Chapter

Reports of the Joint Procedures Committee

Author(s):
International Monetary Fund. Secretary's Department
Published Date:
November 1990
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ChairmanKenya
Vice ChairmenDenmark
Indonesia
Reporting MemberMorocco

Other Members: Chile, Costa Rica, Djibouti, France, Gabon, Germany, India, Japan, Nepal, Nigeria, Paraguay, Portugal, St. Kitts and Nevis, Saudi Arabia, Turkey, United Kingdom, United States, Republic of Yemen

Report I1

September 25, 1990

Mr. Chairman:

At the meeting of the Joint Procedures Committee held on September 25, 1990, items of business on the agenda of the Board of Governors of the International Monetary Fund were considered.

The Committee submits the following report and recommendations:

1. Membership of the People’s Republic of Bulgaria

The Committee considered the Report by the Executive Board on the admission of the People’s Republic of Bulgaria to membership in the International Monetary Fund, set forth in Fund Document No. 6.

The Committee recommends that the Board of Governors of the Fund adopt the draft Resolution attached to the said Report.2

2. Membership of the Republic of Namibia

The Committee considered the Report by the Executive Board on the admission of the Republic of Namibia to membership in the International Monetary Fund, set forth in Fund Document No. 7.

The Committee recommends that the Board of Governors of the Fund adopt the draft Resolution attached to the said Report.3

Approved:

/s/ George Saitoti/s/ Mohammed Dairi
Kenya—ChairmanMorocco—Reporting Member

Report III1

September 25, 1990

Mr. Chairman:

The Joint Procedures Committee met on September 25, 1990 and submits the following report and recommendation:

Places and Dates of Forthcoming Annual Meetings The Committee considered the Reports of the Executive Boards of the Fund and the Bank on forthcoming Annual Meetings and recommends that the invitation extended by the Government of Spain be accepted, and that the Resolutions proposing that the 1994 Annual Meetings be convened in Madrid, Spain on October 4, 1994 and that the 1995 and 1996 Annual Meetings be convened, respectively, on October 10 and October 1, in Washington, D.C. be adopted (Fund Document No. 9, Bank/IFC/IDA Document No. 5).2

Approved:

/s/ George Saitoti/s/ Mohammed Dairi
Kenya—ChairmanMorocco—Reporting Member

Report IV1

September 27, 1990

Mr. Chairman:

At the meeting of the Joint Procedures Committee held on September 26, 1990, items of business on the agenda of the Board of Governors of the International Monetary Fund were considered.

The Committee submits the following report and recommendations:

1. 1990 Annual Report

The Committee noted that provision had been made for the annual discussion of the business of the Fund.

2. Report of the Chairman of the Interim Committee

The Committee noted the presentation made by the Chairman of the Interim Committee.2

The Committee recommends that the Board of Governors of the Fund thank the Interim Committee for its work.

3. 1990 Regular Election of Executive Directors

The Committee noted that the 1990 Regular Election of Executive Directors of the Fund [Annex I] had taken place and that the next Regular Election of Executive Directors will take place at the Annual Meeting of the Board of Governors in 1992.

4. Financial Statements, Report on Audit, and Administrative Budget

The Committee considered the Report on Audit for the financial year ended April 30, 1990, the Financial Statements contained therein (Fund Document No. 10 and Appendix IX of the 1990 Annual Report), and the Administrative Budget for the financial year ending April 30, 1991 and the Capital Budget for capital projects beginning in financial year 1991 (Fund Document No. 12 and Appendix VIII of the 1990 Annual Report).

The Committee recommends that the Board of Governors of the Fund adopt the draft resolution set forth in Fund Document No. II.3

5. Amendments of Rules and Regulations

The Committee has reviewed and noted the letter of the Managing Director and Chairman of the Executive Board to the Chairman of the Board of Governors, dated September 25, 1990, reproduced as Fund Document No. 13, regarding amendments of the Rules and Regulations set forth in Attachment I to that document [Annex II].

The Committee recommends that the Board of Governors of the Fund adopt the draft resolution set forth in Attachment 2 of Fund Document No. 13.4

Approved:

/s/ George Saitoti/s/ Abdelmalek Ouenniche
Kenya—ChairmanMorocco—Reporting Member

Annex I to Report IV: Regulations for the Conduct of the 1990 Regular Election of Executive Directors

  • Definitions: In these Regulations, unless the context shall otherwise require:

    • (a) “Articles” means the Articles of Agreement of the Fund.

    • (b) “Board” means the Board of Governors of the Fund.

    • (c) “Chairman” means the Chairman or Vice-Chairman acting as Chairman of the Board.

    • (d) “Governor” includes the Alternate Governor or any temporary Alternate Governor when acting for the Governor.

    • (e) “Secretary” means the Secretary or any Acting Secretary of the Fund.

    • (f) “Election” means the 1990 Regular Election of Executive Directors.

    • (g) “Eligible votes” means the total number of votes that can be cast in an election.

  • Date of Election: The election shall be held during a plenary session of the Annual Meeting to be held Wednesday, September 26, 1990.

  • Eligibility: The Governors eligible to vote in the election shall be all of the Governors except those of the members that:

    • (a) are entitled to appoint an Executive Director pursuant to Article XII, Section 3(fc)(i);

    • (b) have notified the Managing Director, in accordance with the procedure established by the Executive Board, of their intention to appoint an Executive Director pursuant to Article XII, Section 3(c).

  • Schedule E: Subject to the Supplementary Regulations set forth herein, the provisions of Schedule E of the Articles shall apply to the conduct of the election.

  • Number of Executive Directors to be Elected: Sixteen Executive Directors shall be elected. “Sixteen persons” shall be substituted for “fifteen persons” in paragraphs 2, 3, and 6, and “fifteen persons” shall be substituted for “fourteen persons,” and “sixteenth” shall be substituted for “fifteenth” in paragraph 6 of Schedule E.

  • Proportion of Votes Required to Elect: In paragraphs 2 and 5 of Schedule E “four percent” and in paragraphs 3,4, and 5, “nine percent” shall not be changed.

  • Nominations:

    • (a) Any person nominated by one or more Governors eligible to vote in the election shall be eligible for election as an Executive Director.

    • (b) Each nomination shall be made on a Nomination Form furnished by the Secretary, signed by the Governor or Governors making the nomination and deposited with the Secretary.

    • (c) A Governor may nominate only one person.

    • (d) Nominations may be made until 12 o’clock noon on the day before the day on which the election is scheduled to be held. The Secretary shall post and distribute a list of the candidates.

  • Supervision of the Election: The Chairman shall appoint such tellers and other assistants and take such other actions as he deems necessary for the conduct of the election.

  • Ballots and Balloting:

    • (a) One ballot form shall be furnished, before a ballot is taken, to each Governor eligible to vote. On any particular ballot only ballot forms distributed for that ballot shall be counted.

    • (b) Each ballot shall be conducted by the deposit of ballot forms, signed by Governors eligible to vote, in a ballot box.

    • (c) When a ballot has been completed, the Chairman shall cause the ballots to be counted and the names of the persons elected to be announced promptly after the tellers have completed their tally of the ballot forms. If a succeeding ballot is necessary, the Chairman shall announce the names of the candidates to be voted on and the members whose Governors are entitled to vote.

