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Back Matter

Author(s):
International Monetary Fund
Published Date:
September 2003
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Appendixes

Contents

Appendix I

International Reserves

Total international reserves, including gold, increased by 9 percent during 2002 and stood at SDR 2.1 trillion at the end of the year (Table I.1). Foreign exchange reserves, which constitute the largest component of official reserve holdings, grew by 8 percent, to SDR 1.8 trillion. IMF-related assets, which make up the rest of nongold reserves, increased by 12 percent, to SDR 86 billion. The market value of gold held by monetary authorities increased by 13 percent in 2002, to SDR 235 billion at year-end.1

Foreign Exchange Reserves

Foreign exchange reserves represented 95 percent of nongold assets at the end of 2002. The developing countries, which held 63 percent of all foreign exchange reserves at the end of 2002, increased their holdings by 10 percent, to SDR 1.1 trillion, following comparable increases in the previous two years. During 2002, the foreign exchange holdings of industrial countries rose by 5 percent, to SDR 653 billion.

In 2002, the foreign exchange assets of the oil-exporting developing countries, which amount to about 10 percent of all developing countries’ foreign exchange reserves, declined by 2 percent, to SDR 103 billion. Foreign exchange reserves of the net creditor developing country group rose by 11 percent, to SDR 222 billion, and those of net debtor countries grew by 10 percent, to SDR 889 billion at the end of 2002. Foreign exchange reserves of net debtors without debt-servicing problems increased by 13 percent, to SDR 753 billion, while those of countries with debt-servicing problems decreased by 4 percent, to SDR 136 billion.

Holdings of IMF-Related Assets

During 2002, total IMF-related assets (that is, reserve positions in the IMF and SDRs) increased by 12 percent, following an increase of 16 percent in the preceding year. Industrial countries hold a majority of IMF-related assets: 81 percent at the end of 2002. The increase in IMF-related assets was attributable mainly to a 16 percent growth in members’ reserve positions in the IMF—which consist of members’ reserve tranche and creditor positions—to SDR 66 billion. SDR holdings of IMF members have remained broadly constant at SDR 20 billion.

Gold Reserves

The market value of gold reserves increased by 13 percent, to SDR 235 billion, reflecting an increase of 14 percent in the SDR price of gold in 2002; the physical stock of official gold declined by 1 percent. The share of gold in officially held reserves declined gradually to 11 percent by the end of 2002, whereas in the early 1980s gold comprised about half of all officially held reserves. Most of the gold reserves (83 percent) are held by industrial countries: gold constituted 21 percent of these countries’ total reserves at the end of 2002. Gold reserves accounted for 4 percent of the total reserves of the developing countries.

Developments During the First Quarter of 2003

During the first quarter of 2003, total reserve assets rose by SDR 43 billion, whereas foreign exchange reserves increased by SDR 50 billion over the same period. Reflecting a decline in the SDR price of gold since the end of 2002, the market value of gold reserves declined by SDR 9 billion during the first quarter of 2003, while the physical stock of official gold declined by SDR 4 billion. Holdings of IMF-related assets increased by SDR 2 billion.

Currency Composition of Foreign Exchange Reserves

The currency composition of foreign exchange reserves has changed gradually over the past decade, with the share of U.S. dollar holdings in foreign exchange reserves rising from 57 percent in 1993 to 68 percent in 1999 and staying at that level through the end of 2001 (Table I.2). In 2002, however, the share of U.S. dollar holdings declined slightly, to 65 percent, with euro holdings gaining share. The euro, which replaced 11 European currencies and the European currency unit (ECU) on January 1, 1999, accounted for 15 percent of total foreign exchange reserves in 2002, somewhat higher than its average since 1999. Given that, at the introduction of the euro, the Eurosystem’s reserves previously denominated in euro legacy currencies2 became domestic assets of the euro area, the share of the euro in 1999-2002 is not directly comparable with the previous years’ combined share of the four euro legacy currencies identified in Table I.2: deutsche mark, French franc, Netherlands guilder, and private ECU. However, after adjusting the data to take into account only holdings of these currencies outside the euro area, their combined share in 1998 was virtually identical to the share of the euro in 1999.

Table I.1Official Holdings of Reserve Assets1(In billions of SDRs)
March
1997199819992000200120022003
All countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF47.160.654.847.456.966.167.6
SDRs20.520.418.518.519.619.719.8
Subtotal, IMF-related assets67.681.073.265.976.485.787.4
Foreign exchange1,197.01,166.31,297.71,485.41,627.81,763.41,813.5
Total reserves excluding gold1,264.71,247.31,371.01,551.31,704.21,849.11,900.9
Gold2
Quantity(millions of ounces)888.5968.3967.0952.1942.7930.6926.5
Value at London market price191.1197.9204.5200.5207.4234.6225.8
Total reserves including gold1,455.71,445.21,575.41,751.81,911.62,083.72,126.7
Industrial countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF41.353.946.839.747.053.754.7
SDRs15.515.814.714.416.015.815.1
Subtotal, IMF-related assets56.869.861.554.162.969.569.8
Foreign exchange520.9475.8526.1596.2620.4653.0656.6
Total reserves excluding gold577.7545.6587.6650.3683.4722.5726.5
Gold2
Quantity(millions of ounces)732.5808.7810.4796.5783.5769.8765.8
Value at London market price157.5165.3171.4167.8172.4194.1186.6
Total reserves including gold735.2710.9759.0818.1855.7916.6913.1
Developing countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF5.76.78.07.79.912.312.8
SDRs5.04.53.74.13.63.94.7
Subtotal, IMF-related assets10.811.211.711.813.516.217.6
Foreign exchange676.2690.5771.6889.21,007.31,110.31,156.8
Total reserves excluding gold687.0701.7783.4900.91,020.81,126.61,174.4
Gold2
Quantity (millions of ounces)156.0159.6156.6155.5159.2160.7160.7
Value at London market price33.532.633.132.835.040.539.2
Total reserves including gold720.5734.3816.5933.71,055.81,167.11,213.6
Net debtor developing countries
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF4.35.15.75.46.48.18.4
SDRs3.93.33.13.32.72.93.8
Subtotal, IMF-related assets8.18.48.88.79.211.012.2
Foreign exchange538.1550.0609.3705.7806.7888.9919.0
Total reserves excluding gold546.3558.3618.1714.4815.8899.9930.3
Gold2
Quantity(millions of otmces)147.9151.3148.7147.7151.3153.2153.1
Value at London market price31.830.931.431.133.338.637.3
Total reserves including gold578.1589.3649.5745.5849.1938.5967.6
Net debtor developing countries without debt-servicing problems
Total reserves excluding gold
IMF-related assets
Reserve positions in the IMF3.84.64.94.65.77.37.6
SDRs3.02.62.42.12.11.92.1
Subtotal, IMF-related assets6.87.37.36.77.89.39.7
Foreign exchange403.8428.3489.4571.6664.5752.6781.2
Total reserves excluding gold410.6435.6496.6578.3672.3761.9790.4
Gold2
Quantity(millions of ounces)102.8105.7103.5102.8106.4108.1107.9
Value at London market price22.121.621.921.723.427.326.3
Total reserves including gold432.7457.2518.5600.0695.7789.2816.7
Source: International Monetary Fund, International Financial Statistics.Note: Components may not sum to totals because of rounding.

End of year figures for all years except 2003. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain countries or area.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Source: International Monetary Fund, International Financial Statistics.Note: Components may not sum to totals because of rounding.

End of year figures for all years except 2003. “IMF-related assets” comprise reserve positions in the IMF and SDR holdings of all IMF members. The entries under “Foreign exchange” and “Gold” comprise official holdings of those IMF members for which data are available and certain countries or area.

One troy ounce equals 31.103 grams. The market price is the afternoon price fixed in London on the last business day of each period.

Table I.2Share of National currencies in Total Identified Official Holdings of Foreign Exchange, End of Year1(In percent)
1993199419951996199719981999200020012002
All countries
U.S. dollar56.656.556.960.262.265.767.967.667.764.8
Japanese yen7.77.96.86.05.25.45.55.24.94.5
Pound sterling3.03.33.23.43.63.94.03.84.04.4
Swiss franc1.10.90.80.80.70.70.70.70.60.7
Euro12.6213.0213.2214.62
Deutsche mark13.714.213.713.012.812.2
French franc2.32.42.31.91.41.6
Netherlands guilder0.70.50.40.30.40.4
ECUs38.27.76.85.95.00.8
Unspecified currencies46.86.69.28.68.79.39.49.79.711.0
Industrial countries
U.S. dollar50.250.851.856.157.966.772.872.773.370.1
Japanese yen7.88.26.65.65.86.66.66.35.64.8
Pound sterling2.22.32.12.01.92.22.32.01.82.2
Swiss franc0.30.20.10.10.10.20.10.20.30.6
Euro10.6210.429.7211.32
Deutsche mark16.416.316.415.615.913.4
French franc2.62.42.31.70.91.3
Netherlands guilder0.40.30.20.20.20.2
ECUs315.214.613.412.010.91.9—:
Unspecified currencies44.85.07.06.76.47.47.68.39.211.1
Developing countries
U.S. dollar64.162.962.064.065.864.964.263.863.861.3
Japanese yen7.57.66.96.44.74.54.64.44.34.3
Pound sterling4.04.44.34.85.15.15.35.25.55.8
Swiss franc2.01.71.51.41.11.11.11.00.90.8
Euro14.114.915.616.8
Deutsche mark10.511.911.010.610.311.2
French franc2.02.42.32.01.81.9
Netherlands guilder1.00.80.60.50.60.5
ECUs3
Unspecified currcncies59.18.311.410.310.610.810 710.79.910.9
Note: Components may not sum to total because of rounding.

Only IMF member countries that report their official holdings of foreign exchange are included in this table.

Not comparable with the combined share of euro legacy currencies in previous years because it excludes the euros received by euro-area members when their previous holdings of other euro-area members’ legacy currencies were converted into euros on January 1, 1999.

In the calculation of currency shares, the ECU is treated as a separate currency. ECU reserves held by the monetary authorities existed in the form of claims on both the private sector and European Monetary Institute (EMI), which issued official ECUs to European Union central banks through revolving swaps against the contribution of 20 percent of their gross gold holdings and 3U.S. dollar reserves. On December 31, 1998, the official ECUs were unwound into gold and U.S. dollars; hence, the share of ECUs at the end of 1998 was sharply lower than a year earlier. The remaining ECU holdings reported for 1998 consisted of ECUs issued by the private sector, usually in the form of ECU deposits and bonds. On January 1, 1999, these holdings were automatically converted into euros.

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

Note: Components may not sum to total because of rounding.

Only IMF member countries that report their official holdings of foreign exchange are included in this table.

Not comparable with the combined share of euro legacy currencies in previous years because it excludes the euros received by euro-area members when their previous holdings of other euro-area members’ legacy currencies were converted into euros on January 1, 1999.

In the calculation of currency shares, the ECU is treated as a separate currency. ECU reserves held by the monetary authorities existed in the form of claims on both the private sector and European Monetary Institute (EMI), which issued official ECUs to European Union central banks through revolving swaps against the contribution of 20 percent of their gross gold holdings and 3U.S. dollar reserves. On December 31, 1998, the official ECUs were unwound into gold and U.S. dollars; hence, the share of ECUs at the end of 1998 was sharply lower than a year earlier. The remaining ECU holdings reported for 1998 consisted of ECUs issued by the private sector, usually in the form of ECU deposits and bonds. On January 1, 1999, these holdings were automatically converted into euros.

The residual is equal to the difference between total foreign exchange reserves of IMF member countries and the sum of the reserves held in the currencies listed in the table.

The calculations here rely to a greater extent on IMF staff estimates than do those provided for the group of industrial countries.

The share of the Japanese yen in total foreign exchange reserves declined from 8 percent at end-1993 to 5 percent at the end of 1997 and stayed at about that level through 2002. During the past decade, the share of pound sterling has remained around 3 and 4 percent, and that of the Swiss franc approximately 1 percent. The share of unspecified currencies, which include currencies not identified in Table I.2, as well as foreign exchange reserves for which no information on currency composition is available, rose to 11 percent in 2002.

For industrial countries, the share of U.S. dollar holdings increased throughout the 1990s to reach 73 percent in 2001 and declined to 70 percent at the end of 2002. The shares of the euro in those countries’ foreign exchange reserves rose to 11 percent in 2002, whereas that of the Japanese yen declined by less than 1 percentage point. Shares of pound sterling and the Swiss franc have been practically unchanged over the past ten years, but the share of unspecified currencies rose to 11 percent in 2002.

Table I.3Currency Composition of Official Holdings of Foreign Exchange, End of Year1(In millions of SDRs)
199419951996199719981999200020012002
U.S. dollar
Change in holdings32,57073,551121,24587,82818,418103,998120,29587,18529,895
Quantity change57,31478,573103,26945,17248,56185,74574,52651,852112,651
Price change-24,744-5,02317,97642,656-30,14318,25445,76935,332-82,756
Year-end value423,269496,819618,064705,892724,310828,308948,6031,035,7881,065,682
Japanese yen
Change in holdings6,007192,685-3,1979817,2566,3061,221-120
Quantity change3,1243,0898,021-56-3,489-1,98311,0548,655-1,160
Price change2,883-3,070-5,336-3,1414,4709,238-4,749-7,4341,040
Year-end value59,03059,04861,73358,53659,51766,77273,07874,30074,180
Pound sterling
Change in holdings3,9923,2407,3546,1821,1246,1975,0877,17011,058
Quantity change4,1293,8343,2594,6322,7616,3596,4646,6859,242
Price change-136-5944,0951,550-1,637-162-1,3774851,816
Year-end value24,61227,85235,20641,38842,51248,70953,79660,96672,024
Swiss franc
Change in holdings-932210881-35-542411,7451312,206
Quantity change-1,372-5411,81175-1281,2081,44933955
Price change439751-930-10974-966296981,252
Year-end value6,6896,8997,7807,7457,6917,9339,6789,80912,015
Euro
Change in holdings6,958228,14919,68537,902
Quantity change25,60031,50122,96216,776
Price change-18,642-3,353-3,27721,126
Year-end value154,026182,174201,859239,761
Deutsche mark
Change in holdings11,86213,29614,05011,896-11,478
Quantity change7,0816,81720,15922,336-15,364
Price change4,7816,478-6,109-10,4403,886
Year-end value106,414119,709133,759145,655134,176
French franc
Change in holdings1,9121,974-981-3,3882,224
Quantity change1,262668-334-2,0371,860
Price change6501,307-647-1,352364
Year-end value18,08120,05519,07415,68617,910
Netherlands guilder
Change in holdings-512-301-3301,138-569
Quantity change-731-547-1521,443-708
Price change219246-178-305140
Year-end value4,0703,7693,4394,5774,009
European currency unit
Change in holdings9591,665985-3,240-47,848
Quantity change-1,035-1,1571,833515-49,304
Price change1,9942,822-849-3,7551,456
Year-end value57,61359,27860,26257,0229,174
Sum of the above3
Change in holdings55,85993,653145,88897,183-37,201124,650161,581115,39180,941
Quantity change69,77390,736137,86572,079-15,812116,929124,99590,187138,463
Price change-13,9142,9178,02325,103-21,3897,72136,58625,204-57,523
Year-end value699,777793,431939,3191,036,501999,3001,105,7491,267,3301,382,7211,463,662
Total official holdings4
Change in holdings60,720121,995154,291108,574-30,765131,431187,685142,355135,608
Year-end value812,188934,1821,088,4731,197,0471,166,2821,297,7131,485,3981,627,7531,763,361
Note: Components may not sum to total because of rounding.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown.

Represents the change from end-1998 holdings of euro legacy currencies by official institutions outside the euro area.

Each item represents the sum of the currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

Note: Components may not sum to total because of rounding.

The currency composition of foreign exchange is based on the IMF’s currency survey and on estimates derived mainly, but not solely, from official national reports. The numbers in this table should be regarded as estimates that are subject to adjustment as more information is received. Quantity changes are derived by multiplying the changes in official holdings of each currency from the end of one quarter to the next by the average of the two SDR prices of that currency prevailing at the corresponding dates. This procedure converts the change in the quantity of national currency from own units to SDR units of account. Subtracting the SDR value of the quantity change so derived from the quarterly change in the SDR value of foreign exchange held at the end of two successive quarters and cumulating these differences yields the effect of price changes over the years shown.

Represents the change from end-1998 holdings of euro legacy currencies by official institutions outside the euro area.

Each item represents the sum of the currencies above.

Includes a residual whose currency composition could not be ascertained, as well as holdings of currencies other than those shown.

The share of the U.S. dollar in developing countries’ foreign exchange reserves declined to 61 percent in 2002, at the lower end of historical values over the past decade. Holdings of the euro rose to 17 percent of those countries’ foreign exchange reserves, 1 percentage point higher than its share in 2001. During the past decade, the share of the Japanese yen has gradually decreased by about 3 percentage points, to 4 percent at the end of 2002, while the share of pound sterling has increased by about 2 percentage points, to 6 percent. The share of the Swiss franc has remained virtually unchanged at 1 percent since 1997. Unspecified currencies accounted for 11 percent of developing countries’ foreign exchange reserves in 2002.

Changes in the SDR value of foreign exchange reserves can be decomposed into quantity and valuation (price) changes (Table I.3). Official reserves held in U.S. dollars increased by SDR 30 billion in 2002, as an increase of SDR 113 billion in the quantity of U.S. dollar holdings was offset by a valuation decline of SDR 83 billion. Euro holdings increased by SDR 38 billion, reflecting a quantity increase of SDR 17 billion and a valuation increase of SDR 21 billion. Japanese yen holdings remained unchanged, as a quantity decline offset a valuation increase. Pound sterling and Swiss franc holdings increased by SDR 11 billion and SDR 2 billion, respectively, reflecting increases in both quantity and valuation.

Official monetary authorities comprise central banks and also currency boards, exchange stabilization funds, and treasuries, to the extent that they perform monetary authorities’ functions.

Those foreign exchange reserves that, up to December 31, 1998, were denominated in euro-area former national currencies and private ECUs.

Appendix II

Financial Operations and Transactions

The tables in this appendix supplement the information given in Chapter 8 on the IMF’s financial operations and policies. Components may not sum to total because of rounding.

Table II.1Arrangements Approved During Financial Years Ended April 30, 1953-2003
Amounts Committed Under Arrangements1
FinancialNumber of Arrangements(In millions of SDRs)
YearStand-ByEFF SAFPRGFTotalStand-ByEFFSAFPRGFTotal
1953225555
1954226363
1955224040
1956224848
1957991,1621,162
195811111,0441,044
195915151,0571,057
19601414364364
19611515460460
196224241,6331,633
196319191,5311,531
196419192,1602,160
196524242,1592,159
19662424575575
19672525591591
196832322,3522,352
19692626541541
197023232,3812,381
19711818502502
19721313314314
19731313322322
197415151,3941,394
19751414390390
1976182201,1882841,472
1977191204,6805185,198
197818181,2851,285
1979144185081,0931,600
1980244282,4797973,277
19812111325,1985,22110,419
1982195243,1067,90811,014
1983274315,4508,67114,121
1984252274,287954,382
198524243,2183,218
1986181192,1238252,948
19872210324,1183584,476
198814115301,7022456702,617
198912147242,9562074279554,545
199016334263,2497,6273741511,328
199113223202,7862,338154545,593
199221215295,5872,49327438,826
199311318231,9711,242495273,789
199418217281,381779271,1703,357
1995173113113,0552,3351,19716,587
199619418329,6458,3811821,47619,684
199711512283,1831,1939115,287
19989482127,3363,0781,73832,152
199954101914,32514,09099829,413
2000114102515,7066,58264122,929
2001111142613,093-91,24914,333
2002991839,4391,84841,287
2003102102228,5977941,18030,571

Includes augmentations less approved reductions of committed amounts.

Includes augmentations less approved reductions of committed amounts.

Table II.2Arrangement in Effect at the End of Financial Year 1991-20031
Amounts Committed Under Arrangements
as of April 30
FinancialNumber of Arrangements as of April 30(In millions of SDRs)
YearStand-ByEFFSAFPRGFTotalStand-ByEFFSAPPRGFTotal
19911451214452,7039,5975391,81314,652
1992227816534,83312,1591012,11119,203
1993156420454,4908,569832,13715,279
1994166322471,1314,504802,7138,428
19951991275613,1906,840493,30623,385
19962171285714,9639,3901823,38327,918
1997141135603,76410,1844,04817,996
19981413336028,32312,3364,41045,069
1999912355632,74711,4014,18648,334
20001611315845,6069,7983,51658,920
2001178376234,9068,6973,29846,901
2002134355244,0957,6434,20155,939
2003153365442,8074,4324,45051,689

Certain figures have been restated to exclude expired arrangements.

Certain figures have been restated to exclude expired arrangements.

Table II.3Stand-By and Extended Arrangements in Effect During Financial Year Ended April 30, 2003(In millions of SDRs)
Arrangement DatesAmounts ApprovedUndrawn Balance
EffectiveExpirationPrior toInAt date ofAs of
MemberdatedateFY2003FY2003terminationApril 30, 2003
Argentina3/10/20001/24/200316,9377,180
Argentina1/24/2U038/31/20032,1751,201
Bolivia4/2/20034/1/20048643
Bosnia and Herzegovina8/2/200211/1/20036836
Brazil9/14/20019/6/200212,144759
Brazil9/6/200212/31/200322,82115,215
Bulgaria2/27/20022/26/2004240104
Colombia1/15/20031/14/20051,5481,548
Croatia3/19/20015/18/2002200200
Croatia2/3/20034/2/2004106106
Dominica8/28/20028/27/200331
Ecuador3/21/20034/20/2004151121
Guatemala4/1/20023/31/20038484
Jordan7/3/20027/2/20048575
Latvia4/20/200112/19/20023333
Lithuania8/30/20013/29/20038787
Macedonia, FYR4/30/20036/15/20042020
Peru2/1/20022/29/2004255255
Romania10/31/200110/15/2003300110
Serbia and Montenegro16/11/20015/13/2002200
Sri Lanka4/20/20019/19/2002200
Turkey2/4/200212/31/200412,8212,381
Uruguay4/1/20023/31/20055941,534798
Total for Stand-By Arrangements44,09528,5978,34322,014
Colombia12/20/199912/19/20021,9571,957
Indonesia2/4/200012/31/20033,6381,032
Jordan4/15/19995/31/2002128
Serbia and Montenegro15/14/20025/13/2005650450
Sri Lanka4/18/20034/17/2006144124
Ukraine9/4/19989/3/20021,920727
Total for Extended Arrangements7,6437942,6841,606
Total51,73829,39111,02723,620

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Table II.4Arrangements Under the Poverty Reduction and Growth Facility in Effect During Financial Year Ended April 30, 2003(In millions of SDRs)
Arrangement DatesAmounts ApprovedUndrawn Balance
EffectiveExpirationPrior toAt date ofAs of
MemberdatedateFY2003In FY2003terminationApril 30, 2003
Albania6/21/20026/20/20052820
Armenia5/23/20015/22/20046929
Azerbaijan7/6/20017/5/20048064
Benin17/17/20003/31/2004274
Bolivia29/18/19986/7/200210137
Burkina Faso39/10/199912/9/200239
Cambodia410/22/19992/28/200359
Cameroon12/21/200012/20/200311148
Cape Verde4/10/20024/9/200596
Chad51/7/200012/6/20034810
Congo, Dem. Rep. of6/12/20026/11/2005580133
Cote d’Ivoire3/29/20023/28/2005293234
Djibouti610/18/19991/17/2003195
Ethiopia3/22/20013/21/200410031
Gambia, The7/18/20027/17/20052017
Georgia1/12/20011/11/200410859
Ghana75/3/199911/30/200222953
Guinea5/2/20015/1/20046439
Guinea-Bissau12/15/200012/14/2003149
Guyana9/20/20029/19/20055549
Honduras83/26/199912/31/200215748
Kenya98/4/20008/3/2003190156
Kyrgyz Republic12/6/200112/5/20047338
Lao People’s Dem. Rep.4/25/20014/24/20043218
Lesotho3/9/20013/8/20042511
Madagascar103/1/200111/30/20047945
Malawi12/21/200012/20/20034539
Mali118/6/19998/5/2003516
Mauritania127/21/199912/20/200242
Moldova12/21/200012/20/200311183
Mongolia9/28/20019/27/20042824
Mozambique136/28/19996/27/20038717
Nicaragua12/13/200212/12/20059891
Niger12/22/200012/21/20035925
Pakistan12/6/200112/5/20041,034603
Rwanda8/12/20028/11/200543
Sao Tome and Principe4/28/20004/27/200375
Senegal4/28/20034/27/20062424
Sierra Leone9/26/20019/25/200413156
Sri Lanka4/18/20034/17/2006269231
Tajikistan12/11/200212/10/20056557
Tanzania144/4/20006/30/200313515
Uganda9/13/20029/12/20051412
Vietnam4/13/20014/12/2004290166
Zambia153/25/19993/28/20032542441
Total4,2011,1801892,474

Extended from 7/16/03.

Extended from 9/17/01.

Extended from 9/9/02.

Extended from 10/21/02.

Extended from 1/6/03.

Extended from 10/17/02.

Extended from 5/2/02.

Extended from 3/25/02.

Became inoperative on 1/13/03.

Extended from 2/29/04.

Extended from 8/05/02.

Extended from 7/20/02.

Extended from 6/27/02.

Extended from 4/3/03.

Augmented by SDR 24.45 million on 5/29/02. Extended from 3/24/02.

Extended from 7/16/03.

Extended from 9/17/01.

Extended from 9/9/02.

Extended from 10/21/02.

Extended from 1/6/03.

Extended from 10/17/02.

Extended from 5/2/02.

Extended from 3/25/02.

Became inoperative on 1/13/03.

Extended from 2/29/04.

Extended from 8/05/02.

Extended from 7/20/02.

Extended from 6/27/02.

Extended from 4/3/03.

Augmented by SDR 24.45 million on 5/29/02. Extended from 3/24/02.

