The conference concluded with evaluations of the issues by the two heads of the Bretton Woods institutions, along with statements by Jean-Claude Milleron, the Under Secretary-General of the United Nations (UN), who looked at the international agenda from the viewpoint of the UN, and by Pedro Solbes Mira, the Minister of Finance of Spain.

Jean-Claude Milleron

I should like first to express my personal appreciation to the hosts and organizers of this conference. My only regret is that I may not be able to enjoy your one hundredth anniversary. The Secretary-General of the UN, Mr. Boutros Boutros-Ghali, has asked me to convey to you his warmest greetings, to offer you best wishes for the years ahead, and to assure you of the UN’s continued support for your endeavors. More generally, all of us in the Secretariat of the UN would like to congratulate our sister organizations on their golden anniversaries. As has been indicated over the past two days, they have been 50 years of which the World Bank and the Fund—and all of those associated with them during the past half century—can justifiably feel proud. The world is a better place as a result of your achievements.

Mankind’s progress over the past 50 years has probably been beyond even the remarkable foresight of the founders of our institutions. It has become a platitude to emphasize the extent to which the world has changed—even in the past few years—and to point to the new challenges that the international community is facing. It is, I believe, universally accepted that, in a world that has become increasingly globalized and interdependent, there are new responsibilities that must be assumed by international institutions. At the same time, the international community has to recognize where it has failed to accomplish some of its long-standing objectives and to rededicate itself to those tasks of global concern that remain. The aims of both the UN and the Bretton Woods institutions in the years ahead must be to ensure that the progress of the past 50 years is not only continued but enhanced in both depth and breadth.

It would be a rewriting of history to pretend that the World Bank, the Fund, and the UN have worked closely together over the past 50 years. To a large extent, each has focused on its own responsibilities and constituencies and has acted independently. Increasingly, however, there are commonalities between the three organizations and a need for them to work more closely together. All three organizations now have almost universal membership, there is a large measure of agreement on the key items on the international agenda, and—most important of all—there are growing interrelationships between the traditional responsibilities of the different organizations.

We have heard today many proposals for the future work of the two Washington organizations. I should like to take a somewhat different approach and identify what I see as some of the key issues on the agenda of the UN for the immediate future. I think you will agree that these matters also concern both the World Bank and the Fund. I therefore hope that a new dialogue on these subjects will take place between the “northerners” in New York and the “southerners” in Washington. In many cases, such a dialogue could lead us to act more collectively, which is in the spirit of the Agenda for Development that the Secretary-General is currently finalizing.

Nowadays, there is a very wide, almost universal, convergence of views on the desirable nature of many key national economic policies. We agree on the need for a sound macroeconomic framework, for greater emphasis on economic efficiency, and for individual countries to integrate themselves into the global economy. However, there is less agreement about the division of responsibilities between the government and the market in this process, in particular with regard to equity questions, social issues, and the environmental challenge. These are all areas in which government has a crucial role to play and which are, in my view, becoming of increasing relevance at the international level. They are topics that should be on the agenda of the international institutions, hopefully not for the next 50 years but for the immediate future.

Globalization and greater interdependence among countries are increasing the range—and our awareness—of international public goods. There are, to start with, the “global commons,” and the Rio Conference on Environment and Development in 1992 was a major attempt to address many of the questions in this area. The forthcoming entry into force of the Law of the Sea will be another step forward. On such questions, it is agreed that government at both the national and international levels has an important role to play. Nevertheless, many difficult issues remain to be resolved before we can declare that we have a consensus on the extent of that role. Addressing these questions must continue to be a priority item on the international agenda.

A second international public good is global peace and security. Internal law and order and national defense have long been recognized as quintessential public goods: all members of society benefit, and almost nobody argues that meeting these essential foundations of society should be left solely to the market. In most countries, therefore, meeting these needs has long been a public responsibility. At the international level, however, we are far from finding an adequate solution to the problems of peace and security under the changed global circumstances.

We in the UN firmly believe that peace and development are inextricably intertwined: peace provides a foundation for long-term development whereas conflict is often brought about by a lack of development. Here, I refer to development in its broadest sense, meaning not only economic well-being but the ability of all individuals to participate fully and freely in society. It is only too apparent that a lack of such development is one of the threats to the global peace and security that we all seek. It is in our collective interest both to invest in peace and to foster the development that will assist in securing it.