    • (d) If the tellers shall be of the opinion that any particular ballot is not properly executed, they shall, if possible, afford the Governor concerned an opportunity to correct it before tallying the results, and such ballot form, if so corrected, shall be deemed valid.

    • (e) If a Governor does not vote for any candidate when entitled to do so, he shall not be entitled to vote on any subsequent ballot and his votes shall not be counted under Article XII, Section 3(/)(iii) toward the election of any Executive Director.

    • (f) If, at the time of any ballot, a member does not have a duly appointed Governor, such member or its Governor shall be taken not to have voted on that ballot.

    • (g) If a second or subsequent ballot would be required under Schedule E, but the number of remaining candidates is equal to the number of vacancies to be filled, those candidates shall be deemed to have been elected on the preceding ballot, provided that paragraph 14 of these Regulations shall apply.

  • If on any ballot there are more candidates than the number of Executive Directors to be elected and two or more candidates tie with the lowest number of votes, no candidate shall be ineligible for election in the next succeeding ballot, but if the same situation is repeated on such succeeding ballot, the Chairman shall eliminate by lot one of the candidates from the following ballot.

  • If any two or more Governors having an equal number of votes shall have voted for the same candidate and the votes of one or more, but not all, of such Governors could be deemed under paragraph 4 of Schedule E to have raised the total votes received by the candidate above nine percent of the eligible votes, the Chairman shall determine by lot the Governor or Governors, as the case may be, who shall be entitled to vote on the next ballot.

  • When on any ballot the number of candidates is the same as the number of Executive Directors to be elected, and no candidate is deemed to have received more than nine percent of the eligible votes, each candidate shall be considered elected by the number of votes received even though a candidate may have received less than four percent of the eligible votes.

  • If the votes cast by a Governor raise the total votes received by a candidate from below to above nine percent of the eligible votes, the votes cast by the Governor shall be deemed under paragraph 4 of Schedule E not to have raised the total votes of the candidate above nine percent.

  • Any member whose Governor has voted on the last ballot for a candidate not elected may, before the effective date of the election, as set forth in section 16 below, designate an Executive Director who was elected, and that member’s votes shall be deemed to have counted toward the election of the Executive Director so designated.

  • Announcement and Review of Result:

    • (a) After the last ballot, the Chairman shall cause to be distributed a statement setting forth the result of the election.

    • (b) The Board of Governors, at the request of any Governor, will review the result of the election in order to determine whether, in light of the objectives set forth in Chapter O, Section 2 of the Report by the Executive Directors to the Board of Governors on the Proposed Second Amendment to the Articles of Agreement, an additional Executive Director should be elected to serve for the term of office commencing November 1, 1990.

  • Effective Date of Election of Executive Directors: The effective date of election shall be November 1, 1990, and the term of office of the elected Executive Directors, and of any Executive Director appointed under Article XII, Section 3(c), shall commence on that date. Incumbent elected Executive Directors shall serve through October 31, 1990.

  • General: Any question arising in connection with the conduct of the election shall be resolved by the tellers, subject to appeal, at the request of any Governor, to the Chairman and from him to the Board. Whenever possible, any such question shall be put without identifying the members or Governors concerned.

    As approved by Board of Governors

    Resolution No. 45-7, August 28, 1990

Statement of Results of Election, September 26, 1990
Candidate ElectedMembers Whose Votes Counted Toward Election5Number of Votes
G. K. AroraBangladesh3,125
Bhutan275
India22,327
Sri Lanka2,481
28,208
C. Scott ClarkAntigua and Barbuda300
The Bahamas914
Barbados591
Belize345
Canada29,660
Dominica290
Grenada310
Ireland3,684
Jamaica1,705
St. Kitts and Nevis295
St. Lucia325
St. Vincent290
38,709
DAI QiandingChina24,159
Jacques de GrooteAustria8,006
Belgium21,054
Czechoslovakia6,150
Hungary5,557
Luxembourg1,020
Turkey4,541
46,328
E. A. EvansAustralia16,442
Kiribati275
Korea4,878
New Zealand4,866
Papua New Guinea909
Philippines4,654
Seychelles280
Solomon Islands300
Vanuatu340
Western Samoa310
33,254
Renato FilosaGreece4,249
Italy29,341
Malta701
Poland7,050
Portugal4,016
45,357
Mohamed FinaishBahrain739
Egypt4,884
Iraq5,290
Jordan989
Kuwait6,603
Lebanon1,037
Socialist People’s Libyan Arab Jamahiriya5,407
Maldives270
Oman881
Pakistan5,713
Qatar1,399
Somalia692
Syrian Arab Republic1,641
United Arab Emirates2,276
Republic of Yemen1,455
39,276
Markus FogelholmDenmark7,360
Finland5,999
Iceland846
Norway7,240
Sweden10,893
32,338
J. E. IsmaelFiji615
Indonesia10,347
Lao People’s Democratic Republic543
Malaysia5,756
Myanmar1,620
Nepal623
Singapore1,174
Thailand4,116
Tonga282
Viet Nam2,018
27,094
Alexandra KafkaBrazil14,863
Colombia4,192
Dominican Republic1,371
Ecuador1,757
Guyana742
Haiti691
Panama1,272
Suriname743
Trinidad and Tobago1,951
27,582
Abbas MirakhorAfghanistan1,117
Algeria6,481
Ghana2,295
Islamic Republic of Iran6,850
Morocco3,316
Tunisia1,632
21,691
L. B. MonyakeAngola1,700
Botswana471
Burundi677
Ethiopia956
The Gambia421
Kenya1,670
Lesotho401
Liberia963
Malawi622
Mozambique860
Namibia950
Nigeria8,745
Sierra Leone829
Sudan1,947
Swaziland497
Tanzania1,320
Uganda1,246
Zambia2,953
Zimbabwe2,160
29,388
G. A. PosthumusBulgaria3,350
Cyprus947
Israel4,716
Netherlands22,898
Romania5,484
Yugoslavia6,380
43,775
Corentino SantosBenin563
Burkina Faso566
Cameroon1,177
Cape Verde295
Central African Republic554
Chad556
Comoros295
Congo623
Côte d’Ivoire1,905
Djibouti330
Equatorial Guinea434
Gabon981
Guinea829
Guinea-Bissau325
Madagascar914
Mali758
Mauritania589
Mauritius786
Niger587
Rwanda688
Sao Tome and Principe290
Senegal1,101
Togo634
Zaire3,160
18,940
Angel TorresCosta Rica1,091
El Salvador1,140
Guatemala1,330
Honduras928
Mexico11,905
Nicaragua932
Spain13,110
Venezuela13,965
44,401
Alejandro Vegh VillegasArgentina11,380
Bolivia1,157
Chile4,655
Paraguay734
Peru3,559
Uruguay1,888
23,373
/s/ Jens Thomsen/s/ Soegito Sastromidjojo
(Denmark)(Indonesia)
TellerTeller

Annex II to Report IV

September 25, 1990

Dear Mr. Chairman:

In accordance with Section 16 of the By-Laws, the attached amendment of the Rules and Regulations adopted since the 1989 regular meeting (Annex I) is submitted for review by the Board of Governors. A draft resolution for approval by Governors appears in Annex II.

