Resolved:

That the Executive Directors of the International Monetary Fund are invited, at the request of the Governor for the United States of America, to interpret the Articles of Agreement, pursuant to Article XVIII*(a), as to whether the authority of the Fund to use its resources extends beyond current monetary stabilization operations to afford temporary assistance to members in connection with seasonal, cyclical, and emergency fluctuations in the balance of payments of any member for current transactions, and whether the Fund has authority to use its resources to provide facilities for relief, reconstruction, or armaments, or to meet a large or sustained outflow of capital on the part of any member.^**

Resolution No. IM-6

March 18, 1946

Resolved:

Whereas the General Assembly of the United Nations on November 3, 1950, adopted a Resolution entitled “Uniting for Peace”;

Now, therefore, the Board of Governors, taking note of said Resolution, hereby resolves:

That the Fund, in the conduct of its activities shall have due regard for recommendations of the General Assembly made pursuant to the said Resolution for the maintenance or restoration of international peace and security.

Resolution No. 6-8

September 13, 1951

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate, propose an adjustment of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned.” This report and the attached Resolution on increases in quotas under the current, i.e., the Seventh, General Review are submitted to the Board of Governors in accordance with Article III, Section 2.

In their Resolution of March 22, 1976,* the Board of Governors decided that “The Seventh General Review of Quotas shall be completed by February 9, 1978.” The review was not completed by that date. At its meeting in Mexico City in April 1978, considerable progress was made by the Interim Committee toward achieving a consensus on the Seventh Review as reflected in the communiqué issued at the end of its meeting on April 30, 1978.

2. At the last meeting of the Interim Committee in Washington in September 1978, understandings were reached on all major issues of the Seventh Review, as reflected in the relevant passages from the Committee’s communiqué of September 24, 1978, as follows:

The Committee resumed its discussion of the Seventh General Review of Quotas and considered three major issues relating to it: the size of the overall increase in quotas, selective quota adjustments, and the method of payment of the increases in quotas. These issues were considered by the Committee in conjunction with the various issues relating to the SDR with which they are regarded as interrelated. The Committee recalled its view that there was a need for an increase in total quotas under the Seventh Review that would be adequate to meet the expected need for conditional liquidity over the next five years. The Committee also recalled its view that an adequate increase would strengthen the available sources of balance of payments financing by enhancing the ability of the Fund to provide such financing without heavy recourse to borrowing and by furthering the process of international adjustment.

The Committee’s view was that an increase in the overall size of quotas of 50 percent would be appropriate to bring about a better balance between the size of the Fund’s resources and the need of members for balance of payments financing over the medium term. The Committee noted that the Executive Board does not intend to propose a general adjustment in quotas for five years after the Board of Governors approves the increase in quotas under the Seventh Review, unless there is a major change in the world economy and its financing needs.

The Committee noted with satisfaction that agreement had been reached on selective quota increases for 11 developing member countries: Iraq, Iran, Korea, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Singapore, and the United Arab Emirates.

Taking into account the conclusions reached on the issues relating to SDRs, including allocations of SDRs, the Committee was of the view that, for the quota increases proposed as a result of this review, participants in the Special Drawing Rights Department should pay 25 percent of the quota increase in SDRs and that nonparticipants should pay the equivalent of 25 percent of the increase in foreign exchange.

The Committee agreed to request the Executive Board to prepare and complete by November 1, 1978, for final decision and vote by the Board of Governors before the end of the year, a proposed resolution on increases in the quotas of members, which would include necessary provisions dealing with participation, the effective date of quota increases, and the method of payment of the increases in accordance with the understanding reached in the Committee.

The communiqué also included the following passage:

The Committee reached the conclusion … [on the issues related to SDRs] … with the understanding that these conclusions are interrelated and must be adopted in their entirety together with the understandings reached by the Committee on the Seventh General Review of Quotas. In the view of the Committee, therefore, decisions on all these issues relating to SDRs and on the Seventh General Review should be taken at the same time.

3. The Executive Board has considered a number of factors, both of a qualitative and quantitative nature, that affect the expected need for conditional liquidity and the Fund’s ability to finance that need over the medium term without heavy reliance on borrowing. One factor is the extent of the growth of, and possible fluctuations in, the value of international transactions; another factor is the likely continuation of relatively large payments imbalances for many countries in the next few years. In these circumstances, the demand for balance of payments financing may well rise, and the Fund’s resources should be sufficient to permit the Fund to finance a reasonable share of that demand.

Furthermore, the Executive Board, while acknowledging the contribution made by the international capital markets to the effective functioning of the international monetary system over the last few years, believes that an increase in Fund quotas can promote the process of international adjustment in ways that could not be achieved through the private markets. The Fund provides its members with balance of payments financing on the understanding that these members will follow appropriate policies of economic adjustment. In these circumstances, members’ access to the Fund’s resources must be sufficiently large to induce members with substantial balance of payments needs to use those resources and to pursue economic policies and programs which the Fund is able to support. While access to the Fund’s resources in terms of quota is now considerably in excess of the traditional policy norm of 100 percent of quota under the credit tranche policy, the ratio between access to Fund credit and payments imbalances is considered to be lower than a decade ago.

In recent years, the Fund has established or expanded a number of special facilities to help deal with certain balance of payments problems of its members. Some of them, notably the Extended Fund Facility and the expanded Compensatory Financing Facility, which are of a continuing character, have increased access to Fund resources in relation to quota without additional financing being available to the Fund. On the other hand, borrowing by the Fund for the Oil Facilities of 1974 and 1975 and the Supplementary Financing Facility, which is expected to come into operation shortly, entailed, or will entail, the creation of claims on the Fund’s general resources which are encashable on demand if a lender has a balance of payments need. Moreover, as was the case with the Oil Facilities, the resources provided under the Supplementary Financing Facility will augment members’ access for a limited period of time only. At the end of that period, the Fund will be faced with both a reduction in the resources available to meet the needs of members and possibly large liquid liabilities relative to its quotas.

In view of the possibility of large payments imbalances over the next few years and the distribution of such imbalances, the Fund’s liquidity position is likely to be vulnerable, even though the volume of usable currencies available to the Fund has recently increased. Resources made available through increases in quotas give the Fund a more assured access to resources than borrowing.

In light of the above considerations, the Executive Board is of the view that, in general, increased access to the Fund’s resources should, over the longer run, normally result from an increase in Fund quotas.

4. For these reasons, and in accordance with the understandings reached by the Interim Committee at its meeting on September 24, 1978, the Executive Board now proposes to the Board of Governors increases in Fund quotas of 50 percent for most members and special increases for 11 members. The Executive Board does not intend to propose a general adjustment of quotas for five years after the Board of Governors adopts this Resolution, unless there is a major change in the world economy and its financing needs.

5. The Executive Board will review the customary method of calculating quotas after the Seventh General Review of Quotas has been completed. In the context of the next general review of quotas, the Executive Board will examine the quota shares of members in relation to their positions in the world economy with a view to adjusting those shares better to reflect members’ relative economic positions while having regard to the desirability of an appropriate balance in the composition of the Executive Board.

6. Under the proposed Resolution, a member will be able to consent to the increase in its quota at any time on or before November 1, 1980. Therefore, unless this period is extended by the Executive Board, members will have until November 1, 1980 to take whatever action may be necessary under their laws to enable them to give their consent.

7. It is proposed that the increase in a member’s quota will take effect on the latest of the following three dates:

(a) The date on which the Fund receives the member’s consent to the increase in quota;

(b) The date of the payment of the increase in subscription;

and

(c) The date on which the Fund determines that the participation requirement in paragraph 2 of the proposed Resolution has been satisfied. The proposed Resolution provides, however, that if the participation requirement in paragraph 2 has not been met by June 30, 1980, no increase in quotas under the Seventh Review would become effective until after October 5, 1980, so that there would be no changes in quotas during, or shortly before, the 1980 Annual Meeting of the Board of Governors, when the next election of Executive Directors will take place. If the participation requirement were met during the period July 1 to October 5, 1980, increases in quotas would become effective only after October 5, 1980.

The participation requirement in paragraph 2 is reached when the Fund determines that members having not less than 75 percent of the total of quotas on November 1, 1978 have consented to increases in their quotas. In determining whether this degree of participation has been reached, the Fund will take into account all consents to increases, whether they are increases to the maximum amount provided for or to a smaller amount.

8. The proposed Resolution does not provide for increases in quotas by fixed installments. A member will be able, however, to consent to an increase smaller than the maximum provided for. The member will be able to consent to further increases, up to the maximum provided for, at a later date, provided it is within the period for consent under paragraph 3 of the proposed Resolution.

9. The proposed Resolution provides that a member must pay the increase in its subscription within 30 days after (a) the date on which the member notifies the Fund of its consent, or (b) the date on which the participation requirement is met, whichever is the later.

10. Reflecting the understandings reached at the September 1978 meeting of the Interim Committee, 25 percent of the increase in quotas proposed as a result of the current review should be paid in SDRs for those members that are participants in the Special Drawing Rights Department, and 25 percent of the increase in the quotas of nonparticipants should be paid in the currencies of other members specified by the Fund, subject to their concurrence. The balance of the increase shall be in a member’s own currency. These payments are in accordance with the prescription of Article III, Section 3(a), and therefore it is not necessary to include any provision for the payment of increases in the Resolution.

11. In accordance with paragraph 3 of the Interim Committee’s communiqué of September 24, 1978, the Executive Board has taken decisions on aspects of the special drawing right that are referred to in paragraph 5 of that communiqué. These decisions will become effective on the dates referred to in them if the proposed Resolution and the Resolution on allocations of SDRs become effective. The proposed Resolution provides that it will become effective if it and the proposed Resolution on the Allocation of Special Drawing Rights are adopted by the necessary majority of the total voting power for each.

12. The Executive Board recommends adoption of the attached Resolution. The attached Resolution is designed to enable the Board of Governors to vote at one time on all matters connected with the increases in quotas under the Resolution.