One new aspect of this challenge lies in dealing with what are frequently called post-chaos situations—cases where economies have been devastated by war or civil unrest. Here again, it is in the global interest—as well as a moral imperative—to ensure that these countries return to a path of political stability and sustained development and regain their place in the world community. However, these economies are unlikely to achieve these goals if left to fend for themselves, as was recognized when the World Bank was established to assist in the reconstruction of Europe following the Second World War. More recently, the international community should be applauded for its efforts to date in such countries as Cambodia, El Salvador, and Namibia. Nevertheless, we are still in the learning phase of dealing with such situations, and this is one area in which our organizations have to work together more closely.

A similar challenge arises with respect to the burgeoning number of international refugees. Some—but far from all of them—are the result of conflict. It has long been accepted that the responsibility for these downtrodden people should not fall solely on the host country. In this case, I think we can all agree that the Office of the United Nations High Commissioner for Refugees can be proud of the way in which it has responded to the immense new burdens placed upon it. Looking ahead, however, it seems likely that there will continue to be millions of people who will feel under pressure to leave their homes, either as refugees or as long-term migrants. Here again, a collective international response is required.

I do not mean to belittle the large amount of attention and resources that are already being devoted to peacekeeping, post-conflict peace-building, and refugees. Rather, the principle that underpins both the Secretary-General’s Agenda for Peace and the Agenda for Development is that global peace and security and an improvement in development prospects would reduce the need for such activities. Such preventive measures are an international public good whose value should not be underestimated.

Preventive diplomacy is essential and continues to be a major endeavor of my colleagues on the political side of our organization. But diplomacy is unlikely to be sufficient. Global peace is at best tenuous while such a large proportion of the world’s people live in misery. Distribution is a second broad area in which there is a question of the division of responsibilities between government and the market. Even at the national level, there is, almost inevitably, disagreement on the tradeoff to be struck between efficiency and equity. We seek to achieve efficiency through competition, and yet the very objective of competition is to drive out the weakest. Consequently, there is no guarantee that the benefits of progress will be properly distributed, and some form of intervention is called for to pay sufficient attention to the weakest and disadvantaged.

For most of the past 50 years, the industrial countries were largely successful in such efforts—they countered this tendency toward the marginalization of some segments of society by instituting a system of what were widely known as “social safety nets.” However, holes have begun to appear in these safety nets, with the result that even in these countries an increasing number of people are falling below the level at which they can re-establish themselves economically or socially. The concern about distribution is now receiving greater attention in many developing countries. Nevertheless, there continue to be very wide disparities in individual well-being in many of these countries, where hundreds of millions of individuals live in poverty and social deprivation.

The conclusion of the Uruguay Round was an important step toward applying at the international level the principles of competitive markets that are increasingly being adopted at the national level. Although the gains to the world as a whole will be significant, it seems inevitable that some of the countries that are already the most disadvantaged are likely to face further difficulties as a result of the agreements reached in the Round. There are, of course, new opportunities to be seized, but it is becoming increasingly difficult for “latecomers” to penetrate the world market. There is a risk that some countries will fail and be further marginalized. To some extent, this has already occurred: in the words of Ambassador Somavia of Chile, Chairman of the Preparatory Committee for the World Summit for Social Development, “a globalization of prosperity is accompanied by a globalization of poverty.” The old development question of “dualism” persists: the difference between the “haves” and the “have-nots”—at the level of both the country and the individual—may even be more pronounced than ever.

Over recent years, all our organizations have allocated a greater share of their resources to Africa and to other lagging countries that face the threat of marginalization. This focus must continue. At the same time, both national governments and the international community must give more attention to the disadvantaged within countries. In this instance, experience suggests that part of that effort must be devoted to achieving greater understanding of the issues and to devising more effective means of responding.

One key area in which knowledge has improved concerns the interrelationship between poverty, population, development, and the environment. However, this is only a starting point; the real success lies in the agreement of member states to address the corresponding challenges both individually and collectively. The Program of Action that was adopted by the International Conference on Population and Development in Cairo earlier this month was an important building block toward an overall consensus on the challenges currently facing the world community and on the actions that need to be taken.

