Concluding Remarks1

International Monetary Fund. Secretary's Department
Published Date:
October 1976
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Statement by the Governor of the Fund and Bank for Ireland—Richie Ryan

I wish to express my Government’s appreciation of the honor which you have bestowed on our country in selecting Ireland to chair the Annual Meetings of the International Monetary Fund and the World Bank in the coming year. Ireland is one of the smaller European nations. However, our people have spread far and wide throughout the world and, I trust, have made a contribution to the development of many of the countries represented here. I hope that, in our position as Chairman, we will be able to add to this contribution.

The coming year will be an important one for the IMF and the World Bank. In particular, in the IMF, it should see the coming into force of the second amendment of the Articles of Agreement and the new quotas already agreed upon. It should also see the approval of the capital increases in the World Bank and the International Finance Corporation and completion of negotiations on the Fifth IDA Replenishment. I will cooperate with Mr. Witteveen and Mr. McNamara and the Vice Chairmen to ensure that as much progress as possible is made on these and other important issues.

May I congratulate and thank you, Mr. Chairman, on the excellent manner in which you have performed the duties of Chairman in the past year and particularly the manner in which you conducted these Annual Meetings.

Statement by the Governor of the Fund for the Philippines—Gregorio S. Licaros

Hosting the thirty-first joint Annual Meetings of the Governors of the International Monetary Fund and the International Bank for Reconstruction and Development has been both an honor and a pleasure for us. We, the Philippine people and the Government, are happy to have been given the opportunity to provide the facilities and accommodations for the officials, delegates, and guests of this important and prestigious gathering. It is, indeed, a singular privilege for us to have had our country chosen as the venue of the first IMF-IBRD conference in Southeast Asia and, I would like to add, a distinct honor for my country to have our Secretary of Finance, the Hon. Cesar Virata, entrusted with the task of chairing the Development Committee.

It is heartening to note that the level of concern for the developing countries, in particular for the poor among us, has risen during the conference. Discussions during the week brought into sharper focus the harsh meaning of poverty for hundreds of millions of people in the developing countries—the high rates of illiteracy, severe malnutrition, unspeakable squalor, rampant disease, and almost total lack of economic opportunity.

While the governments of the developing countries accept the major responsibility for accelerating economic growth and satisfying the basic human needs of all of their peoples, there is a growing recognition of the paramount need for additional and sustained support from the developed world, if the problem of development of the Third World is to be effectively resolved.

Thus, in Manila, we have moved closer to achieving a “global compact,” if we may borrow the words of President Robert McNamara of the World Bank. The “global compact,” he says, would make clear in overall terms both the additional trade and aid support to be provided by the developed nations and the policy reforms and structural changes to be undertaken by the developing nations. The conjunction of national and international cooperation and the necessity for complementary planning on both planes have been recognized during the conference.

In the context of this new enlightenment, the recent indications of strong resolve to expand the role of both the Fund and the Bank take on greater meaning. Among these are the proposed selective increase in IBRD capital amounting to $8.3 billion in May 1976, the Proposed Second Amendment of the Fund’s Articles of Agreement, the Sixth General Review of Quotas already concluded, and the Seventh General Review of Quotas which will be accelerated two years ahead of schedule. We are also heartened by the expressions of support during the conference for the replenishment of International Development Association funds, for additional contributions to the Third Window, for a general increase in capitalization of the World Bank and the International Finance Corporation, and for more liberalized access to markets of industrialized countries for the exports of the developing countries.

Now, more than ever before, the reduction and eventual eradication of absolute poverty—the central task of our development efforts—appear realizable.

We hope that your visit to our country has been made as pleasant and gratifying as our preparations had intended it to be, and also was made significant and memorable by the accomplishments of these meetings. Please take with you our sincere wishes for a safe and happy journey and many successful days ahead.

Statement by the Chairman of the Executive Board and Managing Director of the International Monetary Fund—H. Johannes Witteveen

Our Annual Meetings in both 1974 and 1975 were held under extremely adverse conditions in the world economy, with accompanying tensions and anxieties. Now, with the improvements that have occurred, a calmer and more confident atmosphere has prevailed in our discussions. There is no doubt that we have made good use of this change in atmosphere to give careful consideration to the difficult problems that remain and to the new challenges that confront us. Our deliberations have been greatly facilitated by the exceptional hospitality and cooperation provided by the Philippine Government; we are truly grateful.

