International Monetary Fund. Monetary and Capital Markets Department
This is the 64th issue of the AREAER. It provides a description of the foreign exchange arrangements, exchange and trade systems, and capital controls of all IMF member countries. It also provides information on the operation of foreign exchange markets and controls on international trade. It describes controls on capital transactions and measures implemented in the financial sector, including prudential measures. In addition, it reports on exchange measures imposed by member countries for security reasons. A single table provides a snapshot of the exchange and trade systems of all IMF member countries. The Overview describes in detail how the general trend toward foreign exchange liberalization continued during 2012, alongside a strengthening of the financial sector regulatory framework. The AREAER is available in several formats. The Overview in print and online, and the detailed information for each of the 191 member countries and territories is included on a CD that accompanies the printed Overview and in an online database, AREAER Online. In addition to the information on the exchange and trade system of IMF member countries in 2012, AREAER Online contains historical data published in previous issues of the AREAER. It is searchable by year, country, and category of measure and allows cross country comparisons for time series.
The Annual Report to the Board of Governors reviews the IMF’s activities and policies during any given year. There are five chapters: (1) Overview, (2) Developments in the Global Economy and Financial Markets, (3) Policies to Secure Sustained and Balanced Global Growth, (4) Reforming and Strengthening the IMF to Better Support Member Countries, and (5) Finances, Organization, and Accountability. The full financial statements for the year are published separately and are also available, along with appendixes and other supplementary materials.
One of the core responsibilities of the International Monetary Fund is to maintain a dialogue with its member countries on the national and international consequences of their economic and financial policies. This process of monitoring and consultation, referred to as surveillance, is mandated under Article IV of the IMF’s Articles of Agreement and lies at the heart of the Fund’s efforts to prevent crises.
Since the onset of the debt problem in the early eighties, developing countries have been in the grip of a deep and protracted economic crisis. For them the decade of the eighties has been aptly described as a lost decade as their standard of living suffered stagnation or even deterioration. Most of them have incurred unsustainable external deficits and experienced high rates of inflation, crushing debt-service burdens, and sluggish growth in gross domestic product (GDP). Part of their woes is undoubtedly ascribable to an unfavorable external environment, notably, mediocre growth in the industrial countries, a rising tide of protectionism, stagnation of financial flows, and worsening terms of trade. While these factors are important, they fail to offer a satisfactory explanation. A good part of the blame lies with domestic factors. In a large number of cases poor economic management is responsible for widespread macroeconomic and structural distortions and for failure to implement timely and effective programs of adjustment in the face of deteriorating external conditions.