- Margaret De Vries
- Published Date:
- March 1987
© 1987 International Monetary Fund
Library of Congress Cataloging-in-Publication Data
De Vries, Margaret Garritsen, 1922-Balance of payments adjustment, 1945 to 1986.
1. Balance of payments—Developing countries.
2. International Monetary Fund. 3. International finance. I. International Monetary Fund. II. Title.
HG3890.D4 1987 332 1’52 87-17242
To deal with the problems of international exchange and of international investment is beyond the capacity of any one country, or of any two or three countries. These are multilateral problems, to be solved only by multilateral cooperation. . . . The transcendant fact of contemporary life is this—that the world is a community.
Henry L, Morgenthau, Jr.
Secretary of the U.S. Treasury,
at Bretton Woods, July 1, 1944
For the past decade balance of payments adjustment has been by far the dominant thrust of the Fund’s work, and it remains today a central concern of Fund officials. Although the topic is now front-page news, the Fund has continuously been dealing with the balance of payments problems of its members and trying to help them achieve a reduction of their payments disequilibria. Its analyses, policies, and experiences with balance of payments adjustment are too rich to have been included in any depth in the multivolume published Histories of the Fund. Also, the latter do not, as yet, go beyond 1978. Because of the current interest in balance of payments adjustment, it seems timely to devote a separate book to the description of the Fund’s forty years of experience with this subject. Moreover, with the formation of the Fund in 1945, new ways of balance of payments adjustment came into use, ways that differed from those that applied roughly from 1870 until World War I under the gold standard and from those that existed under policies to reestablish the gold standard in the 1920s and under the chaotic policies of the 1930s.
I have deliberately not undertaken here to write a detailed history of all the Fund’s activities and policies that pertain to balance of payments adjustment, especially after 1978, leaving that for the next History of the Fund. My intent is rather to present a 40-year perspective of balance of payments adjustment.
Like the Fund Histories, this account is based on Fund documents, and I have had the benefit of comments on the manuscript from my colleagues. But the final product is my own personal responsibility and no statement or opinion expressed should be understood as committing the Fund in any way.
Margaret Garritsen de Vries
I am especially indebted to Michael Dakolias, Assistant Director of the European Department and formerly Assistant Director of the Exchange and Trade Relations Department. While writing this book, as well as while writing the Histories of the Fund, I have had frequent discussions with Mr. Dakolias. His three decades of experience in the Fund, his intimate familiarity with the Fund’s policies and activities, his excellent economic analysis, and his keen thinking generally have all helped me to better understand the Fund’s experiences. He also encouraged me to write this book.
Several other colleagues—too many to cite—have also kindly read the manuscript, or portions thereof, and made a number of useful suggestions. In addition, I am appreciative of the efforts of two former colleagues who have also helped to make the book fuller and more accurate. Edward M. Bernstein, who was Director of the Research Department from 1946 to 1958, made several suggestions, especially on the first three chapters dealing with the Fund’s initial years and on descriptions of how balance of payments adjustment under various monetary systems was supposed to work and why it failed. Subimal Mookerjee, who was on the Fund staff for twenty-three years, ending his staff career in 1984 as Deputy Director of the Exchange and Trade Relations Department, also made numerous valuable suggestions, reflecting his knowledge of the Fund’s policies over a long period.
I am grateful, too, to my husband, Barend A. de Vries, an economist retired from the World Bank, who was also earlier with the International Monetary Fund. Frequent discussions with him over many years have sharpened my awareness of the uniqueness and significance of the Fund’s activities and policies. Barend also made helpful comments on the manuscript, particularly the sections dealing with Colombia and Brazil, countries on which he worked for several years, and the chapters dealing with the world debt crisis.
I have also been fortunate to have had once more the services of a few persons who have worked closely with me on my other books. Faye L. Olin, my editorial assistant for more than eleven years, again performed many valuable services. She also prepared the statistical tables in the Appendix and checked the footnote references. Juanita Roushdy gave the manuscript a final meticulous editing, smoothing the prose, suggesting several stylistic improvements, preparing the index, and coordinating the production. D, Mary Windsor, with the help of Luzmaria Valencia, diligently, and with unusual accuracy, put drafts through the word processor. The cover was designed by the Art Unit.
Once again, the views expressed are mine and should not be construed in any way as being those of the Fund.