This paper is based on a lecture delivered at a seminar of Brazilian professors organized by the International Bank for Reconstruction and Development and the International Monetary Fund in Rio de Janeiro, Brazil, on September 19, 1967.
Since it began activities in the late spring of 1946, the International Monetary Fund has been engaged in assisting members in evolving economic, financial, and foreign exchange programs necessary to attain or to maintain satisfactory economic growth and beneficial participation in the international division of labor, thereby contributing to the balanced growth of the world economy. In addition to providing technical advice, the Fund has often committed its resources in support of such programs. Frequently, the Fund’s technical and financial support has been accompanied by funds from other sources, e.g., governments, long-term lending institutions, and, in Europe, from the European Fund. The implementation of these programs in many cases could not be successfully completed without massive transfers of resources.1 This paper discusses how three countries in Europe—Austria, Turkey, and Finland—emerged from a prolonged inflation, restored viable economies, and resumed economic growth in the 1950’s. It also attempts to draw some conclusions based on their experience as well as the experience of some other countries.
Mr. Sturc, Director of the Exchange and Trade Relations Department, is a graduate of the University of Bratislava and the University of Chicago. He was formerly Deputy Director of the European Department in the Fund. Before he joined the Fund in 1946, he was Deputy Director of the Czechoslovak Government Information Service in the United States and a member of the Czechoslovak delegation to the Bretton Woods and San Francisco Conferences.
The various forms of assistance by the Fund and the particular policies which it has recommended—on the whole rather successfully—to help members to correct their temporary balance of payments disequilibria without unduly slowing down their economic progress are discussed in Chapter 3 of the Fund’s Annual Report, 1966, pp. 21–32.
Being a member of the Fund, the Organization for European Economic Cooperation (OEEC), and the European Payments Union (EPU), Austria was obliged to reduce reliance on quantitative restrictions and bilateralism, although even now, 15 years later, Austria conducts some 18 per cent of its trade on a bilateral basis with Eastern European countries.
Especially as its main competitor, Greece, suffered from the consequences of a civil war which ended only in 1949.
This is the line at which the cost of cutting and processing timber is higher than the sale price, thus leaving nothing for the owners of the timber.