Back Matter

Back Matter

Author(s):
International Monetary Fund
Published Date:
January 1994
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    Appendices
    APPENDIX I International Reserves

    This appendix reviews recent developments in international reserves and liquidity that relate to (1) the evolution of holdings of official assets and (2) the currency composition and distribution of foreign exchange reserves.

    Recent Evolution of Official Reserve Assets

    During 1993, total international reserves measured in SDR terms increased by over 10 percent to SDR 1,016 billion, reflecting strong growth in both the holdings of non-gold reserves and the market value of official holdings of gold (Table I.1). The increase in non-gold reserves resulted from a substantial rise in foreign exchange reserves held by developing countries and a more modest increase in stocks held by industrial countries. The rise in the value of gold holdings was primarily attributable to a significant increase in the price of gold that more than offset the largest decline in the quantity of gold in many years. The fall in gold holdings continued a trend that began in 1989 and accelerated in 1992. In 1993, there was also a shift in Fund-related assets that arose from the increase in quotas under the Ninth General Review, which came into effect in late 1992.

    Table I.1Official Holdings of Reserve Assets, End of Year 1988-March 19941(In billions of SDRs)
    March
    1988198919901991199219931994
    All countries
    Total reserves excluding gold
    Fund-related assets
    Reserve positions in the Fund28.325.523.725.933.932.832.7
    SDRs20.220.520.420.612.914.614.7
    Subtotal, Fund-related assets48.446.044.146.446.847.447.4
    Foreign exchange494.2545.2593.5625.2646.2709.5726.9
    Total reserves excluding gold542.7590.9637.6671.6692.9756.97743
    Gold2
    Quantity (millions of ounces)946.5940.9938.9937.8929.2911.7911.5
    Value at London market price288.6287.1254.1231.8225.3259.3251.7
    Industrial countries
    Total reserves excluding gold
    Fund-related assets
    Reserve positions in the Fund19.619.620.022.829.528.328.3
    SDRs17.617.717.617.510.511.511.5
    Subtotal, Fund-related assets37.137.237.640.240.039.839.8
    Foreign exchange315.9345.0376.5360.4356.8373.7379.3
    Total reserves excluding gold353.1382.2414.1400.7396.7413.4419.1
    Gold2
    Quantity (millions of ounces)801.1797.8795.8793.7785.2769.4768.9
    Value at London market price244.2243.4215.4196.2190.3218.8212.3
    Developing countries
    Total reserves excluding gold
    Fund-related assets
    Reserve positions in the Fund8.75.93.83.14.44.54.4
    SDRs2.62.82.73.12.43.23.2
    Subtotal, Fund-related assets11.38.76.56.26.87.77.6
    Foreign exchange178.3200.0217.0264.8289.4335.8347.6
    Total reserves excluding gold189.6208.7223.5271.0296.2343.5355.2
    Gold2
    Quantity (millions of ounces)145.5143.1143.1144.1144.3142.2142.7
    Value at London market price44.443.738.735.635.040.439.4
    Net debtors
    Total reserves excluding gold Fund-related assets
    Reserve positions in the Fund1.51.61.11.32.82.92.9
    SDRs1.61.61.82.21.72.22.3
    Subtotal, Fund-related assets3.13.23.03.54.55.15.1
    Foreign exchange101.2120.3144.8183.8207.0253.1266.2
    Total reserves excluding gold104.2123.5147.8187.3211.6258.2271.4
    Gold2
    Quantity (millions of ounces)115.0112.5112.6113.6113.8111.6112.1
    Value at London market price35.134.330.528.127.631.731.0
    Countries with debt-servicing problems
    Total reserves excluding gold
    Fund-related assets
    Reserve positions in the Fund0.10.10.10.10.50.50.5
    SDRs0.50.50.71.01.01.11.1
    Subtotal, Fund-related assets0.60.60.81.11.41.61.6
    Foreign exchange29.733.845.461.280.697.098.9
    Total reserves excluding gold30.334.446.262.382.198.5100.5
    Gold2
    Quantity (millions of ounces)48.846.549.148.849.147.047.1
    Value at London market price14.914.213.312.111.913.413.0
    Countries without debt-servicing problems
    Total reserves excluding gold
    Fund-related assets
    Reserve positions in the Fund1.41.61.11.22.42.42.4
    SDRs1.11.11.21.20.81.11.1
    Subtotal, Fund-related assets2.52.62.22.43.13.63.6
    Foreign exchange71.586.499.4122.6126.4156.1167.3
    Total reserves excluding gold74.089.1101.6125.0129.5159.7170.9
    Gold2
    Quantity (millions of ounces)66.166.063.464.864.664.665.0
    Value at London market price20.220.117.216.015.718.418.0
    Source: International Monetary Fund, International Financial Statistics.Note: Components may not sum to total because of rounding.

    “Fund-related assets” comprise reserve positions in the Fund and SDR holdings of all Fund members and Switzerland. Claims by Switzerland on the Fund are included in the line showing reserve positions in the Fund. The entries under “Foreign exchange” and “Gold” comprise official holdings of those Fund members for which data are available and certain other countries or areas, including Switzerland.

    One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

    Non-Gold Reserves

    Total non-gold reserves increased by 9 percent during 1993 to SDR 757 billion at the end of the year. This rise was attributable to continued growth in non-gold reserves since the late 1980s and was the first time in many years that non-gold reserves rose in all major groups of countries. While reserves held by developing countries have increased every year since the mid-1980s, those of industrial countries rose for the first time since 1990. The increase of 16 percent in developing country reserves was substantially larger, however, than the 4 percent increase in industrial country reserves. During 1993, non-gold reserves of all major groups of developing countries rose. In particular, stocks held by the net debtor developing countries rose by 22 percent, after increases of 27 percent and 13 percent in 1991 and 1992, respectively, while the net creditor countries increased their non-gold reserves by 1 percent in 1993.

    Foreign Exchange Reserves

    Foreign exchange reserves, which accounted for most of the change in non-gold reserves, rose by 10 percent during 1993 to SDR 709 billion, the first time since 1989 that the growth rate was at least 10 percent. This increase resulted from an SDR 46 billion (16 percent growth) rise in the holdings of developing countries, and an SDR 17 billion increase (5 percent) in the holdings of industrial countries. The foreign exchange reserves of the latter rose in 1993 after two years of modest declines. The increase in the holdings of developing countries continued the trend of accumulation of foreign exchange reserves that began in 1987; the most recent growth is attributable, to some extent, to the inflow of private capital.

    Holdings of Fund-Related Reserve Assets

    Holdings of Fund-related assets increased by a little more than 1 percent (SDR 650 million) in 1993 to reach SDR 47 billion by the end of the year. The quota increase arising from the Ninth General Review resulted in major changes in the composition of Fund-related reserve assets in 1992, as most members used their holdings of SDRs to pay for the reserve asset portion of the quota increase. Members’ reserve positions in the Fund, which comprise their reserve tranche position and their creditor position, had fallen by SDR 6 billion from 1987 to the end of 1991, but subsequently rose by SDR 8 billion in 1992. Members’ holdings of SDRs, which had remained virtually unchanged from 1987 to 1991, declined by SDR 8 billion in 1992. This pattern of offsetting changes in reserve positions in the Fund and SDRs was evident for both developing and industrial countries. Developments in 1993 reflected the Fund’s decision adopted early in the year to reduce its own SDR holdings from SDR 8.6 billion at the end of 1992 to SDR 1-1.5 billion by the end of 1995 in order to replenish members’ holdings and facilitate their use of SDRs. In implementing this policy, the Fund reduced its holdings by about SDR 2 billion during 1993 by providing SDRs to members in purchases and other transfers, thus generating a similar increase in members’ holdings that was equally shared by industrial and developing countries.

    Gold

    The market value of the stock of official gold reserves rose by 15 percent in 1993 to SDR 259 billion, after declining by 43 percent from 1987 to 1992. This increase in value in 1993 primarily resulted from an increase in the price of gold and occurred despite a decline of 2 percent in the quantity held by members. The price of gold increased by 17 percent in 1993—from SDR 242 an ounce to SDR 285 an ounce—and was the first significant price increase since 1987. The decline in 1993 in the stock of gold held as reserves was larger than in earlier years: the stock of gold held as reserves fell by less than 1 percent between 1987 and 1991, by 1 percent in 1992, and by another 2 percent in 1993. Although the quantity decline over the past several years was more concentrated in the industrial countries, the distribution of gold holdings was approximately the same at the end of 1993 as it was in 1988: industrial countries held 84 percent and developing countries held 16 percent of the total physical stock of gold reserves of 912 million ounces.

    Developments in the First Quarter of 1994

    The increase in total international reserves of SDR 10 billion in the first quarter of 1994 reflected primarily an increase in the holdings of foreign exchange that more than offset a fall in the value of gold reserves resulting from a decline in the price of gold. The SDR 17 billion increase in holdings of non-gold reserves was largely attributable to a rise in the foreign exchange reserves of the net debtor developing countries although the industrial countries also experienced a modest rise.

    Currency Composition of Reserves

    During the past decade, there has been an ongoing diversification as well as sizable fluctuations in the currency composition of foreign exchange reserves (Table I.2). The share of the U.S.dollar in total foreign exchange reserves fell from 70 percent in 1984 to 58 percent in 1990. There was some reversal in this trend through 1992 as its share rebounded to 63 percent, which was followed by a modest decline in 1993 to 61 percent. The counterpart to the changes in the U.S. dollar share was reflected in movements in the shares of other currencies, primarily the deutsche mark, the French franc, and the Japanese yen. However, the diversification of reserves and fluctuations in shares tended to be concentrated in industrial countries rather than in developing countries. The industrial countries’ share of U.S. dollar-denominated reserves decreased by 18 percentage points between 1984 and 1990 before rising by 5 percentage points by the end of 1993, whereas the developing countries’ share fell by only 5 percentage points between 1984 and 1990 and subsequently rose by only 2 percent. Moreover, since 1987 the share of the U.S. dollar in the total reserve holdings of developing countries has risen by 3 percentage points, compared with a decrease of 11 percentage points for industrial countries. In addition, while industrial countries increased the share of the deutsche mark in their reserve portfolios from 15 percent to 20 percent between 1984 and 1993, its share in the portfolios of developing countries was much lower and only increased from 10 percent to 11 percent during this period. The yen, on the other hand, has become an increasingly important reserve asset for all countries, particularly for developing countries; the share of yen holdings in the developing countries’ portfolio (9.5 percent) is now greater than for industrial countries (8.7 percent).

    Table I.2Share of National Currencies in Total Identified Official Holdings of Foreign Exchange, End of Year 1984-931(In percent)
    Memorandum
    ECUs Treated
    Separately2
    19841985198619871988198919901991199219931993
    All countries
    U.S. dollar70.064.867.167.864.660.257.558.463.261.454.6
    Pound sterling2.93.02.52.42.72.73.43.63.33.43.3
    Deutsche mark12.615.114.614.315.518.818.616.514.116.115.5
    French franc0.80.90.80.81.01.42.32.82.42.22.1
    Swiss franc2.02.32.01.91.91.51.41.41.31.51.4
    Netherlands guilder0.71.01.11.21.01.11.11.10.60.60.6
    Japanese yen5.88.07.97.57.77.78.89.48.59.08.7
    Unspecified currencies35.34.94.14.05.56.66.97.06.65.813.7
    Industrial countries
    U.S. dollar73.565.269.471.467.759.655.955.862.860.749.0
    Pound sterling1.41.81.31.11.51.41.92.02.52.72.5
    Deutsche mark15.119.516.715.917.322.521.920.016.319.718.6
    French franc0.10.10.10.40.71.22.53.22.92.72.5
    Swiss franc1.52.11.71.61.71.11.10.80.60.60.6
    Netherlands guilder0.61.01.11.31.11.21.31.20.50.50.5
    Japanese yen6.38.98.37.17.08.19.610.48.08.78.2
    Unspecified currencies31.41.41.41.33.04.85.96.56.44.518.2
    Developing countries
    U.S. dollar66.264.563.259.957.461.360.762.763.862.362.3
    Pound sterling4.44.34.65.15.55.56.46.04.54.34.3
    Deutsche mark9.910.011.110.811.410.911.610.810.811.411.4
    French franc1.51.92.01.81.71.82.02.11.81.61.6
    Swiss franc2.52.62.52.72.52.22.22.22.42.62.6
    Netherlands guilder0.80.91.11.10.90.80.70.80.90.80.8
    Japanese yen5.26.97.18.59.26.87.37.69.19.59.5
    Unspecified currencies49.59.08.410.211.310.69.17.86.87.57.5
    Note: Shares may not sum to 100 because of rounding.

    The SDR value of ECUs issued against dollars is added to the SDR value of dollars, but the SDR value of ECUs issued against gold is excluded from the total distributed here. Only selected countries that provide information about the currency composition of their official holdings of foreign exchange are included in this table.

    This column is for comparison and indicates the currency composition of reserves when holdings of ECUs issued are treated as a separate reserve asset, unlike the other columns, as explained in the preceding footnote. The share of ECUs in total foreign exchange holdings was 14.0 percent for industrial countries and 7.4 percent for all countries.

    The residual is equal to the difference between total identified reserves and the sum of the reserves held in the seven currencies listed in the table.

    The calculations here rely to a greater extent on Fund staff estimates than do those provided for the group of industrial countries.

    In the calculation of the shares in Table I.2, the SDR value of ECUs issued against gold is not counted as part of foreign exchange reserves, but the SDR value of ECUs issued against dollars is counted as part of the holdings of dollars. The overall picture of the trend in the currency composition of foreign exchange reserves is similar if ECUs—introduced in 1979 and accounting for 7.4 percent of the value of total official holdings of foreign exchange at the end of 1993—are treated separately, as shown in the last column of Table I.2. In particular, the USdollar share (excluding holdings of ECUs) in total identified reserve holdings fell from 61 percent at the end of 1984 to 50 percent at the end of 1990 before rising to 55 percent at the end of 1993.

    ECU official reserves are in the form of claims on both the private sector and the European Monetary Cooperation Fund (EMCF).1 The EMCF-backed reserves are issued to the central banks of the members in exchange for deposits of both gold and dollars equal to 20 percent of these ECU reserves These swaps are renewed every three months, and changes in members’ holdings of dollars and gold, as well as changes in the market price of gold and the foreign exchange value of the dollar, affect the amount of ECUs outstanding.2 Quantity changes in ECU holdings depend, therefore, partly on the evolution of the two components of the EMCF swap.3 The SDR 6.7 billion decrease in holdings of ECUs that occurred in 1993 resulted from a decline in the SDR price of the ECUs as well as in the quantity held. The drop in the value of ECU holdings in 1993 was the first decline since 1988.

    Changes in the SDR value of foreign exchange reserves can be decomposed into valuation (or price) and quantity changes for each of the major currencies as well as the ECU. These are shown in Table I.3. In 1993, total identified foreign exchange reserves increased by SDR 62 billion as a result of a positive quantity change of SDR 67 billion that more than offset a valuation loss of SDR 5 billion. Although the quantity of dollar holdings increased even more in 1993 than in the previous year, the SDR value of the dollar changed very little during the year and there was little in the way of valuation change. Of the identifiable reserve currencies, the dollar and the yen were the only reserve assets that experienced both quantity and valuation increases in 1993. The increase in the deutsche mark share was primarily attributable to a substantial increase in holdings of that currency that more than offset a substantial fall in its price on account of a depreciation of the deutsche mark. The more modest increase in the share of Japanese yen was equally divided between changes in the SDR value and in quantity.

    Table I.3Currency Composition of Official Holdings of Foreign Exchange, End of Year 1987-931(In millions of SDRs)
    1987198819891990199119921993
    U.S. dollar
    Change in holdings38,73617,22711,15616,88314,90433,12734,947
    Quantity change70,9714,7185,43637,45117,11321,20733,848
    Price change-32,23612,5085,720-20,568-2,20811,9201,098
    Year-end value225,697242,924254,080270,963285,867318,994353,941
    Pound sterling
    Change in holdings1,1502,3811,1445,1032,003-4462,374
    Quantity change4232,1952,2893,6112,5533,2622,734
    Price change727185-1,1451,492-550-3,708-360
    Year-end value8,71611,09612,24017,34419,34718,90121,275
    Deutsche mark
    Change in holdings9,43210,75023,1789,076-6,640-9,69721,055
    Quantity change6,57414,42916,8054,409-4,670-8,06426,978
    Price change2,858-3,6796,3734,667-1,970-1,633-5,923
    Year-end value52,89363,64286,82095,89689,34079,559100,614
    French franc
    Change in holdings5771,2222,3565,4593,155-1,434-46
    Quantity change4701,4851,9195,1053,154-1,248832
    Price change107-2644373541-186-878
    Year-end value2,9754,1976,55412,01215,16713,73313,687
    Swiss franc
    Change in holdings1,101762-1,03849034551,774
    Quantity change4601,504-989-1863882691,875
    Price change641-742-50676-354-214-101
    Year-end value7,1327,8946,8567,3467,3807,4359,208
    Netherlands guilder
    Change in holdings1,236-234750564190-2,211473
    Quantity change98466415331266-2,220722
    Price change251-300335233-769-249
    Year-end value4,5164,2825,0325,5965,7863,5754,048
    Japanese yen
    Change in holdings4,2893,7823,99110,1215,145-2,7098,522
    Quantity change1,6762,7517,64710,2881,919-4,8863,098
    Price change2,6131,031-3,656-1663,2262,1765,424
    Year-end value27,70431,48635,47745,59950,74448,03556,556
    European currency unit
    Change in holdings16,521-5,9853644924,0462,715-6,667
    Quantity change14,049-3,296-1,878-2,1074,9506,905-2,506
    Price change2,472-2,6892,2422,600-905-4,190-4,161
    Year-end value57,24151,25751,62152,11356,15958,87352,206
    Sum of the above2
    Change in holdings73,04129,90441,90148,18822,83719,39962,431
    Quantity change95,60823,85331,64458,90125,67315,22567,581
    Price change-22,5676,05110,258-10,713-2,8354,174-5,150
    Year-end value386,875416,779458,680506,869529,706549,105611,536
    Total official holdings3
    Change in holdings92,04838,37550,75348,52631,71520,95062,499
    Year-end value455,837494,212544,965593,491625,206646,156708,655
    Note: Components may not sum because of rounding

    The currency composition of foreign exchange is based on the Fund’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quartetly change in the SDR value of the foreign exchange held at the end of two successive quaters and cumulating these different yields the effect of price changesover the years shown.

    Each item represents the sum of the eight currencies above.

    Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

    Although the U.S. dollar share of foreign exchange reserves fell in 1993 (Table I.2), the value of these holdings actually rose more than in 1992 and more than for any other identifiable currency (Table I.3). The share declined because there were relatively larger increases in the holdings of other currencies, especially the deutsche mark.

    The Bank for International Settlements in International Banking and Financial Market Developments (Washington, February 1992, p. 20) estimates that in September 1931, central bank deposits in the ECU market were about ECU 30 billion and that ECU 4-5 billion more was held in ECU securities.

    In calculating the value of the gold holdings of the EMCF in terms of ECUs, the ECU swap price is set equal to the tower of two values: the average of the prices recorded daily at the two London fixings during the previous six calendar months, and the average price at the two price fixings on the penultimate working day of the period.

    The quarterly swaps are arranged at the end of the first week of January, April. July, and October. Changes in the number of ECUs outstanding thus depend on the exchange rale and the gold price on these dates, whereas changes in the SDR value of ECU holdings are calculated at the SDR-ECU exchange rale ai the end of each quarter.

    APPENDIX II Financial Operations and Transactions of the Fund

    The tables in this appendix supplement the information given in the section on the Fund s financial operations and policies.

    Table II.15Members That Have Accepted the Obligations of Article VIII, Sections 2, 3, and 4 of the Articles of Agreement
    Effective DateEffective Date
    Memberof AcceptanceMemberof Acceptance
    Antigua and BarbudaNovember 22, 1983MalaysiaNovember11,1968
    ArgentinaMay14,1968Marshall IslandsMay21,1992
    AustraliaJuly1,1965
    AustriaAugust 1,1962MauritiusSeptember 29, 1993
    Bahamas, TheDecember5, 1973MexicoNovember 12, 1946
    Micronesia, Federated
    BahrainMarch20, 1973States ofJune24, 1993
    BangladeshApril 11, 1994MoroccoJanuary 21, 1993
    BarbadosNovember 3, 1993NepalMay 30, 1994
    BelgiumFebruary 15, 1961
    BelizeJune 14,1983NetherlandsFebruary 15, 1961
    June 14,1983New ZealandAugust 5,1982
    BoliviaJune 5, 1967NicaraguaJuly 20,1964
    CanadaMarch 25, 1952NorwayMay 11, 1967
    ChileJuly 27, 1977OmanJune 19, 1974
    Costa RicaFebruary 1, 1965
    CyprusJanuary 9, 1991PakistanJuly 1, 1994
    PanamaNovember 26, 1946
    DenmarkMay 1, 1967Papua New GuineaDecember 4, 1975
    DjiboutiSeptember 19, 1980PeruFebruary 15, 1961
    DominicaDecember 13,1979PortugalSeptember 12, 1988
    Dominican RepublicAugust 1, 1953
    EcuadorAugust 31, 1970OatarJune 4, 1973
    St. Kitts and NevisDecember 3, 1984
    El SalvadorNovember 6, 1946St. LuciaMay 30, 1980
    FijiAugust 4, 1972St. Vincent and the
    FinlandSeptember 25, 1979GrenadinesAugust 24, 1981
    FranceFebruary 15, 1961San MarinoSeptember 23, 1992
    Gambia, TheJanuary 21, 1993Saudi Arabia
    March 22, 1961
    GermanyFebruary 15, 1961SeychellesJanuary 3, 1978
    GhanaFebruary 21, 1994SingaporeNovember 9, 1968
    GreeceJuly 7, 1992Solomon IslandsJury 24, 1979
    GrenadaJanuary 24, 1994South AfricaSeptember 15, 1973
    GuatemalaJanuary 27, 1947
    SpainJury15,1986
    GuyanaDecember27,1966
    HaitiDecember 22, 1953Sri LankaMarch 15, 1994
    HondurasJuly 1, 1950SurinameJune 29, 1978
    IcelandSeptember 19, 1983SwazilandDecember 11, 1989
    IndonesiaMay 7, 1988SwedenFebruary 15, 1961
    IrelandFebruary 15, 1961SwitzerlandMay 29, 1992
    IsraelSeptember 21, 1993ThailandMay 4, 1930
    ItalyFebruary 15, 1961TongaMarch 22, 1991
    JamaicaFebruary 22, 1963Trinidad and TobagoDecember 13, 1993
    JapanApril 1, 1964TunisiaJanuary 6, 1993
    KenyaJune 30, 1994TurkeyMarch 22, 1990
    KiribatiAugust 22, 1986UgandaApril 5, 1994
    KoreaNovember 1, 1988United Arab EmiratesFebruary 13, 1974
    KuwaitApril 5, 1963United KingdomFebruary 15, 1961
    LatviaMay 3, 1994United StatesDecember 10, 1946
    LebanonJuly 1, 1993UruguayMay 2, 1980
    LithuaniaJune 10, 1994VanuatuDecember 1, 1982
    LuxembourgFebruary 15, 1961VenezuelaJuly 1, 1976
    Note-This table includes acceptances receivedthrough June 30,1994.
    APPENDIX III Technical Assistance and Training, Relations with Other International Organizations, and External Relations

    Technical Assistance and Training

    Technical assistance and training are extended by the Fund to members in a wide range of economic and financial areas, either at Fund headquarters or through staff missions to a member country. Staff from almost every department and bureau of the Fund may be provided in response to a member’s request. Assistance may relate to a whole range of subjects, including economic policy, balance of payments adjustments programs, legal matters, debt management, exchange and trade issues, financial sector topics, accounting, statistics, and data processing.

    Fiscal Affairs Department

    Much of the Fiscal Affairs Department technical assistance has been directed at supporting countries’ efforts in connection with Fund-supported structural adjustment programs. The department also is involved in providing technical assistance as part of major United Nations Development Program (UNDP) and World Bank projects. The pattern of activity in the Baltic countries. Russia, and other countries of the former Soviet Union has moved from an initial wave of assistance that provided general advice on a broad range of topics to more narrowly focused missions that provided specific advice as well as the assignment of long-term experts to implement reform. This specificity in technical assistance is expected to continue, especially with regard to institution-building projects on treasury systems, tax administration, and social safety nets.

    IMF Institute

    The IMF Institute trains officials from member countries and prospective members through courses and seminars at headquarters, at the Joint Vienna Institute, and in regional or national centers. Courses in Washington are offered in Arabic, English, French, and Spanish: in Vienna in English, with Russian interpretation, and French; and in other overseas locations with interpretation into local languages, as needed. The Institute also arranges scholarships to train younger officials at universities in Japan and Australia, and it gives lecturing assistance to other regional or national training institutions. Institute staff also organize briefings at headquarters for visiting officials.

    During 1993/94, training at headquarters consisted of 13 courses and 2 seminars for senior officials, attended by 515 participants. The program included six 10-week courses on financial programming and policy, two 10-week and one 8-week courses on techniques of financial analysis and programming, one 10-week course on programming and policies for medium-term adjustment, and one 5-week course on external sector policies. The financial programming and policy course covered financial programming and adjustment issues for officials with substantial macroeconomic background and practical experience; the course on techniques of financial analysis and programming provided a review of similar issues for relatively junior officials; technical and policy aspects of medium-term adjustment programs were emphasized in the course on programming and policies for medium-term adjustment, while the external sector policies course gave senior- and mid-level officials a deeper understanding of the issues involved in formulating such policies in the context of a macroeconomic framework for adjustment and growth. One 4-week course was presented in collaboration with the Statistics Department on government finance statistics, and an 8-week course on public finance was presented in collaboration with the Fiscal Affairs Department. Seminars for senior officials were held on central banking in collaboration with the Monetary and Exchange Affairs Department and on the coordination of structural reform and macroeconomic stabilization.

    The Joint Vienna Institute, run in cooperation with four other international organizations and with help from Austria and a number of other national donors, began offering in 1993/94 a comprehensive economic training program lasting several months for younger officials, in addition to the shorter courses and seminars on specialized subjects presented by individual agencies. It trains officials and some private sector managers from former centrally planned economies of Eastern Europe, the Baltic countries, Russia, other countries of the former U.S.S.R., and Asia that are in transition to market systems. IMF training at the Vienna Institute during 1993/94 was at more than twice the level of 1992/93 in terms of courses and participants. It consisted of 16 courses and 1 module in the comprehensive course, attended by 520 participants. The program included one 2-week course on public expenditure and one 2-week course on fiscal policy management (in collaboration with the Fiscal Affairs Department), one 1-week course on foreign exchange and related issues, and one 2-week course on bank supervision (in collaboration with the Monetary and Exchange Affairs Department), one 3-week course on balance of payments statistics, one 3-week course on money and banking statistics, and one 3-week course on government finance statistics (in collaboration with the Statistics Department), three 3-week courses on basic economics, two 6-week courses on macroeconomic and financial policies, two 6-week courses on macroeconomic analysis and policy, one 3-week course on the same subject in French, and one 2-week module on macroeconomic policy.

    In addition to residential training courses in Washington and Vienna, the Institute conducted 28 overseas courses and 7 seminars for high-level officials and provided lecturing assistance on 6 occasions to 5 training organizations. The Institute also organized 17 briefings at headquarters for a total of 343 visiting officials from member countries. Except for staff and teaching materials provided by the Institute, costs of overseas training are increasingly covered either by local partners or through cofi-nancing arrangements with other collaborating institutions and national authorities, including the UNDP, the European Union, and Japan.

    The Japan-IMF Scholarship Program for Asia, financed by the Japanese authorities, was launched with the arrival of seven young officials at Saitama University (near Tokyo) in September 1993 and two at the Australian National University, Canberra, in early 1994. The program is designed to train young officials from economies in transition for a period of about one year, following which some are assigned to internships in the region.

    The Institute, in cooperation with the Research Department, has also been conducting an internal training program for Fund economists. Six internal training courses and seminars took place in fiscal year 1994, attended by some 270 economists. The Institute also provides briefings for official visitors to Fund headquarters, and hosts visits by individual special participants (normally senior officials who are attached to Fund departments for short periods).

    Legal Department

    During the fiscal year, the Legal Department continued to meet an increasing demand from member countries for assistance in drafting monetary, fiscal, and foreign exchange legislation. This continued demand reflects an increased awareness that economic stability and development require the support of an appropriate legal system.

    Although the Legal Department focuses its technical assistance working on banking, fiscal, and foreign exchange law, it has recently expanded its work to include bankruptcy and foreign investment law. In the areas of banking and foreign exchange legislation, legal assistance has included central bank and commercial banking law and exchange control regulation. In carrying out these tasks, the Legal Department cooperates closely with the area departments and the Monetary and Exchange Affairs Department so as to ensure that the legal services—especially the drafting of legislation—accommodate and reflect sound policy objectives. The work in bankruptcy law results from requests for this essential element of commercial law for economies in transition. The work on foreign investment law has related to both foreign direct investment and external debt.

    In fiscal law, the work of the department has included corporate and personal income tax, value-added tax, tax administration, and customs laws. The department works closely with area departments and the Fiscal Affairs Department in helping countries translate policy decisions into law.

    To function effectively, a legal system must include not only adequate legislation but also an efficient institutional infrastructure for the administration of the law, including, for instance, a competent and independent judiciary, qualified legal practitioners, and registers for companies, banking licenses, collateral rights, and judgments. Accordingly, although drafting of banking, fiscal, and foreign exchange law has remained the principal area of assistance by the Legal Department, increasing attention is given to the need to extend legal assistance beyond the drafting of legislation to the establishment of institutions and procedures that can ensure the proper functioning of the legislation. The need for such extended legal assistance is particularly felt in the economies in transition. The Legal Department addresses these areas of need in close consultation with the legal staffs of other international organizations, such as the World Bank and the European Bank for Reconstruction and Development (EBRD), in order to arrive at a reasonable division of technical assistance tasks and to avoid duplication of work.

    The Legal Department provides assistance to member countries partly from headquarters and partly during missions. In providing this assistance, the Legal Department draws on its staff as well as on outside legal experts. During the fiscal year, staff and experts traveled for the Legal Department on 42 missions to 26 different member countries. In addition, members of the department participated in several seminars and workshops in which technical assistance was provided to a number of countries under the sponsorship of the Fund, other international organizations, and central banks.

    Monetary and Exchange Affairs Department

    The Monetary and Exchange Affairs Department’s 1993/94 technical assistance program continued to reflect its intensive and comprehensive assistance efforts in the Baltic countries. Russia, other countries of the former Soviet Union, and Eastern Europe; these efforts accounted for about 46 percent of all advisory missions and about half of all expert trips. The program of subject-specific technical assistance workshops for the Baltic countries, Russia, and other countries of the former Soviet Union proved to be highly successful in improving the effectiveness of technical assistance in this region. The combination of technical assistance and skill development in the workshop format provides increased opportunities for the cross-fertilization of ideas and strategies, for interactive learning, and for gathering information that can facilitate the subsequent implementation of reforms. Although a broad range of subjects was covered in the assistance provided to this region, particular focus has been given to monetary policy operations, banking supervision, new currency issues, foreign exchange operations, payment and settlement systems, and accounting. During 1993/94, long-term experts were resident in Kazakhstan (two), the Kyrgyz Republic (two), Latvia, Lithuania (two), Moldova, the Russian Federation (two), Turkmenistan, and Ukraine.