October 25, 1978

ANNEX

	Proposed Maximum Quota (In millions of SDRs)
1. Afghanistan	67.5
2. Algeria	427.5
3. Argentina	802.5
4. Australia	1,185.0
5. Austria	495.0
6. Bahamas	49.5
7. Bahrain	30.0
8. Bangladesh	228.0
9. Barbados	25.5
10. Belgium	1,335.0
11. Benin	24.0
12. Bolivia	67.5
13. Botswana	13.5
14. Brazil	997.5
15. Burma	109.5
16. Burundi	34.5
17. Cameroon	67.5
18. Canada	2,035.5
19. Central African Empire	24.0
20. Chad	24.0
21. Chile	325.5
22. China, Republic of	550.0
23. Colombia	289.5
24. Comoros	3.5
25. Congo, People’s Republic of the	25.5
26. Costa Rica	61.5
27. Cyprus	51.0
28. Denmark	465.0
29. Dominican Republic	82.5
30. Ecuador	105.0
31. Egypt	342.0
32. El Salvador	64.5
33. Equatorial Guinea	15.0
34. Ethiopia	54.0
35. Fiji	37.0
36. Finland	393.0
37. France	2,878.5
38. Gabon	45.0
39. Gambia, The	13.5
40. Germany, Federal Republic of	3,234.0
41. Ghana	159.0
42. Greece	277.5
43. Grenada	4.5
44. Guatemala	76.5
45. Guinea	45.0
46. Guinea-Bissau	5.9
47. Guyana	37.5
48. Haiti	34.5
49. Honduras	51.0
50. Iceland	43.5
51. India	1,717.5
52. Indonesia	720.0
53. Iran	1,075.0
54. Iraq	234.1
55. Ireland	232.5
56. Israel	307.5
57. Italy	1,860.0
58. Ivory Coast	114.0
59. Jamaica	111.0
60. Japan	2,488.5
61. Jordan	45.0
62. Kampuchea Democratic	25.0
63. Kenya	103.5
64. Korea	255.9
65. Kuwait	393.3
66. Lao People’s Democratic Republic	24.0
67. Lebanon	27.9
68. Lesotho	10.5
69. Liberia	55.5
70. Lybia	298.4
71. Luxembourg	46.5
72. Madagascar	51.0
73. Malawi	28.5
74. Malaysia	379.5
75. Maldives	1.4
76. Mali	40.5
77. Malta	30.0
78. Mauritania	25.5
79. Mauritius	40.5
80. Mexico	802.5
81. Morocco	225.0
82. Nepal	28.5
83. Netherlands	1,422.0
84. New Zealand	348.0
85. Nicaragua	51.0
86. Niger	24.0
87. Nigeria	540.0
88. Norway	442.5
89. Oman	35.1
90. Pakistan	427.5
91. Panama	67.5
92. Papua New Guinea	45.0
93. Paraguay	34.5
94. Peru	246.0
95. Philippines	315.0
96. Portugal	258.0
97. Qatar	66.2
98. Romania	367.5
99. Rwanda	34.5
100. São Tomé and Príncipe	3.0
101. Saudi Arabia	1040.1
102. Senegal	63.0
103. Seychelles	2.0
104. Sierra Leone	46.5
105. Singapore	92.4
106. Solomon Island	3.2
107. Somalia	34.5
108. South Africa	636.0
109. Spain	835.5
110. Sri Lanka	178.5
111. Sudan	132.0
112. Suriname	37.5
113. Swaziland	18.0
114. Sweden	675.0
115. Syrian Arab Republic	94.5
116. Tanzania	82.5
117. Thailand	271.5
118. Togo	28.5
119. Trinidad and Tobago	123.0
120. Tunisia	94.5
121. Turkey	300.0
122. Uganda	75.0
123. United Arab Emirates	202.6
124. United Kingdom	4,387.5
125. United States	12,607.5
126. Upper Volta	24.0
127. Uruguay	126.0
128. Venezuela	990.0
129. Viet-Nam, Socialist Republic of	135.0
130. Western Samoa	4.5
131. Yemen Arab Republic of	19.5
132. Yemen, People’s Democratic Republic of	61.5
133. Yugoslavia	415.5
134. Zaïre	228.0
135. Zambia	211.5

View Table

	Proposed Maximum Quota (In millions of SDRs)
1. Afghanistan	67.5
2. Algeria	427.5
3. Argentina	802.5
4. Australia	1,185.0
5. Austria	495.0
6. Bahamas	49.5
7. Bahrain	30.0
8. Bangladesh	228.0
9. Barbados	25.5
10. Belgium	1,335.0
11. Benin	24.0
12. Bolivia	67.5
13. Botswana	13.5
14. Brazil	997.5
15. Burma	109.5
16. Burundi	34.5
17. Cameroon	67.5
18. Canada	2,035.5
19. Central African Empire	24.0
20. Chad	24.0
21. Chile	325.5
22. China, Republic of	550.0
23. Colombia	289.5
24. Comoros	3.5
25. Congo, People’s Republic of the	25.5
26. Costa Rica	61.5
27. Cyprus	51.0
28. Denmark	465.0
29. Dominican Republic	82.5
30. Ecuador	105.0
31. Egypt	342.0
32. El Salvador	64.5
33. Equatorial Guinea	15.0
34. Ethiopia	54.0
35. Fiji	37.0
36. Finland	393.0
37. France	2,878.5
38. Gabon	45.0
39. Gambia, The	13.5
40. Germany, Federal Republic of	3,234.0
41. Ghana	159.0
42. Greece	277.5
43. Grenada	4.5
44. Guatemala	76.5
45. Guinea	45.0
46. Guinea-Bissau	5.9
47. Guyana	37.5
48. Haiti	34.5
49. Honduras	51.0
50. Iceland	43.5
51. India	1,717.5
52. Indonesia	720.0
53. Iran	1,075.0
54. Iraq	234.1
55. Ireland	232.5
56. Israel	307.5
57. Italy	1,860.0
58. Ivory Coast	114.0
59. Jamaica	111.0
60. Japan	2,488.5
61. Jordan	45.0
62. Kampuchea Democratic	25.0
63. Kenya	103.5
64. Korea	255.9
65. Kuwait	393.3
66. Lao People’s Democratic Republic	24.0
67. Lebanon	27.9
68. Lesotho	10.5
69. Liberia	55.5
70. Lybia	298.4
71. Luxembourg	46.5
72. Madagascar	51.0
73. Malawi	28.5
74. Malaysia	379.5
75. Maldives	1.4
76. Mali	40.5
77. Malta	30.0
78. Mauritania	25.5
79. Mauritius	40.5
80. Mexico	802.5
81. Morocco	225.0
82. Nepal	28.5
83. Netherlands	1,422.0
84. New Zealand	348.0
85. Nicaragua	51.0
86. Niger	24.0
87. Nigeria	540.0
88. Norway	442.5
89. Oman	35.1
90. Pakistan	427.5
91. Panama	67.5
92. Papua New Guinea	45.0
93. Paraguay	34.5
94. Peru	246.0
95. Philippines	315.0
96. Portugal	258.0
97. Qatar	66.2
98. Romania	367.5
99. Rwanda	34.5
100. São Tomé and Príncipe	3.0
101. Saudi Arabia	1040.1
102. Senegal	63.0
103. Seychelles	2.0
104. Sierra Leone	46.5
105. Singapore	92.4
106. Solomon Island	3.2
107. Somalia	34.5
108. South Africa	636.0
109. Spain	835.5
110. Sri Lanka	178.5
111. Sudan	132.0
112. Suriname	37.5
113. Swaziland	18.0
114. Sweden	675.0
115. Syrian Arab Republic	94.5
116. Tanzania	82.5
117. Thailand	271.5
118. Togo	28.5
119. Trinidad and Tobago	123.0
120. Tunisia	94.5
121. Turkey	300.0
122. Uganda	75.0
123. United Arab Emirates	202.6
124. United Kingdom	4,387.5
125. United States	12,607.5
126. Upper Volta	24.0
127. Uruguay	126.0
128. Venezuela	990.0
129. Viet-Nam, Socialist Republic of	135.0
130. Western Samoa	4.5
131. Yemen Arab Republic of	19.5
132. Yemen, People’s Democratic Republic of	61.5
133. Yugoslavia	415.5
134. Zaïre	228.0
135. Zambia	211.5

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate, propose an adjustment of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned.” This report and the attached Resolution on increases in quotas under the current, i.e., Eighth, General Review are submitted to the Board of Governors in accordance withArticle III, Section 2.

2. The Seventh General Review of Quotas was completed by Board of Governors Resolution No. 34-2, adopted December 11, 1978. To comply with the five-year interval prescribed by Article III, Section 2(a), the Eighth General Review has to be completed not later than December 11, 1983. In the Report of the Executive Board to the Board of Governors on Increases in Quotas of Fund Members—Seventh General Review, it was stated that:

The Executive Board will review the customary method of calculating quotas after the Seventh Review of Quotas has been completed. In the context of the next general review of quotas, the Executive Board will examine the quota shares of members in relation to their positions in the world economy with a view to adjusting those shares better to reflect members’ relative economic positions while having regard to the desirability of an appropriate balance in the composition of the Executive Board.

3. At its meeting in Helsinki, Finland, in May 1982, the Interim Committee urged the Executive Board to pursue its work on the Eighth General Review as a matter of high priority. At that meeting the Committee also “… noting that the present quotas of a significant number of members do not reflect their relative positions in the world economy, … reaffirmed its view that the occasion of an enlargement of the Fund under the Eighth General Review should be used to bring the quotas of these members more in line with their relative positions, taking account of the case for maintaining a proper balance between the different groups of countries.” At its meeting in Toronto, Canada, in September 1982, the Committee noted that “there was widespread support in the Committee on the urgent need for a substantial increase in quotas under the Eighth General Review” and “urged the Executive Board to pursue its work on the issues of the Review as a matter of high priority, so that the remaining issues on the size and distribution of the quota increase could be resolved by the time of the Committee’s next meeting in April 1983.”

4. In its discussions on the Eighth General Review, the Executive Board has considered, inter alia, (i) the method of calculating quotas; (ii) the size of the overall increase in quotas; (iii) the distribution of the overall increase; (iv) the position of countries with very small quotas in the Fund; and (v) the mode of payment for the increase in quotas.

5. As regards the Executive Board’s review of the method of calculating quotas, the Executive Board agreed to certain changes regarding the quota formulas used for calculating quotas in connection with the Eighth General Review. The Executive Board accepted the quota calculations based on the revised quota formulas as reasonable indicators of the relative positions of countries in the world economy, though some Directors felt that they do not provide a wholly satisfactory measure of relative economic positions. It is understood that the changes that have been made do not preclude further appropriate changes in connection with future reviews.

6. At the meeting of the Interim Committee held in Washington in February 1983, which had been advanced from April 1983, agreement was reached on all major issues of the Eighth Review, as reflected in the relevant passages from the Committee’s communiqué of February 11, 1983, as follows:

(a) The total of Fund quotas should be increased under the Eighth General Review from approximately SDR 61.03 billion to SDR 90 billion (equivalent to about US$98.5 billion).

(b) Forty percent of the overall increase should be distributed to all members in proportion to their present individual quotas, and the balance of sixty percent should be distributed in the form of selective adjustments in proportion to each member’s share in the total of the calculated quotas, i.e., the quotas that broadly reflect members’ relative positions in the world economy.

(c) Twenty-five percent of the increase in each member’s quota should be paid in SDRs or in usable currencies of other members.

The Committee also considered the possibility of a special adjustment of very small quotas, i.e., those quotas that are currently less than SDR 10 million, and agreed to refer this matter to the Executive Board for urgent consideration in connection with the implementation of the main decision.

7. As requested by the Interim Committee at its meeting on February 11, 1983, the Executive Board has considered the position of the 17 members with very small quotas—i.e., those with quotas that at present are less than SDR 10 million. The Executive Board proposes that the quotas of these members should, after being increased in accordance with (b) quoted in paragraph 6 above, be further adjusted to the next higher multiple of SDR 0.5 million. The Executive Board proposes that all other quotas be rounded to the next higher multiple of SDR 0.1 million. The rounding to SDR 0.5 million would provide for larger quota increases relative to present quotas for most of the members with very small quotas.

8. In accordance with the agreement reached by the Interim Committee at its meeting on February 11, 1983, on items (a) and (b) quoted in paragraph 6 above and with rounding adjustments indicated in paragraph 7 above, the Executive Board proposes to the Board of Governors that the new quotas of members be as set out in the Annex to the proposed Resolution. These increases would raise Fund quotas from approximately SDR 61 billion to approximately SDR 90 billion.

9. Article III, Section 3(a) provides that 25 percent of any increase shall be paid in special drawing rights, but permits the Board of Governors to prescribe, inter alia, that this payment may be made on the same basis for all members, in whole or in part in the currencies of other members specified by the Fund, subject to their concurrence. Paragraph 5 of the Resolution provides that 25 percent of the increase in quotas proposed as a result of the current review should be paid in SDRs or in currencies of other members selected by the Fund, subject to their concurrence, or in any combination of SDRs and such currencies. The balance of the increase shall be paid in a member’s own currency. A reserve asset payment will help strengthen the liquidity of the Fund and will not impose an undue burden on members because under the existing decisions of the Fund a reserve asset payment will either enlarge or create a reserve tranche position of an equivalent amount. In addition, the Fund stands ready to assist members that do not hold sufficient reserves to make their reserve asset payments to the Fund to borrow SDRs from other members willing to cooperate; these loans would be made on the condition that such members would repay on the same day the loans from the SDR proceeds of drawings of reserve tranches which had been established by the payment of SDRs.

10. Under the proposed Resolution, a member will be able to consent only to the amount of quota proposed for it in the Annex. A member will be able to consent to the increase in its quota at any time before 6:00 p.m., Washington time, November 30, 1983. In order to meet this time, members will have until the end of November 1983 to complete whatever action may be necessary under their laws to enable them to give their consents.