On December 27, 1989 the Executive Board decided to modify Rule N-12, which provides for notification to the Executive Board by the Managing Director of any action to appoint or dismiss any person “at or above the rank of division chief or receiving a salary equal to or exceeding that of a division chief.”

As a result of the Fund’s new grade and salary structure, the same salary range is now attributed to two grades (A 15 and B1), even though they are not equivalent in rank within the institutional structure of Fund positions. The salary structure approved by the Executive Board on January 30, 1986 recognizes the existence of a certain number of positions below the rank of a division chief, and therefore below the first managerial level, whose requirements and responsibilities justify the attribution of a salary range equivalent to that of a division chief. As the salary range of Grade A15 does not provide an indication of rank at least equal to that of a division chief, it was considered appropriate to replace the reference to salary range in Rule N-12 with a reference to the rank of division chief, which is the threshold managerial position in the institutional structure of the Fund. In addition, the modification of Rule N-12, by excluding reference to salary range, will ensure that possible future changes to the Fund’s salary structure will not affect the determination of positions requiring such notification to the Board.

The Executive Board has made no other changes in the Rules and Regulations since the last Annual Meeting.

Very truly yours,

/s/

M. Camdessus

Managing Director

and

Chairman of the Executive Board

Chairman of the Board of Governors

1990 Annual Meeting

International Monetary Fund

Attachment. Rules and Regulations Amended Since the 1989 Annual Meeting

1. Rule N-12. Text as amended December 27, 1989.

The Managing Director shall inform the Executive Board at least two weeks in advance of any action to appoint or dismiss any person to or from a position graded equal to or above that of a division chief. Such information shall not be necessary for other appointments or dismissals by the Managing Director.

Report VI1

September 27, 1990

Mr. Chairman:

The Joint Procedures Committee met on September 26, 1990 and submits the following report and recommendations:

1. Development Committee

The Committee noted that the Annual Report of the 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) has been presented to the Boards of Governors of the Fund and the Bank pursuant to paragraph 5 of Resolutions Nos. 29-9 and 294 of the Fund and Bank, respectively (Fund Document No. 5 and Bank Document No. 3) [Annex].

The Committee recommends that the Boards of Governors of the Fund and the Bank note the report and thank the Development Committee for its work.

2. Officers and Joint Procedures Committee for 1990/91

The Committee recommends that the Governor for Ecuador be Chairman, and that the Governors for Lesotho and the Netherlands be Vice Chairmen, of the Boards of Governors of the Fund and of the World Bank Group, to hold office until the close of the next Annual Meetings.

It is further recommended that a Joint Procedures Committee be established to be available, after the termination of these meetings and until the close of the next Annual Meetings, for consultation at the discretion of the Chairman, normally by correspondence and, if the occasion requires, by convening; and that this Committee shall consist of the Governors for the following members: Bangladesh, Bolivia, Canada, Cameroon, Ecuador, France, Germany, Ghana, Grenada, Iceland, Japan, Lesotho, the Netherlands, Poland, Saudi Arabia, Syrian Arab Republic, Thailand, Togo, Tunisia, United Kingdom, United States, and Vanuatu.

It is recommended that the Chairman of the Joint Procedures Committee shall be the Governor for Ecuador, and the Vice Chairmen shall be the Governors for Lesotho and the Netherlands, and that the Governors for Bangladesh shall serve as Reporting Member.

Approved:

/s/ George Saitoti/s/ Abdelmalek Ouenniche
Kenya—ChairmanMorocco—Reporting Member

Annex to Report VI

September 24, 1990

Sir:

As Chairman of the Joint Ministerial Committee of the Boards of the Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries (Development Committee), I have the honor to present herewith to the Boards of Governors the XVIth Annual Report by the Committee on the progress of its work for the period July 1989-June 1990. The report is presented in compliance with Section 5(i) of the Bank Board of Governors Resolution No. 294 and the Fund Board of Governors Resolution No. 29-9, adopted on October 2, 1974.

Yours sincerely,

/s/

B.T.G. Chidzero

Chairman

Development Committee

Attachment

The Honorable

George Saitoti

Chairman

Boards of Governors

International Monetary Fund and the World Bank Group

Attachment. Report of the Joint Ministerial Committee of the Board of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries

(July 1989-June 1990)

I. Introduction

The Committee held its 37th and 38th regular meetings during the period under review. Both meetings, chaired by B.T.G. Chidzero, Senior Minister of Finance, Economic Planning and Development of Zimbabwe, were convened in Washington, D.C., the first on September 25, 1989 and the second on May 8, 1990.

The meetings were conducted on the basis of the usual format, with a morning plenary session for general statements and an afternoon plenary session for an in-depth discussion on selected aspects of the items on the agendas. A luncheon for members was held at each meeting for a private exchange on a specific topic related to an agenda item (the implications of the external environment for structural adjustment programs were discussed in September 1989 and the adequacy of official flows to severely indebted countries and the experience with official debt relief for those countries in May 1990).

The Committee’s discussions were assisted by a number of issues papers and reports prepared by the staffs of the IMF and the World Bank, as well as by the written opening statements of the Chairman and the reports of the President and the Managing Director. In addition, papers related to the agenda items were presented in advance by the following observers:

African Development Bank

Asian Development Bank

General Agreement on Tariffs and Trade (GATT)

Inter-American Development Bank

International Fund for Agricultural Development

Islamic Development Bank

OPEC Fund for International Development

United Nations Conference on Trade and Development (UNCTAD)

II. International Economic Setting

The Committee discussed several important international development issues aimed at promoting and sustaining growth and development in developing countries, against the background of a volatile and uncertain external economic climate facing them. The 1980s, in general, were very difficult years for most developing countries. At the end of the decade, apart from Asia, GDP per capita growth rates were stagnant or declining in all developing regions. The growth of real GDP in developing countries as a whole fell from 4 percent in 1988 to 3 percent in 1989. GDP per capita growth rates for the sub-Saharan African, Latin American and the Caribbean regions were negative in both 1988 and 1989. The GDP per capita growth rate was also negative for the region comprising the developing countries of Europe, the Middle East and North Africa in 1989 due to the absence of growth in Eastern Europe. These unsatisfactory trends coincided with the seventh consecutive year of expansion in the industrial countries.

The weakness in the terms of trade, higher interest rates, as well as the persistence of protectionist agricultural, industrial and trade policies in many industrial and developing countries continued to influence adversely the economic prospects of many developing countries. The level of non-fuel primary commodity prices despite a recent modest rise, in real terms, remained a constraint to the ability of a number of developing countries dependent on commodity exports to adjust their balance of payments.

At the same time, problems of severe indebtedness continued to affect the adjustment and growth efforts of many developing countries. In this connection, the negotiations of debt and debt service reduction arrangements under the strengthened debt strategy announced in the spring of 1989 and the implementation of debt relief measures in favor of the severely indebted low-income countries were seen as important steps in addressing the debt problem.

The above-mentioned developments and the sharp acceleration of inflation in many of the developing countries underscored the need for sound macroeconomic and structural policies and the need for the adoption and the implementation of adjustment programs. In fact, an increasing number of developing countries adopted growth-oriented adjustment programs supported by the World Bank and the IMF, thereby improving confidence and the prospects for investment flows and the repatriation of flight capital. The situation also underscored the importance of strengthening adjustment efforts underway as well as creating a supportive external environment through the adoption and implementation by all countries of appropriate monetary, fiscal as well as structural policies aimed at eliminating existing trade barriers.

