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37 - January 1983

During many North-South conferences, those of UNCTAD in particular, developing countries have been calling for measures to guarantee prices for the basic commodities which they mainly supply. To this end, it was several times decided to create stocks in price which were preventing the developing countries from following through their development plans, through lack of reliable earnings. These proposals for creating stocks have remained on the drawing board through lack of the very considerable financing which they would entail.

This is the problem which Charles WARIN has attempted to solve by bringing in new concepts, as set out in his posthumous book "A Currency for a New Economic World Order". He proposes the setting up of a convention of the interested countries (preferably all countries), to be followed by the creation of an organized international commodity trading sector constituted around an International Commodity Fund able to buy, manage, and sell the relevant stocks. To this end, the Fund would issue a new unit of exchange, "Primon" (or prime pound) not in the first instance for circulation but used to guarantee the monetary value of the commodities stockpiled. This unit of exchange, geared to international trade and usable as a reserve currency, would have the great advantage of being tied to ne country, in contrast to the dollar with its inconvenience (even for the U.S.) of being at one and the same time a national currency yet also the principal form of international exchange and reserve currency.

Thus Charles WARIN foresees the financing of stocks of basic commodities. But his proposals go further, in attempting to balance the consumption and production of each commodity. He has worked out a detailed mechanism by which the difference between import and export price would prompt new productive investments, the existence of a stockpile giving time for the resulting extra production to materialize. In the reverse direction, the lower import price would tend to show down production. The arrangement would have to be limited to commodities that can be stockpiled at a reasonable cost.

The proposals of Charles WARIN thus consist of two main planks : firstly, the international unit or prime pound, available for the use of developing producer countries - whereas I.M.F. finance is limited for these countries to tiny quotas - and secondly the management of world stockpiles in order to stabilize world prices and benefit the development of those countries.

This stabilization of prices depends in fact on the requisite political qill on the part of the rich countries. Is there that will one wonders ?




AMIP - Mundialist News Agency

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