11. A member’s quota cannot be increased until it has consented to the increase and paid the subscription. Under the proposed Resolution, the increase in a member’s quota will take effect only after the Fund has received the member’s consent to the increase in quota and a member has paid the increase in subscription, provided that the quota cannot become effective before the date on which the Fund determines that the participation requirement in paragraph 2 of the proposed Resolution has been satisfied. The Executive Board is authorized by paragraph 3 of the proposed Resolution to extend the period of consent.

12. The participation requirement in paragraph 2 will be reached when the Fund determines that members having not less than 70 percent of the total of quotas on February 28, 1983 have consented to the increases in their respective quotas as set out in the Annex.

13. The proposed Resolution provides that a member must pay the increase in its subscription within 30 days after (a) the date on which the member notifies the Fund of its consent, or (b) the date on which the participation requirement is met, whichever is the later.

14. The Executive Board recommends that the Board of Governors adopt the attached Resolution that covers all the matters on which the Governors are requested to act. The adoption of the Resolution requires positive responses from Governors having an 85 percent majority of the total voting power.

February 25, 1983

ANNEX

	Proposed Maximum Quota (In millions of SDRs)
1. Afghanistan	86.7
2. Algeria	623.1
3. Antigua and Barbuda	5.0
4. Argentina	1,113.0
5. Australia	1,619.2
6. Austria	775.6
7. Bahamas	66.4
8. Bahrain	48.9
9. Bangladesh	287.5
10. Barbados	34.1
11. Belgium	2,080.4
12. Belize	9.5
13. Benin	31.3
14. Bhutan	2.5
15. Bolivia	90.7
16. Botswana	22.1
17. Brazil	1,461.3
18. Burma	137.0
19. Burundi	42.7
20. Cameroon	92.7
21. Canada	2,941.0
22. Cape Verde	4.5
23. Central African Republic	30.4
24. Chad	30.6
25. Chile	440.5
26. China	2,390.9
27. Colombia	394.2
28. Comoros	4.5
29. Congo, People’s Republic of the	37.3
30. Costa Rica	84.1
31. Cyprus	69.7
32. Denmark	711.0
33. Djibouti	8.0
34. Dominica	4.0
35. Dominican Republic	112.1
36. Ecuador	150.7
37. Egypt	463.4
38. El Salvador	89.0
39. Equatorial Guinea	18.4
40. Ethiopia	70.6
41. Fiji	36.5
42. Finland	574.9
43. France	4,482.8
44. Gabon	73.1
45. Gambia, The	17.1
46. Germany, Federal Republic of	5,403.7
47. Ghana	204.5
48. Greece	399.9
49. Grenada	6.0
50. Guatemala	108.0
51. Guinea	57.9
52. Guinea-Bissau	7.5
53. Guyana	49.2
54. Haiti	44.1
55. Honduras	67.8
56. Hungary	530.7
57. Iceland	59.6
58. India	2,207.7
59. Indonesia	1,009.7
60. Iran, Islamic Republic of	1,117.4
61. Iraq	504.0
62. Ireland	343.4
63. Israel	446.6
64. Italy	2,909.1
65. Ivory Coast	165.5
66. Jamaica	145.5
67. Japan	4,223.3
68. Jordan	73.9
69. Kampuchea, Democratic	25.0
70. Kenya	142.0
71. Korea	462.8
72. Kuwait	635.3
73. Lao People’s Democratic Republic	29.3
74. Lebanon	78.7
75. Lesotho	15.1
76. Liberia	71.3
77. Libya	515.7
78. Luxembourg	77.0
79. Madagascar	66.4
80. Malawi	37.2
81. Malaysia	550.6
82. Maldives	2.0
83. Mali	50.8
84. Malta	45.1
85. Mauritania	33.9
86. Mauritius	53.6
87. Mexico	1,165.5
88. Morocco	306.6
89. Nepal	37.3
90. Netherlands	2,264.8
91. New Zealand	461.6
92. Nicaragua	68.2
93. Niger	33.7
94. Nigeria	849.5
95. Norway	699.0
96. Oman	63.1
97. Pakistan	546.3
98. Panama	102.2
99. Papua New Guinea	65.9
100. Paraguay	48.4
101. Peru	330.9
102. Philippines	440.4
103. Portugal	376.6
104. Qatar	114.9
105. Romania	523.4
106. Rwanda	43.8
107. St. Lucia	7.5
108. St. Vincent	4.0
109. São Tomé and Príncipe	4.0
110. Saudi Arabia	3,202.4
111. Senegal	85.1
112. Seychelles	3.0
113. Sierra Leone	57.9
114. Singapore	250.2
115. Solomon Islands	5.0
116. Somalia	44.2
117. South Africa	915.7
118. Spain	1,286.0
119. Sri Lanka	223.1
120. Sudan	169.7
121. Suriname	49.3
122. Swaziland	24.7
123. Sweden	1,064.3
124. Syrian Arab Republic	139.1
125. Tanzania	107.0
126. Thailand	386.6
127. Togo	38.4
128. Trinidad and Tobago	170.1
129. Tunisia	138.2
130. Turkey	429.1
131. Uganda	99.6
132. United Arab Emirates	385.9
133. United Kingdom	6,194.0
134. United States	17,918.3
135. Upper Volta	31.6
136. Uruguay	163.8
137. Vanuatu	9.0
138. Venezuela	1,371.5
139. Viet Nam	176.8
140. Western Samoa	6.0
141. Yemen Arab Republic	43.3
142. Yemen, People’s Democratic Republic of	77.2
143. Yugoslavia	613.0
144. Zaïre	291.0
145. Zambia	270.3
146. Zimbabwe	191.0

View Table

	Proposed Maximum Quota (In millions of SDRs)
1. Afghanistan	86.7
2. Algeria	623.1
3. Antigua and Barbuda	5.0
4. Argentina	1,113.0
5. Australia	1,619.2
6. Austria	775.6
7. Bahamas	66.4
8. Bahrain	48.9
9. Bangladesh	287.5
10. Barbados	34.1
11. Belgium	2,080.4
12. Belize	9.5
13. Benin	31.3
14. Bhutan	2.5
15. Bolivia	90.7
16. Botswana	22.1
17. Brazil	1,461.3
18. Burma	137.0
19. Burundi	42.7
20. Cameroon	92.7
21. Canada	2,941.0
22. Cape Verde	4.5
23. Central African Republic	30.4
24. Chad	30.6
25. Chile	440.5
26. China	2,390.9
27. Colombia	394.2
28. Comoros	4.5
29. Congo, People’s Republic of the	37.3
30. Costa Rica	84.1
31. Cyprus	69.7
32. Denmark	711.0
33. Djibouti	8.0
34. Dominica	4.0
35. Dominican Republic	112.1
36. Ecuador	150.7
37. Egypt	463.4
38. El Salvador	89.0
39. Equatorial Guinea	18.4
40. Ethiopia	70.6
41. Fiji	36.5
42. Finland	574.9
43. France	4,482.8
44. Gabon	73.1
45. Gambia, The	17.1
46. Germany, Federal Republic of	5,403.7
47. Ghana	204.5
48. Greece	399.9
49. Grenada	6.0
50. Guatemala	108.0
51. Guinea	57.9
52. Guinea-Bissau	7.5
53. Guyana	49.2
54. Haiti	44.1
55. Honduras	67.8
56. Hungary	530.7
57. Iceland	59.6
58. India	2,207.7
59. Indonesia	1,009.7
60. Iran, Islamic Republic of	1,117.4
61. Iraq	504.0
62. Ireland	343.4
63. Israel	446.6
64. Italy	2,909.1
65. Ivory Coast	165.5
66. Jamaica	145.5
67. Japan	4,223.3
68. Jordan	73.9
69. Kampuchea, Democratic	25.0
70. Kenya	142.0
71. Korea	462.8
72. Kuwait	635.3
73. Lao People’s Democratic Republic	29.3
74. Lebanon	78.7
75. Lesotho	15.1
76. Liberia	71.3
77. Libya	515.7
78. Luxembourg	77.0
79. Madagascar	66.4
80. Malawi	37.2
81. Malaysia	550.6
82. Maldives	2.0
83. Mali	50.8
84. Malta	45.1
85. Mauritania	33.9
86. Mauritius	53.6
87. Mexico	1,165.5
88. Morocco	306.6
89. Nepal	37.3
90. Netherlands	2,264.8
91. New Zealand	461.6
92. Nicaragua	68.2
93. Niger	33.7
94. Nigeria	849.5
95. Norway	699.0
96. Oman	63.1
97. Pakistan	546.3
98. Panama	102.2
99. Papua New Guinea	65.9
100. Paraguay	48.4
101. Peru	330.9
102. Philippines	440.4
103. Portugal	376.6
104. Qatar	114.9
105. Romania	523.4
106. Rwanda	43.8
107. St. Lucia	7.5
108. St. Vincent	4.0
109. São Tomé and Príncipe	4.0
110. Saudi Arabia	3,202.4
111. Senegal	85.1
112. Seychelles	3.0
113. Sierra Leone	57.9
114. Singapore	250.2
115. Solomon Islands	5.0
116. Somalia	44.2
117. South Africa	915.7
118. Spain	1,286.0
119. Sri Lanka	223.1
120. Sudan	169.7
121. Suriname	49.3
122. Swaziland	24.7
123. Sweden	1,064.3
124. Syrian Arab Republic	139.1
125. Tanzania	107.0
126. Thailand	386.6
127. Togo	38.4
128. Trinidad and Tobago	170.1
129. Tunisia	138.2
130. Turkey	429.1
131. Uganda	99.6
132. United Arab Emirates	385.9
133. United Kingdom	6,194.0
134. United States	17,918.3
135. Upper Volta	31.6
136. Uruguay	163.8
137. Vanuatu	9.0
138. Venezuela	1,371.5
139. Viet Nam	176.8
140. Western Samoa	6.0
141. Yemen Arab Republic	43.3
142. Yemen, People’s Democratic Republic of	77.2
143. Yugoslavia	613.0
144. Zaïre	291.0
145. Zambia	270.3
146. Zimbabwe	191.0

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members.” The five-year period since the completion of the previous review will end on March 31, 1988. This report and the attached draft resolution are submitted to the Board of Governors, the organ competent under the Articles to deal with an adjustment of quotas, in accordance with Article III, Section 2.

2. In the course of the past year, the Executive Board has considered various aspects of the adjustment of quotas, including the formulas used to calculate quotas, the variables used in those formulas, the method of calculating quotas, and updated quota calculations. The Executive Board has also considered the need for and the size of an increase in the total of quotas, the techniques and criteria that might be considered in distributing a total increase among members, and matters relating to the payment of the increased subscriptions. While the Executive Board has concluded consideration of certain technical aspects of its work, it has not completed work on a number of substantive issues. Consequently, the Executive Board is not in a position to make recommendations in time for the Board of Governors to adopt a resolution completing the Ninth General Review by March 31, 1988.

3. The Interim Committee considered the subject of the Ninth General Review of Quotas during the twenty-ninth meeting of the Committee in Washington on September 27–28, 1987. Paragraph 7 of the communiqué issued at the conclusion of the meeting reads as follows:

The Committee noted that the Committee of the Whole on the Ninth General Review of Quotas has begun its work by considering preliminary quota calculations and reviewing issues bearing on the size of the Fund. The Committee urged Executive Directors to pursue their work on the Ninth General Review of Quotas so as to be in a position to make appropriate recommendations in due course.

The Managing Director intends to make a progress report on the Ninth General Review to the Interim Committee at the next meeting of the Committee on April 14, 1988.

4. The Executive Board proposes to continue its work on this subject and to submit a report to the Board of Governors, together with appropriate recommendations regarding the size of the overall increase in quotas, increases in the quotas of individual members, and on the mode of payment of increases in subscriptions, not later than April 30, 1989.

5. In view of the foregoing considerations, it is recommended that the Board of Governors adopt the resolution set forth in the attachment to this report.