In spite of a number of positive developments regarding official development assistance flows, aggregate transfers of resources to developing countries continued to fall particularly as a result of the drying up of commercial flows to severely indebted middle-income countries. The reversed flow of resources from developing to developed countries, which started in 1987, continued in 1989.

III. International Development Issues

The September 1989 and May 1990 agendas of the Committee were determined in the light of the current international development situation, macroeconomic trends and main problem areas outlined above. The Committee had discussions on the following issues confronting the developing countries:

  • (1) Structural adjustment.

  • (2) The debt strategy and its impact on the development prospects of the severely indebted countries.

  • (3) Long-term perspective for the development of sub-Saharan Africa.

  • (4) The contribution of the private sector to development and the roles of the World Bank and the IMF.

  • (5) Environmental issues.

  • (6) Transfer of resources.

  • (7) International trade developments.

1. Structural Adjustment

The Committee had initiated its first global review of experience with growth-oriented structural adjustment programs assisted by the World Bank and the IMF by focusing mainly on the design and implementation of those programs at its April 1989 meeting.

In the fall of 1989, the Committee reiterated that the essential ingredients in the design and implementation of successful structural adjustment programs were: (a) strong political commitment by developing countries to sound macroeconomic policies; (b) broad public support for programs; (c) integration of poverty-reduction objectives, environmental considerations, and contingency planning in the design of programs; (d) strengthening of administrative and institutional capacity; (e) adequate and timely financing to support programs; and (f) a favorable external economic climate enabling developing countries to implement structural adjustment programs.

In reviewing the implications of the external macroeconomic climate for the adjustment process in developing countries members were of the view that, while growth-oriented structural adjustment could yield positive results even under unfavorable external conditions, the pace, scale and sustainability of benefits would be adversely affected by an unsupportive external setting. Accordingly, members generally considered that the adoption by industrial countries of economic policies, supportive of adjustment efforts of developing countries, would also help improve their own economic performance; moreover, it would assist the integration of developing countries into the world economy. The Committee requested the World Bank and the IMF to prepare a report on the impact of industrial countries’ trade, agricultural and industrial policies on developing countries for its spring 1991 meeting. The Committee also asked the Bank and the Fund to keep under review the results of structural adjustment programs that developing countries undertake.

2. The Debt Strategy and Its Impact on the Development Prospects of the Severely Indebted Countries

The Committee continued its review of the debt strategy and its impact on the development prospects of all severely indebted countries at its two meetings under review. It also agreed to continue this review process at its September 1990 meeting.

(a) Strengthened debt strategy

In the fall of 1989, the Committee reaffirmed its support for the strengthened debt strategy it had endorsed at its spring 1989 meeting, based on a cooperative framework between the debtor countries, the commercial banks and official creditors. The Committee underscored the need for a flexible case-by-case approach to realistic commercial bank financing packages, including both debt and debt-service reduction and new financing as appropriate. It welcomed the rapid adoption of guidelines by the World Bank and the IMF for their support for voluntary debt and debt-service-reduction packages. Members encouraged debtor countries to develop strong economic reform programs in cooperation with the two Bretton Woods institutions. They also re-emphasized the importance of special efforts by debtor countries to attract foreign direct investment, promote the repatriation of flight capital and implement appropriate debt equity swap programs. They stressed that the implementation of officially supported debt and debt-service reduction should not divert World Bank and IMF financial support from countries which have performed well. The Committee also expressed its appreciation of the substantial financial support of the Japanese Government for adjustment programs by debtor countries and encouraged other countries in a position to do so to take similar action.

In the spring of 1990, the Committee welcomed the progress achieved so far in the implementation of the debt strategy. Members reiterated the need to maintain the case-by-case approach and stressed again the central importance of the adoption of adjustment programs by debtor countries. They also noted that the combination of adjustment programs and commercial bank financing arrangements could help improve confidence in the economies of debtor countries. The Committee called on the World Bank and the IMF to continue to provide support for debt and debt-service reduction programs, with the necessary flexibility, under their established guidelines which they reaffirmed and to keep the strengthened debt strategy under review. The Committee also called on the World Bank and the IMF to emphasize measures to promote investment and capital repatriation in country reform programs.

(b) Severely indebted lower middle-income countries

Members expressed their concern about the development needs of severely indebted lower middle-income countries whose debt is mainly to official creditors. In the fall of 1989, the Committee stated that special attention should be given to that issue. In the spring of 1990, members reiterated this concern noting that a number of lower middle-income countries had uncertain prospects for a return to external viability and sustained growth. The Committee, therefore, asked the World Bank and the IMF to continue to analyze the debt problems of these countries as well as those of severely indebted middle-income countries with significant official debt.

(c) Severely indebted low-income countries

The debt issues of low-income countries has been one of the major concerns of the Committee since the mid-eighties. In this connection, the Committee welcomed the following measures: (a) concessional official debt reschedulings by the Paris Club under Toronto terms in favor of severely indebted low-income countries undertaking adjustment programs; (b) cancellation by an increasing number of creditor countries of official development assistance (ODA) debt owed by many low-income countries, particularly in sub-Saharan Africa; (c) utilization of IDA reflows for the benefit of IDA-only countries with outstanding IBRD debt; and (d) activation by the World Bank of a $100 million facility to assist eligible IDA-only countries to reduce their debt to commercial banks. Members, however, expressed their concern that despite efforts by the Paris Club and other debt relief measures mentioned above, a number of countries had uncertain prospects for an early return to external viability. The Committee, therefore, requested the World Bank and the IMF to undertake an evaluation of the benefits of debt relief and other measures taken so far in favor of the severely indebted low-income countries. Members also considered that, given the low debt-service capacity of these countries, their new commitments for assistance to them should be provided on highly concessional terms.

(d) Indebted countries which have avoided debt restructuring

The importance of the needs of a number of indebted developing countries which had not restructured their external debt obligations and which had been implementing sound macroeconomic policies was also recognized by the members. The Committee urged that efforts be made to maintain adequate financial flows to these countries, including multilateral flows, to support their adjustment, development, and poverty reduction efforts.

3. Long-Term Perspective for the Development of Sub-Saharan Africa

In the spring of 1990, the Committee reviewed the World Bank’s report “Sub-Saharan Africa: From Crisis to Sustained Growth” and endorsed the approach of the strategic agenda outlined in that report. Members particularly emphasized the following points made in the report: (a) sustained growth and development required firm commitment and good governance on the part of the concerned governments of the sub-Saharan African countries given their primary responsibility in the design and implementation of their development strategies; (b) the need for adequate, effective, and well-coordinated funding from donors and multilateral institutions, noting that large ODA flows to those countries would continue to be required in the 1990s; and (c) resources should be channelled more selectively to countries implementing adjustment programs, thereby maximizing the effectiveness of external assistance.

The Committee emphasized the complementary roles of the World Bank and the IMF in the long-term development process of sub-Saharan Africa, and requested that it be kept informed of the progress in implementing the long-term strategic agenda. In this respect, the initiative of the Government of the Netherlands to convene an international conference on sub-Saharan Africa in Maastricht in July 1990 was welcomed.

