The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx

Abstract

The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx

Kyrgyz Republic: Sound Policies Yield Economic Improvement

Soon after the collapse of the former Soviet Union, the Kyrgyz Republic—one of the smallest and poorest of the former Soviet republics—faced disruption of its traditional trade relationships and the loss of large financial transfers from Moscow. As a result, output fell by one-third during 1991-93, inflation soared to 1,200 percent in 1993, and the external balance deteriorated precipitously, partly the result of a substantial rise in imported petroleum prices.

In the face of these formidable difficulties, in 1993 the Kyrgyz government adopted a far-reaching medium-term economic program. The program sought to revive economic growth through price stability and structural reforms aimed at transforming the economy into a market-oriented system. These efforts were supported by the IMF through credits under a stand-by arrangement and the systemic transformation facility in 1993 and 1994, and, since mid-1994, under a three-year enhanced structural adjustment facility (ESAF) arrangement. Kyrgyz’s ESAF-supported program sets the following targets to be achieved by the end of 1997:

• a turnaround in output growth to about 5 percent a year;

• a reduction in consumer price inflation to an annual rate of about 10 percent;

• a reduction in the budget deficit to about 3 percent of GDP;

• a narrowing in the external current account deficit (excluding official transfers) to about 9 percent of GDP, and an increase in gross international reserves to more than two months of imports; and

• wide-ranging structural reforms, including the privatization of most state enterprises and land reform.

Kyrgyz Republic: Key Indicators

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For the first six months of 1996.

Data: Kyrgyz authorities and IMF staff estimates

Kyrgyz’s implementation of policies supported by the ESAF has vastly improved its economic situation. Output has begun to grow again, while inflation has declined sharply. Real GDP expanded by 1 percent in 1995 and is expected to grow by 3½ percent in 1996, slightly more than targeted—as compared with a drop of 20 percent in 1994. The output increase was led by robust growth in the agricultural sector, the result of productivity gains after the dismantling of state farms, construction activity related to a large gold mining project, and by rapid growth in trade and services in response to economic liberalization. Industrial production continued to fall through 1995 but is estimated to have grown in 1996, owing to an increase in exports to members of the Commonwealth of Independent States (CIS).

Inflation is projected at about 27 percent this year; a significant portion of the increase in prices is due to increases in domestic electricity and heating tariffs to cost-recovery levels. The reduction in inflation has brought about a sharp decline in nominal interest rates and a stable exchange rate. Since January 1995, interest rates on three-month treasury bills have fallen by two-thirds to 35 percent (compounded annually), while the national currency (the som) has been relatively stable against the U.S. dollar.

Public Finances Strengthen

A key element of Kyrgyz’s ESAF-supported program has been strengthening government finances, in part to allow for the contraction in monetary and credit growth rates that underpinned the reduction in inflation. An ambitious program to improve tax administration has been put in place, including the July 1996 implementation of a new tax code that modernizes the value-added tax. Expenditure savings have come from rationalizing education and health services and tightening eligibility for social payments. Budgetary management has also been strengthened through the introduction of a treasury on January 1, 1995, with the assistance of the IMF. With lower-than-expected revenues, however, the government’s efforts to meet its deficit target often led to the sequestration of expenditure; this has resulted in domestic payments arrears, particularly at the local level, as the authorities have abstained from increasing lending to the budget beyond planned amounts. The government is currently implementing measures to clear all of its payments arrears by the end of 1996.

Structural Reforms Are Broadly Based

The Kyrgyz Republic has been at the forefront among CIS countries in carrying out structural reforms aimed at reducing state control of the economy and in privatizing state enterprises. By the end of 1995, almost all of the 900 enterprises included in the 1994–95 privatization program were offered for sale, and state ownership was removed entirely from more than half the enterprises. Diagnostic studies to determine the viability of enterprises under the Enterprise Restructuring and Resolution Agency Program—sponsored by the World Bank—were completed. Five enterprises were liquidated, several left the program, and the remaining enterprises underwent massive downsizing and restructuring. Attempts to attract foreign direct investment into some of the restructured enterprises, however, have had limited success.

The government also undertook significant reforms in the agricultural sector, further lessening state control. These included the elimination of all export taxes on agricultural products, the breakup of most state and collective farms, the relaxation of regulations on the use of land, the passage of legislation extending land-use rights to 99 years, and the establishment of a unified land registration system. The authorities have also eliminated all price controls, particularly on food and energy.

Given the importance of financial reform in transition economies, the authorities have taken measures to address the weaknesses in the banking sector. New central bank and commercial bank laws were approved in 1992; the national currency was introduced in May 1993 in the context of a fully liberalized foreign exchange regime; and a number of market-based policy instruments were introduced with technical assistance from several international institutions.

In early 1995, the National Bank of the Kyrgyz Republic conducted inspections of all commercial banks. Nine of the country’s 18 banks were found to have had a negative net worth, and about two-thirds of loans—the bulk of which were extended before independence—were classified as unrecoverable. To address the problems of the banks, the authorities in 1996 launched a comprehensive restructuring program of the financial system supported by a financial sector adjustment credit from the World Bank’s International Development Association (IDA).

Kyrgyz Republic At a Glance

The Kyrgyz Republic is a landlocked, largely mountainous country in central Asia. The country is about the size of Austria and Hungary combined and is bounded by China on the east, Kazakstan on the north, Uzbekistan on the west, and Tajikistan on the south and west. Its population of 4½ million is largely rural; slightly more than half the population is ethnic Kyrgyz, with a considerable portion of the rest ethnic Russian, Uzbek, and Ukrainian.

Kyrgyz Republic is one of the smallest republics of the former Soviet Union, with one of the lowest per capita GDPs. When the country gained independence in August 1991, it inherited an economy that was mainly agricultural, with a small but highly specialized industrial sector that relied on other Soviet republics for customers and inputs. The country has considerable hydroelectric potential.

Trade and Exchange Policies Are Liberal

The Kyrgyz Republic maintains a very liberal trade and exchange system. The few remaining export duties—on hides and silk cocoons—were eliminated in early 1996, and a uniform 10 percent import tariff is applied on imports from non-CIS countries (except for a few commodities subject to the excise tax). The som enjoys full current and capital account convertibility, and in March 1995 the Kyrgyz Republic accepted the obligations of Article VIII of the IMF’s Articles of Agreement (under which members refrain from imposing restrictions on payments and transfers for current transactions). The Kyrgyz government is also pressing ahead with membership in the World Trade Organization, having obtained observer status in 1996, notwithstanding the country’s membership in a customs union with Russia, Kazakstan, and Belarus.

