Aid for trade can support countries trying to further benefit from the expanding global market place by helping to address poorly performing infrastructure and institutions. Needless to say, good policies also matter: trade liberalization, improving incentives for private investment in trade, and reducing the costs and improving the quality of services. Market access also matters; accordingly, a successful conclusion to the Doha Round remains a top policy objective.
The paper highlights three challenges and suggests some areas for further consideration/action: making competitiveness a pillar of country growth strategies; filling the remaining gaps in trade-related assistance; and expanding the overall aid envelope and making full use of opportunity to replenish the International Development Association.
International Monetary Fund. External Relations Dept.
This paper highlights that agreement on an important package of reforms of vital significance to the future of the international monetary system was reached at a meeting of the Interim Committee of the Board of Governors of the IMF on the International Monetary System in Kingston, Jamaica, on January 7–8, 1976. The reforms include a substantial quota increase for almost all members, as well as an increase in access to the IMF’s resources for all member countries in the period prior to implementation of the increase in their IMF quotas, and some other amendments.
Broad economic institutions are of fundamental importance for sustained economic growth. Changing these institutions is difficult, particularly for outsiders. But this does not mean that there is no role for the Fund to play in assisting low-income countries to create conditions for sustained growth acceleration.
Mr. Alexei P Kireyev, Mr. Boaz Nandwa, Ms. Lorraine Ocampos, Mr. Babacar Sarr, Mr. Ramzy Al Amine, Mr. Allan G Auclair, Mr. Yufei Cai, and Mr. Jean-Francois Dauphin
Individual countries of the Maghreb have achieved substantial progress on trade, but, as a region they remain the least integrated in the world. The share of intraregional trade is less than 5 percent of their total trade, substantially lower than in all other regional trading blocs around the world. Geopolitical considerations and restrictive economic policies have stifled regional integration. Economic policies have been guided by country-level considerations, with little attention to the region, and are not coordinated. Restrictions on trade and capital flows remain substantial and constrain regional integration for the private sector.
Approximately half of the countries that had IMF-supported programs during 1993-2003 also had trade-related conditions. A large literature has shown that trade openness is an essential part of the environment in which economic growth and poverty reduction take place.
Mr. Dmitry Gershenson, Mr. Albert Jaeger, and Mr. Subir Lall
To absorb the still-large internal slack, and to reduce the very high stock of external imbalances at the same time, competitiveness gains achieved in the past few years need to be maintained. An investigation of structural factors with strong empirical linkages to external competitiveness suggests, however, that the sustainability of Portugal’s external gains cannot be taken for granted. The country needs to continue to push forward with structural reforms in a few key areas that were identified during the 2011–14 IMF program, such as further increasing labor market flexibility and enhancing competition.