Looking ahead, the World Summit for Social Development that will take place in Copenhagen next March is an explicit recognition by member states that many questions of distribution remain unresolved. The three themes of the summit are the alleviation of poverty, the expansion of employment, and the enhancement of social integration. We expect the summit to agree on a plan of action in each of these areas, with the result that they will become more important on the international agenda in the years ahead.

An important cornerstone of the Program of Action adopted in Cairo is the recognition that it gives both to the role of women in the development process and to their needs. This half of the world’s population continues to find itself in a disadvantaged position, and its potential contribution to development remains constrained. This situation cannot be allowed to continue. A further opportunity for new and more wide-ranging initiatives will arise in Beijing one year from now when the Fourth World Conference on Women is held.

A final challenge lies in mobilizing the necessary resources. At present, the outlook in this respect is mixed: additional resources have been forthcoming for emergency needs, while development assistance has been faltering. But it is short-sighted to reduce efforts to foster development, because development reduces the need for emergency assistance. Mobilizing resources for development must therefore continue to be the overriding challenge facing the international community and international organizations.

I hope that what I have said here will not be interpreted as another call by an international bureaucrat for more international bureaucracy. Clearly, I believe that there are areas where more should be done at the international level. But I should like to underline that I subscribe fully to the principle of subsidiarity—that local problems should be addressed at the local level, national problems at the national level, and only international problems at the international level. I believe we have to make greater efforts to devise methods of applying the principle of subsidiarity to the priorities I have identified this evening. We need to establish a consensus on our international responsibilities, the means of accomplishing them, and the resources that are required. If we can do this, our successors may credit us with the same sense of vision that we attribute to those who established the institutions that we are celebrating here this week.

Michel Camdessus

This has been a most interesting conference. We have been treated to a rich feast of statements and discussions. The proceedings will make an important contribution to our work and help our constant efforts to improve our approaches and methods. We are grateful to all participants and discussants for their contributions.

The conference has, if anything, made it even clearer to us that the Fund has a lot to do as it enters its second half century. I am well aware of our full agenda, and I have been highly encouraged by the support that has been expressed for the Fund to continue pursuing actively the purposes for which it was established—purposes that all agree are so highly relevant to the needs of today.

I have also been impressed by the additional evidence I have seen at this conference of the strong consensus that now exists on the policy strategies that all countries need in order to pursue the objective of sustainable, equitable economic growth with high employment—what I like to call “high-quality growth.” It seems that few here would disagree that high-quality growth requires five ingredients: sound macro-economic policies; structural policies that promote the efficient use of resources and a responsive supply side; an open trade and exchange regime; active and effective social policies; and good governance.

The formation and strengthening over the past decade or so of this consensus on the policy strategies needed by all countries—industrial, developing, and transition economies—is surely one of the most significant developments in the history of economic policy in the postwar period. It lies behind policy improvements in many countries, which have borne much fruit; those successes have in turn helped to strengthen the consensus. Many of those successes have, of course, occurred in developing and transition economies with policy programs supported by Fund and World Bank financial and technical assistance. Here, I include a number of countries whose reliance on Fund financial support at critical times in their development, in the 1960s and 1970s, is now sometimes forgotten. If, as suggested by several speakers, the Bretton Woods institutions have contributed to this new consensus—I call it the “silent revolution”—this is certainly something of which we can be proud.

But the Fund has also seen disappointments and setbacks. Let me share with you some thoughts on how the failings we see can be corrected, and on how the Fund can help its member countries—which is to say the world—achieve stronger and more consistent progress. I shall consider the two areas of Fund activity that have received most attention in the past two days.

First, let me consider financial assistance for adjustment and reform in the developing and transition economies. Although there are many examples of outstanding growth performance in countries that have persevered with structural adjustment strategies, some countries that have begun to implement Fund-supported programs have apparently seen little early reward in terms of growth and little early improvement in saving and investment performance. This is frustrating, but it is not altogether surprising. Experience shows that two of the essential requirements of improved growth performance are effective and wide-ranging structural reforms to enable markets to work and time to establish a track record of better policies and build the confidence of potential investors. Boldness in reform and perseverance often provide the key to better growth performance for these countries.

