As far as we are concerned, we favour a solution in terms of stable exchange rates and orderly changes in monetary system. A regime of floating rates creates additional problems and uncertainties for our overstretched economies and administrative machinery. We have said it on more than one occasion that going beyond any immediate realignment of exchange rates that may be .necessary, we are prepared to agree that somewhat wider margins around parities may be necessary to discourage speculative capital flows. At the same time, we cannot help wondering whether in the name of freedom we have not disregarded the sound principle adumbrated at Bretton Woods, namely, freedom of capital movements can often be an enemy of freedom on the current account. We also feel that the sound emphasis on appropriate discrimination at Bretton Woods has somehow been replaced by indiscriminate non-discrimination whereby for the sins of the developed countries, the less developed countries are also punished by imposition of duties and reduction in aid. Cannot the Commonwealth countries at least agree that they are not in favour of such meaningless and even harmful non-discrimination?
If the IMF Charter is to be amended, the amendment cannot be with reference only to the issues thrown up by the recent difficulties of the industrial countries. We in the developing world also find the present Charter unsatisfactory in many ways. Most important, we feel that the system of weighted voting and representation with weightage given in terms essentially of wealth and prosperity is an anachronism as it gives to more than 100 developing Members hardly one-third share in the total. The inequity of the situation has been aggravated in recent years when the same formula of weightage reflected in the voting structure has been made the basis for the distribution of Special Drawing Rights.
We also feel that in the present preoccupation with major currencies. the central issues of the creation of SDRs beyond the present three years period is likely to be obscured. We regard the creation of SDRs as the greatest achievements under the auspices of the International Monetary Fund. We consider that there should be a continuing and regular creation of SDRs, and action for the period beyond 1972 should be initiated immediately and decisions taken well before the end of 1972. In this connection, I would also mention that we are dissatisfied with the progress made in the Fund on the consideration of the proposal to link SDRs and Development Finance.