March 18, 1988

Resolved:

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Ninth General Review, hereby resolves to continue its review under Article III, Section 2(a) and requests the Executive Board to complete its work on this matter and to submit appropriate proposals to the Board of Governors not later than April 30, 1989.

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deemed it appropriate propose an adjustment, of the quotas of the members.” The five-year period since the completion of the previous review of quotas ended on March 31, 1988. The Board of Governors decided in April 1988 to continue its review and requested the Executive Board to report on this matter and submit appropriate proposals to the Board of Governors not later than April 30, 1989. The Executive Board believes that further consideration is needed of the substantive issues relating to the Ninth Review before it will be in a position to make appropriate recommendations to the Board of Governors. The Executive Board is submitting this report, and the attached draft resolution, to the Board of Governors, the organ competent under the Articles to deal with an adjustment of quotas, in accordance with Article III, Section 2 and Resolution No. 43-1, adopted April 22, 1988.

2. In the course of the past year, the Executive Board has considered all the main elements relating to the Ninth Review. The main issues that have been discussed by Executive Directors are (i) the role of the Fund in the early 1990s; (ii) the size of the overall increase in quotas; (iii) the issues bearing on the distribution of the overall increase, including an examination of the position of the developing countries in the Fund and, in particular, those members with very small quotas; (iv) the question of ad hoc quota increases in the context of the quota review; (v) the mode of payment for the increase in quotas; and (vi) technical issues relating to the economic data and the formulas used to make quota calculations. The Directors have concluded certain technical aspects of their work but they have not concluded their discussions on most of the substantive issues, including the size of the overall increase in quotas, its distribution, and the media of payment for the increased subscriptions. Directors will also continue their discussion of the role of the Fund in the early 1990s. Consequently, the Executive Board is not in a position to make recommendations in time for the Board of Governors to adopt a resolution completing the Ninth General Review by April 30, 1989.

3. The Interim Committee considered the subject of the Ninth General Review during the thirty-first and thirty-second meetings of the Committee in Berlin (West) on September 25–26, 1988, and in Washington on April 3, 1989, respectively. In connection with its latest meeting, the Executive Board submitted a report on the Ninth General Review which outlined the progress made in its work relating to the Ninth General Review and requested guidance from the Committee on the main issues discussed in the report. Paragraph 5 of the communiqué issued at the conclusion of the meeting reads as follows:

The Committee agreed that the size and distribution of any quota increase should take into account changes in the world economy since the last review of quotas as well as members’ relative positions in the world economy and the need to maintain a balance between different groups of countries, the Fund’s effectiveness in fulfilling its systemic responsibilities, including its role in the strengthened debt strategy, and reduce the Fund’s reliance on borrowing. The Committee urged the Executive Board to complete its work on the Ninth Review with a view to a decision on this matter by the Board of Governors before the end of this year.

A further report on the Ninth General Review will be made to the Interim Committee at its next meeting on September 24, 1989.

4. In the light of the above, and taking into account the conclusion of the Interim Committee as expressed in it latest communiqué, the Executive Board proposes that the Board of Governors continue its review and that the Executive Board submit a report to the Board of Governors, together with appropriate recommendations regarding the size of the overall increase in quotas, increases in the quotas of individual members, and on the mode of payment of increases in subscriptions, with a view to enable the Board of Governors to complete the Ninth Review by December 31, 1989.

5. In view of the foregoing considerations, it is recommended that the Board of Governors adopt the resolution set forth below:

April 24, 1989

Resolved:

That the Board of Governors having noted the report of the Executive Board entitled Increases in Quotas of Members—Ninth General Review, hereby resolves to continue its review of quotas under Article III, Section 2(a), and requests the Executive Board to complete its work on the Ninth General Review of Quotas with a view to a decision by the Board of Governors on the completion of the Ninth Review before the end of this year.

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members.” The five-year period since the completion of the previous review of quotas ended on March 31, 1988. The Ninth Review was not completed by that date. In April 1988 the Board of Governors decided to continue its review and requested the Executive Board to report on this matter and submit appropriate proposals to the Board of Governors not later than April 30, 1989. In May 1989, the Board of Governors again decided to continue its review and requested the Executive Board to complete its work on the Ninth Review with a view to a decision by the Board of Governors on the completion of the Review before the end of this year. The Executive Board believes that further consideration is needed of the substantive issues relating to the Ninth Review before it will be in a position to make appropriate recommendations to the Board of Governors. The Executive Board is submitting this report, and the attached draft resolution, to the Board of Governors, the organ competent under the Articles to deal with an adjustment of quotas, in accordance with Article III, Section 2 and Resolution No. 44-1, adopted May 30, 1989.

2. Since April 1989, the Executive Board has considered: (i) the role of the Fund in the early 1990s; (ii) the size of the overall increase in quotas; (iii) the issues bearing on the distribution of the overall increase, including the question of ad hoc increases in the context of the review, and an examination of the position of the developing countries in the Fund, in particular, those members with very small quotas; and (iv) the mode of payment for the increase in quotas. The Executive Board also considered the issues relating to the quota formulas used in making quota calculations for the Ninth Review. The Directors have concluded certain technical aspects of their work and have made considerable progress in their discussions relating to the role of the Fund, as well as on the size, distribution, and payment for the increased subscriptions. However, the Directors have concluded that further consideration of the main issues relating to the increase in quotas is needed. Consequently, the Executive Board is not in a position to complete its work on the Ninth Review in time to enable the Board of Governors to complete the Ninth Review before the end of this year.

3. The Interim Committee considered the subject of the Ninth General Review during the thirty-first, thirty-second, and thirty-third meetings of the Committee in Berlin (West) on September 25–26, 1988, and, for the latter two meetings, in Washington, D.C., on April 3, 1989, and September 24–25, 1989, respectively. In connection with its latest meeting, the Executive Board submitted a report on the Ninth General Review which outlined the progress made in its work relating to the Ninth General Review and requested guidance from the Committee in particular on the size of an overall increase and on the principles that could be followed in distributing an enlargement of the Fund between members. Paragraph 4 of the communiqué issued at the conclusion of the meeting reads in part as follows:

There was widespread support in the Committee on the need for a substantial increase in quotas under the Ninth General Review, although a few members believe that the Fund has adequate resources at the present time to fulfill its responsibilities. The Committee underscored the central role of the Fund in fostering a stable international monetary system and in promoting a strong and sound global economy. It agreed that it is of fundamental importance further to reinforce the role of the Fund as the central monetary institution and that it must be adequately endowed to fulfill its systemic responsibilities in the first half of the 1990s, while reducing reliance on borrowing. It also agreed that the Fund must be able to respond in an effective manner to the balance of payments needs of individual members that implement strong programs of growth-oriented adjustment—and to assist them in mobilizing support from other sources—while maintaining a strong liquidity position and the revolving character of its resources. In this context, the Committee noted that prolonged use of Fund resources by some countries could impair the revolving character of the Fund and asked the Executive Board to examine actions that could be taken to address these problems.

The Committee reiterated that the size and distribution of any quota increase should take into account changes in the world economy since the last review of quotas as well as members’ relative positions in the world economy and the need to maintain a balance between different groups of countries, and the Fund’s effectiveness in fulfilling its systemic responsibilities, including its role in the strengthened debt strategy. The main principles that could guide the distribution of the enlargement of the Fund among members are (i) all members should receive a meaningful increase in quotas and (ii) the distribution should be based on uniform methods. The Committee agreed that, in the case of a general quota increase, an ad hoc increase in quotas should be considered where appropriate.

4. In light of the above, and taking into account the conclusion of the Interim Committee as expressed in its latest communiqué, the Executive Board proposes that the Board of Governors continue its review and that the Executive Board submit a report to the Board of Governors, together with appropriate recommendations regarding the size of the overall increase in quotas, increases in the quotas of individual members and on the mode of payment for increases in subscriptions, with a view to enable the Board of Governors to complete the Ninth Review not later than March 31, 1990.

5. In view of the foregoing considerations, it is recommended that the Board of Governors adopt the resolution set forth in the attachment to this report.

November 28, 1989

Resolved:

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Ninth General Review, hereby resolves to continue its review of quotas under Article III, Section 2(a), and requests the Executive Board to complete its work on the Ninth General Review of Quotas with a view to a decision by the Board of Governors on the completion of the Ninth Review not later than March 31, 1990.

Report of Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of members.” The five-year period since the completion of the previous review of quotas ended on March 31, 1988. The Ninth Review was not completed by that date. In April 1988, May 1989, and December 1989 the Board of Governors decided to continue its review under Article III, Section 2(a). In December 1989, the Board of Governors requested the Executive Board to complete its work on the Ninth General Review with a view to a decision by the Board of Governors on the completion of the Review not later than March 31, 1990. The Executive Board believes that further consideration is needed of some of the substantive issues relating to the Ninth Review before it will be in a position to make appropriate recommendations to the Board of Governors. The Executive Board is submitting this report, and the attached draft resolution, to the Board of Governors, the organ competent under the Articles to deal with an adjustment of quotas, in accordance with Article III, Section 2 and Resolution No. 44-5, adopted December 29, 1989.

2. The Executive Directors have concluded certain technical aspects of their work. They have also considered further the issues relating to an increase in quotas under the Ninth General Review in the light of the guidance received from the Interim Committee as expressed in the communiqués issued at the conclusion of the Meetings of the Committee in April and September 1989. The Executive Directors have made substantial progress in their discussions on the Ninth General Review of Quotas, as well as all related issues including the strengthening of the Fund’s intensified cooperative approach in dealing with the problem of overdue financial obligations to the Fund.

3. The Executive Directors have concluded that further consideration of the issues relating to the increase in quotas is needed. Consequently, the Executive Board is not in a position to complete its work on the Ninth Review in time to enable the Board of Governors to complete the Review before March 31, 1990 as called for in Resolution 44-5.

The Executive Board therefore proposes that the Board of Governors continue its review and that the Executive Board submit a report to the Board of Governors, together with appropriate recommendations, with a view to enable the Board of Governors to complete the Ninth Review not later than June 30, 1990.

4. In view of the foregoing considerations, it is recommended that the Board of Governors adopt the resolution set forth below:

February 26, 1990

Resolved:

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Ninth General Review, hereby resolves to continue its review of quotas under Article III, Section 2(a), and requests the Executive Board to complete its work on the Ninth General Review of Quotas with a view to a decision by the Board of Governors on the completion of the Ninth Review not later than June 30, 1990.

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned.” This Report and the attached Resolution on increases in quotas under the Ninth General Review are submitted to the Board of Governors in accordance with Article III, Section 2. The views expressed by the Interim Committee in the communiqués issued by the Committee at the conclusion of its thirtieth, thirty-first, thirty-second, thirty-third, and thirty-fourth meetings are set out in the Appendix to this Report.

2. The Eighth General Review of Quotas was completed by Board of Governors’ Resolution No. 38-1, adopted March 31, 1983. The five-year period prescribed by Article III, Section 2(a) since the completion of the Eighth General Review ended on March 31, 1988. On March 27, 1987, the Ninth General Review commenced with the formation of a Committee of the Whole of the Executive Board. As the Ninth Review was not completed by March 31, 1988, the Board of Governors adopted a number of Resolutions which continued its review of quotas under the Ninth General Review. The last Resolution, adopted on March 29, 1990, was as follows:

Resolved:

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Ninth General Review, hereby resolves to continue its review of quotas under Article III, Section 2(a), and requests the Executive Board to complete its work on the Ninth General Review of Quotas with a view to a decision by the Board of Governors on the completion of the Ninth Review not later than June 30, 1990.

3. The Executive Board has considered: (i) the role of the Fund in the early 1990s; (ii) the size of the overall increase in quotas; (iii) the issues bearing on the distribution of the overall increase, including the question of ad hoc increases in the context of the review, and an examination of the position of the developing countries in the Fund, in particular, those members with very small quotas; (iv) the mode of payment for the increase in quotas; and (v) the timing of the next review of quotas. The Executive Board also considered the issues relating to the quota formulas used in making quota calculations for the Ninth Review.