External trade expanded rapidly in 1995: Kyrgyz exports increased by 20 percent and imports by 47 percent (in U.S. dollar terms), compared with 1994. The sizable increase in imports was due partly to the large foreign-financed gold mining project. The expansion in trade reflects increasing trade with non-CIS trading partners—notably, with China, the United Kingdom, and Turkey—and a shift in exports from heavy industry to light industry and agricultural products. The external current account deficit (including grants but excluding imports related to the gold project) amounted to the equivalent of 9 percent of GDP in 1995. It was financed largely by borrowing from non-CIS countries and multilateral institutions, with a significant proportion of assistance obtained at concessional rates. A slightly smaller current account deficit is projected for 1996, with the bulk of disbursements expected to come from IDA, the Asian Development Bank, the European Bank for Reconstruction and Development, and Japan’s Overseas Economic Cooperation Fund. Gross reserves increased to more than two months of imports by mid-1996.

Overall, the Kyrgyz Republic has made great strides in stabilizing and restructuring its economy. Output is growing, inflation is lower, and the economy is much more competitive and market oriented. The authorities’ efforts have laid a solid foundation for future growth. To further consolidate the gains from the IMF-supported reform program, the authorities need to persevere with sound financial policies and deepening structural reforms.

IMF European II Department

Have North-South Growth Linkages Shifted?

Despite sluggish growth in the industrial countries (the North) in the early 1990s, many developing countries (the South), particularly in Asia, were able to sustain rapid growth. This apparent resilience to the economic downturn in the industrial countries suggests that the conventional wisdom of the North pulling the South may no longer be valid. The increasing weight of the South in the world economy also implies that the developing countries may now have a more significant impact on economic developments in the North, with the impact becoming more powerful over time. On the assumption that average growth in the developing countries is sustained at about 6 percent a year and that industrial countries continue to grow at about 2½ percent a year—broadly in line with past trends and current estimates of potential output growth—the share of global output produced by the countries currently classified as developing could surpass that produced by the industrial countries by the year 2004.

A18ufig03

North and South Output Growth1

(In percent a year)

Citation: IMF Survey 0025, 001; 10.5089/9781451937442.023.A018

1Annual rate of change in aggregate output in constant purchasing power parity dollars.Data: IMF. Working Paper 96/54

Influence of South Grows

Traditional analyses of the linkages between the North and the South emphasize the asymmetric nature of their interactions, arising from the dependence of the South on northern capital goods, technology, and export markets. They also stress the crucial role that the South’s terms of trade play by influencing its purchasing power as well as the demand for its products by the North. By contrast, the more recent literature emphasizes the changing pattern in North-South interactions and increasingly presents the relationship between the two regions as one of interdependence, with the South playing a more active role in sustaining growth in the world economy and with policies in the South having a more significant impact on output in the North.

According to a recent IMF Working Paper by Alexander W. Hoffmaister, Mahmood Pradhan, and Hossein Samiei, the sustained growth in the South during the last four or five years represents a “significant structural break” in the North-South relationship. Whereas for most of the past 20 years, output growth in both regions has been relatively well synchronized—with the North generally leading the South—during the late 1980s and early 1990s, growth in the South was sustained despite weak growth in the North (see chart, page 277). Moreover, robust growth in the South in the recent period has contributed substantially to containing the growth slowdown in the North as well as to the North’s subsequent recovery. The study, however, cautions against treating the evidence as providing support in favor of a long-term change in North-South linkages, since the divergence in growth rates is relatively recent. The increased resilience to slowdowns in the North, moreover, is not a universal phenomenon, since it is concentrated among several Asian countries. Indeed, there is little evidence of a similar change in the economic relationship between the North and other regions in the South.

Structural Reform and Liberalization in the South

Nonetheless, the apparent change in North-South linkages can be attributed to a number of factors. Over the past decade, many developing countries have implemented far-reaching structural reforms, especially trade liberalization and the removal of distortions in domestic product and financial markets. These reforms have helped improve the allocation of resources and productivity. They have also attracted large inflows of foreign capital and boosted activity in the North by expanding export markets. Traditional trade linkages have been deepened—and new ones developed—by more open trade and exchange regimes, increased diversification of developing country exports, and closer financial linkages. The shift in the orientation of trade policies has been particularly striking in Asian and Latin American countries, enabling them to substantially expand both intraregional trade and trade with industrial countries.

For many developing countries, vulnerability to external shocks has also been mitigated through diversification of the export base—especially through an expanded manufacturing sector—because the demand for manufactures has been less cyclical and has risen more rapidly than the demand for primary commodities. For these countries, stronger export growth and smaller terms of trade losses have contributed to increased resilience, higher investment, and more rapid economic growth in recent years.

Higher growth and investment have in turn facilitated export diversification, creating a virtuous circle. For example, in Asia, where growth has been especially strong, the share of manufactured exports relative to primary commodities has increased substantially, accounting for over 70 percent of total exports of goods in 1990. The rising share of manufactured exports also reflects an underlying shift in the comparative advantage of many developing countries. Relatively low wage costs coupled with rising investment have made some developing countries highly competitive in the production of many manufactured goods, especially in countries where this process has been accompanied by improvements in the supporting infrastructure.

The diversification of export markets and a marked increase in intraregional trade have also contributed to (and been stimulated by) the increased resilience of developing countries. This has been especially true in Asia, where almost 40 percent of the region’s exports are now destined for other Asian countries. The expansion of markets in Asia has benefited other regions as well—all industrial and developing country regions have increased the share of their exports going to Asia. Although intraregional trade has also risen markedly among Latin American countries, diversification of export markets there has been limited. Almost 50 percent of the region’s exports are destined for North America. And export markets have remained relatively undiversified among African countries, with about 50 percent of African exports going to Europe.

Developing countries may now have a more significant impact on economic developments in the North.

