It had been the intention of the Minister for Foreign Affairs and Trade, Mr. Hayden, to be present at this session of the General Assembly for his general debate statement. It is evidence of the Australian Government's deep attachment to the United Nations and the principles which underlie the Organization that Mr. Hayden has presented each Australian general debate statement since his appointment in 1983. On this occasion, however, events in our own region compelled Mr. Hayden to return home from New York. The statement I shall now make is the statement Mr. Hayden would have delivered if it had been possible for him to attend this session.
Let me first extend to Mr. Peter Florin my congratulations on his assumption the presidency of the forty-second session of the General Assembly. At the same time I should like to express Australia's warm appreciation to the outgoing President and representative of a fellow Commonwealth country, the Minister for Foreign Affairs of Bangladesh.
As Australia prepares to commemorate the 200 years which have passed since the first European settlement in 1788, a feeling of celebration is naturally enough developing in my country But there is also occurring in Australia a new degree o analysis of the developments that have brought Australia to its present condition and the reasons for them. As a result, more Australians are becoming more clear about the real meaning of their past and their future.
Australia's relative advantages in the production and export of raw materials served us well in colonial times and have continued to be the mainstay of our exports until the present. The sharp decline in the terms of trade for primary commodities — something we share with many developing countries - has/ however made it clear to us that we need to diversify our export base without neglecting our traditional strengths.
At the same time we are finding that our past policies which created a sheltered and protected environment for manufactured goods and services, have poorly prepared those sectors of our economy for competition in world markets. We are now addressing seriously the task of structural adjustment, which is needed to put our economy on a more mature footing.
Our bicentenary particularly reminds Australians of the extent of the disruption suffered by the original inhabitants of our country, the Aboriginal people, now a minority in the land. Australia, in other words, is at an especially important point in its development, seeking to understand the reality of its past and preparing for the realities of its future. Our economic and industrial structures are undergoing fundamental out necessary reform.
Australians are going through an equally stressful process towards a proper understanding of the effect of their history on their Aboriginal compatriots. That demands great change - in such matters as land rights, protection of cultural systems and heritage and economic development. It is a difficult, complex process, often frustrating, always demanding unusual understanding and new attitudes of mind. So, in their bicentenary year, Australians are going through a period both of celebration and of deep reflection. I mention this because the process gives Australians a better appreciation of many of the issues that are preoccupying the world community; because we all have a significant stake in seeing these issues dealt with effectively, expeditiously and fairly.
With such a perspective, two issues are clearly of immediate importance and pressing concern; one is our failure to agree on systematic, effective and just ways to solve the problem of international debt; the other is the distortion of world markets and the resultant hardship to innocent bystanders caused by the trade policies of the major economies.
The two issues are connected, not least in that they both threaten grave consequences for all - industrial nations and developing nations. North and South alike. In this context I commend Ambassador Yeutter's comment to members of the United States Congress last February, "Would that our grandchildren were to understand what we are doing to them."
Present international economic conditions reflect the difficult economic circumstances in both rich and poor countries. The latest world development report of the World Bank points out some of the dangers in the international economy and mentions the need for the wealthier countries to face more squarely the damage that their domestic policies are causing the developing countries. It is therefore time to ask whether or not the paralysis in economic policy-making is becoming so serious that the world economy is on the verge of sliding into an era of stagnation and protectionism.
The Baker plan set out the framework for the resolution of the international debt crisis. It was an attempt to forge an international consensus in which the different parties would all contribute to a solution and they would all gain from co-operation. Unfortunately, the plan in our view is not working, mainly because the richer parties have not been pulling their weight. Not only have the wealthier countries failed to tackle fiscal and trading imbalances, but private international banks have also failed to support the Baker plan. As a result, there is really no effective world plan to solve the continuing international debt crisis.
Although the Baker plan has in essence failed, its three original elements remain the key to the solution of the world economic crisis. These elements are, first, that heavily indebted developing countries need to formulate and implement structural adjustment plans at home, in particular by curbing excessive Government spending and promoting exports in an endeavour to service their international debts; secondly, creditor nations in turn would need to support structural adjustments in the developing countries through such institutions as the World Bank, by increasing resources flows to the heavily indebted countries thirdly, private international banks would also be expected to support such a plan.
It is important, however, to resist the notion that the first step to a solution is to allocate blame to one side or another. The great task is to find a solution that does not, on the one hand, destabilize the international financial system or, on the other hand, increase the severity of the social and political burdens which the debt crisis imposes on the people of less developed nations.
In this, each side to the issue has a great responsibility. Debtor nations should not undermine the financial system by walking away from their obligations. Creditor nations cannot insist on debt repayment pressed to the point that it destroys the human and other resources of debtor nations. Each side must therefore recognize the validity of the other's point of view.