It is, of course, also disappointing to see that a number of countries have failed, for political, administrative, or other reasons, to implement programs with enough consistency even to establish a sufficient degree of macroeconomic stability to make sustainable growth possible.

What can the Fund do to help in these cases?

First, to speed up the growth-generating effects of our programs, we can encourage the earlier and more effective introduction of structural reforms in the programs we support, as well as the pursuit and strengthening over the medium term of these demanding but essential efforts. I referred yesterday (Chapter 2) to the ways in which the Fund’s financial facilities have been adapted to take account of the need for medium-term programs and structural reforms. The extended Fund facility and the extended ESAF (enhanced structural adjustment facility) are now in place as the key instruments for programs appropriately front-loaded with structural measures, institution building, and social safety nets.

Second, in our technical assistance, training, and surveillance work, we must intensify our efforts to help countries establish the expertise and administrative capacity they need both to implement and to design the policies that are appropriate to their circumstances. We are strongly in favor of countries having their own “homegrown” policy programs, as long as they meet the necessary conditions. In fact, there is a remarkable variety of features among the programs to which the Fund has given, and is giving, its support. This fact is not always fully appreciated.

Third, the Fund’s financing instruments must be strengthened further, and we have been working toward this end. I am confident that the Interim Committee will this weekend endorse a “package” that has been put together to help meet the financing needs of many members. This package will, I hope, comprise a rise in access limits on Fund financing, an extension of the availability of the systemic transformation facility, and an allocation of SDRs that will ease the reserve constraints on members and ensure that each member has a fair stake in the SDR system.

Fourth, far from weakening its conditionality, the Fund must seek to strengthen the programs to which it gives financial support. This is not only because the Fund is required by its Articles to lend only “under adequate safeguards”; it is also because it is through conditionality that Fund financial support has acquired the credibility that is the foundation of its ability to catalyze parallel financial support from other creditors and donors. We cannot allow this credibility to be weakened. And conditionality must be maintained also, of course, to catalyze the domestic support required to implement the necessary measures; let me assure you that some of the strongest support of Fund conditionality that I hear comes not from within the Fund but from policymakers striving for adjustment, reform, and progress in their own countries.

In sum, I believe that the Fund must work to provide and obtain stronger financial and technical support for stronger growth-oriented adjustment and reform programs.

Let me now turn to the second area of Fund activity—the Fund’s role in the international monetary system. Here also, there have been failures and disappointments. I continue to consider that the exchange rate volatility and misalignments we have seen under present arrangements are too costly and destabilizing to be acceptable; I attach importance to exchange rate stability as part of the environment of monetary stability essential for the effective working of market economies. Moreover, I am attracted by the objective of carefully designed systems of formal exchange rate commitments because of their potential advantages in terms of macroeconomic discipline, as well as of reduced exchange rate instability. But we know from experience the difficulties: we know the limited power of intervention and the limited role that fiscal policy can play. And we also know that such a system could work at the global level only if certain conditions were to be met. Now, for sure, the time is not ripe for it, partly because the countries issuing the three major currencies are not convinced at this stage that they must be ready to go an extra step—to subordinate their monetary policies to exchange rate objectives. We therefore have to approach the task of fostering a more stable system of exchange rates in a different way. And that way is to strengthen Fund surveillance. What you have told us yesterday and today has been an unambiguous call for a stronger and indeed central role for the Fund in surveillance, in particular of industrial countries. I have heard the message, and I welcome it.

We must go beyond business as usual. Your message has many aspects. Effective surveillance must be backed by solid, high-quality analysis. I was heartened to hear a number of you refer to the technical competence, professionalism, and objectivity of the work of the Fund’s staff. We shall continue to strive to improve it. Participation in the surveillance process should be at a very senior level: this was another call. I agree, and indeed we have an Executive Board consisting of competent individuals. We must keep it that way and achieve the highest possible level of national government representation to give weight and authority to the Fund’s views and to ensure that they translate into action. We must publicize the results of surveillance: this was a recurrent theme in the speeches yesterday and today. I know this is a sensitive matter, but we must be more transparent and open in our work than we have been so far. We will carefully consider this and every other part of your message, and I intend as Managing Director to undertake new initiatives. Sometimes our efforts in this area have been frustrating, but we will try again with steadfast determination, and I am sure that the inspiration of the meetings in Washington (of the Bretton Woods Commission) and Madrid will help us find proper responses to your calls.