The Committee also welcomed the agreement, in principle, of donors for an extension of the Special Program of Assistance (SPA) beyond 1990 and urged them to indicate their levels of adjustment assistance for 1991-93 at the SPA donor session to be held in the fall of 1990. Members also suggested that donors continue to consider steps to untie their commitments in the framework of the SPA and to further harmonize procurement and disbursement procedures.

4. The Contribution of the Private Sector to Development and the Roles of the World Bank and the IMF

The discussion of this question at the spring 1990 meeting was a reflection of the growing emphasis given by a number of developing countries to the role of the private sector, including the promotion of domestic and foreign investment, and to market-oriented policies in their development strategies in order to increase efficiency in utilizing scarce resources and to mobilize higher levels of domestic resources. In the discussion, members noted that it was also a timely and important issue given recent developments in Eastern Europe.

The Committee emphasized the importance of creating an enabling environment favorable to private sector activities through macroeconomic stability, structural adjustment, and appropriate price and investment policies. The need to adopt legislation and administrative practices compatible with sound private sector development was also stressed. At the same time the Committee underscored the complementarity of the roles of efficient and well-managed private and public sectors in developing countries, noting that infrastructure and social services, including investments in human resources, were needed to support private sector development and economic growth in general. The Committee also noted that the confidence of private investors could be enhanced through the adoption by all countries of open markets and sectoral adjustment policies and a supportive financial climate.

In view of the drying up of private flows, particularly from commercial banks at the end of the 1980s and the continuous debt-servicing problems of developing countries, members recognized that foreign direct investment was a valuable non-debt-creating external resource. The Committee, therefore, stressed the need for developing countries to mobilize foreign direct investment and repatriate flight capital. It noted the importance of the role that such foreign direct investment can play in transferring technology, improving managerial skills, and facilitating market development.

The Committee urged the World Bank and the IMF to assist developing countries’ efforts to implement long-term institutional, regulatory and legal reforms, consistent with their socioeconomic situations. The Committee encouraged the World Bank Group agencies to give a very high priority to private sector development in their operations and to continue to expand the scope of their activities in this area. Members also emphasized the importance of close coordination within the World Bank Group so as to ensure that private sector considerations were better integrated into its operations while avoiding duplication. The Committee requested the World Bank to move expeditiously to implement its action plan for private sector development to help achieve this objective.

Given the rapidly growing needs for private sector assistance, the Committee outlined the important roles of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). Noting the need for IFC to have adequate means to fulfill its role in the coming years, the Committee encouraged the IFC’s Board of Executive Directors to continue its discussion of the adequacy of the capital of the Corporation, including modalities of subscription. The Committee also emphasized the benefits that countries could derive from membership in the MIGA.

The Committee requested that the implementation of the World Banks’ action plan for private sector development be reviewed at the Fall 1990 meeting and that members be kept informed of progress in the discussion of the adequacy of the IFC’s capital.

5. Environmental Issues

At both its meetings under review the Committee reiterated the importance it attached to environmental issues. The Committee had a special plenary session in September 1989 devoted to “World Bank support for the environment” at which members welcomed the progress by the World Bank in integrating environmental issues into Bank activities, including the preparation and release of environmental impact assessment guidelines thus providing an opportunity for interested parties to comment. Members also expressed their satisfaction on the steps taken to increase public awareness of World Bank activities in the environmental area and encouraged the World Bank to increase public access to environmental information on projects and programs. The Committee noted that the integration of environmental considerations into development projects could result in increased costs as well as benefits and could require technological transfers to the developing countries. It was also recognized that additional external financial and technical support from donor governments and multilateral development institutions could help meet these costs and requirements. In this connection, the Committee requested the World Bank to prepare a study of mechanisms and financial requirements that might be needed to address the environmental challenges of the developing world.

While it was recognized that the bulk of global environmental pollution so far stemmed from the industrial countries, the Committee agreed that a cooperative effort was required by both the industrial and the developing countries in addressing this critical problem. The Committee, therefore, urged all countries to take measures to penalize polluters and to check the flow of exports and imports of environmentally damaging materials. Members took special note of the importance of the global climate change issue. The World Bank’s increasing emphasis on energy conservation and efficiency programs and on conversion to less environmentally damaging fuels was welcomed. The World Bank was encouraged to assist in the introduction of alternatives to chlorofluorocarbons. Members commended the World Bank’s efforts in increasing its work in conservation and sustainable development of forestry resources and, more generally, in the promotion of environmental action plans. The World Bank was also encouraged to assist countries in the development of arrangements such as debt-for-nature swaps.

In the spring of 1990, the Committee noted the progress being made by the World Bank on a number of environmental issues, such as the new Operational Directive on Environmental Assessment, the integration of environmental concerns into economic analysis, and the growth in lending for freestanding environmental projects. The World Bank was encouraged to continue its efforts to take environmental consideration fully into account in its operations. The Committee noted that there would be a comprehensive review of World Bank-related environmental issues in the World Bank’s 1990 Annual Report on Environment in accordance with the request it had made at its September 1988 meeting in Berlin. The Committee stressed that the aforementioned report should include a review of the progress made in respect of Bank-related issues which had been discussed in its previous meetings, such as environmental impact assessment guidelines, environmental action plans, energy efficiency and conservation, forestry protection, and debt-for-nature swaps.

Members considered a report prepared by the World Bank on funding global environmental protection. The Committee agreed that the World Bank should play an important role in this area and do further work to develop methods to assist developing countries to take actions which would contribute to the reduction of global environmental problems. Members also agreed that efforts should continue to be made to develop proposals for a pilot mechanism for this purpose, taking into account the Bank’s existing programs. The Committee urged the World Bank to take steps to strengthen and expand its environmental programs and thus assist developing countries to contribute to the achievement of the same objective in accordance with their priorities. The World Bank was also urged to proceed with this work expeditiously in close collaboration with UNEP and UNDP and in consultation with other interested parties. The Committee underlined the need for sufficient flexibility to attract as wide support as possible. Emphasizing the importance it continued to attach to environmental issues, the Committee decided to consider those further at its fall 1990 meeting.

6. Transfer of Resources

Given the mandate of the Committee, the question of the transfer of resources to developing countries was considered by the members as a standing agenda item at both its meetings under review.

In the fall of 1989, the Committee noted that net flows in real terms were well below the levels of the early 1980s. Although flows of official development assistance actually increased in 1988, reversing the earlier decline of the mid-1980s, the Committee nevertheless recognized that more needed to be done by all countries to support the objectives of growth and poverty reduction. The Committee again repeated its call on donor countries, particularly those with assistance levels below the 0.7 percent ODA/GDP target, to make further efforts to secure financial flows to developing countries. The Committee also made a special call for the international community to continue to support high-priority programs in sub-Saharan Africa.

Since a sharp decline in private flows to heavily indebted countries and their debt-service difficulties had been noted, the Committee called for sustained efforts on the part of all countries to stimulate the flow of private direct investment and the repatriation of capital as well as to create an economic climate conducive to external and domestic investment. The Committee also stressed the need for strengthening the resources of the Bretton Woods institutions. The Committee particularly emphasized the urgency of completing negotiations by the November 1989 meeting of IDA Deputies and of achieving agreement on a substantial replenishment of IDA-9.

