Front Matter

Front Matter

International Monetary Fund
Published Date:
January 1994
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Purposes of the Fund

  • (i) To promote international monetary cooperation through a permanent institution which provides machinery for consultation and collaboration on international monetary problems.
  • (ii) To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the production resources of all members as primary objectives of economic policy.
  • (iii) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
  • (iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper growth of world trade.
  • (v) To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
  • (vi) In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.

The Fund shall be guided in all its policies and decisions by the purposes set forth in this Article.

Article I of the Fund’s Articles of Agreement

Board of Governors, Executive Board, Interim Committee, and Development Committee

The Board of Governors, the highest decision-making organ in the Fund, consists of one governor and one alternate governor appointed by each member country. The governor is chosen by the member and is usually the minister of finance or the governor of the central bank. All powers of the Fund are vested in the Board of Governors. The Board of Governors may delegate to the Executive Board all except certain reserved powers. The Board of Governors normally meets once a year.

The Executive Board (the Board) is the Fund’s permanent decision-making organ, currently composed of 24 Directors appointed or elected by member countries or by groups of countries. Chaired by the Managing Director the Board usually meets several days a week to conduct the day-to-day business of the Fund. Decisions by the Executive Board are based on papers prepared by Fund management and staff. In 1993/94, the Board spent more than half of its time on member country matters (Article IV consultations and reviews and approvals of arrangements) and most of its remaining time on policy issues (such as the world economic outlook, developments in international capital markets, issues related to Fund facilities and program design, and international liquidity and the SDR mechanism).

The Interim Committee of the Board of Governors on the International Monetary System is an advisory body made up of 24 Fund Governors, ministers, or other officials of comparable rank, representing the same constituencies as in the Fund’s Executive Board. The Interim Committee normally meets twice a year, in April or May, and at the time of the Annual Meeting of the Board of Governors in September or October. It advises and reports to the Board of Governors on issues regarding the management and adaptation of the international monetary system, including sudden disturbances that might threaten the international monetary system, and on proposals to amend the Articles of Agreement.

The Development Committee (the Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries) is composed of 24 members—finance ministers or other officials of comparable rank—and generally meets in conjunction with the Interim Committee. It advises and reports to the Boards of Governors of the Bank and Fund on all aspects of the transfer of real resources to developing countries.

International Monetary Fund

Annual Report

of the Executive Board

for the Financial Year

Ended April 30, 1994

Washington, D.C.

The following symbols have been used in this Report:

  • … to indicate that data are not available;
  • — to indicate that the figure is zero or less than half the final digit shown or that the item does not exist;
  • – between years or months (e.g., 1991-92 or January-June) to indicate the years or months covered, including the beginning and ending years of months;
  • / between years (e.g., 1992/93) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

All references to dollars are to U.S. dollars unless otherwise noted.

International Standard Serial Number: ISSN 0250-7498

International Monetary Fund

700 19th Street, N.W., Washington D.C. 20431, U.S.A.

Tel: (202) 623-7430 Telefax (202) 623-7201


Deputy Managing Directors Appointed

In early June 1994, the Board endorsed proposals by the Managing Director to increase the number of Deputy Managing Directors from one to three, and to name Stanley Fischer, Alassane D. Ouattara, and Prabhakar R. Narvekar to the positions. This was the first major change in the structure of the Fund’s senior management since 1949, when the position of Deputy Managing Director was established. The change was designed to strengthen the management of the institution, which has carried an increased burden of responsibilities for a greatly enlarged membership in recent years. Mr. Fischer was designated as First Deputy Managing Director. In this capacity, he would have broad responsibilities across the whole range of issues facing the institution and exercise comprehensive oversight. Working as part of a team under the direction of the Managing Director, each Deputy Managing Director would have the authority to chair Board meetings and maintain contacts with officials of member governments and Executive Directors, the media, and other institutions.