Table II.5Summary of Disbursements, Repurchases, and Repayments, Financial Years Ended April 30, 1948-2003(In millions of SDRs)
DisbursementsRepurchases and RepaymentsTotal Fund
FinancialTrust FundSAFPRGFTrust FundSAF/PRGFCredit
YearPurchases1loansloansloansTotalRepurchasesrepaymentsrepaymentsTotalOutstanding2
1948606606133
1949119119193
195052522424204
195128281919176
195246463737214
19536666185185178
1954231231145145132
1955494927627655
1956393927227672
19571,1141,1147575611
195866666687871,027
1959264264537537898
1960166166522522330
1961577577659659552
19622,2432,2431,2601,2601,023
19635805808078071,059
1964626626380380952
19651,8971,8975175171,480
19662,8172,8174064063,039
19671,0611,0613403402,945
19681,3481,3481,1161,1162,463
19692,8392,8391,5421,5423,299
19702,9962,9961,6711,6714,020
19711,1671,1671,6571,6572,556
19722,0282,0283,1223,122840
19731,1751,175540540998
19741,0581,0586726721,085
19755,1025,1025185184,869
19766,5916,5919609609,760
19774,910324,94286886813,687
19782,5032682,7714,4854,48512,366
19793,7206704,3904,8594,8599,843
19802,4339623,3953,7763,7769,967
19814,8601,0605,9202,8532,85312,536
19828,0418,0412,0102,01017,793
198311,39211,3921,555181,57426,563
198411,51811,5182,0181112,12934,603
19856,2896,2892,7302122,94337,622
19864,1014,1014,2894134,70236,877
19873,6851393,8246,1695796,74933,443
19884,1534454,5977,9355288,46329,543
19892,5412902643,0956,2584476,70525,520
19904,5034194085,3296,0423566,39824,388
19916,955844917,5305,4401685,60825,603
19925,3081254835,9164,76814,77026,736
19938,465205739,0584,083364,11928,496
19945,325506125,9874,348521124,51329,889
199510,6151457311,1753,98442444,23136,837
199610,8701821,29512,3476,69873957,10042,040
19974,9397055,6446,66855247,19640,488
199820,00097320,9733,78915954,38556,026
199924,07182624,89710,46562711,09267,175
20006,3775136,89022,99363423,62750,370
20019,59963010,22911,24358811,83148,691
200229,19495230,14619,20776919,97658,699
200321,7841,21823,0027,7849288,71272,879

Includes reserve tranche purchases.

Excludes reserve tranche purchases; includes outstanding associated loans from the Saudi Fund for Development.

Includes reserve tranche purchases.

Excludes reserve tranche purchases; includes outstanding associated loans from the Saudi Fund for Development.

Table II.6Purchases and Loans from the IMF, Financial Year Ended April 30, 2003(In millions of SDRs)
ReserveStand-By/ExtendedTotalPRGFTotal Purchases
MemberTrancheCredit TrancheFund FacilitySRFPurchasesLoansand Loans1
Afghanistan444
Albania88
Argentina973973973
Armenia3030
Benin38
Bolivia434343
Bosnia and Herzegovina323232
Brazil4,87910,43715,31615,316
Bulgaria104104104
Burkina Faso66
Burundi101010
Cambodia1717
Cameroon1616
Cape Verde11
Chad55
Congo, Dem. Rep. of6161447507
Djibouti55
Dominica222
Ecuador303030
Ethiopia1010
Gambia, The33
Georgia2323
Grenada333
Guinea1313
Guyana66
Indonesia1,1701,1701,170
Jordan11617272
Kyrgyz Republic2323
Lao, PDR55
Lesotho44
Madagascar1111
Malawi171717
Mali1414
Mauritania1212
Moldova99
Mozambique88
Nicaragua77
Niger88
Pakistan258258
Romania138138138
Rwanda11
Serbia and Montenegro150200250250
Sierra Leone1919
Sri Lanka48216938107
Tajikistan88
Tanzania2020
Timor-Leste222
Turkey2,2462,2462,246
Uganda22
Uruguay361,0791291,2431,243
Vietnam4141
Zambia133133
Total1029,6641,45110,56621,7841,21823,002

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Table II.7Repurchases and Repayments to the IMF, Financial Year Ended April 30, 2003(In millions of SDRs)
SAF/PRGF andTotal
Stand-By/ExtendedTotalTrust FundRepurchases
MemberCredit TrancheFund FacilityOthers1RepurchasesRepaymentsand Repayments
Albania33610
Algeria18384272272
Argentina7814341,2151,215
Armenia66814
Azerbaijan63844650
Bangladesh61611476
Belarus232323
Benin1212
Bolivia2121
Bosnia and Herzegovina252525
Brazil373373373
Bulgaria114419137137
Burkina Faso1212
Burundi22
Cambodia1189
Cameroon33
Chad55
Congo, Dem. Rep. of127323157143300
Congo, Republic of4436
Cote d’lvoire6767
Croatia24608484
Djibouti222
Dominican Republic202020
Equatorial Guinea11
Estonia999
Ethiopia1212
Gabon101010
Georgia991929
Ghana1111
Guinea1111
Guinea-Bissau1112
Guyana1313
Haiti88311
Honduras2424630
Indonesia1,5591181,6781,678
Jamaica141414
Jordan54177171
Kenya1414
Kyrgyz Republic881422
Lao People’s Dem. Rep.38
Latvia888
Lesotho22
Lithuania5896666
Macedonia, FYR8829
Madagascar44
Malawi—.66
Mali2020
Mauritania1313
Moldova681414
Mongolia66
Mozambique1818
Nepal33
Nicaragua44
Niger55
Pakistan193017622540266
Panama444
Peru134134134
Philippines253132385385
Romania28316060
Russian Federation1777453591,2811,281
Rwanda222
Senegal2424
Sierra Leone2424
Sri Lanka3434
St. Kitts and Nevis111
Sudan71512222
Tajikistan772532
Tanzania1717
Thailand913913913
Togo88
Turkey174174174
Uganda3232
Ukraine362083140140
Uruguay575757
Uzbekistan171717
Vietnam444352
Yemen, Republic of2244
Zambia169169
Zimbabwe1112
Total4,7762,0081,0007,7849288,712

Includes Compensatory and Contingency Financing Facility and Systemic Transformation Facility.

Includes Compensatory and Contingency Financing Facility and Systemic Transformation Facility.

Table II.8Outstanding IMF Credit by Facility and Policy, Financial Years Ended April 30, 1995-2003(In millions of SDRs and percent of total)
199519961997199819992000200120022003
In Millions of SDRs
Stand-By Arrangements115,11720,70018,06425,52625,21321,41017,10128,61234,241
Extended Arrangements10,1559,98211.15S12,52116,57416,80816,10815,53814,981
Supplemental Reserve Facility7,10012,6554,0855,87515,700
Compensatory and Contingency
Financing Facility3,0211,6021,3366852,8453,0322,992745413
Systemic Transformation Facility3,8483,9843,9843,3693,3642,7181,9331,311644
Subtotal (GRA)32,14036,26834,53949,70160,65143,96842,21952,08165,978
SAF Arrangements1,2771,208954730565456432341137
PRGF Arrangements23,3184,4694,9045,5055,8705,8575,9516,1886,676
Trust Fund1029590908989898989
Total36,33742,04040,43856,02667,17550,37048,69158,69972,879
Percent of total
Stand-By Arrangements1414945463843354947
Extended Arrangements282428222533332621
Supplemental Reserve Facility131991022
Compensator}’ and Contingency
Financing Facility843146611
Systemic Transformation Facility10910755421
Subtotal (GRA)878685899087878891
SAF Arrangements33211111—3
PRGF Arrangements2911121091212119
Trust Fund333333333
Total100100100100100100100100100

Includes outstanding credit tranche and emergency purchases.

Includes outstanding associated loans from the Saudi Fund for Development.

Less than ½ of 1 percent of total.

Includes outstanding credit tranche and emergency purchases.

Includes outstanding associated loans from the Saudi Fund for Development.

Less than ½ of 1 percent of total.

Table II.9Summary of Bilateral Contributions to the PRGF and PRGF-H1PC Trusts(In millions of SDKs; as of April 30, 2003)
PRGF TrustPRGF-HIPC Trust
Subsidy contributionsSubsidies and HIPC grant
"as needed"1Loan commitments2contributions "as needed"3
Total3,490.215,722.71,561.6
Major industrial countries2,294.012,864.8880.5
Canada204.3700.048.8
France474.42,900.082.2
Germany197.72,750.0127.2
Italy157.81,380.063.6
Japan723.15,134.8144.0
United Kingdom358.982.2
United States177.7332.6
Other advanced countries980.82,452.8299.7
Australia14.824.8
Austria62.814.3
Belgium120.8350.035.3
Denmark66.9100.018.5
Finland42.18.0
Greece39.66.3
Iceland4.60.9
Ireland8.15.9
Israel1.8
Korea60.092.715.9
Luxembourg14.10.7
Netherlands141.6450.0454
New Zealand1.7
Norway45.5150.018.5
Portugal5.36.6
San Marino0.05
Singapore32.716.5
Spain26.2708.423.3
Sweden186.318.3
Switzerland109.5601.737.0
Fuel-exporting countries17.249.593.1
Algeria5.5
Brunei Darussalam0.1
Gabon42.5
Iran, Islamic Republic of2.02.2
Kuwait3.1
Libya7.3
Nigeria13.9
Oman0.8
Qatar0.5
Saudi Arabia15.149.553.5
United Arab Emirates3.8
Other developing countries184.9355.6221.1
Argentina535.116.2
Bangladesh0.91.7
Barbados04
Belize0.3
Botswana2.35.7
Brazil15.0
Cambodia0.04
Chile4.04.4
China14.9200.019.7
Colombia0.9
Cyprus0.8
Egypt13.3155.61.3
Ghana0.5
India13.222.9
Indonesia6,18.2
Jamaica2.7
Malaysia46.012.7
Malta2.11.1
Mauritius0.1
Mexico54,5
Micronesia, F. S.0.006
Morocco9.71.6
Pakistan4.03.4
Paraguay0.1
Peru2.5
Philippines6.7
Samoa0.00-6
South Africa28.6
Sri Lanka0.6
St. Lucia0.1
St. Vincent and the Grenadines0.1
Swaziland0.01
Thailand17.24.5
Tunisia1.81.5
Turkey11.6
Uruguay2.62.2
Vietnam0.4
Countries in transition13.442.9
Croatia0.4
Czech Republic1344.1
Estonia0,5
Hungary6.0
Latvia1.0
Poland12.0
Russian Federation14.6
Slovak Republic4.0
Slovenia0.4
Pending contributions to the PRGF-
HIPC Trust (“as needed”)324.1
Bahrain0.9
Dominican Republic0.5
Fiji0.1
Grenada0.1
Lebanon0.4
Maldives0.01
Venezuela20.4
Tonga0.02
Trinidad and Tobago1.6
Vanuatu0.1

The calculations are based on actual interest rates through end-June 2002 and an assumed SDR interest rate of 5 percent per annum thereafter.

Excludes a loan commitment from the OPEC Fund for International Development of US$50 million (equivalent to SDR 37 million).

The term “as needed” refers to the nominal undiscounted sum of the projected delivery of HIPC assistance plus the profile of projected subsidy needs associated with PRGF lending during 2002-05.

Contribution to the PRGF-HIPC Trust includes a pending balance of SDR 1.9 million “as needed.”

Contribution to the PRGF-HIPC Trust includes a pending balance of SDR 6.4 million “as needed.”

Less than SDR 5,000.

The calculations are based on actual interest rates through end-June 2002 and an assumed SDR interest rate of 5 percent per annum thereafter.

Excludes a loan commitment from the OPEC Fund for International Development of US$50 million (equivalent to SDR 37 million).

The term “as needed” refers to the nominal undiscounted sum of the projected delivery of HIPC assistance plus the profile of projected subsidy needs associated with PRGF lending during 2002-05.

Contribution to the PRGF-HIPC Trust includes a pending balance of SDR 1.9 million “as needed.”

Contribution to the PRGF-HIPC Trust includes a pending balance of SDR 6.4 million “as needed.”

Less than SDR 5,000.

Table II.10Holdings of SDRs by All Participants and by Groups of Countries as Percentage of Their Cumulative Allocations of SDRs, at End of Financial Years Ended April 30, 1994-2003
Nonindustrial Countries1
Net debtor countries
AllIndustrialAll nonindustrialNet creditorAll net debtorHeavily indebted
Participants1Countries2countriescountriescountriespoor countries
199471.077.956.3222.547.712.5
199590.9105.160.4263.949.814.1
199691.4102.467.9285.556.617.4
199787.299.860.5303.647.817.3
199895.0107.069.4323.756.124.1
199981.194.652.5170.746.326.3
200084.695,062,5174.156.620.6
200186.6101.654.6204.246.512.4
200291.5107.756.9227.944.714.6
200393.0102.472.0173.757.717.1

Consists of member countries that are participants in the SDR Department. At the end of FY2003, of the total SDRs allocated to participants in the SDR Department (SDR 21.4 billion), SDR 1.5 billion was not held by participants, but instead by the IMF and prescribed holders.

Based on IFS classification (International Monetary Fund, International Financial Statistics, various years).

Consists of member countries that are participants in the SDR Department. At the end of FY2003, of the total SDRs allocated to participants in the SDR Department (SDR 21.4 billion), SDR 1.5 billion was not held by participants, but instead by the IMF and prescribed holders.

Based on IFS classification (International Monetary Fund, International Financial Statistics, various years).

Table II.11Key IMF Rates, Financial Year Ended April 30, 2003(In percent)
SDR Interest RateSDR Interest Rate
Periodand Unadjusted RateBasic RatePeriodand Unadjusted RateBasic Rate
Beginningof Remuneration1of Charge1Beginningof Remuneration1of Charge1
2002
May 12.282.82November 42.102.59
May 62.302.84November 111.982.45
May 132.302.84November 181.992.46
May 202.332.88November 251.972.43
May 272.312.85
December 21.962.42
June 32.322.87December 91.922.37
June 102.322.87December 161.922.37
June 172.312.85December 231.942.40
June 242.322.87December 301.912.36
July 12.302.842003
July 82.332.88January 61.912.36
July 152.282.82January 131.902.35
July 222.292.83January 201.892.33
July 292.252.78January 271.882.32
August 52.222.74February 31.862.30
August 122.212.73February 101.842.27
August 192.212.73February 171.822.25
August 262.232.75February 241.812.24
September 22.252.78March 31.762.17
September 92.222.74March 101.732.14
September 162,242.77March 171.762.17
September 232.222.74March 241.752.16
September 302.192.70March 311.742.15
October 72.192.70April 71.722.12
October 142.182.69April 141.742.15
October 212.232.75April 211.772.19
October 282.202.72April 281.752.16

Under the FY2003 decision on burden sharing, the rate of remuneration was adjusted downward and the rate of charge was adjusted upward to share the burden of protecting the IMF’s income from overdue charges and of contributing to the IMF’s precautionary balances. The amounts generated from burden sharing in FY2003 are refundable when overdue charges are paid and when overdue obligations cease to be a problem. The basic rate of charge presented is the effective rate following the retroactive reduction that was implemented after the end of the financial year. The basic rate of charge, which was set at 128.0 percent of the SDR interest rate, was reduced to 123.5 percent of the SDR interest rate as a result of the retroactive reduction.

Under the FY2003 decision on burden sharing, the rate of remuneration was adjusted downward and the rate of charge was adjusted upward to share the burden of protecting the IMF’s income from overdue charges and of contributing to the IMF’s precautionary balances. The amounts generated from burden sharing in FY2003 are refundable when overdue charges are paid and when overdue obligations cease to be a problem. The basic rate of charge presented is the effective rate following the retroactive reduction that was implemented after the end of the financial year. The basic rate of charge, which was set at 128.0 percent of the SDR interest rate, was reduced to 123.5 percent of the SDR interest rate as a result of the retroactive reduction.

Table II.12Members That Have Accepted the Obligations of Article VIII, Sections 2, 3, and 4, of the Articles of Agreement
Effective DateEffective Date
Memberof AcceptanceMemberof Acceptance
AlgeriaSeptember 15, 1997Guinea-BissauJanuary 1, 1997
Antigua and BarbudaNovember 22, 1983GuyanaDecember 27, 1966
ArgentinaMay 14, 1968HaitiDecember 22, 1953
ArmeniaMay 29,1997HondurasJuly 1,1950
AustraliaJuly 1, 1965HungaryJanuary 1, 1996
AustriaAugust 1, 1962IcelandSeptember 19, 1983
Bahamas, TheDecember 5, 1973IndiaAugust 20, 1994
BahrainMarch 20, 1973IndonesiaMay 7,1988
BangladeshApril 11, 1994IrelandFebruary 15, 1961
BarbadosNovember 3, 1993IsraelSeptember21, 1993
BelarusNovember 5, 2001ItalyFebruary 15, 1961
BelgiumFebruary 15, 1961JamaicaFebruary 22, 1963
BelizeJune 14, 1983JapanApril 1,1964
BeninJune 1, 1996JordanFebruary 20,1995
BoliviaJune 5, 1967KazakhstanJuly 16, 1996
BotswanaNovember 17, 1995KenyaJune 30, 1994
BrazilNovember 30, 1999KiribatiAugust 22, 1986
Brunei DarussalamOctober 10, 1995KoreaNovember 1, 1988
BulgariaSeptember 24, 1998KuwaitApril 5,1963
Burkina FasoJune 1, 1996Kyrgyz RepublicMarch 29, 1995
CambodiaJanuary 1, 2002LatviaJune 10, 1994
CameroonJune 1, 1996LebanonJuly 1, 1993
CanadaMarch 25, 1952LesothoMarch 5,1997
Central African RepublicJune 1, 1996LithuaniaMay 3,1994
ChadJune 1,1996LuxembourgFebruary 15, 1961
ChileJuly 27, 1977Macedonia, FYRJune 19,1998
ChinaDecember 1,1996MadagascarSeptember 18, 1996
ComorosJune 1, 1996MalawiDecember 7, 1995
Congo, Democratic Republic ofFebruary 10,2003MalaysiaNovember 11,1968
Congo, Republic ofJune 1,1996MaliJune 1,1996
Costa RicaFebruary 1, 1965MaltaNovember 30,1994
Cote d’IvoireJune 1, 1996Marshall IslandsMay 21,1992
CroatiaMay 29, 1995MauritaniaJuly 19, 1999
CyprusJanuary 9,1991MauritiusSeptember 29, 1993
Czech RepublicOctober 1, 1995MexicoNovember 12, 1946
DenmarkMay 1, 1967Micronesia, Federated States ofJune 24, 1993
DjiboutiSeptember 19, 1980MoldovaJune 30, 1995
DominicaDecember 13,1979MongoliaFebruary 1, 1996
Dominican RepublicAugust 1, 1953MoroccoJanuary 21, 1993
EcuadorAugust 31, 1970NamibiaSeptember 20, 1996
El SalvadorNovember 6, 1946NepalMay 30, 1994-
Equatorial GuineaJune 1,1996NetherlandsFebruary 15,1961
EstoniaAugust 15, 1994New ZealandAugust 5, 1982
FijiAugust 4, 1972NicaraguaJuly 20,1964
FinlandSeptember 25, 1979NigerJune 1,1996
FranceFebruary 15, 1961NorwayMay 11,1967
GabonJune 1, 1996OmanJune 19,1974
Gambia, TheJanuary 21, 1993PakistanJuly 1,1994
GeorgiaDecember 20, 1996PalauDecember 16, 1997
GermanyFebruary 15, 1961PanamaNovember 26, 1946
GhanaFebruary 21, 1994Papua New GuineaDecember 4, 1975
GreeceJuly 7, 1992ParaguayAugust 22, 1994
GrenadaJanuary 24, 1994PeruFebruary 15, 1961
GuatemalaJanuary 27, 1947PhilippinesSeptember 8, 1995
GuineaNovember 17, 1995PolandJune 1, 1995
PortugalSeptember 12, 1988SwitzerlandMay 29, 1992
QatarJune 4, 1973TanzaniaJuly 15, 1996
RomaniaMarch 25, 1998ThailandMay 4, 1990
Russian FederationJune 1, 1996Timor-LesteJuly 23, 2002
RwandaDecember 10, 1998TogoJune 1, 1996
St. Kitts and NevisDecember 3,1984TongaMarch 22, 1991
St. LuciaMay 30,1980Trinidad and TobagoDecember 13, 1993
St. Vincent and the GrenadinesAugust 24, 1981TunisiaJanuary 6, 1993
SamoaOctober 6, 1994TurkeyMarch 22,1990
San MarinoSeptember 23, 1992UgandaApril 5, 1994
Saudi ArabiaMarch 22,1961UkraineSeptember 24, 1996
SenegalJune 1,1996United Arab EmiratesFebruary 13, 1974
Serbia and Moutenegro1May 15,2002United KingdomFebruary 15, 1961
SeychellesJanuary 3, 1978United StatesDecember 10, 1946
Sierra LeoneDecember 14, 1995UruguayMay 2, 1980
SingaporeNovember 9, 1968VanuatuDecember 1, 1982
Slovak RepublicOctober 1,1995VenezuelaJuly 1, 1976
SloveniaSeptember 1, 1995Yemen, Republic ofDecember 10, 1996
Solomon IslandsJuly 24,1979ZambiaApril 19,2002
South AfricaSeptember 15, 1973ZimbabweFebruary 3, 1995
SpainJuly 15, 1986
Sri LankaMarch 15, 1994
SurinameJune 29, 1978
SwazilandDecember 11, 1989
SwedenFebruary 15, 1961

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Table II.13De Facto Exchange Rate Arrangement and Anchors of Monetary Policy as of April 30, 2003
Classification of De Facto Exchange Rate Regimes and Monetary Policy Frameworks
This classification system is based on members’ actual, de facto regimes, which may differ from their officially announced arrangements. The scheme ranks exchange rate regimes on the basis of the degree of flexibility of the arrangement or a formal or informal commitment to a given exchange rate path. It distinguishes between the more rigid forms of pegged regimes, such as currency board arrangements; other conventional fixed-peg regimes against a single currency or a basket of currencies; exchange rate bands around a fixed peg; crawling-peg arrangements; and exchange rate bands around crawling pegs, in order to help assess the implications of the choice of exchange rate regime for the degree of independence, of monetary policy. This includes a category to distinguish the exchange arrangements of those countries that have no separate legal tender. The system presents members’ exchange rate regimes against alternative monetary policy frameworks with the intention of using both criteria as a way of providing greater transparency in the classification scheme and to illustrate that different forms of exchange rate regimes could be consistent with similar monetary frameworks. The following explains the categories.
Exchange Rate Regimes
Exchange Arrangements with No Separate Legal Tender
The currency of another country circulates as the sole legal tender (formal dollarization), or the member belongs to a monetary or currency union in which the same legal tender is shared by the members of the union. Adopting such regimes is a form of surrendering the monetary authorities’ independent control over domestic monetary policy.
Currency Board Arrangements
A monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation. This implies that domestic currency be issued only against foreign exchange and that it remain fully backed by foreign assets, eliminating traditional central bank functions, such as monetary’ control and lender of last resort, and leaving little scope for discretionary monetary policy; some flexibility may still be afforded, depending on how strict the rules of the boards are.
Other Conventional Fixed Peg Arrangements
The Country (formally or de facto) pegs its currency at a fixed rate to another currency or a basket of currencies, where the basket is formed from the currencies of major trading or financial partners and weight sreflect the geographical distribution of trade, services, or capital flows. The currency composites can also be standardized, such as those of the SDR. There is no commitment to keep the parity irrevocably. The exchange rate may fluctuate within a narrow margin of Jess than ±1 percenr around a central rate or the maximum and minimum value of the exchange rate may remain within a narrow margin of 2 percent for at least three months. The monetary authority stands ready to keep the fixed parity through direct intervention (i.e., via sale/purchase of foreign exchange in the market) or indirect intervention (e.g., via aggressive use of interest rate policy, imposition of foreign exchange regulations or exercise of moral suasion that constrains foreign exchange acriviry, or through inrcrvenrion by other public institutions). Flexibility of monetary policy, rhough limited, is greater than in hard pegs, because traditional central banking functions are still possible, and the monetary authority can adjust the level of the exchange rate, although relatively infrequendy.
Pegged Exchange Rates within Horizontal Bands
The value of rhe currency is maintained within certain margins of fluctuation of at least ±1 percent around a formal or a de facto fixed central rate. It also includes the arrangements of the countries in the exchange rate mechanism (ERM) of the European Monetary System (EMS), which was replaced with the ERM 11 on January 1; 1999.
There is a limired degree of monerary policy discrerion, with the degree of discrerion depending on the band width.
Crawling Pegs
The currency is adjusted periodically in small amounrs ar a fixed rate or in response to changes in sclecrive quantitative indicators, such as past inflation differentials vis-a-vis major rrading partners, differentials between the target inflation and expected inflation in major trading partners, and so forth. The rate of crawl can be set to generate inflation-adjusted changes in the currency (backward looking), or set at a preannounced fixed rate and/or below the projected inflation differentials (forward looking). Maintaining a credible crawling peg imposes constraints on monetary policy in a similar manner as a fixed-peg system.
Exchange Rates within Crawling Bands
The currency is maintained within certain fluctuation margins of at least ±1 percent around a central rate, which is adjusted periodically at a fixed rare or in response to changes in selective quantitative indicators. The degree of flexibility of rhe exchange rate is a function of the width of the band, with bands chosen ro be either symmetric around a crawling central parity or to widen gradually with an asymmetric choice of the crawl of tipper and lower bands (in the latter case, there may not be a preannounced central rate). The commitmenr to maintain the exchange rate within rhe band continues to impose constraints on monetary policy, with the degree of policy independence being a function of rhe band width.
Managed Floating with No Predetermined Path for the Exchange Rate
The monetary authority influences exchange rate movements through active inrcrvenrion to counter the long-term rrend of the exchange rate without specifying a predetermined exchange rate path or wirhout having a specific exchange rate target. Indicators for managing the rare are broadly judgmental—e.g., balance of payments position, international reserves, parallel market developments—and adjustments may not be automatic. Intervention may be direct or indirect. A distinction is made between “tightly managed floating”—where intervention takes the form of very tight monitoring that generally results in a stable exchange rate without having a clear exchange rare path, with the aim of permirring authorities an extra degree of flexibility in deciding the tactics to achieve a desired path—and “other managed floating,” where the exchange rate is influenced in a more ad hoc fashion.
Independently Floating
The exchange rate is marker dcrermined, with any foreign exchange inrervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than at establishing a level for it. In these regimes, monetary policy is, in principle, independent of exchange rate policy.
Monetary Policy Frameworks
The exchange rate regime is presenred against alternative monetary policy frameworks in order to present the role of the exchange rate in broad economic policy and help identify potential sources of inconsistency in the monetary-exchange rate policy mix.
Exchange Rate Anchor
The monetary authority srands ready ro buy/sell foreign exchange at given quoted rates to maintain the exchange rate at its preannounced level or range; the exchange rate serves as the nominal anchor or intermediate target of monetary policy. This type of regime covers exchange rate regimes with no separate legal tender; CBAs; fixed pegs with and without bands; and crawling pegs with and without bands, where the rate of crawl is set in a forward-looking manner.
Mo netary Aggregate Anchor
The monetary authority uses its instruments to achieve a target growth rate for a monetary aggregate, such as reserve money, Ml, and M2, and the targeted aggregate becomes the nominal anchor or intermediate target of monetary policy.
Inflation-Targeting Framework
This involves the public announcement of medium-term numerical rargets for inflation with an institutional commitment by the monetary authority ro achieve these targets, Additional key features include increased communication with the public and the markets about the plans and objectives of monetary policymakers and increased accountability of the central bank for obtaining its inflation objectives. Monetary policy decisions are guided by the deviation of forecasts of furure inflation from the announced inflation rargcr, wirh the inflation forccasr acting {implicitly or explicitly) as the intermediate target of monetary policy.
Fund-Supported or Other Monetary Program
This involves implementation of monetary and exchange rate policies within the confines of a framework rhar establishes floors for international reserves and ceilings for ner domesric assers of the central bank. Because the ceiling on net domestic assets limits increases in reserve money through central bank operations, indicative targets for reserve money may be appended to this system.
Other
The counrry has no explicirly srarcd nominal anchor but rather monitors various indicators in conducting monetary policy, or there is no relevant information available for the country.
Monetary Policy Framework1
IME
Exchangesupported
Rate RegimeMonetaryInflation-or other
(number ofaggregatetargetingmonetary
countries)Exchange rate anchortargetframeworkprogramOther
ExchangeAnotherEuro urea3
arrangementscurrency asCFA france zoneAustria
with no separatelegal tenderECCU2WAEMUCAEMCBelgium
legal tender (41)EcuadorAntigua andBenin*Cameroon*Finland
El Salvador4BarbudaBurkina FasoCentral AfricanFrance
KiribatiDominica*Cote d’lvoire*Rep.Germany
MarshallGrenadaGuinea-Bissau*Chad*Greece
IslandsSt. Kitts andMali*Congo, Rep.ofIreland
MicronesiaNevisNiger*EquatorialItaly
PalauSt. LuciaSenegalGuineaLuxembourg
PanamaSt. VincentTogoGabonNetherlands
San Marinoand thePortugal
Timor-LesteGrenadinesSpain
Currency boardBosnia and Horizegovina*
arrangements (7)Brunei Darussalam
Bulgaria*
China—Hong Kong, SAR
Djibouti
Estonia
Lithuania
Other conventionalAgainst a single currency (33)Against a compasite (9)China†6
fixed pegArubaBotswana5
arrangements (42)Bahamas, The5Fiji
BahrainLatvia
BangladeshLibya
BarbadosMalta
BelizeMorocco
BhutanSamoa
Cape Verde*Seychelles
China†6Vanuatu
Comoros7
Eritea
Guinea*6
Jordan*6
Kuwait6
Lebanon6
Lesotho*
Macedonia, FYR6
Malaysia
Maldives6
Namibia
Nepal
Netherlands, Antilles
Oman
Qatar
Saudi Arabia
Suriname5,6
Swaziland
Syrian Arab Repubtic6
Turkmenistan6
Ukraine6
United Arab Emirates
Venezuela
Zimbabwe*
Pegged exchangeWithin a cooperative
rates withinarrangementOther bandSudan6Hungary†
horizontalERMII(l)arrangements (4)
bands (5)8DenmarkCyprus
Hungary†
Sudan6
Tonga
Crawling pegs (5)BoliviaTunisia
Costa Rica6
Nicaragua*
Solomon Islands6
Tunisia
Exchange ratesBelarusSlovenia†6Israel†
within crawlingHonduras
bands (5)9Israel†
Romania6
Slovenia†6
Managed floatingCambodia5Czech Rep.ArgentinaAfghanistan
with no pre-Egypt5ThailandAzerbaijanAlgeria3
announced pathGambia, The*CroatiaAngola3
for the exchangeGhanaEthiopiaBurundi3
rate (46)Guyana*KenyaDominican Rep35
Indonesia*KyrgyzGuatemala3
Iran, I.R ofRepublicHaiti36
Jamaica6Lao PDR5India3
MauritiusMoldova6Iraq10
São Tomé andMongoliaKazakhstan3
PríncipePakistanMauritania
ZambiaRwandaMyanmar3,5,6
Serbia andNigeria
Montenegro11Paraguay3
TajikistanRussian
VietnamFederation
Singapore3
Slovak Rep.3
Trinidad and
Tobago
Uzbekistan3,5
Independently
floating (36)Malawi*AustraliaAlbaniaJapan3
SierraBrazil*ArmeniaLiberia3
Leone*CanadaCongo, Dem.Papua New
Sri LankaChile5Rep. ofGuinea3
UruguayColombiaGeorgiaSomalia5-10
Yemen,IcelandMadagascarSwitzerland3
Rep. ofKoreaMozambiqueUnited States3
MexicoTanzania
New ZealandUganda
Norway
Peru*
Philippines
Poland
South Africa
Sweden
Turkey*
United
Kingdom
Sources: IMF Country Reports; and International Financial Statistics.

