Statement of the Bank of Israel1
- Susana Almuina, Ian McCarthy, Gabriel Sensenbrenner, and Justin Zulu
- Published Date:
- December 1995
The excellent organization and the beautiful city of St. Petersburg have created an ideal setting for the April 14-15 meetings. It has been a rare opportunity to grasp the difficulties as well as the achievements of the technical assistance project from a wide perspective, provided by the different points of view of all the parties involved. As the formal and informal discussions have evolved, important insights have been conveyed.
It was very gratifying to hear from representatives of central banks of the Baltic countries, Russia, and other countries of the former Soviet Union of the progress they have made in most areas where technical assistance has been provided. Due to the difficulties encountered, the pace may have been slower than some would have desired, but clearly substantial progress has been achieved. The corollary is that the significant obstacles posed by institutional volatility and political constraint should not be underestimated, nor should they be seen as insurmountable.
Agreement and awareness were expressed regarding the need to reach maximum efficiency in providing technical assistance with resources that are valuable and in limited availability. Professionalism and good communication are thus indispensable; empathy is helpful.
A strong support for central bank independence characterized the debate. The worldwide experiences of the last two decades seem to have made a point. Their message is one of avoiding painfully illusory shortcuts for economic growth. These, seeking to trade growth for inflation, result in suffocating growth through financial instability.
Representatives of recipient central banks expressed their view that it is they who can better determine priorities regarding the areas and subjects to be addressed in their respective institutions. This is an important point that raises a more general one, which can be illustrated by considering the habitual classification of central banks that participate in the technical assistance project in two categories: donors and recipients. This classification can be misleading if it suggests a division into a passive side (the recipient) and an active one (the donor). No such division exists. On the contrary, the only possibly successful basis for the technical assistance project is one of strategic partnership among independent institutions seeking to contribute to the consolidation of free and affluent societies. The Bank of Israel is deeply committed to taking its share in this partnership.
This statement was submitted after the St. Petersburg meetings.