International Monetary Fund

Managing Director and Chairman of the Executive Board
Michel Camdessus
Deputy Managing Directors
Richard D. Erb*Alassane D. OuattaraPrabhakar R. Narvekar
Executive DirectorsExecutive DirectorsExecutive DirectorsExecutive Directors
Karin LlssakersBarry S. NewmanEwen L. WatermanAmando M. Tetangco, Jr.
Stefan SchoenbergErika WagenhoeferA. Shakour ShaalanYacoob Yousef Mohammed
Hiroo FukuiToshihiko FukuyamaKonstantin G. kagalovskyAleksei V. Mozhin
Marc-Antoine AuthemanMichel SiratJ. E. IsmaelKleo-Thong Hetrakul
Huw EvansJohn DorringtonDaniel KaeserKrzysztof Link
Willy KiekensJohann PraderAbbas MirakhorMohammed Daïri
Godert A. PosthumusOleh HavrylyshynAlexandre KafkaAlberto Calderon
Roberto MarinoGerver TorresK. P. GeethakrishnanL. Eustace N. Fernando
Giulio LanciottiNjkolaos CoumbisL. J. MwananshikuBarnabas S. Dlamini
Douglas E. SmeeGarrett F. MurphyZHANG MingWEI Benhua
Jarle BergoEva SrejberA. Guillermo ZoccaliAlberto F. Jimenez de Lucio
Muhammad Al-JasserAbdulrahman Al-Tuwaijricorentino V. SawtosYves-Marie T, Koissy
Senior Officers
Sterie T. Beza


Michael Mussa

Economic Counsellor

Mamoudou Touré


Leo Van Houtven


Graeme F. Rea


Administration Department

Mamoudou Touré


African Department

Hubert Neiss


Central Asian Department

Massimo Russo


European I Department
John Odling-Smee


European II Department

Shailendra J. Anjaria


External Relations Department

Vito Tanzi


Fiscal Affairs Department

Patrick B. de Fontenay


IMF Institute

François P. Gianviti

General Counsel

Legal Department

Paul Chabrier


Middle Eastern Department

J. B. Zulu


Monetary and ExchangeAffairs Department
John T. Boorman


Policy Development and Review Department

Michael Mussa

Director Research Department

Leo Van Houtven


Secretary’s Department

Kunio Saito


Southeast Asia and Pacific Department

John B. McLenaghan


Statistics Department

David Williams


Treasurer’s Department

Sterie T. Beza


Western Hemisphere Department
Warren N.Minami


Bureau of Computing Services

Patrick Delannoy


Bureau of Language Services

Joaquín Ferrán


Office in Europe (Paris)

Helen B. Junz

Director and Special Trade


Office in Geneva

Lindsay A. Wolfe


Office of Budget and Planning

Marcello Caiola


Office of Internal Audit and Review
Ian S. McDonald
Chief Editor

Mr. Stanley Fischer will replace Mr. Erb on September 1, 1994.

Alphabetical Listing

Mr. Stanley Fischer will replace Mr. Erb on September 1, 1994.

Alphabetical Listing

Letter of Transmittal to the Board of Governors

July 21, 1994

Dear Mr. Chairman:

I have the honor to present to the Board of Governors the Annual Report of the Executive Board for the financial year ended April 30, 1994, in accordance with Article XII, Section 7(a) of the Articles of Agreement of the International Monetary Fund and Section 10 of the Fund’s By-Laws. In accordance with Section 20 of the By-Laws, the administrative and capital budgets of the Fund approved by the Executive Board for the financial year ending April 30, 1995 are presented in Appendix VIII. The audited financial statements for the year ended April 30, 1994 of the General Department, the SDR Department, accounts administered by the Fund, and the Staff Retirement Plan and the Supplemental Retirement Benefit Plan, together with reports thereon of the External Audit Committee, are presented in Appendix IX.

Yours sincerely,


Chairman of the Executive Board

Chairman of the Board of Governors

International Monetary Fund

Reaffirming the Commitment to the Cooperative Growth Strategy

On the eve of the fiftieth anniversary of the Bretton Woods conference that led to the foundation of the International Monetary Fund, the Fund’s operations on behalf of its member countries were at a very high level as it continued to face the challenges of an evolving world economy. In particular, it confronted the enormous undertaking of assisting a large number of new members make the historic transition to a market economy.

During the 1993/94 financial year, there was substantial progress in implementing the cooperative medium-term growth strategy that had been adopted by the Interim Committee of the Board of Governors at its April 1993 meeting (Annual Report, 1993). At its meeting in September 1993, the Interim Committee reaffirmed this strategy and welcomed a number of developments that were consistent with it, including the achievement of low inflation rates in many industrial countries, lower interest rates in Europe, the commitment to medium-term budget consolidation in North America and in several European countries, the measures taken by Japan to strengthen the recovery of domestic demand, and the favorable reaction of financial markets to these developments. Meeting in April 1994, the Interim Committee again welcomed the progress that had been made in implementing the strategy and the steps taken by the Fund to intensify its surveillance over members’ economic policies. At the same time, it noted that the successful conclusion of the Uruguay Round gave a strong impetus to world trade and improved the climate for growth among the Fund’s member countries.

The Fund moved even closer to a universality of membership when Micronesia became a member in June 1993 and Eritrea in July 1994. The Fund now has 179 members, and membership applications are pending for the Federal Republic of Yugoslavia (Serbia and Montenegro), and the Republic of Bosnia and Herzegovina.

