How officials from abroad woo the American capitalist
Boston — Should anyone doubt the industrial might of the United States, watch the parade of high economic officials from other nations courting American capitalists - often through the press.
This week, Michel Rocard, minister for planning and regional development in France, held a press conference here to say, among other things, that his Socialist-Communist government welcomed new US corporate investments. He had a special eye on the Route 128 electronics companies that circle Boston.
Earlier in the month, Jamaica's prime minister, Edward P. G. Seaga, spoke to the press at the joint annual meetings of the International Monetary Fund and the World Bank in Toronto, distributing sizable press kits about the merits of investing in Jamaica. And at the same gathering, Indian Finance Minister Pranab Kumar Mukherjee held a breakfast press conference with mostly American journalists to talk about India's economic situation.
Here's something of what these top officials said. As patriotic politicians, they emphasized the positive in their nation's economic developments:
Michel Rocard: Consumer prices rose only 0.3 percent both in July and August, the first two months of a four-month wage and price freeze. That compares with around 1 percent a month before the freeze. ''It is better than we hoped,'' Mr. Rocard said. He hopes it will help businessmen negotiate lower wage increases when the freeze ends Nov. 1.
Also, he said, the government will ''negotiate'' with management groups about what happens to prices after the end of the freeze.
Rocard hopes his left-wing government's improved relations with the trade unions will help in achieving lower wage increases.
The planning minister, a political rival of President Francois Mitterrand, also expects somewhat tighter monetary and fiscal policy to slow down the economy. That, he admits, would make it more difficult for the government to carry on its policy of redistribution of income in favor of the less affluent in France.
Moreover, the government wants to alter the nation's pension program so that its costs grow more slowly. At the moment it is indexed to increases in salary levels two years ago - when wages were rising rapidly. The new plan is to index it to the most recent changes in wage levels.
In view of the world economic crisis, Rocard said, France's government ''should have forgotten (its) social promises earlier.'' Such criticisms of his own government indicate Rocard's political popularity and relative independence.
Mr. Rocard defended France's budget deficit for 1983 as the second smallest in terms of gross national product among the industrial nations. It will be about 3 percent of GNP.
''The international financial community has not taken measure of what we are doing,'' he said, referring to the government's reversal of its earlier expansionary economic policy. One goal of his visit, he admitted, was ''to convince company bosses that France remains a good place to invest.''
Pranab Kumar Mukherjee: India's economy, the finance minister said, has been doing ''fairly well'' over the last two years. Growth of industrial production was up 4.5 percent in the fiscal year that ended March 31, 1981, and 8.5 percent in fiscal 1981-82. Agricultural production was up 15 percent in 1980-81; 3 percent in the year to March 31, 1982.
He cited a list of handsome jumps in production of cement, coal, steel, and crude oil. Further, prices at the wholesale level in August were up only 1.3 percent from the same month a year earlier. That compares with a comparable figure of 11 percent for August 1981.
The nation's supply of money was increased 7.1 percent last year, compared with 15 percent the year before. Such a reduction normally promises lower inflation rates.
Mr. Mukherjee is also proud of India's agricultural progress. In a year of a good monsoon, Indian farmers grow 99 to 100 percent of the nation's food needs. In bad years, India may have to import grain.
Government subsidies, he maintained, have been cut ''to a minimum.'' Only food grains for the poorest are subsidized. Subsidies amount to 1.3 percent of gross domestic product. The public-sector deficit is 5.8 percent of GDP, of which half is financed by the sale of debt on the open market and half financed through the banking system, which means the creation of new money.
One problem remains a large international payments deficit, covered to a large extent by a major $5.4 billion, three-year loan from the International Monetary Fund (IMF). He said adjustment of India's balance-of-payments situation ''is bound to take time.''
Mukherjee urged a large increase in funds for the International Development Association, the World Bank soft-loan affiliate. ''The fight against poverty is a tremendous task,'' he said.
Edward P. G. Seaga: Jamaica, he noted, taking a poke at the previous government, ''had a decade of very serious problems.'' Mr. Seaga took power Nov. 7, 1980. This brought a return of political stability to the Caribbean island. Partly as a result, tourism was up 20 percent last year, and will be up about 20 percent more this year, Mr. Seaga said.
Also, production of cement and steel is doubling this year over last year. But bauxite and alumina production is suffering from a poor world market for aluminum products.
Seaga said Jamaica will have no problem in meeting the requirements set by the IMF in making a three-year, $698 million loan to Jamaica in the spring of 1981. Government deficits are being reduced.
The press kit included, significantly, ''The Investor's Guide to Jamaica.''