Abstract
As Mr. Ouattara’s remarks have suggested, we in the Fund have been devoting increasing attention to structural reforms as a necessary complement to macroeconomic stabilization in the design of Fund-supported adjustment programs, and more generally in the advice that the Fund provides to member countries in the context of its surveillance responsibilities. Over recent years, in fact, the most successful Fund-supported adjustment programs have been those that have had a medium-term focus with corresponding emphasis on structural reforms, including in that context trade reforms, which are crucial. To further that effort, the Fund, the World Bank, and the new WTO must increasingly complement each other in assisting countries in their trade liberalization efforts. The Fund’s own perspective in such efforts is to integrate trade reform with comprehensive macroeconomic adjustment programs, taking account of the many links between trade and macroeconomic policies. We all know that inappropriate macroeconomic (including exchange rate) policies can constrain an economy’s ability to compete abroad and could also generate protectionist pressures at home. Trade policies, in turn, can affect macroeconomic policies through their impact on fiscal balances, on the balance of payments, and on the exchange rate. The fact is that exchange and trade restrictions often operate as substitutes, and progress in one area can be hampered by developments in the other.
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