Capital Inflows Play Important Role

Perhaps the most striking development in North-South linkages has been the recent surge in capital flows to developing countries. This reflects the growth of trade and successful adjustment and stabilization efforts, and domestic financial liberalization—including fewer restrictions on acquisition of assets by foreigners—in a number of developing countries. It also reflects greater international diversification of industrial country investments, especially in periods when growth and interest rates are low in the industrial countries. In contrast to earlier periods of large capital flows to developing countries, an increasing proportion comprises private capital flows, especially in the form of foreign direct investment and portfolio investments in bond and equity markets. Although in some cases capital inflows, especially portfolio flows, have been attracted by high short-term interest rates, for many developing countries, particularly those in Asia, capital flows in the form of foreign direct investment have helped to boost investment further. Higher foreign direct investment has enabled many developing countries to gain greater access to industrial country production technologies and increased the scope for rapid export growth.

With more open capital markets, weak activity and low interest rates in the North have tended to generate larger capital inflows and investment in the South. At the same time, there has been an increase in intraregional trade and export diversification in the South, in particular a shift toward manufacturing from primary commodity exports. Both developments have helped to offset the effects of cyclically low growth on exports to the North. Thus, despite a much closer relationship between developments in the North and the South, these recent changes appear to have broken the predominantly unidirectional link between growth rates in the two regions that had resulted from the dominance of trade linkages with the North. Although it would be premature to suggest that these changes have permanently reduced the dependence of developing country growth on growth in the industrial countries, the recent resilience of the more successful developing countries to weak external conditions is indicative of their improved ability to withstand cyclical downturns in the industrial countries.

Have North-South Growth Linkages Changed? by Alexander W. Hoffmaister, Mahmood Pradhan, and Hossein Samiei, is No. 96/54 in the IMF’s Working Paper series. Copies are available for $7.00 from Publication Services, Box XS600, IMF, Washington, DC 20431 U.S.A. Telephone: (202) 623-7430; fax: (202) 623-7201; Internet: publications@imf.org

EMU Could Require Greater Fiscal Policy Coordination

Fiscal policy in a monetary union has become a topical issue as the deadline set by the European Union (EU) for economic and monetary union (EMU) approaches. Many EU countries face the prospect of not being able to meet the budget deficit and debt criteria—government deficits not in excess of 3 percent of GDP, and gross public debt below 60 percent of GDP or declining at a sufficiently rapid pace—set out in the December 1991 Maastricht Treaty as one of the conditions for membership in EMU. In a recent study, Paul R. Masson of the IMF’s Research Department, considers these qualifying conditions for EMU membership, the need for fiscal discipline and policy coordination in EMU and the role of the criteria in achieving these objectives, and the potential for creating a supranational fiscal authority in the EU.

Are Fiscal Criteria Necessary?

Historically, the only real qualifications for joining a monetary union have been the desire to do so and the willingness to accept the rules. Yet, according to Masson, the Maastricht convergence criteria serve a number of useful functions:

• They commit a country to monetary union, even when the going gets rough.

• The convergence of long-term interest rates eliminates the prospect of big capital gains (or losses) for those contracting at a high interest rate in a weak currency and being repaid (or having to repay) in a strong one.

• The fiscal criteria have prodded politicians to address unsustainably large deficits.

In normal times, says Masson, the fiscal criteria would not be considered particularly stringent. Even given the unexpected severity of the 1992–93 recession in Europe, reducing deficits to 3 percent by the end of 1997 (the decision on which countries are eligible to participate in EMU will be made early in 1998) is not an ambitious target for most EU countries with a satisfactory growth rate. The recent slowdown in Europe, however, raises the possibility that a strict application of the deficit criterion may imperil the whole project. The problem, says Masson, lies not so much with the criterion but rather with its arbitrariness and with the measures that countries have taken to meet it.

Meeting the fiscal criteria has to some extent diverted policymakers’ attention away from other important structural concerns, according to Masson. The most serious fiscal problems in EU countries are high tax burdens and overly generous social transfers. But because the deficit target is so concrete and the timetable for achieving it so precise, efforts to meet it have focused on the most readily accessible and flexible instrument—taxation—rather than on spending reductions. A thoroughgoing expenditure reform calls for difficult negotiations with unions, employers, and providers of social services. Targeting social benefits, which have become entitlements that are jealously protected by highly visible and vocal interest groups, is far more politically difficult than raising taxes, since in most countries taxpayers are a diffuse and ineffective force. In addition, says Masson, a focus on deficit reduction has meant that too little energy is being expended on such fundamental issues as inadequate labor flexibility and the need to adapt to changing technologies.

Monetary-Fiscal Policy Mix

The Maastricht treaty stipulates that countries must continue to meet the criteria after they have joined EMU. It is still open to debate, however, whether additional mechanisms to enforce fiscal discipline will be required once the monetary union comes into existence. Such mechanisms may be needed to ensure that the European Central Bank (ECB) is able to fulfill its mandate to deliver low inflation and resist calls to bail out national governments. On the one hand, the ECB will be facing fragmented national governments that are unlikely to push it in a single direction. Furthermore, governments will become borrowers in a single European currency in a vast, unsegmented capital market where market sanctions—in the form of higher borrowing costs—will be quickly imposed.

On the other hand, market discipline may not be sufficient in some circumstances. It seems inevitable, Masson says, that governments—especially those facing near-term elections or lacking majority support—will occasionally get into trouble; and it is not inconceivable that the ECB would try to avoid a major crisis by easing monetary policy. Fiscal rules could help shield the ECB from having to take this step by inducing countries in difficulty to take preventive measures before they reach the 3 percent deficit ceiling. But Masson cautions that in the face of a severe shock, the deficit criterion would actually make it more difficult for national policymakers to use fiscal policy for stabilization purposes and would therefore increase the pressure for a looser EMU-wide monetary policy.

EMU and National Fiscal Policy

In the absence of practical experience, planners and policymakers cannot yet determine how much ability governments would retain—once EMU comes into existence—to use fiscal policy for stabilization purposes, if they had to abide strictly by the debt and deficit criteria. Masson considers the question from both the transitional and long-run perspective.

Transition. Two important elements limit governments’ room for maneuver in the transitional period—even in the absence of the Maastricht fiscal criteria. First, the starting level of debt in several countries that would otherwise qualify for EMU is already undesirably high (for instance, Belgium’s debt-to-GDP ratio is 135 percent). Most European countries will thus have to run tight fiscal policies to achieve steady declines in these ratios.