4. The Executive Board has considered the need for an increase in the Fund’s resources to enable the Fund to promote more effectively its purposes, as set out in its Articles of Agreement, namely: to promote stability and growth in the world economy; to contribute to the maintenance of an open system of trade and payments and to encourage further liberalization of trade; and to make its resources temporarily available to its members on appropriate terms and conditions in support of their programs of growth-oriented balance of payments adjustment.

In assessing the Fund’s need for resources over the medium term in order to carry out its purposes, the Executive Board has stressed that (i) the Fund is the central institution in the international monetary system and it must be adequately endowed so as to maintain an effective presence at the center of the system, and (ii) the Fund is a monetary institution and must preserve its monetary character by providing balance of payments assistance on a temporary basis, ensuring that its resources revolve, and holding a level of usable assets sufficient to protect the liquidity and immediate usability of members’ claims on the Fund, and thereby maintaining members’ confidence in and support of the institution.

As reflected in its report to the Interim Committee in September 1989, the Executive Board is agreed that the Fund must have adequate resources to meet the temporary balance of payments financing needs of all members on appropriate terms and conditions. The financing provided by the Fund should be such as to encourage members to take early measures of adjustment, including the liberalization of trade and capital flows and to pursue appropriate exchange rate policies, which would help avoid the emergence of crisis situations that may cause strains that could impair the working of the international monetary system.

The Fund’s role in the financing of members’ payments deficits is now essentially catalytic. This role is of enhanced significance in the strengthened international debt strategy, which needs to be considered in the context of the Fund’s basic responsibility of providing general balance of payments financing in support of growth-oriented adjustment programs. The Fund’s purpose is achieved primarily through promoting adjustment, thereby helping members to achieve sustainable external payments positions, renewed economic growth, and price stability, and to increase or restore members’ creditworthiness with official and private creditors. Through an appropriate combination of adjustment and financing, it can, moreover, encourage increased flows, both official and private, which would provide the bulk of the external financing needs of members. The Executive Board is agreed that the Fund must not replace private market financing with its own resources.

5. In its consideration of the size of the increase in quotas, the Executive Board has taken into account a number of factors, as discussed by the Interim Committee, including changes in the world economy since the last review of quotas, the imbalance in international payments, the Fund’s systemic responsibilities, and the support of members’ growth-oriented adjustment programs, of which some may involve far-reaching economic reforms. The Executive Board has also taken into account the Fund’s current and prospective liquidity position as well as the conclusion of the Interim Committee at its September 1988 meeting that the Fund should reduce its reliance on borrowing to exceptional circumstances.

6. In light of these considerations and the understandings reached during the course of the thirty-fourth meeting of the Interim Committee on May 7 and 8, 1990, the Executive Board now proposes to the Board of Governors that the present total of Fund quotas be increased by 50 percent, from approximately SDR 90.1 billion to approximately SDR 135.2 billion before applying the rounding procedures and adjustments for the very small quotas agreed by the Executive Board and described in paragraphs 9 and 10 below.

7. In accordance with Article III, Section 2(a), the Board of Governors must conduct the Tenth General Review of Quotas not later than March 31, 1993, that is, five years from the date on which the Ninth Review of Quotas should have been conducted. The Interim Committee at its meeting on May 7 and 8, 1990, noted that “the review could be conducted earlier if there is a clear need to do so.”

8. As regards the distribution of the overall increase in quotas, the Executive Board has been guided by the principles agreed by the Interim Committee as expressed in its communiqués of April and September 1989. In its communiqué of September 1989, “the Committee reiterated that the size and distribution of any quota increase should take into account changes in the world economy since the last review of quotas as well as members’ relative positions in the world economy and the need to maintain a balance between different groups of countries, and the Fund’s effectiveness in fulfilling its systemic responsibilities, including its role in the strengthened debt strategy. The main principles that could guide the distribution of the enlargement of the Fund among members are (i) all members should receive a meaningful increase in quotas and (ii) the distribution should be based on uniform methods. The Committee agreed that, in the case of a general quota increase, an ad hoc increase in quotas should be considered where appropriate.” The Executive Board has agreed that in order to provide all members with a meaningful increase in quotas and to help maintain a balance between different groups of countries, sixty percent of the overall increase in quotas should be distributed to all members in proportion to their present individual quotas; the remainder should be devoted to the objective of bringing members’ quotas more in line with their relative economic positions and should be distributed in proportion to members’ shares in the total of the calculated quotas.

9. The Executive Board has also considered a request for an ad hoc increase in the quotas of Japan, Iran, and Korea and has also considered the possibility of a special adjustment of very small quotas, i.e. those quotas that are currently less than SDR 10 million. The Executive Board proposes that the quota of Japan should, after being increased in accordance with paragraph 8 above, be further increased to that shown in the Annex. In making the further adjustment of the quota of Japan, the increases in quotas of Canada, France, Germany, Italy, the United Kingdom, and the United States have also been adjusted in a manner that would maintain unchanged the increases in quotas for all other members as determined under paragraph 8 above. The Executive Board notes the agreement reached between the United Kingdom and France on an equal distribution of quotas between themselves under the Ninth General Review and subsequent reviews of quotas. The quotas of Antigua and Barbuda, Bhutan, Maldives, and Seychelles shall be further increased by amounts that would increase their shares in the total of new quotas so that they correspond to their individual shares in the total of the calculated quotas before taking account of the rounding procedures described in paragraph 10 below.

10. The Executive Board proposed that the quotas determined in paragraphs 8 and 9 above be rounded to the next higher multiple of SDR 0.1 million, except that the quotas that are currently SDR 10 million or less should, after being increased in accordance with paragraphs 8 and 9 above, be rounded to the next higher multiple of SDR 0.5 million. The proposed quotas set out in the Annex to the proposed Resolution would raise Fund quotas from SDR 90,132.55 million to SDR 135,214.7 million.

11. The Executive Board reviewed the quota formulas used for calculating quotas in connection with the Ninth General Review. While accepting the quota calculations based on the present five quota formulas and on data ended 1985 as reasonable indicators, the Executive Board, as agreed in its Report to the Interim Committee in September 1989, would further examine the working of the quota formulas in the context of the preparatory work for the next general review of quotas, so as to ensure that they would take adequate account of all relevant developments bearing on members’ quotas.

12. Article III, Section 3(a) provides that 25 percent of an increase in quota shall be paid in SDRs, but permits the Board of Governors to prescribe, inter alia, that this payment may be made on the same basis for all members, in whole or in part in the currencies of other members specified by the Fund, subject to their concurrence. Paragraph 7 of the Resolution provides that 25 percent of the increase in quotas proposed as a result of the current review should be paid in SDRs or in currencies of other members specified by the Fund, subject to their concurrence, or in any combination of SDRs and such currencies. The balance of the increase shall be paid in a member’s own currency. A reserve asset payment will help strengthen the liquidity of the Fund and will not impose an undue burden on members because it will either enlarge or create a reserve tranche position of an equivalent amount. In addition, the Fund stands ready to assist members that do not hold sufficient reserves to make their reserve asset payments to the Fund to borrow SDRs from other members willing to cooperate; these loans would be made on the condition that such members would on the same day repay the loans from the SDR proceeds of drawing of reserve tranches which had been established by the payment of SDRs.

13. Under the proposed Resolution, a member that does not have overdue obligations with respect to repurchases, charges or assessments to the General Resources Account will be able to consent to the amount proposed for it in the Annex to the proposed Resolution. The member will be able to consent at any time before 6:00 p.m., Washington time, December 31, 1991. In order to meet this deadline, the member will have to have completed before that date whatever action that may be necessary under its laws to enable it to give its consent. The Executive Board is authorized in paragraph 4 of the proposed Resolution to extend the period for consent.

14. The participation requirement in paragraph 3 of the proposed Resolution will be reached: (i) during the period ending December 30, 1991, when the Fund determines that members having not less than 85 percent of the total of quotas on May 30, 1990 have consented to increases in their respective quotas as set out in the Annex, or (ii) thereafter on the date of the Fund’s determination that members having not less than 70 percent of the total of quotas on May 30, 1990 have consented to increases in their respective quotas as set out in the Annex. Since a member with the specified overdue financial obligations to the General Resources Account may not consent to an increase in its quota, a communication of consent from such a member will not be taken into account in the determination.

15. The Executive Board has, in the context of the discussions on the Ninth Review of Quotas and the strengthened arrears strategy, also explored the issue of an amendment of the Articles of Agreement providing for suspension of voting and related rights of members that do not fulfill their obligations under the Articles. Such an amendment is being proposed to the Board of Governors in a draft resolution separate from the draft resolution on the quota increase.

The Executive Board, taking into account the recommendations of the Interim Committee, proposes that no increase in quota shall become effective before the effective date of the third amendment of the Articles.

The Interim Committee, at its meeting on May 7 and 8, 1990, stated that “every effort should be made by members to ensure that both the quota increase and the amendment shall be effective before end-1991. If it appeared that these resolutions might not be effective by this date, the Committee would consider what steps might need to be taken.”

16. A member’s quota cannot be increased until it has paid for the increase. The proposed Resolution provides that a member must pay the increase in its quota within 30 days after (a) the date on which the member notifies the Fund of its consent, or (b) the date on which the requirement for the effectiveness of increases in quotas under paragraphs 14 and 15 has been met, whichever is the later. A member may not make such a payment unless it is current in its obligations with respect to repurchases, charges, and assessments to the General Resources Account. The Executive Board is authorized in paragraph 5 of the proposed Resolution to extend the period for payment.

17. The Executive Board has agreed that, when considering any extension of the period for consent or payment, it shall give particular consideration to the situation of members that may still wish to consent to or pay for the increase in quota, including those members with protracted arrears to the General Resources Account, consisting of overdue repurchases, charges, or assessments to the General Resources Account, that are judged to be cooperating with the Fund toward the settlement of these obligations.

18. The Executive Board recommends that the Board of Governors adopt the attached Resolution that covers all the matters on which the Governors are requested to act. The adoption of the Resolution by the Board of Governors requires an 85 percent majority of the total voting power.