This has indeed been a week of very useful discussions. The speeches by Governors have ranged widely over the problems facing the Fund and its members, and they have been frank, penetrating, and constructive. From our discussions a number of very important conclusions have emerged, and I should like to mention some of them briefly.

Of primary significance is the general consensus that has been reached with respect to economic policy in the industrial countries. Notwithstanding all the difficulties in this area, there is a clear and general view that the path to sustainable economic growth and to the reduction of unemployment lies in the elimination of inflationary psychology and the restoration of a reasonable degree of price stability.

Among the primary producing countries, there is understandable concern that import expansion in the industrial world may proceed at lower rates than in past recoveries because of the need for cautious policies in the fight against inflation. Yet, I sense that the developing countries concur that it would be in their own best interest for the industrial countries to conquer inflation.

In my opening statement last Monday, I pointed to the need for the industrial countries to supplement their cautious demand policies by measures to improve market access for the exports of developing countries and to increase the flow of official development assistance. Let me again emphasize the importance of this aspect of economic policy and strategy in the industrial countries. It is gratifying that the speeches by Governors from those countries have given much attention to the economic plight of developing countries, and to the urgency of increasing development assistance. And I fervently hope that the numerous statements of intention in this regard will be translated into effective action.

This meeting has also given attention to issues of balance of payments adjustment and financing. Of particular significance, in my opinion, is the apparent extent of prevailing agreement among Governors that these issues should now be seen in a different light as a result of changes in the world economy over the past few years. It is encouraging that many Governors have agreed that there is need for greater emphasis on the adjustment of imbalances, as distinct from financing alone. Also, I welcome the view, generally shared by Governors, that the adjustment process should be symmetrical as between surplus and deficit countries, and that exchange rates should be allowed to play their proper role in this process.

The comments that Governors have made on these and other aspects of the world economy will be helpful in furnishing guidance for our consultations with members and ideas for our continuing research on the functioning of the international adjustment process. In addition, Governors have contributed many comments that bear more directly on various programs and activities of the Fund. We shall study these comments very carefully upon returning to Washington, and we expect to derive considerable benefit from them. Meanwhile, let me make a few remarks in this general area.

One of the most challenging tasks that the Fund will have under the amended Articles of Agreement is the surveillance of exchange rate policies. In the period ahead, the Fund will have to develop a code of conduct that helps members to recognize and observe their obligations in this field. From the statements that have been made by Governors, we can expect this important work to have the widespread support of members that is so indispensable to its success.

I was also very interested in the many remarks that Governors have made on the subject of international liquidity, both conditional and unconditional, and on the role that the Fund should play in this area. As a result of developments this week in Manila, we will need to intensify our work on international liquidity. In addition to the comments and suggestions by Governors, the Interim Committee—as noted in its communiqué of October 2—has requested the Executive Directors “to keep all aspects of international liquidity under review and to report to it at a later meeting.” High priority will be given to initiation of the Seventh General Review of Quotas.

However successful countries may be in their efforts to adjust their external positions, one must expect that there will continue to be, for some time to come, a large demand by members for use of the Fund’s resources in the financing of payments deficits. In these circumstances, the many observations that have been made on the various forms of such use take on particular interest. I have noted suggestions with respect to use of the ordinary credit tranches and the extended Fund facility, and also of the compensatory financing facility and the buffer stock facility. The latter facilities will be the subject of reviews in the coming months. But, beyond this, we will keep a close watch on the effectiveness of the Fund’s operations in all their aspects.

I am happy to note the announcement yesterday by the Finance Ministers of the members of the Organization of Petroleum Exporting Countries of their willingness to facilitate our further work by recommending that their Governments make contributions to the Trust Fund.

I should now like to repeat a point I made in my opening statement—namely, that it is very important for the amended Articles of Agreement to go into effect as soon as possible. In this regard, let me express our gratitude to the Philippine Government for the example it has set in being among the first of the Fund’s members to accept the amendment to the Articles, and I trust that heed will be paid to the call of President Marcos for other members to follow suit.

Perhaps I may take this opportunity to congratulate Mr. De Clercq on his re-selection as Chairman of the Interim Committee and Mr. Virata on his selection as Chairman of the Development Committee.

In conclusion let me simply observe that the Executive Directors and staff of the Fund will have a very heavy schedule of work in the coming year—the more so because of this meeting. The effectiveness of their work will depend greatly on the cooperation received from member countries. I know that we can count on this.