Ultimately, of course, what the Fund can do in any field depends on its members’ will to cooperate; what the Fund can do to foster a more favorable exchange system depends above all on the political will of the major industrial countries to cooperate. I strongly hope that this cooperation will be forthcoming.

International cooperation is all the more important because the process of globalization is making the Fund’s task of surveillance even more essential, as a means of preventing negative spillovers of policy mistakes from one country to others, and indeed of preventing all forms of weakness in policies, which often lie at the root of exchange rate volatility and misalignment. Through our efforts to sharpen our analysis and surveillance, we must also seek to provide the world with an even more reliable early warning system of emerging economic risks.

Also in the context of globalization, I would say that the progress that has been made toward greater freedom of capital movements invites the Fund to give early consideration to the appropriateness and modalities of a fast-disbursing, very short-term financing mechanism that could help cushion the reserves of countries experiencing short-term balance of payments pressures in spite of sound fundamentals and policies.

In these remarks, I have focused on growth and stability—two key objectives of economic policy that the Fund was founded to serve. The past 50 years have shown how multilateral cooperation can serve these objectives. In the years ahead, the Fund, together with the governments that form our membership, must ensure that the benefits of multilateral Cooperation are exploited more fully. After 50 years, the spirit of Bretton Woods, so alive at this conference, has a great deal more to offer.

Lewis T. Preston

My colleagues and I have been listening with great interest to the issues raised during the past two days. I would like to thank everyone for the time and thought they have devoted to the future of the World Bank Group. Your presence here reflects your genuine concern for the development of our member countries—and for the important role you see for the World Bank Group in that process.

We will need some time to absorb the many useful ideas put on the table. I will not therefore attempt to provide specific reactions at this stage but rather try to convey some of my thinking on the broad issues raised. I will focus on three points.

First, the World Bank needs to change both what it does and how it does it. The Bank has been flexible over the past 50 years in responding to diverse challenges; it must continue to change in response to the changing needs of our members.

We are already seeing some profound changes in the composition of our lending program, for example, with a substantially enhanced focus on private sector development, environmental sustainability, and human resource development. Many of you have urged us to continue aggressively in this direction. Let me assure you that we will.

We are also changing the way we do business. The guiding principles we outlined earlier this year in our vision statement reflect the broad directions of change, and they are part of the ongoing change in management practices and institutional “culture.” As Gerry Helleiner, among others, noted yesterday afternoon (Chapter 5), a number of measures are under way to increase the development effectiveness of our operations, enhance country focus and client orientation, and increase participation by beneficiaries in project design and implementation. These changes will help us to get better results on the ground—which is what really matters.

A second set of issues relates to the World Bank’s cost-effectiveness. I am committed to ensuring that the Bank becomes a more agile, more responsive, and leaner institution. Actions have begun to be taken to bring that about. For example, we are on a zero-growth budget this year—and sizable budget reductions are planned for fiscal years 1996 and 1997.

But I also want to sound a note of caution here. As we make an increased effort to be even more cost-effective, it is important to recognize that the Bank cannot be all things to all people. It will need to be increasingly selective in the things it does, and to seek partnerships with others. This will not only reduce some of the burden on the Bank but also help to maximize everyone’s different strengths.

I am all too aware of the danger, to which Manmohan Singh alluded (Chapter 3), of the risks of a diffused pattern of lending that can result from pursuing too many objectives. This is precisely why selectivity is the first of our guiding principles. However, for it to be applied effectively, we will need the support of our shareholders. And on this point, let me just echo what Moisés Naím and others have said (Chapter 5) about the need for our shareholders not to be “absentee landlords.” It is in the institution’s interest for our shareholders to play an active role in helping to shape our future direction.

A third set of issues relates to accountability and openness. The World Bank has had a long tradition of openness in analyzing its own performance—including through the publication of our evaluation reports. In other areas of the external dialogue, however, we have not been as forthcoming, and we have paid a high price for an institutional culture that Moisés Naím has described as “inward looking.” We are trying to break this down.