Second, starting in the second decade of the next century, the proportion of retirees in the population will increase sharply, putting upward pressures on pension plan deficits and increasing spending on medical care. At the same time, the number of working-age people will fall. Policymakers need to anticipate these pressures by running down debt and reducing public pension benefit levels, to avoid being faced with having to either impose massive further tax increases or exceed the Maastricht deficit and debt ceilings. Fiscal adjustment is thus essential. Indeed, Masson suggests that deficits may have to be reduced to well below 3 percent for the next few decades.

Long Run. Abstracting from both initial debt levels and the demographic considerations mentioned above, cyclical fluctuations tend to cause deficits to vary, assuming that automatic stabilizers operate freely. If the deficit ceiling is to be 3 percent of GDP, the average or midpoint level of the cycle must therefore be considerably lower—say, no more than 1 percent. It has been argued that in a monetary union, cyclical fluctuations in deficits should be allowed to occur to a greater extent than otherwise, because the monetary instrument will not be available for national stabilization purposes. The Maastricht Treaty, however, does nothing to increase the flexibility of fiscal policy; on the contrary, it imposes restraints on it. A series of negative shocks could push deficits up to the 3 percent ceiling, causing governments to impose additional taxes and, in effect, offsetting the action of the automatic stabilizers. In this case, governments might choose to forgo any stabilization role. This possibility raises the issue of whether other stabilization instruments are necessary at the EU level.

It seems likely, Masson suggests, that all aspects of national fiscal policies will be subject to greater harmonization and—to the extent that countries attempt to use fiscal policy to limit the effects of EU-wide shocks—to much closer coordination in EMU. Increases in labor mobility, for example, will lead to a rethinking of social protection systems in order to link benefits more closely to contributions. In the area of taxation, pressures will arise to harmonize further those taxes whose bases are especially mobile and to address such issues as the joint administration of tax collection.

Fiscal Federalism in EMU?

A number of countries strongly oppose the idea of a federal EU. But, as Masson maintains, the use of fiscal policies for stabilization purposes will be limited in coming decades by the size of existing debt stocks, demographic trends, and, to some extent, the Maastricht debt and deficit criteria themselves. The question that needs to be addressed, then, is whether national governments can continue to perform stabilization functions adequately, or even increase them if necessary, when the monetary union comes into existence, or if a fiscal mechanism at the EU level will be necessary to cushion regional shocks.

Aside from the rigidity imposed by the debt and deficit criteria—which could be most constraining precisely when stabilization is most needed—EU countries may no longer be able to insure themselves adequately against macroeconomic shocks when they move to EMU. This is because financial markets may not allow governments that have lost the power to use the inflation tax to borrow to the extent that they do now. Stabilization policy at the supranational level, Masson suggests, could be more effective as a means of providing insurance by allowing for some redistribution from regions (or countries) facing positive income shocks to those that have experienced negative shocks.

Several EU-wide stabilization schemes have been put forward along these lines, although they have not garnered much support from national governments. Among the objections are fears that moves to a federal system may increase political uncertainty and open the door to free riding in the administration of federal spending. Even less popular is the idea of large-scale redistribution at the EU level, although monetary union need not necessarily entail an increase in redistribution, except to the extent that it is the short-run consequence of stabilization policy.

Popular support for monetary union may have suffered, Masson suggests, as a result of an “economic deficit”—the lack of accompanying fiscal policy measures or other structural transformations that would compensate for the loss of monetary sovereignty and address existing economic problems. If monetary union is to be a success, he concludes, that deficit will have to be reduced.

Fiscal Dimensions of EMU, by Paul R. Masson, is No. 96/7 in the IMF’s Papers on Policy Analysis and Assessment (PPAA) series. Copies are available for $7.00 from Publication Services, Box XS600, IMF, Washington, DC 20431 U.S.A. Telephone: (202) 623-7430; fax: (202) 623-7201; Internet: publications@imf.org

Banking Reforms in Transition Economies Should Be Linked to Macro Stabilization

On June 26–28, senior government officials from transition economies, academicians, and representatives of the IMF and the World Bank gathered in Dubrovnik for the second Dubrovnik Conference on Transition Economies. The conference was sponsored by the National Bank of Croatia and the program organized by Marko Škreb, Governor of the National Bank of Croatia, and Mario Blejer, Senior Advisor in the IMF’s Monetary and Exchange Affairs Department. It dealt with reform of the banking sector, which is particularly relevant for economies in transition to market-oriented systems, many of which are encountering problems with their banking systems.

By the end of 1994, most countries in transition had shifted to varying degrees to market-oriented (indirect) instruments of monetary policy, according to Martha de Melo of the World Bank, who presented a paper coauthored with Cevdet Denizer, also of the World Bank, on the use of monetary policy instruments in 26 transition economies. De Melo observed that credit ceilings had been a useful interim tool in moving from direct to indirect instruments of monetary policy—although the subsequent elimination of credit ceilings was associated with effective stabilization. But she saw no clear evidence that indirect instruments were more efficient than direct ones in reducing inflation and deepening the process of monetization. The choice of monetary policy instruments, she said, was of secondary importance in bringing about stabilization, compared with broader structural reform in the real economy and the stance of monetary policy.

To explain why banking sector reforms in transition economies have taken so long and sometimes been illfocused, Arye Hillman of Israel’s Bar Ilan University discussed the results of a political economy model of banking in a partially privatized economy, which he developed with Heinrich Ursprung. In an economy with strong links between banks and the remaining state-owned enterprises, Hillman said, the incentives can contribute to a diminution of bank capital and ultimately lead to a financial crisis. In his model, bank profits that were generated by lending to the private sector are eroded—and banks are ultimately bankrupted—by competition among state-owned enterprises to capture banks’ resources.

Lessons of Country Experiences

Paul Wachtel of New York University and Almos Kovacs of the National Bank of Hungary noted that competition in banking should arise from free entry—including free foreign entry—and not necessarily from a large number of banks. Mario Nuti of the London Business School identified two features of market-oriented banking: matching supply and demand of monetary resources, and transforming short-term into longer-term liabilities based on project profitability. Only the first condition had been achieved in transition economies, he said, as banks tended to seek short-term profitability outlets, such as investments in short-term treasury bills and foreign exchange speculation. As a result, long-term project financing had been crowded out, with adverse implications for growth.