A solution should be approached by seeking, not only to maximize the advantage of all concerned, but also to ensure that the broad economic interdependence between nations is recognized. Neither party can be seen in isolation, important interdependences must be considered, including the responsibilities of the debtor countries, the creditor countries, the private banks and the multilateral agencies. It is in the long-term interest of all parties to co-operate in overcoming these grave and continuing economic difficulties.
In the long term the solution also demands some form of broad structure that would help to invest resources intelligently and would establish, in advance, ways in which debt could be repaid more effectively, more systematically and more fairly. This requires a more supportive external economic environment, which must include adequate external financing in support of macroeconomic and structural policies in debtor countries, efforts by surplus industrial countries to maintain the maximum rate of growth they can afford, continued reductions in international interest rates, and action by the major industrialized countries to reduce protectionism, including protectionism in agriculture.
In addition to these points, another critical ingredient should be a co-ordinated economic adjustment by the major economies: a managed mixture of monetary and fiscal change and reduced trade protection along the lines emphasized at various economic summits. The alternative to such managed adjustment is the chaos which will result when the market enforces its own adjustment to the detriment of both culpable participants and innocent bystanders alike. This is an essential point: the policies driving towards this conclusion are not only endangering the interests of developing countries; they also threaten the interests of the developed countries.
The dangers to the world economy are equally serious from trade protectionism, which is such a feature of the current world trading environment. The World Bank has warned of the results of the resurgence of protection in the form of non-tariff barriers to trade in manufactures. This policy will undermine the integrity of the system of the General Agreement on Tariffs and Trade (GATT') even further and will impede the exports of less developed countries, which in turn will aggravate their debt problem.
Unfair trade in agricultural products is especially serious. Indeed, it is potentially ruinous. The Tokyo Summit offered not much more than a bare acknowledgement of the problem almost 18 months ago although it was the first time that the major economies admitted that there was a problem and that it needed their joint attention. Their perception of it has changed significantly since then. The change has been noticeable at such developments as the GATT meeting at Punta del Este a year ago, at the Organisation for Economic Co-operation and Development (OECD) Ministerial Council in Paris last May, and at the Venice Summit last June. Indeed, the Venice Summit made an important commitment towards reforming agricultural trade by calling on all involved to refrain from actions which "by further stimulating production of agricultural commodities in surplus, increasing protection or destabilizing world markets" (ft/42/344, para. 20) would damage trade relations.
This increase in consciousness of the problem over only 18 months has been an important and, in the Australian Government's view a hopeful, development in that it injects urgency into finding ways to solve a problem which is contributing significantly to uncertainty and disorder in the global economic system.
Distortions in global agricultural trade caused by barriers to market access and subsidization policies of the major economies have seriously affected Australia, among other efficient and competitive producers. They have raised a huge impediment to the efforts of the Australian Government towards recovery from our economic difficulties of the early 1980s. Australia, therefore, attaches high priority to the Uruguay round of multilateral negotiations on agriculture. Australia's concern led it to joining 13 other non-subsidizing exporters in the Cairns Group of fair traders in agriculture in August last year. That group played an important role at Punta del Este in the successful campaign to include agriculture in the negotiating mandate and for the mandate to encompass negotiation of rules for all measures affecting market access and export competition.
These negotiations on agriculture will be a major test of the commitment of GATT members to an open, market-oriented trading system. The GATT rules and disciplines which have overseen world trade for the last 40 years have never been extended to cover agricultural products in a comparable way to their coverage of manufactures. This failure has been a major problem in the current world economic environment.
Australia put a proposal to the European Management Forum at Davos in January of this year to help solve problems in world trade in agriculture. Our proposal underlined the need to reassert the role of comparative advantage in shaping world trade in agriculture and to restore the link between market signals and production trends. Our proposal aimed progressively to reduce the gap which exists between world and domestic prices in many countries, and it called for the careful management of stocks to restore order in world markets. Acceptance of such an approach would produce a world order in agricultural trade in which comparative advantage and market signals are once more the major influences. But it cannot be emphasized too strongly that the most important and necessary ingredient in programmes to alleviate the crisis in agricultural trade is immediate action by the major agricultural subsidizers to eliminate all agricultural subsidies.
As with international debt, a solution will emerge, one way or another, to the problems caused by unfair trading. What is not so clear is whether it will be a benign solution or a disorderly one; whether it will be a planned solution by well-informed and well-intentioned policymakers; or a chaotic one forced on recalcitrant governments by market forces driven by uncertainty and frustration. If markets enforce their own solutions to the problems of international debt and unfair trading, there will be instability in foreign exchange rates and on commodity exchanges, debtor default, world recession and world tension, or even worse.
With such serious prospects threatening us all, some blunt truths need to be expressed to those who have the capacity to find and enforce sensible solutions. Unfair trading is in essence an extremely unfriendly act - even a hostile one. One should not be surprised, therefore, if its victims react accordingly.