    As in the past, the department’s technical assistance program relied on a large number of outside experts, many of them drawn from the cooperating central banks; these banks support comprehensive programs of technical assistance in many countries, notably, in the Baltic countries, Russia, and other countries of the former Soviet Union. Assistance was provided in 1993/94 by 297 outside experts whose total time amounted to 70-person years. Of this total, approximately 46 expert years (66 percent) were provided by 78 long-term experts residing in member countries. The remaining 24 expert years of assistance were provided by 219 experts who accompanied departmental missions or made separate, short visits organized by the department. External financing—from the UNDP, the Japan Administered Account (JAA), and the World Bank—increased in 1993/94 and accounted for about 25-person years (36 percent) of expert time compared with 17-person years (24 percent) in 1992/93.

    Activities relating to the coordination of technical assistance with cooperating central banks and other multilateral and bilateral institutions increased sharply in the second half of 1993/94. The scope and frequency of coordination meetings were increased, in part owing to the intensified collaboration with other multinationals in providing financial sector technical assistance in the Baltic countries, Russia, and other countries of the former Soviet Union. The department has assumed a major coordinating role in the reforms of the Russian payment system, involving the mobilization and supervision of a large volume of parallel assistance (from the EU, OECD, IBRD, and EBRD) in addition to direct assistance provided by the IMF with the support of four cooperating central banks.

    Efforts to leverage project specific parallel assistance from multiple donors also intensified in 1993/94, growing to 16 expert assignments in 10 countries and with 9 organizations. Some eight years of expert time were managed and supervised by the department through these parallel arrangements.

    In 1993/94, the department intensified its efforts to integrate analysis, review, and jurisdiction functions of the department with technical assistance. It sought to ensure consistency in policy advice on monetary and exchange rate issues across the membership and also to integrate the technical assistance work on the institutions of monetary and exchange management within the overall structure of Fund programs.

    Operational research on structural issues in the transition to indirect instruments of monetary management was intensified in 1993/94. The department continued to improve and update its legislation data bank, which contains banking laws from some 150 countries.

    Statistics Department

    The technical assistance activities of the Statistics Department showed a further increase during fiscal year 1994. The department conducted 152 technical assistance missions, 13 of which were multitopic, to 60 countries. By comparison, in fiscal year 1993 it conducted 143 technical assistance missions, 17 of which were multitopic, to 71 countries.

    The increase in the number of missions was mainly in support of the continuing needs of countries in transition that are still adapting their statistical systems to better serve economic analysis and policy in a market economy. Eastern Europe, the Baltic countries, Russia, and other countries of the former Soviet Union received about 68 percent of all technical assistance provided by the department during the year compared with 47 percent in fiscal year 1993. This level of technical assistance involved 176 trips by staff, headquarters-based consultants, and outside experts on 103 missions. Only 5 of these missions were multitopic, compared with 11 such missions in fiscal year 1993, reflecting the need for follow-up work in specific areas of statistics after the diagnostic missions conducted in recent years.

    In addition to this effort in the transition economies, the Statistics Department increased its level of technical assistance to other member countries, in particular to those that were actual or prospective users of Fund resources or whose statistical infrastructure was at an early stage of development. There were 49 missions to these countries in fiscal year 1994, compared with 76 missions in the previous fiscal year.

    The department’s technical assistance activities were again principally concentrated in the areas of monetary, balance of payments, and government finance statistics, which together accounted for about 80 percent of the total technical assistance provided during fiscal year 1994. In addition, partly in response to the operational needs of the Fund, the department continued to field missions to the Baltic countries, Russia, and other countries of the former Soviet Union on consumer price statistics and national accounts and started work on the development of producer price indices.

    The provision of technical assistance in fiscal year 1994 continued to depend on an increasing number of outside experts for both short-term and medium- and long term assignments. Over half of the projects using such experts were financed with resources provided by the Japanese Government under the Japan Administered Account. During the year, there were 268 active expert assignments, 6 of which were long-term, involving some 30 countries. About 36 expert assignments during fiscal year 1994 were financed under the Japan Administered Account program, and 2 under the Executing Agency Agreement with the UNDP. In addition, a significant amount of technical assistance was provided through participation of staff of the Statistics Department in 18 missions of other departments. 6 of which were to Russia and other countries of the former Soviet Union.

    The Statistics Department continued to offer training to national statisticians on statistical methodologies and their application, mainly through courses at the IMF Institute at Fund headquarters and at the Joint Vienna Institute. In fiscal year 1994, the department conducted a seminar on government finance statistics in China, courses on money and banking and balance of payments statistics at the Arab Monetary Fund, and a balance of payments seminar at the headquarters of the Central Bank of West Africa States (BCEAO). In addition, the department contributed to regional seminars on financial accounts, price statistics, and national accounts organized in cooperation with the OECD and EUROSTAT for the Baltic countries, Russia, and other countries of the former Soviet Union.

    Treasurer’s Department

    Technical assistance requests received by the Treasurer’s Department are in areas related to members’ financial relations with the Fund. The demand for such assistance—on the establishment and maintenance of the Fund accounts, the Fund’s financial organization and operations, and the conduct of transactions by members with the Fund—remained at a relatively high level in 1993/94, mainly reflecting the unfamiliarity with Fund financial transactions and accounting practices of new members and members that previously have not had extensive relations with the Fund.

    A total of seven missions were sent for periods of one to two weeks in 1993/94, of which all but one were single-person missions. Five of these missions went to member countries whose economies are moving from centrally planned to more marketdetermined systems and covered such areas as accounting for Fund-related assets and liabilities and a member’s position in the Fund, the Fund’s financial structure and organization, recording and reporting on financial operations and transactions with the Fund, and the Fund’s operational budget. Seminars and technical workshops were conducted for officials of the central banks and finance ministries of these countries, and in some cases working groups were established to ensure the involvement of all staff concerned.

    A staff member from the department participated in a seminar at the Joint Vienna Institute to introduce officials from central banks of the Baltic countries, Russia, and other countries of the former Soviet Union to a proposed chart of accounts for central banks and to accounting for a member’s position in the Fund in the balance sheet of the central bank. In response to a request from a member country in Latin America, the department provided technical assistance advice on internationally accepted practices for accounting for a central bank’s international reserves and on methods of valuation of those reserves.

    Several aide-memoire on specific accounting questions raised by new members of the Fund were prepared by Treasurer’s Department staff in 1993/94.

    Bureau of Computing Services

    The Bureau of Computing Services (BCS) provides limited technical assistance in electronic data processing to member countries in direct support of the economic and financial work of the Fund. These missions provide narrowly focused advice on planning and developing systems for the automation of economic and financial time-series data bases, guidance on the computerization of fiscal and administrative policy and planning, and assisting with the automation in central banking operations, tax administration, budgeting, customs, and treasury operations.

    With many member countries now developing computer systems to process, analyze, and manage economic, financial, and administrative information, and with the continued rapid advancement and changes taking place in technology, it is anticipated that member countries will look more toward the Fund for overall guidance in the development of capabilities to collect, store, process, and exchange data and documents. Such guidance is likely to include advice on data organization and management, statistical processing, and estimation and modeling. In order to accommodate the rise in demand for computer expertise, the BCS technical assistance program has been somewhat expanded. Additional funding under the auspices of the Japan Administered Account has provided for several short-term expert visits to Viet Nam, the Lao People’s Democratic Republic, and Tanzania. Since overall budgetary and staff resources will continue to be limited, the BCS will focus its technical assistance automation efforts on those areas deemed necessary to facilitate the economic missions of the Fund and that specialize in the Fund’s areas of expertise.

    During the past financial year, the BCS continued to receive a large number of delegations and visitors from member countries and from international and regional institutions for training in computer technology. Training courses, lectures, briefings, presentations, and demonstrations were given to visitors on numerous technology topics and information-processing application systems Efforts were directed to further the collaboration with member countries in the sharing and exchange of information technology and electronic data and documents. The visits ranged from several days to one month. They covered aspects such as data administration, data base management systems, statistical analysis and data modeling, financial processing and reporting, office automation, guidance on strategic planning, communication, and networking to provide easy access and sharing of information, training curriculum and support for end users, and policy and planning of electronic data processing (EDP) systems. Visiting officials were particularly interested in the newer technology such as client server systems and data communications networks that provide sharing and exchange between the Fund and its member countries. The number of delegations requesting to visit the BCS for technology discussions and training is expected to increase substantially in the coming year.

    Relations with Other International Organizations

    The Fund continuously maintains close relations with other international and regional institutions that share common interests and goals. Recently, cooperation with these organizations has focused not only on international monetary and financial matters, but on environmental issues as well. Fund staff work closely with the United Nations, the General Agreement on Tariffs and Trade (GATT), the Organization for Economic Cooperation and Development, the European Commission, the Bank for International Settlements (BIS), and several other organizations.

    Maintaining contacts with these organizations is the responsibility of the three offices of the Fund located away from headquarters. The Director of the Fund Office in the United Nations and Special Representative to the United Nations is responsible for the collaborative relationship with the UN and its specialized agencies. The activities of the Office in Europe, which is located in Paris, are directed toward maintaining the Fund’s relations with the BIS, the European Commission, and the OECD, while the Geneva Office monitors, reports on, and analyzes the activities of such institutions as the GATT, the UN Conference on Trade and Development (UNCTAD), the UN Conference on Environment and Development (UNCED), and other Geneva-based organizations. As the need arises, staff and technical experts from headquarters are assigned to supplement the work of these offices and to provide operational linkages. Other forums, meetings, and seminars, such as those of the regional economic and financial organizations in Africa, Asia and the Pacific, Latin America and the Caribbean, and the Middle East, including the regional development banks, are also attended by Fund staff.

    From its inception almost fifty years ago, the Fund has enjoyed a close affiliation with the World Bank. Collaboration between the two institutions involves joint participation in missions, attendance at each other’s Executive Board meetings and seminars, joint preparation of policy framework papers and papers on the environment, and regular exchange of documents and information. Aid coordination meetings including Aid Groups, Consultative Groups, and Donors Conferences held under the auspices of the World Bank are regularly attended by Fund staff.

    The accelerated activities in the GATT’s Committee on Balance of Payments Restrictions enhanced the Fund’s involvement in various cooperative arrangements. Staff continue to represent the Fund at the sessions of the GATT Council of Representatives, the Contracting Parties to the GATT, and several standing GATT committees, and also continue to provide relevant documents. The Geneva Office and other Fund staff closely monitored and analyzed issues and developments of the Uruguay Round of Multilateral Trade Negotiations, which concluded on December 15, 1993. The Managing Director welcomed the successful conclusion of these negotiations and expressed the Fund’s interest in a collaborative relationship with the World Trade Organization established under the Round. Plans are now under way for developing that relationship, and the Fund is examining the various trade and environmental issues that will result from the establishment of the World Trade Organization.

    The Fund, as one of the sponsoring institutions, has actively participated in the endeavors of the Joint Vienna Institute (JVI). The JVI is a cooperative venture whose purpose is to provide training to former centrally planned economies in transition to market-based systems. It offers a wide variety of courses in economic and financial management and public administration for policy advisors, their staff, training officers, and private sector executives from countries of Central and Eastern Europe and the Baltic countries, Russia, and other countries of the former Soviet Union, as well as from other former centrally planned economies in Asia. In addition to the Fund, the other sponsors of the JVI are the BIS, the EBRD, the OECD, and the World Bank.

    The Managing Director’s important role in maintaining relations with other international and regional organizations is underscored by his participation in meetings and seminars, most notably those of the United Nations, where he addressed the High-Level Meeting of the Economic and Social Council (ECOSOC) in Geneva on June 29, 1993. In April 1994, he attended meetings of the UN Administrative Committee on Coordination (ACC) in Geneva. He participated in the OECD ministerial meeting, which was held in Paris on June 2-3, 1993, and the BIS Central Bank Governors’ Meeting in Basle on July 12, 1993. The Managing Director addressed the Fifth Inter-sessional Meeting of CARICOM Heads of Government in St. Vincent and the Grenadines on March 11, 1994.

    External Relations

    The role and the functions of the Fund came under intense public scrutiny during the year as it provided policy advice and technical assistance to the countries in transition, assisted countries in the CFA franc zone to develop appropriate policies in the wake of the devaluation of the CFA franc in January 1994, and adjusted to calls for more transparency in its operations from both official and nonofficial quarters. To meet these demands, the Fund continued to expand its efforts to explain its work and policies to an ever-growing audience.

    The work of the Fund in assisting the countries of Central Europe and the Baltic countries, Russia, and other countries of the former Soviet Union generated an unprecedented amount of attention for the Fund, as did its efforts to enlarge and expand the enhanced structural adjustment facility (ESAF) for its low-income members. In order to explain these developments to the general public, the Managing Director, the Deputy Managing Director, and senior staff delivered speeches on a wide range of domestic, regional, and global economic issues to both international and national forums. At the same time, to respond to demands for more transparency about the work of the Fund, on-the-record interviews were given to a broad spectrum of media outlets, both printed and electronic. Moreover, Fund staff members delivered papers and participated in a wide range of conferences, seminars, and symposiums. A seminar for nonofficials on “Macroeconomic Structural and Social Policies for Growth: The Evolving Latin American Experience,” was held in Mangaratiba, Brazil, in March 1994; and two regional press seminars were held, in Accra for the West African press and in Vienna for the Central European press.

    Meanwhile, the Fund’s contacts with the international news media expanded rapidly during the year, with continued emphasis on the economies in transition. Management and senior staff actively developed these contacts through interviews, press conferences, and briefings to the press both at headquarters and in the field, to explain major issues and developments. At headquarters and during field missions, staff made presentations on the role and work of the Fund to representatives of the press and to academic, labor, political, and nongovernmental groups in Africa, Europe, Latin America, North America, and the Baltic countries, Russia, and other countries of the former Soviet Union. As of the end of the financial year, more than two hundred staff members had taken media training courses to prepare themselves for press relations, both at Fund headquarters and overseas.

    During the fiscal year, the Fund strengthened its relations with nongovernmental organizations, the U.S. Congress, research institutes, private businesses, labor unions, and universities. A number of economic forums and international seminars were held at the IMF Visitors’ Center. A seminar on macroeconomic policy and the environment brought together representatives of leading environmental organizations to discuss the interrelationship between environmental matters and macroeconomic policy.

    Publications

    During the financial year 1993/94, the Fund’s publications program continued at a high level. These publications constitute an important vehicle through which the Fund informs the membership and the public at large of its activities and of related monetary and financial issues. In addition to the substantial program of publications in English, a large number of publications were also translated into Russian for distribution in the Baltic countries, Russia, and other countries of the former Soviet Union. Others were made available in Chinese translation for distribution in China through a cooperative arrangement with the China Financial Publishing House.

    The World Economic Outlook was published twice during the year in English, French, Spanish, and Arabic editions Effective with the May 1993 edition. this publication was redesigned in a four-color format. Other publications issued in the series of World Economic and Financial Surveys included background studies for the World Economic Outlook, studies of international capital markets, international trade developments, and private and official capital flows to developing countries.

    Eight Occasional Papers were published during the year, covering such topics as developments in individual member countries, central bank credit, the world gold market, and the experience of countries with programs under the ESAF.

    The Economic Reviews series, which was launched in 1992 with the publication of studies of the economies of the Baltic countries, Russia, and other countries of the former U.S.S.R., was broadened to include other country studies. The first of these, on Nepal, was published in December 1993. A number of the studies were translated into Russian.

    The IMF Survey published a special supplement (in English and French) on the realignment of the CFA franc and the economic growth strategy of the franc zone members. Also, an Arabic edition of the IMF Survey Supplement was introduced (in addition to the existing editions in English, French, Spanish, and Russian).

    In the statistical field, a ten-year effort by five international agencies came to fruition with the publication in December 1993 of the System of National Accounts. The Fund played an active role in the management and drafting of this publication, and in organizing meetings of experts on this subject.

    Under the program of marketing Fund publications, special attention was given to promoting the World Economic Outlook and related publications and to expanding the distribution of statistical information on CD-ROM format. A complete list of publications issued during the financial year appears in Table III.1.

    Table III. 1Publications Issued, Financial Year Ended April 30, 1994
    • Reports and Other Documents

    • Annual Report of the Executive Board for the Financial Year Ended April 30. 1993

    • (English. French. German, and Spanish). Free.

    • Articles of Agreement of the International Monetary Fund 1993 edition (English, French, and Spanish). Free.

    • By-Laws, Rules and Regulations

    • Fiftieth Issue (English, French, Spanish). Free.

    • Exchange Arrangements and Exchange Restrictions, Annual Report 1993

    • $70.00 ($35.00 to full-time university faculty members and students).

    • Selected Decisions of the International Monetary Fund and Selected Documents, Eighteenth Issue (English). Free.

    • Summary Proceedings of the Forty-Eighth Annual Meeting of the

    • Board of Governors

    • Free.

    • Periodic Publications

    • Balance of Payments Statistics Yearbook Vol. 44. A two-part yearbook. $56.00 a year.

    • Direction of Trade Statistics

    • Quarterly, with yearbook. $96.00 a year. $48.00 to full-time university faculty members and students. $30.00 for yearbook only.

    • Government Finance Statistics Yearbook

    • Vol. 17, 1993. (Introduction and titles of lines in English, French,

    • and Spanish) $54.00.

    • International Financial Statistics

    • Monthly, with yearbook (English, French, and Spanish). $218.00 a year. $109.00 to full-time university faculty members and students $50.00 for yearbook only.

    • Staff Papers

    • Four times a year. $50.00 a year. $25.00 to full-time university faculty members and students.

    • The five publications listed above may be obtained at a special rate of $330.00 ($165.00 to full-time university faculty members and students).

    • Magnetic tape subscriptions to Balance of Payments Statistics Yearbook, Direction of Trade Statistics, Government Finance Statistics Yearbook, and International Financial Statistics are also available. International Financial Statistics is also available on CD-ROM. Price information is available on request.

    • The IMF Committee on Balance of Payments Statistics, Annual Report 1993

    • Finance and Development

    • Issued jointly with the World Bank: quarterly (English, Arabic, Chinese, French, German, Portuguese, and Spanish). Free. Airspeed delivery, $20.00.

    • IMF Survey

    • Twice monthly, but only once in December (English, French, and Spanish). Private firms and individuals are charged at an annual rate of $79.00.

    • Occasional Papers

    • No. 104. Price Liberalization in Russia: Behavior of Prices, Household Incomes, and Consumption During the First Year By Vincent Koen and Steven Phillips.

    • No. 105. The Structure and Operation of the World Gold Market By Gary O’Caliaghan.

    • No. 106. Economic Adjustment in Low-Income Countries: Experience Under the Enhanced Structural Adjustment Facility (English and French)

    • By Susan Schadler, Franek Rozwadowski, Siddharth Tiwari, and David O. Robinson.

    • No. 107. China at the Threshold of a Market Economy

    • By Michael W. Bell, Hoe Ee Khor, and Kalpana Kochhar, with

    • Jun Ma, Simon N’guiamba, Rajiv Lall.

    • No. 108. Recent Experiences with Surges in Capital Inflows By Susan Schadler, Maria Carkovic, Adam Bennett, and Robert Kahn.

    • No. 109. The Path to Convertibility and Growth: The Tunisian Experience

    • By Saleh M. Nsouli, Sena Eken, Paul Duran, Gerwin Bell, and Zuhtu Yucelik.

    • No. 110. Limiting Central Bank Credit to the Government: Theory

    • and Practice

    • By Carlo Cottareili.

    • No. 111. The Russian Federation in Transition: External Developments

    • By Benedicte Vibe Christensen.

    • Occasional Papers No 80-86 are available (or $10.00 each, with a special price of $7.50 each to full-time university faculty members and students, and Nos. 90-111 are $15.00 each, with a special price of $12.00 each to full-time university faculty members and students.

    • World Economic and Financial Surveys

    • World Economic Outlook: A Survey by the Staff of the

    • International Monetary Fund

    • (May 1993) (Arabic, English, French, and Spanish).

    • $30.00 ($20.00 to full-time university faculty members and

    • students).

    • World Economic Outlook: A Survey by the Staff of the International Monetary Fund

    • October 1993) (Arabic, English, French, and Spanish). $30.00 ($20.00 to full-time university faculty members and students).

    • World Economic Outlook: A Survey by the Staff of the

    • International Monetary Fund

    • (May 1994) (Arabic, English, French, and Spanish).

    • $34.00 ($23.00 to full-time university faculty members and

    • students).

    • Private Market Financing for Developing Countries

    • By a Staff Team in the Policy Development and Review

    • Department led by Charles Collyns.

    • $20.00 ($12.00 to full-time faculty members and students)

    • International Capital Markets, Part II: Systemic Issues in International Finance

    • By a Staff Team led by Morris Goldstein and David Folkerts-Landau.

    • $20.00 ($12.00 to full-time faculty members and students).

    • Official Financing for Developing Countries

    • By a Staff Team in the Policy Development and Review

    • Department led by Michael Kuhn.

    • $20.00 ($12.00 to full-time faculty members and students).

    • Books

    • Building Sound Finance in Emerging Market Economies

    • Edited by Gerard Caprio, David Folkerts-Landau, and Timothy D.

    • Lane.

    • $27.50.

    • Current Legal Issues Affecting Central Banks, Vol. 2

    • Edited by Robert C. Effros.

    • $42.50.

    • Economic Development of the Arab Countries: Selected Issues

    • Edited by Said El Naggar.

    • $22.00.

    • Fiscal Policies in Economies in Transition (English and Russian)

    • Edited by Vito Tanzi.

    • $24.50.

    • How to Measure the Fiscal Deficit

    • Edited by Mario I. Blejer and Adrienne Cheasty.

    • $22.50.

    • The Payment System: Design, Management, and Supervision

    • Edited by Bruce J. Summers.

    • $22.50.

    • Public Expenditure Management (Russian edition)

    • By A. Premchand.

    • $20.00.

    • Transition to Market: Studies in Fiscal Reform

    • Edited by Vito Tanzi.

    • $30.00.

    • IMF Economic Reviews: 1993

    • No. 2. Moldova (Russian)

    • No. 4. Estonia (English and Russian)

    • No. 5. Kazakhstan (English)

    • No. 6. Latvia (English)

    • No. 7. Lithuania (English)

    • No. 8. Russian Federation (English and Russian)

    • No. 9. Georgia (English)

    • No. 10. Ukraine (English and Russian)

    • No. 11. Belarus (English)

    • No. 12. Kyrgyz Republic (English)

    • No. 13. Nepal (English)

    • IMF Economic Reviews: 1994

    • No. 1. Financial Relations Among Countries of the Former

    • Soviet Union (English) No. 2. Trade Policy Reform in the Countries of the Former

    • Soviet Union (English) No. 3. Turkmenistan (English) No. 4. Uzbekistan (English)

    • The Economic Reviews are $15.00 each.Pamphlets

    • No. 45. Financial Organization and Operations of the IMF By the Treasurer’s Department. Third edition. (English). Free.

    • Booklets

    • The Baltic States in Transition

    • By John M. Starrels (English, French, Spanish). Free.

    • The IMF Support for African Adjustment Programs: Questions and Answers

    • By F.L. Osunsade (English, French, Spanish). Free.

    • The IMF and International Cooperation for Growth By Michel Camdessus (English, French, Spanish). Free.

    • Copies of the Fund’s publications may be obtained from Publication Services, International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Telephone (202)623-7430 Telefax (202)623-7201

    APPENDIX IV Principal Policy Decisions of the Executive Board

    A. Access Policy—Guidelines on Access Limits—Review

    Pursuant to Decision No. 10181 (92/132),1 adopted November 3, 1992, the Fund has reviewed the guidelines and the access limits for access by members to the Fund’s general resources under the credit tranches and the extended Fund facility, and decides that they remain appropriate in the present circumstances.

    Decision No. 10500-(93/148)

    October 27, 1993

    B. Debt- and Debt-Service-Reduction Operations—Early Repurchase Expectations—Amendment

    • The introductory paragraph of Decision No. 9331-(89/167),2 adopted December 19, 1989, as amended, is amended to read as follows:

      In the context of the guidelines on the role of the Fund in the debt strategy, the Fund adopts the following decision on expectations of early repurchase by members with respect to purchases of additional resources under stand-by or extended arrangements or amounts set aside under such arrangements for use in debt- and debt-service-reduction operations involving (i) debt reduction, (ii) interest support, or (iii) collateralization of principal in reduced interest par bond exchanges.

    • Section A, paragraph 1 is amended to read as follows:

      Whenever the Fund approves a member’s request for purchases of additional resources or amounts set aside under a stand-by or extended arrangement pursuant to the Fund’s guidelines on the role of the Fund in the debt strategy, the Fund shall specify in the decision approving the request the purposes for which, and the period of time within which, such set-aside amounts or additional resources can be used.

    • Section B, paragraph 4(a) is amended to read as follows:

      If the program of a member that has previously made accelerated purchases of amounts set aside under a stand-by or extended arrangement is off track on the date a purchase becomes available under the phasing provision in the arrangement, and is not back on track within 90 days after that date, the Managing Director shall report the matter to the Executive Board promptly after the expiration of the 90-day period.

    • A new paragraph 11 shall be added to Section C, to read as follows (the paragraphs of Section D to be renumbered accordingly):

      For purposes of this Section, and with respect to Fund resources made available in accordance with the amended guidelines on the role of the Fund in the debt strategy…, in cases where debt or debt-service reduction operations include the establishment of a collateral, any portion of the collateral that has not been financed from additional resources from international financial institutions other than the Fund shall be deemed to be financed first from additional resources from the Fund and, subsequently, from other resources.

      Decision No. 10547-(94/1)

      January 7, 1994

    C. Fund’s Income Position

    (a) Burden Sharing—Implementation During the First Quarter of FY 1995

    Section I. Principles of “Burden Sharing”

    1. The financial consequences for the Fund which stem from the existence of overdue financial obligations shall be shared between debtor and creditor member countries.

    2. The sharing shall be applied in a simultaneous and symmetrical fashion.

    Section II. Determination of the Rate of Charge

    1. During the first quarter of financial year 1995, the rate of charge for financial year 1995 referred to in Rule 1-6(4) shall be adjusted in accordance with the provisions of Section IV.

    2. When estimating income for purposes of Rule I-6(4)(a) and (b), no projection shall be made of deferred income. The calculation of actual net income under Rule I-6(4)(b) shall include the proceeds of adjustments for deferred income under Section IV, paragraph 2.

    Section III. Amount for Special Contingent Account

    An amount equivalent to 1.25 percent of the Fund’s reserves at the beginning of the financial year shall be generated during the first quarter of financial year 1995 in accordance with the provisions of Section IV, and shall be placed to the Special Contingent Account 1 referred to in Decision No. 9471-(90/98),3 adopted June 20, 1990.

    Section IV. Implementation of Burden Sharing

    1. During the first quarter of financial year 1995, notwithstanding Rule 1-6(4)(a) and (b) and Rule 1-10, the rate of charge referred to in Rule 1-6(4) and the rate of remuneration prescribed in Rule M0 shall be adjusted in accordance with the provisions of this Section.

    2. (a) In order to generate the amount to be placed to the Special Contingent Account 1 in accordance with Section III, the rate of charge, and, subject to the limitation in (c), the rate of remuneration, shall be adjusted in accordance with the provisions of this paragraph, so as to produce equal amounts of income.

    (b) If income from charges becomes deferred during the adjustment period as defined in (d), the rate of charge and, subject to the limitation in (c), the rate of remuneration, shall be further adjusted, in accordance with the provisions of this paragraph, so as to generate, in equal amounts, an additional amount of income equal to the amount of deferred charges. For the purposes of this provision, special charges on overdue financial obligations under Decision No. 8165-(85/189) G/TR,4 adopted December 30, 1985. as amended, shall not be taken into account.

    (c) No adjustment in the rate of remuneration under this paragraph shall be carried to the point where the average remuneration coefficient would be reduced below 85 percent for an adjustment period.

    (d) The adjustments under this paragraph shall be made as of May 1, 1994 shortly after July 31 for the period of May 1 to July 31.

    3. (a) Subject to paragraph 3 of Decision No. 8780-(88/12),5 adopted January 29, 1988, the balances held in the Special Contingent Account 1 shall be distributed in accordance with the provisions of this paragraph to members that have paid additional charges or have received reduced remuneration as a result of the adjustment, when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

    (b) An amount equal to the proceeds of any adjustment for deferred charges shall be distributed, in accordance with the provisions of this paragraph, to members that have paid additional charges or have received reduced remuneration, when, and to the extent that, charges, the deferral of which had given rise to the same adjustment, are paid to the Fund. Distributions under this provision shall be made quarterly.

    (c) Distributions under (a) or (b) shall be made in proportion to the amounts that have been paid or have not been received by each member as a result of the respective adjustments.

    (d) If a member that is entitled to a payment under this paragraph has any overdue obligation to the Fund in the General Department at the time of payment, the member’s claim under this paragraph shall be set off against the Fund’s claim in accordance with Decision No. 8271-(86/74),6 adopted April 30, 1986, or any subsequent decision of the Fund.

    (e) Subject to paragraph 4 of Decision No. 8780-(88/12),5 adopted January 29, 1988, if any loss is charged against the Special Contingent Account 1, it shall be recorded in accordance with the principles of proportionality set forth in (c).

    Decision No. 10660-(94/38)

    April 29, 1994

    (b) Special Contingent Account (SCA-2)—Review

    Effective February 1, 1994, the words “by 0.26 percentage point” in paragraph 2(a) of Decision No. 9471-(90/98),7 adopted June 20, 1990, as amended by Decision No. 10341-(93/54),8 adopted April 14, 1993, shall be replaced by the words “by 0.04 percentage point.” provided that no further adjustments to the rate of charge shall be made under this decision when an amount equal to SDR 250 million has been generated from adjustments to the rate of charge under this decision. If by August 1,1994, no decision on the implementation of burden sharing for FY 1995 has been adopted, the existing wording of Decision No. 9471-(90/98),7 adopted June 20, 1990, as amended by Decision No. 10341-(93/54),8 adopted April 14, 1993, on extended burden sharing shall be reinstated.

    Decision No. 10662-(94/38)

    April 29, 1994

    (c) Disposition of Net Income for FY 1994

    The Fund’s net income for financial year 1994, equal to SDR 74, 149, 193, shall be placed to the Special Reserve.

    Decision No. 10704-(94/52)

    June 8, 1994

    (d) Net Income Target for FY 1995; Rate of Charge on Use of Fund Resources; and Retroactive Reduction of Rate of Charge for FY 1995 and Increase in Net Income Target for FY 1996

    1. The target amount of net income for financial year 1995 shall be 5 percent of the Fund’s reserves at the beginning of the financial year.

    2. Effective May 1, 1994, the proportion of the rate of charge referred to in Rule 1-6(4) to the SDR interest rate under Rule T-l shall be 115.1 percent.

    3. Any net income for financial year 1995 in excess of the target amount of net income of 5 percent of the Fund’s reserves at the beginning of that financial year shall be used to reduce retroactively the proportion of the rate of charge to the SDR interest rate for financial year 1995. If net income for financial year 1995 is below the target amount for that year, the net income target for financial year 1996 shall be increased by the equivalent of that shortfall.

    Decision No. 10705-(94/52)

    June 8, 1994

    (e) Burden Sharing—Implementation During the Second Through Fourth Quarters of FY 1995

    Section I. Principles of “Burden Sharing”

    1. The financial consequences for the Fund which stem from the existence of overdue financial obligations shall be shared between debtor and creditor member countries.

    2. The sharing shall be applied in a simultaneous and symmetrical fashion.

    Section II. Determination of the Rate of Charge

    1. During the second through fourth quarters of financial year 1995, the rate of charge for financial year 1995 referred to in Rule 1-6(4) shall be adjusted in accordance with the provisions of Section IV.