An asterisk (*) indicates that the country has an IMF-supported or other monetary program. A dagger (“j”) indicates that the country adopts more than one nominal anchor in conducting monetary policy (it should be noted, however, that it would not be possible, for practical reasons, to infer from this table which nominal anchor plays the principal role in conducting monetary policy).

These countries have a currency board arrangement.

The country has no explicitly stated nominal anchor, but rather monitors various indicators in conducting monetary policy.

For El Salvador, the printing of new colones, the domestic currency, is prohibited, but the existing stock of colones will continue to circulate, along with the U.S. dollar as legal tender until all colon notes wear out physically.

The member maintains an exchange arrangement involving more than one market. The arrangement shown is that maintained in the major market.

The regime operating de facto in the country is different from its de jure regime.

Comoros has the same arrangement with the French Treasury as the CFA franc zone countries do.

The band widths for these countries are Cyprus (±15%), Denmark (±2.25%), Hungary (±15%), Sudan (±2%), and Tonga (±5%).

The band widths for these countries are Belarus (±5%), Honduras (±7%), Israel (±22%), and Romania and Slovenia (unannounced).

Insufficient information on the country is available for classification.

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Sources: IMF Country Reports; and International Financial Statistics.

An asterisk (*) indicates that the country has an IMF-supported or other monetary program. A dagger (“j”) indicates that the country adopts more than one nominal anchor in conducting monetary policy (it should be noted, however, that it would not be possible, for practical reasons, to infer from this table which nominal anchor plays the principal role in conducting monetary policy).

These countries have a currency board arrangement.

The country has no explicitly stated nominal anchor, but rather monitors various indicators in conducting monetary policy.

For El Salvador, the printing of new colones, the domestic currency, is prohibited, but the existing stock of colones will continue to circulate, along with the U.S. dollar as legal tender until all colon notes wear out physically.

The member maintains an exchange arrangement involving more than one market. The arrangement shown is that maintained in the major market.

The regime operating de facto in the country is different from its de jure regime.

Comoros has the same arrangement with the French Treasury as the CFA franc zone countries do.

The band widths for these countries are Cyprus (±15%), Denmark (±2.25%), Hungary (±15%), Sudan (±2%), and Tonga (±5%).

The band widths for these countries are Belarus (±5%), Honduras (±7%), Israel (±22%), and Romania and Slovenia (unannounced).

Insufficient information on the country is available for classification.

Effective February 4, 2003, the Federal Republic of Yugoslavia changed its name to Serbia and Montenegro.

Appendix III

Principal Policy Decisions of the Executive Board

A. Disposition of Net Income for FY2003

1. SDR 69 million of the Fund’s net income for FY2003 derived from the application of paragraph 2 of Decision No. 12730(02/43)1 adopted April 26,2002, shall be placed to the Fund’s Special after the end of the financial year.

2. The expense derived from the application of International Accounting Standard 19—Employee Benefits during FY2003 shall be charged against the Fund’s Special Reserve and shall be recorded separately in the financial records of the Fund (EBS/03/43, 4/7/03).

Decision No. 12987-(03/36)

April 21, 2003

B. Rate of Charge on Use of Fund Resources for FY2004

1. Notwithstanding Rule I-6(4)(a), effective May 1, 2003, the proportion of the rate of charge referred to in Rule 1-6(4) to the SDR interest rate under Rule T-l shall be 132 percent.

2. The net income target for FY2004 shall be SDR 108 million. Any net income for financial year 2004 in excess of SDR 108 million shall be used to reduce retroactively the proportion of the rate of charge for financial year 2004. If net income for financial year 2004 is below SDR 108 million, the amount of projected net income for financial year 2005 shall be increased by the equivalent of that shortfall. For the purpose of this provision, net income shall be calculated without taking into account net operational income generated by the surcharges on purchases under the Supplemental Reserve Facility and Contingent Credit Lines, the surcharge on purchases in the credit tranches and under the Extended Fund Facility or the effect on income of the implementation of International of International According Standard 19—Employee Benefits (EBS/03/43, 4/7/03).

Decision No. 12988-(03/36)

April 21, 2003

C. Burden Sharing—Implementation in FY2004

Section I. Principles of Burden Sharing

1. The financial consequences for the Fund that stem from the existence of overdue financial obligations shall be shared between debtor and creditor member countries.

2. The sharing shall be applied in a simultaneous and symmetrical fashion.

Section II. Determination of the Rate of Charge

The rate of charge referred to in Rule I-6(4) shall be adjusted in accordance with the provisions of Section IV of this decision and Section IV of Executive Board Decision No. 12189-(00/45),2 adopted April 28, 2000.

Section III. Adjustment for Deferred Charges

Notwithstanding paragraph l(a) of Section IV of Executive Board Decision No. 12189-(00/45), adopted April 28, 2000, the rate of charge and the rate of remuneration determined under that Section shall be rounded to two decimal places.

Section IV. Amount for Special Contingent Account-1

1. An amount of SDR 94 million shall be generated during financial year 2004 in accordance with the provisions of this Section and shall be placed to the Special Contingent Account-1 referred to in Decision No. 9471-(90/98), adopted June 20, 1990.

  • 2. (a) In order to generate the amount to be placed to the Special Contingent Account-1 in accordance with paragraph 1 of this Section, notwithstanding Rule I- 6(4)(a) and (b) and Rule 1-10, the rate of charge referred to in Rule 1-6(4) and, subject to the limitation in (b), the rate of remuneration prescribed in Rule I-10 shall be adjusted in accordance with the provisions of this paragraph.

    (b) Notwithstanding paragraph 1 above, adjustments to the rate of charge and the rate of remuneration under this paragraph shall be rounded to two decimal places. No adjustment in the rate of remuneration under this paragraph shall be carried to the point where the average remuneration coefficient would be reduced below 85 percent for an adjustment period.

    (c) The adjustments under this paragraph shall be made as of May 1, 2003, August 1, 2003, November 1, 2003, and February 1, 2004; shortly after July 31 for the period May 1 to July 31; shortly after October 31 for the period from August 1 to October 31; shortly after January 31 for the period from November 1 to January 31; shortly after April 30 for the period from February 1 to April 30.

  • 3. (a) Subject to paragraph 3 of Decision No. 8780- (88/12), adopted January 29, 1988, the balances held in the Special Contingent Account-1 shall be distributed in accordance with the provisions of this paragraph to members that have paid additional charges or have received reduced remuneration as a result of the adjustment when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

    (b) Distributions under (a) shall be made in proportion to the amounts that have been paid or have not been received by each member because of the respective adjustments.

    (c) If a member that is entitled to a payment under this paragraph has any overdue obligation to the Fund in the General Department at the time of payment, the member’s claim under this paragraph shall be set off against the Fund’s claim in accordance with Decision No. 8271-(86/74),3 adopted April 30, 1986, or any subsequent decision of the Fund.

    (d) Subject to paragraph 4 of Decision No. 8780- (88/12), adopted January 29, 1988, if any loss is charged against the Special Contingent Account-1, it shall be recorded in accordance with the principles of proportionality set forth in (b).

Section V. Review

The operation of this decision shall be reviewed when the adjustment in the rate of remuneration reduces the remuneration coefficient to the limit set forth in paragraph 2(b) of Section IV of this decision and Section IV of Executive Board Decision No. L2189-(00/45),4 adopted April 28, 2000 (EBS/03/43, 4/7/03).

Decision No. 12989-(03/36)

April 21, 2003

D. Surcharges on Purchases Under Supplemental Reserve Facility and Contingent Credit Lines, and in Credit Tranches and Under Extended Fund Facility—Disposition of Net Operating Income

For financial year 2004, after meeting the cost of administering the PRGF Trust, any remaining net operational income generated by the surcharges on purchases under the Supplemental Reserve Facility and the Contingent Credit Lines and the surcharges on purchases in the credit tranches and under the Extended Fund Facility shall be placed, after the end of that financial year, to the General Reserve (EBS/03/43, 4/7/03).

Decision No. 12990-(03/36) SRF/CCL

April 21, 2003

E. Review of System of Special Charges

The Fund has reviewed the system of special charges applicable to overdue obligations to the General Resources Account, the Structural Adjustment Facility, and the Trust Fund (EBS/03/43, 4/7/03).

Decision No. 12991-(03/36) G/SAF/TR

April 21, 2003

F. Framework Administered Account for Technical Assistance Activities—Pacific Financial Technical Assistance Center Subaccount

In accordance with the terms and conditions of the Instrument establishing the Framework Administered Account for Technical Assistance Activities (Decision No. 10942-(95/33)),5 as amended, the Fund hereby approves the establishment of the “Pacific Financial Technical Assistance Center Subaccount,” which shall be used by the Fund to administer resources to be contributed by the Government of Australia, and any subsequent Contributors, as described in EBS/02/84, 5/15/02.

Decision No. 12751-(02/52)

May 22, 2002

G. Framework Administered Account for Technical Assistance Activities—Africa Regional Technical Assistance Centers Subaccount

In accordance with the terms and conditions of the Instrument establishing the Framework Administered Account for Technical Assistance Activities (Decision No.10942-(95/33))6 as amended, the Fund hereby approves the establishment of the Africa Regional Technical Assistance Centers Subaccount, which shall be used by the Fund to administer resources to be contributed by the Governments of France, the Federal Republic of Germany, Italy, the Netherlands, Norway/Ministry of Foreign Affairs, Sweden, and the United Kingdom, and any subsequent Contributors, as described in EBS/02/135(7/26/02).

Decision No. 12832-(02/88)

August 9, 2002

H. Implementation of Procedures for Surveillance: 2002 Review

The Executive Board has reviewed the general implementation of the Fund’s surveillance over members’ exchange rate policies, as required by paragraph VI of Procedures for Surveillance contained in the document entitled “Surveillance over Exchange Rate Policies” attached to Decision No. 5392-(77/63),7 adopted April 29,1977, as amended. The next review shall be conducted no later than August 10, 2002.

The Executive Board has reviewed the document entitled “Surveillance over Exchange Rate Policies” attached to Decision No. 5392-(77/63), adopted April 29, 1977, as amended, as required by paragraph 2 of that decision. The next review of the document shall be conducted no later than August 10, 2002;

Decision No. 12178-(00/41)

April 10, 2000,

as amended by Decision Nos. 12713-(02/38), April 5, 2002,

and 12792-(02/75),

July10, 2002

I. Implementation of Procedures for Surveillance: 2002 Review

The Executive Board has reviewed the general implementation of the Fund’s surveillance over members’ exchange rate policies, as required by paragraph VI of Procedures for surveillance contained in the document entitled “Surveillance over Exchange Rate Policies” Attached to Decision No. 5392-(77/63), adopted April 29,1977, as amended. The next review shall be conducted no later that July 15, 2004

The Executive Board has reviewed the document entitled “Surveillance over Exchange Rate Policies” attached to Decision No. 5392-(77/63), adopted April 29, 1977, as amended, as required by paragraph 2 of that decision. The next review of the document shall be conducted no later than July 15, 2004 (SM/02/184, Sup. 1, 6/18/02).

Decision No. 12793-(02/76)

July 15, 2002

J. Biennial Review of implementation of Fund Surveillance and of 1977 Surveillance Review—Changes in Article IV Consultation Cycles

1. Each member presently receiving financial assistance under a Fund arrangement shall immediately be placed on the 24-month consultation cycle and, in future, whenever a Fund arrangement is approved for a member, that member shall automatically be placed on the 24-month consultation cycle. Article IV consultations with such members shall be conducted in accordance with the procedures specified below

2. Article IV consultations with a member receiving financial assistance under a Fund arrangement will be expected to be completed within 24 months of the date of completion of the previous Article IV consultation with that member, except that the consultation cycle will be shortened under the following circumstances:

(a) where the most recent Article IV consultation with the member was completed 6 months or more before the date of approval of the relevant arrangement, the next Article IV consultation with that member will be expected to be completed by the later of (i) 6 months after the date of approval of the arrangement, and (ii) 12 months, plus a grace period of three months, after the date of completion of the previous Article IV consultation; and

(b) where, with respect to a member whose circumstances do not fall within paragraph 2(a), a program review under an arrangement for that member is not completed by the date for completion specified in the arrangement, the next Article IV consultation with that member will be expected to be completed by the later of (i) 6 months after the date specified in the arrangement for completion of the review, and (ii) 12 months, plus a grace period of 3 months, after the date of completion of the previous Article IV consultation, provided, however, that, where the relevant program review is completed before the later of the dates specified in (i) and (ii) above, the next Article IV consultation will be expected to be completed within 24 months of the date of completion of the previous Article IV consultation with that member.

Upon the expiration or cancellation of an arrangement for a member, that member shall automatically be placed on the standard 12-month consultation cycle and the next Article IV consultation with that member will be expected to be completed by the later of (i) 6 months after such expiration or cancellation, and (ii) 12 months, plus a grace period of 3 months, after the date of completion of the previous Article IV consultation, but in no event later than 24 months after the completion of the previous Article IV consultation (SM/02/184, Sup. 1, 6/18/02, Sup. 3, 9/5/02).

Decision No. 12794-(02/76), July 15, 2002,

as amended by Decision No. 12854-(02/96),

September 12, 2002

K. Modalities for Surveillance over Euro-Area Policies in Context of Article IV Consultations with Member Countries

The current frequency of Article IV consultations with individual euro-area countries, which are generally on the standard 12-month cycle, will be maintained.

There will be twice-yearly staff discussions with EU institutions responsible for common policies in the euro area. These discussions will be held separately from the discussions with individual euro-area countries, but are considered an integral part of the Article IV process for each member. The discussions with individual euro-area countries will be clustered, to the extent possible, around the discussions with the relevant EU institutions.

There will be an annual staff report and Board discussion on Euro-Area Policies in the Context of the Article IV Consultations with Member Countries, which will be considered part of the Article IV consultation process with individual members. In addition to monetary and exchange rate policies, the staff report will also cover from a regional perspective other economic policies relevant for Fund surveillance. Staff will report informally to the Board on the second round of discussions with EU institutions to provide adequate context for bilateral consultations with euro-area countries that do not coincide broadly with the annual Board discussion on the euro area.

There will be a summing up of the conclusion of the Board’s annual discussion on Euro-Area Policies in the Context of the Article IV Consultations with Member Countries. It will be cross-referenced in the summings up for the Article IV consultations with euro-area countries at the conclusion of the Article IV process for each country. To the extent that the summing up for the euro area covers economic policies that apply to all EU member countries and that are considered relevant for Fund surveillance, the pertinent parts of the summing up for the euro area could also be referred to in the bilateral Article IV consultations with EU member countries that are not part of the euro area (SM/02/359, 11/21/02).

Decision No. 12899-(02/119)

December 4, 2002

L. Eleventh General Review of Quotas–Period for Consent to Increases–Extension

Pursuant to Paragraph 4 of the Resolution of the Board of Governors No. 53-2,8 “Increase in Quotas of Fund Members—Eleventh General Review,” the Executive Board decides that notices of consent from members to increases in their quotas must be received in the Fund by 6:00 p.m., Washington time, on January 31, 2003

Decision No. 12802-(02/78)

July 19, 2002

M. Eleventh General Review of Quotas–Period for Consent to Increases–Extension

Pursuant to Paragraph 4 of the Resolution of the Board of Governors No. 53-2, “Increase in Quotas of Fund Members—Eleventh General Review,” the Executive Board decides that notices of consent from members to increases in their quotas must be received in the Fund by 6:00 p.m., Washington time, on July 31, 2003 (EBD/03/3, 1/15/03

Decision No. 12930-(03/3)

January 23, 2003

N. PRGF Trust and PRGF-HIPC Trust—Reserve Account—September 2002 Review

Pursuant to Decision No. 10286-(93/23)9 ESAP, the Fund has reviewed the adequacy of the Reserve Account of the PRGF Trust, and determines that amounts held in the account are sufficient to meet all obligations which could give rise to a payment from the Reserve Account to lenders to the Loan Account of the PRGF Trust in the six months from April 1, 2002, to September 30, 2002 (SM/02/273, 8/21/02).

Decision No. 12847-(02/94) PRGF

September 6, 2002

O. Establishment of a Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations

1. The Fund adopts the Instrument to Establish a Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations, which is annexed to this decision.

2. The Fund shall conduct semiannual reviews of the financing of the Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations.

Decision No. 11436-(97/10)

February 4, 1997,

as amended by Decision Nos. 11492-(97/45), April 24,1997,

11861-(98/131) ESAF, December 18, 1998

12087-(99/118) PRGF, October 21, 1999

effective November 2,1999,

12132-(00/9) PRGF, January 27, 2000,

12349-(00/118), December 1, 2000

12561-(01/85) PRGF, August 23, 2001

effective September 19,2001,

12680-(02/17) PRGF, February 20, 2002

12696-(02/27) PRGF, March 15, 2002, and

12777-(02/65), June 20, 2002,

and 12874-(02/110),

October 25, 2002

P. Access Policy in Capital Account Crises—Modifications to Supplemental Reserve Facility and Follow-Up Issues Related to Exceptional Access Policy

Decision No. 11627-(97/123),10 adopted December 17, 1997, on the Supplemental Reserve Facility and Contingent Credit Lines shall be amended as follows:

1. In Section I on the Supplemental Reserve Facility, paragraphs 6(a) and (b) shall read:

“6 (a) A member making purchases under this section shall repurchase the outstanding amounts of its currency resulting from such purchases within two and a half to three years from the date of each purchase in two equal installments; the first installment shall become due two and a half years and the second installment shall become due three years from the date of each purchase.

(b) The member will be expected to repurchase those amounts six months before they become due, provided that the Fund may, upon request by the member, decide to extend one or more such repurchase expectations by six months. If a member fails to make a repurchase as expected, the Fund may require the member to make the repurchase in question within a specified period not to exceed the repurchase schedule under (a) above.”

2. In Section II on Contingent Credit Lines,

(i) a new paragraph 18 bis shall be added:

“18 bis

(a) A member making purchases under this section shall repurchase the outstanding amounts of its currency resulting from such purchases within two to two and a half years from the date of each purchase in two equal semi-annual installments; the first installment shall become due two years and the second installment two and a half years from the date of each purchase.

(b) The member will be expected to repurchase those amounts one year before they become due, provided that the Fund may, upon request by the member, decide to extend each such repurchase expectation by up to one year. If a member fails to make a repurchase as expected, the Fund may require the member to make the repurchase in question within a specified period not to exceed the repurchase schedule under (a) above.

(c) The Fund shall not approve, and the Managing Director shall not recommend for approval, a request for the use of the general resources of the Fund by a member that is failing to meet a repurchase expectation under (b) above. Provision shall be made in each stand-by and extended arrangement for the suspension of further purchases under the arrangement whenever a member fails to meet a repurchase expectation under (b) above.”

(ii) in paragraph 19, the reference to “paragraph 6” shall be deleted.

3. The changes made by this decision to the Supplemental Reserve Facility shall apply only to purchases made after the date of this decision.

Decision No. 12943-(3/15)

February 21, 2003

Q. PRGF Trust and PRGF-HIPC Trust—Reserve Account—Review

Pursuant to Decision No. 10286-(93/23) ESAF,11 adopted on February 22,1993, as amended, the Fund has reviewed the adequacy of balances in the Reserve Account of the PRGF Trust, and determines that they are sufficient to meet all obligations that could give rise to payments from the Account to lenders to the Loan Account of the PRGF Trust in the six months from April 1, 2003, to September 30, 2003 (SM/03/100, 3/21/03).

Decision No. 12979-(03/31) PRGF

March 31, 2003

R. Joint Vienna Institute—Amendment of Agreement

The Managing Director is authorized to consent to the First Amendment to the Agreement for the Establishment of the Joint Vienna Institute pursuant to Article XI of that Agreement (EBAP/03/16, 2/11/03).

Decision No. 12941-(03/13)

February 19, 2003

See Selected Decisions, Twenty-Seventh Issue (December 31, 2002), page 386.

Ibid., page 378.

Ibid., page 372.

Ibid., page 378.

Ibid., page 150.

Ibid., page 150.

Ibid., page 10.

Ibid., pages 680–84.

Ibid., page 413.

Ibid., pages 325 and 627.

Ibid., page 41

Appendix IV

Relations with Other International Organizations

In the face of uneven global economic recovery and heightened geopolitical tensions, close cooperation between the IMF and other international organizations continued to be of critical importance over FY2003. In an increasingly integrated financial system, identifying risks and generating sustained and widespread momentum for economic growth require a high level of collaboration among the Fund, the World Bank, the United Nations (UN) and its specialized agencies, the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), the Bank for International Settlements (BIS), regional development banks, and intergovernmental groups.

Regional Representation and Technical Assistance

The IMF’s offices in Europe and the Regional Office for Asia and the Pacific maintain close ties with other international organizations. In FY2003, the Fund’s offices in Europe were reorganized to establish a new presence in Brussels and to streamline the staffing and management of the three European offices (Paris, Geneva, and Brussels). The new Brussels Office was created to enhance cooperation with European Union institutions, strengthen IMF surveillance activities in the area, and mount more effective outreach with a range of Brussels-based agencies.

The Paris Office remains the center of the IMF’s European representation, liaising with regional and international institutions located in Europe and contributing to the Fund’s European operations focusing on multilateral and regional surveillance. Paris Office staff regularly represent the Fund at donor and surveillance committees of the OECD in Paris, and one member of the Paris Office staff serves on the Secretariat of the Group of Ten (G-10). Additionally, they keep close contact with the BIS in Basel, and attend, on an ad hoc basis, meetings of organizations such as the Financial Action Task Force (FATF), the European Parliament, and the Council of Europe.

