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F I N A N C I Ë L E S I T U A T I E
ment. About 70 to 80 % of total Government expenditure is covered by these
subsidies. It is noticeable that the total deficit of the Budget of Australian New
Guinea (inclusive of capital expenses which are rather high) is covered by an
amount of subsidy a fonds perdu.
The monetary system of New Guinea. The transfer of sovereignty of Indonesia
made it desirable for New Guinea, that until then used the Indies' coinage, to
have its own currency. This opportunity has been taken to carry out a monetary
regulation. Both objects were achieved by measures taken which forced all Indonesian
money to be handed in, in return for which a limited percentage of New
Guinea currency was supplied. Part of the money which was delivered could not
be exchanged, but was entered on a blocked account. Originally an exchance
rate was fixed at 25 %, while sums of less than f 200 were left untouched. The plan
is, to raise the percentage of deblocked money from 25 % to 40 %. If this takes
place, then of the amount of Indonesian money turned in (about fl. 14,7 millions)
fl. 8,5 millions will be deblocked. The total money circulation in New Guinea
was estimated roughly at fl. 11 or 12 millions by the middle of 1951.
Foreign currency transactions. A parity exists between the Netherlands and New
Guinea guilder, whereas payments between both countries are practically free.
Money from New Guinea to other countries is transferred via the Netherlands.
The greater part of New Guinea's international payments is carried out by agents
of a Dutch bank (the Nederlandsche Handel Maatschappij N.V.) in New Guinea.
An estimate of the balance of payments of New Guinea for one year runs as
follows:
Balance of payments of New Guinea (in millions of guilders)
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