Skip to main content

Press Communiqué Approved By The Oecd Council, November 17, 1961

Volume 649: debated on Tuesday 21 November 1961

The text on this page has been created from Hansard archive content, it may contain typographical errors.

1. The first Ministerial Council of the O.E.C.D. meeting in Paris 16th and 17th November under the Chairmanship of the Canadian Minister of Finance, the Honourable Donald M. Fleming, surveyed economic prospects of the vast community of member nations comprising more than five hundred million people in Europe and North America and examined its world responsibilities.

2. The Ministers noted the substantial economic growth that had taken place in most member countries during the past decade. They agreed on the desirability of establishing a target for further growth. Under conditions of price stability and the necessary provision for investment, rapid growth facilitates the harmonious development of world economy, helps to promote a liberal world trading system, provides a necessary foundation for rising living standards and ensures a high level of employment. It will enable industrialised member countries to contribute more effectively to the development of less advanced countries both through the provision of financial and technical assistance and through a widening of their export markets and the increase of their export revenues.

3. Accordingly the Ministers set as a collective target the attainment during the decade from 1960 to 1970 of a growth in real gross national product of 50 per cent. for the twenty member countries taken together. The rate of growth may vary from year to year and from country to country, moreover, being a collective target, individual countries may fall short of or exceed it in varying degrees.

4. Each country will have to make its contribution to collective growth in accordance with its own special circumstances. This contribution will be supported and made more effective by simultaneous expansion in other countries. The setting of a joint target for economic growth is itself recognition of the increasing inter-dependence of the separate economies of the twenty member countries. Given their needs, it is desirable that member countries in the process of development should have a relatively higher rate of growth. A 50 per cent. increase in output during the decade will call for deliberate national economic policies and their co-ordination through the organization's procedures of consultations and co-operation.

5. In this respect the Ministers put particular emphasis on the necessity of a proper equilibrium in the external payments of member countries as a condition for the fulfilment of the growth target mentioned above. It was, therefore, necessary to develop still further the close co-ordination of financial and economic policies and the mutual sense of responsibility between deficit and surplus countries in order to attain the common objective of accelerated economic growth while further improving the international payments mechanism. The various means already available to relieve temporary pressures on particular currencies were of great value, but they should be further developed.

6. Price stability is of the highest importance in order to assure to the population the full benefit of economic growth and to maintain equilibrium in international payments. Excess demand should, therefore, be prevented and efforts made to improve productivity and labour mobility. The gains through higher productivity should be fairly distributed, and increases in the level of money incomes should be kept generally in line with increases in productivity, which alone provide the means to a durable increase in the standard of living. In countries with payments deficits it is particularly important that the competitive position is not undermined through cost increases. Liberal import policies are another means of assuring price stability. The surplus countries have a special responsibility to use this and other means available to them which contribute to both external and internal equilibrium.

7. The Ministers emphasised that a special effort must be made to promote growth in less-developed member countries and thus endeavour to reduce the very great disparities in incomes per head. In these countries there are great possibilities for achieving a higher standard of living through more intensive use of natural and human resources. They stressed their conviction that more investment and more training are necessary conditions for such a development. To induce a real increase in the inadequate growth rates of such member countries the Ministers instructed the organisation to encourage and assist such countries in their efforts including the preparation and achievement of sound development plans.

8. In order to achieve the growth target, increasing use of scientific training and research is needed. Their utilisation in agriculture and industry should be closely studied. The organisation should further develop its work in these fields.

9. The Ministers noted that, thanks to increased productivity and mechanisation, agricultural production had risen considerably in the O.E.C.D. countries and they recognised that agriculture would also play an important rule in attaining the collective growth target. The Ministers agreed that necessary adjustments within agriculture should be carefully studied. They thought that increased productivity within agriculture should contribute to general price stability. In addition agriculture could, in many countries, make manpower available for the expansion of industry. In this connection the importance was recognised of ensuring that the agricultural population should share in the rising standard of living resulting from economic growth. The Ministers agreed with the O.E.C.D. Ministers of Agriculture meeting of October, 1961, that agricultural policies should be the subject of continuous consultation and confrontation within the organisation in order to secure that industrial and agricultural production developed harmoniously.

10. The Ministers were determined that increased production should lead to a significant increase in the aid to the less-developed countries. In 1960, the aggregate flow of resources, both public and private, from member countries and Japan, a member of the organisation's Development Assistance Committee, amounted to about Dollars 7·5 billion. The Ministers agreed that a further increase of development assistance was needed and they welcomed the intention of the Development Assistance Committee to institute, beginning in 1962, an annual review of aid efforts and policies of its member countries. The main purpose should be to increase the efforts and to adapt them better to the needs and circumstances of the recipient countries through exchange of experience regarding bilateral aid. The Ministers expressed the desire that the Development Assistance Committee should encourage greater co-operation among donor countries in their bilateral aid efforts and that a common approach should be applied increasingly to specific problems of economic development assistance. They also recognised the need for full co-operation with and support of multilateral institutions providing development aid, and they welcomed the work going on to define measures to encourage private capital exports to less-developed countries.

11. The Ministers recognised that successful economic expansion in less-developed countries can best be achieved through carefully prepared programmes based on an assessment of needs and resources. They, therefore, welcome individual and regional efforts by less-developed countries in drawing up such programmes. The Ministers instructed the organisation to study the functions and structure of the contemplated O.E.C.D. development centre which could help, in co-ordination with existing institutions, to meet the urgent need for more knowledge and for qualified persons to assist in the development efforts.

12. The Ministers stressed the importance of reducing barriers to the exchange of goods and services, in particular on the part of the more industrialised countries, as a means of promoting economic growth and of providing expanding markets. They emphasised the need to seek ways and means, both in the O.E.C.D. and in other international forums, to reduce barriers to trade among O.E.C.D. countries and between O.E.C.D. countries and the rest of the world. The main instrument of the organisation in achieving this aim should be periodic confrontations of trade policies. The Ministers underlined the significance of the negotiations between the European Economic Community and other European countries—the arrangements adopted should safeguard the legitimate interests of other countries. They expressed their satisfaction that the countries engaged in negotiations were willing to keep the O.E.C.D. informed of the progress of the negotiations. The aim of the organisation should be to contribute to the maximum freedom of trade and to enable the less-developed countries to obtain increasing export revenues.

13. In conclusion, the Ministers noted that these measures were but first steps in a collective effort that must extend increasingly beyond the relationships among their own countries and the material well-being of their citizens. Member countries will pursue together the three objectives of the O.E.C.D. convention pertaining to economic growth, aid and trade in order to ensure a sound expanding free world economy.