    2. When estimating income for purposes of Rule l-6(4)(a) and (b), no projection shall be made of deferred income. The calculation of actual net income under Rule E-6(4)(b) shall include the proceeds of adjustments for deferred income under Section IV, paragraph 2.

    Section III. Amount for Special Contingent Account 1

    An amount equivalent to 1.25 percent of the Fund’s reserves at the beginning of the financial year shall be generated each quarter during the second through fourth quarters of financial year 1995 in accordance with the provisions of Section IV, and shall be placed to the Special Contingent Account 1 referred to in Decision No. 9471-(90/98)9 adopted June 20, 1990.

    Section IV. Implementation of Burden Sharing

    1. During the second through fourth quarters of financial year 1995, notwithstanding Rule 1-6(4)(a) and (b) and Rule 1-10, the rate of charge referred to in Rule 1-6(4) and the rate of remuneration prescribed in Rule 1-10 shall be adjusted in accordance with the provisions of this Section.

    2.(a) In order to generate the amount to be placed to the Special Contingent Account 1 in accordance with Section III, the rate of charge and, subject to the limitation in (c), the rate of remuneration, shall be adjusted in accordance with the provisions of this paragraph, so as to produce equal amounts of income.

    (b) If income from charges becomes deferred during an adjustment period as defined in (d), the rate of charge and, subject to the limitation in (c), the rate of remuneration, shall be further adjusted, in accordance with the provisions of this paragraph, so as to generate, in equal amounts, an additional amount of income equal to the amount of deferred charges. For the purposes of this provision, special charges on overdue financial obligations under Decision No. 8165-(85/189) G/TR,10 adopted December 30, 1985, as amended, shall not be taken into account.

    (c) No adjustment in the rate of remuneration under this paragraph shall be carried to the point where the average remuneration coefficient would be reduced below 85 percent for an adjustment period.

    (d) The adjustments under this paragraph shall be made as of August 1, 1994, November 1,1994, and February 1, 1995:

    • —shortly after October 31 for the period August 1 to October 31;

    • —shortly after January 31 for the period November 1 to January 31;

    • —shortly after April 30 for the period February 1 to April 30.

    (e) The operation of this decision shall be reviewed when the adjustment in the rate of remuneration reduces the remuneration coefficient to the limit in (c) above.

    3. (a) Subject to paragraph 3 of Decision No 8780-(88/12),11 adopted January 29, 1988, the balances held in the Special Contingent Account 1 shall be distributed in accordance with the provisions of this paragraph to members that have paid additional charges or have received reduced remuneration as a result of the adjustment, when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

    (b) An amount equal to the proceeds of any adjustment for deferred charges shall be distributed, in accordance with the provisions of this paragraph, to members that have paid additional charges or have received reduced remuneration, when, and to the extent that, charges, the deferral of which had given rise to the same adjustment, are paid to the Fund. Distributions under this provision shall be made quarterly.

    (c) Distributions under (a) or (b) shall be made in proportion to the amounts that have been paid or have not been received by each member as a result of the respective adjustments.

    (d) If a member that is entitled to a payment under this paragraph has any overdue obligation to the Fund in the General Department at the time of payment, the member’s claim under this paragraph shall be set off against the Fund’s claim in accordance with Decision No. 8271-(86/74),12 adopted April 30, 1986, or any subsequent decision of the Fund.

    (e) Subject to paragraph 4 of Decision No. 8780-(88/12),11 adopted January 29, 1988, if any loss is charged against the Special Contingent Account 1, it shall be recorded in accordance with the principles of proportionality set forth in (c).

    Decision 10706-(94-52)

    June 8, 1994

    D. Stand-By and Extended Arrangements—Standard Forms

    The Executive Board approves the standard forms of stand-by and extended arrangements contained in Attachments A and B…, and the standard clauses contained in Attachment C…, to be added to those arrangements in cases of requests for (i) a decision on external contingency financing under the compensatory and contingency financing facility in association with an arrangement, or (ii) set-asides in support of operations involving debt reduction.

    Decision No. 10464-(93/130)

    September 13, 1993

    Attachment A

    Form of Stand-By Arrangement

    Attached hereto is a letter [, with annexed memorandum,] dated______from (Minister of Finance and/or Governor of Central Bank) requesting a stand-by arrangement and setting forth:

    (a)the objectives and policies that the authorities of (member) intend to pursue for the period of this stand-by arrangement;

    (b)the policies and measures that the authorities of (member) intend to pursue during the [first year] of this stand-by arrangement; and

    (c)understandings of (member) with the Fund regarding [a] review[s] that will be made of progress in realizing the objectives of the program and of the policies and measures that the authorities of (member) will pursue for the remaining period of this stand-by arrangement.

    To support these objectives and policies the International Monetary Fund grants this stand-by arrangement in accordance with the following provisions:

    1. [For a period of____years from____] [For the period from_____to_____] (member) will have the right to make purchases from the Fund in an amount equivalent to SDR ____ million, subject to paragraphs 2, 3, 4, and 5 below, without further review by the Fund.

    2. (a) Purchases under this stand-by arrangement shall not, without the consent of the Fund, exceed the equivalent of SDR____million, provided that purchases shall not exceed the equivalent of SDR____million until____and the equivalent of SDR_million until ___

    (b) The right of (member) to make purchases during the remaining period of this stand-by arrangement shall be subject to such phasing as shall be determined.

    (c) None of the limits in (a) or (b) above shall apply to a purchase under this stand-by arrangement that would not increase the Fund’s holdings of (member’s) currency subject to repurchase beyond 25 percent of quota.

    3. (Member) will not make purchases under this stand-by arrangement that would increase the Fund’s holdings of (member’s) currency subject to repurchase beyond 25 percent of quota:

    (a)during any period in which the data at the end of the preceding period indicate that13

    • (i) [the limit on net international reserves of [Central Bank] described in paragraph-of the

    • attached [letter] [memorandum]], or

    • (ii) [the limit on the net domestic borrowing of the public sector described in paragraph_of the attached [letter] [memorandum]], or

    • (iii) [the limit on the net domestic assets of the Central Bank described in paragraph_of the attached [letter] [memorandum]], or

    • (iv) [these provisions would incorporate other [quantitative or structural] performance criteria monitored at the end of the preceding period]

    [specified in [Tables 1, 2,3, and 4] [paragraphs.....], respectively, of the [letter] [memorandum]] is not observed: or

    (b)[if at anv time during the period of the arrangement] [while]

    • (i) [the limit on the contracting and guaranteeing of external public debt with original maturity of____described in paragraph____of the attached [letter] [memorandum]], or

    • (ii) [the limit on external payments arrears described in paragraph_of the attached [letter] [memorandum], or

    • (iii) [these provisions would incorporate other [quantitative or structural] performance criteria continuously monitured]

    [specified in [Tables 5,6 and 7] [paragraphs ....], respectively, of the [letter] [memorandum]] is not observed, or

    (c) after......and.......until the respective review[s] contemplated in paragraph____of the attached [letter] [memorandum] is [are] completed, or

    (d) if at any time during the period of the stand-by arrangement (member)

    • (i) imposes or intensifies restrictions on the making of payments and transfers for current international transactions; or

    • (ii) introduces or modifies multiple currency practices: or

    • (iii) concludes bilateral payments agreements which are inconsistent with Article VIII: or

    • (iv) imposes or intensifies import restrictions for balance of payments reasons.

    When (member) is prevented from purchasing under this stand-by arrangement because of this paragraph 3, purchases will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

    4. (Member) will not make purchases under this stand-by arrangement during any period in which (member) has an overdue financial obligation to the Fund or is failing to meet a repurchase expectation (a) in respect of a noncomplying purchase pursuant to Decision No. 7842-(84/165)14 on the Guidelines on Corrective Action, or (b) in respect of a purchase in support of debt and debt service reduction operations pursuant to Decision No. 9331-(89/167),15 as amended, or (c) pursuant to subparagraph 16(a) or 33(a) of Decision No. 8955-(88/126),16 as amended, on the Compensatory and Contingency Financing Facility.

    5. (Member’s) right to engage in the transactions covered by this stand-by arrangement can be suspended only with respect to requests received by the Fund after (a) a formal ineligibility, or (b) a decision of the Executive Board to suspend transactions, either generally or in order to consider a proposal, made by an Executive Director or the Managing Director, formally to suppress or to limit the eligibility of (member). When notice of a decision of formal ineligibility or of a decision to consider a proposal is given pursuant to this paragraph 5, purchases under this arrangement will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

    6. Purchases under this stand-by arrangement shall be made in the currencies of other members selected in accordance with the policies and procedures of the Fund, unless, at the request of (member), the Fund agrees to provide SDRs at the time of the purchase.

    7. (Member) shall pay a charge for this stand-by arrangement in accordance with the decisions of the Fund.

    8. (a) (Member) shall repurchase the amount of its currency that results from a purchase under this stand-by arrangement in accordance with the provisions of the Articles of Agreement and decisions of the Fund, including those relating to repurchase as (member’s) balance of payments and reserve position improves.

    (b) Any reductions in (member’s) currency held by the Fund shall reduce the amounts subject to repurchase under (a) above in accordance with the principles applied by the Fund for this purpose at the time of the reduction.

    9. During the period of the stand-by arrangement (member) shall remain in close consultation with the Fund. These consultations may include correspondence and visits of officials of the Fund to (member) or of representatives of (member) to the Fund. (Member) shall provide the Fund, through reports at intervals or dates requested by the Fund, with such information as the Fund requests in connection with the progress of (member) in achieving the objectives and policies set forth in the attached letter [and annexed memorandum].

    10. In accordance with paragraph____of the attached letter, (member) will consult the Fund on the adoption of any measures that may be appropriate at the initiative of the government or whenever the Managing Director requests consultation because any of the criteria in paragraph 3 above have not been observed or because the Managing Director considers that consultation on the program is desirable. In addition, after the period of the arrangement and while (member) has outstanding purchases in the upper credit tranches, the government will consult with the Fund from time to time, at the initiative of the government or at the request of the Managing Director, concerning (member’s) balance of payments policies.

    Attachment B

    Form of Extended Arrangement

    Attached hereto is a letter [, with annexed memorandum,] dated________from (Minister of Finance and/or Governor of the Central Bank) requesting an extended arrangement and setting forth:

    (a) the objectives and policies that the authorities of (member) intend to pursue for the period of this extended arrangement;

    (b) the policies and measures that the authorities of (member) intend to pursue during the first year of this extended arrangement; and

    (c) understandings of (member) with the Fund regarding reviews that will be made of progress in realizing the objectives of the program and of the policies and measures that the authorities of (member) will pursue for the second and third years of this extended arrangement.

    To support these objectives and policies the International Monetary Fund grants this extended arrangement in accordance with the following provisions:

    1. For a period of [three years] from____(member) will have the right to make purchases from the Fund in an amount equivalent to SDR____million, subject to paragraphs2, 3, 4, and 5 below, without further review by the Fund.

    2.(a) Purchases under this extended arrangement shall not. without the consent of the Fund, exceed the equivalent of SDR___million until____, the equivalent of SDR____million until______the equivalent of SDR_____million until______, and the equivalent of SDR ____million until_____.

    (b) Until (end of second year) purchases under this extended arrangement shall not, without the consent of the Fund, exceed the equivalent of SDR____million.

    (c) The right of (member) to make purchases during the second and third years shall be subject to such phasing as shall be determined.

    3. (Member) shall not make purchases under this extended arrangement:

    (a) during any period in which the data at the end of the preceding period indicate that17

    • (i) [the limit on net international reserves of [Central Bank] described in paragraph_of the attached [letter] [memorandum]], or

    • (ii) [the limit on net domestic borrowing of the public sector described in paragraph_of the attached [letter] [memorandum]], or

    • (iii) [the limit on the net domestic assets of the Central Bank described in paragraph_of the attached [letter] [memorandum]], or

    • (iv) [these provisions would incorporate other [quantitative or structural] performance criteria monitored at the end of the preceding period]

    [specified in [Tables 1, 2,3, and 4] [paragraphs.....], respectively, of the [letter] [memorandum]] is not observed; or

    (b) [if at any time during the period of the arrangement] [while]

    • (i) [the limit on the contracting or guaranteeing of external public debt with original maturity of___ described in paragraph____of the attached [letter] [memorandum]], or

    • (ii) [the limit on external payments arrears described in paragraph_of the attached [letter] [memorandum]], or

    • (iii) [these provisions would incorporate other [quantitative or structural] performance criteria continuously monitored]

    [specified in [Tables 5, 6 and 7] [paragraphs .....], respectively, of the [letter] [memorandum]], is not observed, or

    (c) after......and.......until the review[s] contemplated in paragraph_of the attached [letter] [memorandum] is [are] completed, or

    (d) if at any time during the period of the extended arrangement (member)

    • (i) imposes or intensifies restrictions on the making of payments and transfers for current international transactions; or

    • (ii) introduces or modifies multiple currency practices; or

    • (iii) concludes bilateral payments agreements which are inconsistent with Article VIII: or

    • (iv) imposes or intensifies import restrictions for balance of payments reasons.

    When (member) is prevented from purchasing under this extended arrangement because of this paragraph 3, purchases will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

    4. (Member) will not make purchases under this extended arrangement during any period in which (member) has an overdue financial obligation to the Fund or is failing to meet a repurchase expectation (a) in respect of a noncomplying purchase pursuant to Decision No. 7842-(84/165)18 on the Guidelines on Corrective Action, or (b) in respect of a purchase in support of debt and debt service reduction operations pursuant to Decision No. 9331-(89/167).19 as amended, or (c) pursuant to subparagraph 16(a) or 33(a) of Decision No. 8955-(88/126),20 as amended, on the Compensatory and Contingency Financing Facility.

    5. (Member’s) right to engage in the transactions covered by this extended arrangement can be suspended only with respect to requests received by the Fund after (a) a formal ineligibility, or (b) a decision of the Executive Board to suspend transactions, either generally or in order to consider a proposal, made by an Executive Director or the Managing Director, formally to suppress or to limit the eligibility of (member). When notice of a decision of formal ineligibility or of a decision to consider a proposal is given pursuant to this paragraph 5, purchases under this arrangement will be resumed only after consultation has taken place between the Fund and (member) and understandings have been reached regarding the circumstances in which such purchases can be resumed.

    6. Purchases under this extended arrangement shall be made in the currencies of other members selected in accordance with the policies and procedures of the Fund, unless, at the request of (member), the Fund agrees to provide SDRs at the time of the purchase.

    7. (Member) shall pay a charge for this extended arrangement in accordance with the decisions of the Fund.

    8. (a) (Member) shall repurchase the amount of its currency that results from a purchase under this extended arrangement in accordance with the provisions of the Articles of Agreement and decisions of the Fund, including those relating to repurchase as (member’s) balance of payments and reserve position improves.

    (b) Any reductions in (member’s) currency held by the Fund shall reduce the amounts subject to repurchase under (a) above in accordance with the principles applied by the Fund for this purpose at the time of the reduction.

    9. During the period of the extended arrangement (member) shall remain in close consultation with the Fund. These consultations may include correspondence and visits of officials of the Fund to (member) or of representatives of (member) to the Fund. (Member) shall provide the Fund, through reports at intervals or dates requested by the Fund, with such information as the Fund requests in connection with the progress of (member)in achieving the objectives and policies set forth in the attached letter [and annexed memorandum].

    10. In accordance with paragraph____of the attached letter, (member) will consult with the Fund on the adoption of any measures that may be appropriate at the initiative of the government or whenever the Managing Director requests consultation because any of the criteria in paragraph 3 above have not been observed or because the Managing Director considers that consultation on the program is desirable. In addition, after the period of the arrangement and while (member) has outstanding purchases under this arrangement, the government will consult with the Fund from time to time, at the initiative of the government or at the request of the Managing Director, concerning (member’s) balance of payments policies.

    Attachment C

    (i) Standard Clause on External Contingency Mechanism

    (To be inserted in the introductory section of the requested [stand-by] [extended] arrangement, in which case that section will be broken into two subparagraphs)

    b. a decision that, should adverse external contingencies occur during the period of the program supported by the [stand-by] [extended] arrangement, the Fund will provide in association with this [stand-by] [extended] arrangement, external contingency financing up to a maximum amount equivalent to SDR___million under the Compensatory and Contingency Financing Facility (Decision No. 8955-(88/126), adopted August 23, 1988, as amended) and in accordance with the factors set out in [memorandum/other relevant document], with the understanding that, should favorable external contingencies occur during such period, the Fund may make adjustments of up to SDR___million under paragraph 22 of that decision, in accordance with the factors set out in [memorandum/other relevant document].

    (ii) Standard Clauses on Set Asides in Support of Operations Involving Debt Reduction

    (To be inserted in paragraph 2 of the requested [stand-by] [extended] arrangement)

    (d)Each amount that would be available in accordance with paragraphs 1[,] [and] 2(a), [2(b), and 2(c)] above shall be reduced by an amount equivalent to [25 percent], and these set aside amounts shall be made available in accordance with the terms of this [stand-by] [extended] arrangement and subject to the following conditions:

    • (i) (member) represents that it has a need to make the requested purchase because of use of its reserves or impending payments for the discharge of liabilities under operations involving debt reduction; and

    • (ii) the Fund determines that the requested purchase is needed in accordance with (member’s) representation and that the debt reduction involved is consistent with the objectives of the program and the guidelines on Fund involvement in the debt strategy.

    (e)If requested by (member), the Fund may decide to make available to (member), notwithstanding the phasing specified under (a), (b) and (c) above, an amount not exceeding the equivalent of [25 percent] of the total of purchases that may be made by (member) during the remainder of this [stand-by] [extended] arrangement. In that event, the right of (member) to make purchases under this [stand-by] [extended] arrangement shall be subject to such phasing and deduction of amounts for debt reduction as shall be determined.

    (f) If requested by (member), the Fund may decide to discontinue the deduction of amounts for debt reduction under (d) and (e) above if the Fund determines that the objectives of (member’s) program supported by this [stand-by] [extended] arrangement can be achieved without such deductions.

    E. Special Disbursement Account (SDA)—Review of Structural Adjustment Facility (SAF), Termination of Authority to Make Commitments to Provide Assistance from SAF in Conjunction with Loans from ESAF Trust, and Transfer of Resources from SDA to ESAF Trust

    1. The Fund has reviewed the operation of the Structural Adjustment Facility (SAF) within the Special Disbursement Account (SDA) and decides that from the date this decision becomes effective it will no longer approve commitments to provide assistance from the SAF in conjunction with loans from the Enhanced Structural Adjustment Facility Trust (ESAF Trust).

    2. With the exception of the resources that have been or are to be transferred to the Reserve Account of the ESAF Trust pursuant to subparagraphs 1(i), 1(ii), or 1(iii) of Decision No. 8760-(87/176),21 as amended, (i) SDR 260 million of the resources held in the SDA derived from the termination of the 1976 Trust Fund shall be maintained in that account for further use under the SAF, and (ii) SDR 400 million of the resources held or to be received by the SDA that are derived from the termination of the 1976 Trust Fund shall be transferred promptly after the effectiveness of this decision to the Subsidy Account of the ESAF Trust for the subsidization of ESAF Trust loans. Accordingly, Decision No. 8760-(87/176),21 as amended, is further amended by adding at the end of subparagraph l(iv) the following: “and that have not been transferred to the Subsidy Account of the ESAF Trust in accordance with Decision No. 10531-(93/170) SAF.”

    Decision No. 10531 (93/170) SAF

    December 15, 1993

    F. Enhanced Structural Adjustment Facility

    (a) Enhanced Structural Adjustment Facility Trust—Extension and Enlargement

    1. The Fund adopts the following decisions [Decision No. 10531-(93/170) SAF through Decision No. 10535-(93/170) SAF],22 which shall become effective when (i) the Executive Board has determined that sufficient contributions to the Loan and Subsidy Accounts of the Enhanced Structural Adjustment Facility Trust (ESAF Trust) are committed or in firm prospect to initiate operations under the enlarged and amended ESAF Trust, and (ii) all creditors to the Loan Account of the ESAF Trust have consented to the partial transfer to the Subsidy Account of the ESAF Trust of resources from the Special Disbursement Account that were to be transferred to the Reserve Account of the ESAF Trust in accordance with Decision No. 8760-(87/176),21 adopted December 18, 1987, as amended.

    2. The period for making commitments specified in Section II, subparagraph 1(d) of the ESAF Trust Instrument is extended until February 28, 1994 or the date of effectiveness of the decisions referred to in paragraph 1 of this decision, whichever is earlier.

    Decision No. 10530-(93/170) ESAF

    December 15, 1993

    (b) Enhanced Structural Adjustment Facility Trust Instrument-Amendment

    The Instrument to Establish the Enhanced Structural Adjustment Facility Trust annexed to Decision No. 8759-(87/176) ESAF,23 adopted December 18, 1987, as amended. shall be further amended as follows:

    In Section II, subparagraph 1(d), “December 31, 1993” shall be substituted for “November 30, 1993.” to read as follows:

    (d) Commitments under three-year arrangements may be made during the period from January 1, 1988 to December 31, 1993.

    Decision No. 10515-(93/162) ESAF

    November 29, 1993

    The Instrument to Establish the Enhanced Structural Adjustment Facility Trust annexed to Decision No. 8759-(87/176) ESAF,23 as amended, shall be further amended as follows:

    (i) Section II, Paragraph 1:

    subparagraph (a) shall be substituted by the following:

    (a)The members on the list annexed to Decision No. 8240-(86/56) SAF,24 as amended, shall be eligible for assistance from the Trust.

    subparagraph (b) shall be substituted by the following:

    (b)This assistance shall be committed to a qualifying member, subject to this Instrument, for a three-year period upon approval by the Fund of a three-year arrangement in support of a three-year macroeconomic and structural adjustment program presented by the member. The three-year arrangement will prescribe the total amount, and the annual amounts within the total, committed to the member. Resources so committed shall be made available in the form of loans under three annual arrangements approved by the Fund. An annual arrangement may not be approved before the expiration of the preceding annual arrangement, other than under exceptional circumstances. After the expiration of the original three year commitment period for an eligible member, the Trustee may approve a new three-year commitment for that member on the same conditions and terms as under the original commitment in accordance with the Instrument.

    in subparagraph (c), the requirement that the Fund must be satisfied that the member has a protracted balance of payments problem is added, to read as follows:

    (c) Before approving a three-year arrangement, the Trustee shall be satisfied that the member has a protracted balance of payments problem and is making an effort to strengthen substantially and in a sustainable manner its balance of payments position.

    in subparagraph (d), “December 31, 1996” shall be substituted for “November 30, 1993,” to read as follows:

    (d)Commitments under three-year arrangements may be made during the period from January 1, 1988 to December 31, 1996.

    in subparagraph (e), “under a three-year commitment” shall be added after “eligible member” in the first sentence, the second sentence shall become the third sentence, and a new second sentence shall be added so that the provision shall read as follows:

    (e)After the expiration of the third annual arrangement for an eligible member under a three year commitment, the Trustee may approve an additional annual arrangement for that member, if it is satisfied that the performance of the member under the arrangement has been satisfactory and that the member has adopted appropriately strong measures in response to its external circumstances in an effort to strengthen substantially and in a sustainable manner its balance of payments position. The Trustee may extend the period of the additional arrangement to allow the disbursement of undisbursed amounts. Subject to appropriate conditions consistent with the terms of assistance under this Instrument. Commitments under such additional annual arrangements shall be within the access limits determined in accordance with paragraph 2 of this Section and may be made during the period specified in (d) above.

    current subparagraph (f) shall be deleted and a new subparagraph (f) shall be added as follows:

    (f) If a three-year commitment to an eligible member has expired with undrawn amounts, the Trustee may approve a new commitment for that member, subject to this Instrument, provided that the member submits a three-year macroeconomic and structural adjustment program and that the amount of resources that could be made available under the new commitment approved in accordance with this subparagraph shall not exceed the undrawn amounts under the expired commitment. The new commitment may be made under a one-year or two-year arrangement as the case may be, with the annual access to be determined on the basis of the strength of the member’s program and its balance of payments need.

    (ii) Section II, Paragraph 2:

    in subparagraph (a), the words “and in any event not later than March 31, 1989” shall be deleted;

    subparagraph (c) shall be substituted by the following:

    (c) The access for each member that qualifies for assistance from the Trust shall be determined on the basis of an assessment by the Trustee of the balance of payments need of the member, the strength of its adjustment program, the amount of the member’s outstanding use of credit extended by the Fund, and its record in using Fund credit in the past.

    (iii) Section II, Paragraph 3:

    the following new subparagraph (b) shall be added and current subparagraphs (b) and (c) shall become subparagraphs (c) and (d), respectively:

    (b) Disbursements under an annual arrangement must precede the expiration of the period of that arrangement and be made prior to the expiration of the three-year commitment period. The Trustee may extend the period of the three-year commitment to allow the disbursement of undisbursed amounts, subject to appropriate conditions consistent with the terms of assistance under this Instrument.

    Disbursements under each annual arrangement shall be made in two installments, the first after approval of the corresponding arrangement, and the second after the conditions established under the arrangement for that disbursement have been met, or if not met, after consultation has taken place between the Trustee and the member, and understandings have been reached regarding the circumstances in which the member may request the disbursement of that installment.

    in new subparagraph (d), the phrase “the period specified in Section III, paragraph 3” shall be amended to read “the period referred to in Section III, paragraph 3.”

    (iv) Section II, Paragraph 4:

    subparagraph (c) shall be amended to read as follows:

    (c) The Trustee may not reschedule the repayment of loans from the Trust.

    (v) Section III:

    Paragraph 3 shall be substituted by the following:

    Commitments for drawings under loan agreements to the Loan Account of the ESAF Trust that were entered into before November 30, 1993 shall extend through December 31, 1997, and under loan agreements that are entered into after November 30, 1993 shall extend through December 31, 1999. The drawdown period may be extended by mutual agreement between the Trustee and the lender. The Managing Director is authorized to conclude such agreements on behalf of the Trustee.

    subparagraph 4(a) shall be amended to read as follows:

    (a)Drawings on the commitments of individual lenders over time shall be made so as to maintain broad proportionality of these drawings relative to commitments, provided that the Trustee will aim to draw fully all loans entered into prior to November 30, 1993 before calling on loans entered into after that date.

    the first sentence in subparagraph 4(b) shall be substituted by the following:

    (b)Calls on a lender’s commitment shall be suspended temporarily if. at any time prior to June 30, 1997 in case of a commitment under a loan agreement entered into before November 30, 1993, or prior to June 30, 1999 in case of a commitment under a loan agreement entered into after November 30, 1993, the lender represents to the Trustee that it has a liquidity need for such suspension and the Trustee, having given this representation the overwhelming benefit of any doubt, agrees.

    (vi)Section IV: Paragraph 1:

    the following new subparagraph (c) shall be added:

    (c) transfers from the Special Disbursement Account in accordance with Decision No. 10531-(93/170) SAF25 to that Account; and;

    former subparagraph (c) shall become subparagraph (d) and shall read as follows:

    (d) net earnings from investment of resources held in that Account.

    Paragraph 6:

    the third sentence shall be amended to read as follows:

    Any resources remaining after that subsidization shall be distributed to the Fund, donors, and lenders that have contributed to the subsidy operation, in proportion to their contributions.

    the following new sentence shall be added after the third sentence:

    The resources representing the Fund’s share in such distribution shall be transferred to the Special Disbursement Account.

    (vii)Section V:

    subparagraph 1(a) shall be amended to read as follows:

    (a) transfers by the Fund from the Special Disbursement Account in accordance with Decision No. 8760-(87/176),26 adopted December 18, 1987, as amended by Decision No. 10531-(93/170) SAF,25 adopted December 15, 1993.

    Decision No. 10532-(93/170) ESAF

    December 15, 1993

    (c) Access Limits

    Decision No. 8845-(88/61) ESAF,27 as amended, shall be further amended as follows:

    by amending paragraph 1 to read as follows:

    1. In accordance with Section II, Paragraph 2(a) of the Instrument to Establish the Enhanced Structural Adjustment Facility Trust, the initial maximum limit on access of each eligible member to the resources of the Trust under a three year commitment shall be set at 190 percent of the member’s quota in the Fund, minus resources committed to the member for loans in association with Trust loans.

    by replacing paragraph 3 as follows:

    3. The Fund shall review the maximum access limit and the exceptional maximum limit, together with the operation of the Enhanced Structural Adjustment Facility and the Enhanced Structural Adjustment Facility Trust, not later than June 30, 1995.

    Decision No. 10533-(93/170) ESAF

    December 15, 1993

    (d) Enhanced Structural Adjustment Facility Trust—Borrowing for Loan Account—Consultation with Creditors

    The Managing Director, after having consulted with all creditors in accordance with Decision No. 9056-(89/2)

    ESAF,28 adopted January 11, 1989, is authorized to confirm that he does not intend to propose to the Executive Board borrowing of more than SDR 11 billion for the Loan Account of the Enhanced Structural Adjustment Facility Trust except after consultation with all creditors regarding the justification for such additional borrowing and the adequacy of the Trust’s Reserve in relation thereto.

    Decision No. 10534-(93/170) ESAF

    December 15, 1993

    (e) Enhanced Structural Adjustment Facility Trust—Expansion of Eligibility

    The list annexed to Decision No. 8240-(86/56) SAF 29 as amended, shall be further amended by adding Armenia, Georgia, Kyrgyz Republic, and Tajikistan for purposes of eligibility under Section II, Paragraph 1(a) of the ESAF Trust Instrument.

    Decision No 10535-(93/170) SAF

    December 15, 1993

    (f) Successor—Initiation of Operations

    The Executive Board determines that sufficient contributions to the Loan and Subsidy Accounts of the ESAF Trust are committed or in firm prospect to initiate operations under the enlarged and amended ESAF Trust.

    Decision No. 10597-(94/14) ESAF

    February 23, 1994

    (g) Successor—List of Eligible Members

    The list annexed to Decision No. 8240-(86/56) SAF,29 as amended, shall be further amended by adding Cameroon and the former Yugoslav Republic of Macedonia for purposes of eligibility under Section II, Paragraph 1(a) of the ESAF Trust Instrument.

    Decision No. 10598-(94/14) SAF

    February 23, 1994

    G. Periods for Consent to and Payment for Increases in Quotas Under Ninth General Review—Extension

    1. Pursuant to paragraph 4 of the Resolution of the Board of Governors No. 45-2, “Increases in Quotas of Members—Ninth General Review,” the Executive Board decides that notices in accordance with paragraph 2 of that Resolution must be received in the Fund before 6:00 p.m., Washington time, on June 30, 1994.

    2. Pursuant to paragraph 5 of the Board of Governors Resolution 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota under the Ninth Review within 596 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

    Decision No. 10555-(94/1)

    December 23, 1993

    1. Pursuant to paragraph 4 of the Resolution of the Board of Governors No. 45-2, “Increases in Quotas of Members—Ninth General Review,” the Executive Board decides that notices in accordance with paragraph 2 of that Resolution must be received in the Fund before 6:00 p.m., Washington time, on December 30, 1994.

    2. Pursuant to paragraph 5 of the Board of Governors Resolution 45-2, the Executive Board decides that each member shall pay to the Fund the increase in its quota under the Ninth Review within 779 days after the later of (a) the date on which it notifies the Fund of its consent or (b) November 11, 1992.

    Decision No. 10716-(94/55)

    June 17, 1994

    See Selected Decisions. Eighteenth Issue, page 92.

    Ibid.. pages 202-206.

    lbid., pages 263-65.

    lbid.. pages 237-39.

    Ibid.. pages 252-53.

    Ibid.. pages 241-42.

    Ibid., pages 263-65

    lbid.., page 269.

    Ibid., pages 263-65.

    Ibid… pages 237-39.

    Ibid., pages 252-53.

