Liquidity and Aid

THE LONG SPELL of uninterrupted growth which the developed capitalist countries have had is now threatened, on the one hand, by shortage of international finance or liquidity and, on the other, by the yawning chasm between the prosperous few and the poor many. The leaders of the World Bank and the International Monetary Fund have voiced their grave concern over the situation in their addresses to the annual meetings of the two institutions in Washington. The President of the World Bank stressed the importance of a rapid rate of growth in the developing countries and drew pointed attention to the need to ensure an expanding flow of development assistance from the rich countries. He argued that if the momentum of development was allowed to slow down, if the leaders and peoples of the developing countries lost heart, the consequences would be such as would intimately impinge on the industrial countries themselves. True, the growth rate of the developing world was perhaps less than what seems achievable, but the millieu in which these countries work was not one conducive to growth. The barriers" were formidable and to overcome them was no mean task. The quantum of international aid, he said, had stagnated since the beginning of the current decade and its terms had tended to become onerous. Added to these developments was the problem of servicing the existing debts. Altogether, then, in the developing countries the element of despair threatened to overweight that of hope. The theme of the speech by the Managing Director of the International Monetary Fund was the same, though he stressed the problem of liquidity rather than that of aid, it being his immediate concern.