Summary Proceedings of the Forty-Second Annual Meetings of the Board of Governors 1987

Statement by the Chairman of the Boards of Governors, the Governor of the Fund and the Bank for Bahrain—Ibrahim Abdul Karim

International Monetary Fund. Secretary's Department
Published Date:
November 1987
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It is now my duty as Chairman of the Boards of Governors to bring to a close these Forty-Second Annual Meetings of the Bank and the Fund. I would like to take this opportunity to thank my fellow Governors, Mr. Conable, and Mr. Camdessus for their valuable contributions to our deliberations.

Looking back at our discussions, it is clear to me that we are all in agreement, first and foremost, on the crucial importance of close international cooperation. All sections of the international financial community—the industrial countries, developing countries, commercial banks, and multilateral institutions—will have to do their share if we are to be successful in restoring satisfactory and sustainable growth in the world economy.

Governors have emphasized the major role that must be played by the industrial countries, especially the larger ones, in order to strengthen noninflationary growth, while reducing the large external imbalances. President Reagan’s affirmation of his commitment to continue his fight against protectionism and pursuit of policies aimed at further reducing the U.S. fiscal deficit was therefore particularly reassuring. Moreover, if the benefits of faster growth in the developed world are to be shared by the developing countries, a more open trading environment is essential. Protectionist pressures must be resisted and existing trade restrictions must be rolled back.

Governors have applauded the efforts of many developing countries that have undertaken rigorous adjustments and successfully achieved high growth rates. They urged others to follow their example.

The World Bank

Governors welcomed the Bank’s initiative to assist the debt-distressed low-income countries, particularly those in sub-Saharan Africa. Further, Governors emphasized the importance of the timely provision of resources to support adjustment programs in developing countries.

I am gratified by the overwhelming support for a sizable capital increase for the World Bank that has been expressed by Governors. I trust that negotiations will begin promptly, so that an agreement can be reached by the end of the year. The Governors urged that those donors who have not formally notified IDA of their participation in the IDA-VIII Replenishment do so as quickly as possible, so as to avoid any interruption in commitments.

Governors also endorsed IFC’s expanding activities in support of the private sector, including its use of debt/equity swaps and capital market funds. Concerning MIGA, while progress toward its launching is under way, the ratifications needed for it to become effective are yet to be completed.

With regard to the environment, the Governors welcomed the new and stronger emphasis to be placed by the Bank on protection of the environment consistent with acceleration of economic growth. Governors noted that this topic will be discussed by the Development Committee at its future meetings.

The Fund

Broad support has been expressed for the Fund’s role in promoting a favorable economic environment. Governors particularly endorsed the Fund’s surveillance functions and the greater utilization of selected indicators in assessing the sustainability and desirability of key economic variables within a medium-term framework.

The central role of the Fund in the debt strategy was reaffirmed, and many Governors have called for a strengthening of the strategy. It is indeed essential that all parties to the strategy play their role in full. Growing markets, continued adjustment, and adequate flows of finance are essential to resolve the problem.

Overwhelming support was expressed for the Managing Director’s proposal to enhance the structural adjustment facility to help the low-income countries to overcome their difficulties. A number of speakers have indicated their governments’ commitment to make the necessary contributions to facilitate a substantial increase in the resources available to that facility.

* * * * *

These Annual Meetings have provided us with an opportunity to share our views on developments in the world economy and to express our support for the activities of the World Bank and the Fund. It is now the responsibility of all of us to follow through on our commitments.

On behalf of my fellow Governors, I wish to thank the Government and people of the United States for their gracious hospitality and to commend the staff of the Joint Secretariat for their role in ensuring the smooth functioning of these meetings. I extend my best wishes to the Governor for Sweden, who is succeeding me as Chairman of the Boards of Governors.

Fellow Governors, the soul sees things in their truth. Let us put the seal of love on all that we do, for nothing else lasts. May God’s peace by upon you all.

With that I hereby adjourn the 1987 Annual Meetings of the Boards of Governors of the World Bank and its affiliates and of the International Monetary Fund.

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