Ardo Hansson, until recently with the World Bank, said, in referring to the Baltic countries’ experience, that banking crises were almost inevitable in transition economies, because uncontrolled and unsupervised growth in commercial bank lending quickly unmasked hidden problems. Robert Mundell of Columbia University stressed the importance of sound macroeconomic policies. He noted that, even in the United States, all three major banking crises in the twentieth century were preceded by inadequate macroeconomic policies resulting in negative real interest rates; the subsequent macroeconomic adjustment restoring positive real interest rates inevitably destroyed a number of banks. For small countries, Mundell stressed that a rapid and uncontrolled increase in banking assets should be discouraged. Furthermore, given the small size of the domestic monetary sector, the banking sector is highly sensitive to even minor swings in capital flows.

Andrei Illarionov, Director of Independent Research on the Russian Economy, said that Russian banks had adapted relatively successfully to emerging business opportunities. Following the elimination of profitable foreign exchange operations after the July 1995 introduction of a foreign exchange corridor (aimed at stabilizing exchange rate fluctuations), banks successfully shifted into the treasury bill market. This, however, has left them vulnerable to a crisis if the treasury bill market dries up in the wake of a reduction in the fiscal deficit and real interest rates remain high.

Conclusions

Among the main conclusions that emerged at the conference were the following:

• Banking sector problems in transition economies are, to a significant extent, unavoidable.

• The transition process implies a dramatic change in the role and instruments of monetary policy.

• Development and reform of the financial sector are necessary aspects of the transition process, best achieved simultaneously with macroeconomic stabilization and enterprise reform because of the interactions between them.

• Competition in the banking system is important. Foreign entry may offer a means to foster competition, but proliferation of banks is not necessarily a good thing in all countries. Some new entrants may be weak and poorly managed, underscoring the need for proper licensing procedures.

• In fostering the financial sector, government’s role in the transition process needs to change from directing credit—including for political reasons—to promoting proper supervision and regulation, including sound accounting and information standards, and fostering a competitive environment in which market discipline could prevail.

From the Executive Board

Benin: ESAF

The IMF approved a new three-year loan under the enhanced structural adjustment facility (ESAF) for Benin, totaling SDR 27.2 million (about $40 million) to support the government’s economic and financial reform program for 1996-99. The first annual loan for 1996-97, equivalent to SDR 9.1 million (about $13 million), will be disbursed in two equal installments, the first of which is available immediately.

Benin has successfully implemented an economic reform program supported by the ESAF that expired in March 1996 Progress was made in strengthening public finances, enlarging the revenue base, improving competitiveness, expanding the export base, liberalizing the economy, and strengthening key infrastructure. Real GDP growth accelerated to nearly 5 percent in 1995, and the rate of inflation declined sharply to 3 percent at end-December 1995. However, the external current account deficit widened, owing to a temporary surge in imports related to infrastructure and other expenditures in connection with the francophone countries’ summit held in Benin in 1995.

Medium-Term Strategy and 1996-97 Program

The medium-term strategy aims at achieving sustained economic growth within a framework of financial stability by gradually reducing the dependence on external foreign assistance and maintaining external competitiveness. The strategy assigns high priority to increasing the income-earning opportunities for and improving the provision of services to the poorest groups of the population. To these ends, the program will enhance economic diversification through more dynamic private sector development and increased public resources directed to the education and health sectors.

The medium-term economic program for 1996–99 aims at an annual real GDP growth rate of over 5 percent, an annual rate of inflation of about 3 percent, and a reduction in the external current account deficit (excluding grants) to about 5.5 percent of GDP by 1999. Within this medium-term framework, the 1996–97 program seeks to achieve a real GDP growth rate of 5.5 percent in 1996 and 5.8 percent in 1997, to limit the yearly inflation rate to about 3 percent by end-1997, and to gradually reduce the external current account deficit to 7.3 percent of GDP in 1996 and 6.4 percent in 1997, from 8.6 percent in 1995.

To achieve these objectives, the central focus of the program will be to strengthen public finances. The overall budget deficit (excluding grants) will be reduced to 6.6 percent of GDP in 1996 and 6.2 percent in 1997, down from 7 percent in 1995. Measures to increase revenues include a reduction of customs exemptions and an increase in the taxation of a number of products. On the expenditure side, wage policy will be reformed to ensure that wage increases are more closely related to merit and performance and that they do not exceed productivity increases in the economy at large. Monetary policy, conducted within the framework of the West African Economic and Monetary Union, will seek to strengthen Benin’s foreign reserve position through a cautious policy stance and use of indirect instruments of monetary policy.

Structural Reform Policies

Structural reforms under the ESAF program are aimed at reinforcing the role of the private sector and promoting the diversification of economic activity and exports, while ensuring that the potential of the cotton sector, which produces Benin’s main export commodity, is fully exploited. The privatization and restructuring of public enterprises will continue, concentrating on certain agroprocessing plants and hotels. In addition, the transfer of the fire, accident, and other risks portfolio of the liquidated insurance company SONAR to private operators will be carried out. To encourage private sector development, the authorities are preparing a plan of action to streamline regulations, modernize business laws, create a more efficient judiciary system, and strengthen the financial sector. Producer prices for cotton were increased for the 1996-97 crop in order to boost incentives for production and improve farmers’ remuneration. In addition, a development strategy for the cotton sector has recently been completed and an ensuing action plan will be adopted before the end of 1996.

Addressing Social Needs

Public expenditure policy in 1996 and 1997 will continue to give priority to current and capital outlays on education and health. Special attention will be given to the rehabilitation of schools, creation of vocational schools, provision of teaching materials, and establishment of regional health centers. The government will also implement labor-intensive public works in urban and rural areas, reinforce the labor component of public investment projects, and improve social services for the most disadvantaged social groups.

Benin: Selected Economic Indicators

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Estimate.

Program.

Data: Beninese authorities and IMF staff estimates

Stand-By, EFF, SAF, and ESAF Arrangements as of July 31

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Data: IMF Treasurer’s DepartmentNote: EFF = extended Fund facility.SAF = structural adjustment facility.ESAF = enhanced structural adjustment facility.Figures may not add to totals owing to rounding.

The Challenge Ahead

Attainment of the program’s objectives is subject to the evolution of the terms of trade. If necessary, additional measures might be needed to realize those objectives. While Benin’s external debt indicators are relatively favorable, the debt outlook also remains highly vulnerable to terms of trade and other external shocks. Under these circumstances, it will be important to pursue an extremely prudent debt management strategy, continuing to rely on grants and highly concessional loans to finance investment projects.