Recent changes, such as enhanced access to information, increased interaction with nongovernmental organizations, the emphasis on participation, and the establishment of an inspection panel, will help to increase openness and broaden the World Bank’s outreach efforts. Openness permits outside scrutiny of our policies and operations—and thus helps to strengthen accountability and performance. Given our new policies, I think it is fair to say that the Bank is among the most—if not the most—open development institution in the world (including nongovernmental institutions).

The dialogue that this permits with our friends and critics is vitally needed. But it must be a genuine dialogue, based on mutual respect and intellectual honesty on all sides. A few failed projects, for example, should not be allowed to define an institution that has undertaken some 6,000 development operations. Development is a risky business. All institutions seriously engaged in that business will inevitably make some mistakes. But mistakes must be seen in context. In the case of the Bank—as many of you have noted—that overall context has been highly positive.

At the end of the day, all of us must remain focused on how we can best help the 4 billion people in the developing countries to reduce poverty and improve their quality of life. The World Bank Group will continue to concentrate on this goal—and we call on all our partners in development to work with us in this great endeavor.

May I conclude by thanking Finance Minister Solbes and the Spanish authorities for the excellent arrangements for this conference. We have learned a lot these past two days—and the Annual Meetings will have been enriched by your many thoughtful contributions.

Pedro Solbes Mira

This conference commemorating the fiftieth anniversary of the Bretton Woods agreements is an excellent opportunity to take an in-depth look at the lessons we have learned from the past and, more important, to consider the future of our institutions. Although we have not taken any formal decisions, I do not think it would be an exaggeration to characterize the discussions of these past two days as historic, inasmuch as the proposals that have been discussed and the ideas they have prompted will be fundamental in predisposing us to face the reforms that may be needed to improve the functioning of the IMF and the World Bank.

Although it has been said repeatedly during these two days, I have no hesitation in once again stressing the importance of the moment in which we live. The ongoing changes in international relationships are of transcendental importance and are having profound consequences for all our societies, when, for the first time in many years, the economies of many of our countries are experiencing broad economic recovery.

The IMF’s half-yearly report on the world economic outlook, presented two days ago, contains—also for the first time in several years—an upward revision of the last previous projections. The world economy is moving strongly out of an economic recession likely to have been the worst in the last 50 years. Not only the developed economies but also a large number of Asian and Latin American countries now find themselves in much more favorable economic circumstances than they experienced even a few months ago.

We must not forget, however, that important exceptions to this favorable economic situation remain, including the poorest countries in Africa and several countries in transition to a market economy.

We must put this relatively widespread economic boom to good advantage. We must not forget that the economic recession left significant aftereffects, such as the unemployment rate in many European countries—of which Spain is a clear illustration—and the sizable budgetary deficits we have incurred as a result of the recession.

We are indeed coming out of a very deep crisis, which requires that economic policies be designed with a view to ensuring the sustainable economic development that is the ultimate objective set for the IMF and the World Bank at the time of their creation.

Increased economic interdependence and the resulting need for closer coordination of economic policies are two basic concepts on which our cooperation efforts must surely be based. From this standpoint, the roles to be played by the Bretton Woods institutions are further strengthened, even as they are constantly adapted to the new realities.

During this fiftieth anniversary conference, we have had the opportunity to listen to comments of every kind on the evolution and functioning of the IMF and the World Bank. The balance of the first 50 years in the life of these institutions may be regarded as a positive one, even if it is not devoid of aspects that are not fully satisfactory. This brings up the irrevocable need to introduce or consolidate, as the case may be, reforms that in some cases have already begun.

The evolution of both the Fund and the World Bank has also entailed gradual changes in their functions, as would be expected. These changing functions may have made it appear at times that the roles of the two institutions were beginning to overlap, giving rise to seemingly inefficient situations at first sight. The shift in the functions of the two institutions is an issue that has been discussed ever since the Bretton Woods agreements came into effect. Let us look at some of the aspects of their evolution.

