- International Monetary Fund. Secretary's Department
- Published Date:
- October 1969
Statement by the Chairman of the Executive Board and Managing Director of the International Monetary Fund—Pierre-Paul Schweitzer
This has been a fruitful meeting as regards both the proceedings in this hall and the close and constructive consultations that my colleagues and I have had with many delegations.
The main actions of the Fund at this meeting have been in the field of international liquidity: the decisions to begin allocation of special drawing rights and also to set in motion the quota review, which I trust will before long result in an appropriate increase of members’ quotas. As many Governors have stressed, the establishment and activation of the special drawing rights facility constitute a momentous innovation in the international monetary system—a landmark in the process of international monetary cooperation. It is gratifying that participation in the Special Drawing Account has grown further during this week, so that now 74 members are participants. From indications received during the past few days I am sure that by the end of this year most of the other members will have completed the necessary steps for participation and will thus be able to share in the first allocation of special drawing rights on January 1, 1970.
Many Governors have expressed the hope that the increased reserve ease resulting from the allocation of special drawing rights should lead to an expansion of development aid. I share this view. I believe, as I said on Monday, that conditions should now be favorable for a major improvement in the volume and quality of development aid and for a decisive check to regressive tendencies in trade and payments liberalization. I trust that the report of the Pearson Commission will help toward the fulfillment of these hopes. For our part, we in the Fund shall study most carefully the suggestions made in that report.
I have noted the many statements made on the problems that face developing countries because of the fluctuations in commodity exports. In the past year the Fund has made a further contribution in this respect. We are aware of the many difficulties that remain, including access to the markets of the developed countries. We shall continue to pay close attention to the problems in this area.
In my opening remarks I invited Governors to comment on the topic of exchange rate flexibility. The observations that Governors have made will be of great value to the further study of this subject by the Fund. This study will have to encompass intricate technical questions and will have to give due weight to the wider policy aspects of the exchange rate system as it affects the interests of all Fund members. In my opening statement I indicated that the study could investigate whether a limited increase in flexibility of exchange rate variation would be desirable and attainable with the necessary safeguards; and through what means any such increased flexibility might be achieved. I believe I am right in saying that the range of views expressed by Governors has supported this approach to the study.
On Monday I announced that the German authorities had informed the Fund of their decision not to confine the rate for the deutsche mark to the prescribed margins when the exchange markets in Germany were reopened on Tuesday. The Executive Board has considered this question and has expressed the expectation that this temporary departure from the par value system will be brought to an end at the earliest opportunity. We continue to be in close consultation with the German authorities. I am confident that the situation of the deutsche mark will be regularized in accordance with the interests of the whole international community.
I have touched briefly in these remarks on the questions of international liquidity and exchange rates. I should not like to end without emphasizing again that the provision of international liquidity and the adjustment of exchange rates, whenever this is necessary, are in no way substitutes for the economic policy measures that governments must be prepared to take in order to keep their economies in line internationally and to bring them back into line once disequilibria have arisen. The pursuit of an effective adjustment process lies at the very heart of the Fund’s activities, and we shall again devote our energies to it in the coming year—in consultation with individual countries as well as in our more general work.
I should like to conclude by thanking Governors for their valuable comments and suggestions; by expressing my appreciation to you, Mr. Chairman, and to your colleague for the exemplary manner in which you have conducted these meetings; and by congratulating the Governors for Tunisia who are to succeed you in the year ahead. I look forward to seeing all of you again in Copenhagen in 1970.
Statement by the Governor of the Fund for Tunisia—Hédi Nouira
It is indeed a signal honor that you do to Tunisia in asking it to serve as Chairman at our next meeting.
I find it a very great privilege to express my thanks to you for this invitation on both my country’s and my own behalf.
I interpret this gesture as a mark of esteem toward a young nation, heir to an ancient civilization, which, despite its undeniably limited resources, is making a sustained effort to promote a new society within which man, in full possession of all his rights, will assume the responsibility for his own future.
The fact that you have accorded this distinction to an African representative has a very particular significance, indicative as it is of the interest you attach to the development and advancement of Africa. I have no doubt that this gesture of recognition will encourage African leaders to assess their responsibilities and to shoulder them resolutely and conscientiously.
The distinction you have accorded to us has thus added one more to the long list of obligations to which the African nations must face up if they are to lessen the wide and very serious gap separating them from the industrialized countries.
They will no doubt find that the sum total of their efforts and energies is not sufficient to enable them to achieve this goal as quickly as is to be desired. The main thing is that they start out on the right road and make judicious and effective use of their own resources and of any others that may be made available to them.
It is my opinion, nay firm conviction, that such is their intention and desire.
Once again, I thank you all for this mark of your esteem, which my country appreciates most highly.
Closing Remarks by the Chairman of the Boards of Governors of the Bank, IFC, and IDA, the Governor of the Bank for Argentina2—Egidio Iannella
These meetings, which are drawing to a close, will stand as important landmarks in the history of our organizations.
I am sure all join me in thanking Mr. Pearson and the members of the Commission on International Development for their challenging report, and I urge my fellow Governors to accept such challenge and to give serious study and consideration to its conclusions and proposals in the search for a new and more efficient strategy for economic and social development.
The Governors of the Fund have decided to make the first allocation of special drawing rights beginning on January 1 next year. This decision to make the future growth of international liquidity subject to the considered judgment of the international community has been referred to as historic, and I am sure that we all concur with this assessment.
During these past few days we have heard valuable and interesting comments and ideas in matters that concern and affect us all, and although certainly there is not universal agreement on many proposals I am sure we can all look forward to the actions that will be taken on these matters by our organizations in the period immediately ahead.
I am sure that Governors will follow with interest the work of the Fund Executive Directors pursuant to the Resolution on the review of quotas, and in continuing their studies on the exchange rate system.
And now, on behalf of my fellow Chairman, Governor Dagnino Pastore, and myself, I wish to thank all those who have contributed to the success of these meetings. I wish you all Godspeed and a safe return to your homes, and declare the 1969 Meetings of the Boards of Governors of the Bank and its affiliates and the Fund adjourned.
Delivered at the Closing Joint Session, October 3, 1969.
See footnote on page 2.