Benin joined the IMF on July 10, 1963; its quota is SDR 45.3 million (about $66 million); and its outstanding use of IMF credit currently totals SDR 65 million (about $95 million).

Press Release No. 96/46, August 28

Selected IMF Rates

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The SDR interest rate, and the rate of remuneration, are equal to a weighted average of interest rates on specified short-term domestic obligations in the money markets of the five countries whose currencies constitute the SDR valuation basket (the U.S. dollar, weighted 39 percent; deutsche mark, 21 percent; Japanese yen, 18 percent; French franc, 11 percent; and U.K. pound, 11 percent). The rate of remuneration is the rate of return on members’ remunerated reserve tranche positions. The rate of charge, a proportion (currently 109.4 percent) of the SDR interest rate, is the cost of using the IMF’s financial resources. All three rates are computed each Friday for the following week. The basic rates of remuneration and charge are further adjusted to reflect burden-sharing arrangements. For the latest rates, call (202) 623-7171.

Data: IMF Treasurer’s Department

Sound Policies Underlie Ireland’s Economic Strength

Following is a summary of an internal IMF study by the IMF’s European I Department evaluating recent economic developments in Ireland.

Sustained financial discipline and outward-looking policies have transformed the Irish economy into one of the best performers in Europe, characterized by steady growth and low inflation, according to IMF staff. The Irish economy has undergone significant change in the last two decades in the context of policies of closer integration with the European Union (EU). As part of this approach, Ireland joined the exchange rate mechanism of the European Monetary System in 1979 and aims to be in the first group of countries qualifying to enter the European Economic and Monetary Union in 1999.

The Fundamentals

Economic growth has been exceptionally robust, reflecting buoyant exports and, since 1994, resurgent investment and consumer spending. Real output grew by 7.4 percent in 1994 and by 7.3 percent in 1995, compared with an average growth rate of about 2.3 percent for the 1991-93 period. Strong and broad-based growth also contributed to an unprecedented pace of job creation. Employment rose at an annual rate of 3.6 percent during 1994–95, generating more jobs in those 2 years than in the previous 30. Unemployment fell sharply—to about 13 percent in 1995, from 16.7 percent in 1993. Nonetheless, long-term joblessness remains a problem.

Ireland’s impressive economic performance has been facilitated by a major increase in total factor productivity. This, in turn, can be traced to two causes: a gradual shift of human and capital resources toward the highly productive sector associated with foreign direct investment, and related improvements in the qualifications of new entrants to the workforce.

Despite continued surges in output and employment, inflation was subdued in 1995, remaining below the EU average for the eighth straight year. Both consumer and producer prices increased by 2½ percent in 1995, while the core consumer price index (which excludes mortgage interest) increased by 2.4 percent. In the first quarter of 1996, increases in both core and headline (which includes all items) consumer prices decelerated to an annual rate of 2 percent.

But there is a risk of overheating, according to the IMF staff. Capacity utilization reached an all-time high in the first quarter of 1996. Bottlenecks have emerged in the construction sector. Housing prices are buoyant, and credit growth—led by brisk mortgage lending—remains rapid.

Ireland’s external current account remains solid. Since registering a small deficit in 1990, the country has run consistent surpluses, reflecting a particularly favorable trade balance. Both high-tech and traditional exports surged in 1995. Increased openness and closer integration with the EU have significant implications for the Irish economy: they increase Ireland’s interdependence with other EU economies, eliminate barriers, and bring competition into previously sheltered sectors.

Ireland’s external trade has featured rapid export growth facilitated by outward-oriented policies and rapid expansion of the multinational sector; this sector currently accounts for 63 percent of manufacturing exports and almost 50 percent of Irish exports. The importance of EU markets for Irish exports is growing, accounting for 41 percent of the total in 1994. Within this total, Austria, Belgium/Luxembourg, Denmark, France, Germany, and the Netherlands absorbed almost 35 percent. At the same time, trade with the United Kingdom has declined; its share in Irish exports dropped to 27 percent in 1994 from more than 43 percent in 1980.

Members’ Recent Use of IMF Credit

(million SDRs)

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Note: EFF = extended Fund facility.CCFF = compensatory and contingency financing facility.STF = systemic transformation facility.SAF = structural adjustment facility.ESAF = enhanced structural adjustment facility.Figures may not add to totals shown owing to rounding.Data: IMF Treasurer’s Department.

Ireland’s improved current account position reflects substantial swings in saving and investment. The gross national savings rate fluctuated around 22 percent of GNP for most of the 1970s, followed by a steep drop reflecting rising public sector dissaving and declining private sector savings. It soon recovered and was about 18 percent during the 1980s, owing to a marked improvement in public sector finances and increased corporate savings. The national savings rate has averaged one-fifth of GNP in the 1990s. This reflects continued prudent public finances and high business sector savings driven by strong profitability.

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Ireland and European Union: Consumer Prices

(annual percent change)

Citation: IMF Survey 0025, 001; 10.5089/9781451937442.023.A018

Data: Irish authorities and IMF. International Financial Statistics

Industrial Transformation. Multinational corporations form the core of Ireland’s modern sector. These include pharmaceuticals, office equipment, electrical and instrumental engineering, and processed foods (mainly soft drink concentrates). The modern sector is characterized by remarkable productivity and a highly skilled workforce. Although accounting for only one-third of overall manufacturing employment, these industries have been the major force behind the overall increase in manufacturing productivity over the past decade. In 1995, production in the modern sector expanded by 30 percent, following an increase of 14 percent in 1994. There is evidence of increased linkages between the modern sector and the local economy, with a growing proportion of modern sector inputs being supplied domestically.

Ireland’s traditional manufacturing sector (such as food, textiles, and mining) has also gone through a major restructuring over the past decade focusing on technological modernization and market diversification. Output in nonfood traditional manufacturing increased by 7 percent in 1995. Exports of traditional manufactures are currently equivalent to one-fifth of total exports and one-eighth of GDP.

The Medium-Term Outlook

Real GNP growth is projected to moderate to 6 percent in 1996, with inflation projected to decline to 2 percent. Faster personal consumption growth (5 percent in 1996 from 3¾ percent in 1995) is expected to be offset by a decline in the growth of investment (9½ percent) and exports (11 percent), the latter reflecting Europe’s economic slowdown. Employment growth is expected to remain strong and contribute to a further decline in unemployment. On current prospects, the Irish economy will have grown by more than one-fifth during 1993-96.