I look forward to seeing all of you next year in Washington.

Statement by the Co-Chairman of the Boards of Governors, the Governor of the Fund for the Syrian Arab Republic—Mohammed Imady

The past five days have enabled us to hear the different points of view on the problems we face and the action required to solve these problems.

Undoubtedly the friendly Philippine atmosphere encouraged our cooperation. Surely the economic developments in progress here demonstrate clearly the vital importance of the human element and wise leadership in economic growth. No unanimity has emerged: none was expected.

I feel that we have, however, reached a broader and deeper understanding of the problems we must face together in working toward international monetary stability and the economic development on which it must be based. Many Governors have repeated our call for a revision of the international economic order toward greater equity. Most importantly, they have joined us in seeking the necessary changes through cooperation rather than confrontation.

There has been a recognition at these meetings that world market structures should reflect each nation’s control of its natural wealth, a recognition of the need for a basic equality of economic power between the producers of raw materials and the manufacturers of finished goods.

Another common point has been the strengthening of the institutions we represent here—the International Monetary Fund and the World Bank. A consensus has emerged on the need for a central guiding hand in the creation and distribution of adequate international liquidity. Many Governors have expressed their hopes that the Fund can increasingly assume this role—acting as a cooperative multilateral institution favoring no nation or group of nations.

Almost all Governors have joined in supporting Mr. Witteveen on the need for speedy ratification of the Proposed Second Amendment of the Fund’s Articles of Agreement in an imperfect—but necessary—first step toward making the international monetary system more realistic.

There has been further agreement to continue diminishing the importance of the role of gold and its replacement in national reserves by the SDR. A number of Governors have asserted our belief that the developing countries should be given a greater proportion of any newly created reserves. We have been in agreement, too, on the need for the Fund to develop and put into use surveillance and stabilization techniques, and that the process of adjustment and stabilization should be symmetrical.

As Mr. McNamara and so many Governors have stressed, the World Bank’s greatest need at this point is the resources it must have to continue its work as the catalyst of economic development.

All other questions regarding the Bank’s future—though many are quite important in themselves—are ancillary to this one basic issue: will the Bank, the International Development Association (IDA), and the International Finance Corporation (IFC) be given the means needed to achieve the ends we all desire? This question will be answered in the very near future. I cannot overemphasize the importance for all our futures of an overwhelmingly positive response.

Many Governors pointed out the need for a full IDA replenishment, for a speedy and substantial increase in the capital of the Bank and the IFC, showing that the urgency of this agenda has been recognized. The call from the heart of Mr. McNamara for some kind of bridging mechanism to prevent a gap in IDA’s commitment powers, and for an intensive and careful study of the Bank’s proper future role, has been echoed by many of us.

The membership of our institutions consists of both rich and poor nations, joined in idealistic goals. Behind these goals lie the stark realities of poverty, of economic inequity, and even of starvation. In all our discussions of principles and theories we must never forget these realities. Let the suffering of mankind be our driving force for greater cooperation among us in order to achieve economic security and prosperity for all.

I would like now once again to express my appreciation—and, I am sure, the appreciation of all of us—to President and Mrs. Marcos for the warm hospitality we have enjoyed in Manila. On behalf of all the developing countries, I congratulate Secretary Virata on his selection to chair the Development Committee. I also wish to voice our continued support for the wise and courageous leadership shown by Mr. Witteveen and Mr. McNamara in directing the work of the International Monetary Fund and the World Bank.

The staffs of our institutions are deserving of special praise. Through the years they have worked with great efficiency and dedication—at headquarters and around the world—to realize the policy decisions and guidelines set out by the Governors and Executive Directors. Our friend, Mr. Hebbard, will retire from his position as Secretary of the Fund before the next Annual Meeting. The Governors will miss his wise counsel. I am sure that he will leave this meeting in Manila content in a job well done.

We shall meet again next year in Washington. Chairman Ayoubi and I hope that Mr. Ryan, next year’s Chairman, will be able to report to you that real progress has been made on the initiatives put forward here in Manila. Although these meetings are now drawing to a close, our work is not completed; the frank, open, and valuable discussions we have had here have served only to create an agenda for actions that must be carried out in the years to come.

I declare the thirty-first joint Annual Meetings of the International Monetary Fund and the International Bank for Reconstruction and Development to be adjourned.

Delivered at the Closing Joint Session, October 8, 1976.

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