May 21, 1990

ANNEX

	Proposed Quota (In millions of SDRs)
1. Afghanistan	120.4
2. Algeria	914.4
3. Angola	207.3
4. Antigua and Barbuda	8.5
5. Argentina	1,537.1
6. Australia	2,333.2
7. Austria	1,188.3
8. Bahamas	94.9
9. Bahrain	82.8
10. Bangladesh	392.5
11. Barbados	48.9
12. Belgium	3,102.3
13. Belize	13.5
14. Benin	45.3
15. Bhutan	4.5
16. Bolivia	126.2
17. Botswana	36.6
18. Brazil	2,170.8
19. Burkina Faso	44.2
20. Burundi	57.2
21. Cameroon	135.1
22. Canada	4,320.3
23. Cape Verde	7.0
24. Central African Republic	41.2
25. Chad	41.3
26. Chile	621.7
27. China	3,385.2
28. Colombia	561.3
29. Comoros	6.5
30. Congo, People’s Republic of the	57.9
31. Costa Rica	119.0
32. Côte D’Ivoire	238.2
33. Cyprus	100.0
34. Denmark	1,069.9
35. Djibouti	11.5
36. Dominica	6.0
37. Dominican Republic	158.8
38. Ecuador	219.2
39. Egypt	678.4
40. El Salvador	125.6
41. Equatorial Guinea	24.3
42. Ethiopia	98.3
43. Fiji	51.1
44. Finland	861.8
45. France	7,414.6
46. Gabon	110.3
47. Gambia, The	22.9
48. Germany, Federal Republic of	8,241.5
49. Ghana	274.0
50. Greece	587.6
51. Grenada	8.5
52. Guatemala	153.8
53. Guinea	78.7
54. Guinea-Bissau	10.5
55. Guyana	67.2
56. Haiti	60.7
57. Honduras	95.0
58. Hungary	754.8
59. Iceland	85.3
60. India	3,055.5
61. Indonesia	1,497.6
62. Iran, Islamic Republic of	1,078.5
63. Iraq	864.8
64. Ireland	525.0
65. Israel	666.2
66. Italy	4,590.7
67. Jamaica	200.9
68. Japan	8,241.5
69. Jordan	121.7
70. Kampuchea, Democratic	25.0
71. Kenya	199.4
72. Kiribati	4.0
73. Korea	799.6
74. Kuwait	995.2
75. Lao People’s Democratic Republic	39.1
76. Lebanon	146.0
77. Lesotho	23.9
78. Liberia	96.2
79. Libya	817.6
80. Luxembourg	135.5
81. Madagascar	90.4
82. Malawi	50.9
83. Malaysia	832.7
84. Maldives	5.5
85. Mali	68.9
86. Malta	67.5
87. Mauritania	47.5
88. Mauritius	73.3
89. Mexico	1,753.3
90. Morocco	427.7
91. Mozambique	84.0
92. Myanmar	184.9
93. Nepal	52.0
94. Netherlands	3,444.2
95. New Zealand	650.1
96. Nicaragua	96.1
97. Niger	48.3
98. Nigeria	1,281.6
99. Norway	1,104.6
100. Oman	119.4
101. Pakistan	758.2
102. Panama	149.6
103. Papua New Guinea	95.3
104. Paraguay	72.1
105. Peru	466.1
106. Philippines	633.4
107. Poland	988.5
108. Portugal	557.6
109. Qatar	190.5
110. Romania	754.1
111. Rwanda	59.5
112. São Tomé and Principe	5.5
113. Saudi Arabia	5,130.6
114. Senegal	118.9
115. Seychelles	6.0
116. Sierra Leone	77.2
117. Singapore	357.6
118. Solomon Islands	7.5
119. Somalia	60.9
120. South Africa	1,365.4
121. Spain	1,935.4
122. Sri Lanka	303.6
123. St. Kitts & Nevis	6.5
124. St. Lucia	11.0
125. St. Vincent	6.0
126. Sudan	233.1
127. Suriname	67.6
128. Swaziland	36.5
129. Sweden	1,614.0
130. Syrian Arab Republic	209.9
131. Tanzania	146.9
132. Thailand	573.9
133. Togo	54.3
134. Tonga	5.0
135. Trinidad and Tobago	246.8
136. Tunisia	206.0
137. Turkey	642.0
138. Uganda	133.9
139. United Arab Emirates	392.1
140. United Kingdom	7,414.6
141. United States	26,526.8
142. Uruguay	225.3
143. Vanuatu	12.5
144. Venezuela	1,951.3
145. Viet Nam	241.6
146. Western Samoa	8.5
147. Yemen Arab Republic	70.8
148. Yemen, People’s Democratic Republic of	105.7
149. Yugoslavia	918.3
150. Zaïre	394.8
151. Zambia	363.5
152. Zimbabwe	261.3

View Table

	Proposed Quota (In millions of SDRs)
1. Afghanistan	120.4
2. Algeria	914.4
3. Angola	207.3
4. Antigua and Barbuda	8.5
5. Argentina	1,537.1
6. Australia	2,333.2
7. Austria	1,188.3
8. Bahamas	94.9
9. Bahrain	82.8
10. Bangladesh	392.5
11. Barbados	48.9
12. Belgium	3,102.3
13. Belize	13.5
14. Benin	45.3
15. Bhutan	4.5
16. Bolivia	126.2
17. Botswana	36.6
18. Brazil	2,170.8
19. Burkina Faso	44.2
20. Burundi	57.2
21. Cameroon	135.1
22. Canada	4,320.3
23. Cape Verde	7.0
24. Central African Republic	41.2
25. Chad	41.3
26. Chile	621.7
27. China	3,385.2
28. Colombia	561.3
29. Comoros	6.5
30. Congo, People’s Republic of the	57.9
31. Costa Rica	119.0
32. Côte D’Ivoire	238.2
33. Cyprus	100.0
34. Denmark	1,069.9
35. Djibouti	11.5
36. Dominica	6.0
37. Dominican Republic	158.8
38. Ecuador	219.2
39. Egypt	678.4
40. El Salvador	125.6
41. Equatorial Guinea	24.3
42. Ethiopia	98.3
43. Fiji	51.1
44. Finland	861.8
45. France	7,414.6
46. Gabon	110.3
47. Gambia, The	22.9
48. Germany, Federal Republic of	8,241.5
49. Ghana	274.0
50. Greece	587.6
51. Grenada	8.5
52. Guatemala	153.8
53. Guinea	78.7
54. Guinea-Bissau	10.5
55. Guyana	67.2
56. Haiti	60.7
57. Honduras	95.0
58. Hungary	754.8
59. Iceland	85.3
60. India	3,055.5
61. Indonesia	1,497.6
62. Iran, Islamic Republic of	1,078.5
63. Iraq	864.8
64. Ireland	525.0
65. Israel	666.2
66. Italy	4,590.7
67. Jamaica	200.9
68. Japan	8,241.5
69. Jordan	121.7
70. Kampuchea, Democratic	25.0
71. Kenya	199.4
72. Kiribati	4.0
73. Korea	799.6
74. Kuwait	995.2
75. Lao People’s Democratic Republic	39.1
76. Lebanon	146.0
77. Lesotho	23.9
78. Liberia	96.2
79. Libya	817.6
80. Luxembourg	135.5
81. Madagascar	90.4
82. Malawi	50.9
83. Malaysia	832.7
84. Maldives	5.5
85. Mali	68.9
86. Malta	67.5
87. Mauritania	47.5
88. Mauritius	73.3
89. Mexico	1,753.3
90. Morocco	427.7
91. Mozambique	84.0
92. Myanmar	184.9
93. Nepal	52.0
94. Netherlands	3,444.2
95. New Zealand	650.1
96. Nicaragua	96.1
97. Niger	48.3
98. Nigeria	1,281.6
99. Norway	1,104.6
100. Oman	119.4
101. Pakistan	758.2
102. Panama	149.6
103. Papua New Guinea	95.3
104. Paraguay	72.1
105. Peru	466.1
106. Philippines	633.4
107. Poland	988.5
108. Portugal	557.6
109. Qatar	190.5
110. Romania	754.1
111. Rwanda	59.5
112. São Tomé and Principe	5.5
113. Saudi Arabia	5,130.6
114. Senegal	118.9
115. Seychelles	6.0
116. Sierra Leone	77.2
117. Singapore	357.6
118. Solomon Islands	7.5
119. Somalia	60.9
120. South Africa	1,365.4
121. Spain	1,935.4
122. Sri Lanka	303.6
123. St. Kitts & Nevis	6.5
124. St. Lucia	11.0
125. St. Vincent	6.0
126. Sudan	233.1
127. Suriname	67.6
128. Swaziland	36.5
129. Sweden	1,614.0
130. Syrian Arab Republic	209.9
131. Tanzania	146.9
132. Thailand	573.9
133. Togo	54.3
134. Tonga	5.0
135. Trinidad and Tobago	246.8
136. Tunisia	206.0
137. Turkey	642.0
138. Uganda	133.9
139. United Arab Emirates	392.1
140. United Kingdom	7,414.6
141. United States	26,526.8
142. Uruguay	225.3
143. Vanuatu	12.5
144. Venezuela	1,951.3
145. Viet Nam	241.6
146. Western Samoa	8.5
147. Yemen Arab Republic	70.8
148. Yemen, People’s Democratic Republic of	105.7
149. Yugoslavia	918.3
150. Zaïre	394.8
151. Zambia	363.5
152. Zimbabwe	261.3

Report of the Executive Board to the Board of Governors

Article III, Section 2(a) of the Articles of Agreement provides that “[t]he Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members.” The five-year period for the Tenth Review will end on March 31, 1993. The Executive Board has established a Committee of the Whole in accordance with Rule D-3. The Committee has not yet been in a position to undertake a substantive review of the issues relating to the Tenth Review including a review of the quota formulas, as called for in its report to the Board of Governors on the Ninth Review. As a consequence, the Executive Board is not in a position to make recommendations in time for the Board of Governors to adopt a resolution completing the Tenth General Review by March 31, 1993. Therefore, the Executive Board proposes that the Board of Governors decide to continue its review under Article III, Section 2(a), to request the Executive Board to complete its work on the matter and to submit a report to the Board of Governors together with appropriate proposals not later than December 31, 1994.

In view of the foregoing considerations, it is recommended that the Board of Governors adopt the resolution set forth in the attachment to this report.

March 12, 1993

Resolved

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Tenth General Review, hereby resolves to continue its review under Article III, Section 2(a) and requests the Executive Board to complete its work on this matter and to submit a report together with appropriate proposals to the Board of Governors not later than December 31, 1994.

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “[t]he Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members.” This Report and the attached Resolution on the Tenth General Review of Quotas are submitted to the Board of Governors in accordance with Article III, Section 2.

2. The five-year period prescribed by Article III, Section 2(a) for the Tenth General Review of Quotas ended on March 31, 1993, five years from the date on which the Ninth General Review of Quotas should have been concluded. As the Tenth General Review was not completed by March 31, 1993, the Board of Governors decided to continue its review of quotas under the Tenth General Review (Resolution No. 48-3, adopted April 14, 1993). That Resolution was as follows:

Resolved

That the Board of Governors, having noted the report of the Executive Board entitled Increases in Quotas of Members—Tenth General Review, hereby resolves to continue its review under Article III, Section 2(a) and requests the Executive Board to complete its work on this matter and to submit a report together with appropriate proposals to the Board of Governors not later than December 31, 1994.

3. The Executive Board established a Committee of the Whole on the Tenth General Review of Quotas on March 31, 1992 in accordance with Rule D-3. The Committee met on March 18, 1994 [and on December, 1994]. The Committee undertook a substantive review of the issues relating to the Tenth Review including a review of the quota formulas, as called for in its report to the Board of Governors on the Ninth Review.

4. The Executive Board reviewed the working of the quota formulas and the results of quota calculations based on the present five formulas and updated economic data for members through 1990. The Executive Board noted that the results of the quota formulas purport to give a reasonably comprehensive measure of the relative economic size of member countries, and the Executive Board is of the view that the quota formulas are broadly working as intended. However, in connection with its work in connection with the Eleventh General Review, the Executive Board intends to examine further the extent to which a number of countries have actual quota shares that remain substantially out of line with their shares in the total of calculated quotas, issues relating to the long run decline in the share of developing countries in the total of Fund quotas, the use of population as a variable in the quota formulas, and a review of the methodology employed in calculating quotas for the successor states of the former Soviet Union.

5. In connection with its work on the Tenth General Review, the Executive Board has considered the adequacy of the quotas of members in the Fund. The Executive Board is of the view that the overall size of the Fund is for the time being broadly sufficient to enable the Fund to promote effectively its purposes and to fulfill its central role in the international monetary system. In coming to this conclusion, the Executive Board noted that the increase in quotas under the Ninth General Review, which came into effect in late 1992, provided the Fund with substantial usable resources. Furthermore, the recent increase in access limits to the Fund’s resources over the next three years, the establishment of the Systemic Transformation Facility in April 1993, and the possible extension, with augmented access, of that Facility, as well as the possible development of further facilities, including a short-term financing facility and possible support for currency stabilization funds, would enable the Fund to meet members’ needs for balance of payments assistance in the period ahead. The Executive Board also noted that the recent extension and enlargement of ESAF will be of increased benefit to the Fund’s low income developing countries over the next few years. The Executive Board expressed its view that the Fund is at present relatively well positioned to meet a prospective substantial demand for its resources over the next three years. Nevertheless, the Fund’s liquidity position is expected to decline over the next few years from its currently strong position. Furthermore, considerable uncertainties can be expected as regards the supply of usable resources, which depends on the continued relative strength in the balance of payments and reserve positions of mainly the industrial countries in the Fund. The continued adequacy of members’ quotas, including the Fund’s liquidity position, will be closely monitored by the Executive Board in the period ahead.