Against this favorable background, IMF staff cite several policy areas requiring further attention:

• Employment policy. Unemployment—particularly long-term, structural unemployment associated with the unskilled—remains a formidable challenge. Efforts to address long-term unemployment through improved training and placement activities need to be carefully monitored given their high cost. Existing policies to discourage young school leavers from sinking into the ranks of the long-term unemployed appear appropriate. The government’s current proposal to strengthen employment incentives also needs to be vigorously pursued.

• Fiscal policy. Ireland’s fiscal position has been improved by declining interest rates, buoyant revenue arising from vigorous growth, and the recent reimposition of expenditure restraint. Continued favorable conditions need to be exploited fully to strengthen the medium-term fiscal position. The debt ratio, while declining rapidly, remains high and should be reduced. The budgetary position needs to be prepared for a likely decline in EU transfers and a more rigorous fiscal regime for participants in the European Economic and Monetary Union.

Finally, future tax reform efforts should be directed toward improving employment incentives while maintaining tight limits on the deficit. For these reasons, the Irish government’s decision to set fiscal policy within a medium-term framework is appropriate, as is its emphasis on maintaining future expenditure restraint.

• Structural reform. A faster pace of structural reform would be desirable in a number of areas. A more active approach to privatization would be especially welcome. Experience has shown that delays in addressing inefficiency in the semistate sector only increase the ultimate burden on the budget and prolong price distortions. The gap between the standard and preferential corporation tax rates should be narrowed further to reduce distortions. In addition, plans to enhance the government’s enforcement capacity should, once adopted, result in more active efforts to discourage anticompetitive practices. Signs of increased competition and lower prices in the financial services sector are encouraging.

• Monetary policy. Low inflation continues notwithstanding above-trend economic growth. The appreciation of the Irish pound both in effective terms and against sterling has contributed importantly to subdued prices. The authorities recognize that it is crucial to maintain expectations of continued low inflation during the period leading to the expiration of the current centralized wage agreement. (Established in 1987, such agreements bring together employers, unions, and the government to negotiate wage policy on a firm or industry-wide level.)

Ireland’s system of centralized wage agreements has fostered social consensus on wage moderation and sound macroeconomic policies. At the same time, it has avoided the worst rigidities often associated with such arrangements. Thus, any successor to the current wage agreement structure should provide for continued flexibility and wage moderation. The Irish authorities have expressed a readiness to tighten monetary conditions at the first sign of increasing price pressures.

Photo Credits: Denio Zara and Padraic Hughes for the IMF, page 281.

IMF Annual Report 1996: IMF Continues Adapting to New Global Environment

In 1995/96, the challenges posed by an increasingly integrated world economy and an intensifying process of globalization continued to shape the IMF’s work. The IMF’s Annual Report 1996, describes an active year. The IMF extended an unprecedented level of financial support to its members in 1995/96. Total commitments for the year under stand-by and extended arrangements amounted to SDR 18.0 billion. This compares with SDR 14.1 billion in 1982/83—the height of the debt crisis—and with SDR 15.5 billion in 1994/95. The three-year SDR 6.9 billion extended arrangement for Russia in March 1996 was the largest such arrangement in IMF history. New commitments under the structural adjustment facility (SAF) and enhanced structural facility (ESAF)—the IMF’s concessional financing facilities—were SDR 1.6 billion in 1995/96.

The IMF’s Annual Report reviews IMF policy and procedural changes in response to changes in the international monetary system. In 1995/96, the IMF significantly strengthened its surveillance function, adapted its financial instruments and procedures to cope with the changed nature of financial crises, initiated steps to ensure the adequacy of its resources, and focused on the needs of its low-income countries—particularly those faced with unsustainable debt-service burdens.

Strengthened Surveillance

Surveillance over members’ economic policies is a vital part of the IMF’s work. As the international monetary system has grown in complexity, the IMF has steadily sharpened the focus of its surveillance and strengthened the means by which it tracks economic developments and renders policy advice. In recent years, volatility in capital markets, as well as in exchange rates, has underscored the importance of sound policies and pointed to the vital role that surveillance can play in encouraging appropriate policies and in identifying, at an early stage, potential problems. The Mexican financial crisis of late 1994—early 1995 prompted a comprehensive review of the IMF’s surveillance policies and procedures and led to a number of initiatives in 1995/96. These include:

• monthly informal Executive Board sessions that review major developments in selected countries and help identify emerging strains at an early stage;

• twice-yearly Executive Board discussions of the principal issues emerging from surveillance over members’ policies. These Board discussions form the basis for reports to the Interim Committee;

• interim staff visits to countries, as needed, to supplement annual Article IV consultations with members;

• Article IV consultations more sharply focused on core topics related to exchange rate policy;

• greater attention to capital account developments and to countries whose domestic policies and developments might have spillover effects;

• increased priority to regional surveillance; and

• steps to improve the quality and timeliness of the basic statistical data and information that member countries provide to the IMF.

Among the lessons learned from the Mexican financial crisis was the key role of economic and financial information in triggering an early recognition of, and response to, policy deviations and in avoiding sudden shocks to, and disproportionate responses from, the international capital markets. In April 1996, the IMF announced the establishment of a Special Data Dissemination Standard, which offers countries having, or seeking, access to international capital markets a voluntary means of providing regular, timely, and comprehensive economic data. A key feature of the implementation of the special standard will be an electronic bulletin board maintained by the IMF at a World Wide Web site on the Internet. This bulletin board will be operational later in September. The special data standard is expected to provide an impetus to the formulation of sound macroeconomic policies in participating countries and improve the functioning of the financial markets.

IMF Initiatives In Openness

In pursuing greater openness, the IMF has made public a wider range of information to a broader audience, according to the Annual Report. In July 1994, for example, Executive Directors approved the release of background reports on recent economic developments prepared for Article IV consultations with members. In 1995/96, 136 reports were released. The IMF has also encouraged countries to disclose details of their IMF-supported adjustment programs by releasing “letters of intent” and, when such a document is drawn up, the “policy framework paper” prepared in close collaboration with staff of the World Bank. The coverage of the Annual Report has also increased considerably, including more information on Article IV consultations with individual members. And in January 1996, the Executive Board agreed to grant access by the public, on request, to documentary materials held in the IMF’s archives that are more than 30 years old, subject to certain provisions.