The Geneva Office monitors, analyzes, and reports on activities of Geneva-based socioeconomic agencies with particular emphasis on the multilateral trading system, along with trade-related developments in the European Union. These institutions include the WTO, the International Labor Organization (ILO), the UN Conference on Trade and Development (UNCTAD), the UN High Commissioner for Refugees (UNHCR), the UN Office of the High Commissioner for Human Bights (OHCHR), the World Health Organization (WHO), the UN Economic Commission for Europe (ECE), and the Inter-Parliamentary Union.

The IMF’s Regional Office for Asia and the Pacific, located in Tokyo, is responsible for enhancing surveillance and promoting the IMF’s initiatives in the Asia region. The Office works closely with regional groupings, such as the Asia Pacific Economic Cooperation (APEC), the Association of South East Asian Nations (ASEAN), the South Pacific Forum (FORUM), the South Asian Association for Regional Cooperation (SAARC), the South East Asian Central Banks (SEACEN), and the Executives’ Meeting of East Asia and Pacific Central Banks (EMEAP). In addition to providing the Secretariat for the Manila Framework Group, the Office also maintains close contact with two regional organizations, the Asian Development Bank (AsDB) and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and with the World Bank’s Office in Japan. It also facilitates the IMF’s participation in the Consultative Group meetings of donor nations held in the Asia and Pacific region.

The Africa Regional Technical Assistance Center (AFRITAC) in East Africa was opened in Dar es Salaam, Tanzania, on October 24, 2002, to strengthen locally based technical assistance and training, and thus to further efforts by the IMF and World Bank, in cooperation with donor parties, to build country ownership of poverty reduction efforts. Five such AFRITACs are planned for sub-Saharan Africa; the next to open will strengthen capacity building in West Africa. Originally planned to be based in Abidjan, it has temporarily been relocated to Bamako, Mali, because of civil unrest in Côte d’lvoire. The IMF provides similar technical assistance to assist its members in improving their economic and fiscal management practices in the Asia-Pacific region through the Pacific Financial Technical Assistance Center (PFTAC) and in the Caribbean through the Caribbean Regional Technical Assistance Center (CARTAC). The IMF also provides policy-related training to public sector officials and private sector managers through its support of the Joint Africa Institute, the Joint Vienna Institute, and the Singapore Regional Training Institute. Each of these facilities offers courses and seminars on topics of relevance to regional capacity building.

Collaboration with the World Bank

The collegial relationship between the IMF and the World Bank has existed since their founding at the Bretton Woods Conference of 1944. As mandated in their respective Articles of Agreements and in the joint 1989 Concordat, each plays an important, complementary role in ensuring the world’s economic growth and stability. Both institutions conduct regular consultations of their senior staff, participate together on missions, attend joint meetings, and share documents. Collaboration at the staff level, both in policy advice and on operational matters, is also guided by the ongoing dialogue between IMF and Bank management.

As the missions of the two institutions have evolved, it has been necessary periodically to redefine the rules of engagement and division of labor between the two organizations, with a view toward enhancing their overall effectiveness. Building upon the momentum of the previous year to strengthen the framework for Bank-Fund collaboration, the two institutions continued in FY2003 to consider ways to streamline and focus conditionality so as to strengthen country ownership of policy reform programs, thereby making them more effective. In August 2002, the Executive Boards of the IMF and the Bank reviewed the experience gained to date in implementing the Guidance Note on Operationalizing Bank-Fund Collaboration in Country Programs and Conditionality, issued in spring 2002. The Guidance Note forms the basis for collaboration on country programs and conditionality between the area departments of the Fund and the regional departments at the Bank. This review indicated broad support for the approach taken in the Guidance Note (see Chapter 4), and recommended that a further review should be undertaken in two years’ time.

The Fund and Bank also cooperate closely in monitoring financial system stability, especially through the Financial Sector Assessment Program (FSAP), which aims to increase the effectiveness of efforts to promote the soundness of financial systems in member countries. Detailed Financial System Stability Assessments (FSSAs) of observance of relevant financial sector standards and codes are a key component of the FSAP and in turn give rise to Reports on Observance of Standards and Codes (ROSCs) as a by-product. The value added from the program derives importantly from its collaborative nature.

On March 14 and 18, 2003, the IMF’s Executive Board reviewed experience to date with the FSAP. Ninety-five countries have already participated or agreed to participate in an FSAP assessment, including a significant number of systemically or regionally important countries and economies. Given the increasing number of countries now participating in the FSAP, the Fund and Bank will continue to work closely together over the coming year on developing ways to further streamline, focus, and prioritize the program.

Given synergies with assessments of prudential supervisory standards, the FSAP provides a suitable context to undertake assessments of countries’ efforts in respect of anti-money-laundering (AML) and combating the financing of terrorism (CFT). In its communiqué of September 28, 2002, the International Monetary and Financial Committee endorsed the earlier conditional agreement by the Boards of the Fund and Bank to add the Financial Action Task Force (FATF) 40 + 8 Recommendations to the list of standards for which ROSCs are prepared. In October 2002, the FATF Plenary endorsed the common AML/CFT methodology document developed by the Fund and Bank over FY2002, and agreed that it would be used in both Fund-Bank-led ROSCs and those led by the FATF and FATF-style regional bodies (FSRBs). Following this endorsement, on October 15, 2002 the Fund and Bank initiated a 12-month pilot program of AML/CFT assessments using the common methodology. It is expected that between 45 and 56 assessments will be completed over this period, including at least 36 led by IMF/Bank staff. Planning and executing the pilot program has involved extensive coordination and cooperation among the Fund, Bank, the FATF, FSRBs, and their members.

The joint Financial Sector Liaison Committee (FSLC) provides another mechanism for close Fund-Bank cooperation in identifying financial system weakness. Established in 1998, the FSLC helps to integrate into a coherent joint work program the various financial sector tasks assigned to the two institutions, and to facilitate coordination with the work of other institutions, especially in relation to reform of the financial sector. In September 2002, the FSLC reported to the Boards of the Fund and the Bank, focusing particularly on its ongoing work to improve the coordination of financial technical assistance between the two institutions, as well as with other donor organizations.

One of the most important areas of IMF and World Bank cooperation is their work toward the common objective of stimulating economic growth through the reduction of poverty and through debt relief. Launched by the Bank and Fund in 1996, the HIPC Initiative is a comprehensive approach to debt reduction for poor countries that entails coordinated action by the international financial community, including multilateral institutions. The HIPC Initiative is based on the country’s continued effort toward macroeconomic adjustment and structural and social policy reforms, while also providing financing for social sector programs—primarily basic health and education. All countries requesting HIPC Initiative assistance must have adopted a Poverty Reduction Strategy Paper (PRSP) through a broad-based participatory process. Fund and Bank staff work closely together in evaluating PRSPs and Interim Poverty Reduction Strategy Papers (I-PRSPs). The staffs of both institutions work together to prepare Joint Staff Assessments (JSAs) of the PRSPs, for referral to the Executive Boards of both institutions for decision. Over FY2003, 28 JSAs were completed by Fund and Bank staff.

Relations with the United Nations

The IMF works closely with the United Nations, through the IMF Special Representative to the UN and through other extensive institutional contacts. The mandate of the Special Representative, operating out of the Office at the United Nations in New York, is to foster communications and cooperation between the IMF and the UN. The most prominent functions of the UN Office include making the IMF’s views known, providing input for the deliberations at the UN on IMF-related issues, keeping the IMF informed of major developments within the UN system, and facilitating cooperation between the institutions.

During FY2003, collaboration between the IMF and the UN continued to focus on the challenges of financing development around the world. Following the commitments made at the UN International Conference on Financing for Development (FfD) in Monterrey, Mexico, in 2001 (the “Monterrey Consensus”), attention has increasingly focused on translating broad concepts for reducing poverty into a program for implementation. In his remarks to the annual High-Level Meeting of the UN Economic and Social Council (ECOSOC) held in New York on July 1, 2002, Managing Director Horst Köhler noted the need for concrete actions for addressing the “foremost challenge” of poverty and achieving measurable progress toward the Millennium Development Goals (MDGs). On July 11-13, 2002, IMF officials met with ministers and representatives of several other international organizations, including the UN, World Bank, OECD, the Asian and African Development Banks, and the European Commission in Rosendal, Norway, for informal discussions on maintaining a dynamic process for progressing the agreements reached at Doha and Monterrey.

Those objectives, and the importance of reducing poverty, were subsequently reaffirmed by Heads of State at the World Summit on Sustainable Development held in Johannesburg, South Africa, during August 29-September 5, 2002. The summit confirmed the primacy of macroeconomic stability and growth as the foundation of sustainable development, and recognized the Poverty Reduction Strategy Paper (PRSP) approach, suitably extended to encompass environmental concerns, as the basis of national sustainable development programs, where applicable. The Plan of Implementation agreed at the summit also confirms the commitments toward reducing poverty in the areas of trade and finance, globalization, institutional arrangements, and governance, all of which are directly relevant to the Fund’s mandate and work. The IMF, World Bank, and United Nations Environment Program (UNEP) presented a joint paper on “Financing for Sustainable Development” at the summit, and IMF staff participated in several panel discussions.

At the following High-Level Meeting of the ECOSOC held on April 14, 2003, Deputy Managing Director Eduardo Aninat reiterated the Fund’s strong commitment to poverty reduction in the context of its mandate, and cochaired a roundtable discussion on the domestic policies required to help achieve the MDGs. The continuing dialogue among the UN’s ECOSOC, the Bretton Woods institutions, and the WTO is an important means of enhancing policy coherence at national, regional, and international levels, since it brings together the different cultures of finance, trade, development, and foreign affairs.

Liaison with Other Intergovernmental Groups

As a member of the Financial Stability Forum (FSF), the IMF takes the lead on developing, organizing, and carrying out a process for assessing Offshore Financial Centers’ adherence to international standards. IMF staff attended the eighth meeting of the FSF held on September 3-4, 2002, in Toronto, Canada, at which progress on development of a methodology for Reports on Standards and Codes was noted. IMF staff also attended the FSF’s second regional meeting with financial stability authorities from the Asia-Pacific region in Beijing on October 11-12, 2002, and the ninth meeting of the FSF in Berlin on March 24-25, 2003. The Chairman of the FSF participated as an observer at the October 2002 and April 2003 meetings of the International Monetary and Financial Committee.

Collaboration between the IMF and World Trade Organization (WTO) takes place formally as well as informally, as outlined in their Cooperation Agreement signed in December 1996. Under the agreement, the IMF has observer status in WTO meetings and regularly attends formal meetings of most WTO bodies. In particular, IMF staff participate in the WTO-led Integrated Framework for Trade-Related Technical Assistance (a joint effort by six agencies, including the World Bank), contributes to the work of the WTO Working Group on Trade, Debt and Finance, and is a regular member of the Committee on Balance of Payments Restrictions. On August 9, 2002, First Deputy Managing Director Anne Krueger met with the outgoing Director-General of the WTO (Mr. Michael Moore) to explore avenues for cooperation in research. The Managing Director subsequently met with the incoming Director-General, Dr. Supachai Pantichpakdi, on October 13, 2002, to discuss areas where the Fund’s cooperation with the WTO may be particularly effective in the support of the Doha Development Agenda.

Throughout FY2003, the IMF continued to participate actively in the meetings and activities of other major intergovernmental groups, including the Group of Seven (G-7), Group of Ten (G-10), Group of Twenty (G-20), and Group of Twenty-Four (G-24). First Deputy Managing Director Anne Krueger attended the Annual Meeting of the G-20 Finance Ministers and Central Bank Governors on November 22–23, 2002. The Managing Director attended the meeting of G-7 Ministers and Central Bank Governors in Paris on February 22, 2003.

Cooperation with Regional Development Banks

Whether working to prevent crises, alleviate poverty, combat financial abuse, or strengthen the global economic system, the IMF works closely with the world’s multilateral and regional development banks. This collaboration includes formulation and implementation of policies in the economic and financial areas, release of information, and exchange of staff visits. In FY2003, the IMF worked with the Islamic Development Bank to facilitate establishment of the Islamic Financial Services Board; with the Inter-American Development Bank (IDB) to address the crisis in Uruguay; and with the African Development Bank (AfDB) to launch the AFRITACs. The Fund also participated with the European Bank for Reconstruction and Development (EBRD), Asian Development Bank (AsDB), World Bank, and other donor organizations in cosponsoring the third Forum on Poverty Reduction Strategies for the Commonwealth of Independent States (CIS-7), held in Almaty, Kazakhstan, on December 11-13, 2002. Deputy Managing Director Shigemitsu Sugisaki opened the follow-up high-level CIS-7 conference in Lucerne, Switzerland, in January 2003, which focused on “The Low-Income Countries of the CIS: Progress and Challenges in Transition” (see Box 5.2 in Chapter 5).

Role of IMF Management

In a globalized world, close cooperation among financial, trade, and development organizations is essential. Efforts to prevent crises and to promote growth depend upon the coordinated actions of many international institutions. This is especially true in times of economic uncertainty. IMF management plays an important role in promoting this multilateral collaboration in many international forums.

During April 28-May 3, 2002, Managing Director Horst Köhler conducted his third tour of the African continent since assuming office. He visited Dar es Salaam, Kinshasa, Abidjan, Ouagadougou, and Accra, where he attended meetings with heads of state, participated in a series of workshops, and held discussions with a broad cross section of society on a range of topics of importance to Africa. At the High-Level Meeting of the ECOSOC in New York on July 1, 2002, he reaffirmed the IMF’s commitment to the implementation of the Monterrey consensus. The Managing Director addressed the Treasury Select Committee of the House of Commons in London on July 4, 2002, and discussed the IMF’s work program and the fundamental changes it had undertaken in the areas of transparency, surveillance, conditionality, standards and codes, and other areas of the IMF’s core business. At the Symposium to Commemorate the 50th Anniversary of Japan’s membership in the IMF and World Bank, held in Tokyo on September 10, 2002, he spoke of the importance of strong leadership by the advanced economies to bolster investor confidence and sustain global economic recovery, and the specific need for Japan to undertake decisive reforms of the banking and corporate sectors and pursue antideflationary macroeconomic policies. The Managing Director traveled to Latin America during December 6-12, 2002, in order to meet with the presidents of Brazil, Colombia, and Chile—his second visit to Latin America since taking office. On March 11, 2003, he spoke at the Bank of Spain on the prospects for economic recovery in Latin America, noting that Mexico and Chile had been bright spots in an area facing particularly difficult economic circumstances, and that better policies in several countries, including Brazil and Colombia, had enabled them to withstand these pressures reasonably well.

The IMF’s Deputy Managing Directors also attended many conferences, meetings, and seminars throughout the year. On July 17, 2002, First Deputy Managing Director Anne Krueger addressed a National Bureau for Economic Research (NBER) conference on the lessons to be learned from the crisis in Argentina and how these could be used to raise the effectiveness of IMF efforts to prevent and resolve financial crises. Ms. Krueger participated in a panel discussion on “A World Without Globalization” at the World Economic Forum meeting held in Davos, Switzerland, on January 23-28, 2003. Deputy Managing Director Shigemitsu Sugisaki presented remarks on international perspectives on achieving financial stability at the first annual forum of the APEC Finance and Development Program in Beijing on May 26, 2002. Deputy Managing Director Eduardo Aninat delivered the keynote address at the opening of the AFRITAC in East Africa on October 24, 2002, and spoke of the importance of capacity building in Africa to develop strong and independent domestic institutions that are both a precondition to economic development and an insurance policy against external shocks. Mr. Aninat also traveled to Latin America in January 2003, and outlined a “self-help” agenda at conferences at the University of Viña del Mar in Chile and the Central Bank in Lima, Peru.

Appendix V

External Communications

In FY2003, the IMF continued to develop its ongoing efforts to improve understanding of and support for the Fund and its activities. Particular importance was placed on two-way communication with people through nonofficial channels, as the Fund continues to engage in self-assessment and reform and seeks to learn from its interlocutors. (For an account of developments in the IMF’s initiative to become more transparent and open to outside input, see Chapter 7.) Some activities in the main areas of external communications are described in this Appendix

Public Statements and Publications

In accordance with the IMF’s transparency policy, a further large volume of policy and country papers, and summaries of Board discussions, was released during FY2003. The Fund’s external website (http://www.imf.org) continued to be the primary vehicle for dissemination. During the year, an average of 120 items a month were added to the What’s New section of the website

Enhancements were made to the site’s search feature and navigation. New sections continued to be added, especially for Resident Representatives.

Inviting comments from the public on IMF policy proposals via the external website and in specially convened meetings and conferences has become commonplace. Recent examples include the Poverty Reduction Strategy Paper and Poverty Reduction and Growth Facility reviews, the review of IMF conditionally, and the establishment and work program of the Independent Evaluation Office.

Speeches and other public appearances by management and senior staff conveyed the IMF’s views on broad policy and economic issues ranging from IMF reform to the outlook for the world economy, and on specific country and regional issues. The IMF posted most speeches on the website within hours of delivery

Publication of economic and financial research and policy analysis papers included two issues of the World Economic Outlook, four issues of the Global Financial Stability Report; the quarterly magazine Finance & Development; and a wide array of books, manuals and guides, Occasional Papers, Working Papers, Policy Discussion Papers, pamphlets, and leaflets (see Table V.1).

To make the IMF’s technical and analytical work more accessible, the IMF published new titles in its Economic Issues, Issues Briefs and Factsheets series. Economic Issues are brief, simplified summaries of policy-related economic research findings. Issues Briefs discuss key issues facing the IMF and the global economy, while Factsheets explain in plain language how the IMF works.

The Media

Press briefings covering the IMF by the Director of the External Relations Department were held at headquarters for Washington-based journalists roughly every two weeks. Transcripts and videos of the briefings were posted on the IMF’s website shortly afterwards.

Press Releases on decisions taken by the Executive Board, and News Briefs expressing the views of management and senior staff on topical matters, were posted on the website and also distributed directly by fax to journalists and others. Over the course of the financial year, roughly 350 press releases and other communications to the press were prepared and distributed. From December 31, 2002, the News Brief series was consolidated into the Press Release series.

Press conferences with management and senior staff, held on such occasions as the Spring and Annual Meetings, and on release of major reports such as the World Economic Outlook and the Global Financial Stability Report, were also made widely available to the public as transcripts and videos posted on the website.

To reach wider audiences in a variety of countries and languages, the IMF has begun more frequently to prepare media articles—“op-eds,” which appear opposite a newspaper’s editorials—on country-specific issues. In particular, opportunities are being sought to place op-eds at important junctures, for instance, at the conclusion of an Article IV consultation or approval of a Fund arrangement.

Outreach to Civil Society

In December 2002, the IMF undertook a survey of outreach activities in its member countries. The survey confirmed that extensive outreach was being conducted by Fund staff, but revealed considerable variation across countries and regions. In general, the IMF’s dialogue with civil society, parliaments, and the media appears well-established in Africa and in the transition countries of Asia and Europe.

Following the Executive Board’s review of the IMF’s external communications strategy, the Fund initiated an examination of its relations with civil society organizations (CSOs). To. ensure that the process was independent and reflected a balanced spectrum of views from civil society, the IMF approached an outside expert to facilitate the discussion within the Fund and seek ideas from a variety of CSOs. One intended output of this study is a guide to good practices for IMF staff relations with CSOs.

The IMF also developed the Civil Society Newsletter into a quarterly electronic format, to disseminate information about Fund activities and policies of particular concern to civil society.

Public Outreach

IMF staff expanded efforts to engage students, academics, and the policy research community, and participated in discussions and delivered presentations on the IMF’s work, including governance, globalization, trade, and regional and country matters. In FY2003, some 170 separate briefings were given, along with the launching of biannual briefings to Washington- area “think tanks” to provide background on key issues surrounding upcoming Spring and Annual Meetings.

The IMF Center hosted close to 13,000 visitors in 2003. Well-established educational segments such as the “IMF in Action” and “Money Matters” were supplemented by new website educational offerings, such as interactive money and trading games for younger students, “Where in the World and What in the World is Money?” and “Trading Around the World.” Special events hosted by the Center in 2003 included the Carolyn Ball Award ceremony honoring retired IMF economist Margaret de Vries; the Global Ethics Exhibit, highlighting the role of religion and ethics in promoting peace and understanding; and the Peace Pole award presented to the IMF for its role in promoting international monetary and exchange rate cooperation. The Center also served as a polling station for the Foggy Bottom community during the mayoral election.

Through the IMF Civic Program, over $665,000 was donated to charities working to reduce poverty in the Washington, D.C., metropolitan region and in low-income countries. Close coordination between IMF staff and families and their World Bank and Inter-American Development Bank counterparts played an important part in strengthening these initiatives. In addition, goods—such as used computers and furniture—were donated to charitable and educational organizations.

Table V.IPublications Issued, Financial Year Ended April 30, 2003

* Available in English and selected other languages in full text on the IMF’s website (http://www.imf.org).

Reports and Other Documents
Annual Report of the Executive Board for the Financial Year Ended April 30, 2002*

(Chinese, English, French, German, and Spanish), Free.
Annual Report on Exchange Arrangements and Exchange Restrictions, 2002

$110; $55 to full-time university faculty members and students.
Summary Proceedings of the Fifty-Sixth Meeting of the Board of Governors (2001). * Free.
The IMF Committee on Balance of Payments Statistics, Annual Report,2002. * Free.
Selected Decisions and Selected Documents of the International Monetary Fund, 27th edition. Free.
IMF Financial Statements, Quarters ended April 30, 2002; October 31, 2002; January 31, 2003. Free.
Periodic Publications
Balance of Payments Statistics Yearbook

Vol. 53, 2002. A two-part yearbook. $98 a year.
Direction of Trade Statistics
Quarterly, with yearbook. $155 a year; $129 to full-time university faculty members and students. $70 for yearbook only.
Finance and Development*
Quarterly (Arabic, Chinese, English, French, and Spanish). Free by subscription. Airspeed delivery, $20. Individual copies, $10.
Government Finance Statistics Yearbook
Vol. 26, 2002 (Introduction and tides of lines in English, French, and Spanish). $80.
International Financial Statistics
Monthly, with yearbook, $495 a year; $247 to full-time university faculty members and students. $95 for yearbook only; $65 for monthly issues. International Financial Statistics is also available on CD-ROM and on the Internet at http://www.imfstatistics.org/; price information is available on request.
IMF Staff Papers*
Three times a year. $72 a year; $46 to full-time university faculty members and students.
IMF Staff Papers: Special Issue of the Proceedings of the Second Annual Research Conference (Vol. 49, 2002). $18.
IMF Research Bulletin*
Quarterly. Free.
IMF Survey*
Twice monthly, once in December (English, French, and Spanish).

Private firms and individuals are charged an annual rate of $109. Vol. 32-2002 (English), Vol. 32-2002 (French), and Vol. 32-2002 (Spanish).
Occasional Papers
No. 214. Advanced Country Experiences with Capital Account Liberalization, by Age Bakker and Bryan Chapple. 2002.
No. 216. Is the PRGF Living Up to Expectations?—An Assessment of Program Design, by Sanjeev Gupta, Mark Plant, Benedict Clements, Thomas Dorsey, Emanuele Baldacci, Gabriela Inchauste, Shamsuddin Tareq, and Nita Thacker. 2002.
No. 217.Managing Financial Crises: Recent Experience and Lessons for Latin America, edited by Charles Collyns and G. Russell Kincaid. 2003.
No. 218. Fiscal Vulnerability and Financial Crises in Emerging Market Economics, by Richard Hemming, Michael Kell, and Axel Schimmelpfenning. 2003.
Recent Occasional Papers are available for $25 each, with a price of $22 each to full-time university faculty members and students.
World Economic and Financial Surveys
World Economic Outlook*
A Survey by the Staff of the International Monetary Fund. Twice a year (April and September) (Arabic, English, French, and Spanish).

$49; $46 to full-time university faculty members and students.
Global Financial Stability Report, June, September, December 2002, March 2003.

$49; 546 to full-time university faculty members and students.
Exchange Arrangements and Foreign Exchange Markets: Developments and Issues, March 2003.

$42; $35 to full-time university faculty members and students.
Books and Seminar Volumes
Building Strong Banks Through Surveillance and Resolution, edited by Charles A. Enoch, David Marston and Michael W. Taylor. $38.
China: Competing in the Global Economy, edited by Wanda Tseng and Markus Rodlauer. $26.
Governance, Corruption, and Economic Performance, edited by George T. Abed and Sanjeev Gupta. $37.50.
Guyana: Experience with Macroeconomic Stabilization and Structural Adjustment and Poverty Reduction, by Philippe Egoumé-Bossogo, Ebrima Faal, Raj Nallari, and Ethan Weisman. $18.
Into the EU: Policy Frameworks in Central Europe, prepared by a staff team led by Robert Feldman and C. Maxwell Watson. $26.
Japan’s Lost Decade: Policies for Economic Revival, edited by Timothy Callen and Jonathan D. Ostry. $28.
Korean Crisis and Recovery, edited by David T, Coe and Se-Jik Kim, $32.
Statistical Implications of Inflation Targeting: Getting the Right Numbers and Getting the Numbers Right, by Carol S. Carson, Charles A. Enoch and Claudia H. Dziobek. $42.50.
Sweden’s Welfare State: Can the Bumblebee Keep Flying? by Subhash M. Thakur, Michael J. Keen, Balázs Horváth, and Valerie Cerra, $23.50.
The West Bank and Gaza: Economic Performance, Prospects, and Policies—Achieving Prosperity and Confronting Demographic Challenges, by Rosa A. Valdivieso, Ulric Erickson von Allmen, Geoffrey J. Bannister, Hamid R. Davoodi, Felix Fischer, Eva Jenkner, and Mona Said (Arabic). $25.
Manuals and Guides
Coordinated Portfolio Investment Survey Guide (Second Edition), by the Statistics Department (English, French, and Spanish). $26.
Government Finance Statistics Manual 2001, by the Statistics Department (Spanish, Chinese). $50.
International Reserves and Foreign Currency Liquidity for a Data Template, by Anne Y. Kester (French and Russian), $23.
Manual of Statistics of International Trade in Services, by staffs of the UN, EU, IMF, OECD, UNCTAD, and WTO (English), $30.
Manual on Fiscal Transparency, prepared by the Fiscal Affairs Department (Russian). $19.50.
Measuring the Non-Observed Economy: A Handbook, by staffs of the OECD, IMF, ILO, and Interstate Statistical Committee of the CIS (English). $50.
Monetary and Financial Statistics Manual, by the Statistics Department (Arabic), $40.
Quarterly National Accounts Manual: Concepts, Data Sources, and Compilation, by Adriaan M. Bloem, Robert J. Dippelsman, and Nils Ø Mæde (Russian). $40.
Economic Issues Series*
No. 26. Rural Poverty In Developing Countries: Implications for Public Policy, by Vito Tanzi and Howell Zee (Arabic). Free.
No. 28. Moral Hazard: Does IMF Financing Encourage Imprudence by Borrowers and Lenders? Timothy7 Lane and Steven Phillips (English, French, Spanish, Chinese, and Russian). Free.
No. 29. The Pension Puzzle: Prerequisites and Policy Choices in Pension Design, by Nicholas Barr (French, Spanish, Chinese, and Russian), Free.
No. 30. Hiding in the Shadows: The Growth of the Underground Economy, by Friedrich Schneider with Dominik Enste (French, Spanish, and Russian). Free.
No. 31. Corporate. Sector Restructuring: The Role of Government in Times of Crisis, by Mark R. Stone (English), Free.
Pamphlet Series*
No. 45. Financial Organization and Operations of the IMF, Sixth Edition, by the Treasurer’s Department (French, Spanish, and Russian). Free.
No. 53. Governance of the International Monetary Fund: Decision Making, Institutional Oversight, Transparency, and Accountability, by Leo Van Houtven. Free.
No. 54. Fiscal Dimensions of Sustainable Development, by Sanjeev Gupta, Michael J. Keen, Benedict J. Clements, Kevin T. Fletcher, Luiz R. De Mello, Jr., and Muthukumara Mani (English, French, and Spanish). Free.
Guide to the IMF Series*
What Is the International Monetary Fund? (Arabic.) Free.
Independent Evaluation Office ReportsEvaluation of Prolonged Use of IMF Resources, by the Independent Evaluation Office. $25
Working Papers and Policy Discussion Papers*
IMF Working Papers and Policy Discussion Papers are designed to make IMF staff research available to a wider audience. They represent work in progress and reflect the views of the individual authors rather than those of the IMF.
Working Papers 02/78-02/240 and 03/1-91 were issued in FY2003. $15 each; 5375 for annual subscription.
Policy Discussion Papers 02/7-02/13 and 03/1-03/2 were issued in FY2003. $10 each; annual subscription is included as part of the subscription to Working Papers.
Country Reports*
IMF Country Reports provide comprehensive material on economic developments and trends in member countries, including key statistics.
Country Reports 02/92-02/270 and 03/1-03/120 were issued in FY2003, $15 each.