    Ibid., pages 241-42.

    The performance criteria enumerated here are indicative only.

    See Selected Decisions. Eighteenth Issue, pages 70-72.

    Ibid., pages 202-206.

    Ibid., pages 109-36.

    The performance criteria enumerated here are indicative only.

    See Selected Decisions. Eighteenth Issue, pages 70-72.

    Ibid., pages 202-206.

    Ibid., pages 109-36.

    Ibid., pages 305-307.

    See item E. above, and items (b)-(e), below.

    See Selected Decisions, Eighteenth Issue, pages 26-41.

    Ibid., pages 287-90.

    See item E. above.

    See Selected Decisions. Eighteenth Issue, pages 305-307.

    Ibid., pages 48-49.

    Ibid., page 49.

    lbid., pages 287-90.

    APPENDIX V Press Communiqués of the Interim Committee and the Development Committee

    Interim Committee of the Board of Governors on the International Monetary System

    PRESS COMMUNIQUÉS

    Forty-First Meeting, Washington, September 26, 1993

    1. The Interim Committee of the Board of Governors of the International Monetary Fund held its forty-first meeting in Washington, DC., on September 26, 1993 under the chairmanship of Mr. Philippe Maystadt, Minister of Finance of Belgium. The Committee expresses its appreciation to its outgoing Chairman, Mr. Carlos Solchaga, former Minister of Economy and Finance of Spain, for his invaluable contribution to the Committee’s work.

    2. The Committee expresses its concern about the continued weak growth performance in industrial countries and the high and rising rates of unemployment and persistent protectionist pressures. The recovery remains moderate in North America and has yet to emerge in Japan and in continental Europe. The Committee therefore reaffirms its commitment to the cooperative growth strategy adopted in April 1993. A number of developments consistent with this strategy are welcome and can be expected to contribute to an improved economic climate: the achievement of low inflation rates in many industrial countries; lower interest rates in Europe; the commitment to medium-term budget consolidation in North America and in several European countries; the measures taken in Japan to strengthen the recovery of domestic demand; and the favorable reaction of financial markets to these developments.

    3. The Committee considers completion of the Uruguay Round by the end of 1993 crucial to the success of the cooperative strategy and to restoring confidence in global economic prospects. At this critical juncture of the Round, the Committee stresses the essential role of trade and competitive forces in the growth prospects of all countries and the job-creating effects of liberalizing trade. The Committee expects leadership and vision from all in order to resolve the remaining issues and conclude the Round by the end of the year. Failure to do so could reinforce protectionist pressures, erode business confidence, and weaken growth in all countries.

    4. The Committee stresses the need for Fund members to continue action to promote a robust economic recovery and a sustained expansion. Continued progress toward price stability and fiscal deficit reduction would provide scope for further interest rate reductions. As the recovery gains momentum, additional fiscal consolidation in the industrial countries will be needed to increase savings and private investment. Structural reforms in the industrial countries will also have to be given a higher priority to enhance prospects for longer-term growth; these include labor market flexibility, social security and health care reform, and market-opening and deregulation policies. The Committee reiterates its support to the efforts of the Fund in implementing its strengthened surveillance over members’ policies.

    5. The Committee welcomes the continued strong economic expansion in many developing countries, based on the maintenance of sound macroeconomic policies and a continued easing of structural rigidities. The Committee welcomes in particular the developing countries’ significant contribution to the growth of world output and of international trade through outward-oriented policies. The success of these policies should serve to encourage those developing countries where progress toward macroeconomic stability and structural reform has lagged.

    6. The Committee expresses particular concern, however, about the plight of many of the poorest developing countries, especially in Africa. Improvement of their prospects will require strong adjustment programs, continued efforts to reduce further their excessive debt levels, and substantially increased external assistance on concessional terms. All members recognize the special role enhanced structural adjustment facility (ESAF) has played in fostering effective reform in these countries; the Committee welcomes the indication from a number of members, including in the developing world, of their readiness to contribute to the facility. It urges the broadest possible spectrum of contributors among the membership to step forward with early indications of participation, and calls on the Executive Board to implement rapidly the agreed framework so as to ensure continuity of ESAF operations after November 30, 1993.

    7. The Committee welcomes the progress made by a number of formerly centrally planned economies toward economic stabilization and market-based systems and the role played by the Fund in catalyzing the support of the international financial community. In central and eastern Europe, output is expected to grow moderately in 1994 following several years of decline in a number of countries. However, some countries in the region continue to face high inflation and declining output; all are encouraged to persevere with macroeconomic discipline and structural reforms, especially in the areas of privatization and financial sector reform, accompanied by adequate and well-targeted social safety nets.

    8. While privatization and other structural reforms are gaining momentum in several countries of the former Soviet Union, inflation remains high in most of them, and dangerously high in some large countries. To curb inflation and induce market behavior, it is essential for all these countries to tackle their budget deficits, pursue appropriate monetary policies, promote financial sector reform, and impose financial discipline on enterprises. The Committee recognizes that most countries in the area face severe balance of payments difficulties as a result of the move to world prices and the reduction in transfers within the area. The prospects for much-needed international financial support, including under the Fund’s systemic transformation facility (STF), depend on the introduction and sustained pursuit of strong adjustment and reform programs, and on arrangements for effective financial cooperation within the area to improve current account positions and reduce the risk of capital flight and of trade disruptions. Global trade liberalization will be particularly important in promoting economic growth in the economies in transition.

    9. Having discussed a report from the Executive Board on an allocation of SDRs and related matters, the Committee requests the Executive Board to continue its work on these issues—having particularly in mind the situation of the many new members that have not participated in previous SDR allocations—and to report to the Committee at its next meeting, to be held in Washington, DC., on April 25, 1994.

    Annex: Interim Committee Attendance September 26, 1993

    Chairman

    Philippe Maystadt, Minister of Finance, Belgium

    Managing Director

    Michel Camdessus

    Members or Alternates

    Mohammad Abalkhail, Minister of Finance and National Economy, Saudi Arabia

    Edmond Alphandery, Minister of Economy, France

    Ahmed Humaid Al-Tayer, Minister of State for Finance and Industry, United Arab Emirates

    Piero Barucci, Minister of the Treasury, Italy

    Lloyd M. Bentsen, Secretary of the Treasury, United States

    Fernando Henrique Cardoso, Minister of Finance, Brazil

    Carlos Sanchez, Vice Minister of Economy and Public Works, Argentina (Alternate for Domingo Felipe Cavallo, Minister of Economy and Public Works, Argentina)

    CHEN Yuan, Deputy Governor, People’s Bank of China Kenneth Clarke, Chancellor of the Exchequer, United Kingdom Ralph Willis, Minister for Finance, Australia (Alternate for John Dawkins, Treasurer, Australia)

    j. Soedradjad Djiwandono, Governor, Bank Indonesia

    Hirohisa Fujii, Minister of Finance, Japan

    Abdelouahab Keramane, Governor, Banque d’Algerie

    Wim Kok, Deputy Prime Minister and Minister of Finance, Netherlands

    Ruth de Krivoy, President, Banco Central de Venezuela

    Gilles Loiselle, Minister of Finance, Canada

    Jehoash Mayanja-Nkangi, Minister of Finance and Economic Planning, Uganda

    Ferdinand Lacina, Federal Minister of Finance, Austria (a.m. session) and Ivan Kocarnik, Deputy Prime Minister and Minister of Finance, Czech Republic (p.m. session) (Alternates for Philippe Maystadt, Minister of Finance, Belgium)

    Marcelino Nguema Onguene, Minister of Economy and Commerce, Equatorial Guinea

    Aleksandr N. Shokhin, Deputy Prime Minister, Russian Federation

    Jon Sigurdsson, Governor, Central Bank of Iceland

    Manmohan Singh, Minister of Finance, India

    Otto Stich, Minister of Finance. Switzerland

    Theo Waigel, Federal Minister of Finance, Germany

    Observers

    Y. Akyuz, Senior Economic Affairs Officer, International Monetary Issues Programme, Global Interdependence Division, UNCTAD

    Henning Christophersen, Vice President, CEC

    Rudolf Homines, Chairman, Development Committee

    Alexandre Lamfalussy, General Manager, BIS

    Jean-Claude Milleron, Under-Secretary-General, Department of Economic and Social Information and Policy Analysis, UN

    Jean-Claude Paye, Secretary-General, OECD

    Lewis T. Preston, President, World Bank

    Peter D Sutherland, Director-General, GATT

    Forty-Second Meeting, Washington, April 25, 1994

    1. The Interim Committee of the Board of Governors of the International Monetary Fund held its forty-second meeting in Washington, DC, on April 25, 1994 under the chairmanship of Mr. Philippe Maystadt, Minister of Finance of Belgium.

    2. The Committee welcomes the substantive progress in implementing the cooperative growth strategy set out in its Declaration of April 1993, and the Fund’s intensification of its surveillance activities over members’ economic policies. The successful conclusion of the Uruguay Round will give new impetus to world trade and provide an improved climate for economic growth worldwide. Early ratification of the agreement should now be sought in all countries concerned. The Committee welcomes the creation of the World Trade Organization and looks forward to close cooperation with the new organization.

    3. Conditions for sustained growth of the world economy have improved: inflation in most industrial countries remains low;some countries have made significant progress toward medium-term budget consolidation; Japan has taken additional supportive action; short-term interest rates are lower and exchange market tensions have abated in Europe. Many developing countries have made progress in stabilization and reform, allowing robust growth to be sustained. In several economies in transition, the reform process has advanced with the support of the Fund, including through the new systemic transformation facility (STF). The recent devaluation of the CFA franc, with the courageous accompanying measures taken in the context of Fund-supported programs, should facilitate the resumption of growth in the countries concerned.

    4. In the industrial world, the recovery is well established in a number of countries, such as the United States, the United Kingdom, and Canada. Signs of recovery are evident in continental Europe and in Japan. Further action is required by all to ensure a more broad based and sustained recovery. Where recovery is still weak, continued progress toward price stability would provide scope for further cautious declines in short-term interest rates; in Japan, fiscal policy is supporting domestic demand. In those industrial countries where recovery is well established, monetary policies should be pursued in a way which sustains the recovery over the medium term and prevents a re-emergence of inflationary pressures, while fiscal imbalances must continue to be addressed decisively. In all countries, forceful implementation of plans for medium-term fiscal consolidation is necessary to strengthen national savings and raise growth and employment prospects. Disciplined monetary and fiscal policies will also help to alleviate pressures on long-term interest rates. The most pressing economic and social problem in many industrial countries remains high structural unemployment. It is therefore essential that the recovery be used to proceed decisively with labor market reforms that address the root causes of structural unemployment.

    5. The Committee welcomes the continued strong growth performance of many developing countries that have pursued sound macroeconomic policies and implemented structural reforms, and notes their favorable prospects in the more open trading environment. It views with concern, however, the difficulties of those developing countries suffering from inadequate rates of savings and productive investment and inefficiencies in resource allocation, leading to stagnating or even declining living standards. Obstacles to sustained growth in these and other developing countries must be reduced, and their resilience to external shocks strengthened, through the pursuit of strong structural adjustment programs, the provision of adequate financial support from the international community, and improved access to industrial country markets. For low-income countries, a flexible approach to stock of debt reductions by official bilateral creditors and continued external assistance on concessional terms will also be required.

    6. The Committee welcomes the initiation of operations of the enlarged and extended ESAF, which will permit continued concessional support for low-income developing countries undertaking strong programs of adjustment and reform. It welcomes the broad-based financial support for this initiative among the membership, including many developing countries.

    7. The benefits of sustained policies of stabilization and reform followed by a number of economies in transition are apparent. It is particularly noteworthy that growth is being restored in countries that have brought inflation down and persevered with major structural reforms, including institution building and the steady pursuit of enterprise restructuring. Conversely, the costs of delays in implementing comprehensive economic programs are starkly evident in other countries. The Committee welcomes Russia’s adoption of a program to which the Fund has extended its support with a second drawing under the STF, and emphasizes the importance of the program’s firm implementation, so as to pave the way for a more comprehensive program that could be supported by a stand-by arrangement.

    8. The transition to market economies by a large group of countries is a task of historic proportions deserving the full and concerted support of the international community. The guiding principle must remain that where there are assurances of strong policies, there is adequate financial support. The Committee encourages the Fund to continue to play a central role in this process, including if needed through increased access to its own resources, commensurate with the strength of programs. In this endeavor, the monetary character and the catalytic role of the Fund must be safeguarded, and the Committee calls for the continued participation and support of all potential bilateral and multilateral creditors and donors in providing adequate and timely assistance, in conjunction with the Fund.

    9. The Committee considered the report by the Managing Director on an SDR allocation, including ways to address the situation of members that have not participated in previous SDR allocations and methods to allow countries in a position to do so to mobilize their own SDRs in support of Fund programs. The Committee requests the Executive Board to continue to work on SDR issues and to make its recommendations to the next Committee meeting.

    10. The Committee discussed its future work, particularly with regard to systemic issues and the strengthening of the Committee’s contribution to the effective exercise of surveillance and economic policy coordination. It requests the Executive Board to examine these issues and to report back by its next meeting, to be held in Madrid, Spain, on October 2, 1994.

    Annex: Interim Committee Attendance April 25, 1994

    Chairman

    Philippe Maystadt, Minister of Finance, Belgium

    Managing Director

    Michel Camdessus

    Members or Alternates

    Mohammad Abalkhail, Minister of Finance and National Economy, Saudi Arabia

    Edmond Alphandery, Minister of Economy, France

    Sultan Nasser Al-Suwaidi, Governor, United Arab Emirates Central Bank (Alternate for Ahmed Humaid Al-Tayer, Minister of State for Finance and Industry, United Arab Emirates)

    MUSTAPA Mohamed, Deputy Minister of Finance, Malaysia (Alternate for ANWAR Ibrahim, Deputy Prime Minister and Minister of Finance, Malaysia)

    Antonio Fazio, Governor, Banca d’ltalia (Alternate for Piero Barucci, Minister of the Treasury, Italy)

    Lloyd M. Bentsen, Secretary of the Treasury, United States

    Domingo Felipe Cavallo, Minister of Economy and Public Works and Services, Argentina

    Kenneth Clarke, Chancellor of the Exchequer, United Kingdom

    Marcel DOUPAMBY MATOKA, Minister of Finance, Budget, and Participations, Gabon

    Yasuchi Mieno, Governor, The Bank of Japan (Alternate for Hirohisa Fujii, Minister of Finance, Japan)

    Sigbjoern Johnsen, Minister of Finance, Norway

    Abdelouahab Keramane, Governor, Banque d’Algérie

    W. F. Duisenberg, President, De Nederlandsche Bank, NV (Alternate for Wim Kok, Deputy Prime Minister and Minister of Finance, Netherlands)

    Paul Martin, Minister of Finance, Canada

    Jehoash Mayanja-Nkangi, Minister of Finance and Economic Planning, Uganda

    Ferdinand Lacina, Federal Minister of Finance, Austria (a.m. session) and Brigita Schmognerova, Deputy Prime Minister for Economic Affairs, Slovak Republic (p.m. session) (Alternates for Philippe Maystadt, Minister of Finance, Belgium)

    Pedro Sampaio Malan, President, Banco Central do Brasil (Alternate for Rubens Ricupero, Minister of Finance, Brazil)

    Aleksandr N. Shokhin, Deputy Prime Minister, Russian Federation

    C. Rangarajan, Governor, Reserve Bank of India (Alternate for Manmohan Singh, Minister of Finance, India)

    Alfredo Pastor, Secretary of State for Economy, Ministry of Economy and Finance, Spain (Alternate for Pedro Solbes, Minister of Economy and Finance, Spain)

    Otto Stich, Minister of Finance, Switzerland

    Theo Waigel, Federal Minister of Finance, Germany

    George Gear, Assistant Treasurer, Australia (a.m. session) and Roberto F. de Ocampo, Secretary of Finance, Philippines (p.m. session) (Alternates for Ralph Willis, Minister for Finance, Australia)

    CHEN Yuan, Deputy Governor, People’s Bank of China (Alternate for ZHU Rongji, Vice Premier and Governor, People’s Bank of China)

    Observers

    Henning Christophersen, Vice President, CEC

    Andrew D. Crockett, General Manager, BIS

    Rudolf Hommes, Chairman, Development Committee

    Roger Lawrence, Deputy to the Secretary-General and Director, Global Interdependence Division, UNCTAD

    Jean-Claude Milleron, Under-Secretary-General, Department of Economic and Social Information and Policy Analysis, UN

    Jean-Claude Paye, Secretary-General, OECD

    Lewis T. Preston, President, World Bank

    Gary P. Sampson, Director, Regional and Preferential Trade, and Trade and Finance Division, GATT

    Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries (Development Committee)

    PRESS COMMUNIQUÉS

    Forty-Seventh Meeting, Washington, September 27, 1993

    1. The forty-seventh meeting of the Development Committee was held in Washington, DC, on September 27, 1993 under the chairmanship of Mr. Rudolf Hommes, Minister of Finance and Public Credit of Colombia.1 The Committee extended its thanks to the retiring Chairman, Mr. Ricardo Hausmann of Venezuela.

    Gaza and the West Bank

    2. The Committee welcomed the outstanding contribution to the Middle East Peace Process made by the World Bank in preparing the ground for a coordinated program of financial support for Gaza and the West Bank.

    World Economy

    3. The Committee reviewed the impact on developing countries of recent trends in the world economy. It renewed its call for a fresh impetus to growth in the industrial countries, and for a successful conclusion of the Uruguay Round by the end of 1993 on the basis of a comprehensive and balanced agreement; this is crucial to the growth prospects for industrial and developing countries alike. It therefore welcomed the joint statement by Mr. Sutherland, Mr. Preston, and Mr. Camdessus, issued on the morning of its meeting.

    Adjustment Experience of Low-Income Countries and Their Financing Needs

    4. The Committee recognizes that many low-income countries have found it hard to make the economic adjustment necessary to achieve economic and social progress. There are several reasons: the main ones are poor initial conditions; lack of domestic savings; lack of adequate institutional and administrative capacity; inappropriate policies which take time to correct; and an unfavorable external environment. Progress in most directions has been slower than among the middle-income countries, but the preliminary evidence suggests that countries which sustain strong adjustment policies do better than the rest. In these countries there has been significant progress with macro-economic stabilization and outwardly oriented policies, and in decontrolling domestic prices, particularly in agriculture. But even there, financial sector and public enterprise reforms have lagged behind, and private investment has responded only with a considerable lag. As a result, improvements have not yet led to a sustained increase in income per capita, and success in reducing poverty and in protecting the environment has been uneven.

    5. The Committee welcomes the broadening political consensus on adjustment strategies which stress stabilization and market friendly measures, combined with human resource development and poverty alleviation. It believes such strategies will succeed over time, if implemented consistently and backed up by structural reforms consistent with long-term sustainable development. It therefore urges countries that have not yet embarked on the adjustment process to formulate and implement their own programs accordingly. The design of adjustment programs and of external assistance needs to reflect the sociopolitical background and institutional capacity of the countries concerned. It follows that the best programs are those which are homegrown. The Bank and the Fund (as appropriate) in their relations with the borrowing countries, will do more to address the impact of macroeconomic and adjustment measures and their sequencing on poverty, employment, investment and the environment. Some of the lessons of the east Asian experience may be relevant to today’s low-income countries, particularly those of macroeconomic policy, export orientation, human resource development, and the training of a professional civil service.

    6. In many cases, low-income countries will need to supplement domestic savings with foreign investment and with substantial and timely concessional financial support, together with necessary and appropriate relief of bilateral debt. To sustain the required levels of external support and investment, they will have to maintain their commitment to economic reform, poverty alleviation, environmental soundness, public participation, and good governance. Donors should focus concessional assistance on the low-income adjusting countries. They should complete ratification of IDA-10 (International Development Association, Tenth Replenishment) as early as possible, agree to the broadest possible spectrum of contributors to the ESAF successor, work for its rapid implementation, and make significant bilateral Contributions to the Special Program of Assistance (SPA).

    Social Security Reform and Social Safety Nets

    7. The Committee looked at the continued need for social support, both to meet life hazards and to help those hurt by necessary adjustment measures. Many existing insurance structures have created unsustainable burdens on the government budget and the competitiveness of the formal sector, while failing to cover important groups of the population. Existing entitlements may now have to be reviewed. In many countries, including economies in transition, a system combining elements of public and private provision will be appropriate, but the mix will vary from case to case. The international institutions can help by continuing to provide technical assistance and policy advice.

    8. In addition to these classical social security systems, countries engaged in adjustment or systemic transformation may require well-designed extra social safety nets, integrated into their poverty-reduction strategy, involving schemes such as labor-intensive public works, nutrition programs, targeted food subsidies, retraining of dismissed workers, and “social funds.” But governments should avoid creating new long-term entitlements that might build up future budgetary problems. The appropriate mix of measures depends on data availability, administrative capacity, and financial resources. Budget outlays should where necessary be reallocated to provide financial resources, both for safety nets and for other pro-poor social spending. The poorest among them may require continued technical and financial support for such schemes from the World Bank and from donors. The Committee welcomes the constructive part played by the Bank and the Fund in their respective roles, in supporting social security system reforms and establishing and financing safety nets as part of their adjustment lending.

    World Bank Women-in-Development Strategy

    9. The Committee welcomed a report on the World Bank’s attempts to integrate gender issues into its overall development strategy. It commends the progress made, and welcomes the President’s commitment to a further strengthening of the Bank’s operations in this area. It notes that the Bank’s Executive Board will be reviewing the strategy in the Spring of 1994.

    The Cost Effectiveness of Aid

    10. The Committee believes it is more than ever important to enhance the effectiveness of development assistance, welcomes recent steps taken by the World Bank in this context, and proposes to address this matter next year. In order to provide maximum help to recipients, donor agencies and multilateral institutions need to maintain and improve their cost effectiveness.

    Next Meeting

    11. The Committee will meet again in Washington, DC., on April 26, 1994, when it will discuss population and migration issues.

    Forty-Eighth Meeting, Washington, April 26, 1994

    1. The forty-eighth meeting of the Development Committee was held in Washington, DC., on April 26, 1994, under the chairmanship of Mr. Rudolf Hommes, Minister of Finance and Public Credit of Colombia.1

    Resource Flows

    2. Ministers welcome the increased flows of resources to developing countries; 1993 was another record year. Particularly noteworthy was the sustained growth in private flows, which went mainly to the faster-growing and outwardly oriented countries that have implemented successful reforms. Similarly, much of the increase in official flows has been concentrated on non-concessional loans to middle-income countries. Much of the concessional official development assistance has been targeted on poorer countries, although its total increased only modestly in 1993 and the outlook continues to be unfavorable. In that connection. Ministers welcome the progress made and the increased amounts pledged at last week’s meeting on the Special Program of Assistance for Africa, and the recent extension and enlargement of the IMF’s enhanced structural adjustment facility.

    Population

    3. The Committee reviewed some of the issues that will be raised at the forthcoming United Nations Conference on Population and Development to be held in Cairo in September 1994. They welcomed the Secretary-General of the Conference, Dr. Nafis Sadik, who addressed their meeting.

    4. Trends. The world’s population has grown by 1.7 billion in the past two decades. Almost all the increase was in the developing countries. The total population now stands at nearly 5.7 billion, about a billion of whom still live in poverty. Although the rate of growth is now slowing down, another 2.8 billion will be added to the total by 2025, on the current United Nations “most likely” projections. On this basis, world population will probably double in less than 50 years. Ministers agree that the massive economic, social, political, and environmental consequences of these changes cannot be ignored.

    5. Policies. Ministers believe that an integrated population policy in developing countries must recognize the links between economic growth, population, poverty reduction, health, investment in human resources, and environmental degradation. All couples and individuals have the right to decide freely and responsibly on the number and spacing of their children. Family planning is only one of the available instruments and needs to be seen in the broader context of changing social patterns and the increased awareness of women’s role. Population programs are therefore becoming increasingly diverse, depending on the stage of the demographic transition in each country. Moreover, experience demonstrates that improved education and employment prospects (particularly for girls), improved health, and increased income all tend to reduce the birth rate. Institutional arrangements for the delivery of services may need to be strengthened, and must be tailored to local conditions and needs, taking full advantage of available nongovernmental and private sector organizations. They must pay full regard to the social and cultural traditions of each country.

    6. Priorities. Ministers note that the Cairo Conference will seek to establish clear and realistic objectives for future population policy. Without prejudging the outcome of the Conference, they agree that three objectives in particular deserve special attention:

    First, improvements in the primary school enrollment rate in low-income countries to achieve universal primary education;

    Second, improving access to family planning and related health services, estimated by the UN Fund for Population Activities (UNFPA) to require a doubling of investments by the year 2000;

    Third, reductions in maternal and child mortality in developing countries

    7. Developing Countries. In general, the resource requirements are affordable, compared with other major expenditure programs. Many developing economies can meet the costs. In some cases costs are already covered by user fees. But for the poorest people, continued public support will be essential, and is justified by the benefits. Ministers agreed that developing countries should consider giving these three objectives priority within total budgets.

    8. Donors. The poorest countries will still need help from donors. Bilateral and multilateral donors currently contribute about $1 billion a year to population programs in developing countries. Ministers hope that many individual bilateral donors will be able to improve the present average 1.25 percent share of existing aid budgets allocated to population programs, as well as their support for health and education.

    9. The World Bank. At the multilateral level, Ministers welcome the increasing share of the World Bank’s social sector programs that have risen from 6 percent to 16 percent of the total portfolio in the past five years. Within this program, about $1.8 billion annually is currently allocated to population, health, and nutrition, and $1.9 billion to education. Much of this affects the demand for population services indirectly. There are currently ten or more projects a year with significant direct population components, costing $200 million, concentrated mainly in the poorest developing countries. Ministers welcome the Bank’s readiness to respond rapidly to requests for more assistance in this field. Ministers recognize that the Bank is not the principal organization concerned with population, but that its policy dialogue and wider operations give it a unique opportunity to promote population policies. They therefore call on the Bank, other donors, the other multilateral such as UNFPA, and the borrowing governments to collaborate fully in operations and in mobilizing the institutional and financial resources needed; and re-evaluate their efforts following the Cairo Conference.

    10. Migration. Ministers discussed the related issue of international migration, and its social, political, and financial consequences for importing and exporting countries alike. They note that relatively little is known about the nature of these issues. Ministers noted the need for policies addressing these issues. They call for more policy-oriented research on migration and closer collaboration between the different international agencies concerned.

    Trade

    11. Impact of the Uruguay Round on the Developing Countries and Countries in Transition. Ministers greatly welcome the successful conclusion of the Uruguay Round and the agreements reached at Marrakesh and call for their rapid ratification and full implementation. These agreements reduce the risk of a relapse into protectionism, which would have greatly damaged many developing countries and countries in transition. They open up the prospect of faster economic growth for the world as a whole. All countries stand to gain. For countries to reap the full benefits from the Round, it is essential that they maintain stable macroeconomic environments and intensify their structural reform programs and trade liberalization, while improving their access to world markets.

    12. Ministers note that some developing countries may be adversely affected in the transition to the new world trading system, by the loss of preferences or by higher prices for food imports, although these effects will only be felt gradually, leaving time for adjustment. They urge the Bank and the Fund to take account of these possible adverse effects in designing country assistance strategies and operational support for the affected countries.

    13. Ministers welcome the creation of the new World Trade Organization (WTO), They urge the WTO, the Bank, and the Fund to cooperate fully and, within their own areas of responsibility, to help developing countries and countries in transition to take advantage of the new market opportunities. They also hope that all developing countries and countries in transition will soon join, so as to increase market access for their exports. They note that both Bank and Fund are engaged in fuller study of the impact of the Round, of future trade policy, and of their own future activities in the trade area. Ministers will resume discussion of these questions at their next meeting.

    14. Commodities. Ministers also reviewed recent work in the Bank and the Fund on commodity prices. They agree that despite signs of a modest recovery in the short term, prices are unlikely to return to the levels of the 1970s and early 1980s. Given these uncertainties, Ministers agree it would be prudent not to assume an improvement in the long term, and wise to err on the side of caution.

    15. Ministers agree that if price shocks are expected to be only temporary, then provision of compensatory finance may be appropriate. But if the fall in prices is expected to be permanent, then an adjustment-oriented response should not be deferred in the hope of a recovery. Ministers therefore believe that developing country governments should continue to diversify their economies. They will need the ongoing support of the World Bank, the Fund, and the donor community. Ministers call on the Bank to explore additional measures in its investment work in this area. The continuing volatility of prices also requires the maintenance of contingency measures to safeguard programs supported by the Fund.

    16. Ministers note that few international commodity agreements have maintained price levels in the face of falling demand, increased production, and lower costs. Government price stabilization schemes do not generally work well when commodity prices are expected to fall further or remain low; they tend to create distortions and place considerable strain on government budgets. For many countries and products, hedging instruments in commercial futures markets now permit private agents to protect themselves against price fluctuations, although there remain a number of legal, financial, and technical barriers. Ministers welcome the technical assistance being given by UN Conference on Trade and Development (UNCTAD), the World Bank, and other agencies, to help smaller producers overcome these obstacles and take advantage of such markets. They welcome the studies being undertaken by the Bank of new guarantee mechanisms which would permit these poorer and less creditworthy countries to undertake market-based hedging operations.

    Development Banks

    17. The Committee agreed in principle to establish a small task force to review the development role being played by the multilateral development banks, including the World Bank, and the four main regional banks. This task force, whose Chairman, terms of reference, and composition will be agreed after consultation with the governments, will aim to complete its work by October 1995.

    Chairman

    18. The Committee selected Mr. M’Hamed Sagou of Morocco to be its next Chairman in succession to Mr. Rudolf Hommes of Colombia. The Committee expressed its warmest thanks to Mr. Hommes at the end of his period in the Chair.

    Next Meeting

    19. The Committee agreed to meet again in Madrid, Spain, on October 3, 1994, when it will discuss the question of aid effectiveness and the work of the World Bank and IMF in the light of the Uruguay Round.

    Mr. Lewis T. Preston, President of the World Bank, Mr, Michel Camdessus, Managing Director of the International Monetary Fund, Mr. Peter Sutherland, Director-General of the GATT. Mr, Mohammed Imady, Minister of Economy and Foreign Trade of Syria and Chairman of the Croup of Twenty-Four, and Mr. Peter Mountfield, Executive Secretary, took part in the meeting. Observers from a number of international and regional organizations also attended.