In the spring of 1990, the Committee expressed its appreciation for a number of positive developments, such as the successful negotiations for the Ninth Replenishment of IDA which would begin on July 1, 1990, the signing of the Lomé IV Convention, and a modest increase in official development finance in 1989. The Committee also welcomed the understandings reached by the Interim Committee on the Ninth General Review of Quotas that would allow the IMF to continue to play its role at the center of the international monetary system. In spite of these developments, the Committee noted with concern the significant decline in aggregate net flows to the severely indebted middle-income countries in 1989, reflecting a sharp drop in private flows. Members noted the implications of this negative trend on domestic investment in those developing countries at a time when many of them were struggling with severe poverty problems. Members also expressed their concern about the impact of the recent rise in interest rates on the cost of debt services of severely indebted countries.

Members stressed that financial support for reforms in Eastern Europe called for adequate resources so that the requirements of this region could be met while also allowing increased financial flows on appropriate terms to developing countries. The Committee also welcomed the decision to create the European Bank for Reconstruction and Development (EBRD) and called on the World Bank Group and the IMF to work with the EBRD in assisting economic and political reforms and the transition to market economies in Eastern Europe.

Since it is in the interest of all borrowers and shareholders to have overdues handled in a way which continues to allow these institutions to keep the costs of borrowed funds to the lowest level possible, the Committee asked the World Bank, in consultation with the regional development banks, to review the current policies and procedures for handling overdues and to present a report to the Committee at its next meeting.

7. International Trade Developments

Members were concerned with the impact of trade policies on developing countries and the uncertain prospects for a successful conclusion of the Uruguay Round of trade negotiations. They noted the adverse effects of industrial and agricultural protectionism on the effective implementation of structural adjustment programs of the developing countries. Therefore, the importance of an open multilateral trading system in improving the external economic environment for the success of such programs was stressed.

Members heard from the GATT representative that the multilateral trade negotiations under the Uruguay Round were in their final phase and that, while much progress had been achieved, a number of key agricultural, industrial, and other issues remained unresolved. The Committee, therefore, called on all countries to reach an early agreement on these issues and to agree on a strengthened multilateral trading system based on predictable and uniform rules to promote trade liberalization by all countries. The Committee stressed that the successful conclusion of the Uruguay Round negotiations was essential to prevent the drift toward protectionism. Members also emphasized that an improvement in market access and greater participation by developing countries in GATT benefits were essential and, in many cases, more important than ODA flows or debt relief in facilitating the structural adjustment and growth-oriented efforts of developing countries. The Committee reiterated its call on the World Bank and the IMF to keep under study, in close consultation with the GATT, the implications of regional trading arrangements for developing countries’ economic prospects for consideration at a future meeting.

Annexes

  • A. Members of the Committee

  • B. Agendas and Press Communiqués of Meetings Held in September 1989 and May 1990

Annex A: Members of the Development Committee

MemberCountries
1.Mohammad Abalkhail

Minister of Finance and

National Economy

Saudi Arabia
Saudi Arabia
2.Ibrahim Abdul Karim

Minister of Finance and

National Economy

Bahrain
Bahrain, Egypt, Iraq,

Jordan, Kuwait, Lebanon,

Socialist People’s Libyan

Arab Jamahiriya, Maldives,

Oman, Pakistan, Qatar,

Somalia, Syrian Arab

Republic, United Arab

Emirates, Republic of Yemen
3.Pedro Aspe

Secretary of Finance and Public Credit

México
Costa Rica, El Salvador,

Guatemala, Honduras, México,

Nicaragua, Spain, Venezuela
4.Pierre Bérégovoy

Minister of State for Economy, Finance, and the Budget

France
France
5.Mohamed Berrada

Minister of Finance

Morocco
Afghanistan, Algeria, Ghana,

Islamic Republic of Iran,

Morocco, Tunisia
6.Nicholas F. Brady

Secretary of the Treasury

United States
United States
7.Guido Carli

Minister of the Treasury

Italy
Greece, Italy, Malta,

Poland, Portugal
8.B.T.G. Chidzero1

Senior Minister of Finance, Economic Planning and Development

Zimbabwe
Botswana, Burundi, Ethiopia,

The Gambia, Kenya, Lesotho,

Liberia, Malawi, Mozambique,

Nigeria, Sierra Leone,

Sudan, Swaziland, Tanzania,

Uganda, Zambia, Zimbabwe,

(Angola)
9.Madhu Dandavate

Minister of Finance

India
Bangladesh, Bhutan, India,

Sri Lanka
10.Jorge Gallardo Zavala

Minister of Finance and Public Credit

Ecuador
Brazil, Colombia, Dominican

Republic, Ecuador, Guyana,

Haiti, Panama, Suriname,

Trinidad and Tobago
11.Enrique Garcia

Minister of Planning and Coordination

Bolivia
Argentina, Bolivia, Chile,

Paraguay, Peru, Uruguay
12.Ryutaro Hashimoto

Minister of Finance

Japan
Japan
13.Paul J. Keating, M.P.

Deputy Prime Minister and Treasurer of the

Commonwealth of Australia

Australia
Australia, Kiribati, Korea,

New Zealand, Papua New

Guinea, Philippines,

Seychelles, Solomon Islands,

Vanuatu, Western Samoa
14.Wim Kok

Deputy Prime Minister and Minister of Finance

Netherlands
Cyprus, Israel, Netherlands,

Romania, Yugoslavia
15.Moïse Koumoué Koffi

Minister of Economy, Finance and Budget

Côte d’Ivoire
Benin, Burkina Faso,

Cameroon, Cape Verde,

Central African Republic,

Chad, Comoros, People’s

Republic of the Congo,

Côte d’Ivoire, Djibouti,

Equatorial Guinea, Gabon,

Guinea, Guinea-Bissau,

Madagascar, Mali,

Mauritania, Mauritius,

Niger, Rwanda, Sao Tome

and Principe, Senegal,

Togo, Zaire
16.John Major

Chancellor of the Exchequer

United Kingdom
United Kingdom
17.Philippe Maystadt

Minister of Finance

Belgium
Austria, Belgium, Hungary,

Luxembourg, Turkey
18.Pramual Sabhavasu

Minister of Finance

Thailand
Fiji, Indonesia, Lao

People’s Democratic

Republic, Malaysia, Myanmar,

Nepal, Singapore, Thailand,

Tonga, Viet Nam
19.Arne Skauge

Minister of Finance

Norway
Denmark, Finland, Iceland,

Norway, Sweden
20.WANG Bingqian

State Councillor and Minister of Finance

China
China
21.Jürgen Warnke

Federal Minister for Economic Cooperation

Federal Republic of Germany
Federal Republic of Germany
22.Michael H. Wilson

Minister of Finance

Canada
Antigua and Barbuda,

The Bahamas, Barbados,

Belize, Canada, Dominica,

Grenada, Ireland, Jamaica,

St. Kitts and Nevis,

St. Lucia, St. Vincent

and the Grenadines

Annex B: Agendas and Press Communiqués of Meetings Held in September 1989 and May 1990

  • Meeting of September 25, 1989

    • A. Agenda

      • Problems and issues in structural adjustment

      • Development prospects for severely indebted countries and the evolving debt strategy

      • World Bank support for the environment

      • Reports:

        • (a) Status of the negotiations for the Ninth Replenishment of IDA

        • (b) trends in the transfer of real resources

        • (c) current international trade developments

      • Annual Report of the Committee

      • Other Business

  • B. Press Communiqué (text published in Summary Proceedings, 1989, pages 238–42).