Copies of IMF publications and videos may be obtained from Publication Services, International Monetary Fund, 700 19th Street, N.W., Washington, DC. 20431, U.SA.

Telephone: (202) 623-7430

Telefax: (202) 623-7201

E-mail: publications@imf.org

Internet: http://www.imf.org

Additional information about the IMF and its publications and videos—including the current Publications Catalog, a searchable IMF Publications Database, and ordering information and forms—is available on the World Wide Web (http://www.imf.org).

Appendix VI

Press Communiqués of the International Monetary and Financial Committee and the Development Committee

International Monetary and Financial Committee of the Board of Governors the International Monetary Fund

PRESS COMMUNIQUÉS

Sixth Meeting, Washington D.C., September 28, 2002

1. The International Monetary and Financial Committee held its sixth meeting in Washington, D.C., on September 28, 2002, under the Chairmanship of Mr. Gordon Brown, Chancellor of the Exchequer of the United Kingdom.

The Global Economy and Financial Markets

2. The Committee observes that the global economic recovery is proceeding, although at a slower pace than expected earlier this year. Growth is expected to strengthen in the near term, supported by a strong policy response across the international community. However, there remain downside risks and uncertainties, as well as medium-term challenges associated with persistent imbalances, underscoring the need for vigilance. IMF members should continue to be ready to adapt policies as necessary in order to foster broad and sustained growth, to strengthen policy and regulatory frameworks, and to support durable poverty reduction. The Committee underscores the importance of stability in oil markets at prices reasonable for consumers and producers.

3. In the advanced economies, growth generally is expected to strengthen. However, monetary policymakers should remain ready to respond to developments where necessary and to ease policy further if the risk of economic weakness intensifies and inflation prospects remain subdued. In Japan, monetary easing should help end deflation. In many countries, there is scope for automatic stabilizers to operate, but fiscal policy needs to be attentive to the medium-term challenge of consolidation in order to ensure sustainable debt levels, improve the scope to respond flexibly to future economic shocks, and help address challenges such as those associated with population aging. Structural reforms should also be pursued vigorously to further improve growth prospects and strengthen resilience:

  • In the United States, the actions under way to strengthen corporate governance, accounting, and auditing are important to underpin confidence;

  • In Europe, further reforms, particularly in labor and product markets, are needed;

  • In Japan, banking and corporate restructuring should be vigorously pursued, in particular addressing the issue of nonperforming loans.

4. Performance in emerging markets has been mixed, reflecting both global developments and domestic circumstances. While growth in Asia has picked up strongly, several economies in Latin America in particular are facing a deterioration in conditions due to external developments, country-specific vulnerabilities, and policy uncertainties. In countries that have room to maneuver, the policy stance should generally remain accommodative, but countries facing external financing difficulties will need to continue to give priority to restoring market confidence. The Committee welcomes Brazil’s commitment to sound policies. It acknowledges the positive steps taken in recent months by Argentina to address its difficult economic situation, and urges the authorities, in cooperation with the Fund, to move quickly to reach agreement on a sustainable economic program that could receive the support of the international financial institutions and provide the basis for the reestablishment of stability and growth.

5. Many of the developing countries have also been affected by global developments and adverse movements in commodity prices, as well as domestic circumstances. The Committee reiterates the need for sustained international efforts to fight poverty. The Global Development Compact embodied in the Monterrey Consensus and the Doha Development Agenda—based on mutual accountability, country ownership, sound domestic policies and institutions, good governance, increased and more effective international support, and commitment to an open multilateral trading system—was reaffirmed at the World Summit in Johannesburg. The Committee looks forward to the effective implementation, with international assistance, of the New Partnership for Africa’s Development (NEPAD) to strengthen institutional foundations, governance, and infrastructure. Stressing the critical importance of technical assistance to support this effort, the Committee looks forward to the important contribution that the AFRITACs will play. It also calls for urgent international assistance to address the human and economic toll exacted by the drought in southern Africa. It also stresses the positive role of the CIS-7 initiative in improving prospects for enhanced growth and reduced poverty.

6. The Committee underscores the vital importance for global growth and effective development of achieving substantial trade liberalization in the Doha round of multilateral trade negotiations, which will benefit both developed and developing countries. Urgent progress is essential in enlarging market access for developing countries and phasing out. trade-distorting subsidies in developed countries. Developing countries should also further liberalize their trade regimes to maximize growth and development opportunities. Trade-related technical assistance is also important to support developing countries’ capacity building.

Strengthening Crisis Prevention and Resolution

7. The Committee welcomes the Managing Director’s report on the IMF in a Process of Change, which sets out the reforms under way to make the Fund more effective in promoting greater financial stability and stronger global growth, the progress which is being made, and the agenda for the period ahead.

8. The Committee supports the steps taken by the Fund to improve the quality and effectiveness of its policy advice, and to help countries strengthen policy frameworks and prevent crises. These are the key priorities for surveillance. In particular, the Committee:

  • stresses that rigorous vulnerability assessments will be key to the Fund’s crisis prevention efforts, and, in this regard, welcomes the progress in improving the framework for assessing debt sustainability and looks forward to its application to all members;

  • welcomes in this context the increased focus on the interactions between external shocks and domestic vulnerabilities, the strengthened focus on global capital markets in the Fund’s multilateral surveillance, and the recent steps to further improve data provision by members to the Fund;

  • emphasizes the importance of surveillance of systemically important countries and their impact on the global economy;

  • supports the Fund’s ongoing work to ensure that surveillance in program countries reassesses economic developments and strategy from a fresh perspective; and

  • underlines the need for high-quality and persuasive surveillance of all member countries to help them act promptly to minimize emerging vulnerabilities and avoid policies that might have negative regional or global effects.

The Committee will review, at its next meeting, ways of further enhancing the effectiveness of Fund surveillance. It looks forward to further progress in the voluntary publication of country staff reports, building on the positive role that improved transparency and data dissemination by the Fund and its membership are playing in informing the public and supporting financial market assessments.

9. The Committee notes the substantial progress on the Financial Sector Assessment Program and the standards and codes initiative, including their increasing integration into Fund surveillance. It looks forward to the forthcoming reviews of these initiatives, and calls on the Fund to consider ways to build on this progress, together with the World Bank and relevant standard-setting bodies, to address gaps, strengthen technical assistance, and promote broader participation. The Committee notes the importance of enhanced standards and principles on corporate governance, accounting, and auditing, and of stronger national practice. It also underscores the role that precautionary access to Fund financing can play in safeguarding sound policy frameworks in the face of uncertainty in international capital markets. The Committee looks forward to the forthcoming review of the Contingent Credit Lines.

10. The Committee endorses the Fund’s continuing work on private sector involvement and a stronger framework for crisis resolution to provide members and markets with greater clarity and predictability, including about the decisions the Fund will take in crisis management. In particular, the Committee welcomes the work under way to strengthen the policy on exceptional access to Fund resources. This involves more clearly defined criteria to justify exceptional access, and strengthened procedures for early consultation and decision making. The priority now is to finalize and implement the new framework, and the Committee calls for a progress report by the Spring meetings.

11. The Committee strongly welcomes the progress made with the contractual and statutory approaches to restructuring unsustainable sovereign debts. It welcomes the ongoing dialogue on collective action clauses in the G-10 and other fora with private creditors and emerging market sovereign issuers. Going forward, the Committee encourages the official community, the private sector, and sovereign debt issuers to continue working together to develop collective action clauses, and to promote their early inclusion in international sovereign bond issues; in that regard, it welcomes the recent decision by many countries to include collective action clauses. The Committee also calls on the Fund to consider the issues further and to develop, for consideration at its next meeting, a concrete proposal for a statutory sovereign debt restructuring mechanism to be considered by the membership.

The Fund’s Role in Low-Income Countries

12. The Committee supports the Fund’s continuing role in helping poor countries address the challenge of meeting the Millennium Development Goals by supporting economic reforms aimed at accelerating growth and reducing poverty. It welcomes the increased momentum in countries’ efforts to develop and implement their PRSPs, and the Fund’s and donors’ efforts to align their support more closely with PRSPs. It recognizes that there may be a need to consider mobilizing new PRGF resources if high demand for PRGF financing continues. The Committee stresses the importance of: sound macroeconomic frameworks that can respond flexibly to changes in the external environment; identifying ways to encourage higher and sustainable growth; good governance; improving public expenditure and financial management systems; and using poverty and social impact analysis more systematically, and building country capacity in this area. The Committee encourages the Fund and Bank to continue their collaboration on these issues and looks forward to reviewing progress. Furthermore, it looks forward to considering the results of the Fund’s work to better meet the diverse needs of its low-income members, including those stemming from disruptive exogenous shocks and emergence from conflict.

13. The Committee welcomes the progress made on the HIPC Initiative, allowing countries to benefit from lower debt servicing and higher social spending. It recognizes that significant challenges remain to ensure that countries achieve a lasting exit from unsustainable debt. The Committee reaffirms the commitment to implement the initiative and finance it fully to help countries overcome the burden of unsustainable debt, and underscores that the HIPC Initiative has the flexibility to provide additional debt relief at the completion point to help countries that have suffered a fundamental change in their economic circumstances due to exceptional exogenous shocks. These elements, together with sustained commitment to sound economic policies—including efforts to improve resilience to external shocks, to manage debt prudently, and to reinforce good governance—and new financing on appropriately concessional terms, should provide a basis for long-term sustainability. The Committee notes that the financing shortfall in the HIPC Trust Fund could be up to $1 billion, and welcomes the recent pledges of support. It calls on other governments to make firm pledges and contributions as a matter of urgency. Furthermore, it urges all official and commercial creditors that have not yet done so to fully participate in the HIPC Initiative. The Committee acknowledges that the issues of HIPC-to-HIPC debt relief and creditor litigation raise serious issues that should be addressed.

Combating Money Laundering and the financing of Terrorism

14. The Committee welcomes the actions taken by many countries to combat money laundering and the financing of terrorism, in response to the action plan agreed in Ottawa last year, and urges countries that have not fully responded to do so urgently. It also urges rapid progress on the exchange of information between authorities. The Committee commends the substantial progress made by the Fund, in close collaboration with the Bank, in advancing the action plan. It endorses the conditional addition of the Financial Action Task Force (FATF) recommendations to the list of standards and codes for which Reports on the Observance of Standards and Codes (ROSCs) are prepared, and looks forward to the final adoption of the methodology and an early start of the 12-month pilot program of assessments and accompanying ROSCs. The Committee encourages countries to make available additional experts and resources for the IMF/World Bank pilot program, welcomes the pledges made so far, and urges the IMF and World Bank to coordinate closely with the strong international and bilateral efforts to provide critically important technical assistance. The Committee looks forward to an interim report at its next meeting and a full report at the conclusion of the pilot program.

Other Issues

15. The Committee welcomes the adoption by the Fund’s Executive Board of new guidelines on conditionality, thus bringing to a successful conclusion the review of conditionality initiated by the Managing Director two years ago. The consistent implementation of these guidelines will help enhance the effectiveness of Fund-supported programs by fostering national ownership and streamlining conditionality, focusing it on elements critical to the success of members’ economic programs. The Committee stresses that strengthened collaboration with the World Bank is an integral part of these efforts to enable both institutions to provide complementary and effective support.

16. The Committee stresses the importance of the Fund having adequate resources to fulfill its financial responsibilities. Quotas should reflect developments in the international economy. The Committee notes that the Executive Board is continuing its consideration of the Twelfth General Review of Quotas and will present its report to the Board of Governors by January 2003. It recommends an early implementation of the Fourth Amendment.

17. The Committee welcomes the first report of the Independent Evaluation Office on “Prolonged Use of Fund Resources” to the Executive Board. It welcomes the establishment by Fund Management of an internal task force to propose steps to carry forward the report’s recommendations, as appropriate.

18. The next meeting of the IMFC will be held in Washington, D.C., on April 12, 2003.

Annex: International Monetary And Financial Committee Attendance September 28, 2002

Chairman

Gordon Brown

Managing Director

Horst Köhler

Members or Alternates

Ibrahim A. Al-Assaf, Minister of Finance and National Economy, Saudi Arabia

Julio Marcelino V. Bessa, Minister of Finance, Angola

Sir Edward George, Governor, Bank of England, United Kingdom

  • (Alternate for Gordon Brown, Chancellor of the Exchequer, United Kingdom

Tobias Nóbrega, Minister of Finance, República Bolivariana de Venezuela

  • (Alternate for Diego L. Castellanos, Governor, Banco Central de Venezuela)

Peter Costello, Treasurer of the Commonwealth of Australia

Dai Xianglong, Governor, People’s Bank of China

Ernst Welteke, President, Deutsche Bundesbank, Germany

  • (Alternate for Hans Eichel, Minister of Finance, Germany)

Nicoás Eyzaguirre, Minister of Finance, Chile

Geir Hilmar Haarde, Minister of Finance, Iceland

Hans Hoogervorst, Minister of Finance, The Netherlands

Mohammed K. Khirbash, Minister of State for Finance and Industry, United Arab Emirates

Aleksei Kudrin, Deputy Chairman of the Government and Minister of Finance, Russian Federation

Mohammed Laksaci, Governor, Banque d’Algérie

Pedro Sampaio Malan, Minister of Finance, Brazil

John Manley, Minister of Finance, Canada

Francis Mer, Minister of Economy, Finance and Industry, France

Paul H. O’Neill, Secretary of the Treasury, United States

Didier Reynders, Minister of Finance, Belgium

Syahril Sabirin, Governor, Bank Indonesia

Masaru Hayami, Governor, Bank of Japan

  • (Alternate for Masajuro Shiokawa, Minister of Finance, Japan)

Jaswant Singh, Minister of Finance and Company Affairs, India

Paul Toungui, Minister of State, Minister of Finance,

Economy, Budget and Privatization, Gabon

Giulio Tremonti, Minister of Economy and Finance, Italy

Kaspar Villiger, President of the Swiss Confederation and Minister of Finance, Switzerland

Observers

Yilmaz Akyuz, Director, Division for Globalization and Development Strategies, United Nations Conference on Trade and Development (UNCTAD)

Andrew D. Crockett, Chairman, Financial Stability Forum (FSF)

Willem F. Duisenberg, President, European Central Bank (ECB)

André Icard, Deputy General Manager, Bank for International Settlements (BIS)

Donald J. Johnston, Secretary-General, Organization for Economic Cooperation and Development (OECD)

Ian Kinniburgh, Director, Development Policy Analysis,

Department of Economic and Social Affairs, United Nations (UN)

Eddy Lee, Director, International Policy Group Department, International Labor Organization (ILO)

Trevor A. Manuel, Chairman, Joint Development Committee

Pedro Solbes Mira, Commissioner for Economic and Monetary Affairs, European Commission

Supachai Panitchpakdi, Director-General, World Trade Organization (WTO)

James D. Wolfensohn, President, World Bank

Seventh Meeting, Washington D.C., April 12, 2003

1. The International Monetary and Financial Committee held its seventh meeting in Washington, D.C., on April 12, 2003, under the Chairmanship of Mr. Gordon Brown, Chancellor of the Exchequer of the United Kingdom.

Global Economic Outlook

2. Meeting at a time of economic uncertainty, the Committee reaffirms its commitment to close international cooperation to strengthen confidence and support the global recovery. It underscores the importance of continued vigilance. But with readiness to adjust policies as necessary and determined further action on the structural front, the world economy has the prospect of strengthening growth and renewed prosperity. Substantial and concrete progress with multilateral trade liberalization is a key priority for the coming months and has the full political commitment of Ministers.

3. In the advanced economies, sound fundamentals and policies should deliver stronger growth in the second half of the year. With inflationary pressures well contained, monetary policies should remain accommodative, and in many countries there is room to ease monetary policy further if needed. On the fiscal side, the automatic stabilizers should be generally allowed to operate, though in many countries action is needed to address medium-term fiscal pressures, including those arising from aging populations. The advanced economies have a shared responsibility to go further in implementing structural reforms—to enhance prospects for a sustained broad-based world recovery that helps correct global imbalances. In the United States, policies consistent with a sound medium-term fiscal position remain important. In Europe, labor and product market reforms need to be accelerated. In Japan, further steps are needed to strengthen the banking and corporate sectors and end deflation, accompanied by a start toward strengthening the medium-term fiscal position.

4. Emerging market countries will need to continue to strengthen their policies for macroeconomic stability and structural reforms and therefore their resilience to adverse global developments. In countries facing external financing constraints, efforts to sustain macroeconomic stability will continue to be key to restoring confidence. For all countries, the continued implementation of reforms to strengthen banking and corporate sectors and underpin growth remains a priority. The IMF has a key role to play in supporting these efforts.

5. Prospects for stronger growth in low-income countries should be supported by improved economic policies, stronger institutions, progress in resolving regional conflicts, and increased donor resources, including through debt relief under the HIPC Initiative. Sustained implementation of sound policies, supported by strong ownership and the Monterrey Consensus, will remain key to reducing poverty and meeting the Millennium Development Goals (MDGs). African countries need to continue to press ahead with the wide-ranging reforms embedded in the New Partnership for Africa’s Development (NEPAD)—in particular to improve the quality of their institutions and ensure peace and security. The Committee reiterates the importance of technical assistance, including the contribution of AFRITACs and other regional technical assistance centers. It calls on the international community to urgently mobilize additional assistance to address the serious food shortage in Africa.

6. The Committee notes that the present situation in Iraq poses significant challenges, with an urgent need to restore security, relieve human suffering, and promote economic growth and poverty reduction. We support a further UN Security Council resolution. We further note that engagement by the international community, including the Bretton Woods institutions, would be essential for sustained economic, social, and political development in Iraq, recognizing that the Iraqi people have the responsibility to implement the right policies and build their own future. The IMF and the World Bank stand ready to play their normal role in Iraq’s redevelopment at the appropriate time. They will also monitor closely the impact of the conflict on all their members and stand ready to help and support those adversely affected. It is important to address the debt issue, and we look forward to early engagement of the Paris Club.

7. The Committee—having greatly benefited from the views of Dr. Supachai Panitchpakdi, Director-General of the World Trade Organization—underscores the urgency of concrete progress toward multilateral trade liberalization under the Doha Round through the continued commitment of the international community. This will be critical in supporting higher economic growth and poverty reduction, and enabling developing countries to participate more fully in the benefits of globalization. The Committee accordingly calls on industrial, emerging, and developing countries to play their part in renewed efforts to address obstacles to further progress in advance of the ministerial meeting of the World Trade Organization in Cancún next September. Urgent progress is needed in a number of areas, including agriculture, where better market access and lower trade distorting subsidies are particularly important for developing countries. The IMF, in collaboration with other international institutions, stands ready to support members’ closer regional cooperation in the context of deeper integration into world markets.

Strengthening Crisis Prevention

8. The Committee reiterates the importance it attaches to strengthening the IMF’s crisis prevention capacity and welcomes the steps in many countries to improve economic resilience and financial stability. However, there is still room for further improvement. Going forward, sustained implementation of a strengthened framework of bilateral, regional, and multilateral surveillance will be essential to provide more robust assessments of crisis vulnerabilities, debt sustainability, currency mismatches and other balance sheet and capital account developments, as well as further progress in strengthening data provision to the IMF and data dissemination to the public.

9. The Committee welcomes progress with the standards and codes process and the Financial Sector Assessment Program (FSAP) and the role these play in enhancing IMF surveillance. It calls on the IMF to continue to move forward with these initiatives to strengthen members’ institutions, policy frameworks, and financial sectors, including through technical assistance. It stresses the importance of further enhancing the quality and effectiveness of standards and codes assessments, and calls on the IMF to implement quickly agreed measures to strengthen prioritization, technical assistance, and follow up of FSAP and ROSC assessments. In this context, the Committee looks forward to the further work of the Financial Stability Forum and standard-setting bodies on strengthening the content and coverage of standards in accounting, auditing, and corporate governance, and on improving transparency and financial disclosure.

10. The Committee supports the IMF’s continued efforts to make surveillance more comprehensive and accountable, including through strengthening the IMF’s policy advice on reducing vulnerabilities; greater attention to the spillovers from policies in countries of systemic or regional importance; more effective use of the IMF’s cross-country experience; enhanced awareness of political economy factors; and bringing to bear a fresh perspective in surveillance of program countries. The Committee looks forward to the IMF’s further work on surveillance and other crisis prevention issues and a report on progress for this year’s Annual Meetings.

11. The Committee welcomes the increase in voluntary publication of country staff reports, but notes that the rate of publication across countries and regions remains uneven. It looks forward to further progress through the forthcoming review of the IMF’s transparency policy, and stresses that the candor of the IMF’s analysis and advice should be preserved.

12. The Committee emphasizes support for ways to achieve the objectives of the Contingent Credit Lines (CCL) in encouraging policies to reduce vulnerabilities and providing a means of support for members with strong policies in dealing with global financial developments. It looks forward to a report on how best to promote these objectives following the conclusion of the review of the facility.

Improving the Capacity to Resolve Financial Crises

13. Effective crisis resolution mechanisms, by promoting sound policies and better functioning capital markets, contribute to crisis prevention. The Committee welcomes the strengthened framework on access to IMF resources. This includes: the substantive criteria for exceptional access in capital account crises; and strengthened procedures, such as early involvement of the Executive Board in the process and a separate report evaluating the case for exceptional access. Consistent implementation of the framework will provide members and markets with clarity and predictability about IMF decisions in crises.

14. The Committee welcomes the inclusion of collective action clauses (CACs) by several countries, most recently Mexico, in international sovereign bond issues. It also welcomes the announcement that, by June of this year, those EU countries issuing bonds under foreign jurisdictions will include CACs. The Committee welcomes the work of the G-10, emerging markets, and the private sector in contributing to the development of CACs. It looks forward to the inclusion of CACs in international bond issues becoming standard market practice, and calls on the IMF to promote the voluntary inclusion of CACs in the context of its surveillance. The Committee welcomes recent initiatives to formulate a voluntary code of conduct for debtors and their creditors, which will improve the restructuring process, and encourages the IMF to contribute to this work.

15. The Committee welcomes the work of the IMF in developing a concrete proposal for a statutory sovereign debt restructuring mechanism (SDRM) and expresses its appreciation for the IMF management and staffs efforts. The extensive analysis and consultation undertaken in developing the proposal have served to promote better understanding of the issues to be addressed in bringing about orderly resolution of crises. The Managing Director’s report sets out the current position. The Committee, while recognizing that it is not feasible now to move forward to establish the SDRM, agrees that work should continue on issues raised in its development that are of general relevance to the orderly resolution of financial crises. These issues include intercreditor equity considerations, enhancing transparency and disclosure, and aggregation issues. The IMF will report on progress at the Committee’s next meeting.

Implementing Initiatives to Support Low-Income Countries

16. The Committee recognizes the urgent need to address the challenge of meeting the Millennium Development Goals, and reiterates that the IMF continues to have an important role to play in assisting low-income countries progress toward them. This will require enhanced efforts by developing and developed countries working in partnership. The Committee stresses the importance of sound macroeconomic policies and strong public expenditure and financial management systems. The Committee recognizes the urgent need to enhance market access and to increase the level and effectiveness of donor resources for developing countries. Proposals to achieve this, including facilities, arc being considered, and the Committee looks forward to progress in the coming months. Building on countries’ Poverty Reduction Strategy Papers (PRSPs), the Committee encourages the IMF to work with low-income countries to strengthen further the alignment of the PRGF, domestic budgets, and the PRSP approach. This will be facilitated through more realistic economic projections, systematic analysis of the sources of growth, effective Bank-Fund collaboration, and flexibility in program design, including to accommodate higher aid inflows. The Committee encourages donors to coordinate and harmonize their assistance in line with PRSP priorities, and to provide technical assistance to help members build the needed capacity to design and operationalize PRSP strategies and to improve public expenditure management. It endorses further work on the linkages between growth and poverty reduction, including the role of the private sector. The Committee also looks forward to the review of the role of the IMF in low-income countries over the medium term, and its paper on helping low-income countries to deal with shocks.

17. The Committee welcomes the further progress made in implementing the HIPC Initiative, but notes that some countries have experienced delays in reaching the completion point, and that other eligible countries are facing obstacles to participation in the Initiative. It looks forward to a review of these issues at its next meeting. The Committee reaffirms its commitment to the full financing of the Initiative. It urges all creditors to participate fully, and encourages further Bank- Fund efforts to help creditor and debtor countries address HIPC-to-HIPC debt relief and creditor litigation issues. It emphasizes the need to ensure lasting debt sustainability, which will require both the full implementation and financing of the Initiative, and continued sound economic policies, good governance, and prudent debt management. In this context, the Committee welcomes the efforts by some countries to provide additional debt relief beyond HIPC terms. The Committee supports joint Bank-Fund work to improve its assessments of longer-term debt sustainability for heavily indebted poor countries, and looks forward to a progress report at the next meeting.