    APPENDIX VI Executive Directors and Voting Power on April 30, 1994
    VotesPercent
    DirectorCastingbyTotalof Fund
    AlternateVotes ofCountryVotes1Total2
    APPOINTED
    Karin LissakersUnited States265,518265,51817.81
    Barry S. Newman
    Stefan SchoenbergGermany82,66582,6655.54
    Erika Wagenhoefer
    Hiroo Fukuijapan82,66582,6655.54
    Toshihiko Fukuyama
    Marc-Antoine AuthemanFrance74,39674,3964.99
    Michel Sirat
    Huw EvansUnited Kingdom74,39674,3964.99
    John Dorrington
    ELECTED
    Willy KiekensAustria12,133
    (Belgium)Belarus3,054
    Johann PraderBelgium31,273
    (Austria)Czech Republic6,146
    Hungary7,798
    Kazakhstan2,725
    Luxembourg1,605
    Slovak Republic2,824
    Turkey6,67074,2284.98
    Godert A. PosthumusArmenia925
    (Netherlands)Bulgaria4,899
    Oleh HavrylyshynCyprus1,250
    (Ukraine)Georgia1,360
    Israel6,912
    Moldova1,150
    Netherlands34,692
    Romania7,793
    Ukraine10,22369,2024.64
    Roberto MarinoCosta Rica1,440
    (Mexico)El Salvador1,506
    Gerver TorresGuatemala1,788
    (Venezuela)Honduras1,200
    Mexico17,783
    Nicaragua1,211
    Spain19,604
    Venezuela19,76364,2954.31
    Giulio LanciottiAlbania603
    (Italy)Greece6,126
    Nikolaos CoumbisItaly46,157
    (Greece)Malta925
    Portugal5,826
    San Marino35059,9874.02
    ELECTED (continued)
    Douglas E. SmeeAntigua and Barbuda335
    (Canada)Bahamas, The1,199
    Garrett F. MurphyBarbados739
    (Ireland)Belize385
    Canada43,453
    Dominica310
    Grenada335
    Ireland5,500
    Jamaica2,259
    St. Kitts and Nevis315
    St. Lucia360
    St. Vincent and
    the Grenadines31055,5003.72
    Jarle BergoDenmark10,949
    (Norway)Estonia715
    Eva SrejberFinland8,868
    (Sweden)Iceland1,103
    Latvia1,165
    Lithuania1,285
    Norway11,296
    Sweden16,39051,7713.47
    Muhammad Al-JasserSaudi Arabia51,55651,5563.46
    (Saudi Arabia)
    Abdulrahman A. Al-Tuwaijri
    (Saudi Arabia)
    Ewen L. WatermanAustralia23,582
    (Australia)Kiribati290
    Amando M. Tetangco, Jr.Korea8,246
    (Philippines)Marshall Islands275
    Mongolia621
    New Zealand6,751
    Papua New Guinea1,203
    Philippines6,584
    Seychelles310
    Solomon Islands325
    Vanuatu375
    Western Samoa33548,8973.28
    A. Shakour ShaalanBahrain1,078
    (Egypt)Egypt7,034
    Yacoob Yousef MohammedIraq5,290
    (Bahrain)Jordan1,467
    Kuwait10,202
    Lebanon1,037
    Libya8,426
    Maldives305
    Oman1,444
    Qatar2,155
    Syrian Arab Republic2,349
    United Arab Emirates4,171
    Yemen, Republic of2,01546,9733.15
    ELECTED (continued)
    Konstantin G. KagalovskyRussia43,38143,3812.91
    (Russia)
    Aleksei V. Mozhin
    (Russia)
    J. E. lsmaelFiji761
    (Indonesia)Indonesia15,226
    Kleo-Thong HetrakulLao People’s Democratic
    (Thailand)Republic641
    Malaysia8,577
    Myanmar2,099
    Nepal770
    Singapore3,826
    Thailand5,989
    Tonga300
    Viet Nam2,66640,8552.74
    Daniel KaeserAzerbaijan1,420
    (Switzerland)Kyrgyz Republic895
    Krzysztof LinkPoland10,135
    (Poland)Switzerland24,954
    Turkmenistan730
    Uzbekistan2,24540,3792.71
    Abbas MirakhorAfghanistan, Islamic
    (Islamic Republic ofState of1,454
    Iran)Algeria9,394
    Mohammed DairiGhana2,990
    (Morocco)Iran, Islamic Republic of11,035
    Morocco4,527
    Pakistan7,832
    Tunisia2,31039,5422.65
    Alexandre KafkaBrazil21,958
    (Brazil)Colombia5,863
    Alberto CaideronDominican Republic1,838
    (Colombia)Ecuador2,442
    Guyana922
    Haiti691
    Panama1,746
    Suriname926
    Trinidad and Tobago2,71839,1042.62
    K.P. GeethakrishnanBangladesh4,175
    (India)Bhutan295
    L. Eustace N. FernandoIndia30,805
    (Sri Lanka)Sri Lanka3,28638,5612.59
    L. J. MwananshikuAngola2,323
    (Zambia)Botswana616
    Barnabas S. DlaminiBurundi822
    (Swaziland)Ethiopia1,233
    ELECTED (concluded)
    Gambia, The479
    Kenya2,244
    Lesotho489
    Liberia963
    Malawi759
    Mozambique1,090
    Namibia1,246
    Nigeria13,066
    Sierra Leone1,022
    Swaziland615
    Tanzania1,719
    Uganda1,589
    Zambia2,953
    Zimbabwe2,86336,0912.42
    ZHANG Ming (China)China34,10234,1022.29
    WEI Benhua (China)
    A. Guillermo ZoccaliArgentina15,621
    (Argentina)Bolivia1,512
    Alberto F. JiménezChile6,467
    de Lucio (Peru)Paraguay971
    Peru4,911
    Uruguay2,50331,9852.14
    Corentino V. SantosBenin703
    (Cape Verde)Burkina Faso692
    Yves-Marie T. KoissyCameroon1,601
    (Côte d’ivoire)Cape Verde320
    Central African Republic662
    Chad663
    Comoros315
    Congo829
    Côte d’lvoire2,632
    Djibouti365
    Equatorial Guinea493
    Gabon1,353
    Guinea1,037
    Guinea-Bissau355
    Madagascar1,154
    Mali939
    Mauritania725
    Mauritius983
    Niger733
    Rwanda845
    São Tomé and Príncipe305
    Senegal1,439
    Togo793
    Zaïre3,16023,0961.55
    1,469,1453,498.525

    Voting power varies on certain matters pertaining to the General Department with use of the Fund’s resources in that department.

    Percentages of total votes (1,491,143) in the General Department and the SDR Department.

    This total does not include the votes of Cambodia, Croatia, the former Yugoslav Republic of Macedonia, the Federated States of Micronesia, Slovenia, Somalia. South Africa, and Tajikistan, which did not participate in the 1992 Regular Election of Executive Directors. The combined votes of those members total 21.998—1,48 percent of those in the Genera] Department and the SDR Department.

    This total does not include the votes of Sudan, which were suspended effective August 9. 1993 pursuant to Article XXVI, Section 2(b) of the Articles of Agreement.

    This figure may differ from the sum of the percentages shown for individual Directors because of rounding.

    APPENDIX VII Changes in Membership of Executive Board

    Changes in membership of the Executive Board between May 1, 1993 and April 30, 1994 were as follows:

    Manuel Estela (Peru) relinquished his duties as Alternate Executive Director to A. Guillermo Zoccali (Argentina), effective May 3, 1993.

    Alberto F. Jimenez de Lucio (Peru) was appointed as Alternate Executive Director to A. Guillermo Zoccali (Argentina), effective May 4, 1993.

    Bernd Esdar (Germany) relinquished his duties as Alternate Executive Director to Stefan Schoenberg (Germany), effective July 31, 1993.

    Erika Wagenhoefer (Germany) was appointed as Alternate Executive Director to Stefan Schoenberg (Germany), effective August 1, 1993.

    Isabelle Martel (France) relinquished her duties as Alternate Executive Director to Jean-Pierre Landau, effective August 22, 1993.

    Michel Sirat (France) was appointed as Alternate Executive Director to Jean-Pierre Landau (France), effective August 23, 1993.

    Thomas C. Dawson II (United States) relinquished his duties as Executive Director for the United States, effective September 7, 1993.

    Jean-Pierre Landau (France) relinquished his duties as Executive Director for France, effective September 10, 1993.

    Marc-Antoine Autheman (France) was appointed as Executive Director for France, effective September 11, 1993.

    Ingimundur Fridriksson (Iceland) relinquished his duties as Executive Director for Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden, effective October 15, 1993.

    Jarle Bergo (Norway) was elected as Executive Director for Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden, effective October 16, 1993.

    Karin Lissakers (United States) was appointed as Executive Director for the United States, effective December 1, 1993.

    Jon A. Solheim (Norway) relinquished his duties as Alternate Executive Director to Jarle Bergo (Norway), effective December 31, 1993.

    Naoki Tabata (Japan) relinquished his duties as Alternate Executive Director to Hiroo Fukui (Japan), effective December 30, 1993.

    Toshihiko Fukuyama (Japan) was appointed as Alternate Executive Director to Hiroo Fukui (Japan), effective December 31, 1993.

    Eva Srejber (Sweden) was appointed as Alternate Executive Director to Jarle Bergo (Norway), effective January 1, 1994.

    Omar Kabbaj (Morocco) relinquished his duties as Alternate Executive Director to Abbas Mirakhor (Islamic Republic of Iran), effective January 16, 1994.

    David Peretz (United Kingdom) relinquished his duties as Executive Director for the United Kingdom, effective February 18, 1994.

    Huw Evans (United Kingdom) was appointed Executive Director for the United Kingdom, effective February 19, 1994.

    Mohammed Dairi (Morocco) was appointed as Alternate Executive Director to Abbas Mirakhor (Islamic Republic of Iran), effective March 1, 1994.

    Ioannis Papadakis (Greece) relinquished his duties as Alternate Executive Director to Giulio Lanciotti (Italy), effective March 11, 1994.

    Juan Carlos Jaramillo (Colombia) relinquished his duties as Alternate Executive Director to Alexandre Kafka (Brazil), effective March 18, 1994.

    Nikolaos Coumbis (Greece) was appointed as Alternate Executive Director to Giulio Lanciotti (Italy), effective March 21, 1994.

    Barry S. Newman (United States) was appointed as Alternate Executive Director to Karin Lissakers (United States), effective March 28, 1994.

    Alberto Calderon (Colombia) was appointed as Alternate Executive Director to Alexandre Kafka (Brazil), effective March 31, 1994.

    Jacques de Groote (Belgium) relinquished his duties as Executive Director for Austria, Belarus, Belgium, Czech Republic, Hungary, Kazakhstan, Luxembourg, Slovak Republic, and Turkey, effective March 31, 1994.

    Willy Kiekens (Belgium) was appointed Executive Director for Austria, Belarus, Belgium, Czech Republic, Hungary, Kazakhstan, Luxembourg, Slovak Republic, and Turkey, effective April 1, 1994.

    The following served at certain meetings of the Executive Board during 1993/94 as Temporary Alternate Executive Directors to the Executive Directors indicated:

    Temporary AlternateExecutive Director for Whom
    Executive DirectorTemporary Alternate Served
    John M. Abbott (United States)Thomas C. Dawson II (United States)
    John 0. Aderibigbe (Nigeria)L.B. Monyake (Lesotho)
    Meekal A. Ahmed (Pakistan)Mohamed Finaish (Libya)
    Hassan M. Al-Atrash (Syria)A. Shakour Shaalan (Egypt)
    S. E. Al-Huseini (Saudi Arabia)Muhammad Al-Jasser (Saudi Arabia)
    Maria Celina B. Arraes (Brazil)Alexandre Kafka (Brazil)
    David Barr (United Kingdom)David Peretz (United Kingdom)
    Huw Evans (United Kingdom)
    Rita Dias Bessone Basto (Portugal)Giulio Lanciotti (Italy)
    Taye Berrihun (Ethiopia)L. J. Mwananshiku (Zambia)
    George Bindley-Taylor (Trinidad and Tobago)Alexandre Kafka (Brazil)
    Michael Blome (Germany)Stefan Schoenberg (Germany)
    Patrice Bonzom (France)jean-Pierre Landau (France)
    Martha Brettschneider (United States)Karin Lissakers (United States)
    Luis E. Breuer (Paraguay)A. Guillermo Zoccali (Argentina)
    Johannes H. Brits (Netherlands)Godert A. Posthumus (Netherlands)
    Juan M. Burdiel (Spain)Roberto Marino (Mexico)
    P. Cailleteau (France)Marc-Antoine Autheman (France)
    Alan G. Cathcart (United Kingdom)David Peretz (United Kingdom)
    Huw Evans (United Kingdom)
    Amoy Chang Fong (Trinidad and Tobago)Alexandre Kafka (Brazil)
    Mohamed Bahaa Chatah (Lebanon)A. Shakour Shaalan (Egypt)
    CHEN Minqiang (China)CHE Peiqin (China)
    Roberto F. Cippa (Switzerland)Daniel Kaeser (Switzerland)
    Susan B. Creane (United States)Thomas C. Dawson II (United States)
    Karin Lissakers (United Slates)
    Akos Cseres (Hungary)Jacques de Groote (Belgium)
    Doc Cuong (Viet Nam)J, E. Ismael (Indonesia)
    Dominique Desruelle (France)Jean-Pierre Landau (France)
    Maiga Dzervite (Latvia)Jarle Bergo (Norway)
    Gamal Zaki El-Masry (Egypt)A. Shakour Shaalan (Egypt)
    Samia Farid (Egypt)A. Shakour Shaalan (Egypt)
    Salam K. Fayyad (Jordan)A. Shakour Shaalan (Egypt)
    Raphael Ferrillo (Switzerland)Daniel Kaeser (Switzerland)
    B. R. Fuleihan (United Kingdom)Muhammad Al-Jasser (Saudi Arabia)
    Antonio Galicia (Mexico)Roberto Marino (Mexico)
    Toufic K. Gaspard (Lebanon)A. Shakour Shaalan (Egypt)
    Massimo Giulimondi (Italy)Giulio Lanciotti (Italy)
    Grigori Y. Glazkov (Russia)Konstantin G. Kagalovsky (Russia)
    Hassan Golriz (Iran, Islamic Republic of)Abbas Mirakhor (Iran, Islamic Republic of)
    Mohamed Ali Hammoudi (Iran. Islamic Republic of)Abbas Mirakhor (Iran. Islamic Republic of)
    Mary Elizabeth Hansen (United States)Thomas C. Dawson II (United States)
    Georges Heinen (Luxembourg)Jacques de Groote (Belgium)
    Chorobek Imashev (Kyrgyz Republic)Daniel Kaeser (Switzerland)
    Shinya Ishida (Japan)Hiroo Fukui (J apan)
    Abdel Rehman Ismael (Mauritius)Corentino V. Santos (Cape Verde)
    James Jamnik (Canada)Douglas E. Smee (Canada)
    Jiri Jonas (Czech Republic)Jacques de Groote (Belgium)
    J. Mills Jones (Liberia)L. J. Mwananshiku (Zambia)
    Teruhide Kanada (Japan)Hiroo Fukui (Japan)
    Werner C. Keller (Switzerland)Daniel Kaeser (Switzerland)
    Elena Kotova (Russia)Konstantin G. Kagalovsky (Russia)
    Aguil M. Koulizade (Azerbaijan)Daniel Kaeser (Switzerland)
    Ekaterina Kouprianova (Russia)Konstantin G. Kagalovsky (Russia)
    Kwassivi Kpetigo (Togo)Corentino V Santos (Cape Verde)
    Tuseno-Minu Kudiwu (Zaire)Corentino V. Santos (Cape Verde)
    Vural Kural (Turkey)Jacques de Groote (Belgium)
    Nicole Laframboise (Canada)Douglas E. Smee (Canada)
    Kathryn J. Langdon (Canada)Douglas E. Smee (Canada)
    Wolfgang Laux (Germany)Stefan Schoenberg (Germany)
    Young-Hoi Lee (Korea)E. L. Waterman (Australia)
    Gillian Lindsay-Nanton (St. Vincent and the Grenadines)Douglas E. Smee (Canada)
    Boris M. Lvin (Russia)Konstantin G. Kagalovsky (Russia)
    J. Mafararikwa (Zimbabwe)L. J. Mwananshiku (Zambia)
    Noel Mancebo (Uruguay)A. Guillermo Zoccali (Argentina)
    Graham J. Matthews (Australia)E. A. Evans (Australia)
    Sarah McDougall (New Zealand)E. L Waterman (Australia)
    Pedro Antonio Merino (Spain)Roberto Marino (Mexico)
    Raphael Meron (Israel)Godert A. Posthumus (Netherlands)
    Mohammad Jafar MojarradAbbas Mirakhor (Iran, Islamic Republic of)
    (Iran, Islamic Repulic of)
    Frank Moss (Belgium)Jacques de Groote (Belgium)
    James A.K. Munthali (Malawi)L. J. Mwananshiku (Zambia)
    James A.K. Munthali (Malawi)L. B. Monyake (Lesotho)
    Jean-Christian Obame (Gabon)Corentino V. Santos (Cape Verde)
    Toshio Oya (Japan)Hiroo Fukui (Japan)
    Yasmin Patel (Mozambique)L. J. Mwananshiku (Zambia)
    L. M. Piantini (Dominican Republic)Alexandre Kafka (Brazil)
    Carsten F. Pillath (Germany)Stefan Schoenberg (Germany)
    Robert Kenneth W. Powell (United Kingdom)David Peretz (United Kingdom)
    Neeraj Prasad (India)K. P. Geethakrishnan (India)
    Enzo Quattrociocche (Italy)Giulio Lanciotti (Italy)
    Roderick Rainford (Jamaica)Douglas E. Smee (Canada)
    A. Raza (India)K. P. Geethakrishnan (India)
    Sadok Rouai (Tunisia)Abbas Mirakhor (Iran, Islamic Republic of)
    Patricio L. Rubianes (Ecuador)Alexandre Kafka (Brazil)
    Matthew W. Ryan (United States)Thomas C. Dawson II (United States)
    Daniel Saha (Cameroon)Corentino V. Santos (Cape Verde)
    Bawwirou A. Sarr (Mauritania)Corentino V. Santos (Cape Verde)
    Shigei Shimizu (Japan)Hiroo Fukui (Japan)
    Arnor Sighvatsson (Iceland)jarle Bergo (Norway)
    Frixos Antonios Sorokos (Cyprus)Godert A. Posthumus (Netherlands)
    Bea Szombati (Hungary)Jacques de Groote (Belgium)
    Lisa Tase (Romania)Godert A. Posthumus (Netherlands)
    T. P. Thomas (India)K. P. Geethakrishnan (India)
    Rupert Thorne (United Kingdom)David Peretz (United Kingdom)
    Norbert Toe (Burkina Faso)Corentino V Santos (Cape Verde)
    Ake TOrnqvist (Sweden)Ingimundur Fridriksson (Iceland)
    Jarle Bergo (Norway)
    Jan Willem van der Kaaij (Netherlands)Godert A. Posthumus (Netherlands)
    Vitali Verjbitski (Russia)Konstantin G. Kagalovsky (Russia)
    R. Von Kleist (Germany)Stephan Schoenberg (Germany)
    Silvia Vori (Italy)Renato Filosa (Italy)
    WANG Yanzhi (China)ZHANG Ming (China)
    WANG Xiangyong (China)ZHANG Ming (China)
    Jeremy B. Wire (United States)Karin Lissakers (United Stales)
    WU Hongwei (China)ZHANG Ming (China)
    YANG Xiangyuan (China)CHE Peiqin (China)
    APPENDIX VIII Administrative and Capital Budgets, Staffing, and Organization

    The Fund’s Administrative Budget for the financial year ended April 30, 1994 (1993/94) was $476.8 million, and capital projects totaling $124.8 million, including a major building project, were also approved. The actual administrative expenditures totaled $448.3 million, and capital project disbursements totaled $26.0 million for projects approved in 1993/94 or prior years (Table VIII.1). During the year, a number of steps were taken to increase the efficiency of the Fund and reduce its costs. These included increased automation of Fund work activities and adjustments in administrative standards, including a reduction in the class of business travel.

    Table VIII.1Administrative Budget as Approved by the Executive Board for the Financial Year Ending April 30, 1995 Compared with Actual Expenses for the Financial Years Ended April 30, 1992, April 30, 1993, and April 30, 1994; and Capital Budgets as Approved by the Executive Board for Capital Projects in Financial Years 1992, 1993, 1994, and 1995

    (Values expressed in thousands of U.S. dollars)1

    FinancialFinancialFinancialFinancial
    Year EndedYear EndedYear EndedYear Ending
    April 30, 1992April 30, 1993April 30, 1994April 30, 1995
    ActualActualActual
    ExpensesExpensesExpensesBudget
    ADMINISTRATIVE BUDGET
    I. Personnel Expenses
    Salaries153,093174,551192,920208,930
    Other personnel expenses82,89395,961122,785121,585
    Subtotal235,986270,512315,705330,515
    II. Travel Expenses
    Business travel36,14243,67541,32048,470
    Other travel18,20924,49227,09925,710
    Subtotal54,35168,16768,91974,180
    III. Other Administrative Expenses
    Communications7,4628,95410,30311,510
    Building occupancy21,81928,36137,61343,360
    Books and printing5,8765,8647,0407,375
    Supplies and equipment6,3928,4368,6148,315
    Data processing18,25714,20715,85718,000
    Miscellaneous4,9366,4848,95611,350
    Subtotal64,74272,30688,38399,910
    IV. Reimbursements-17,012-21,913-24,712-29,775
    TOTAL ADMINISTRATIVE BUDGET338,067389,072448,295474,830
    Less: Reimbursement for administering the SDR Department-5,618-4,067-5,392
    Reimbursement for administering the SAF/ESAF-20,912-23,200-26,392
    Net Administrative Budget Expenses2311,537361,305416,511474,830
    CAPITAL BUDGET
    Capital Project Budgets341,3009,050124,76017,445
    Capital Project Disbursements8,88217,57625,975

    Due to rounding, details may not add to total.

    Net administrative budget expenses exclude valuation gain or loss on administrative currency holdings

    Capital budgets for projects beginning in each financial year.

    During 1993/94, resources were used to support the work of the institution in the following proportions: country-specific work (48.9 percent); policy development, evaluation, and research (11.1 percent); statistics, information, and external relations (6.3 percent): external training (4.6 percent); administrative support (17.2 percent); and Board of Governors and Executive Board (11.9 percent); see Chart 9.

    Chart 9Cost of Major Activities

    (As a percentage of total costs)

    Note: Information based on financial year 1994 estimated outturn of expenditures. The cost of general supervision, training, professional development and leave has been distributed proportionally to each of the other categories.

    During the year, steps were taken to decentralize responsibility for budget decisions in selected areas. Specifically, department managers were provided dollar-denominated budgets in the area of business travel to increase their incentives and flexibility in controlling costs in this area. Also, the time horizon for budget planning increasingly emphasized longer term, as opposed to, annual planning.

    Over the last three years, 1991/92-93/94, the Fund’s budgeted staff resources have increased by 507 staff years, a substantial majority having been devoted to work with the countries of Eastern Europe and the states of the former Soviet Union. This was a significant undertaking requiring recruitment and training of the largest staff increase in the Fund’s history.

    In the financial year ended April 30, 1994, there were 217 appointments to the Fund’s regular staff and 99 separations. At the end of the financial year, there were 2,090 staff members from 114 countries. Organizational changes included the addition of one new division in each of three area departments (Central Asia, European II, and Western Hemisphere Departments), to help maintain an adequate level of supervision, and the redefinition of the functions of the divisions of the IMF Institute, to meet better the training needs of member countries and to integrate the Fund’s external training program more closely with country operations. A new Work Practices and Technology Secretariat was established in the Office of the Managing Director to help coordinate the application of technologies and changes in Fund work practices.

    Late in 1993/94, the Executive Directors approved an administrative budget for 1994/95 of $474.8 million, a decrease of 0.4 percent over the original budget for the previous year, and a capital project budget of $17.4 million. The 1994/95 administrative budget represents a decision to hold expenses to a minimal or no real growth level. The only increases permitted relate to changes in pricing levels and filling of previously authorized vacancies.

    To meet the Fund’s office space needs and reduce office occupancy costs, the Executive Board also approved a capital project budget of $111.0 million for the construction of an addition to the headquarters building. The new addition, which will be occupied beginning in 1997, will allow the Fund to bring back to the expanded headquarters about 600 of the 1,300 staff currently occupying higher-cost leased space.

    APPENDIX IX Financial Statements

    REPORT OF THE EXTERNAL AUDIT COMMITTEE

    Washington, D.C.

    June 29, 1994

    Authority and Scope of the Audit

    In accordance with Section 20(b) of the By-Laws of the International Monetary Fund we have audited the financial statements of the Fund covering the:

    • General Department for the year ended April 30, 1994,

    • SDR Department for the year ended April 30, 1994, and

    • Accounts Administered by the International Monetary Fund, for the year ended April 30, 1994, which consist of the:

      • 1. Enhanced Structural Adjustment Facility Trust,

      • 2. Enhanced Structural Adjustment Facility Administered Accounts:

        • —Austria,

        • —Belgium,

        • —Greece,

        • —Saudi Fund for Development Special Account,

      • 3. Other Administered Accounts:

        • —Administered Account—Japan,

        • —Administered Technical Assistance Account—Japan,

      • 4. Trust Fund,

      • 5. Supplementary Financing Facility Subsidy Account.

    Our audit was conducted in accordance with generally accepted auditing standards and included reviews of accounting and internal control systems, and tests of the accounting records. We evaluated the extent and results of the work of the outside accounting firm as well as that of the Office of Internal Audit and Review and also used other audit procedures as deemed necessary.

    Audit Opinion

    In our opinion the financial statements of the General Department (including the related supplemental schedules one to three), the SDR Department, and the Accounts Administered by the International Monetary Fund have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year, except for the changes in the Fund’s method of accounting for capital assets and post-retirement benefits, and give a true and fair view of the respective financial positions and the allocations and holdings of SDRs as at April 30, 1994, and of the financial results of operations and transactions during the year then ended.

    EXTERNAL AUDIT COMMITTEE:

    /s/ Mohammed Zouhair Tallaj, Chairman (Syrian Arab Republic)

    /s/ Gerwald Kern (Germany)

    /s/ Suwit Nivartvong (Thailand)

    GENERAL DEPARTMENT BALANCE SHEETS as at April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    ASSETS
    GENERAL RESOURCES ACCOUNT
    Currencies and securities (Notes 2 and 5)140,980,507138,828,278
    SDR holdings (Note 3)6,037,7617,930,129
    Gold holdings (Note 4)3,624,7973,624,797
    Charges receivable (Note 5)1,319,9161,408,218
    Interest receivable on SDR holdings65,944102,765
    Other receivables (Note 2)77,38082,397
    Other assets (Note 1)107,67250,052
    Quota subscriptions receivable73,500
    TOTAL GENERAL RESOURCES ACCOUNT152,213,977152,100,136
    SPECIAL DISBURSEMENT ACCOUNT
    Deposits226,465615,315
    Structural adjustment facility loans1,835,2471,879,252
    Interest receivable6,0987,362
    TOTAL SPECIAL DISBURSEMENT ACCOUNT2,067,8102,501,929
    TOTAL ASSETS154,281,787154,602,065
    QUOTAS, RESERVES, LIABILITIES, AND RESOURCES
    GENERAL RESOURCES ACCOUNT
    Quotas (Note 2)144,859,000144,606,200
    Reserves (Note 6)1.701,4721,627,323
    Special Contingent Accounts (Note 5)1,154,493911,897
    Liabilities
    Borrowing (Note 7)3,060,0003,360,000
    Remuneration payable (Note 5)182,459241,719
    Accrued interest26,51541,320
    Other liabilities187,103253,727
    3,456,0773,896,766
    Deferred income from charges (Note 5)1,042,9351,057,950
    TOTAL GENERAL RESOURCES ACCOUNT152,213,977152,100,136
    SPECIAL DISBURSEMENT ACCOUNT
    Accumulated resources2,065,2192,499,884
    Deferred income (Note 5)2,5912,045
    TOTAL SPECIAL DISBURSEMENT ACCOUNT2,067,8102,501,929
    TOTAL QUOTAS. RESERVES, LIABILITIES, AND RESOURCES154,281,787154,602,065
    The accompanying notes and schedules are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    GENERAL DEPARTMENT INCOME STATEMENTS for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    GENERAL RESOURCES ACCOUNT
    OPERATIONAL INCOME (Note 5)
    Periodic charges1,173,1201,392,023
    Interest on SDR holdings299,507217,380
    Service charges26,20226,422
    Stand-by, special charges, and other income9,29237,680
    Burden-sharing contributions net of refunds (Note 5)
    Additional charges96,64562,795
    Reduction of remuneration154,367103,489
    Settlements in excess of deferred charges15,01598,300
    1,774,1481,928,089
    OPERATIONAL EXPENSES
    Remuneration (Note 5)992,8621,116,839
    Interest expense (Note 7)147,156222,072
    Allocation to the Special Contingent Accounts (Note 5)242,597255,265
    1,382,6151,594,176
    391,533333,913
    ADMINISTRATIVE EXPENSES (Notes 1 and 9)318,002263,342
    NET INCOME OF GENERAL RESOURCES ACCOUNT
    BEFORE NET EFFECT OF CHANGES IN
    ACCOUNTING METHODS
    73,53170,571
    Cumulative effect of changes in accounting methods (Note 1):
    Accounting for property and equipment48,418
    Accrual of post-retirement benefits other than pensions(47,800)
    NET INCOME OF GENERAL RESOURCES ACCOUNT74,14970,571
    SPECIAL DISBURSEMENT ACCOUNT
    Investment income23,90639,720
    Interest and special charges8,7278,521
    32,63348,241
    Administrative expenses (Note 9)19,20016,502
    NET INCOME OF SPECIAL DISBURSEMENT ACCOUNT13,43331,739
    The accompanying notes and schedules are an integral part of the financial statements.
    GENERAL DEPARTMENT STATEMENTS OF CHANGES IN RESERVES AND RESOURCES for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    RESERVES—GENERAL RESOURCES ACCOUNT
    SPECIAL RESERVE (Note 6)
    Balance, beginning of the year1,261,7431,191,172
    Net income74,14970,571
    Balance, end of the year1,335,8921,261,743
    GENERAL RESERVE (Note 6)
    Balance, beginning and end of the year365,580365,580
    TOTAL RESERVES OF THE GENERAL
    RESOURCES ACCOUNT1,701,4721,627,323
    RESOURCES—SPECIAL DISBURSEMENT ACCOUNT
    Balance, beginning of the year2,499,8842,570,314
    Transfers from Trust Fund59,6051,601
    Transfers to ESAF Trust(507,703)(103,770)
    2,051,7862,468,145
    Net income13,43331,739
    TOTAL RESOURCES Or THE SPECIAL DISBURSEMENT ACCOUNT2,065,2192,499,884
    The accompanying notes and schedules are an integral part of the financial statements.

    GENERAL DEPARTMENT NOTES TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    General Department

    The General Department consists of the General Resources Account, the Special Disbursement Account, and the Investment Account. The Investment Account had not been activated at April 30, 1994.

    General Resources Account

    Most of the transactions between member countries and the Fund take place through the General Resources Account. This account reflects the receipt of quota subscriptions, purchases and repurchases, collection of charges on member’s use of Fund credit and payment of remuneration on creditor positions in the Fund, and repayment of principal to the Fund’s lenders. Assets held in the General Resources Account include (i) currencies (including securities) of the Fund’s member countries, (ii) SDR holdings, and (iii) gold.

    The Fund makes its resources available to its members under policies on the use of its resources by selling to members, in exchange for their own currencies, SDRs or currencies of other members. When members make purchases, they incur an obligation to repurchase the Fund’s holdings of their currencies, within the periods specified by the Fund, by the payment to the Fund of SDRs or currencies of other members specified by the Fund. The Fund’s policies on the use of its resources are intended to assure that their use is temporary and will be reversed within time periods specified by the Fund.

    The composition of the Fund’s holdings of members’ currencies changes as a result of the Fund’s transactions, including purchases and repurchases. Currencies and securities consist of holdings of currencies or notes payable on demand that substitute for the members’ currencies, including those of members that make use of the Fund’s resources and those used to finance the Fund’s operations and transactions.

    A member has a reserve tranche in the Fund to the extent that the Fund’s holdings of its currency, excluding holdings that reflect the member’s use of Fund credit, are less than the member’s quota. A member’s reserve tranche is considered a part of the member’s external reserves, which it may draw at any time when it represents that it has a need. Reserve tranche purchases are not considered a use of Fund credit and are not subject to repurchase obligations.

    A member is entitled to repurchase at any time the Fund’s holdings of its currency on which the Fund levies charges and is expected to make repurchases as and when its balance of payments and reserve position improves.