Secondly, if developed economies' policies, particularly protectionist policies, impoverish their customers, they themselves will suffer the consequences of reduced export prospects and restricted world trade. Finally, when unfair trading reduces the capacity of countries like Australia to promote political and social stability through aid programmes, one should not be surprised if donor countries like Australia, find themselves forced to reduce these aid programmes.
This threat of economic and political instability adds weight and urgency to the third great imperative facing the world community; control of armaments, to which I now turn. Australia argued at the recent Conference on disarmament and development that security is a wider concept than a definition in purely military terms would allow. In our view, security has important economic and social, as well as military, dimensions.
Disarmament and development may not be tied together in an exclusive relationship; the abolition of arms may not lead automatically to the abolition of our economic problems. But it is a fact that military spending does take up a disproportionate share of global resources: this has been estimated to be 20 times the amount disbursed through official development assistance. Arms imports, to take another example, are responsible for roughly one-quarter of the debt burden of the nations of the South.
While Australia believes that effective and lasting disarmament should lead to larger and more predictable flows of assistance to less developed countries, we also believe that the economic benefits of the implementation of a wider concept of security will be of greater importance to all countries.
The other obvious, major reason for the urgency in dealing with the arms race, particularly the nuclear-arms race, is the destruction that it threatens. Australia warmly welcomes the prospect that the United States and the Soviet Union will reach an intermediate nuclear forces (INF) agreement, and particularly we welcome their decision to eliminate ground-based intermediate-range missiles in the Asian region as well.
If this agreement is reached, three critically important principles will have been accepted. One is that it will be the first agreement which not only reduces but also entirely eliminates a whole class of modern, front-line nuclear arsenals. It will also give concrete expression to the principle that security cannot be achieved by a build-up in weapons alone. And it will bear witness to the idea that security can be enhanced by balanced and verifiable arms reduction and disarmament assures.
Regrettably, the chances of an agreement to reduce the levels of strategic nuclear arms have not advanced far since the Reykjavik Summit last year. Discussions in the defence and space components of the negotiations between the super-Powers have also not yet achieved a breakthrough. In the strong belief that the issue is not the preserve only of the nuclear Powers, Australia has been an energetic participant in efforts by the international community to achieve nuclear-arms control and disarmament. We have urged the leaders of both the United States and the Soviet Union not to miss the opportunity apparently before them now o reach accord on all the topics under negotiation. Further progress on the issue f strategic arms would be greatly facilitated by agreements also to eliminate chemical weapons and to control conventional weapons.
In a specific field to which Australia has devoted special attention, our resolution with New Zealand last year on the urgent need for a comprehensive test-ban treaty attracted the highest support of any of the draft resolutions submitted to the Assembly on the issue of nuclear testing. We are co-operating again this year with New Zealand and our other traditional co-sponsors to produce draft resolution which reflects a practical, non-declaratory approach to a treat which we hope will receive very wide support.
We have also taken steps towards the development of an international system monitoring network so that the necessary verification measures will be ready for test-ban treaty. And we have made special efforts to contribute to the international effort to eliminate chemical weapons, efforts which appear to be close to fruition,
Australians share with other peoples good reasons for this active interest this issue: that is, the extra dimension of danger which unconstrained armament add to developments which are already unstable.
I refer in this context, to the Middle East dispute, the war between Iraq and Iran, the deteriorating situation in southern Africa and the divisions between North and South Koreans. Australia continues to support the principle that the international community has a major role in resolving such disputes.
We especially support the Security Council and the Secretary-General in the efforts to end the Iraq-Iran conflict. We support the proposal that the United Nations should contribute to reconciling North and South Korea by admitting both Members of the Organization. Both North and South Korea have, for example, recently acceded to the Antarctic Treaty.
We profoundly regret that the Government of South Africa continues to turn back on the sincere demands of the world community for genuine dialogue and peaceful change in that troubled country, that it continues to reject the legitimate aspirations of the majority black population to political rights. The actions of the international community in adopting economic and other measures against South Africa are welcomed by Australia, which understands the growing anger and frustration of African countries in the face of continuing South African intransigence.
Australia also continues to be concerned by the plight of the Kampuchean people and disappointed at the lack of movement towards a political settlement during the past eight years. We hope that the increased level of activity in recent months represents real elements of flexibility among the parties and that it might free the way to the start of talks and lead to an end to foreign occupation of Kampuchea and to the self-determination of its people. There are also some encouraging signs of progress in Central America.