6. In view of the foregoing considerations, it is recommended that the work on the Tenth Review be concluded and that the Board of Governors adopt the Resolution set forth in the attachment to this report.

Resolved

That the Tenth General Review of Quotas is hereby completed and requests the Executive Board to continue its work on quotas in connection with the Eleventh General Review of Quotas, as indicated in its report entitled Tenth General Review of Quotas—Completion of Review Under Article III, Section 2.

Report of the Executive Board to the Board of Governors

1. Article III, Section 2(a) of the Articles of Agreement provides that “The Board of Governors shall, at intervals of not more than five years, conduct a general review, and if it deems it appropriate, propose an adjustment of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned.” This report and the attached Resolution on increases in quotas under the current, i.e., Eleventh General Review are submitted to the Board of Governors in accordance with Article III, Section 2.

2. The five-year period prescribed by Article III, Section 2(a) for the Eleventh General Review of Quotas ends on March 31, 1998, five years from the date on which the Tenth General Review of Quotas should have been concluded.* The Tenth General Review of Quotas was completed in early 1995 without recommending an increase in quotas to the Board of Governors. At that time, the Executive Board reported to the Board of Governors that:

…the Fund is at present relatively well-positioned to meet a prospective substantial demand for its resources over the next three years. Nevertheless, the Fund’s liquidity position is expected to decline over the next few years from its currently strong position. Furthermore, considerable uncertainties can be expected as regards the supply of usable resources, which depends on the continued relative strength in the balance of payments and reserve positions of mainly the industrial countries in the Fund. The continued adequacy of member’s quotas, including the Fund’s liquidity position, will be closely monitored by the Executive Board in the period ahead.

3. The conduct of the Eleventh General Review of Quotas has been guided by the views expressed by the Interim Committee since the Spring of 1995. At its meeting in April of that year, the Interim Committee requested the Executive Board “to continue to review the adequacy of the Fund’s resources, and, in connection with its review of the role of the Fund, to carry forward its work on the Eleventh General Review of Quotas.” At its meeting in October 1995, the Committee “welcomed the progress already made by the Executive Board on Fund quotas, and requested the Board to move forward with the Eleventh Quinquennial Review. . . .” The Committee’s April 1996 Communique stated, with respect to the Fund’s financial resources and assistance to members, that the Committee “notes the progress made by the Executive Board in preparatory work for the Eleventh General Review of Quotas and stresses the need to ensure the adequacy of the quotas for the Fund to continue to carry out its mandate, taking into account changes in the world economy since the last increase in quotas was agreed in 1990.” In September 1996, the Committee reiterated its request to the Executive Board “to continue its work on the Review and to do its utmost to reach a conclusion as soon as possible.” In April 1997, the Committee requested the Executive Board to complete its work on quotas as soon as possible and to report to it in time for the Hong Kong meeting of the Committee. The Committee also stated that “the proposed distribution should be predominantly equiproportional while contributing to a correction of the most important anomalies in the present quota distribution. The Executive Board should also review the quota formulae promptly after the completion of the Eleventh Review of Quotas.” The Executive Board reached agreement on the size and distribution of the increase in quotas, which was endorsed by the Interim Committee at its meeting on September 21, 1997, in Hong Kong, China.

4. The Interim Committee agreed that:

• the present total of Fund quotas would be increased by 45 percent;

• 75 percent of the overall increase would be distributed in proportion to present quotas;

• 15 percent of the overall increase would be distributed in proportion to members’ shares in calculated quotas (based on 1994 data), so as to better reflect the relative economic positions of members; and

• the remaining 10 percent of the overall increase would be distributed among those members whose present quotas are out of line with their positions in the world economy (as measured by the excess of their share in calculated quotas over their share in actual quotas), of which 1 percent of the overall increase would be distributed among five members whose current quotas are far out of line with their relative economic positions, and which are in a position to contribute to the Fund’s liquidity over the medium term.

The Committee requested the Executive Board to submit before the end of this year a proposed resolution for the approval of the Board of Governors to effect the agreed increases in quotas. The Committee reiterated its view that the formulas used to calculate quotas should be reviewed by the Board promptly after the completion of the Eleventh General Review.

5. In its discussions on the Eleventh General Review, the Executive Board has considered, inter alia (i) the size of the overall increase in quotas; (ii) the distribution of the overall increase; (iii) the procedures for consent and payment for the increase in quotas, including by members with overdue obligations in the General Resources Account; and (iv) the media for payment for the increase in quotas. In its preparatory work on the Review, the Executive Board also considered issues relating to the role of the Fund in providing balance of payments financing, the quota formulas used in making quota calculations, and the declining share in quotas of developing countries in the Fund.

6. In assessing the Fund’s need for resources over the medium term in order to carry out its purposes, the Executive Board stressed that (i) the Fund is the central institution in the international monetary system and it must be adequately endowed with financial resources to enable it to act effectively when dealing with members’ balance of payments difficulties; (ii) the Fund, in fulfilling its function at the center of the system, must ensure that its resources are fully safeguarded, including by the adoption and implementation of appropriate policies by members supported by use of the Fund’s general resources, and that its resources are provided on a temporary basis, thereby ensuring that its resources revolve; and (iii) the Fund must hold a level of usable assets that are sufficient to protect the liquidity and immediate usability of members’ claims on the Fund, so as to maintain members’ confidence in and support of the institution.

7. In its consideration of the size of the increase in quotas, the Executive Board has taken into account a range of factors, including the growth of world trade and payments since 1990; the scale of potential payments imbalances, including imbalances that may stem from sharp changes in capital flows; the prospective demand for Fund resources, including the need for the Fund to support members’ growth-oriented adjustment programs, which, in many cases, may involve far-reaching economic and structural reforms; and the rapid globalization and the associated liberalization of trade and payments, including on capital account, that has characterized the development of the world economy since the last increase in quotas was agreed in 1990. The Executive Board has also considered the Fund’s current and prospective liquidity position, and has also taken into account the adequacy of the Fund’s borrowing arrangements, in particular the General Arrangements to Borrow (GAB) and the prospective coming into effect of the New Arrangements to Borrow (NAB). These borrowing arrangements are an important buttress to the Fund’s liquidity but are not a substitute for larger quotas. The Executive Board reiterated its view that the Fund should continue to rely on its quota resources as its principal form of financing and should resort to borrowing only in exceptional circumstances.

In its consideration of the prospective demand for the Fund’s resources in the context of the globalized economy, the Executive Board stressed that members should approach the Fund at an early stage of their balance of payments difficulties, and take all appropriate steps to maintain the confidence of markets, not only through the pursuit of adequate and transparent policy actions but also through the timely and transparent provision of economic and financial information to the markets.

8. In the light of these considerations, and taking into account the agreement reached by the Executive Board at the Annual Meetings in Hong Kong which was endorsed by the Interim Committee at its meeting on September 21, 1997 in Hong Kong, the Executive Board now proposes to the Board of Governors that the present total of Fund quotas be increased by 45 percent, from approximately SDR 146 billion to approximately SDR 212 billion.

9. As regards the distribution of the overall increase in quotas, the Executive Board has been guided by the views of the Interim Committee as expressed in its CommuniquÉs of April and September 1997, and summarized in paragraph 4 above.

10. In reaching the agreement on the size and distribution of the increase in quotas, Directors confirmed that there was no intention to re-open the issues of the size and composition of the Executive Board, and that the existing representation of developing countries should not be affected.

11. The Executive Board also proposes adjustments in the quotas of France, Germany, Italy, and the United Kingdom in a manner that would maintain unchanged the increases in quotas for all other members as determined under paragraph 4 above. The Executive Board notes that the United Kingdom and France have agreed to maintain the equal distribution of quotas between themselves under the Eleventh General Review as first agreed under the Ninth General Review.

12. The Executive Board proposes that the quotas determined in paragraph 4 above be rounded to the nearest multiple of SDR 0.1 million. The quotas proposed under the Eleventh Review for those members that have not yet consented or paid for their proposed increase in quotas under the Ninth Review (Resolution 45-2 of the Board of Governors) have been calculated on the basis of their proposed Ninth Review quotas.

13. The list of proposed quotas for all members is to be found in the Annex to the draft Resolution proposed for adoption by the Board of Governors.

14. Under the proposed Resolution, a member that does not have overdue obligations with respect to purchases, charges or assessments to the General Resources Account will be able to consent to the amount of quota proposed for it in the Annex to the proposed Resolution. The member will be able to consent to the increase in its quota at any time before 6:00 p.m., Washington time, January 29, 1999. In order to meet this deadline, the member will have to have completed before that date whatever action may be necessary under its laws to enable it to give its consent. The Executive Board is authorized by paragraph 4 of the proposed Resolution to extend the period of consent.

15. A member’s quota cannot be increased until it has consented to the increase and paid the subscription. Under the proposed Resolution, the increase in a member’s quota will take effect only after the Fund has received the member’s consent to the increase in quota and the member has paid the increase in subscription, provided that the quota increase cannot become effective before the date on which the Fund determines that the participation requirement in paragraph 3 of the proposed Resolution has been satisfied. The participation requirement in paragraph 3 of the proposed Resolution will be reached when the Fund determines that members having not less than 85 percent of the total of quotas on December 23, 1997 have consented to the increases in their respective quotas as set out in the Annex.

16. Taking into consideration the situation of members that may still wish to consent to or pay for their quota increases under the Ninth Review, the Executive Board recommends that the periods for consent and payment for quota increases under the Ninth Review be extended until the date when the participation requirement in paragraph 3 of the proposed Resolution on the Eleventh Review has been reached. Such extension of the periods of consent and payment for quota increases under the Ninth Review is provided for in paragraph 7 of the proposed Resolution.

17. The proposed Resolution provides that a member must pay the increase in its subscription within 30 days after (a) the date on which the member notifies the Fund of its consent, or (b) the date on which the participation requirement is met, whichever is the later. A member may not make such a payment unless it is current in its obligations with respect to repurchases, charges and assessments to the General Resources Account. The Executive Board is authorized in paragraph 5 of the proposed Resolution to extend the period for payment.

18. The Executive Board has agreed that, when considering any extension of the period for consent or payment, it shall give particular consideration to the situation of members that may still wish to consent to or pay for the increase in quota, including those members with protracted arrears to the General Resources Account, consisting of overdue repurchases, charges, or assessments to the General Resources Account, that are judged to be cooperating with the Fund toward the settlement of these obligations.

19. Article III, Section 3(a) provides that 25 percent of any increase in quota shall be paid in special drawing rights, but permits the Board of Governors to prescribe, inter alia, that this payment may be made on the same basis for all members, in whole or in part, in the currencies of other members specified by the Fund, subject to their concurrence. Paragraph 8 of the Resolution provides that 25 percent of the increase in quotas proposed as a result of the current review should be paid in SDRs or in currencies of other members selected by the Fund, subject to their concurrence, or in any combination of SDRs and such currencies. The balance of the increase shall be paid in a member’s own currency. A reserve asset payment will help strengthen the liquidity of the Fund and will not impose an undue burden on members because under the existing decisions of the Fund, a reserve asset payment will either enlarge or create a reserve tranche position of an equivalent amount. In addition, the Fund stands ready to assist members that do not hold sufficient reserves to make their reserve asset payments to the Fund to borrow SDRs from other members willing to cooperate; these loans would be made on the condition that such members would repay on the same day the loans from the SDR proceeds of drawings of reserve tranche positions which had been established by the payment of SDRs.

20. The Executive Board recommends that the Board of Governors adopt the attached Resolution that covers all the matters on which the Governors are requested to act. The adoption of the Resolution requires positive responses from Governors having an 85 percent majority of the total voting power.

ANNEX

¹Under Executive Board Decision No. 10237-(92/150) adopted December 14, 1992, the Federal Republic of Yugoslavia (Serbia/Montenegro) may succeed to the membership of the former Socialist Federal Republic of Yugoslavia.