    On April 23, 1993, the systemic transformation facility (STF) was established as a temporary facility to provide assistance at an early stage to members experiencing serious balance of payments difficulties as a result of disruptions in their traditional trade and payments arrangements. This facility provides assistance to members that are significantly affected by these systemic shocks.

    Special Disbursement Account

    The Special Disbursement Account was activated on June 30, 1981 to receive transfers from the Trust Fund, which is in the process of being wound up. A structural adjustment facility (SAF) was established in March 1986 within the Special Disbursement Account to provide balance of payments assistance on concessional terms to qualifying low-income developing members.

    The Special Disbursement Account is a part of the General Department of the Fund. The assets and income of the account are held separate from resources of other accounts of the General Department. Assets that exceed the needs of the account are transferred to the Reserve Account of the Enhanced Structural Adjustment Facility Trust (ESAF Trust), which is separately administered by the Fund as Trustee. Resources of the ESAF Trust Reserve Account that are determined to be in excess of its estimated needs are to be transferred back to the Special Disbursement Account. Upon liquidation of the ESAF Trust, the amounts remaining in the ESAF Trust Reserve Account after the discharge of remaining liabilities shall be transferred to the Special Disbursement Account. On February 23, 1994, the Fund transferred certain resources derived from the termination of the 1976 Trust Fund to the ESAF Trust Subsidy Account. Upon liquidation of the ESAF Trust, any resources remaining in the ESAF Trust Subsidy Account will be returned in proportion to the Special Disbursement Account and the contributors of the ESAF Trust Subsidy Account.

    1. Summary of Significant Accounting Practices

    Unit of Account

    The accounts of the General Department are expressed in terms of the SDR. SDRs are interest-earning assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the review of the SDR valuation basket, which is conducted every five years. The SDR valuation basket was last reviewed in financial year 1991. The currencies comprising the basket and their amounts in the basket are as follows:

    CurrencyAmount
    U.S. dollar0.572
    Deutsche mark0.453
    Japanese yen31.8
    French franc0.800
    Pound sterling0.0812

    Valuation of Currencies

    Currencies are valued in terms of the SDR on the basis of the representative exchange rate determined for each currency. Each member is obligated to maintain the value of the balances of its currency held by the Fund in the General Resources Account in terms of the SDR. Whenever the Fund revalues its holdings of a member’s currency, a receivable or a payable is established for the amount of currency payable by or to the member in order to maintain the SDR value of the Fund’s holdings of the currency. The balances of the receivables or payables are reflected in the Fund’s total currency holdings.

    Income Recognition

    The Fund maintains its accounts on an accrual basis and, accordingly, recognizes income as it is earned and records expenses as they are incurred, except that income from charges from members that are overdue in settling their obligations to the Fund by six months or more is deferred and is recognized as income only when paid unless the member has remained current in settling charges when due (see also Note 5).

    Capital Assets

    On May 1, 1993, the Fund adopted depreciation accounting and capitalized land and buildings at their historical cost less their estimated depreciation. A net amount of SDR 48.4 million was capitalized as a result of this change and is included in the Income Statement and in Other assets for the year ended April 30, 1994. Depreciation is calculated using the straight-line method over the estimated useful lives of buildings and equipment. The Fund’s capital assets at April 30, 1994 amounted to SDR 135.9 million, net of accumulated depreciation of SDR 57.8 million for a net value of SDR 78.1 million, consisting of land (SDR 32.2 million), buildings (SDR 35.2 million), equipment (SDR 5.1 million), and construction in progress (SDR 5.6 million). If this method of depreciation accounting had been in effect in financial year 1993 the net income would have been SDR 8 million higher.

    Post-Retirement Benefits

    The Fund provides certain health care benefits to staff and retirees that elect to participate in its medical benefits plan. Participants and the Fund contribute towards meeting the costs of these benefits.

    Prior to financial year 1994, the Fund recognized its share in the expense of health care benefits for retirees on a pay-as-you-go basis. During the current financial year, the Fund changed its method to the accrual method of accounting for these benefits. The combined effect on the Fund’s income position due to the change in accounting method for post-retirement benefits during the year ended April 30, 1994 amounted to SDR 61.4 million.

    The total past-service liability in respect of the future cost for retirees and current employees was actuarially estimated at SDR 111 million as of May 1, 1993; of this amount SDR 47.8 million represents the future cost of medical benefits for retirees. This latter amount was charged in full to the Fund’s income in financial year 1994 and is reflected in the income Statement as the cumulative effect of a change in accounting method. The estimated future cost for current employees, equal to SDR 63.3 million, will be amortized over 20 years, the estimated remaining service life of employees. For the year ended April 30, 1994, the amortization of past-service benefits and the cost of the benefits accrued during the current year increased the administrative expenses by SDR 13.6 million. If this method of accounting had been in effect in financial year 1993, net income would have been lower by an amount comparable to the increase in expense in financial year 1994. A separate account or trust will be established to hold assets equal to the recognized portion of the liability in this respect.

    2. Quotas, Currencies, and Securities

    Each member is required to pay to the Fund the amount of its initial quota and subsequent increases partly in the member’s own currency and the remainder in the form of reserve assets, except that in 1978 members were permitted to pay the entire increase in their own currencies. A member’s quota is not increased until the member consents to the increase and pays the subscription. Each member has the option to substitute nonnegotiable and non-interest-bearing securities for the amount of its currency held by the Fund in the General Resources Account that is in excess of ¼ of 1 percent of the member’s quota. These securities, which are part of the Fund’s currency holdings, are encashable by the Fund on demand.

    The increase under the Ninth General Review of Quotas became effective on November 11, 1992, after members having 70 percent of the total quotas on May 30, 1990 consented to the increase in quotas and after the adoption of the Third Amendment to the Fund’s Articles of Agreement. The Third Amendment provides that a member’s voting and certain related rights may be suspended by a 70 percent majority of the total voting power, if the member persists in its failure to fulfill its obligations under the Articles. When all members have consented and paid the increase, the quotas of the members in the Fund will increase to SDR 146.0 billion. As at April 30, 1994, 169 members had paid their increase of quota amounting to SDR 47.7 billion; Cambodia made an ad hoc quota increase payment of SDR 40 million bringing the Fund’s quota resources to SDR 144.9 billion as at April 30, 1994.

    On December 14, 1992, the former Socialist Federal Republic of Yugoslavia ceased to be a member of the Fund. Each of the five successor states has agreed to its share in the assets and liabilities of the former Socialist Republic of Yugoslavia in the Fund as determined by the Fund. As of April 30. 1994, two of the successor states (Republic of Bosnia and Herzegovina and Federal Republic of Yugoslavia (Serbia/Montenegro)) had not succeeded to membership in the Fund.

    Changes in the Fund’s holdings of members’ currencies and securities for the year ended April 30, 1994 were as follows:

    April 30,April 30,Net
    19941993Change
    In millions of SDRs
    Members’ quotas144,859114,606253
    Less quota subscriptions receivable(74)74
    Less other receivables(77)(82)5
    144,782144,450332
    Members’ outstanding use of Fund resources25,53324,635898
    Members’ outstanding reserve tranche positions(29,338)(30,264)926
    Administrative currency balances47(3)
    Currencies and securities140,981138,8282,153

    Each member is obligated to maintain the value of the balances of its currency held by the Fund in the General Resources Account in terms of the SDR and therefore the Fund periodically revalues its holding of a member’s currency. At April 30, 1994, when all holdings of currencies of members were revalued, receivables and payables arising from valuation adjustments amounted to SDR 18,644.5 million and SDR 809.1 million, respectively (SDR 21,700.8 million and SDR 804.6 million respectively at April 30, 1993). At June 23, 1994, the amounts receivable were SDR 12,429.2 million and the amounts payable were SDR 655.7 million.

    The Fund’s holdings of members’ currencies at April 30, 1994 are shown in Schedule 1.

    3. SDR Holdings

    SDRs are reserve assets created by the Fund and allocated to members participating in the SDR Department Although SDRs are not allocated to the Fund, the Fund may acquire, hold, and dispose of SDRs through the General Resources Account. The Fund receives SDRs from members in the settlement of their financial obligations to the Fund and uses SDRs in transactions and operations between the Fund and its members. The Fund earns interest on its SDR holdings at the same rate as all other holders of SDRs.

    4. Gold Holdings

    At April 30, 1994 and April 30, 1993, the Fund held 3,217,341 kilograms equal to 103,439,916 fine ounces of gold at designated depositories. Gold held by the Fund is valued on the basis of 0.888671 gram of fine gold per SDR, which is equivalent to SDR 35 per fine ounce, except that 21,396 fine ounces held by the Fund on behalf of a member were acquired on December 14, 1992 at market value, for a total amount of SDR 5.1 million in partial settlement of the member’s overdue obligations.

    5. Fund Operations

    The Fund’s financial resources are made available to members under a number of policies and facilities that differ mainly in the type of balance of payments need they seek to address and in the degree of conditionality attached to them. Changes in the outstanding use of Fund credit under various facilities during the year ended April 30, 1994 were as follows:

    April 30,April 30,
    1993PurchasesRepurchases1994
    In millions of SDRs
    Regular facilities6,7668981,4286,236
    Compensatory and contingency financing4,2077181,1693,756
    Extended Fund facility6,8691206626,327
    Systemic transformation facility2,7252,725
    Supplementary financing facility1987191
    Enlarged access6,5957801,0776,298
    Total24,6355,2414,34325,533

    Fund credit outstanding at April 30, 1994 and April 30, 1993 includes Fund credit amounting to SDR 77.4 million with respect to the two successor states of the former Socialist Federal Republic of Yugoslavia (the Republic of Bosnia and Herzegovina and the Federal Republic of Yugoslavia (Serbia/Montenegro)) that had not succeeded to membership of the Fund as of April 30, 1994. Members’ use of Fund credit is shown in Schedule 1.

    Charges

    The Fund levies periodic charges on its holdings of members’ currencies that derive from their use of Fund credit. The rate of charge on the use of the Fund’s own resources is set as a proportion of the SDR interest rate. This rate is adjusted periodically to offset the effect on income of the deferral of charges and to finance the additions to Special Contingent Accounts, which are further discussed below. A separate rate of charge, based on the average cost of borrowing, was levied on the use of resources financed by the Fund’s borrowing. However, effective May 1, 1993, a single unified rate of charge applies to all uses of Fund resources. Special charges are levied on holdings that are not repurchased when due, and on overdue charges that are not settled when due, except that these charges do not apply to members that are six months or more overdue to the Fund. A service charge is levied by the Fund on each purchase, except on a reserve tranche purchase, and a stand-by fee is charged on stand-by and extended arrangements, which is refunded in proportion to purchases made under the arrangement.

    At April 30, 1994, the total holdings on which the Fund levied charges amounted to SDR 25,532.7 million (SDR 24,635.4 million at April 30, 1993).

    Remuneration

    The Fund pays remuneration on a member’s remunerated reserve tranche position. The rate of remuneration is equal to the SDR interest rate, and is adjusted subject to a specific floor, to offset the effect as a result of the deferral of charges on income and to finance the additions to the Special Contingent Accounts. A remunerated reserve tranche position is the amount by which the Fund’s holdings of a member’s currency (excluding holdings that derive from the use of Fund credit) is below the member’s norm. The norm varies for each member and on average amounted to 94.5 percent of quota at April 30, 1994.

    At April 30, 1994, the total creditor positions on which the Fund paid remuneration amounted to SDR 22,950.5 million (SDR 23,875.7 million at April 30, 1993).

    Overdue Obligations

    At April 30, 1994, seven members were six months or more overdue in settling their financial obligations to the Fund (ten members at April 30, 1993); six of these members were overdue to the General Department (nine at April 30, 1993). Credit extended to these members through the General Resources Account and the Special Disbursement Account, including SAF loans, amounted to SDR 1,817.4 million as of April 30, 1994 (SDR 1,950.7 million as of April 30, 1993). One of these members (Zambia) has been settling obligations as they fall due and is implementing a rights accumulation program that could lead to the settlement of its arrears. During the year ended April 30, 1994, three members (Sierra Leone, Viet Nam, and Cambodia) fully settled their overdue financial obligations to the Fund. This restored these members’ eligibility to use the Fund’s general resources.

    Overdue repurchases and SAF loan repayments and charges and SAF interest of the six members (nine at April 30, 1993) that are six months or more overdue to the General Department were as follows:

    RepurchasesCharges and
    and SAF LoansSAF Interest
    1994199319941993
    In millions of SDRs
    Total overdue1,6491,7081,0191,026
    Overdue for six months or more1,6161,687989988
    Overdue for three years or more1,4321,427718615

    The type and duration of the arrears of these members were as follows:

    ChargesLongest
    Repurchasesand SAFTotalOverdue
    Memberand SAF LoansInterestObligationObligation
    In millions of SDRs
    Haiti14.02.516.5November 1991
    Liberia201.6168.8370.4January 1985
    Somalia98.956.8155.7July 1987
    Sudan604.3477.01,081.3July 1984
    Zaïre178.332.3210.6February 1991
    Zambia551.9281.1833.0July 1986
    Total1,649.01,018.52,667.5

    In addition, the Republic of Bosnia and Herzegovina and the Federal Republic of Yugoslavia (Serbia/Montenegro) were also six months or more overdue in meeting financial obligations to the Fund. While these two states agreed to their share in the assets and liabilities of the former Socialist Federal Republic of Yugoslavia in the Fund, they had not succeeded to membership in the Fund as of April 30, 1994. Overdue repurchases and charges due by these two successor states amounted to SDR 61.7 million and their total obligations to the Fund amounted to SDR 83.5 million at April 30, 1994 (SDR 33.8 million and SDR 80.0 million, respectively at April 30, 1993).

    Strengthened Cooperative Strategy

    In March 1990, the Fund agreed on a strengthened cooperative strategy aimed at resolving the issue of overdue obligations to the Fund. Three major elements form the basis of the cooperative strategy: (i) preventative measures, (ii) remedial and deterrent measures, and (iii) intensified collaboration and the rights approach. Under the intensified collaborative approach, the Fund has developed Fund-monitored programs and rights accumulation programs, which permit a member with protracted arrears to the Fund to establish a track record of performance related to policy implementation and payments. A rights accumulation program allows the member to earn rights toward future financing through the implementation of a comprehensive economic program. Rights would be encashed under a successor arrangement after clearance of arrears and when all the requirements for that successor arrangement are met.

    Deferred Income and Special Contingent Accounts

    It is the policy of the Fund to exclude from current income charges due by members that are six months or more overdue in meeting payments to the Fund unless the member is current in the payment of charges. Charges subsequently accrued will also be excluded from income unless the member becomes current in the payment of charges. Charges excluded from income are recorded as deferred income. Charges due and accrued by members that are six months or more overdue and that have been deferred amounted to SDR 1,042.9 million at April 30, 1994 (SDR 1,057.9 million at April 30, 1993).

    Since May 1, 1986, the Fund adopted decisions to give effect to the Principles of Burden Sharing whereby debtor and creditor members share the financial consequences of overdue obligations. An amount equal to deferred charges (excluding special charges) is generated and included in the Fund’s income each quarter by an adjustment of the rate of charge and the rate of remuneration. However, the average rate of remuneration is not to be reduced below 85 percent of the SDR interest rate for the financing of deferred charges and the first Special Contingent Account (see following paragraphs). The proceeds from the settlement of overdue charges are distributed to members that paid additional charges or received reduced remuneration when and to the extent that deferred charges that gave rise to adjustments are paid.

    In view of the existence of protracted overdue obligations, the Fund accumulates precautionary balances, inter alia, in the Special Contingent Accounts. At April 30, 1994, SDR 1,154.5 million was held in the first and second Special Contingent Accounts (SCA-1 and SCA-2). A total of SDR 517.2 million was held in the SCA-1 (SDR 435.8 million at April 30, 1993) and SDR 637.3 million was held in the SCA-2 at April 30, 1994 (SDR 476.1 million at April 30, 1993). The Special Contingent Accounts are financed by additional quarterly adjustments to the rate of charge and the rate of remuneration. Balances in the SCA-1 are to be distributed to the members that share the cost of financing it when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

    The SCA-2 became effective on July 1, 1990 (as part of the strengthened cooperative strategy) to accumulate SDR 1.0 billion over a period of approximately five years. It is financed by a further adjustment to the rate of charge and to the rate of remuneration, subject to the floor to the rate of remuneration of 80 percent of the SDR interest rate. Resources accumulated in SCA-2 are to safeguard against potential losses arising from purchases made under a successor arrangement after a rights accumulation program has been successfully completed by members with protracted arrears to the Fund at the end of 1989, while at the same time providing additional liquidity to assist in the financing of such purchases. Refunds of contributions are to be made after all repurchases under the rights approach have been made, or at such earlier date as the Fund may determine. Use of Fund credit in the General Resources Account following the completion and encashment of rights accumulation programs amounted to SDR 621.0 million.

    The allocations to the SCA-1 and SCA-2, and the costs of deferred charges and corresponding adjustments to charges and remuneration during the year ended April 30, 1994 were as follows:

    Total CostsAdjustments to
    and AllocationChargesRemuneration
    In millions of SDRs
    Deferred charges944747
    SCA-1824141
    SCA-216151110
    Total24392151
    Refunds of deferred charges864244
    Burden-sharing corntributions net of refunds25197154

    The cumulative charges that have been deferred since May 1, 1986, and have resulted in adjustments to charges and remuneration, amount to SDR 787.5 million (SDR 779.4 million at April 30, 1993). The cumulative refunds for the same period amount to SDR 643.6 million (SDR 556.8 million at April 30, 1993).

    6. Reserves

    The Fund determines annually what part of its net income shall be placed to the General Reserve or to the Special Reserve, and what part, if any, shall be distributed. The Articles of Agreement permit the Fund to use the Special Reserve for any purpose for which it may use the General Reserve, except distribution. An administrative deficit for any financial year must be charged first against the Special Reserve.

    7. Borrowing

    Outstanding borrowing by the Fund was as follows:

    April 30.April 30.
    1993Repayments1994
    In millions of SDRs
    Enlarged access37530075
    Other2,9852,985
    Total3,3603003,060

    Scheduled repayments of outstanding borrowing by the Fund are as follows:

    FinancialIn millions
    Yearof SDRs
    19951,100
    19961,960
    Total3,060

    Bilaleral Arrangements with Japan

    In December 1986, the Government of Japan agreed to make available to the Fund SDR 3.0 billion to help finance the Fund’s support of adjustment programs of member countries. Calls were made by the Fund over a period of four years until resources under this borrowing agreement were fully drawn by the end of March 1991. The final maturity of each call is five years from the initial date of the call. Interest on amounts borrowed is based on the weighted average of six-month domestic interest rates in the countries that make up the currency basket of the SDR.

    Enlarged Access

    The policy on enlarged access became operational in May 1981. The Fund entered into borrowing agreements under which the lenders made resources equal to SDR 13.5 billion available to the Fund to finance purchases by members under the policy. The maturities of borrowing by the Fund under these agreements vary from two to seven years. Interest rates on amounts borrowed vary and are based on Eurocurrency deposit rates and weighted average yields of domestic instruments denominated in the five currencies in the SDR valuation basket. After full use of the borrowing agreements, the Fund decided in September 1990 that ordinary resources would be substituted to meet commitments of borrowed resources in financing purchases under arrangements approved under the enlarged access policy. Access to the use of credit under the enlarged access policy was terminated on November 11, 1992, following the effectiveness of quota increases under the Ninth General Review.

    General Arrangements to Barrow

    Under the General Arrangements to Borrow (GAB), the Fund may borrow up to SDR 18.5 billion when supplementary resources are needed to forestall or to cope with an impairment of the international monetary system. The GAB became effective on October 24, 1962 and has been extended through December 25, 1998. At April 30, 1994, the GAB had not been activated.

    8. Arrangements in the General Department

    At April 30, 1994, 32 arrangements were in effect and undrawn balances under these arrangements amounted to SDR 2,618.0 million. These arrangements are listed in Schedule 3. Use of Fund credit is also available under the systemic transformation facility to members who are in an early stage of the transition process. Use of Fund credit under the STF, which is limited to not more than 50 percent of quota, is provided in two disbursements: half of the total financing is disbursed at the outset and the remainder is made available 6 to 12 months after the first purchase. At April 30, 1994, 13 members had made drawings under this facility amounting to SDR 2,725.2 million; a further SDR 315.9 million may be drawn by these members.

    9. Administrative Expenses

    For the year ended April 30, 1994, the Fund incurred administrative expenses for personnel (SDR 239.4 million), travel (SDR 48.6 million), and other administrative needs (SDR 30.1 million). Included in administrative expenses are pension plan contributions, expenses related to post-retirement benefits other than pensions and depreciation expense. The General Resources Account is reimbursed for expenses incurred in administering the SDR Department, the Special Disbursement Account, and the Enhanced Structural Adjustment Facility Trust.

    The Fund has a defined benefit Staff Retirement Plan and a defined benefit Supplemental Retirement Benefits Plan (“the Plans”). All contributions to the Plans and all other assets, liabilities, and income of the Plans are administered separately from the General Department and can be used only for the benefit of the participants in the Plans and their beneficiaries. Participants contribute a fixed percentage of their pensionable remuneration. The Fund contributes the remainder of the cost of funding the Plans and pays certain administrative costs of the Plans

    The Fund uses the aggregate cost method for determining its pension cost and for funding the Plans. Under this method, the Fund’s contributions, including those for cost of living adjustments and for experience gains and losses, are spread over the expected future working lifetimes of the participants in the Plans and are determined annually as a percentage of pensionable remuneration of the participants. The funding and cost of the Plans for the year ended April 30, 1994 are based upon an actuarial valuation at April 30, 1992.

    As described in Note 1, the Fund adopted the accrual method of accounting for post-retirement benefits other than pensions. The past-service liability and annual cost are determined on an actuarial basis, assuming the actual medical cost history in the Fund, a discount rate of 8.5 percent and an initial increase in the rate of the medical cost equal to 13 percent, declining to 6 percent over time. This liability, estimated at SDR 111 million at the beginning of the year, increased by SDR 10.4 million during the financial year. The annual amortization of the past-service cost for current employees during financial year 1994 amounted to SDR 3.2 million. Of the total estimated liability equal to SDR 121.4 million as of April 30, 1994, including the past service costs for retirees and current employees, SDR 61.4 million has been included in other liabilities, pending the transfer of these funds to a separate account or trust.

    GENERAL DEPARTMENT QUOTAS, FUND’S HOLDINGS OF CURRENCIES, MEMBERS’ USE OF FUND RESOURCES, AND RESERVE TRANCHE POSITIONS as at April 30, 1994(In thousands of SDRs)
    Fund’s Holdings
    of Currencies1Use ofReserve
    PercentGRATranche
    QuotasTotalof QuotaResourcesPositions
    Afghanistan, Islamic State of120,400115,48895.94,928
    Albania35,30048,425137.213,1255
    Algeria914,4001,198,261131.0283,8637
    Angola207,300207,445100.1
    Antigua and Barbuda8,5008,499100.01
    Argentina1,537,1004,374,801284.62,837,675
    Armenia. Republic of67,50067,500100.05
    Australia2,333,2001,932,71782.8400,480
    Austria1,188,300799,35767.3388,967
    Azerbaijan117,000117,000100.010
    Bahamas, The94,90088,66393.46,239
    Bahrain82,80041,60150.241,208
    Bangladesh392,500392,451100.056
    Barbados48,90085,723175.336,84025
    Belarus, Republic of280,400350,500125.070,10020
    Belgium3,102,3002,540,81381.9561,495
    Belize13.50010,58778.42,914
    Benin45,30043,21995.42,099
    Bhutan4,5003,93087.3570
    Bolivia126,200117,33993.08,875
    Botswana36,60018,99851.917,609
    Brazil2,170,8002,361,429108.8189,854
    Bulgaria464,9001,031,650221.9599,37532,630
    Burkina Faso44,20037,00183.77,201
    Burundi57,20051,34589.85,860
    Cambodia65,00071,250109.66,250
    Cameroon135,100166,614123.331,841339
    Canada4,320,3003,669,46484.9650,881
    Cape Verde7,0006,999100.01
    Central African Republic41,20051,818125.810,71094
    Chad41,30051,347124.310,325280
    Chile621,700924,680148.7302,99312
    China3,385,2002,378,34585.0506,857
    Colombia561,300471,59484.089,707
    Comoros6,5005,97892.0523
    Congo57,90060,431104.43,000469
    Costa Rica119,000169,568142.559,2808,725
    Côte d’lvoire238,200383,717161.1145,57570
    Croatia, Republic of261,600274,089104.812,479
    Cyprus100,00074,56074.625,453
    Czech Republic589,6001,228,565208.4638,9653
    Denmark1,069,900756,65170.7313,251
    Djibouti11,50011,500100.0
    Dominica6,0005,99299.99
    Dominican Republic158,800294,280185.3135,480
    Ecuador219,200246,728112.644,62417,125
    Egypt678,400771,867113.8147,20053,750
    El Salvador125,600125,603100.0
    Equatorial Guinea24,30024,309100.0
    Estonia, Republic of46,50088,350190.041,8503
    Ethiopia98,30091,30892.96,992
    Fiji51,10041,14680.69,952
    Finland861,800653,78975.9208,014
    France7,414,6006,742,85777.51,671,866
    Gabon110,300165,034149.654,77852
    Gambia, The22,90021,41893.51,485
    Georgia. Republic of111,000111,000100.010
    Germany8,241,5005,402,91765.62,838,593
    Ghana274,000367,839134.2111,21017,375
    Greece587,600473,91380.7113,687
    Grenada8,5008,501100.0
    Guatemala153,800153,806100.0
    Guinea78,70078,63899.968
    Guinea-Bissau10,50010,500100.02
    Guyana67,200106,898159.139,696
    Haiti44,10059,056133.915,00045
    Honduras95,000164,796173.569,795
    Hungary754,8001,558,096206.4859,39056,097
    Iceland85,30074,82387.710,477
    India3,055,5005,606,182183.52,763,181212,630
    Indonesia1,497,6001,285,24785.8212,354
    Iran, Islamic Republic of1,078,5001,078,509100.0
    Iraq504,000504,013100.0
    Ireland525,000370,10870.5154,892
    Israel666,200844,844126.8178,640
    Italy4,590,7003,092,90367.41,497,800
    Jamaica200,900438,845218.4237,892
    Japan8,241,5005,225,50663.43,016,043
    Jordan121,700179,300147.357,6012
    Kazakhstan, Republic of247,500383,625155.0136,1255
    Kenya199,400187,17493.912,230
    Kiribati4,0004,001100.0
    Korea799,600435,73254.5363,873
    Kuwait995,200832,04983.6163,159
    Kyrgyz Republic64,500108,360168.043,8605
    Lao People’s Democratic Republic39,10039,100100.0
    Latvia. Republic of91,500169,275185.077,7755
    Lebanon78,70059,86976.118,833
    Lesotho23,90020,39285.33,512
    Liberia71,300272,836382.7201,55428
    Libya817,600498,74561.0318,980
    Lithuania. Republic of103,500217,350210.0113,8505
    Luxembourg135,500111,21482.124,286
    Macedonia, former Yugoslav Republic of49,60064,367129.814,765
    Madagascar90,40093,912103.93,5122
    Malawi50,90049,42397.17402,224
    Malaysia832,700593,95271.3238,752
    Maldives5,5004,62184.0879
    Mali68,90064,62793.84,4458,727
    Malta67,50041,97262.225,549
    Marshall Islands2,5002,500100.01
    Mauritania47,50047,506100.0
    Mauritius73,30065,97890.07,325
    Mexioo1,753,3004,900,017279.53,146,701
    Micronesia3,5003,500100.01
    Moldova, Republic of90,000153,000170.063,0005
    Mongolia37,10050,850137.113,7505
    Morocoo427,700574,201134.3176,81330,313
    Mozambique84,00084,000100.07
    Myanmar184,900184,903100.0
    Namibia99,60099,592100.09
    Nepal52,00046,27789.05,730
    Netherlands3,444,2002,604,68075.6839,553
    New Zealand650,100547,02284.1103,089
    Nicaragua96,100113,140117.717,030
    Niger48,30052,367108.412,6278,561
    Nigeria1,281,6001,281,589100.068
    Norway1,104,600647,50258.6457,101
    Oman119,40081,66868.437,844
    Pakistan758,2001,205,828159.0447,68363
    Panama149,600229,022153.191,27011,861
    Papua New Guinea95,300116,682122.421,41853
    Paraguay72,10056,12877.8015,975
    Peru466,1001,108,819237.9642,686
    Philippines633,4001,413,882223.2867,57287,104
    Poland, Republic of988,5001,721,383174.1810,00677,125
    Portugal557,600327,23158.7230,373
    Qatar190,500156,70682.333,795
    Romania754,1001,505,005199.6750,900
    Russian Federation4,313,1007,187,947166.72,875,5501,014
    Rwanda59,50049,72783.69,791
    St. Kitts and Nevis6,5006,48899.815
    St. Lucia11,00011,000100.01
    St. Vincent and the Grenadines6,0005,50091.7500
    San Marino, Republic of10,0007,65076.52,352
    São Tomé and Príncipe5,5005,503100.10
    Saudi Arabia5,130,6004,465,36187.0665,245
    Senegal118,900149,964126.132,1641,104
    Seychelles6,0005,19786.6804
    Sierra Leone77,20077,189100.024
    Singapore357,600202,82656.7154,819
    Slovak Republic257,400646,080251.0388,675
    Slovenia. Republic of150,500144,81096.27,17912,875
    Solomon Islands7,5006,96792.9538
    Somalia44,200140,907318.896,701
    South Africa1,365,4001,979,784145.0614,43046
    Spain1,935,4001,166,543603768,859
    Sri Lanka303,600283,39693.320,205
    Sudan169,700773,976456.1604,25611
    Suriname67,60067,601100.00
    Swaziland36,50033,52091.83,002
    Sweden1,614,0001,162,59472.0451,416
    Switzerland2,470,4001,883,27076.2587,180
    Syrian Arab Republic209,900209,903100.05
    Tajikistan, Republic of60,00060,00010002
    Tanzania146,900136,93293.29,975
    Thailand573,900309,33053.9264,577
    Togo54,30057,527105.93,470248
    Tonga5,0003,81376.31,192
    Trinidad and Tobago246,800339,923137.793,1319
    Tunisia206,000413,265200.6207,30036
    Turkey642,000609,72895.032,275
    Turkmenistan, Republic of48,00048,000100.05
    Uganda133,900133,907100.0
    Ukraine997,300997,300100.010
    United Arab Emirates392,100238,96760.9153,134
    United Kingdom7,414,6006,057,10881.71,357,538
    United States26,526,30018,156,56668.48,371,410
    Uruguay225,300233,782103.823,85015,375
    Uzbekistan, Republic of199,500199,500100.05
    Vanuatu12,50010,01280.12,488
    Venezuela1,951,3003,700,086189.61,893,734144,950
    Viet Nam241,600314,080130.072,4805
    Western Samoa8,5007,83792.2664
    Yemen, Republic of176,500176,490100013
    Zaïre291,000475,807163.5184,807
    Zambia270,300822,196304.2551,91319
    Zimbabwe261,300400,231153.2139,00070
    Total144,859,000140,980,50725,455,30629,338,010

    Includes nonnegotiable. non-interest-bearing notes that members are entitled to issue in substitution for currencies.

    Less than SDR 500.

    GENERAL DEPARTMENT SCHEDULE OF REPURCHASES AND REPAYMENTS OF LOANS as at April 30, 1994(In thousands of SDRs)
    Special
    Financial YearGeneral ResourcesDisbursement
    Ending April 30Account1Account
    Overdue1,683,06023,790
    19953,277,992222,336
    19964,780,904321,992
    19974,210,779345,129
    19983,630,668328,620
    19992,770,030262,643
    20001,771,823174,613
    20011,333,85474,957
    2002933,40049,946
    2003785,15821,131
    2004355,00010,090
    Total25,532.6681,835,247

    A member is entitled to repurchase at any time the Fund’s holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve positions improve.