  • Meeting of May 8, 1990

    • A. Agenda

      • The contribution of the private sector to development, and the roles of the Bank Group and the Fund

      • The debt strategy and its impact on the development prospects for all severely indebted countries

      • Long-term perspective for development of sub-Saharan Africa

      • Reports:

        • (a) Progress report on environmental issues

        • (b) trends in the transfer of resources

        • (c) current international trade developments

      • Other Business

  • B. Press Communiqué

    • The Development Committee met in Washington, D.C. on May 8, 1990 under the chairmanship of the Hon. B.T.G. Chidzero, Senior Minister of Finance, Economic Planning and Development of Zimbabwe.1

    • In the context of its broad mandate for the transfer of resources to developing countries, the Committee focused its discussion on three topics: (a) the contribution of the private sector to development and the roles of the World Bank Group and the IMF: (b) the debt strategy and its impact on the development prospects for all severely indebted countries: and (c) the long-term perspective for development of sub-Saharan Africa. The concept of a global environmental facility, trends in the transfers of resources, and current international trade developments were also considered.

    • The Committee welcomed the growing emphasis given by developing countries to the role of the private sector, including the promotion of domestic and foreign investment, in their development strategies. It underscored the importance of creating an enabling environment favorable to private sector activities through macro-economic stability, structural adjustment, and appropriate price and investment policies. The need to adopt legislation and administrative practices compatible with sound private sector development was also stressed. The complementarity of the roles of efficient and well-managed private and public sectors in development was emphasized. The Committee noted that infrastructure and social services, including investments in human resources, are needed to support private sector development and for economic growth in general. The Committee also noted that the confidence of private investors could be enhanced through the adoption by all countries of open markets and sectoral adjustment policies and a supportive financial environment. Recalling its earlier invitation to the Bank and the Fund to keep under review the impact of industrial countries’ trade, agricultural, and industrial policies on developing countries, members requested a report on this topic for its spring 1991 meeting.

    • Members recognized that foreign direct investment is a valuable non-debt creating external resource for developing countries, and emphasized the need, particularly for severely indebted countries, to mobilize direct investment and repatriate flight capital. They also noted the role of such investment in transferring technology, improving managerial skills and facilitating market development. Members underscored the need for policies that would increase savings and could facilitate a greater flow of direct investment to developing countries. Such investment could best be attracted to developing countries through the adoption of sound macroeconomic and market-oriented policies.

    • The Committee urged the World Bank Group and the Fund to strengthen further their efforts to support private sector development. Members encouraged the Bank to give a very high priority to private sector development in its operations, to continue to expand the scope of its activities in this area, including new approaches and instruments as may be needed, as well as to assist developing countries’ efforts to implement long-term institutional, regulatory, and legal reforms, consistent with their socio-economic situation. Members therefore emphasized the importance of close coordination within the Bank Group so as to ensure that private sector considerations are better integrated in its operations while avoiding duplication. To help achieve this, the Committee requested the Bank to move expeditiously to implement its action plan for private sector development. Considering the importance of the contribution of the private sector to development, the Committee requested that this issue be reviewed at its fall 1990 meeting.

    • The Committee noted the increasingly important role that the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) can play in assisting private sector development in developing countries, including through their policy advisory roles. It emphasized the benefits that countries can derive from membership in the Agency. Given the rapidly growing needs for private sector assistance, members noted the need for IFC to have adequate means to fulfill its role in the years ahead. In this respect, the Committee encouraged the IFC’s Executive Board to continue its discussion on the adequacy of the capital of the Corporation, including modalities of subscription. Members requested that they be informed of progress on this issue at its fall 1990 meeting.

    • The Committee reaffirmed its support for the strengthened debt strategy as endorsed at its last meeting and welcomed the progress achieved so far. Members reiterated the need to maintain the case-by-case approach to commercial bank financing packages and underlined again the central importance of appropriate adjustment programs, including measures to encourage investment and the return of flight capital, as a basis for implementing the strategy. Members noted that the combination of growth-oriented adjustment programs and commercial bank financing arrangements which include debt and debt-service reduction can help improve confidence in debtor country economies. They commended the Bank, the Fund, and Japan for their early and substantial support for debt and debt service reduction packages negotiated by debtors and their creditor banks. The Committee called on the Bank and the Fund to continue to provide support for debt and debt-service-reduction programs, with the necessary flexibility, under their established guidelines, which they reaffirmed, and to keep the strengthened debt strategy under review. It also called on the Bank and the Fund to emphasize measures to promote investment and capital repatriation in country reform programs.

    • The Committee also recalled the concerns it had expressed at its last two meetings that the development needs of severely indebted lower middle-income countries whose debts are mainly to official creditors should be given special attention. Members noted that a return to external viability and sustained growth remained uncertain for a number of these countries. Members therefore asked the Bank and the Fund to continue to analyze the debt problems of these countries as well as those of severely indebted middle-income countries with significant official debt.

    • Members welcomed the various measures taken to alleviate the debt burden of the severely indebted low-income countries, in particular the concessional official debt reschedulings by the Paris Club, the cancellation of ODA debt of many low-income countries by an increasing number of creditor countries, the utilization of IDA reflows for the benefit of IDA-only countries with outstanding IBRD debt, and the activation by the Bank of its $100 million facility to assist eligible IDA-only countries to reduce their debt to commercial banks. Members noted that even with these arrangements a number of these countries have uncertain prospects for an early return to external viability. The Committee requested the Bank and the Fund to undertake an evaluation of the benefits of the debt relief and other measures taken so far in favor of the severely indebted low-income countries. In view of the low debt-service capacity of these countries, members also considered that their new commitments of assistance to the severely indebted low-income countries should be provided on highly concessional terms.

    • Members agreed that it was also important to recognize the needs of a number of indebted countries which have not restructured their external debt obligations and which have been implementing sound macroeconomic policies. The Committee urged that efforts be made to maintain adequate financial flows to these countries, including multilateral flows, to support adjustment, development, and poverty reduction.

    • The Committee welcomed the World Bank’s report “Sub-Saharan Africa: From Crisis to Sustained Growth.” It emphasized the complementary roles of the Bank and the Fund in the long-term development process in sub-Saharan Africa. The Committee endorsed the approach of the report’s strategic agenda. It stressed that sustained growth and development required firm commitment and good governance on the part of the concerned African governments given their primary responsibility in the design and implementation of their development strategies. Members also agreed that there is a need for adequate, effective, and well-coordinated funding from donors and multilateral institutions, noting that large official development assistance flows to sub-Saharan Africa would continue to be required in the 1990s. They expressed their support for the recommendation in the report that resources be channelled more selectively to countries implementing adjustment programs, thereby maximizing the effectiveness of external assistance. The Committee requested to be kept informed of the progress in respect of the long-term strategic agenda. In this respect it welcomed the Dutch Government’s initiative to hold a conference on sub-Saharan Africa next July in Maastricht.