Other Issues

18. The committee welcomes the further actions by members to combat money laundering and the financing of terrorism, and notes with satisfaction the progress with the 12- month pilot program of AML/CFT assessments. It underscores the importance of continued close cooperation between the IMF, the World Bank, the FATF, and regional bodies to complete the pilot successfully, and of further enchhancing the delivery of critically needed technical assistance. The committee encourages all members to adopt AML/CFT laws and practices consistent with the agreed international standards, and looks forward to a full report at the conclusion of the pilot program.

19. The Committee considers it important that, as pointed out in the Monterrey Consensus, all members should have an adequate voice and representation in the institution. It welcomes recent administrative steps to strengthen the capacity of the African constituencies. The Committee notes that the Twelfth General Review of Quotas has been concluded and that the IMF is well positioned to meet the projected needs of its members. The Committee looks forward to receiving a status report by the 2003 Annual Meetings on the adequacy of IMF resources, the distribution of quotas, and measures to strengthen IMF governance, consistent with the resolution of the Board of Governors, in the context of the Thirteenth General Review of Quotas. The Committee recommends completion of the ratification of the Fourth Amendment.

20. The Committee welcomes the thorough follow-up being given to the first report of the Independent Evaluation Office on prolonged use of IMF resources. It looks forward to future IEO reports as a way of enhancing the listening and learning culture within the IMF.

21. The Committee expresses its appreciation of the work of Eduardo Aninat as Deputy Managing Director.

22. The next meeting of the IMFC will be held in Dubai, on September 21, 2003.

Annex: International Monetary and Financial Committee Attendance April 12, 2003

Chairman

Gordon Brown

Managing Director

Horst Köhler

Members or Alternates

Hamad Al-Sayari, Governor, Saudi Arabian Monetary Agency

  • (Alternate for Ibrahim A. Al-Assaf, Minister of Finance and National Economy, Saudi Arabia)

Sir Edward George, Governor, Bank of England, United Kingdom

  • (Alternate for Gordon Brown, Chancellor of the Exchequer, United Kingdom

Felipe Pérez Martí, Minister of Planning and Development, República Bolivariana de Venezuela

  • (Alternate for Diego L. Castellanos, Governor, Banco Central de Venezuela

Ian Campbell, Parliamentary Secretary to the Treasurer, Australia

  • (Alternate for Peter Costello, Treasurer of the Commonwealth of Australia)

Job Graca, Deputy Minister of Finance, Angola

  • (Alternate for José Pedro de Morais, Jr., Minister of Finance, Angola)

Hans Eichel, Minister of Finance, Germany

Geir Hilmar Haarde, Minister of Finance, Iceland

A.H.E.M. Wellink, President, De Nederlandsche Bank N.V.

  • (Alternate for Hans Hoogervorst, Minister of Finance, The Netherlands)

Jamaludin Mohd Jarjis, Finance Minister II, Malaysia

Mohammed K. Khirbash, Minister of State for Finance and Industry, United Arab Emirates

Aleksei Kudrin, Deputy Chairman of the Government and Minister of Finance, Russian Federation

Mohammed Laksaci, Governor, Banque d’Algérie

Roberto Lavagna, Minister of Economy, Argentina

John Manley, Minister of Finance, Canada

Francis Mer, Minister of Economy, Finance and Industry, France

Antonio Palocci, Minister of Finance, Brazil

Guy Quaden, Governor, Banque Nationale de Belgiqu

  • (Alternate for Didier Reynders, Minister of Finance, Belgium)

Masajuro Shiokawa, Minister of Finance, Japan

Bimal Jalan, Governor, Reserve Bank of India

  • (Alternate for Jaswant Singh, Minister of Finance and Company Affairs, India)

Masajuro Shiokawa, Minister of Finance, Japan

Bimal Jalan, Governor, Reserve Bank of India

  • (Alternate for Jaswant Singh, Minister of Finance and Company Affairs, India)

John W. Snow, Secretary of the Treasury, United States

Paul Toungui, Minister of State, Minister of Finance,

Economy, Budget and Privatization, Gabon

Giulio Tremonti, Minister of Economy and Finance, Italy

Kaspar Villiger, Minister of Finance, Switzerland

Li Ruogii, Assistant Governor, People’s Bank of China

  • (Alternate for Zhou Xiaochuan, Governor, People’s Bank of China)

Observer

Oscar de Rojas, Acting Head, Financing for Development Office, Department of Economic and Social Affairs, United Nations (UN)

Willem F. Duisenberg, President, European Central Bank (ECB)

Heiner Flassbeck, Chief, Macroeconomic and Development Policies Branch, United Nations Conference on Trade and Development (UNCTAD)

Donald J. Johnston, Secretary-General, Organization for

Economic Cooperation and Development (OECD)

Malcolm D. Knight, General Manager, Bank for International Settlements (BIS)

Caio Koch-Weser, Interim Chairman, Financial Stability Forum (FSF)

Caio Koch-Weser, Interim Chairman, Financial Stability Forum (FSF)

Eddy Lee, Economic Adviser and Director, International Policy Group Department, International Labor Organization (ILO)

Trevor A. Manuel, Chairman, Joint Development Committee

Pedro Solbes, Commissioner for Economic and Monetary Affairs, European Commission

Supachai Panitchpakdi, Director-General, World Trade Organization (WTO)

James D. Wolfensohn, President, World Bank

Joint Ministerial Committee of the Boards of Governors of the Bank And the Fund on the Transfer of Real Resources to Developing Countries (Development Committee)

PRESS COMMUNIQUÉS

Sixty-Sixth Meeting, Washington D.C., September 28, 2002

1. We met today to discuss implementation of the strategies and decisions agreed in Monterrey and Johannesburg and achieving debt sustainability for heavily indebted poor countries.

2. At our meeting last April, we welcomed the very important progress achieved in Monterrey laying out a new partnership between developed and developing countries, based on mutual responsibility and accountability, to achieve measurable improvements in sustainable growth and poverty reduction. We welcomed the announcements by a number of donors of significant increases in their ODA. Earlier this month, the WSSD concluded in Johannesburg with a number of decisions that provide additional direction to our task of eradicating poverty and achieving sustainable development. A series of important commitments were made in the areas of water and sanitation, energy, health, agriculture, biodiversity, and ecosystem management, accompanied by the launch of implementation initiatives. Today we committed ourselves with a new vigor and determination to implement the agreed strategies and partnerships and to use our future meetings regularly to review progress through clear and measurable indicators. Building on the outcomes of Monterrey and Johannesburg, we also intend to have further discussions on global public goods.

3. The global community must now convert the ideas and the shared approaches agreed in Doha, Monterrey, and Johannesburg into concrete action and measure ongoing progress. Experience has repeatedly shown that progress will only be made through implementation of sound and sustainable country-driven strategies. To make existing and new aid commitments more effective, these strategies must also be supported by better coordination and cooperation among development partners and by effective alignment of donor support with country strategies. We underline our commitment to work together and with civil society and the private sector, under the leadership of the government concerned, in a coherent way to achieve concrete results.

4. We reaffirmed the crucial importance of trade as a source of growth and poverty reduction. We recognized that it is essential for developed countries to do more to open their markets and eliminate trade-distorting subsidies for products that represent major potential exports for developing countries, such as agriculture, textiles, and clothing. At the same time, we recognized the importance of continued efforts towards trade liberalization in developing countries as part of an overall development strategy, in conjunction with the necessary policies and capacities that facilitate an appropriate supply response and minimize the adjustment burdens on the poor. We therefore welcomed the increased attention to trade issues in the work of the World Bank and International Monetary Fund in support of a successful Doha Development Agenda. We urged intensified efforts to mainstream trade in the development dialogue with the Bank’s members, with an enhanced operational focus on building both institutional and physical capacity to help developing countries take advantage of new trade opportunities.

5. Last April, we endorsed a World Bank plan to help make primary education a reality for all children by 2015 and gender equality in primary and secondary education by 2005. Today we reviewed implementation of the Fast Track Initiative and requested a progress report on results achieved for our next meeting. In addition, we considered the challenges of scaling up activities in two additional areas—HIV/AIDS/ Communicable Diseases and water and sanitation. We urged the World Bank to pursue its work in these areas.

6. We endorsed the overall approach set out for discussion today for making results central to the management of development programs in both developing countries and in development agencies. We urged the Bank to expedite implementation of the action plan for increasing its results orientation and to intensify its work with multilateral and bilateral partners to share information on planned and ongoing country development activities, including diagnostic work and operational support, as a basis for enhanced alignment of donor support for national development strategies. We also urged increased use of joint evaluations of donor programs, especially for country and sector program support, to complement assessments of individual agencies’ performance, including as development partners. We highlighted the need for increased and coordinated donor support for capacity building, including for results-oriented monitoring and evaluation and statistics. We asked the Bank to report on these efforts at our next meeting.

7. We recognized the need for intensified efforts to harmonize operational policies and procedures of bilateral and multilateral agencies at the institutional and country levels so as to enhance aid effectiveness and efficiency and promote greater ownership by developing countries. We committed to further action in streamlining such policies, procedures, and requirements over the period leading to the high-level forum scheduled in Rome in February 2003 and beyond.

8. Recognizing the special challenges faced by Africa in meeting the Millennium Development Goals, we urge the Bank and the IMF to scale up assistance to these countries and to build on the NEPAD initiative as a unique opportunity to make significant and quick progress building on African leadership.

9. Our discussions have reinforced our conviction that major progress on achieving the Millennium Development Goals is possible. What is needed now is determined implementation of agreed strategies and partnerships on the part of both developed and developing countries, as well as multilateral agencies, and the setting out of a clear framework identifying responsibilities and accountabilities by which progress can be regularly measured. The Development Committee intends to contribute to moving this implementation agenda forward through regular monitoring and review of the policies, actions, and outcomes needed to achieve these goals. We request the Bank and the Fund to present proposals at our next meeting for taking this forward, while recognizing the role of the United Nations in monitoring the MDGs.

10. The Monterrey Summit also stressed the importance of greater coherence, coordination, and cooperation among multilateral organizations and the need to broaden and strengthen participation of developing countries and countries with economies in transition in international decision making and norm setting. The Summit encouraged the World Bank and the IMF to find pragmatic and innovative ways to further enhance participation of these countries and thereby to strengthen the international dialogue and work of these institutions. We requested the Bank and the Fund to prepare a background document to facilitate consideration of these important issues at our next meeting.

11. We welcomed the continued progress made on the HIPC Initiative and reconfirmed our commitment to its implementation and full financing. We fully support the objective of helping our poorest, most heavily indebted members achieve an enduring exit from unsustainable debt but we recognize that considerable challenges remain. Success will require: a sustained commitment by HIPC countries to improvements in domestic policies and economic management; capacity building for the management of financial assets and liabilities; full participation and delivery of relief by all affected creditors; and adequate and sufficiently concessional financing by international financial institutions and the donor community. We call upon all official and commercial creditors that have not yet done so to fully participate in the HIPC Initiative. We have asked the Bank and the Fund to undertake an early review of the difficult issues of HlPC-to- HIPC debt relief and creditor litigation. We stressed the urgency of meeting the financing shortfall of the HIPC Trust Fund, which could be up to $1 billion. We welcome the recent announcements of support and call upon other donor countries to make firm pledges and contributions as early as possible. At the same time, we reaffirm our commitment to ensuring that the cost of debt relief to IDA is not permitted to compromise IDA’s resources, and we note the arrangements in place to accomplish this objective.

12. We reviewed further experience with PRSPs, which confirmed the broad findings of the joint Bank/Fund review earlier this year. The Committee is encouraged by the increased momentum in countries’ efforts to develop and implement their PRSPs. We call on the Fund and Bank together with all donors to align their support with country PRSPs and to collaborate with each other to: strengthen their analysis of the sources of growth; streamline conditionality; help countries improve their public expenditure management systems; facilitate an environment conducive to private sector development; and intensify efforts to help countries undertake poverty and social impact analyses on a more systematic basis.

13. Finally, we reviewed the role being played by the Bank and Fund, in collaboration with other international institutions, in combating money laundering and the financing of terrorism (AML/CFT). We endorse the conditional addition of the FATF 40+8 Recommendations to the list of international standards and codes useful to the operational work of the Bank and the Fund, and the conditional beginning of the 12-month pilot program of comprehensive AML/CFT assessments and accompanying ROSCs, in accordance with the voluntary, cooperative, and uniform approach. We encourage the Bank and the Fund to continue to integrate these issues into their diagnostic and surveillance work in line with their respective mandates and to enhance their technical and capacity-building efforts.

14. We express our deep condolences to the family of the late Mr. Bernard Chidzero, former Minister of Finance of Zimbabwe. Minister Chidzero served with great skill and distinction as Chairman of the Development Committee from 1986 to 1990.

15. The next meeting of the Development Committee will be held in Washington, D.C. on April 13, 2003.

Sixty-Seventh Meeting, Washington D.C., April 13, 2003.

1. We met today to review progress in the work of implementing the strategies, partnerships, and actions agreed in Monterrey and Johannesburg to achieve the Millennium Development Goals1 and to consider ways to enhance the voice and participation of developing and transition countries in our institutions.

2. Since our meeting last fall, the global environment has become more uncertain. Slower economic growth, the war in Iraq, and failure to make more substantive progress on the Doha Development Agenda add to the challenge of implementing the global development agenda. We therefore strongly reaffirmed our commitment to the global effort needed to reduce poverty in developing and transition countries and achieve the MDGs.

3. To accelerate progress toward these and related goals, we emphasized the need for policies by both developed and developing countries in partnership to generate stronger economic growth complemented by actions to enhance the capabilities of poor people to participate in growth and access key social services. For developing countries, three interrelated areas in particular require strengthened efforts: improving the environment for investment and private sector activity, including macroeconomic stability and supporting infrastructure; strengthening governance, including public financial management, and capacity in the private and public sector; and increasing human capital through broader and more effective delivery of basic and social services to the poor. Such stronger reform efforts by developing countries would lay the foundations for enhanced growth and private financing. As agreed at Monterrey, these efforts need to be matched with stronger support from developed countries, in particular through increased market access for developing country exports, debt relief, and increases in the volume, predictability and effectiveness of aid. Proposals to achieve this, including facilities, are being considered, and we look forward to progress in the coming months. We are pleased that on April 8, IDA’s Thirteenth Replenishment became effective. We also reaffirmed our commitment to increased assistance to the sub-Saharan African and other countries that face special challenges in meeting the MDGs.

4. On improving aid quality, including its delivery and management aspects, we called for swift progress in implementing the results agenda and the agreements in the Rome Declaration on Harmonization. We underlined the central importance of anchoring strengthened efforts in country. country-owned strategies, as set out for low-income countries in PRSPs, linked to national budget processes and providing the country context within which donors and international agencies can align support.

5. We welcomed the progress on developing a global monitoring framework to allow the Committee to regularly assess progress and to reinforce accountabilities among developing and developed countries, as well as institutional partners, for the policies and actions for achieving the MDGs and related outcomes. We urged the Bank and the Fund to continue to work closely with partner agencies—UN, regional development banks, OECD/DAC, and WTO—using institutional mandates to guide the division of responsibilities for monitoring work. We called upon both multilateral agencies and bilateral donors to take the necessary steps to refine and harmonize their instruments of analysis and measurement. In this context, we urged the Bank, working in a participatory manner, to continue to improve the Country Policy and Institutional Assessment (CPIA) methodology and the transparency of its application. The urgency of the work on statistical capacity building, especially for those countries most at risk of not meeting the MDGs, was underlined. We look forward to the next global monitoring report.

6. Continuing progress on the Fast Track Initiative on Education for All was welcomed, although we recognized that more needs to be done to follow up on the commitment to adequately fund the initial seven countries and to provide the required support to other countries that meet the eligibility criteria. Furthermore, extra efforts are needed to achieve the 2005 MDG on gender parity in access to primary and secondary education. We asked, before our next meeting, to be informed on progress. We reviewed progress on water and sanitation and underlined the important contribution that these make to the other development goals. We welcomed the Bank’s recent strategy to enhance support to the water sector and look forward to its implementation. We noted the recent report of the Panel on Financing Water Infrastructure, and asked the Bank to consider, before our next meeting, how it can implement relevant recommendations of the Panel report. We also considered progress in health and HIV/AIDS and encouraged the Bank to strengthen further its cooperation with other partners and to intensify its efforts at the country level. While each service sector will have to find its own approach to accelerating progress, we underlined the importance of anchoring the efforts to achieve MDG goals in country-owned strategies such as in PRSPs for low-income countries. We stressed that sound policies and efforts by developing countries should be supported by adequate and appropriate financing and we asked the Bank to report on progress in this regard at our next meeting.

7. We emphasized the critical role of investment in infrastructure for economic growth, and its linkages with the provision of social services and the attainment of the MDGs. We welcomed the Bank’s renewed commitment to increase its support to such investment and asked the Bank to report on its further efforts at our next meeting.

8. Trade remains of crucial importance to growth and poverty reduction. At a time of global uncertainty, it is even more important to demonstrate that multilateral cooperation can succeed in meeting the ambitious targets set for the Doha Development Agenda. We urge countries to come to an agreement quickly in those areas where Doha deadlines have already been missed. It is essential for developed countries to do more to liberalize their markets and eliminate trade-distorting subsidies, including in the areas of agriculture, textiles, and clothing, which are of particular importance for developing countries. At the same time, we emphasize the importance of trade facilitation and liberalization efforts in developing countries. These efforts must be integrated into an overall development strategy, in conjunction with the necessary policies, infrastructure, and institutional capacities that strengthen their ability to participate in international trade. We call on the Bank and the Fund to continue to step up their efforts to support trade. We urge that future Country Assistance Strategies include trade-enhancing lending operations and capacity building for member countries where such trade-related support is a clear country priority.

9. Enhancing the voice and effective participation of developing and transition countries in the work and decision making of the Bretton Woods Institutions can contribute importantly to strengthening the international dialogue and the effectiveness of these institutions. We welcomed the recent capacity-enhancing decisions by the Executive Boards of the Bank and the Fund and we urge them to consider additional steps that might be taken. These decisions will help to ensure that a more effective capacity exists to articulate the views and concerns of all members. We encourage potential donors to actively pursue the idea of creating a financing mechanism that could support independent research and advice in key policy areas. Broader and more far-reaching ideas have also been advanced to help achieve enhanced participation in the institutions. We note that a status report by the Fund Executive Board to the IMFC on the adequacy of IMF resources, the distribution of quotas and the strengthening of Fund governance is to be prepared for its next meeting. We requested the Boards of the Bank and Fund to consider and elaborate upon options with a potential for broad support, taking account of shareholder and institutional implications. On this basis, we will pursue our discussions of these matters and requested a progress report for our next meeting.

10. We welcomed the progress made on the HIPC Initiative and reconfirmed our commitment to its implementation and full financing. We recalled that achievement of long-term debt sustainability will require actions on the part of HIPC countries as well as development partners to complement debt relief under the enhanced HIPC Initiative. We also recalled that within existing guidelines, additional relief can be provided at the completion point, on a case-by-case basis. We welcomed the donor community pledges to close the financing gap in the HIPC Trust Fund and urged donors to translate these into concrete contributions in the coming months. We welcomed the recent paper by the Bank and the Fund that reviewed the difficult issues of creditor participation, including HIPC-to-HIPC debt relief and creditor litigation, and welcomed the decision by the Bank to explore options to assist with HIPC-to-HIPC debt. We once again reiterated the request that all official bilateral and commercial creditors that have not yet done so participate in the HIPC Initiative. We look forward to reviewing implementation, including any difficulties encountered in reaching decision and completion points, at our next meeting.

11. We noted that the present situation in Iraq poses significant challenges, with an urgent need to restore security, relieve human suffering, and promote economic growth and poverty reduction. We support a further UN Security Council resolution. We further note that engagement by the international community, including the Bretton Woods institutions, would be essential for sustained economic, social, and political development in Iraq, recognizing that the Iraqi people have the responsibility to implement the right policies and build their own future. The World Bank and the IMF stand ready to play their normal role in Iraq’s redevelopment at the appropriate time. They will also monitor closely the impact of the conflict on all their members and stand ready to help and support those adversely affected. It is important to address the debt issue, and we look forward to early engagement of the Paris Club.

12. The next meeting of the Development Committee will be held in Dubai, United Arab Emirates, on September 22, 2003.

From the UN Millennium Declaration, endorsed by Heads of State and Government in the UN Assembly on September 8, 2000.

Appendix VII

Executive Directors and Voting Power on April 30, 2003

DirectorVotes byTotalPercent of
AlternateCasting Votes ofCountryVotes1IMF Total2
Appointed
Nancy P. JacklinUnited States371,743371,74317.11
Meg Lundsager
Ken YagiJapan133,378133,3786.14
Haruyuki Toyama
Karlheinz BischofbergerGermany130,332130,3326.00
Ruediger von Kleist
Pierre DuquesneFrance107,635107,6354.95
Sébastian Boitreaud
Tom ScholarUnited Kingdom107,635107,6354.95
Martin A. Brooke
Elected
Willy KiekensAustria18,973
(Belgium)Belarus4,114
Johann PraderBelgium46,302
(Austria)Czech Republic8,443
Hungary10,634
Kazakhstan3,907
Luxembourg3,041
Slovak Republic3,825
Slovenia2,567
Turkey9,890111,6965.14
Jeroen KrcmersArmenia1,170
(Netherlands)Bosnia and Herzegovina1,941
Turiy G. TakushaBulgaria6,652
(Ukraine)Croatia3,901
Cyprus1,646
Georgia1,753
Israel9,532
Macedonia, former Yugoslav Republic of939
Moldova1,482
Netherlands51,874
Romania10,552
Ukraine13,970105,4124.85
Hernán OyarzábalCosta Rica1,891
(República BolivarianaEl Salvador1,963
de Venezuela)Guatemala2,352
Mario BeauregardHonduras1,545
(Mexico)Mexico26,108
Nicaragua1,550
Spain30,739
Venezuela, República Bolivariana de26,84192,9894.28
Pier Carlo PadoanAlbania737
(Italy)Greece8,480
Harilaos VittasItaly70,805
(Greece)Malta1,270
Portugal8,924
San Marino420
Timor-Leste33290,9684.19
Elected
Ian E. BennettAntigua and Barbuda385
(Canada)Bahamas, The1,553
Nioclás A. O’MurchúBarbados925
(Ireland)Belize438
Canada63,942
Dominica332
Grenada367
Ireland8,634
Jamaica2,985
St. Kitts and Nevis339
St. Lucia403
St. Vincent and the Grenadines33380,6363.71
Vilhjálmur EgilssonDenmark16,678
(Iceland)Estonia902
Benny AndersenFinland12,888
(Denmark)Iceland1,426
Latvia1,518
Lithuania1,692
Norway16,967
Sweden24,20576,2763.51
Michael J. CallaghanAustralia32,614
(Australia)Kiribati306
Michael H. ReddellKorea16,586
(New Zealand)Marshall Islands285
Micronesia, Federated States of301
Mongolia761
New Zealand9,196
Palau281
Papua New Guinea1,566
Philippines9,049
Samoa366
Seychelles338
Solomon Islands354
Vanuatu42072,4233.33
Sulaiman M. Al-TurkiSaudi Arabia70,10570,1053.23
(Saudi Arabia)
Abdullah S. Alazzaz
(Saudi Arabia)
Sri Mulyani lndrawatiBrunei Darussalam2,402
(Indonesia)Cambodia1,125
Ismail AlowiFiji953
(Malaysia)Indonesia21,043
Lao People’s Democratic Republic779
Malaysia15,116
Myanmar2,834
Nepal963
Singapore8,875
Thailand11,069
Tonga319
Vietnam3,54169,0193.18
Ismaila UsmanAngola3,113
(Nigeria)Botswana880
Peter J. NgumbulluBurundi1,020
(Tanzania)Eritrea409
Ethiopia1,587
Gambia, The561
Kenya2,964
Lesotho599
Malawi944
Mozambique1,386
Namibia1,615
Nigeria17,782
Sierra Leone1,287
Elected
South Africa18,935
Sudan1,947
Swaziland757
Tanzania2,239
Uganda2,055
Zambia5,141
Zimbabwe3,78469,0053.18
A. Shakour ShaalanBahrain1,600
(Egypt)Egypt9,687
Oussama T. KanaanIraq5,290
(Jordan)Jordan1,955
Kuwait14,061
Lebanon2,280
Libya11,487
Maldives332
Oman2,190
Qatar2,888
Syrian Arab Republic3,186
United Arab Emirates6,367
Yemen, Republic of2,68564,0082.95
WEI BenhuaChina63,94263,9422.94
(China)
WANG Xiaoyi
(China)
Fritz ZurbrüggAzerbaijan1,859
(Switzerland)Kyrgyz Republic1,138
Wieslaw SzezukaPoland13,940
(Poland)Serbia and Montenegro4,927
Switzerland34,835
Tajikistan1,120
Turkmenistan1,002
Uzbekistan3,00661,8272.85
Aleksei V. MozhinRussia59,70459,7042.75
(Russia)
Andrei Lushin
(Russia)
Murilo PortugalBrazil30,611
(Brazil)Colombia7,990
Roberto SteinerDominican Republic2,439
(Colombia)Ecuador3,273
Guyana1,159
Haiti857
Panama2,316
Suriname1,171
Trinidad and Tobago3,60653,4222.46
Abbas MirakhorAfghanistan1,454
(Islamic Republic of Iran)Algeria12,797
Mohammed DaïriGhana3,940
(Morocco)Iran, Islamic Republic of15,222
Morocco6,132
Pakistan10,587
Tunisia3,11553,2472.45
Yaga V, ReddyBangladesh5,583
(India)Bhutan313
R.A. JayatissaIndia41,832
(Sri Lanka)Sri Lanka4,38452,1122.40
Guillermo Le FortArgentina21,421
(Chile)Bolivia1,965
A. Guillermo ZoccaliChile8,811
(Argentina)Paraguay1,249
Peru6,634
Uruguay3,31543,3952.00
Elected
Damian Ondo MañeBenin869
(Equatorial Guinea)Burkina Faso852
Laurean W. RutayisireCameroon2,107
(Rwanda)Cape Verde346
Central African Republic807
Chad810
Comoros339
Congo, Democratic
Republic of5,580
Congo, Republic of1,096
Côte d’Ivoire3,502
Djibouti409
Equatorial Guinea576
Gabon1,793
Guinea1,321
Guinea-Bissau392
Madagascar1,472
Mali1,183
Mauritania894
Mauritius1,266
Niger908
Rwanda1,051
São Tomé and Príncipe324
Senegal1,868
Togo98430,7491.41
2,171,653,499.925

Voting power varies on certain matters pertaining to the General Department with use of the IMF’s resources in that Department.