    GENERAL DEPARTMENT STATUS OF ARRANGEMENTS as at April 30, 199(In thousands of SDRs)
    Total
    AmountUndrawn
    MemberDate of ArrangementExpirationAgreedBalance
    GENERAL RESOURCES ACCOUNT
    STAND-BY ARRANGEMENTS
    BulgariaApril 11, 1994March 31, 199569,74046,490
    CameroonMarch 14, 1994September 13, 199581,06059,150
    Central African RepublicMarch 28, 1994March 27, 199516,4805,770
    ChadMarch 23, 1994March 22, 199516,5206,195
    El SalvadorMay 10, 1993December 31, 199447,11047,110
    Estonia, Republic ofOctober 27, 1993March 26, 199511,6259,300
    GabonMarch 30, 1994March 29, 199538,60033,090
    HungarySeptember 15, 1993December 14, 1994340,000283,300
    Kazakhstan, Republic ofJanuary 26, 1994January 25, 1995123,750111,375
    Latvia, Republic ofDecember 15, 1993March 14, 199522,87522,875
    Lithuania, Republic ofOctober 22, 1993March 21, 199525,87520,700
    Moldova. Republic ofDecember 17, 1993March 16, 199551,75047,250
    NigerMarch 4, 1994March 3, 199518,5967,487
    PanamaFebruary 24, 1992September 23, 199474,17019,600
    SenegalMarch 2, 1994March 1, 199547,56016,646
    Viet NamOctober 6, 1993October 5, 1994145,00084,600
    TOTAL STAND-BY ARRANGEMENTS1,130,711820,938
    EXTENDED ARRANGEMENTS
    ArgentinaMarch 31, 1992March 30, 19952,483,150556,100
    EgyptSeptember 20, 1993September 19, 1996400,000400,000
    JamaicaDecember 11, 1992December 10, 1995109,12554,750
    PakistanFebruary 22, 1994February 21, 1997379,100341,200
    PeruMarch 18, 1993March 17, 19961,018,100375,414
    ZimbabweSeptember 11, 1992September 10, 1995114,60046,800
    TOTAL EXTENDED ARRANGEMENT4,504,0751,774,264
    TOTAL GENERAL RESOURCES ACCOUNT5,634,7862,595,202
    SPECIAL DISBURSEMENT ACCOUNT
    STRUCTURAL ADJUSTMENT FACILITY
    ComorosJune 21, 1991June 20, 19943,150900
    EthiopiaOctober 28, 1992October 27, 199549,42014,120
    Sierra LeoneMarch 28, 1994March 27, 199527,020
    TOTAL STRUCTURAL ADJUSTMENT FACILITY79,59015,020
    SAF RESOURCES COMMITTED UNDER ESAF A R FtANG EMENTS1
    BeninJanuary 25, 1993January 24, 19967,000
    BoliviaJury 27, 1988May 31, 199445,350
    Burkina FasoMarch 31, 1993March 30, 199615,8006,320
    Equatorial GuineaFebruary 3, 1993February 2, 19962,9501,475
    MaliAugust 28, 1992August 27, 199510,160
    MauritaniaDecember 9, 1992December 8, 19943,410
    UgandaApril 17, 1989June 30, 199419,920
    TOTAL SAF RESOURCES COMMITTED UNDER ESAF104,5907,795
    TOTAL SPECIAL DISBURSEMENT ACCOUNT184,18022,815
    TOTAL GENERAL DEPARTMENT5,818,9662,618,017

    Resources under enhanced structural adjustment facility arrangements may be provided from the structural adjustment facility within the Special Disbursement Account and from the Enhanced Structural Adjustment Facility Trust.

    SDR Department

    SDR DEPARTMENT STATEMENTS OF ALLOCATIONS AND HOLDINGS as at April 30, 1994 and 1993(In thousands of SDRs)
    19941993
    ALLOCATIONS
    Net cumulative allocations of SDRs21,433,33021,433,330
    Overdue charges51,43049,860
    TOTAL ALLOCATIONS21,484.76021,483,190
    HOLDINGS
    Participants with holdings above allocations
    Allocations7,446,1836,663,537
    Net receipts of SDRs3,860,6082,196,147
    11,306,7918,859,684
    Participants with holdings below allocations
    Allocations13,987,14714,769,793
    Net uses of SDRs10.074,31610,124,205
    3.912,8314,645,588
    Total holdings of participants15,219,62213,505,272
    General Resources Account6,037,7627,930,129
    Holdings of SDRs by Prescribed Holders227,37647,789
    TOTAL HOLDINGS21,484,76021,483,190
    The accompanying note is an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    SDR DEPARTMENT STATEMENTS OF RECEIPT AND USE for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    GeneralTotal
    ResourcesPrescribed
    ParticipantsAccountHolders19941993
    Total holdings at beginning of the year13,505,2727,930,12947,78921,483,9021,471,309
    Receipt of SDRs
    Transfers among participants and prescribed holders
    Transactions by agreement3,032,61689,4603,122,0765,055,983
    Operations
    Grants23,67223,672
    Loans146,870146,8702,766,979
    Settlement of financial obligations164,02071,116235,1362,843,383
    Fund-related operations
    Subsidy payments177177120
    SAF/ESAF loans116,305116,30527,745
    SAF repayments and interest82,87982,87912,599
    Trust Fund repayments and interest42,78042,78065
    Special charges on SAF, ESAF, and Trust Fund5,2885,288254
    ESAF contributions and payments5,864173,695179,55947,131
    ESAF repayments and interest9,3239,3236,036
    Net interest on SDRs116,6303,935120,565337,177
    Transfers from participants to General Resources Account
    Repurchases642,264642,264583,122
    Charges1,424,5231,424,5231,797,811
    Quota payments70,72870,72812,643,192
    Interest on SDRs336,329336,329127,881
    Assessment on SDR allocation3,9793,9792,834
    Adjustments5
    Transfers from General Resources Account
    to participants and prescribed holders
    Purchases2,675,8562,675,8565,768,524
    Repayments of Fund borrowings300,000300,000350,000
    Interest on Fund borrowings161,961161,96191,812
    In exchange for currencies of other members
    Acquisitions to pay charges
    166,235166,235699,354
    Remuneration958,449958,449922,414
    Other
    Refunds and adjustments107,689107,68972,950
    Total receipts7,952,6722,477,823502,14810,932,64334,157,371
    SDR DEPARTMENT STATEMENTS OF RECEIPT AND USE for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    GeneralTotal
    ResourcesPrescribed
    ParticipantsAccountHolders19941993
    Use of SDRs
    Transfers among participants and prescribed holders
    Transactions by agreement2,939,012183,0643,122,0765,055,983
    Operations
    Grants23,67223,672
    Loans146,870146,8702,766,979
    Settlement of financial obligations217,98517,151235,1362,843,383
    Fund-related operations
    Subsidy payments177177120
    SAF/ESAF loans116,305116,30527,745
    SAF repayments and interest82,87982,87912,599
    Trust Fund repayments and interest42,78042,78065
    Special charges on SAF, ESAF, and Trust Fund5,2885,288254
    ESAF contributions and payments173,6955,864179,55947,131
    ESAF repayments and interest9,3239,3236,036
    Transfers from participants to General Resources Account
    Repurchases642,264642,264583,122
    Charges1,424,5231,424,5231,797,811
    Quota payments70,72870,72812,643,192
    Assessment on SDR allocation3,9793,9792,834
    Adjustments5
    Transfers from General Resources Account to
    participants and prescribed holders
    Purchases2,675,8562,675,8566,768,524
    Repayments on Fund borrowings300,000300,000350,000
    Interest on Fund borrowings161,961161,96191,812
    In exchange for currencies of other members Acquisitions to pay charges166,235166,235699,354
    Remuneration958,449958,449922,414
    Other
    Refunds and adjustments107,689107,68972,950
    Charges paid in the SDR Department
    Net charges due456,894456,894465,058
    Charges not paid when due(24,497)(24,497)(36,307)
    Settlement of unpaid charges22,92722,92724,426
    Total uses6,238,3224,370,190322,56110,931,07334,145,490
    Total holdings at end of the year15,219,6226,037,762227,37621,484,76021,483,190
    The accompanying note is an integral part of the financial statements.

    SDR DEPARTMENT NOTE TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    SDR Department

    All transactions and operations involving SDRs are conducted through the SDR Department. Each member of the Fund can become a participant in the SDR Department. At April 30, 1994, all members of the Fund were participants in the SDR Department, SDRs are allocated by the Fund to members that are participants in the SDR Department in proportion to their quotas in the Fund. Allocations were made in 1970, 1971, and 1972, totaling SDR 9.3 billion. Further allocations were made in 1979, 1980, and 1981, totaling SDR 12.1 billion. SDRs do not constitute claims by holders against the Fund to provide currency. However, upon termination of participation or liquidation of the SDR Department, the Fund will provide to holders the currencies received from the withdrawing participants. The Fund is empowered to prescribe certain official entities as holders of SDRs: at April 30, 1994, fifteen institutions have been prescribed as holders. These prescribed holders do not receive allocations and cannot use or receive SDRs in designation.

    uses of SDRs

    The Fund ensures, by designating participants to provide freely usable currency in exchange for SDRs, that a participant can use its SDRs to obtain an equivalent amount of currency if it has a need because of its balance of payments or its reserve position or developments in its reserves. A participant is not obligated to provide currency for SDRs beyond the point at which its holdings of SDRs in excess of its net cumulative allocation are equal to twice its net cumulative allocation. A participant may, however, provide currency in excess of this limit. Participants and prescribed holders can also use and receive SDRs in transactions and operations by agreement among themselves. Participants can also use SDRs in operations and transactions involving the General Resources Account, such as the payment of charges and repurchases.

    Interest, Charges, and Assessment

    Interest is paid on holdings of SDRs. Charges are levied on each participant’s net cumulative allocation plus any negative balance of the participant or unpaid charges. Interest on SDR holdings is paid and charges on net cumulative allocations are collected on a quarterly basis Interest and charges are levied at the same rate and settled by crediting and debiting individual holdings accounts on the first day of the subsequent quarter. The SDR Department is required to pay interest to each holder, whether or not sufficient SDRs are received to meet the payment of interest. If sufficient SDRs are not received, because charges are overdue, additional SDRs are temporarily created. At April 30, 1994, charges of SDR 51.4 million were overdue (SDR 49.9 million at April 30, 1993). At April 30, 1994, seven members (ten members at April 30, 1993) were six months or more overdue in meeting financial obligations to the Fund and five of these members were six months or more overdue to the SDR Department (six members at April 30, 1993).

    Unpaid charges of these members to the SDR Department were as follows:

    19941993
    In millions of SDRs
    Total overdue charges44047.5
    Overdue for six months or more39.641.2
    Overdue for three years or more10.59.9
    The duration of arrears of these members were as follows:
    Longest Overdue
    MemberTotalObligation
    In millions of SDRs
    Haiti2.0November 1991
    Iraq17.2November 1990
    Liberia10.6August 1988
    Somalia3.1February 1991
    Sudan11.1November 1990
    Total44.0

    In addition, the Republic of Bosnia and Herzegovina and the Federal Republic of Yugoslavia (Serbia/Montenegro) were also six months or more overdue in meeting financial obligations to the Fund. Overdue SDR charges owed and outstanding by these two successor states to the former Socialist Federal Republic of Yugoslavia amounted to SDR 5.8 million at April 30, 1994 (SDR 2.2 million at April 30, 1993).

    The rate of interest on the SDR is determined by reference to a combined market interest rate, which is a weighted average of yields or rates on short-term instruments in the capital markets of France, Germany, Japan, the United Kingdom, and the United States. The combined market interest rate used to determine the SDR interest rate is calculated each Friday, using the yields or rates of that day. The SDR interest rate, which is set equal to the combined market interest rate, enters into effect on the following Monday and applies until the end of the following Sunday.

    The expenses of conducting the business of the SDR Department are paid by the Fund from the General Resources Account, which is reimbursed in SDRs by the SDR Department at the end of each financial year. For this purpose, the SDR Department levies an assessment on all participants in proportion to their net cumulative allocation.

    Participants in the SDR Department

    On December 14, 1992, the former Socialist Federal Republic of Yugoslavia ceased to be a member of the Fund. Each of the five successor states has agreed to its share in the assets and liabilities of the former Socialist Federal Republic

    of Yugoslavia in the Fund as determined by the Fund. As at April 30, 1994, two of the successor states (Republic of Bosnia and Herzegovina and Federal Republic of Yugoslavia (Serbia/Montenegro)) had not succeeded to membership in the Fund and, therefore, are not participants in the SDR Department.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST COMBINED BALANCE SHEETS as at April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    LoanReserveSubsidyCombinedCombined
    AccountAccountAccount19941993
    ASSETS
    Loans2,397,3162,397,3161,804,547
    Investments (Note 2)819,6811,318,7202,138,4011,406,953
    Accrued interest3,5063,4243,97510,9059,047
    Currencies553589
    Accrued account transfers17,860(17.860)
    TOTAL ASSETS2,418,682823,1601,304,8384,546,6603,220,556
    RESOURCES AND LIABILITIES
    Resources823,1601,161,8161,984,9761,268,900
    Borrowing (Note 4)2,397,316142,0322,539,3481,928,952
    Accrued interest21,31599022,30522,660
    Other liabilities515144
    TOTAL RESOURCES AND LIABILITIES2,418,682823,1601,304,8384,546,6803,220,556
    The accompanying notes and schedules are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST COMBINED INCOME STATEMENTS for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    LoanReserveSubsidyCombinedCombined
    AccountAccountAccount19941993
    INCOME
    Investment income62731,90036,73069,25777,829
    Interest on loans9,9389,9388,038
    Exchange valuation gain (loss)39(6)31(112)
    10,56531,93936,72279,22685,755
    EXPENSE
    Interest expense68,4161,41169,82772,571
    Other expenses575744
    68,4731,41169,88472,615
    NET INCOME (LOSS)(57,908)31,93935,3119,34213,140
    The accompanying notes and schedules are an integral part of the financial statements.
    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST COMBINED STATEMENTS OF CHANGES IN RESOURCES for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    LoanReserveSubsidyCombinedCombined
    AccountAccountAccount19941993
    Balance, beginning of the year662,645606,2551,268,9001,026,445
    Contributions (Note 3)199,031199,031125,545
    Transfers from Special
    Disbursement Account127,996379,707507,703103,770
    Subsidy Account transfers58,488(58,488)
    Loan Account transfers(580)580
    Net income (toss)(57,908)31,93935,3119,34213,140
    Balance, end of the year823,1601,161,8161,984,9761,268,900
    The accompanying notes and schedules are an integral part of the financial statements.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST NOTES TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    Purpose

    The Enhanced Structural Adjustment Facility Trust (“the Trust”), for which the Fund is Trustee, was established in December 1987 and was extended and enlarged in February 1994 to provide loans on concessional terms to qualifying low-income developing members. The resources of the Trust are separate from the assets of all other accounts of, or administered by, the Fund and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

    The operations of the Trust are conducted through a Loan Account, a Reserve Account, and a Subsidy Account.

    Loan Account

    The resources of the Loan Account consist of the proceeds from borrowing and principal and interest payments on loans extended by the Trust. Resources of the Account are committed to qualifying members for a three-year period, upon approval by the Trustee, in support of the member’s macroeconomic and structural adjustment programs Interest on the outstanding loan balances is currently set at the rate of ½ of 1 percent per annum. At April 30, 1994, SDR 2,397.3 million in loans is outstanding (SDR 1,804.5 million at April 30, 1993).

    Reserve Account

    The resources of the Reserve Account consist of amounts transferred by the Fund from the Special Disbursement Account; net earnings from investment of resources held in the Account or in the Loan Account; and receipts of overdue principal or interest payments under Loan Account loans or interest under Loan Account loans when payment has been made to a lender from the Reserve Account.

    The resources held in the Reserve Account are to be used by the Trustee to make payments of principal and interest on borrowing for the Loan Account to the extent that the amounts available from receipts of repayments and interest from borrowers under the Loan Account, together with the authorized interest subsidy, are insufficient to cover payments to lenders as they become due and payable.

    Subsidy Account

    The resources held in the Subsidy Account consist of donations to the Trust, including transfers of net earnings from administered accounts and amounts transferred by the Fund from the Special Disbursement Account; the proceeds of loans made to the Trust for the Subsidy Account; and the net earnings from investment of Account resources.

    The resources available in the Subsidy Account are drawn by the Trustee to pay the difference, with respect to each interest period, between the interest due from the borrowers under the Trust and the interest due on resources borrowed for Loan Account loans.

    1. Accounting Practices

    The accounts of the Trust are expressed in terms of the SDR. SDRs are interest earning assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in US. dollars, based on market exchange rates, of a basket of five currencies. The Fund’s procedures require that the SDR valuation basket be reviewed every five years and that it include the currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the revisions. The SDR valuation basket was last reviewed in financial year 1991. The currencies comprising the basket and their amounts in the basket are as follows:

    CurrencyAmount
    U.S. dollar0.572
    Deutsche mark0.453
    Japanese yen31.8
    French franc0.800
    Pound sterling0.0812
    Members are not obligated to maintain the SDR value of their currencies held in the Accounts of the Trust.

    The Accounts of the Trust are maintained on the accrual basis and, accordingly, income is recognized as it is earned and expenses are recorded as they are incurred. The expenses of conducting the business of the Trust that are paid by the General Resources Account of the Fund are reimbursed on an annual basis by the Special Disbursement Account, and corresponding transfers from the Trust’s Reserve Account may be made to the Special Disbursement Account, when and to the extent needed.

    2. Investments

    The resources of the Trust are invested pending their use in operations. Investments are denominated in SDRs or in currency. Balances held in currency-denominated investments may give rise to valuation gains and losses. Pending their investment, resources may be temporarily held in currency, which also may give rise to valuation gains and losses.

    3. Contributions

    The Trustee accepts contributions of resources for the Subsidy Account on such terms and conditions as agreed between the Trust and the contributors. Cumulative contributions received as at April 30, 1994 amounted to SDR 1,202.7 million (SDR 624.0 million at April 30, 1993), including SDR 380.0 million transferred from the Special Disbursement Account in February and March 1994 and are listed in schedule 1.

    4. Borrowing

    The Trust borrows resources for the Loan Account and for the Subsidy Account on such terms and conditions as agreed between the Trust and the lenders.

    The following summarizes the borrowing agreements concluded as at April 30, 1994 (in thousands of SDRs):

    AmountAmount
    AgreedAvailable
    Loan Account4,945,0002,546,219
    Subsidy Account151,3659,333

    Scheduled repayments of outstanding borrowing are shown in Schedule 2.

    5. Commitments Under Loan Arrangements

    At April 30, 1994, resources of the Loan Account were committed to members under twenty-two loan arrangements and undrawn balances under those arrangements amounted to SDR 1,367.5 million. At April 30, 1993, undrawn balances under twenty loan arrangements amounted to SDR 753.8 million. Loan arrangements are listed in Schedule 3. Scheduled repayments of outstanding loans are shown in Schedule 4.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST CONTRIBUTIONS TO THE SUBSIDY ACCOUNT1 as at April 30, 1994(In thousands of SDRs)
    Cumulative
    ContributorContributions
    Special Disbursement Account379,707
    Austria20,778
    Belgium34,340
    Canada21,300
    Denmark27,028
    Finland22,684
    Germany48,403
    Greece12,111
    Iceland1,100
    Italy122,575
    Japan217,475
    Korea27,700
    Luxembourg3,003
    Netherlands32,170
    Norway16,930
    Sweden73,302
    United Kingdom122,589
    United States19,493
    Total contributions received1,202,688

    The Subsidy Account also benefits from the net investment earnings of the proceeds of loans or investments, which amounted to SDR 142.0 million at April 30,1994.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST SCHEDULE OF REPAYMENTS OF BORROWING as at April 30, 1994(In thousands of SDRs)
    Financial YearLoanSubsidy
    Ending April 301AccountAccount
    199556,739
    1996130,771
    1997211,583
    1998302,221
    1999379,52860.000
    2000423,01720,000
    2001348,98610,000
    2002268,17410,000
    2003177,5351,365
    200498,76240,000
    2010667
    Total2,397,316142,032

    Dates of repayment are the dates provided in the borrowing agreements between the Trustee and lenders.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST STATUS OF LOAN ARRANGEMENTS1 as at April 30, 1994(In thousands of SDRs)
    Amount AgreedUndrawn Balance
    ESAFStructuralESAFStructural
    Date ofloanadjustmentloanadjustment
    MemberArrangementExpirationaccountfacilityTotalaccountfacilityTotal
    AlbaniaJuly 14, 1993Jury 13, 199642,36042,36025,42025,420
    BeninJan. 25, 1993Jan. 24, 199644,8907,00051,89027,18027,180
    BoliviaJuly 27, 1988May 31, 1994117,91045,350163,26013,60513,605
    Burkina FasoMar. 31, 1993Mar. 30, 199632,82015,80048.62024,6206.32030,940
    BurundiNov. 13, 1991Nov. 12, 199442,70042,70023,49023,490
    Côte d’lvoireMar. 11, 1994Mar. 10, 1997333,480333.430273,930273,930
    Equatorial GuineaFeb. 3, 1993Feb. 2, 19969,9302,95012,8808,6451,47510,120
    GuineaNov. 6, 1991Nov. 5, 199457,90057,90040,53040,530
    HondurasJuly 24, 1992July 23, 199540,68040,68027,12027,120
    KenyaDec.22, 1993Dec. 21, 199445,23045,23022,61522,615
    Lao People’s
    Democratic RepublicJune 4, 1993June 3, 199635,19035,19023,46023,460
    LesothoMay 22, 1991Aug. 1, 199418,12018,120
    MaliAug. 28, 1992Aug. 27, 199569,07510,16079,23544,18644.186
    MauritaniaDec. 9, 1992Dec. 8, 199430,4903,41033,9008,4758,475
    MongoliaJune 25, 1993June 24, 199640,81040,81022,26022,260
    NepalOct. 5, 1992Oct. 4, 199533,57033,57016,78516,785
    PakistanFeb. 22, 1994Feb. 21, 1997606,600606,600505,500505,500
    Sierra LeoneMar. 28, 1994Mar. 27, 199788,78088,78025,28025,280
    Sri LankaSep. 13, 1991Mar. 29, 1995336,000336,00056,00056,000
    TanzaniaJuly 29, 1991July 28, 1994181,900181,90096,30096,300
    UgandaApr. 17, 1989June 30, 1994199,20019,920219,120
    ZimbabweSep. 11, 1992Sep. 10, 1995200,600200,60082,10082,100
    Total2,608,235104,5902,712,8251,367,5017,7951,375,296

    Resources under enhanced structural adjustment facility arrangements may be provided from the structural adjustment facility within the Special Disbursement Account and from the Enhanced Structural Adjustment Facility Trust. The Saudi Fund for Development may also provide resources to support arrangements under the enhanced structural adjustment facility through loans to qualifying members in association with loans under the enhanced structural adjustment facility. As at April 30, 1994. SDR 19.5 million in such associated loans have been disbursed.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY TRUST SCHEDULE OF REPAYMENTS OF LOANS as at April 30, 1994(In thousands of SDRs)
    Periods of Repayment
    Financial YearLoan
    Ending April 30Account
    199540,534
    1996103,691
    1997196,737
    1998293,550
    1999375,767
    2000439,222
    2001376,066
    2002283,020
    2003186,205
    2004102,524
    Total2,397,316
    ENHANCED STRUCTURAL ADJUSTMENT FACILITY ADMINISTERED ACCOUNTS BALANCE SHEETS as at April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    AustriaBelgiumGreeceAustriaBelgiumGreece
    ASSETS
    Investments (Note 2)60,000180,01070,00060,000100,01035,000
    Accrued interest receivable3984021181367
    Advance payments to ESAF
    Subsidy Account10592131
    TOTAL ASSETS60,398180,15570,21160,100100,15435,067
    RESOURCES AND LIABILITIES
    Resources2981452
    Deposits (Note 3)60,000180,00070,00060,000100.00036,000
    Accrued interest on deposits1001556610015465
    TOTAL RESOURCES AND LIABILITIES60,398180,15570,21160,100100,15435,067
    The accompanying notes are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    ENHANCED STRUCTURAL ADJUSTMENT FACILITY ADMINISTERED ACCOUNTS INCOME STATEMENTS for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    AustriaBelgiumGreeceAustriaBelgiumGreece
    Investment income2,5954,3271,4923,5055,8342,067
    Interest expense on deposits300502176300500175
    NET INCOME2,2953,8251,3163,2055,3341,892
    The accompanying notes are an integral part of the financial statements.
    ENHANCED STRUCTURAL ADJUSTMENT FACILITY ADMINISTERED ACCOUNTS STATEMENTS OF CHANGES IN RESOURCES for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    AustriaBelgiumGreeceAustriaBelgiumGreece
    Balance, beginning of the year2568971238
    Net income2,2953,8251,3163,2055,3341,892
    Transfers to Enhanced Structural Adjustment Facility Trust
    Subsidy Account
    (1,997)(3,825)(1,173)(3,773)(6,305)(2,128)
    Balance, end of the year2981452
    The accompanying notes are an integral part of the financial statements.
    ENHANCED STRUCTURAL ADJUSTMENT FACILITY ADMINISTERED ACCOUNT SAUDI FUND FOR DEVELOPMENT SPECIAL ACCOUNT STATEMENTS OF RECEIPTS AND USE OF RESOURCES for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    RECEIPT OF RESOURCES
    Cumulative transfers from Saudi Fund for Development19,50019.500
    Cumulative receipts of interest on associated loans211114
    Accrued interest on associated loans3232
    Total19,74319,646
    USE OF RESOURCES
    Associated loans (Note 4)19,50019,500
    Cumulative payments of interest on loans211114
    Accrued interest on transfers3232
    Total19,74319,646
    The accompanying notes are an integral part of the financial statements.

    ENHANCED STRUCTURAL ADJUSTMENT FACILITY ADMINISTERED ACCOUNTS NOTES TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    Purpose

    The Administered Accounts for Austria, Belgium, and Greece were established for the administration of resources deposited in the accounts. The difference between interest earned by the Administered Accounts and the interest on deposits due is transferred to the Subsidy Account of the Enhanced Structural Adjustment Facility Trust.

    The Saudi Fund for Development (SFD) Special Account was established at the request of the SFD for the disbursement of amounts under loans made by the SFD to recipient countries in association with loans (associated loans) under the enhanced structural adjustment facility (ESAF), simultaneously with ESAF disbursements, and to receive payments of interest and repayments of principal due to the SFD under associated loans to be transferred to the SFD. The Fund acts as agent of the SFD in that respect.

    The resources of each Administered Account are separate from the assets of all other accounts of, or administered by, the Fund and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

    1. Accounting Practices

    The accounts of the Administered Accounts are expressed in terms of the SDR. SDRs are interest-earning assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund’s procedures require that the SDR valuation basket be reviewed every five years and that it include the currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the revisions. The SDR valuation basket was last reviewed in financial year 1991. The currencies comprising the basket and their amounts in the basket are as follows:

    CurrencyAmount
    U.S. dollar0.572
    Deutsche mark0.453
    Japanese yen31.8
    French franc0.800
    Pound sterling0.0812

    The accounts of the Administered Accounts are maintained on the accrual basis and, accordingly, income is recognized as it is earned and expenses are recorded as they are incurred.

    2. Investments

    The resources of the Administered Accounts for Austria, Belgium, and Greece are invested in SDR-denominated deposits and valued at costs, which approximate market value.

    3. Deposits

    The Administered Account Austria was established on December 27, 1988 for the administration of resources deposited in the account by the Austrian National Bank. The deposit totaling SDR 60.0 million is to be repaid in 10 equal semiannual installments beginning 5 ½ years after the date of the deposit and will be completed at the end of the tenth year after the date of the deposit. The deposit bears interest at a rate of ½ of 1 percent per annum.

    The Administered Account Belgium was established on July 27, 1988 for the administration of resources deposited in the account by the National Bank of Belgium. Two deposits, totaling SDR 100.0 million and SDR 80.0 million, respectively, had an initial maturity of six months and are renewable, at the option of the Fund, on the same basis. The final maturity of each deposit, including renewals, will be 10 years from the initial date of the deposit. The deposits bear interest at a rate of ½ of 1 percent per annum.

    The Administered Account Greece was established on November 30, 1988 for the administration of resources deposited in the account by the Bank of Greece. Two deposits, totaling SDR 35.0 million each, are to be repaid in 10 equal semiannual installments beginning 5 ½ years after the date of deposit and will be completed at the end of the tenth year after the date of the deposits. The deposits bear interest at a rate of ½ of 1 percent per annum.

    4. Associated Loans

    The SFD will provide resources up to the equivalent of SDR 200.0 million to support arrangements under the ESAF through loans to qualifying members in association with loans under the ESAF. Funds become available under an associated loan after a bilateral agreement between the SFD and the recipient country has been effected and when the recipient country satisfies the requisites and procedures for all or part of the loan amount. Amounts denominated in SDRs, for disbursement to a recipient country under an associated loan are placed by the SFD in the Special Account for disbursement by the Fund simultaneously with disbursements under an ESAF arrangement. These loans are repayable in 10 equal semiannual installments commencing not later than the end of the first six months of the sixth year, and are to be completed at the end of the tenth year after the date of disbursement. Interest on the outstanding balance is currently set at the rate of ½ of 1 percent per annum.

    OTHER ADMINISTERED ACCOUNTS ESTABLISHED AT THE REQUEST OF MEMBERS BALANCE SHEETS as at April 30, 1994 and 1993(In thousands of U.S. dollars)
    (Note 1)
    Administered
    Technical
    AdministeredAssistance
    Account—JapanAccount—Japan
    1994199319941993
    ASSETS
    Investments (Note 2)58,300100,2006,7784,794
    Currency deposit5992
    Accrued interest receivable6
    TOTAL ASSETS58,365100,2926,7784,794
    RESOURCES
    TOTAL RESOURCES53,365100,2926,7784,794
    The accompanying notes are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    OTHER ADMINISTERED ACCOUNTS ESTABLISHED AT THE REQUEST OF MEMBERS INCOME STATEMENTS AND CHANGES IN RESOURCES for the years ended April 30, 1994 and 1993(in thousands of U.S. dollars)
    (Note 1)
    Administered
    Technical
    AdministeredAssistance
    Account—JapanAccount—Japan
    1994199319941993
    Resource balance, beginning of the year100,29297,0504,7941,075
    Contributions received11,2068,760
    Income earned on investments2,3613,24220299
    102,656100,29216,2029,934
    Payments to beneficiaries44,2919,4245,140
    Resource balance, end of the year58,365100,2926,7784,794
    The accompanying notes are an integral part of the financial statements.

    OTHER ADMINISTERED ACCOUNTS ESTABLISHED AT THE REQUEST OF MEMBERS NOTES TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    Purpose

    At the request of members, the Fund has established special purpose accounts to administer contributed resources, and to perform financial and technical services consistent with the purposes of the Fund. The assets of each Account are separate from the assets of all other accounts of, or administered by, the Fund and are not to be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

    Administered Account—Japan

    At the request of Japan, the Fund established an Account on March 3, 1989 to administer resources made available by Japan or other countries with Japan’s concurrence, that are to be used to assist certain members with overdue obligations to the Fund. The resources of the Account are to be disbursed in amounts specified by Japan and to members designated by Japan. At April 30, 1994 and 1993, cumulative resources received amounted to $97.4 million, of which $58.3 million ($14.0 million at April 30, 1993) had been disbursed to certain beneficiaries.

