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IMF, World Bank to help developing countries adjust to more open trade

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 2003
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On August 21, IMF Managing Director Horst Köhler and World Bank President James D. Wolfensohn sent a letter to Supachai Panitchpakdi, Director-General of the World Trade Organization (WTO), reiterating the importance of a successful round of multilateral trade talks for developing countries. They also reaffirmed the two institutions’ commitment to helping developing countries adjust to a more open trading environment.

A successful conclusion of the Doha Round, the two men wrote, “is essential for the world economy and will benefit all countries.” It can also contribute significantly to the efforts of the international community to meet the UN Millennium Development Goals. Developing countries have much to gain from a more open multilateral trading system, but adjusting to a more liberal trade environment could impose costs on some member countries.

Köhler and Wolfensohn described what the two institutions were doing to help these countries. In addition to a variety of instruments to address concerns about the impact of trade liberalization, the IMF-World Bank plan, still under consideration, would have three dimensions: work closely with members to assess the nature and magnitude of any adjustment need; assist in designing policies, institutional reform, and investment programs to address obstacles to trade expansion and to managing the impact on affected groups; and examine how to use and tailor the two institutions’ lending authority to respond to the specific challenges posed by the Doha Development Agenda.

Finally, Köhler and Wolfensohn reiterated that they were fully committed to helping ensure the successful completion of the Doha Development Round. “Given the substantial promise for the world’s poor,” the letter ended, “we should work together to address the short-term adjustment problems. As you embark on the crucial WTO ministerial meetings in Cancún, we would like to assure you that both our institutions stand ready to support our members in taking full advantage of these opportunities.”

For the full text of Press Release No. 03/140, see the IMF’s website (www.imf.org).

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