Percentages of total votes of 2,173,313 in the General Department and the Special Drawing Rights Department.

This total does not include the votes of Somalia, which did not participate in the 2000 and 2002 Regular Election of Executive Directors. The total votes of this member are 692—0.03 percent of those in the General Department and Special Drawing Rights Department.

This total does not include the votes of Liberia, which was suspended effective March 5, 2003, pursuant to Article XXVI, Section 2 (b) of the Articles of Agreement. The total votes of this member are 963—0.04 percent of those in the General Department and Special Drawing Rights Department.

This figure may differ from the sum of the percentages shown for individual Directors because of rounding. 146 A

Voting power varies on certain matters pertaining to the General Department with use of the IMF’s resources in that Department.

Percentages of total votes of 2,173,313 in the General Department and the Special Drawing Rights Department.

This total does not include the votes of Somalia, which did not participate in the 2000 and 2002 Regular Election of Executive Directors. The total votes of this member are 692—0.03 percent of those in the General Department and Special Drawing Rights Department.

This total does not include the votes of Liberia, which was suspended effective March 5, 2003, pursuant to Article XXVI, Section 2 (b) of the Articles of Agreement. The total votes of this member are 963—0.04 percent of those in the General Department and Special Drawing Rights Department.

This figure may differ from the sum of the percentages shown for individual Directors because of rounding. 146 A

Appendix VIII

Changes in Membership of the Executive Board

Changes in the membership of the Executive Board between May 1, 2002, and April 30, 2003, were as follows:

Fernando Varela (Spain) relinquished his duties as Executive Director for Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Spain, and Venezuela, effective June 30, 2002.

Hernán Oyarzábal (Venezuela), formerly Alternate Executive Director to Fernando Varela (Spain), was elected Executive Director by Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Spain, and Venezuela, effective July 1, 2002.

Fernando Varela (Spain) was appointed Alternate Executive Director to Hernan Oyarzábal (Venezuela), effective July 1, 2002.

Vijay L. Kelkar (India) relinquished his duties as Executive Director for Bangladesh, Bhutan, India, and Sri Lanka, effective July 31, 2002.

Roberto Junguito (Colombia) relinquished his duties as Alternate Executive Director to Murilo Portugal (Brazil), effective July 31, 2002.

Yaga V. Reddy (India) was elected Executive Director by Bangladesh, Bhutan, India, and Sri Lanka on August 1, 2002.

Roberto Steiner (Colombia) was appointed Alternate Executive Director to Murilo Portugal (Brazil), effective August 26, 2002.

Ahmed Saleh Alosaimi (Saudi Arabia) relinquished his duties as Alternate Executive Director to Sulaiman Al-Turki (Saudi Arabia), effective September 12, 2002.

Abdallah S. Alazzaz (Saudi Arabia) was appointed Alternate Executive Director to Sulaiman Al-Turki (Saudi Arabia), effective September 13, 2002.

Alexandre Barro Chambrier (Gabon) completed his term of service as Executive Director for Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Republic of Congo, Côte d’Ivoire, Djibouti, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Madagascar, Mali, Mauritania, Mauritius, Niger, Rwanda, São Tomé and Príncipe, Senegal, and Togo, effective October 31, 2002.

Mohamad B. Chatah (Lebanon) relinquished his duties as Alternate Executive Director to A. Shakour Shaalan (Egypt), effective October 31, 2002.

Roberto Cippà (Switzerland) completed his term of service as Executive Director for Azerbaijan, Kyrgyz Republic, Poland, Serbia and Montenegro, Switzerland, Tajikistan, Turkmenistan, and Uzbekistan, effective October 31, 2002.

Dono Iskander Djojosubroto (Indonesia) completed his term of service as Executive Director for Brunei Darussalam, Cambodia, Fiji, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga, and Vietnam, effective October 31, 2002.

Kwok Mun Low (Singapore) relinquished his duties as Alternate Executive Director to Dono Iskander Djojosubroto (Indonesia), effective October 31, 2002.

Cyrus Rustomjee (South Africa) completed his term of service as Executive Director for Angola, Botswana, Burundi, Eritrea, Ethiopia, The Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Nigeria, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe, effective October 31, 2002.

Fernando Varela (Spain) relinquished his duties as Alternate Executive Director to Hernán Oyarzábal (Venezuela), effective October 31, 2002.

A. Guillermo Zoccali (Argentina) completed his term of service as Executive Director for Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay, effective October 31, 2002.

Sulaiman Al-Turki (Saudi Arabia) was reelected Executive Director by Saudi Arabia, effective November 1, 2002.

Ian E. Bennett (Canada) was reelected Executive Director by Antigua and Barbuda, The Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Ireland, Jamaica, St. Kitts and St. Nevis, St. Lucia, and St. Vincent and the Grenadines, effective November 1, 2002.

Mario Beauregard (Mexico) was appointed Alternate Executive Director to Hernán Oyarzábal (Venezuela), effective November 1, 2002.

Michael J. Callaghan (Australia) was reelected Executive Director by Australia, Kiribati, Korea, Marshall Islands, Federated States of Micronesia, Mongolia, New Zealand, Palau, Papua New Guinea, Philippines, Samoa, Seychelles, Solomon Islands, and Vanuatu, effective November 1, 2002.

Willy Kiekens (Belgium) was reelected Executive Director by Austria, Belarus, Belgium, Czech Republic, Hungary, Kazakhstan, Luxembourg, Slovak Republic, Slovenia, and Turkey, effective November 1, 2002.

Oláfur Ísleifsson (Iceland) was reelected Executive Director by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden, effective November 1, 2002.

Sri Mulyani Indrawati (Indonesia) was elected Executive Director by Brunei Darussalam, Cambodia, Fiji, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga, and Vietnam, effective November 1,2002.

Ismail Alowi (Malaysia) was appointed Alternate Executive Director to Sri Mulyani Indrawati (Indonesia), effective November 1,2002.

Guillermo Le Fort (Chile), formerly Alternate Executive Director to A. Guillermo Zoccali (Argentina), was elected Executive Director by Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay, effective November 1, 2002.

Abbas Mirakhor (Islamic Republic of Iran) was reelected Executive Director by Algeria, Ghana, Islamic Republic of Iran, Morocco, Pakistan, and Tunisia, effective November 1, 2002.

Aleksei V. Mozhin (Russia) was reelected Executive Director by Russia, effective November 1, 2002.

Damian Ondo Mañe (Equatorial Guinea), formerly Alternate Executive Director to Alexandre Barro Chambrier (Gabon), was elected Executive Director by Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Republic of Congo, Côte d’Ivoire, Djibouti, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Madagascar, Mali, Mauritania, Mauritius, Niger, Rwanda, São Tomé and Príncipe, Senegal, and Togo, effective November 1, 2002.

Hernán Oyarzábal (Venezuela) was elected Executive Director by Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Spain, and Venezuela, effective November 1, 2002.

Pier Carlo Padoan (Italy) was reelected Executive Director by Albania, Greece, Italy, Malta, Portugal, San Marino, and Timor-Leste, effective November 1, 2002.

Murilo Portugal (Brazil) was reelected Executive Director by Brazil, Colombia, Dominican Republic, Ecuador, Guyana, Haiti, Panama, Suriname, and Trinidad and Tobago, effective November 1,2002.

Yaga V. Reddy (India) was reelected Executive Director by Bangladesh, Bhutan, India, and Sri Lanka, effective November 1, 2002.

Laurean Rutayisire (Rwanda) was appointed Alternate Executive Director to Damian Ondo Mañe (Equatorial Guinea), effective November 1, 2002.

A. Shakour Shaalan (Egypt) was reelected Executive Director by Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, Syrian Arab Republic, United Arab Emirates, and Yemen, effective November 1, 2002.

Ismaila Usman (Nigeria), formerly Alternate Executive Director to Cyrus Rustomjee (South Africa), was elected Executive Director by Angola, Botswana, Burundi, Eritrea, Ethiopia, The Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Nigeria, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe, effective November 1, 2002.

WEI Benhua (China) was reelected Executive Director by China, effective November 1, 2002.

J. de Beaufort Wijnholds (Netherlands) was reelected Executive Director by Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel, former Yugoslav Republic of Macedonia, Moldova, Netherlands, Romania, and Ukraine, effective November 1, 2002.

Fritz Zurbrügg (Switzerland) was elected Executive Director by Azerbaijan, Kyrgyz Republic, Poland, Serbia and Montenegro, Switzerland, Tajikistan, Turkmenistan, and Uzbekistan, effective November 1, 2002.

A. Guillermo Zoccali (Argentina) was appointed Alternate Executive Director to Guillermo Le Fort (Chile), effective November 1, 2002.

Peter J. Ngumbullu (Tanzania) was appointed Alternate Executive Director to Ismaila Usman (Nigeria), effective November 4, 2002.

Nancy P. Jacklin (United States) was appointed Executive Director by the United States on December 4, 2002.

Oussama T. Kanaan (Jordan) was appointed Alternate Executive Director to A. Shakour Shaalan, effective January 7, 2003.

J. de Beaufort Wijnholds (Netherlands) relinquished his duties as Executive Director for Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel, former Yugoslav Republic of Macedonia, Moldova, Netherlands, Romania, and Ukraine, effective January 14, 2003.

Jeroen Kremers (Netherlands) was elected Executive Director by Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel, former Yugoslav Republic of Macedonia, Moldova, Netherlands, Romania, and Ukraine, effective January 15, 2003.

Oláfur Ísleifsson (Iceland) relinquished his duties as Executive Director for Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden, effective January 15, 2003.

Vilhjálmur Egilsson (Iceland) was elected Executive Director by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden, effective January 16, 2003.

Diwa Guinigundo (Philippines) relinquished his duties as Alternate Executive Director to Michael J. Callaghan (Australia), effective March 2, 2003.

Michael H. Reddell (New Zealand) was appointed Alternate Executive Director to Michael J. Callaghan (Australia), effective March 3, 2003.

Hernán Oyarzábal (Venezuela) relinquished his duties as Executive Director for Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Spain, and Venezuela, effective April 30, 2003.

APPENDIX IX

Financial Statements

April 30, 2003

Report of the Independent Accountants

To the Board of Governors

of the International Monetary Fund:

In our opinion, the accompanying balance sheets and the related statements of income, changes in resources and cash flows give a true and fair view of the financial condition of the General Department of the International Monetary Fund (the “IMF”) as at April 30, 2003 and 2002, and its results of operations and cash flows for the years then ended in conformity with International Accounting Standards. These financial statements are the responsibility of the IMF’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with International Standards on Auditing, which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information on pages 162 to 167 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the auditing procedures applied in the audits of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole.

June 16, 2003

General Department

Balance Sheets as at April 30,2003 and 2002(In thousands of SDRs)
2003200220032002
AssetsLiabilities and Resources
Credit outstanding65,977,97752,080,697liabilities:
Usable currencies97,028,740102,460,003Remuneration payable244,544272,187
Other currencies47,692,34854,625,246Other liabilities140,347120,750
Total currencies (Notes 3 and 4)210,699,065209,165,946Special Contingent Account (Note 10)1,401,0191,307,019
Total Liabilities1,785,9101,699,956
SDR holdings962,6411,484,927Members’ Resources:
Gold holdings (Note 5)5,851,7715,851,771Quotas, represented by:
Reserve tranche positions (Notes 2 and 4).68,008,95155,327,139
Subscription payments: Usable97,028,740102,460,003
576,570500,670Other47,693,60954,628,758
Other assets (Notes 7 and 14)714,092752,987Total quotas212,731,300212,415,900
Reserves of the General Resources Account4,286,9293,640,445
Investments held in the Special Disbursement Account (Note 8)2,590,3492,537,301
Structural Adjustment Facility loans (Note 3)136,816341,692Accumulated resources of the Special Disbursement Account2,727,1652,878,993
Total Assets221,531,304220,635,294Total Liabilities and Resources221,531,304220,635,294
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
/s/ Eduard Brau/s/ Horst Kohler
Director, Finance DepartmentManaging Director
General Department Income Statements for the Years Ended April 30, 2003 and 2002(In thousands of SDRs)
20032002
Operational Income
Interest and charges (Note 6)2,295,2501,985,921
Interest on SDR holdings28,03841,284
Investment income of the Special Disbursement Account61,431132,503
Other charges and income (Note 6)131,629157,496
2,516,3482,317,204
Operational Expenses
Remuneration (Note 9)1,201,3471,293,961
Administrative Expenses (Note 13)607,086530,794
1,808,4331,824,755
Total Net Income707,915492,449
Net Income of the General Department comprises:
Net Income of the General Resources Account646,484359,946
Income of the Special Disbursement Account61,431132,503
707,915492,449
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
General Department Statements of Changes in Resources for the Years Ended April 30, 2003 and 2002(In thousands of SDRs)
Special
General ResourcesDisbursement
AccountAccount
SpecialGeneralTotalAccumulated
QuotasReserveReserveReservesResources
Balance at April 30, 2001212,414,9002,344,982935,5173,280,4992,838,454
Quota subscriptions1,000
Net income46,242313,704359,946132,503
Transfers from the Trust Fund191
Transfers from the Supplementary Financing
Facility Subsidy Account103
Transfers to the PRGF Trust(30,658)
Transfers to the PRGF-HIPG Trust(61,600)
Balance at April 30, 2002212,415,9002,391,2241,249,2213,640,4452,878,993
Quota subscriptions315,400
Net (loss)/income(9,770)656,254646,48461,431
Transfers to the PRGF Trust(149,259)
Transfers to the PRGF-HIPC Trust(64,000)
Balance at April 30, 2003212,731,3002,381,4541,905,4754,286,9292,727,165
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
General Department Statements of Cash Flows for the Years Ended April 30, 2003 and 2002(In thousands of SDRs)
20032002
Usable currencies and SDRs from operating activities
Net income707,915492,449
Adjustments to reconcile net income to usable resources generated by operations:
Changes in receivables and other assets(37,005)3,948
Changes in remuneration payable and other liabilities(8,046)(149,227)
Increase in the Special Contingent Account94,00094,000
Unrealized losses on investments24,415
Usable currencies and SDRs from credit to members:
Purchases in currencies and SDRs, including reserve tranche purchases(21,783,516)(29,194,497)
Repurchases in currencies and SDRs7,783,89419,207,036
Repayments of Structural Adjustment Facility loans204,87690,834
Net usable currencies and SDRs used in operating activities(13,037,882)(9,431,042)
Usable currencies and SDRs from investment activities
Net acquisition of investments by the Special Disbursement Account(53,048)(155,788)
Net usable currencies and SDRs used by investment activities(53,048)(155,788)
Usable currencies and SDRs from financing activities
Subscription payments in SDRs and usable currencies78,850250
Changes in composition of usable currencies7,271,7901,532,302
Transfers to the PRGF Trust, PRGF-HIPC Trust, and other accounts(213,259)(91,964)
Net usable currencies and SDRs provided by financing activities7,137,3811,440,588
Net decrease in usable currencies and SDRs(5,953,549)(8,146,242)
Usable currencies and SDRs, beginning; of period103,944,930112,091,172
Usable currencies and SDRs, end of period97,991,381103,944,930
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.

General Deparment Notes to the Financial Statements as at April 30,2003 and 2002

1. Purpose and Organization

The IMF is an international organization of 184 member countries. It was established to promote international monetary cooperation and exchange stability and to maintain orderly exchange arrangements among members; to facilitate the expansion and balanced growth of international trade, and contribute thereby to the promotion and maintenance of high levels of employment; and to provide temporary financial assistance to member countries under adequate safeguards to help ease balance of payments adjustment. The IMF conducts its operations and transactions through the General Department and the Special Drawing Rights Department (the SDR Department). The General Department consists of the General Resources Account (GRA), the Special Disbursement Account (SDA), and the Investment Account. The latter has not been activated. The IMF also administers trusts and accounts established to perform financial and technical services and financial operations consistent with the purposes of the IMF. The resources of these trusts and accounts are contributed by members or the IMF through the SDA. The financial statements of the SDR Department and these trusts and accounts are presented separately.

General Resources Account

The GRA holds the general resources of the IMF. Its resources reflect the receipt of quota subscriptions, use and repayment of IMF credit, collection of charges on the use of credit, payment of remuneration on creditor positions, borrowings, and payment of interest and repayment of borrowings.

Special Disbursement Account

The assets and resources of the SDA are held separately from other accounts of the General Department. Resources of the SDA include transfers received from the Trust Fund, an account administered by the IMF, and part of the proceeds from the sales of the IMF’s gold in the past (there were no gold sales in financial year 2003 or 2002). Income from the investment of gold profits in the SDA is to be transferred, as needed, to the Poverty Reduction and Growth Facility-Heavily Indebted Poor Countries Trust (PRGF-HIPC Trust), in accordance with decisions of the IMF. The SDA also holds outstanding loans extended under the Structural Adjustment Facility (SAF), which was established in March 1986 to provide balance of payments assistance on concessional terms to qualifying low-income developing country members.

Assets that exceed the financing needs of the SDA, excluding investments arising from the sales of gold undertaken pursuant to the 1999 decision on gold sales by the IMF, are transferred to the Reserve Account of the Poverty Reduction and Growth Facility Trust (PRGF Trust), which is administered separately by the IMF as trustee.

2. Summary of Significant Accounting Policies

Basis of Presentation

The financial statements of the IMF are prepared in accordance with International Accounting Standards (IAS). Specific accounting principles and disclosure practices are explained further below. The preparation of financial statements in conformity with IAS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Revenue and Expense Recognition

The financial statements are prepared on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

Unit of Account

The financial statements are expressed in terms of SDRs. The value of the SDR is determined by the IMF each day by summing the values in U.S. dollars, based on market exchange rates, of the currencies in the SDR valuation basket. The IMF reviews the SDR valuation basket every five years. The latest review was completed in October 2000, and the new composition of the SDR valuation basket became effective on January 1, 2001. The currencies in the basket as of April 30, 2003 and 2002 and their amounts were as follows:

CurrencyAmount
Euro0.426
Japanese yen21.0
Pound sterling0.0984
US.dollar0.577

As of April 30, 2003, one SDR was equal to 1.38391 U.S. dollars (one SDR was equal to 1.26771 U.S. dollars as of April 30, 2002).

Credit Outstanding

The IMF provides balance of payments assistance in accordance with established policies by selling to members, in exchange for their own currencies, SDRs or currencies of other members. When members make purchases, they incur obligations to repurchase the IMF’s holdings of their currencies arising from the purchases within specified periods by payments in SDRs or other currencies, as determined by the IMF. Fund credit is subject to specific repayment schedules over periods which vary depending on the type of facility used. Repayment schedules comprise two elements: (i) repurchase expectations, aimed at securing early repayment from members in a position to do so, in keeping with a long-standing principle of the IMF that its resources should be used only as long as there is a balance of payments need, and (ii) repurchase obligations. Repayments on the expectation schedules can be extended by a period of up to one year for credit tranche and Supplemental Reserve Facility (SRF) purchases or three years for Extended Fund Facility (EFF) purchases (up to six months for SRF and one year for Contingent Credit Lines (CCL) purchases after February 21, 2003), upon a member’s request if its external position is not sufficiently strong.

In financial year 2003, the IMF approved requests from Argentina to extend by one year repurchase expectations amounting to SDR 5.8 billion (one repurchase from Argentina in financial year 2002 for an amount of SDR 741 million was extended by one year). The financial year 2003 extensions include scheduled repurchase expectations in the period from May to August 2003 amounting to SDR 390 million. The IMF also approved requests from Ecuador, Sri Lanka and Uruguay to extend by one year repurchase expectations amounting to SDR 14 million, SDR 52 million and SDR 129 million arising during financial years 2004, 2004 and 2003, respectively.

A member is considered overdue after failure to make payment on a repurchase obligation. Failure to obtain an extension from the IMF for payment according to the repurchase expectations schedule date would result, inter alia, in a suspension of the right to make further purchases, including prospective purchases under an existing arrangement. The IMF’s policies on the use of its general resources are intended to ensure that their use is temporary and will be reversed within agreed-upon repurchase periods.

A member is entitled to repurchase, at any time, the IMF’s holdings of its currency on which charges are levied and is expected to make repurchases as and when its balance of payments and reserve position improve.

Overdue Obligations and the First Special Contingent Account

It is the policy of the IMF to exclude from current income, charges due by members that are six months or more overdue in meeting payments to the IMF, unless these members are current in the payment of charges.

Debtor and creditor members share equally the financial consequences of overdue obligations under a mechanism referred to as burden sharing. The IMF recovers amounts equal to unpaid and deferred charges, excluding special charges, by adjusting the rates of charge and remuneration. Members that have borne the financial consequences of overdue charges will receive refunds only to the extent that overdue charges that had given rise to burden sharing adjustments are settled, and these adjustments are therefore not presented as liabilities. In view of the risk resulting from overdue credit, the IMF also accumulates balances in the first Special Contingent Account (SCA-1). In assessing the risk of impairment, the IMF considers balances in the SCA-1. Allocations to the SCA-1 are financed by further adjustments to the rates of charge and remuneration (see Note 10).

Currencies

Currencies consist of members’ currencies and securities held by the IMF. Each member has the option to substitute nonnegotiable and non-interest-bearing securities for the IMF’s holdings of its currency that exceed VA of 1 percent of the member’s quota. These securities are encashable by the IMF on demand.

Each member is required to pay to the IMF its initial quota and subsequent quota increases partly in its own currency, with the remainder to be paid in usable currencies prescribed by the IMF, or SDRs. One exception was the quota increase of 1978, which was paid entirely in members’ own currencies.

Usable Currencies

Usable currencies consist of currencies of members considered by the IMF to have strong balance of payment and reserve positions. These currencies are included in the IMF’s financial transactions plan to finance purchases and other transfers of the IMF. Participation in the financial transactions plan is reviewed on a quarterly basis. The IMF considers cash and cash equivalents to be usable currencies and SDR holdings. The changes in non-usable currency result from the IMF’s transactions (purchases and repurchases) where a member’s currency is exchanged for another member’s currency, or from the inclusion/exclusion of a member’s currency in the IMF’s transaction plan.

Valuation of Currencies

Currencies, including securities, are valued in terms of the SDR on the basis of the currency/SDR exchange rate determined for each currency. Securities are not marketable, but can be converted into cash on demand. Each member is obligated to maintain, in terms of the SDR, the SDR value of the balances of its currency held by the IMF in the GRA. This requirement is referred to as the maintenance-of-value obligation. Whenever the IMF revalues its holdings of a member’s currency, a receivable or a payable is established for the amount required to maintain the SDR value of the IMF’s holdings of that currency. The currency balances in the balance sheet include these receivables and payables. All currencies were revalued in terms of the SDR on April 30, 2003 and 2002.

SDR Holdings

Although SDRs are not allocated to the IMF, the IMF may acquire, hold, and dispose of SDRs through the GRA. The IMF receives SDRs from members in the settlement of their financial obligations to the IMF and uses SDRs in transactions and operations with members. The IMF earns interest on its SDR holdings at the same rate as all other holders of SDRs.

SDR Interest Rate

The SDR interest rate is determined weekly by reference to a combined market interest rate, which is a weighted average of yields on short-term instruments in the capital markets of the euro area, Japan, the United Kingdom, and the United States.

Gold Holdings

The Articles of Agreement limit the use of gold in the IMF’s operations and transactions. Any use provided for in the Articles requires a decision supported by an 85 percent majority of the total voting power. In accordance with the provisions of the Articles, whenever the IMF sells gold held on the date of the Second Amendment of the IMF’s Articles of Agreement (April 1, 1978), the portion of the proceeds equivalent at the time of sale to one SDR per 0.888671 gram of fine gold, which is equal to SDR 35 per fine troy ounce, must be placed in the GRA. Any excess over this value will be held in the SDA or transferred to the Investment Account. The IMF may also sell gold held on the date of the Second Amendment to those members that were members on August 31, 1975, in proportion to their quotas on that date, in exchange for their own currencies, at a price equivalent at the time of sale to one SDR per 0.888671 gram of fine gold.

The IMF values its gold holdings at historical cost using the specific identification method (see Note 5).

SAF Loans in the Special disbursement Account

SAF loans in the SDA are held at historical cost. Allowances for loan losses would be established if and when the IMF expected to incur a loss; no losses have been incurred in the past, and it is the current expectation that no losses will be incurred in the future. Repayments of all SAF loans are transferred to the PRGF Trust Reserve Account when received.

Investments in the Special Disbursement Account

The resources of the SDA are invested pending their use. Investments are made in debt securities and fixed-term deposits, either directly or by participation in an investment pool. Debt securities comprise securities issued by international financial organizations and domestic government bonds in the euro area, Japan, the United Kingdom and the United States. Investments are marked to market on the last business day of the accounting period. The carrying amounts of investments approximate their fair value. Purchases are valued and reflected on the trade date basis and sales are based on the actual settlement date valuations. Investment income comprises interest earned on investments, realized and unrealized gains and losses on investments, and currency valuation differences arising from exchange rate movements against the SDR.

Interest rate risk is managed by limiting the investment portfolio to a weighted average effective duration that does not exceed three years. Currency risk is minimized by investing in securities denominated in SDRs or in the constituent currencies of the SDR valuation basket. Risk is further minimized by ensuring that the currency composition of the investment portfolio matches, as closely as possible, the currency composition of the SDR valuation basket.

Fixed Assets

Fixed assets with a cost in excess of a threshold amount are capitalized at cost. Buildings and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from 3 years for equipment to 30 years for buildings.

Quotas

Each member is assigned a quota that forms the basis of its financial and organizational relationship with the IMF. A member’s quota is related to, but not strictly determined by, economic factors such as national income, the value of external trade and payments, and the level of official reserves. Quotas determine members’ subscriptions to the IMF, their relative voting power, access to financing, and their share in SDR allocations. Should a member withdraw from the Fund, quotas are repayable to the extent they are not needed to settle other net obligations of the member to the Fund.

Reserve Tranche Position

A member has a reserve tranche in the IMF when the IMF’s holdings of its currency, excluding holdings that reflect the member’s use of IMF credit, are less than the member’s quota. A member’s reserve tranche is considered a part of the member’s external reserves and the member may draw on the reserve tranche at any time when it represents that it has a balance of payments need. Reserve tranche purchases are not subject to repurchase obligations or charges.