Member	Quota (In SDR Millions)
1. Afghanistan, Islamic State of	161.9
2. Albania	48.7
3. Algeria	1,254.7
4. Angola	286.3
5. Antigua and Barbuda	13.5
6. Argentina	2,117.1
7. Armenia	92.0
8. Australia	3,236.4
9. Austria	1,872.3
10. Azerbaijan	160.9
11. Bahamas, The	130.3
12. Bahrain	135.0
13. Bangladesh	533.3
14. Barbados	67.5
15. Belarus	386.4
16. Belgium	4,605.2
17. Belize	18.8
18. Benin	61.9
19. Bhutan	6.3
20. Bolivia	171.5
21. Bosnia and Herzegovinia	169.1
22. Botswana	63.0
23. Brazil	3,036.1
24. Brunei Darussalam	215.2
25. Bulgaria	640.2
26. Burkina Faso	60.2
27. Burundi	77.0
28. Cambodia	87.5
29. Cameroon	185.7
30. Canada	6,369.2
31. Cape Verde	9.6
32. Central African Republic	55.7
33. Chad	56.0
34. Chile	856.1
35. China	4,687.2
36. Colombia	774.0
37. Comoros	8.9
38. Congo, Democratic Republic of the	533.0
39. Congo, Republic of	84.6
40. Costa Rica	164.1
41. Côted’Ivoire	325.2
42. Croatia	365.1
43. Cyprus	139.6
44. Czech Republic	819.3
45. Denmark	1,642.8
46. Djibouti	15.9
47. Dominica	8.2
48. Dominican Republic	218.9
49. Ecuador	302.3
50. Egypt	943.7
51. El Salvador	171.3
52. Equatorial Guinea	32.6
53. Eritrea	15.9
54. Estonia	65.2
55. Ethiopia	133.7
56. Fiji	70.3
57. Finland	1,263.8
58. France	10,738.5
59. Federal Republic of Yugoslavia (Serbia/Montenegro)1	467.7
60. Gabon	154.3
61. Gambia, The	31.1
62. Georgia	150.3
63. Germany	13,008.2
64. Ghana	369.0
65. Greece	823.0
66. Grenada	11.7
67. Guatemala	210.2
68. Guinea	107.1
69. Guinea-Bissau	14.2
70. Guyana	90.9
71. Haiti	81.9
72. Honduras	129.5
73. Hungary	1,038.4
74. Iceland	117.6
75. India	4,158.2
76. Indonesia	2,079.3
77. Iran, Islamic Republic of	1,497.2
78. Iraq	1,188.4
79. Ireland	838.4
80. Israel	928.2
81. Italy	7,055.5
82. Jamaica	273.5
83. Japan	13,312.8
84. Jordan	170.5
85. Kazakhstan	365.7
86. Kenya	271.4
87. Kiribati	5.6
88. Korea	1,633.6
89. Kuwait	1,381.1
90. Kyrgyz Republic	88.8
91. Lao People’s Democratic Republic	52.9
92. Latvia	126.8
93. Lebanon	203.0
94. Lesotho	34.9
95. Liberia	129.2
96. Libya	1,123.7
97. Lithunia	144.2
98. Luxembourg	279.1
99. Macedonia, former Yugoslav Republic of	68.9
100. Madagascar	122.2
101. Malawi	69.4
102. Malaysia	1,486.6
103. Maldives	8.2
104. Mali	93.3
105. Malta	102.0
106. Marshall Islands	3.5
107. Mauritania	64.4
108. Mauritius	101.6
109. Mexico	2,585.8
110. Micronesia, Federal States of	5.1
111. Moldova	123.2
112. Mongolia	51.1
113. Morocco	588.2
114. Mozambique	113.6
115. Myanmar	258.4
116. Namibia	136.5
117. Nepal	71.3
118. Netherlands	5,162.4
119. New Zealand	894.6
120. Nicaragua	130.0
121. Niger	65.8
122. Nigeria	1,753.2
123. Norway	1,671.7
124. Oman	194.0
125. Pakistan	1,033.7
126. Palau, Republic of	3.1
127. Panama	206.6
128. Papua New Guinea	131.6
129. Paraguay	99.9
130. Peru	638.4
131. Philippines	879.9
132. Poland	1,369.0
133. Portugal	867.4
134. Qatar	263.8
135. Romania	1,030.2
136. Russia	5,945.4
137. Rwanda	80.1
138. Samoa	11.6
139. San Marino	17.0
140. São Tomé and Principe	7.4
141. Saudi Arabia	6,985.5
142. Senegal	161.8
143. Seychelles	8.8
144. Sierra Leone	103.7
145. Singapore	862.5
146. Slova Republic	357.5
147. Slovenia	231.7
148. Solomon Islands	10.4
149. Somalia	81.7
150. South Africa	1,868.5
151. Spain	3,048.9
152. Sri Lanka	413.4
153. St. Kitts and Nevis	8.9
154. St. Lucia	15.3
155. St. Vincent and the Grenadines	8.3
156. Sudan	315.1
157. Suriname	92.1
158. Swaziland	50.7
159. Sweden	2,395.5
160. Switzerland	3,458.5
161. Syrian Arab Republic	293.6
162. Tajikistan	87.0
163. Tanzania	198.9
164. Thailand	1,081.9
165. Togo	73.4
166. Tonga	6.9
167. Trinidad and Tobago	335.6
168. Tunisia	286.5
169. Turkey	964.0
170. Turkmenistan	75.2
171. Uganda	180.5
172. Ukraine	1,372.0
173. United Arab Emirates	611.7
174. United Kingdom	10,738.5
175. United States	37,149.3
176. Uruguay	306.5
177. Uzbekistan	275.6
178. Vanuatu	17.0
179. Venezuela	2,659.1
180. Vietnam	329.1
181. Yemen, Republic of	243.5
182. Zambia	489.1
183. Zimbabwe	353.4

¹Under Executive Board Decision No. 10237-(92/150) adopted December 14, 1992, the Federal Republic of Yugoslavia (Serbia/Montenegro) may succeed to the membership of the former Socialist Federal Republic of Yugoslavia.

View Table

Member	Quota (In SDR Millions)
1. Afghanistan, Islamic State of	161.9
2. Albania	48.7
3. Algeria	1,254.7
4. Angola	286.3
5. Antigua and Barbuda	13.5
6. Argentina	2,117.1
7. Armenia	92.0
8. Australia	3,236.4
9. Austria	1,872.3
10. Azerbaijan	160.9
11. Bahamas, The	130.3
12. Bahrain	135.0
13. Bangladesh	533.3
14. Barbados	67.5
15. Belarus	386.4
16. Belgium	4,605.2
17. Belize	18.8
18. Benin	61.9
19. Bhutan	6.3
20. Bolivia	171.5
21. Bosnia and Herzegovinia	169.1
22. Botswana	63.0
23. Brazil	3,036.1
24. Brunei Darussalam	215.2
25. Bulgaria	640.2
26. Burkina Faso	60.2
27. Burundi	77.0
28. Cambodia	87.5
29. Cameroon	185.7
30. Canada	6,369.2
31. Cape Verde	9.6
32. Central African Republic	55.7
33. Chad	56.0
34. Chile	856.1
35. China	4,687.2
36. Colombia	774.0
37. Comoros	8.9
38. Congo, Democratic Republic of the	533.0
39. Congo, Republic of	84.6
40. Costa Rica	164.1
41. Côted’Ivoire	325.2
42. Croatia	365.1
43. Cyprus	139.6
44. Czech Republic	819.3
45. Denmark	1,642.8
46. Djibouti	15.9
47. Dominica	8.2
48. Dominican Republic	218.9
49. Ecuador	302.3
50. Egypt	943.7
51. El Salvador	171.3
52. Equatorial Guinea	32.6
53. Eritrea	15.9
54. Estonia	65.2
55. Ethiopia	133.7
56. Fiji	70.3
57. Finland	1,263.8
58. France	10,738.5
59. Federal Republic of Yugoslavia (Serbia/Montenegro)1	467.7
60. Gabon	154.3
61. Gambia, The	31.1
62. Georgia	150.3
63. Germany	13,008.2
64. Ghana	369.0
65. Greece	823.0
66. Grenada	11.7
67. Guatemala	210.2
68. Guinea	107.1
69. Guinea-Bissau	14.2
70. Guyana	90.9
71. Haiti	81.9
72. Honduras	129.5
73. Hungary	1,038.4
74. Iceland	117.6
75. India	4,158.2
76. Indonesia	2,079.3
77. Iran, Islamic Republic of	1,497.2
78. Iraq	1,188.4
79. Ireland	838.4
80. Israel	928.2
81. Italy	7,055.5
82. Jamaica	273.5
83. Japan	13,312.8
84. Jordan	170.5
85. Kazakhstan	365.7
86. Kenya	271.4
87. Kiribati	5.6
88. Korea	1,633.6
89. Kuwait	1,381.1
90. Kyrgyz Republic	88.8
91. Lao People’s Democratic Republic	52.9
92. Latvia	126.8
93. Lebanon	203.0
94. Lesotho	34.9
95. Liberia	129.2
96. Libya	1,123.7
97. Lithunia	144.2
98. Luxembourg	279.1
99. Macedonia, former Yugoslav Republic of	68.9
100. Madagascar	122.2
101. Malawi	69.4
102. Malaysia	1,486.6
103. Maldives	8.2
104. Mali	93.3
105. Malta	102.0
106. Marshall Islands	3.5
107. Mauritania	64.4
108. Mauritius	101.6
109. Mexico	2,585.8
110. Micronesia, Federal States of	5.1
111. Moldova	123.2
112. Mongolia	51.1
113. Morocco	588.2
114. Mozambique	113.6
115. Myanmar	258.4
116. Namibia	136.5
117. Nepal	71.3
118. Netherlands	5,162.4
119. New Zealand	894.6
120. Nicaragua	130.0
121. Niger	65.8
122. Nigeria	1,753.2
123. Norway	1,671.7
124. Oman	194.0
125. Pakistan	1,033.7
126. Palau, Republic of	3.1
127. Panama	206.6
128. Papua New Guinea	131.6
129. Paraguay	99.9
130. Peru	638.4
131. Philippines	879.9
132. Poland	1,369.0
133. Portugal	867.4
134. Qatar	263.8
135. Romania	1,030.2
136. Russia	5,945.4
137. Rwanda	80.1
138. Samoa	11.6
139. San Marino	17.0
140. São Tomé and Principe	7.4
141. Saudi Arabia	6,985.5
142. Senegal	161.8
143. Seychelles	8.8
144. Sierra Leone	103.7
145. Singapore	862.5
146. Slova Republic	357.5
147. Slovenia	231.7
148. Solomon Islands	10.4
149. Somalia	81.7
150. South Africa	1,868.5
151. Spain	3,048.9
152. Sri Lanka	413.4
153. St. Kitts and Nevis	8.9
154. St. Lucia	15.3
155. St. Vincent and the Grenadines	8.3
156. Sudan	315.1
157. Suriname	92.1
158. Swaziland	50.7
159. Sweden	2,395.5
160. Switzerland	3,458.5
161. Syrian Arab Republic	293.6
162. Tajikistan	87.0
163. Tanzania	198.9
164. Thailand	1,081.9
165. Togo	73.4
166. Tonga	6.9
167. Trinidad and Tobago	335.6
168. Tunisia	286.5
169. Turkey	964.0
170. Turkmenistan	75.2
171. Uganda	180.5
172. Ukraine	1,372.0
173. United Arab Emirates	611.7
174. United Kingdom	10,738.5
175. United States	37,149.3
176. Uruguay	306.5
177. Uzbekistan	275.6
178. Vanuatu	17.0
179. Venezuela	2,659.1
180. Vietnam	329.1
181. Yemen, Republic of	243.5
182. Zambia	489.1
183. Zimbabwe	353.4

¹Under Executive Board Decision No. 10237-(92/150) adopted December 14, 1992, the Federal Republic of Yugoslavia (Serbia/Montenegro) may succeed to the membership of the former Socialist Federal Republic of Yugoslavia.