    Administered Technical Assistance Account—Japan

    At the request of Japan, the Fund established an Account on March 19, 1990 to administer resources contributed by Japan that are to be used to finance technical assistance to member countries. Resources are to be used with the approval of Japan to assist members in resolving debt-related difficulties. Disbursements can also be made from the Account to the General Resources Account to reimburse the Fund for qualifying technical assistance projects. At April 30, 1994, cumulative contributions received by the Account amounted to $24.8 million ($13.6 million at April 30, 1993), of which $18.4 million ($9.0 million at April 30, 1993) had been disbursed. Cumulative contributions included $0.44 million earmarked for scholarships of which $0.38 million had been disbursed.

    1. Accounting Practices

    The Accounts are expressed in US. dollars. All transactions and operations of the Accounts, including the transfers to and from the Accounts, are denominated in US. dollars. Contributions denominated in other currencies are converted into US. dollars upon receipt of the funds.

    The Accounts are maintained on the accrual basis, and, accordingly, income is recognized as it is earned and expenses are recorded as they are incurred.

    2. Investments

    The assets of the Accounts, pending their disbursement, are held in the form of repurchase agreements or interest-earning deposits and are valued at cost, equal to market value. Interest received on these assets varies and is market related.

    3. Accounts Termination

    Administered Account—Japan

    The Account can be terminated by the Fund or by Japan. Any remaining resources in the Account at termination are to be returned promptly to Japan.

    Administered Technical Assistance Account—Japan

    The Account can be terminated by the Fund or by Japan. Any resources that may remain in the Account at termination, net of accrued liabilities under Technical Assistance Projects, are to be returned promptly to Japan.

    TRUST FUND BALANCE SHEETS as at April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    ASSETS
    Loans (Note 2)105,464157,723
    Interest and charges receivable and accrued (Note 3)25,11531,780
    TOTAL ASSETS130,579189,503
    RESOURCES AND LIABILITIES
    Trust resources105,474157,723
    Liabilities Deferred income (Note 3)25,10531,780
    TOTAL RESOURCES AND LIABILITIES130,579189,503
    The accompanying notes are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    TRUST FUND INCOME STATEMENTS for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    INCOME
    Interest and charges on loans (Note 2)7,8665,138
    Less income defferred(Note 3)5103,745
    7,3561,393
    Investment income72
    7,3561,465
    EXPENSE
    Exchange valuation loss2
    NET INCOME7,3561,463
    The accompanying notes are an integral part of the financial statements.
    TRUST FUND STATEMENTS OF CHANGES IN TRUST RESOURCES for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    (Note 1)
    19941993
    Balance, beginning of the year157,723157,861
    Net income7,3561,463
    Balance before transfers to the Special
    Disbursement Account165,079159,324
    Transfers to the Special Disbursement
    Account (Note 4)59,6051,601
    Balance, end of the year105,474157,723
    The accompanying notes are an integral part of the financial statements.

    TRUST FUND NOTES TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    Purpose

    The Trust Fund, for which the Fund is Trustee, was established in 1976 to provide balance of payments assistance on concessional terms to eligible members that qualify for assistance. In 1980, the Fund, as Trustee, decided that upon the completion of the final loan disbursements, the Trust Fund shall be terminated as of April 30, 1981. After that date, the activities of the Trust Fund have been confined to the completion of the unfinished business of the Trust Fund and the winding up of its affairs. The resources of the Trust Fund are separate from the assets of all other accounts of, or administered by, the Fund and cannot be used to discharge liabilities or to meet losses incurred in the administration of other Fund accounts.

    1. Accounting Practices

    The accounts of the Trust Fund are expressed in terms of the SDR. SDRs are interest-earning assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund’s procedures require that the SDR valuation basket be reviewed every five years and that it include the currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the revisions. The SDR valuation basket was last reviewed in financial year 1991. The currencies comprising the basket and their amounts in the basket are as follows:

    CurrencyAmount
    U.S.dollar0.572
    Deutsche mark0.453
    Japanese yen31.8
    French franc0.800
    Pound sterling0.0812

    The accounts are maintained on the accrual basis, and, accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred except that interest income from members that are overdue in settling their obligations to the Fund by six months or more is deferred and is recognized as income only when paid, unless the member has remained current in settling charges when due (see Note 3). Following the termination of the Trust Fund as of April 30, 1981, residual administrative costs have been absorbed by the General Resources Account of the Fund.

    2. Loans

    Loans were made from the Trust Fund to those eligible members that qualified for assistance in accordance with the provisions of the Trust Fund Instrument. The final Trust Fund loan installment was due on March 31, 1991. Interest on the outstanding loan balances is charged at the rate of ½ of 1 percent per annum, while special charges have been levied on late payments of interest and principal since February 1986. Beginning May 1, 1993, special charges on overdue obligations to the Trust Fund have been suspended for members who are more than six months overdue.

    3. Overdue Obligations

    At April 30, 1994, four members (six members at April 30, 1993) with obligations to the Trust Fund were six months or more late in discharging their obligations to the Trust Fund. The recognition of interest income on the loans outstanding to these members and special charges due from them is being deferred. At April 30, 1994, total deferred income amounted to SDR 25.1 million (SDR 31.8 million at April 30, 1993). Overdue loan repayments and interest and special charges due from these members were as follows:

    Interest and
    LoansSpecial Charges
    April 30,April 30,
    1994199319941993
    In millions of SDRs
    Total overdue105.5157.724.930.8
    Overdue six months or more105.5157.724.729.0
    Overdue three years or more105.5156.716.215.3

    The type and duration of the arrears of these members at April 30, 1994. were as follows:

    Interest
    and SpecialLongest Overdue
    MemberLoansChargesTotalObligation
    In millions of SDRs
    Liberia25.06.231.2January 1985
    Somalia6.51.27.7July 1987
    Sudan67.416.784.1July 1984
    Zambia660.87.4April 1989
    Total105.524.9130.4

    4. Transfer of Resources

    The resources of the Trust Fund held on April 30, 1981 or received thereafter have been employed to pay interest and principal when due on loan obligations and to make transfers to the Special Disbursement Account.

    SUPPLEMENTARY FINANCING FACILITY SUBSIDY ACCOUNT BALANCE SHEETS as at April 30, 1994 and 1993(In thousands of SDRs)
    19941993
    ASSETS
    Deposits2,7812,828
    Accrued interest on deposits2936
    TOTAL ASSETS2,8102,864
    RESOURCES
    TOTAL RESOURCES2,8102,864
    The accompanying note is an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    SUPPLEMENTARY FINANCING FACILITY SUBSIDY ACCOUNT INCOME STATEMENTS AND CHANGES IN RESOURCES for the years ended April 30, 1994 and 1993(In thousands of SDRs)
    19941993
    Resource balance, beginning of the year2,8642,818
    Investment income123166
    Resource balance before subsidy payments2,9872,984
    Subsidy payments177120
    Resource balance, end of the year2,8102,864
    The accompanying note is an integral part ot the financial statements.

    SUPPLEMENTARY FINANCING FACILITY SUBSIDY ACCOUNT NOTE TO THE FINANCIAL STATEMENTS April 30, 1994 and 1993

    The Supplementary Financing Facility Subsidy Account ("the Subsidy Account"). which is administered by the Fund, was established in December 1980 to assist low-income developing members to meet the cost of using resources made available through the Fund’s supplementary financing facility and under the policy on exceptional use. The accounts of the Subsidy Account are expressed in terms of the SDR. The accounts are maintained on the accrual basis and accordingly, income is recognized as earned. The resources of the Subsidy Account are separate from the assets of all other accounts of or administered by the Fund and cannot be used to discharge liabilities or to meet losses incurred in the administration of other Fund accounts.

    All repurchases due under these policies were scheduled for completion by January 31, 1991 and the final subsidy payments were approved in July 1991. However, two members (Liberia and Sudan), overdue in the payment of charges, remain ineligible to receive previously approved subsidy payments until their overdue charges are settled. Accordingly, the Account remains in operation and has retained amounts for payment to these members after the overdue charges are paid. At April 30, 1994, subsidy payments totaling SDR 2.2 million had not been made to the two members (at April 30, 1993, SDR 2.4 million to three members).

    REPORT OF THE EXTERNAL AUDIT COMMITTEE STAFF RETIREMENT PLAN

    Washington, D.C.

    June 29, 1994

    Authority and Scope of Audit

    In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have audited the financial statements of the Staff Retirement Plan for the year ended April 30, 1994.

    Our audit was conducted in accordance with generally accepted auditing standards and included reviews of the accounting and internal control systems, and tests of the accounting records. We evaluated the extent and results of the work of the outside accounting firm as well as that of the Office of Internal Audit and Review and also used other audit procedures as deemed necessary.

    Audit Opinion

    In our opinion, the financial statements of the Staff Retirement Plan have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year, and give a true and fair view of the financial status of the Staff Retirement Plan as at April 30, 1994, and of the changes in financial status for the year then ended.

    EXTERNAL AUDIT COMMITTEE:

    /s/ Mohammed Zouhair Tallai, Chairman

    (Syrian Arab Republic)

    /s/ Gerwald Kern (Germany)

    /s/ Suwit Nivartvong (Thailand)

    STAFF RETIREMENT PLAN STATEMENTS OF ACCUMULATED PLAN BENEFITS AND NET ASSETS AVAILABLE FOR BENEFITS as at April 30, 1994 and 1993(In thousands of U.S. dollars)
    (Note 1)
    19941993
    Accumulated Plan Benefits
    Actuarial present value of accumulated Plan benefits
    Vested benefits
    Retired participants434,300406,000
    Active participants429,700374,600
    Nonvested benefits547,600490,400
    Total actuarial present value of accumulated Plan benefits1,411,6001,271,000
    Assets Available for Benefits
    Investments, at current value (Note 3)
    Portfolio denominated in U.S. dollars1,075,312823,122
    Portfolio denominated in other currencies886,447895,919
    1,961,7591,719,041
    Receivables
    Accrued interest and dividends8.77412,017
    Contributions1,5421,223
    Other449
    10,36013,249
    Cash at bank12
    Total assets1,972,1191,732,302
    Liabilities
    Accounts payable2,4782,200
    Net assets available for benefits1,969,6411,730,102
    Excess of net assets available for benefits over actuarial
    present value of accumulated Plan benefits (Note 2)
    558,041459,102
    The accompanying notes are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    STAFF RETIREMENT PLAN STATEMENTS OF CHANGES IN ACCUMULATED PLAN BENEFITS for the years ended April 30, 1994 and 1993(In thousands of U.S. dollars)
    (Note 1)
    19941993
    Actuarial present value of accumulated
    Plan benefits at beginning of the year1,271,0001,170,800
    Increase (decrease) during the year attributable to
    Benefits accumulated (Note 1)70,76338,788
    Increase for interest due to decrease in discount period106,50098,000
    Benefits paid(36,663)(36,588)
    Net increase140,600100,200
    Actuarial present value of accumulated
    Plan benefits at end of the year1,411,6001,271,000
    The accompanying notes are an integral part of the financial statements.
    STAFF RETIREMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS for the years ended April 30, 1994 and 1993(In thousands of U.S. dollars)
    (Note 1)
    19941993
    Investment Income
    Net gain in current value of investments (Note 3)165,586141,244
    Interest and dividends61,62660,560
    227,212201,804
    Contributions(Note 2)
    International Monetary Fund39,48029,398
    Participants17,62515,424
    Participants restored to service112634
    Net transfers to retirement plans of
    other international organizations
    (774)(117)
    56,44346,339
    Total additions283,655247,143
    Benefits
    Pension30,87228,336
    Commutation2,7905,536
    Withdrawal2,4881,986
    Death513730
    36,66336,588
    Investment Fees
    Manager6,1985,175
    Custodian1,2551,027
    7,4536,202
    Total payments44,11642,790
    Net additions239,539204,353
    Net Assets Available for Benefits at
    Beginning of the year1,730,1021,525,749
    End of the year1,969,6411,730,102
    The accompanying notes are an integral part of the financial statements.

    STAFF RETIREMENT PLAN NOTES TO THE FINANCIAL STATEMENTS as at April 30, 1994 and 1993

    Description of the Plan

    General

    The Staff Retirement Plan (Plan) is a defined benefit pension plan covering nearly all staff members of the International Monetary Fund (Employer). All assets and income of the Plan are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used solely for the benefit of participants, retired participants, and their beneficiaries.

    Benefits

    Annual Pension

    Participants are entitled to an unreduced pension beginning at normal retirement age of 62. The amount of the pension is based on the number of years of service, age at retirement, and highest average gross remuneration. The provisions for determining gross remuneration are different for benefits earned before and after May 1, 1990. The gross remuneration on which pensions from the Plan are based is limited to a predetermined amount, which is periodically adjusted. Pension benefits attributable to gross remuneration in excess of this amount are paid from the Supplemental Retirement Benefit Plan.

    The accrual rate of benefits earned before May 1, 1990 was 2 percent of gross remuneration for each year of service, while the accrual rate of benefits earned after May 1, 1990 is 2.2 percent for the first 25 years of service and 1.8 percent for the next 10 years of service. The pensions of participants hired before May 1, 1990 are based on a prorated combination of the old and new accrual rates, using the time period of service before and after May 1, 1990.

    Participants between the ages of 50 and 55 may retire with a reduced pension if their age and years of service total at least 75. Participants age 55 and older may retire with an unreduced pension if the sum of their age and years of service equals 85 or more. Early retirement pensions are based on normal pensions.

    Cost of Living Adjustment

    Whenever the cost of living increases during a financial year, pensions shall be augmented by a pension supplement that, expressed in percentage terms, shall be equal to the increase in the cost of living for the financial year. If the cost of living increase for a financial year should exceed 3 percent, the Employer has the right, for good cause, to reduce prospectively the additional supplement to not less than 3 percent. Deferred pensions become subject to cost of living adjustments when the sum of a former participant’s age and years of service is at least 50.

    Withdrawal Benefit

    Upon termination, a participant with at least three years of eligible service may elect to receive either a withdrawal benefit or a deferred pension to commence after the participant has reached the age of 55 or age 50 if age and years of service add to at least 75. The withdrawal benefit is a percentage of the participant’s highest average gross remuneration.

    Commutation

    A pensioner entitled to receive a normal, early retirement, or deferred pension may elect to commute up to one third of his or her pension, and receive a lump-sum amount at retirement in lieu of the amount of pension commuted. A participant entitled to receive a disability pension may elect to commute one third of the early retirement pension that would otherwise have been applicable.

    Disability Pensions, Death Benefits, and Survivor Benefits

    The Plan also provides for disability pensions, death benefits, and benefits to surviving spouses and children of deceased participants.

    Currency of Pension Payments

    A participant may elect to have his pension paid in the currency of the country in which he has established permanent residence or in a combination of two currencies—the U.S. dollar and the currency of the country in which the participant is a permanent resident. As a result of an amendment to the Plan that became effective on May 1, 1991, the additional cost of paying pensions in local currency, formerly paid by the employer, is now paid by the Plan.

    Contributions

    Participants

    As a condition of employment, regular staff members are required to participate in and to contribute to the Plan. The contribution rate is presently 7 percent of the participant’s gross remuneration. Certain other categories of staff members may elect to participate in the Plan.

    Employer

    The Employer meets certain administrative costs of the Plan, such as the actuary’s fees, and contributes any additional amount not provided by the contribution of participants to pay costs and expenses of the Plan not otherwise covered. In financial year 1994, the administrative costs met by the Employer were approximately $0.13 million ($0.13 million in 1993).

    Plan Termination

    In the event of the termination of the Plan by the Employer, the assets of the Plan shall be used to satisfy all liabilities to participants, retired participants, and their beneficiaries, and all other liabilities of the Plan. Any remaining balance of the assets shall be returned to the Employer.

    1. Accounting Practices

    Accumulated Plan Benefits

    The actuarial value of vested benefits is presented for two categories. For retired participants, the amount presented equals the present value of the benefits expected to be paid over the future lifetime of the pensioner, and, if applicable, the surviving spouse of the pensioner. For active participants, the amount presented equals the present value of the deferred pension earned to the valuation date for a participant, or if greater, the value of the withdrawal benefit for that participant, summed over all participants. For the purpose of determining the actuarial value of the vested benefits at the end of the Plan year, it is assumed that the Plan will continue to exist and that salaries will continue to rise, but that participants will not earn pension benefits beyond the date of the calculation.

    The amount of nonvested benefits represents the total of the withdrawal benefits of all participants with less than three years of eligible service together with the estimated effect of projected salary increases on benefits expected to be paid.

    In contrast to the actuarial valuation for funding purposes, the actuarial valuation used for the financial statements represents the portion of the benefit obligation that had been accumulated by April 30, 1994. It reflects only the service to that date and does not take into account the fact that the value of accumulated benefits, which are the Plan’s liabilities, is expected to increase each year. Nor does it take into account the fact that the market value of investments may fluctuate from year to year, which is significant because the employer’s liability is the excess of the present value of accumulated benefits over the value of the assets. Accordingly, the financial statements do not measure the amount that the Employer will be required to fund in the future.

    Valuation of Investments

    Investments in securities listed on stock exchanges are valued at the last reported market sales price on the last business day of the accounting period. Over-the-counter securities are valued at their bid price on the last business day of the accounting period. Investments in real estate are valued at the last reported appraised value. Purchases and sales made by U.S. investment managers are recorded on the settlement date basis, and transactions made by the international investment managers are recorded on the trade date basis.

    Investment Income

    Dividend and interest income from investments are recognized as they are earned.

    2. Actuarial Valuation and Funding Policy

    Under the actuarial valuation used for funding Calculations, it is assumed that the Plan will continue to exist and that active participants will continue to earn pension benefits beyond the date of the valuation until the date of withdrawal, disability, death, or retirement, but that no new participant will join the Plan (the “closed method").

    Funding by the Employer is based upon a valuation method, known as the “aggregate method.” which expresses liabilities and contribution requirements as single consolidated figures that include provision for experience gains and losses and cost of living increases. Required Employer contributions are expressed as a percentage to be applied to the gross remuneration of participants and are based upon the valuation completed 12 months previously. For the financial year that began on May 1, 1992, this rate was 13.41 percent and was 16.05 percent for the year that began on May 1, 1993 based upon the valuation at April 30, 1992. The proposed rate for the year beginning May 1, 1994 is 14.43 percent of the new gross remuneration.

    The actuarial assumptions used in the valuation to determine the Employer contribution in recent years include (a) life expectancy based upon the 1980 and 1982 United Nations mortality tables for men and women, respectively, (b) withdrawal or retirement of a certain percentage of staff at each age, differentiated by sex, (c) an average rate of return on investments of 8.5 percent per annum, (d) an average inflation rate of 5 percent per annum, (e) salary increase percentages that vary with age, and (f) valuation of assets using a five-year moving average method.

    Several of the actuarial assumptions used to determine the Employer contribution were changed for years beginning after April 30, 1991. The changes include (1) basing life expectancies on the 1984 and 1982 United Nations mortality tables for men and women, respectively, with each table set back one year and (2) increasing the liabilities of the Plan by 1 percent to reflect the May 1, 1991 incorporation into the Plan of the Pension Parity Adjustment System, which are reflected in the 1991 and 1990 valuations.

    The results of the April 30, 1993 and 1992 valuations are:

    19931992
    In millions of U.S. dollars
    Present value of benefits payable2,0341,847
    Less: Assets for valuation purposes1,5211,369
    Required future funding513473
    Less: Present value of prospective
    contributions from participants
    (7 percent of gross remuneration)175154
    Present value of future funding required
    from the Employer338324

    3. Investments

    A summary of investments at market values is as follows:

    19941993
    In millions of U.S. dollars
    Portfolio denominated in U.S. dollars
    Common and preferred stock
    558526
    Short-term investments266102
    U.S. Government securities15497
    Real estate5149
    Corporate bonds and debentures4648
    Venture capital11
    1,076823
    Portfolio denominated in other currencies886896
    1,9621,719

    The net gain in the current value of investments represents the gains and losses realized during the year from the sale of investments, the unrealized appreciation and depreciation of the market value of investments, and, for investments denominated in currencies other than U.S. dollars, valuation differences arising from exchange rate changes of other currencies against the U.S. dollar.

    The Plan enters into forward foreign currency exchange contracts to reduce the impact of foreign currency fluctuations relative to investments in its international portfolio and also invests in financial futures contracts. Although the face amount of these contracts is not included in net assets available for plan benefits, the changes in value of such contracts are recognized currently in the financial statements. Excluding offsetting positions for which the Plan considers there is no material credit risk, the Plan, at April 30, 1994 had $391 million in open positions in equity, fixed income, and currency futures contracts and $85 million in open positions in forward foreign exchange contracts and swaps.

    REPORT OF THE EXTERNAL AUDIT COMMITTEE SUPPLEMENTAL RETIREMENT BENEFIT PLAN

    Washington, DC.,

    June 29, 1994

    Authority and Scope of Audit

    In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have audited the financial statements of the Supplemental Retirement Benefit Plan for the year ended April 30, 1994.

    Our audit was conducted in accordance with generally accepted auditing standards and included reviews of the accounting and internal control systems, and tests of the accounting records. We evaluated the extent and results of the work of the outside accounting firm as well as that of the Office of Internal Audit and Review and also used other audit procedures as deemed necessary.

    Audit Opinion

    In our opinion, the financial statements of the Supplemental Retirement Benefit Plan have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year, and give a true and fair view of the financial status of the Supplemental Retirement Benefit Plan as at April 30, 1994, and of the changes in financial status for the year then ended.

    EXTERNAL AUDIT COMMITTEE:

    /s/ Mohammed Zouhair Tallaj, Chairman (Syrian Arab Republic)

    /s/ Gerwald Kern (Germany)

    /s/ Suwit Nivartvong (Thailand)

    SUPPLEMENTAL RETIREMENT BENEFIT PLAN STATEMENTS OF ACCUMULATED PLAN BENEFITS AND ASSETS AVAILABLE FOR BENEFITS as at April 30, 1994 and 1993(In thousands of U.S. dollars)
    (Note 1)
    19941993
    Accumulated Plan Benefits
    Actuarial present value of accumulated Plan benefits
    Vested benefits6,7006,400
    Nonvested benefits100100
    Total actuarial present value of accumulated Plan benefits6,8006,500
    Assets Available for Benefits
    Receivable
    Contribution4
    Cash at bank (Note 3)1401
    Assets available for benefits1405
    Excess of actuarial present value of accumulated Plan
    benefits over assets available for benefits
    6,7996,095
    The accompanying notes are an integral part of the financial statements.
    /s/ David Williams/s/ M. Camdessus
    TreasurerManaging Director
    SUPPLEMENTAL RETIREMENT BENEFIT PLAN STATEMENTS OF CHANGES IN ACCUMULATED PLAN BENEFITS for the years ended April 30, 1994 and 1993(In thousands of U.S. dollars)
    (Note 1)
    19941993
    Actuarial present value of accumulated
    Plan benefits at beginning of the year6,5004,700
    Increase (decrease) during the period attributable to
    Benefits accumulated2311,948
    Increase for interest due to decrease in discount period500400
    Benefits paid(431)(548)
    Net increase3001,800
    Actuarial present value of accumulated
    Plan benefits at end of the year6,8006,500
    The accompanying notes are an integral part of the financial statements.
    SUPPLEMENTAL RETIREMENT BENEFIT PLAN STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS for the years ended April 30, 1994 and 1993(in thousands of U.S. dollars)
    (Note 1)
    19941993
    Interest income811
    Contributions
    International Monetary Fund218534
    Participants9266
    Transfer of contributions (Note 4)(291)
    19600
    Total additions27611
    Benefits
    Pension431359
    Communication189
    Total payments431548
    Net (decrease) increase(404)63
    Assets Available for Benefits at
    Beginning of the year405342
    End of the year1405
    The accompanying notes are an integral part of the financial statements.

    SUPPLEMENTAL RETIREMENT BENEFIT PLAN NOTES TO THE FINANCIAL STATEMENTS as at April 30, 1994 and 1993

    Description of Supplemental Retirement Benefit Plan

    General

    The Supplemental Retirement Benefit Plan (SRBP) is a defined benefit pension plan covering all participants of the Staff Retirement Plan of the International Monetary Fund (Employer) and operates as an adjunct to that Plan. All assets and income of the SRBP are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used solely for the benefit of participants and retired participants and their beneficiaries.

    Benefits

    The Staff Retirement Plan has adopted limits to pensions payable from that Plan. The SRBP provides for the payment of any benefit that would otherwise have been payable if these limits had not been adopted.

    In financial year 1994, 29 pensioners received benefits from the SRBP (27 in financial year 1993).

    Contributions

    Prior to retirement, the Employer partially prefunds the SRBP for non-US, citizens who plan to retire in the United States, so that the taxable income of the participant is approximately equal to, but not more than, such income that would have accrued if the entire benefit had been payable from any of the prefunded assets of the Staff Retirement Plan. The prefunded amounts are used to pay any of the benefits payable, whether for U.S. or non-U.S. staff. Should the assets of the SRBP be exhausted, benefits will be paid from current contributions by the Employer.

    SRBP Termination

    In the event of the termination of the SRBP by the Employer, the assets of the SRBP shall be used to satisfy all liabilities to participants, retired participants and their beneficiaries, and all other liabilities of the SRBP.

    1. Accounting Practices

    Accumulated SRBP Benefits

    The actuarial present value of accumulated SRBP benefits is stated as at the date of the most recent actuarial valuation, which was April 30, 1994. The actuarial value of benefits is presented for two categories. The vested benefits relate to retired participants and the amount presented equals the present value of the benefits expected to be paid over the future lifetime of the pensioner, and, if applicable, the surviving spouse of the pensioner.

    The nonvested benefits relate to active participants and the amount presented equals the present value of the supplemental deferred pension earned to the valuation date for a participant, taking into account the estimated effect of projected salary increases. For the purpose of determining the actuarial value of the benefits at the end of the period, it is assumed that the SRBP will continue to exist, but that participants will not accumulate further contributory service beyond the date of the calculation.

    Interest Income

    Interest income from investments is recognized as it is earned.

    2. Actuarial Valuation

    The actuarial assumptions used in the valuation to determine the employer contribution in recent years include (a) life expectancy based upon the 1980 and 1982 United Nations mortality tables for men and women, respectively, (b) withdrawal or retirement of a certain percentage of staff at each age, differentiated by sex, (c) an average rate of return on investments of 8.5 percent per annum, (d) an average inflation rate of 5 percent per annum, (e) salary increase percentages which vary with age, and (f) valuation of assets using a five-year moving average method.

    Several of the actuarial assumptions used to determine the employer contribution were changed for years beginning after April 30, 1991. The changes include (1) basing life expectancies on the 1984 and 1982 United Nations mortality tables for men and women, respectively, with each table set back one year and (2) increasing the liabilities of the SRBP by 1 percent to reflect the May 1, 1991 incorporation into the SRBP of the Pension Parity Adjustment System.

    3. Assets

    Cash balances are maintained in a money market deposit account.

    4. Transfer of Contributions

    Because of a retroactive change in U.S. tax regulations, contributions to the Staff Retirement Plan on behalf of current staff are no longer limited. Consequently, employees’ contributions to the SRBP for financial years 1990-1994, with respect to current participants, were transferred from the SRBP to the Staff Retirement Plan. The transfer of resources amounted to $291,279.

    Glossary of Abbreviations

    BEAC

    Bank of Central African States

    BCEAO

    Central Rank of West African States

    CCFF

    Compensatory and contingency financing facility

    CMEA

    Council for Mutual Economic Assistance

    CTA

    Cofinancing Trust Account

    ECU

    European currency unit

    EMCF

    European Monetary Cooperation Fund

    EMS

    European Monetary System

    ERM

    Exchange rate mechanism of the EMS

    ESAF

    Enhanced structural adjustment facility

    EU

    European Union

    GAB

    General Arrangements to Borrow

    GATT

    General Agreement on Tariffs and Trade

    GDP

    Gross domestic product

    GNP

    Gross national product

    GRA

    General Resources Account

    IBRD

    International Bank for Reconstruction and Development (World Bank)

    JVI

    Joint Vienna Institute

    LIBOR

    London interbank offered rate

    NAFTA

    North American Free Trade Agreement

    NMP

    Net material product

    OECD

    Organization for Economic Cooperation and Development

    SAF

    Structural adjustment facility

    SDA

    Special Disbursement Account

    SDR

    Special drawing right

    SNA

    System of National Accounts

    STF

    Systemic transformation facility

    UN

    United Nations

    UNDP

    United Nations Development Program

    VAT

    Value-added tax

    WTO

    World Trade Organization

    In this Report, “Board” refers to the Executive Board of the Fund; references to the Board of Governors are stated fully.

    The study was subsequently released as IMF Occasional Paper, No. 108, Recent Experiences with Surges in Capitol Inflows (Washington, December 1993),

    Enhanced surveillance is not performed under Article IV of the Fund’s Articles; it is a service provided at the request of members under Article V, Section

    The bicyclic procedure was a modified consultation procedure involving a Board discussion every second year and a simplified interim procedure in the intervening year. It had been introduced in 1987 to reduce workload strains on the Board and staff while still attempting to ensure effective surveillance. It had been adopted initially for 23 countries and was eventually applied to 31 countries.

    The 1994 consultation discussion with Japan will take place in the fiancial year 1994/95 and will be described in the 1995 Annual Report.

    For further information, see Financial Relations Among Countries of the Former Soviet Union, IMF Economic Review, No.

    Reserve tranche purchases were made by 10 members in 1993/94 (SDR 0.1 billion), compared with Sri members (SDR 3.2 billion) in 1992/93. The high level of reserve tranche purchases in 1992/93 was related to members’ payments of their increased quota subscriptions under the Ninth General Review; these payments created reserve tranche positions which subsequently were purchased, in many cases in order to repay loans used to make the payments. Reserve tranche purchases represent members’ use of their own Fund-related assets and not use of Fund credit.

    Effective May 1, 1993, the Fund capitalized and depreciated expenditures of a capital nature, in lieu of the previous method of expensing them when incurred. The Fund also recognized the costs of providing postretirement benefits to its employees when those benefits are earned.

    the data in this section include the overdue financial obligations of the Federal Republic of Yugoslavia (Serbia and Montenegro) and the Republic of Bosnia and Herzegovina, which have not yet completed arrangements for succession to membership in the Fund.

    These prescribed holders of SDRs are the African Development Bank, African Development Fund Andean Reserve Fund. Arab Monetary Fund, Asian Development Bank. Bank of Central African States, Bank for International Settlements. Central Bank of West African States. East African Development Bank. Eastern Caribbean Central Bank, International Bank for Reconstruction and Development. International Development Association, International Fund for Agricultural Development, Islamic Development Bank, and Nordic Investment Bank.

    As the Fund cannot hold SDRs in the SDA or in its capacity as trustee of accounts administered for the benefit of members, SDRs for these accounts are held by prescribed holders on behalf of the Fund.

    The Fund’s Articles of Agreement provide for a designation mechanism whereby participants whose balance of payments and reserve positions are deemed sufficiently strong are obliged, or designated, by the Fund to provide freely usable currencies up to specified amounts in exchange for SDRs. In transactions with designation, the participant exchanging its SDRs is required to make a representation to the Fund that it has a need to use its SDRs. and not for the sole purpose of changing the composition of its reserves. There were no transactions with designation in 1993/94. for the sixth consecutive year, as potential exchanges of SDRs through the designation mechanism were channeled through voluntary transactions by agreement with other participants.

    See Annual Report, 1993. pages 97 and 147.

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