Reserves

The IMF determines annually what part of its net income will be retained and placed to the General Reserve or the Special Reserve, and what part, if any, will be distributed. The Articles of Agreement permit the IMF to use the Special Reserve for any purpose for which it may use the General Reserve, except distribution. After meeting the cost of administering the PRGF Trust, net operational income generated from the surcharges on purchases under the SRF, the credit tranches, and the EFF, has been transferred to the General Reserve. All other income has been transferred to the Special Reserve.

Charges

The IMF levies periodic charges on members’ use of IMF credit. The rate of charge is set as a proportion of the SDR interest rate. For financial year 2003, the basic rate of charge after the retroactive reduction in charges was 123.5 percent (116.4 percent during financial year ended April 30, 2002) of the SDR interest rate. The basic rate of charge is increased to offset the effect on the IMF’s income of the deferral of unpaid charges and to finance the additions to the SCA-1. The average adjusted rate of charge before applicable surcharges for financial year 2003 was 2.74 percent (for financial year 2002 the average rate was 3.44 percent). A surcharge progressing from 150 to 500 basis points above the rate of charge applies to use of credit under the SRF and the CCL. In addition, credit outstanding in excess of 200 percent of quota, resulting from purchases after November 28, 2000 in the credit tranches and under the EFF (other than those under the SRF and CCL), is subject to a surcharge of 100-200 basis points. Special charges are levied on members’ currency holdings that are not repurchased when due and on overdue charges. Special charges do not apply to members that are six months or more overdue to the IMF. A service charge is levied by the IMF on all purchases, except reserve tranche purchases. A refundable commitment fee is charged on Stand-By and Extended Arrangements. At the expiration or cancellation of an arrangement, the unrefunded portion of the commitment fee is taken into income.

Remuneration

The IMF pays interest, referred to as remuneration, on a member’s reserve tranche position. The rate of remuneration is equal to the SDR interest rate, adjusted downward to finance a share of the nonpayment of charges and additions to the SCA-1. The average adjusted rate of remuneration for the financial year ended April 30, 2003 was 1.96 percent (2.65 percent for the financial year 2002). A portion of the reserve tranche is unremunerated and is equal to 25 percent of the member’s quota on April 1, 1978—that part of the quota that was paid in gold prior to the Second Amendment of the Fund’s Articles. For a member that joined the Fund after that date, the unremunerated reserve tranche is the same percentage of its initial quota as the average unremunerated reserve tranche was as a percentage of the quotas of all other members when the new member joined the Fund. The unremunerated reserve tranche remains fixed for each member in nominal terms, but because of subsequent quota increases, it is now significantly lower when expressed as a percentage of quota. The average is equal to 3.8 percent of quota at April 30, 2003 and 2002, but the actual percentage is different for each member.

Pension and Other Post-Retirement Obligations

The IMF operates two defined-benefit pension plans and provides post-retirement benefits to retired staff.

The pension plans are funded by payments from the staff and the IMF, taking into account the recommendations of independent actuaries. Assets of the plans arc held in separate trustee-managed funds and arc measured at fair value as of the balance sheet date. Pension obligations are measured using the Projected Unit Credit Method, which measures the present value of the estimated future cash outflows, using interest rates of government securities that have maturities approximating the terms of the pension liabilities.

The assets set aside for the provision of post-retirement benefits are held in an investment account administered by the IMF. This account is funded by contributions from the IMF. The expected costs of the post-retirement medical and life insurance benefits are accrued over the period of employment using the Projected Unit Credit Method. Valuations of these obligations are carried out by independent actuaries.

Comparatives

When necessary, comparative figures have been reclassified to conform with changes in the presentation of the current year.

During the current year, the presentation in the income statement of amounts collected for the SCA-1 has been changed. Since these amounts are refundable once arrears to the IMF are cleared, or earlier if the IMF so decides, the amounts are more properly reflected as adjustments to charges collected and remuneration paid. They arc therefore no longer included in the income statement. Accordingly, comparative figures in the income statement for the year ended April 30, 2002 have been reclassified as follows: periodic charges have been decreased by SDR 47 million, remuneration has been increased by SDR 47 million and the allocation to the SCA-1 has been decreased by SDR 94 million. These reclassifications do not have any impact on the net income of the IMF for the year ended April 30, 2002.

Further, the operating results of the General Department have been amended to reflect a total revenues presentation for the income of the Special Disbursement Account and the General Resources Account with one single net income for the General Department.

3. Credit Outstanding

Changes in the outstanding use of IMF credit under the various facilities of the GRA during the years ended April 30, 2003 and 2002 were as follows:

April 30,RepurApril 30,RepurApril 30,
2001Purchaseschases2002Purchaseschases2003
In millions of SDRs
Credit tranches16,70617,219(5.698)28,2279,664(3,993)33,898
Extended Fund
Facility15,957959(1,425)15,4911,451(2,000)14,942
Supplemental
Reserve Facility4,08510,891(9,101)5,87510,566(741)15,700
Systemic Transformation
Facility1,933(622)1311(667)644
Enlarged Access430(109)321(42)279
Compensatory and
Contingcncy
Financing Facility2,992(2,246)746(332)414
Supplementary
Financing Facility116(6)110(9)101
Total credit outstanding42,21929.069(19,207152,08121,681(7784)65,978

As of April 30, 2003 and 2002, SDA loans and interest receivable computed at 0.5 percent a year, consisted of the following:

20032002
In millions of SDRs
Structural Adjustment
Facility loans137341
Interest accrued18
Less: interest deterred(1)(8)
137341

Scheduled repurchases in the GRA and repayments of SAF loans in the SDA are summarized below:

Financial YearGeneralSpecial
EndingResourcesDisbursement
April 30AccountAccount
In millions of SDRs
200422,83751
200517,47640
200614,47837
20075,656
20082,464
2009 and beyond2,330
Overdue7379
Total65,978137

As of April 30, 2003 and 2002, use of credit in the GRA by the largest users was as follows:

20032002
In millions of SDRs and as a percent
of total GRA credit outstanding
Largest user of credit18,19227.6%14,51027.9%
Three largest users of credit45,38268.8%32,337 62.1%
Five largest users of credit56,12785.1%41,14379.0%

The five largest users of credit as of April 30, 2003 were Brazil, Turkey, Argentina, Indonesia, and the Russian Federation. Outstanding credit, by member, is provided in Schedule 1. The concentration of GRA outstanding credit by regional geographical area as of April 30, 2003 and 2002 was as follows:

20032002
In millions of SDRs and as a percent
of total GRA credit outstanding
Africa1,7512.6%2,1954.2%
Asia and Pacific8,74213,3%10,76920.7%
Europe7,70411.7%9,12917.5%
Latin America
and the Caribbean30,82446.7%15,10029,0%
Middle East
and Turkey16,95725.7%14,88828.6%
Total65,978100%52,081100%

Overdue Obligations

At April 30, 2003, six members (as of April 30, 2002, seven members) were six months or more overdue in settling their financial obligations to the IMF. Four (five members as of April 30, 2002) of these members were overdue to the General Department.

GRA repurchases, GRA charges, SAF loan repayments, and SAF interest that are six or more months overdue in the General Department were as follows:

RepurchasesCharges and
and SAF LoansSAF Interest
2003200220032002
In millions of SDRs
Total overdue7461,0339931,055
Overdue for six months or more7261,0109821,039
Overdue for three years or more663977900930

The type and duration of the overdue amounts in the General Department as of April 30, 2003, were as follows:

RepurchasesChargesLongest
and SAFand SAFTotalOverdue
LoansInterestObligationObligation
In millions of SDRs
Liberia201245446May 1985
Somalia10594199July 1987
Sudan3576461,003July 1985
Zimbabwe83891February 2001
Total7469931,739

4. Currencies

Changes in the IMF’s holdings of members’ currencies for the years ended April 30, 2003 and 2002 were as follows:

April 30.NetApril 30,NetApril 30,
2001Change2002Change2003
In millions of SDRs
Members’ quotas212,4151212,416315212,731
Members’ outstanding
use of IMF credit
in the GRA42,2199,86252,08113,89765,978
Members’ reserve
tranche positions
in the GRA(46,733)(8,594)(55,327)(12,682)(68,009)
Administrative
currency balances3(7)(4)3(1)
Total currencies207,9041,262209,1661,533210,699

Receivables and payables arising from valuation adjustments at April 30, 2003, when all holdings of currencies of members were last revalued, amounted to SDR 20,947 million and SDR4,985 million, respectively (SDR 17,953 million and SDR 3,648 million, respectively, at April 30, 2002). Settlements of these receivables or payables are required to be made promptly after the end of each financial year.

Other currency holdings, other than those resulting from the use of credit or usable currencies, amounted to SDR 47,692 million (SDR 54,625 million as of April 30, 2002); of this amount SDR 28,335 million (SDR 28,996 million as of April 30, 2002) represents currencies of members that use IMF credit.

5. Gold Holdings

At April 30, 2003 and 2002, the IMF held 3,217,341 kilograms of gold, equal to 103,439,916 fine ounces of gold, at designated depositories. As of April 30, 2003, the value of the IMF’s holdings of gold calculated at the market price was SDR 25.2 billion (SDR 25.1 billion at April 30, 2002).

6. Interest and Charges

As of April 30, 2003, the total holdings on which the IMF levies charges amounted to SDR 65,978 million (SDR 52,081 million as of April 30, 2002). Charges and other receivables due to the IMF as of April 30, 2003 and 2002 were as follows:

20032002
In millions of SDRs
Periodic charges1,5681,546
Less: deterred income(996)(1,053)
572493
Other receivables55
Receivables577501

Periodic charges for the years ended April 30, 2003 and 2002 consisted of the following:

20032002
In millions of SDRs
Periodic charges2,2672,002
Adjustments for deferred
charges, net of refunds(28)17
Settlements of deferred charges
above/(below) income deferred56(33)
Total periodic charges2,2951,986

Interest earned on SAF loans for the years ended April 30, 2003 and 2002 amounted to SDR 8.4 million and SDR 1.1 million, respectively.

Special charges, service charges and the unrefunded commitment fees are included in Other Charges and Income which amounted to SDR 132 million (SDR 157 million for the year ended April 30, 2002).

7. Fixed Assets

Other assets include fixed assets, which at both April 30, 2003 and 2002 amounted to SDR 238 million, and consisted of:

20032002
In millions of SDRs
Land and buildings326314
Equipment3945
Total fixed assets365359
Less: accumulated depreciation(127)(121)
Net fixed assets238238

8. Investments

As at April 30, 2003 the investments in the SDA consisted of fixed-term deposits with maturity of less than one year and amounted to SDR 2,590 million (SDR 2,537 million as at April 30, 2002). Fixed-term deposits include cash equivalents amounting to SDR 21 million (SDR 2,166 million as at April 30, 2002) comprising short-term deposits with maturities of less then ninety days.

Investment income for the years ended April 30 included the following:

20032002
In miltions of SDRs
Interest income5396
Realized gains60
Unrealized losses(25)
Total income53131

9. Remuneration

At April 30, 2003, total creditor positions on which the IMF paid remuneration amounted to SDR 61,428 million (SDR 48,817 million at April 30, 2002). Remuneration for the years ended April 30, 2003 and 2002 consisted of the following:

20032002
In millions of SDRs
Remuneration1,1731,311
adjustments for deferred
charges net of refunds28(17)
1,2011,294

10. Deferred Income and the First Special Contingent Account

The SCA-1 is financed by quarterly adjustments to the rate of charge and the rate of remuneration. Balances in the SCA-1 are to be distributed to the members that shared the cost of its financing when there are no outstanding overdue repurchases and charges, or at such earlier time as the IMF may decide. At April 30, 2003, the balances held in the SCA-1 amounted to SDR 1,401 million (SDR 1,307 million at April 30, 2002).

Cumulative charges, net of settlements, that have been deferred since May 1, 1986 and have resulted in adjustments to charges and remuneration amounted to SDR 810 million at April 30, 2003 (SDR 865 million at April 30, 2002). The cumulative refunds for the same period, resulting from the settlements of deferred charges for which burden sharing adjustments have been made, amounted to SDR 1,072 million (SDR 994 million at April 30, 2002).

11. Borrowings

Under the General Arrangements to Borrow (GAB), the IMF may borrow up to SDR 18.5 billion when supplementary resources are needed, in particular, to forestall or to cope with an impairment of the international monetary system. The GAB became effective on October 24, 1962, and has been renewed through December 25, 2008. Interest on borrowings under the GAB is calculated at a rate equal to the SDR interest rate.

Under the New Arrangements to Borrow (NAB), the IMF may borrow up to SDR 34 billion of supplementary resources. The NAB is the facility of first and principal recourse, but it does not replace the GAB, which will remain in force. Outstanding drawings and commitments under these two borrowing arrangements are limited to a combined total of SDR 34 billion. The NAB became effective for a five-year period on November 17, 1998 and was activated on December 2, 1998. In November 2002, the NAB was renewed through November 16, 2008. Interest on borrowings under the NAB is payable to the participants at the SDR interest rate or any such higher rate as may be agreed between the IMF and participants representing 80 percent of the total credit arrangement.

12. Arrangements and Commitments in the General Department

An arrangement is a decision of the IMF that gives a member the assurance that the IMF stands ready to provide SDRs or usable currencies during a specified period and up to a specified amount, in accordance with the terms of the arrangement. Credit under these arrangements is subject to interest and charges that are uniform to all members and that reflect the cost to the IMF of financing such credit, plus a margin. In addition, certain surcharges may apply. At April 30, 2003, the undrawn balances under the 18 arrangements that were in effect in the GRA amounted to SDR 23,620 million (SDR 26,908 million under 17 arrangements at April 30, 2002).

The IMF has committed to lease commercial office space through 2005. Expenditures totaling SDR 15 million will be incurred over this period.

13. Administrative Expenses

The administrative expenses for the years ended April 30, 2003 and 2002 were as follows:

20032002
In millions of SDKs
Personnel370338
Pension and other related
expenses795
Travel7273
Other88117
Less: reimbursements for
the administration
of the SDR Department(2)(2)
Total administrative expenses,
net of reimbursements607531

The majority of these expenses are incurred in U.S. dollars; exchange gains and losses incurred in the normal course of business are reflected in administrative expenses and are not significant.

The GRA is reimbursed for the cost of administering the SDR Department.

The GRA is to be reimbursed annually for expenses incurred in administering the SDA and the PRGF Trust. Following the establishment of the SRF and CCL and the consequent increase in net operational income, the Executive Board decided to forgo reimbursement of the expenses incurred in administering the PRGF Trust for financial years 2003 and 2002 and to transfer the amounts that would otherwise have been reimbursed to the GRA from the PRGF Trust Reserve Account, through the SDA, to the PRGFHIPC Trust. These transfers amounted to SDR 64.0 million for financial year 2003 (SDR 61.6 million for financial year 2002) and have been included under transfers to the PRGFHIPC Trust in the statement of income and changes in resources.

14. Pension and Other Post-Retirement Benefits

The IMF has a defined-benefit Staff Retirement Plan (SRP) that covers substantially all eligible staff and a Supplemental Retirement Benefits Plan (SRBP) for selected participants of the SRP. Participants contribute a fixed percentage of their pensionable remuneration. The IMF contributes the remainder of the cost of funding the plans and pays certain administrative costs of the plans. In addition, the IMF provides other employment and post-retirement benefits, including medical, life insurance and other long-term benefits. In 1995, the IMF established a separate account, the Retired Staff Benefits Investment Account (RSBIA), to hold and invest resources set aside to fund the cost of these other benefits.

In December 2002, a plan amendment was adopted to allow certain periods of past employment to qualify for determination of participants’ benefits in the SRP and the SRBP. This plan amendment will become operational in financial year 2004 and the estimated liability resulting from the amendment has been recognized in the actuarial valuation (SDR 32 million).

The obligations of the SRP, SRBP, and RSBIA are valued by independent actuaries every year using the Projected Unit Credit Method. The latest actuarial valuations were carried out as at April 30, 2003. The key assumptions used are as shown below. The present value of the defined-benefit obligation and current service cost was calculated using the Projected Unit Credit Method.

Amounts recognized in the balance sheet are as follows:

20032002
SRPSRBPRSB1ATotalTotal
In millions of’SDRs
Fair value of plan assets2,4782692,7473,099
Present value of the defined
benefit obligation(1,934)(99)(421)(2,454)(2,884)
Unrecognized actuarial gains/flosses)216(41)(76)99242
Unrecognized prior service cost1418114313
Net balance sheet asset/(liability)774[122)(217)435470

Movement in the net balance sheet asset:

20032002
SRPSRBPRSBIATotalTotal
in millions of SDRs
Net balance sheet asset/(liability),
beginning of year778(108)(200)470431
Income/(expense) recognized
in income statement(21)(18)(40)(79)(5)
Contributions paid174234444
Net balance sheet assct/(liability),
end of year774(122)(217)435470

The expense recognized in the income statement includes SDR 40 million which represents the effect of a change in the actuarial cost resulting from a revision in some participants’ data. This expense relates for the most part to the present value of the defined benefit obligation as originally estimated when IAS 19 was introduced in financial year 2000. The amounts recognized in the income statements are as follows:

20032002
SRPSRBPRSB1ATotalTotal
In millions of SDRs
Current service cost691225106116
Interest cost158837203186
Expected Joss on assets(248)(26)(274)(295)
Amortization of actuarial loss/(gain)22(2)
Prior service cost42(2)242
Total (income)/expense recognized
in income statement211840795
Actual (loss)/retum on assets(75)03(72)(79)

Principal actuarial assumptions used:

20032002
In percent
Discount rare6.57.5
Expected return on plan assets8.39.3
Future salary increases4.0-6.756.4-10.8
Ultimate health care costs growth rates4.0.5.5

Schedule 1

General Department

Quotas, IMF’s Holdings of Currencies, Reserve Tranche Positions, and Members’ Use of Resources as at April 30, 2003
(In thousands of SDRs)
General Resources Account
IMF’s holdingsCredit Outstanding
of currencies1ReserveGRAPRGF
PercenttrancheAmountPercent2SDA3Trust4Total5
MemberQuotaTotalof quotaposition(A)+ (B)+ (C)= (D)
Afghanistan, Islamic State of120,400119,68899.4728
Albania48,70045,35093.13,35561,22961,229
Algeria1,254,7002,056,781163.985,082887,1611.34887,161
Angola286,300286,445100.1
Antigua and Barbuda13,50013,499100.06
Argentina2,117,10012,724,723601.02510,607,63516.0810,607,635
Armenia, Republic of92,000104,661113.812,6560.02135,850148,506
Australia3,236,4001,793,18855.41,443,222
Austria1,872,3001,124,31060.0748,015
Azerbaijan160,900250,811155.91089,9110.1491,856181,767
Bahamas, The130,300124,06395.26,239
Bahrain, Kingdom of135,00066,09949.068,932
Bangladesh533,300557,650104.618624,5310.0424,531
Barbados67,50062,59492.74,916
Belarus, Republic of386,400415,608107.62029,2080.0429,208
Belgium4,605,2002,759,90459.91,845,300
Belize18,80014,56277.54,239
Benin61,90059,72196.52,18835053,29053,640
Bhutan6,3005,28083.81,020
Bolivia171,500205,518119.88,87542,8800.06140,300183,180
Bosnia and Herzegovina169,100261,009154.491,9040.1491,904
Botswana63,00037,39959.425,601
Brazil3,036,10021,228,575699.218,191,87227.5718,191,872
Brunei Darussalam215,200157,12773.058,288
Bulgaria640,2001,401,612218.932,778794,1701.20794,170
Burkina Faso60,20052,93787.97,2643,47685,59089,066
Burundi77,00086,266112.03609,6250.019,625
Cambodia87,50088,021100.652175,30075,821
Cameroon185,700185,12599.7613223,098223,098
Canada6,369,2003,663,91657.52,705,292
Cape Verde9,6009,596100.052,4602,460
Central African Republic55,70055,56999.813424,48024,480
Chad56,00055,71999.528277,28177,281
Chile856,100474,05755.4382,045
China6,369,2003,625,68356.92,743,564
Colombia774,000488,20263.1285,803
Comoros8,9008,36294.0540270270
Congo, Democratic Republic of533,000533,000100.0446,667446,667
Congo, Republic of84,60095,558113.053611,4800.029,72721,207
Costa Rica164,100144,11387.820,000
Cote d’lvoire325,200324,72199.9482355,099355,099
Croatia, Republic of365,100364,943100.0159
Cyprus139,60090,49264.845,115
Czech Republic819,300619,94175.7199,364
Denmark1,642,800928,51856.5714,288
Djibouti15,90015,69998.71,10089913,63014,529
Dominica8,20010,242124.992,0502,050
Dominican Republic218,900233,786106.8314,8880.0214,888
Ecuador302,300542,079179.317,153256,9300.39256,930
Egypt943,700943,716100.0
El Salvador171,300171,303100.0
Equatorial Guinea32,60032,609100.0443109552
Eritrea15,90015,900100.05
Estonia, Republic of65,20065,195100.06
Ethiopia133,700126,52094.67,1887,76694,056101,822
Fiji70,30055,20978.515,126
Finland1,263,800757,02559.9506,862
France10,738,5006,388,79359.54,349,862
Gabon154,300203,658132.017949,5310.0849,531
Gambia, The31,10029,61895.21,48523,50023,500
Georgia150,300171,113113.81020,8130.03193,800214,613
Germany13,008,2007,758,33159.65,249,939
Ghana369,000369,004100.0—6264,545264,545
Greece823,000500,55060.8322,451
Grenada11,70014,631125.12,9302,930
Guatemala210,200210,206100.0
Guinea107,100107,02699.97599,00099,000
Guinea-Bissau14,20017,040120.0—62,84013,34916,189
Guyana90,90090,902100.049265,76866,260
Haiti60,70066,323109.3685,6910.0112,14017,831
Honduras129,500138,687107.18,62717,8130.03119,148136,961
Hungary1,038,400574,79455.4463,607
Iceland117,60099,01684.218,585
India4,158,2003,669,34488.2488,881
Indonesia2,079,3008,402,605404.1145,5006,468,8019.806.468,801
Iran, Islamic Republic of1,497,2001,497,204100.0
Iraq504,000504,013100.0
Ireland838,400492,53558.7345,870
Israel928,200596,19864.2332,009
Italy7,055,5004,073,76657.72,981,734
Jamaica273,500288,092105.314,5420.0214,542
Japan13,312,8007,769,16458.45,544,900
Jordan170,500500,747293.752330,2970.50330,297
Kazakhstan, Republic of365,700365,700100.05
Kenya271,400258,79595.412,61264,61664,616
Kiribati5,6005,601100.05
Korea1,633,6001,222,62774.8411,069
Kuwait1,381,100815,98359.1565,125
Kyrgyz Republic88,80088,800100.05138,351138,351
Lao People’s Democratic
Republic52,90052,900100.030,01130,011
Latvia, Republic of126,800136,296107.5559,5310.019,531
Lebanon203,000184,16890.718,833
Lesotho34,90031,36189.93,54315.13315,133
Liberia71,300272,062381.628200,7810.30223,671
Libya1,123,700728,20664.8395,505
Lithuania, Republic of144,200186,018129.01641,8310.0641,831
Luxembourg279,100166,76259.7112,348
Macedonia, former Yugoslav
Republic of68,90087,619127.218,7170.0327,18545,902
Madagascar122,200122,174100.027108,653108,653
Malawi69,40084,462121.72,29017,3500.0350,11767,467
Malaysia1,486,600877,95759.1608,649
Maldives8,2006,64681.01,554
Mali93,30084,45790.58,846508121,069121,577
Malta102,00061,74160.540,261
Marshall Islands3,5003,500100.01
Mauritania64,40064,406100.077,50077,500
Mauritius101,60087,12585.814,476
Mexico2,585,8002,279,34688.1306,529
Micronesia, Federated
States of5,1005,100100.01
Moldova, Republic of123,200203,200164.9580,0000.1227,720107,720
Mongolia51,10051,01799.88529,29829,298
Morocco588,200517,76088.070,441
Mozambique113,600113,600100.07144,375144,375
Myanmar258,400258,402100.0
Namibia136,500136,458100.045
Nepal71,30065,55791.95,7461,6791,679
Netherlands5,162,4003,018,01058.52,144,401
New Zealand894,600530,25859.3364,357
Nicaragua130,000130,010100.0128,291128,291
Niger65,80057,24087.08,56176,34476,344
Nigeria1,753,2001,753,121100.0143
Norway1,671,700945,46956.6726,247
Oman194,000114,96859.379,090
Pakistan1,033,7001,744,395168.8118710,8121.08737,6401,448,452
Palau3,1003.100100.01
Panama206,600230,585111.611,86035,8330.0535,833
Papua New Guinea131,600216,778164.736885,5400.1385,540
Paraguay99,90078,42878.521,475
Peru638,400745,433116.8107,0000.16107,000
Philippines879,9001,881,914213.987,2761.089,2821.651,089,282
Poland, Republic of1,369,000855,13662.5513,864
Portugal867,400514,35859.3353,082
Qatar263,800155,70959.0108,092
Romania1,030,2001,393,613135.3363,4080.55363,408
Russian Federation5,945,40010,220,142171.91,1844,275,8966.484,275,896
Rwanda80,10080,113100.062,45462,454
St, Kitts and Nevis8,9009,429105.982609609
St. Lucia13,30015,295100.07
St. Vincent and the Grenadines8,3007.80094.0500
Samoa11,60010,91894.1693
San Marino, Republic of17,00012,90075.94,101
São Tomé and Príncipe7,4007,403100.0—61,9021,902
Saudi Arabia6,985,5004,230,52060.62,754,983
Senegal161,800160,34599.11,457178,158178,158
Serbia and Montenegro467,700984,639210.5516,9250.78516,925
Seychelles8,8008,799100.01
Sierra Leone103,700103,685100.0245,404109,069114,473
Singapore862,500496,79157.6365,867
Slovak Republic357,500357,505100.0
Slovenia, Republic of231,700136,12458.895,587
Solomon Islands10,4009,85294.7550
Somalia44,200140,907318.896,7010.158,840112,004
South Africa1,868,5001,868,077100.0425
Spain3,048,9001,840,21460.41,208,691
Sri Lanka413,400586,277141.847,818220,6700.3455,190275,860
Sudan169,700526,647310.311356,9270.54416,155
Suriname92,10085,97693.46,125
Swaziland50,70044,15487.16,552
Sweden2,395,5001,362,91956.91,032,588
Switzerland3,458,5001,983,22557.31,475,292
Syrian Arab Republic293,600293,603100.05
Tajikistan, Republic of87,00087,000100.0260,96060,960
Tanzania198,900188,90395.09,999293,878293,878
Thailand1,081,9001,219,383112.720137,5000.21137,500
Timor-Leste, The Democratic