Australians have a particularly compelling reason for their energetic interest in the arms issue, to which I have just referred. The region in which we live is feeling ever more strongly the pressures exerted by the clash of ideology, distortions in the world economy, the legacy of colonialism and the rivalry between the super-Powers. Our immediate neighbourhood is mercifully relatively free of the immediate military effects of these pressures. With our island neighbours, we are concerned to ensure that the South Pacific remains peaceful. This is why we are committed to the principle that the South Pacific and the Antarctic continent remain nuclear-free under the arrangements established for these zones. We believe that the disarmament provisions of the Antarctic Treaty, which ensure that the territory of Antarctica is used only for peaceful purposes and the obligations that the Treaty carries for the effective management of the Antarctic in support of the principles and purposes of the United Nations Charter, continue to be in the best interests of all peoples.
That is also the reason for the concern felt by Australia and its island neighbours for a viable, peaceful political solution in New Caledonia. We believe that the people of New Caledonia should have been given a wider range of options in the recent referendum and that this referendum should have been conducted in a manner consistent with the established United Nations principles of decolonization. We trust, nevertheless, that a peaceful transition to a truly multiracial independence will take place in New Caledonia and that the situation there will not be allowed to threaten the stability of the region. This is of course a matter to which the United Nations Special Committee of 24 has been devoting its attention, in which process we are interested.
Australia also shares with its South Pacific neighbours concern over the destructive effects of the protectionist commodity policies of major economies. Small primary producers with fragile economies tend to be the first to feel the effects of these policies and the last to recover from them. The South Pacific is a region with many examples of this distressing reality. In such circumstances, the prospects of preserving its peaceful nature depend not only on fair and rational solutions to the problems of unfair trading and colonialism, but also on a realistic resolution of the arms issue. Peace in the South Pacific, after all, is connected closely with developments in the North Pacific, where there is a concentration of military forces second only to that in Europe, Australia has suggested that there would be advantage in the United States and the Soviet Union initiating dialogue on their respective security perceptions and concerns in the North Pacific area. We hope that this will lead in time to the development of greater confidence and security, mutually between the super-Powers, but also among the countries of the region. Australia offers this suggestion, once again making the point that efforts to defuse the nuclear-arms issue should not be confined to those most immediately involved. Arms-control and disarmament questions ate the legitimate concern of the whole international community.
For this reason, I wish to conclude this statement by suggesting ways in which this Organization can improve its capacity to act for the international community. I do so as a representative of a country which gives way to no other country in this Hall in its support for the United Nations.
The fact is that many countries are showing a lack of confidence in the United Nations. Worse, this lack of confidence is most obvious in those countries which contribute most to the finances of the United Nations. The lesson should not be lost on us. Several factors are working to erode the credibility of this Organization. Secretariats have grown in size. Their salaries and other emoluments sometimes outstrip those enjoyed by ministers and civil servants in the countries which fund them. Committees, commissions and special conferences have proliferated, giving the United Nations the reputation in some quarters of being an ineffective talking shop.
Dr. Herbert Evatt, as Australia's Minister for External Affairs, played a notable part in the founding of the United Nations As early as 1947 he asked the General Assembly to consider whether United Nations machinery was translating into life and reality its economic and social pledges. He referred then to the risk of the United Nations becoming "all harness and no horse". It is essential that that question be considered anew. The Special Commission established by the Economic and Social Council provides an opportunity for Member States to examine the nature of the horse and to ensure that the harness is as effective and as light as possible. In particular, the Australian Government urges Member States to use the Special Commission to review the 280 or so bodies which have grown over the years, with a view to avoiding duplication, abolishing some bodies and amalgamating the functions of others, while preserving the machinery which works well.
Australia wishes to emphasize the point that while the cost of international organizations continues to grow at an alarming rate, many Member States, including Australia itself, face serious budgetary and adjustment problems which limit their capacity to meet such costs. Our taxpayers' enthusiasm for the burden of funding the United Nations will be strained while the impression persists that the Organization is escaping the economic discipline they and their Governments are facing.
In areas where the United Nations has shown its effectiveness, Australia has this year raised its contributions to programmes it considers have priority. I mention, for example, assistance to the United Nations Development Programme, Palestinian refugees, population programmes, control of drug abuse, the environment and international health concerns. Our contributions in these areas have been increased. But the resources Australia can provide to the United Nations are not without limit. So long as the costs to us of multilateralism continue to rise so steeply, we will have to make difficult choices; whether or not, for example, we should consider membership of all United Nations agencies.
We make that point forcefully because it is centrally important to the continued effectiveness of this Organization's capacity and even to its future, make the point in the interests of the United Nations as well as of Australians. Equally forcefully, Australia emphasizes that this in no way suggests any diminution of our commitment to United Nations ideals which, after 40 years, is as profound as ever. Mr, Evatt told the General Assembly 40 years ago that the Australian Government regarded the support of the United Nations as a cardinal principle in its foreign policy. Firm support for the multilateral system and for an effective United Nations is still a central feature of the Australian Government's foreign policy.