Adapting IMF Policies and Procedures

The speed with which the Mexican financial crisis developed brought home to the IMF, and to the international financial community, how much financial crises have been transformed by dramatic changes in the volume and speed of international capital flows. To respond effectively to the dimensions and dynamics of future crises, the IMF in 1995/96 formalized an emergency financing mechanism. To activate emergency procedures, the member country must be ready to begin accelerated negotiations with the IMF, with the prospect of early implementation of agreed measures strong enough to address the problem.

Other initiatives included an elaboration of the conditions under which the IMF would support currency stabilization funds, on a short-term basis, in the context of an exchange-rate-based disinflation strategy. And in recognition of the urgent problems faced by member countries trying to rebuild their institutional infrastructures and economies after wars or severe civil disturbances, the IMF extended its emergency assistance to countries in post-conflict situations.

Ensuring Adequate Financial Resources

A second year of heavy demand for IMF resources and a projected continued decline in the IMF’s liquidity ratio have prompted increased attention to the adequacy of the IMF’s resources. The Executive Board gave priority to its study of the future size of the IMF and to its work on the Eleventh General Review of Quotas. At the April 1996 meeting of the Interim Committee, Managing Director Michel Camdessus indicated that most member countries favored a substantial increase in IMF quotas. The Interim Committee also urged the Board to reach a conclusion on quota issues as soon as possible.

The size and speed of potential new crises, and the possibility of spillover effects, also suggested the need for contingent resources and highlighted the importance of augmenting the IMF’s own quota-based resources with access to borrowed resources that could be readily marshaled in an emergency. At a meeting in May 1996, representatives of the Group of 10 and other countries with the financial capacity to support the international monetary system reached agreement on the main features of a new borrowing arrangement to supplement the resources available to the IMF under the General Arrangements to Borrow.

Assisting Low-Income Countries

Intensifying globalization of the world economy offers great promise for countries able to keep pace, adapt, and compete, but holds grave consequences for those that fall behind and risk becoming marginalized. Helping low-income countries restructure their economies and become full participants in the global economy was a major focus of the Executive Board in 1995/96. Work advanced on ensuring that the ESAF continued as the centerpiece of IMF efforts to assist low-income countries. The Interim Committee asked the Board to conclude its discussions on interim financing arrangements for ESAF between 2000—when current financing arrangements will end—and 2005—when the facility becomes self-financing—and to devise acceptable financing proposals in time for the 1996 Annual Meetings.

Article IV Consultations Concluded in 1995/96

Following are the member countries for which Article IV consultations were concluded in financial year 1996 (May 1–April 30). Such consultations are mandated in Article IV of the IMF’s charter, or Articles of Agreement, and are an important element of the IMF’s surveillance over its members’ policies. Article IV consultations are conducted with most members on an annual basis. They are preceded by meetings between IMF staff and government officials of each member country to discuss economic developments and policies and assess the short- and medium-term impact of these policies. Staff reports on the discussions then form the basis for concluding the consultations by the IMF’s Executive Board.

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Consultation discussions with Aruba are held in the context of the consultation with the Kingdom of the Netherlands.

Consultation discussions with Hong Kong are held in the context of the consultation with the United Kingdom.

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IMF General Resources: Purchases and Repurchases

(in billion SDRs)

Citation: IMF Survey 0025, 001; 10.5089/9781451937442.023.A018

1Excluding reserve tranche purchases.Data: IMF Annual Report, 1996

The Executive Board also took up a joint initiative of the IMF and the World Bank to resolve the debt problems of the most heavily indebted poor countries. Sound policies coupled with new concessional financing and existing debt-relief mechanisms are expected to permit most low-income countries to ensure debt sustainability over the medium term. For many heavily indebted countries, however, efforts to reform their economies were likely to remain hamstrung by unsustainable debt and debt-service burdens. The Board agreed that additional assistance would be needed and that IMF and Bank efforts should be guided by six principles:

• that eligibility should be determined on a case-by-case examination of a country’s entire debt;

• that assistance should be extended only when there is a record of reform and sound policies and an ability to put exceptional assistance to good use;

• that new debt-relief efforts should be built, where possible, on existing measures;

• that action should be coordinated to ensure broad and equitable participation among all creditors;

• that any debt relief should preserve the financial integrity and preferred creditor status of multilateral creditors; and

• that new external finance should be granted on concessional terms.

In April 1996, the Interim Committee welcomed this framework. It also noted that further support for debt relief for the most heavily indebted countries would require contributions by the international financial institutions and appropriate actions by the Paris Club and other official creditors. The debt initiative is progressing, and it is expected that the IMF, in conjunction with the World Bank and other creditors and donors, will put forward specific proposals at the October 1996 Annual Meetings.

A number of other initiatives—including ensuring the adequacy of IMF resources and continuous ESAF operations—will be the subject of further discussion at the Annual Meetings.

Annual Report of the Executive Board, 1996, is published in English, French, Spanish, and German. Copies are available free from Publication Services, Box XS600, IMF, Washington, DC 20431 U.S.A. Telephone: (202) 623-7430; Fax: (202) 623-7201; Internet: publications@imf.org

David M. Cheney, Editor

Sara Kane • John Starrels

Senior Editors

Sheila Meehan

Assistant Editor

Sharon Metzger

Editorial Assistant

Lijun Li

Staff Assistant

Philip Torsani

Art Editor

In-Ok Yoon

Graphic Artist

The IMF Survey (ISSN 0047-083X) is published by the International Monetary Fund 23 times a year, in addition to an annual Supplement on the IMF, an annual Index, and other occasional supplements. Editions are also published in French and Spanish. Opinions and materials in the IMF Survey, including any legal aspects, do not necessarily reflect the official views of the IMF. Address editorial correspondence to Current Publications Division, Room IS9-1300, International Monetary Fund, Washington, DC 20431 U.S.A. Telephone: (202) 623-8585. The IMF Survey is mailed by first class mail in Canada, Mexico, and the United States, and by airspeed elsewhere. Private firms and individuals are charged an annual rate of US$79.00. Apply for subscriptions to Publication Services, Box XS600, IMF, Washington, DC 20431 U.S.A. Telephone: (202) 623-7430. Cable: Interfund. Fax: (202) 623-7201. Internet: publications@imf.org

IMF Survey: Volume 25 1996
Author: International Monetary Fund. External Relations Dept.