Report of the Executive Board to the Board of Governors

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

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

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

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

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

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

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

March 18, 1988

Resolved:

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