Global Policy Forum

Barry Herman, DESA

In December 1997, the international community gave itself an opportunity to resume a deep dialogue on international finance for development when General Assembly resolution 52/179 was adopted. By that resolution, the Assembly decided to reconvene its Second Committee in early 1998 in order to set an intergovernmental process in motion to prepare for a high-level international consideration of finance for development (the exact form of that consideration was intentionally left vague,). The last time such a potentially bold opportunity arose, which was at the beginning of the 1980s, it ended in failure. This time can be different. It does not have to be, but it can be. It depends on delegations strengthening their confidence in each other and in the United Nations as a forum for serious discussion of difficult economic and financial issues. They have done it before and they ought to do it again. Much is at stake.

Can the UN can be an effective forum on finance for development?

The first point to understand is that the shape of multilateral finance is changing. Political support for some of our institutions has weakened and demands to reform them are growing, now including the International Monetary Fund (IMF). Governments of developed and developing countries might be loath to state this baldly at the present time, but outside official circles -- and to some degree within as well -- the questioning is already very deep. The sense of the shortcomings of international financial cooperation is so pervasive that discussions on reform will have to begin soon in the Bretton Woods machinery and possibly in ad hoc official forums as well, if not also at the United Nations. How do I know? The 21 February 1998 communiqué of the finance ministers and central bank governors of the Group of Seven said so:

"Recent events have underlined the strong and growing interdependence of countries in world economy. We believe that the successful resolution of current and future challenge requires increasingly close cooperation of national authorities. To that end, we will intensifying our efforts for dialogue with all interested and affected parties..." (para. 2).

How much of that dialogue will take place at the UN? The United Nations does not have a great reservoir of successful recent experiences in international economic matters on which to draw. But there have been modest successes on which Governments can build. The discussion of the debt problems of the developing countries is a case in point. In the early 1980s, it was argued that discussion of the debt crisis at the United Nations would be inappropriate, as debt was a technical, financial matter best left to the experts at the Bretton Woods institutions. By 1986, however, the debt crisis was inscribed on the Assembly's agenda. The reason is simple: several heads of state from heavily indebted developing countries came to the General Assembly in the mid- 1980s, observed with some passion that the "technical" fixes had not worked, that their people were paying for the failure, and that it would violate the purpose of the United Nations if the international community were not to address their crises in a political as well as in a technical forum.

In every year since 1986, the Assembly has adopted a consensus text (or consensus minus one) that reflected heavy disappointment with the persistence of the developing country debt problems, but that also applauded when new policy initiatives were introduced to deal with them. Government statements in the Assembly were sober and solid and delegates worked hard to reach consensus texts; in addition, the Secretariat worked effectively with the staff of IMF and the World Bank, albeit sometimes taking positions ahead of those that the latter were able to take themselves, e.g., regarding concessional treatment of debt owed to the multilateral institutions. This collaborative inter-governmental and inter-institutional process continues today, focused mainly on the continuing difficulties that many low-income countries have in servicing debts owed to official creditors. The UN itself never became a forum at which major new policy commitments were undertaken on debt, but it was part of an international consensus-building process that did change policies.1

But is this the moment to undertake new financial discussions at the UN? What would one say to the doubting delegate who argued that everything in his experience at the UN says that this cannot work, that it would be the "North-South Dialogue" all over again? Let us look at that failure. It occurred in two steps about 20 years ago. First, a limited number of Governments, meeting in 1976 and 1977 in Paris as the Conference on International Economic Cooperation gave up on their efforts to reach a working consensus 'involving stability of oil prices, increased foreign aid and trade concessions. As noted by Ambassador Oscar de Rojas in a contribution to a forthcoming book, the North-South dialogue was then brought back to the United Nations, where it foundered again in the effort to launch a round of "global negotiations" in the early 1980s.2 Thus, neither the ad hoc forum nor the global forum could bridge the gap between the various interests.

With the benefit of hindsight it seems that for a round of international financial discussions to be fruitful, two types of opportunity are needed: an "internal" opportunity and an "external" one. The "internal" opportunity arises when Governments feel they can use the forum for a serious dialogue, while the "external" opportunity grows out of the recognition that the international system has difficulties that warrant international attention at a political level. Both opportunities were present in the mid-1970s. The Bretton Woods system of pegged exchange rates had collapsed, control over oil prices had shifted to the Governments of the Organization of the Petroleum Exporting Countries, non-oil commodity producers sought to emulate the oil exporters, and inflation -- coupled with severe recession in 1975 -- had become a major concern in developed economies. Meanwhile the major industrialized countries formed themselves into the Group of Seven (G-7) to coordinate their approach to international economic cooperation, which at first included trying to coordinate their macroeconomic policies. That was a political environment in which economic policy agreements seemed within reach. The need to act was palpable. Government leaders of developed and developing countries were willing to bring international economic policy concerns to the United Nations and thus two special sessions of the General Assembly were held, giving birth to the rallying cry of a "New International Economic Order". It also led to the establishment of a set of negotiations at the United Nations Conference on Trade and Development (UNCTAD), called the International Programme for Commodities, which set out to establish joint producer-consumer treatments of the volatile international markets for a variety of commodities.