The world economic environment against which the Fund’s activities took place was marked by improving conditions for a strengthening of global economic growth. A particularly positive aspect of the world economic situation was the continued strong growth in many developing countries, particularly those that had pursued sound macroeconomic policies and implemented structural reforms. The realignment of the CFA franc in January 1994, which was accompanied by economic reforms supported by the Fund, is expected to promote resumed growth in the countries concerned.

In the industrial countries, inflation remained low, although growth declined slightly as cyclical divergences remained pronounced. A number of industrial countries made good progress toward medium-term budget consolidation, but fiscal deficits remained excessively large in many countries.

Although aggregate output continued to decline in the countries in transition, the decline was less than in 1992-93. In many cases, the reform process advanced further with the support of the Fund, including that extended through the systemic transformation facility (STF).

Also at its April 1994 meeting, the Interim Committee underlined the importance of adequate financial support to countries making the transition to market economies and encouraged the Fund to continue to play a central role in this process, including, if needed, through increased access to its own resources. It stressed that the monetary character and catalytic role of the Fund must be safeguarded and called for potential bilateral and multilateral creditors and donors to provide adequate and timely assistance in conjunction with the Fund. On the issue of a possible SDR allocation, the Interim Committee requested the Executive Board1 to continue to work on SDR issues and to make its recommendations to the next Committee meeting in October 1994.

The Fund continued to provide policy advice and financial and technical assistance to a broad range of its membership. Drawings (purchases) from the Fund’s general resources during 1993/94 totaled SDR 5.2 billion, about the same level as in 1992/93. The largest drawings were made by Russia (SDR 2.2 billion), Argentina and South Africa (SDR 0.6 billion each), Poland (SDR 0.4 billion), and India (SDR 0.2 billion). While purchases under stand-by and extended arrangements declined to SDR 1.8 billion from SDR 5.0 billion, this was offset by increased purchases under the compensatory and contingency financing facility (CCFF) and the STF, which totaled SDR 0.7 billion and SDR 2.7 billion, respectively. Disbursements under the structural adjustment facility (SAF) and enhanced structural adjustment facility (ESAF) totaled SDR 0.7 billion, somewhat above the level of 1992/93. Repayments (repurchases) amounted to SDR 4.3 billion in 1993/94, compared with SDR 4.1 billion in 1992/93.

The Fund was directly involved in supporting the structural reform of the poorest developing countries. In December 1993, recognizing the success of the ESAF in enabling the Fund to extend support to these seriously affected members, the Board agreed to enlarge and extend the ESAF Trust. Operations under the enlarged ESAF Trust began in February 1994. The target for additional loan resources for the enlargement is SDR 5 billion, which together with the loan agreements of SDR 5.1 billion approved to finance ESAF operations prior to the enlargement, would raise total loan resources under the ESAF Trust to SDR 10.1 billion. New loan commitments to the enlarged ESAF Trust currently amount to SDR 4.6 billion and new bilateral subsidy commitments are SDR 1.3 billion.

Continued progress under the Fund’s cooperative arrears strategy led to a number of arrears cases being resolved during the year and, for the second consecutive year, to a small decline in the level of outstanding overdue obligations to the Fund. As of April 30, 1994, 9 members were in protracted arrears to the Fund, compared with 12 a year earlier. As of the same date, five members were ineligible to use the Fund’s general resources—Liberia, Somalia, Sudan, Zaire, and Zambia. Effective August 9, 1993, Sudan’s voting and related rights in the Fund were suspended. This was the first application of the additional remedial measure that became available to the Fund following the entry into force of the Third Amendment to the Articles of Agreement, On April 8, 1994, a complaint was issued under Article XXVI, Section 2(c) of the Fund’s Articles, which initiated a procedure that might lead to the compulsory withdrawal of Sudan from the Fund. Zaïre’s voting and related rights were suspended effective June 2, 1994.

Technical assistance activities continued to expand in both scope and extent, as the number of new members requiring these services from the Fund increased. The Board reviewed the technical assistance work of the Fund in February 1994, taking into account both the growing demand for such assistance and the tight budget constraint affecting its supply. At the review it was recognized that the main determinant of the effectiveness of technical assistance was a country’s commitment to reform and policy adjustments. Also important were effective follow-up in carrying out the advice of technical assistance missions and improved coordination of the technical assistance programs of different international institutions.

During the year, the Fund’s staff resources grew by 5 percent to 2,610 staff years, with most of the increase being concentrated in those departments responsible for working with countries in transition to a market economy.

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