Analysis and Plans, presents an assessment of 1997 survey data and a summary of improvements introduced, as a result of countries' participation in the 1997 Coordinated Portfolio Investment Survey, into national systems for collecting data on international (cross-border) portfolio investment The chapter reviews developments that occurred in international financial markets in the 1980s and 1990s, and the Godeaux Report assessment and recommendations about global data on international portfolio investment flows and stocks. The objectives set for the 1997 survey, the scope of survey results, and the process by which results have been assessed in the chapter. Since publication of the Godeaux Report, substantial expansion and evolution have occurred in exchange and over-the-counter markets for financial derivatives covering a range of financial risks. These markets now have the capacity, in effect, to change the currencies, maturities, and marketability of the financial instruments underlying associated derivative contracts. It is recommended that vigorous efforts should be made to secure the participation of more major investing countries in order to address the under-reporting of global portfolio investment assets and to confirm the reliability of the global data on portfolio investment liabilities.
International Monetary Fund. External Relations Dept.
Public Information Notices (PINs) are IMF Executive Board assessments of members’ economic prospects and policies issued following Article IV consultations—with the consent of the member—with background on the members’ economies and following policy discussions in the Executive Board at the decision of the Board. Recently issued PINs include
The Analysis of 1997 Coordinated Portfolio Investment Survey Results and Plans for the 2001 Survey (Analysis and Plans) is intended to complement the Results of the 1997 Coordinated Portfolio Investment Survey (1997 CPIS), which was published by the International Monetary Fund (IMF) in January 2000. This second publication, Analysis and Plans, presents an assessment of 1997 survey data and a summary of improvements introduced, as a result of countries’ participation in the 1997 CPIS, into national systems for collecting data on international (cross-border) portfolio investment.1
Unprecedented growth in the volume, complexity, and globalization of international financial transactions occurred during the 1980s and 1990s. Changes in international capital markets created additional avenues for raising capital, investing, and hedging risk. A broad range of new participants entered the markets. As a result, there was commensurate growth in the portfolio investment component of total international financial flows (see Chart 1).
The government’s plans to reform the tax system and administration are well founded. The Central Bank of Aruba is to be commended for its prudent management of monetary policy, as demonstrated by the continued credibility and strength of the peg to the U.S. dollar, buttressed by a robust foreign reserve position. There has been significant progress in expanding and strengthening the supervisory and regulatory framework of financial activities. Renewed initiatives on structural reforms will improve efficiency in the use of resources and attract strategic investment.
This 2002 Article IV Consultation for the Kingdom of the Netherlands—Aruba highlights that after growing at more than 4 percent per year in 1996–2000, the Aruba economy experienced two years of retrenchment, with GDP falling an estimated 1.2 percent in 2001 and 3.8 percent in 2002. This downturn reflected a lull in investment activity, but especially weak tourism following the United States recession and the terrorist attacks of September 11, 2001. In 2003, sharply higher private and public investment and a modest revival in tourism should boost economic growth to more than 4 percent.
The staff report for the 2005 Article IV Consultation on the Kingdom of the Netherlands—Aruba highlights the economic developments and policies. Meeting the challenges of population aging requires policies that create conditions for faster productivity growth. IMF Staff recommended applying the successful model of public-private sector cooperation developed in the tourism industry to promote diversification in other areas, in particular in financial services. Staff urged the authorities to speed up the restructuring of public companies and reinvigorate their efforts to improve statistics.
This 1999 Article IV Consultation highlights that Aruba’s real GDP grew at an annual rate of some 3 percent in 1998, while inflation remained subdued at about 2 percent. Comparable rates of satisfactory growth and low inflation have characterized the island’s development since the mid-1990s, following a period of double-digit growth when an investment boom in the hotel sector brought about the transformation of Aruba into a tourism-based economy. The outlook for satisfactory growth and low inflation had been threatened, however, by an undue relaxation of fiscal policy in 1996 and continued laxity through mid-1998.