- International Monetary Fund. External Relations Dept.
- Published Date:
- September 1951
Part II of this Report consists of a general review of developments in restrictions during 1950 and early 1951, followed by a series of Country Surveys in which brief reviews are given of the restrictive systems of member countries availing themselves of the transitional arrangements under Article XIV, Section 2, of the Fund Agreement. Countries which have accepted Article VIII, Sections 2, 3, and 4, of the Fund Agreement (and for which no country survey is included) are El Salvador, Guatemala, Honduras, Mexico, Panama and the United States. As in the First Annual Report on Exchange Restrictions, the exchange controls and restrictions of Belgium and Luxembourg are surveyed jointly and, with the exception of Hong Kong, separate surveys have not been prepared for the non-metropolitan territories of members of the Fund.
In preparing the country surveys, it was necessary to set a cut-off date beyond which changes in restrictive systems would not be taken into account. Therefore, the surveys review the exchange controls and restrictions in force on December 31, 1950. In addition to this, each survey includes a brief chronological statement of the major changes during 1950.
The brief country surveys are based essentially upon the formal characteristics of the restrictive systems of member countries. In practice, the effectiveness and severity of the controls and restrictions are largely dependent on their administrative application rather than only on their formal nature. Quite apart from this problem, the general character of recent developments is difficult to determine from the mere listing of the formal changes which have occurred in various countries. Therefore, it has been felt desirable to include a section (Section B) which sets forth the developments in restrictions during 1950 and early 1951, indicating broadly the nature of the changes which have been taking place. Especially, this facilitates consideration of general trends which may be observed and of developments affecting more than one country. Changes in payments agreements and regional arrangements can thus be more readily described. Further, Section B reviews certain developments not covered by the country surveys, such as changes in the use of restrictions by Fund members not availing themselves of the transitional arrangements under Article XIV of the Fund Agreement and by non-member countries. Also, Section B carries the review of developments up to March 1, 1951, thus going beyond December 31, 1950, the cut-off date of the country surveys.
In both the country surveys and the general review below, the attempt has been to consider restrictive systems in their entirety. Member countries may operate restrictions under Article VIII of the Fund Agreement as well as under the transitional period arrangements of Article XIV. Restrictions under these two Articles can be indistinguishable in their effects. Completeness requires that restrictions under both Articles be covered. Exchange controls and restrictions on capital transfers are also noted, although Article VI, Section 3, provides that such controls may be exercised by members if they do not restrict payments for current transactions or unduly delay transfers of funds in settlement of commitments.
Similarly, coverage is not limited to a narrow consideration of exchange restrictions. So-called trade restriction elements form a part of many restrictive systems which, consequently, cannot be understood if these elements are ignored or treated separately. Thus, as in the First Report, restrictive systems are treated in their entirety. Coverage is, however, limited to practices closely linked to the exchange system and, in general, does not include such elements as import duties.