The IMF has been taking an increasingly closer interest in the problems of developing countries, especially since the debt crisis of the 1980s, and has played a fundamental role not only in its policy advice but also in the solution of the problems of adjustment and indebtedness. This has led to an image of the Fund as rather more distant from its original role of overseer of exchange stability, which had such a great influence on developed countries under the system of fixed but adjustable exchange rates. I am in agreement with some of the opinions expressed these past few days, to the effect that the IMF, without ceasing to play a fundamental role in its relations with developing countries, should try to recover some of the influence it used to have on the design and coordination of economic policy in the developed countries.

From this standpoint, the review of the role of the Interim Committee, which will mark its twentieth anniversary on October 2, may be a fundamental issue. The Committee’s current Chairman, Philippe Maystadt, has taken the timely initiative of having us propose that the Governors of the IMF take up this review of the Committee’s role, and of its working procedures as well, with a view to making them more efficient. Revitalizing the Interim Committee as a forum for discussing not only problems stemming from the increased vulnerability of the exchange system in a context of full capital mobility but also problems related to economic policy coordination will contribute to a useful exchange of ideas, as well as to achievement of a multilateral commitment that may enhance the efficient functioning of the international economy.

What we are talking about is the Fund’s ability to reassume some of the powers assigned to it by the Articles of Agreement, which it should put into practice now more than ever.

Turning now to the evolution of the World Bank, we see that major changes have taken place in its organization and behavior as it has adapted to the changing nature of the problems associated with economic development. The World Bank Group has not only modified some of its thinking but also gone further and introduced major institutional reforms. The creation of new institutions within the World Bank Group, such as the Multilateral Investment Guarantee Agency, the growing emphasis on the essential role of the private sector in the Bank’s activities, and the increasing attention given in its studies to the environmental impact of its projects illustrate the continuing evolution of thought within the Bank itself as it adapts to new requirements in developing countries.

During these days of the conference, as also during the similar meeting held in Washington in July, opinions have been voiced about the advisability of creating new international institutions to deal with specific topics. The decision to create a new institution, such as the World Trade Organization, gives us an idea of the strengthened power of multilateral approaches. I continue to think that, in a more global world, multilateral approaches must indeed coexist suitably with purely regional arrangements. In such a context, coordination of functions among the various existing institutions will be fundamental to preventing interference among them and to permitting each to specialize in the area for which it was created.

We can find an example of enormous significance in the approach we took to solving the huge problems faced by countries with economies in transition.

The relatively recent creation of the European Bank for Reconstruction and Development (EBRD) was a bold initiative. Having gone through its start-up phase, and largely thanks to the wise management of its President, Mr. de Larosière, the EBRD now focuses on increasingly efficient policies to support the transformation of economies in transition. Thus, the gradual strengthening of the EBRD should take into account the policies we ourselves decide should be implemented through the IMF and the World Bank for these countries, which are so much in need of support by the international community.

The conclusion, then, is that a review is needed of the functioning, role, and coordination of multilateral institutions as a group, whose design should never be accepted as fixed in a changing world. Given the nature of this forum, I would be so bold as to state that we need a review that will make use of the positive aspects of the experience of recent years and of the changes already made, but that can be thought of as a kind of refounding of our institutions, amounting in some cases to a return to their origins. If Keynes and White were called upon today to propose plans for organizing the international monetary system, how would they do so? It seems evident that the problem of development, which was not on the original Bretton Woods agenda, is today a basic priority, as is the situation of the countries in transition, now that the Cold War is over.

We would have to adapt to the challenge of the global economy, with no exclusions or self-exclusions, consistent with strong, consolidated areas of regional integration. And all this would have to be suitably reflected in the organization, functioning, and decision-making mechanisms of our institutions, which would play a new role in driving and guiding a new concept of global multilateralism with a political and economic weight distribution different from the one that prevailed at Bretton Woods.

This means being prepared to change the existing pattern, keeping in mind the goal of properly defining the appropriate functions for each institution and ensuring proper coordination between them. These changes will not be effective unless the political will is present. But I am convinced that, sooner or later, they must be taken up, and I believe that this anniversary is a good occasion to begin doing so.

In conclusion, I wish to thank you again for your presence in Spain and to congratulate you on your work. I would like to make special mention of the Managing Directors and Presidents who have led the IMF and the World Bank, respectively, and particularly of Michel Camdessus and Lewis Preston, under whose batons expert staffs representing all our countries are working most effectively.