    • Members recalled their earlier recommendation that the Special Program of Assistance to Africa (SPA) framework be extended beyond 1990. They welcomed the agreement in principle of donors for an extension of the Program and urged them to indicate their levels of adjustment assistance for 1991-93 at the SPA session scheduled for the fall of 1990. They also suggested that donors take that occasion to continue to consider steps to untie their commitments under the SPA and to further harmonize procurement and disbursement procedures.

    • The Committee reiterated the importance it attaches to environmental issues and noted the progress being made by the Bank on a number of issues such as the new Operational Directive on environmental assessment, the integration of environmental concerns into economic analysis, and the growth in lending for freestanding environmental projects. It encouraged the Bank to continue its efforts to integrate better environmental considerations in its operations. The Committee noted that there would be a comprehensive review of Bank-related environmental issues in the Bank’s 1990 Annual Report on Environment in accordance with the request made by the Committee at the September 1988 Berlin meeting. It stressed that this report should be comprehensive in its coverage of the progress made by the Bank, particularly in respect to Bank-related environmental issues discussed by the Committee at its recent meetings, including environmental assessments, Bank environmental action plans, energy efficiency and conservation, forestry protection, and debt for nature swaps.

    • Members considered a report prepared by the World Bank on funding global environmental protection and generally agreed that the Bank should play an important role in this area. Members agreed that further work was necessary to develop methods for the Bank to assist developing countries to take actions which contribute to the reduction of global environmental problems. Members agreed that efforts should continue to develop proposals for a pilot mechanism for this purpose, taking into account the Bank’s existing programs. They also urged the Bank to take steps to reinforce and expand its existing environmental programs and thus assist developing countries to contribute to the achievement of the same objective according to their priorities. The Bank was urged to proceed with this work expeditiously in consultation with interested parties and close collaboration with UNEP and UNDP. Members underlined the need for sufficient flexibility to attract as wide support as possible.

    • The Committee expressed its appreciation for the successful conclusion of the negotiations for the Ninth Replenishment of IDA and called on all member governments to act swiftly to ensure that IDA-9 begins on July 1, 1990. Members also welcomed the signing of the Lomé IV Convention. In spite of these positive developments and a modest increase in official development finance, members noted with concern the impact of the recent rise in interest rates on the cost of debt servicing and the significant decline in aggregate net flows to the severely indebted middle-income countries in 1989, reflecting a sharp drop in private flows. They noted the implications of this trend on domestic investment in these countries at a time when many of them were struggling with severe poverty problems. The Committee called on donor countries, particularly those with assistance levels below the 0.7 percent ODA/GDP target, to make further efforts to increase the transfer of resources to developing countries. The Committee welcomed the recent Policy Statement on Development Cooperation in the 1990s by OECD countries, including their commitment to work for a greater degree of coherence in their policies with regard to their impact on developing countries.

    • The Committee welcomed the understandings reached by the Interim Committee on the Ninth General Review of Quotas that will allow the Fund to continue playing its role at the center of the international monetary system.

    • The Committee welcomed the decision to create the European Bank for Reconstruction and Development (EBRD) aimed at assisting economic and political reforms and the transition to market economies in Central and Eastern Europe. It called on the Bank Group and the Fund to work with the EBRD in fulfilling these objectives. Members emphasized that financial support for reforms in Eastern Europe calls for adequate resources so that the requirements of this region can be met while also allowing increased financial flows on appropriate terms to developing countries.

    • The Committee also noted that among countries facing payment difficulties, there are some with overdues to the World Bank and regional development banks. Since it is in the interest of all borrowers and shareholders to have overdues handled in a way which continues to allow these institutions to keep the costs of borrowed funds to the lowest level possible, the Committee asked the World Bank, in consultation with the regional development banks, to review the current policies and procedures for handling overdues and to present a report to the Development Committee at its next meeting. The Committee recognized that there are other broader issues of coordination which needed to be considered.

    • The Committee heard from the Deputy Director General of GATT that the multilateral trade negotiations under the Uruguay Round were in their final crucial phase and that, while much progress had been achieved, a number of key agricultural, industrial, and other issues remained unresolved. Members called on both developed and developing countries to reach an early agreement on these issues and to agree on a strengthened multilateral trading system based on predictable and uniform rules to promote trade liberalization by all countries. They stressed that a successful conclusion of the negotiations was essential to prevent the drift toward protectionism. Members also emphasized that an improvement in market access and greater participation by developing countries in GATT benefits were essential and in many cases more important than official development assistance flows or debt relief in facilitating the adjustment and growth efforts of developing countries. The Committee reiterated its call on the Bank and the Fund to keep under study, in close consultation with the GATT, the implications of regional trading arrangements for developing countries’ economic prospects for consideration at a future meeting.

    • In view of its previous commitment to review periodically progress in addressing poverty issues, the Committee agreed to discuss at its next meeting strategies for the effective reduction of poverty in the 1990s in light of an issues paper based on the Bank’s forthcoming World Development Report on poverty and on a contribution from the Fund. Given continuing major indebtedness problems, members agreed to continue at their September meeting their review of the debt strategy and its impact on the development prospects of all severely indebted countries with the assistance of documentation prepared by the Bank and the Fund. The Committee also reaffirmed its undertaking to give full consideration in September to the economic role of women in development and requested the Bank to prepare a paper on this subject. Emphasizing the importance it attaches to environmental issues, the Committee will consider these further at its next meeting.

    • The Committee agreed to meet again in Washington, D.C. on September 24, 1990.

Report I and the Resolutions contained therein were adopted by the Board of Governors of the Fund in Joint Session with the Boards of Governors of the Bank, IFC, and IDA, on September 25, 1990.

Resolution No. 45-8; see pages 294-97.

Resolution No. 45-9; see pages 297-99.

Report II dealt with the business of the Boards of Governors of the Bank, IFC, and IDA. Report III and the Resolutions contained therein were adopted by the Boards of Governors of the Fund and of the Bank in Joint Session, on September 25, 1990.

Resolution No. 45-10; see page 299.

Report IV and the Resolutions contained therein were adopted by the Board of Governors of the Fund, in Joint Session with the Boards of Governors of the Bank, IFC, and IDA, on September 27, 1990.

See pages 22–25.

Resolution No. 45-11; see pages 299-300.

Resolution No. 45-12; see page 300.

Democratic Kampuchea and South Africa did not participate in this election.

Report V dealt with the business of the Boards of Governors of the Bank, IFC, and IDA. Report VI and the recommendations contained therein were adopted by the Boards of Governors of the Fund and of the Bank, IFC, and IDA, in Joint Session, on September 27, 1990.

Saihou S. Sabally, Minister of Finance and Trade, The Gambia, served Alternate Member to permit B.T.G. Chidzero to serve as Chairman.

Mr. Barber B. Conable. President of the World Bank. Mr. Michel Camdessus. Managing Director of the International Monetary Fund. Mr. Yves L. Fort in. Executive Secretary of the Development Committee, and Mr. S.M.A. Adeli. Chairman of the Group of Twenty-Four, participated in the meeting. Observers from Switzerland and a number of international and regional organizations also attended.

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