By the end of the decade, however, and despite a second spike in oil prices in 1979-80, the UN moment had passed. First, IMF received a new mandate under the Second Amendment to its Articles of Agreement, which also established two intergovernmental bodies at ministerial level that have become almost the exclusive forums for international negotiations on financial issues: the Interim Committee at the Fund and the joint Fund/World Bank Development Committee. Second, cooperative, interventionist trade policies, such as those UNCTAD had been established to negotiate, lost their constituency in the developed countries, as the Governments of those countries became increasingly wedded to policies of complete liberalization of trade. Third, developed country enthusiasm for coordinated macroeconomic policy disappeared, replaced by mutual support for national efforts t completely squeeze inflation out of the developed economies, even if at the cost of steep recession and a protracted period of high unemployment (let alone igniting the developing country debt crisis in the early 198Os).3 Indeed, the end of the global consensus on interventionist policy left the developing countries still advocating what the developed countries had abandoned. North-South discussions became increasingly shrill and ideological. In the end, economic negotiations bogged down over words (should the "new international economic order" have capital or lower-case letters, should it be modified by a definite or indefinite article,...).

History thus seems to tell us that one requirement for a fruitful UN discussion of international financial issues is that there be a genuine sense of system malfunction and need for reform. The malfunction has to have a political and social dimension as well as a technical one and engage the attention of the highest political authorities of the seriously threatened countries.4 A second requirement for UN discussions to be successful is that the heads of prospective delegations be at an appropriate level of expertise and influence in their countries. A third is that the discussions take a non-confrontational tone. All of these requirements are achievable, especially as the gravity of the challenge is becoming increasingly manifest.

A first opportunity is approaching to signal that such an initiative can be successful at the United Nations. It is the unprecedented meeting of the Economic and Social Council (ECOSOC) scheduled for the morning of 18 April with representatives of the high-level intergovernmental machinery of the Bretton Woods institutions. At that time, the Chairs of the Interim and Development Committees and other high financial officials at an informal meeting of ECOSOC. The Bretton Woods officials will come to New York from their just-completed Spring Meetings in Washington. Who will speak for Governments in ECOSOC? Will other finance ministers or high officials accompany the travellers from Washington? Will aid ministers attend? The latter often attend United Nations meetings at high level, although ECOSOC delegates are usually drawn from foreign ministries. The trip to New York could be long for a half-day meeting, but will any foreign ministers come anyway? Will Governments send delegates from their capitals with economic or social portfolios? Or will it be business as usual on the part of ECOSOC Members? Delegations in New York are currently mulling over precisely such questions as these.

The present situation in Asia may be something like the early years of the debt crisis. When the 1980s debt crisis began, the initial reaction in the heavily-indebted countries was shock and domestic efforts to cope, often in conjunction with IMF, while private creditors rolled over debt-servicing obligations at significant additional interest cost to the debtor. After a few years, however, Governments despaired of solutions through such processes and some even ran up substantial arrears on debt to IMF and the multilateral development banks, while also declaring moratoriums on the servicing of private debt. At that point, Governments demanded a political impulse toward a new approach to debt relief. The most optimistic outlook in Asia today is that financial market access of the countries in crisis will quickly resume, followed by recharged economic growth. Optimists are increasingly in the minority, however, and in any case substantial social costs of adjustment will fester for some time. This would imply that pressure for international reforms arising out of the Asian crisis might not come to a boil for a while, except for one factor. Unlike the debt crisis years, the credibility of international financial cooperation has already been damaged by this crisis and might force the pace of reform.

An increasing number of influential people would dismantle the system of multilateral financial cooperation. They are not people who are usually thought of as extremists. Currently, the votes in the United States Congress are not at hand to approve urgently needed IMF funding to which the US Administration has committed the Government. Although much multilateral cooperation as currently constituted can be crippled without the support of the United States, it is not the only source of discontent. In several donor countries, resources for official development assistance have become increasingly difficult to mobilize, and negotiations to implement adequate debt-reduction agreements under the international programme for the heavily-indebted poor countries are far from smooth. Meanwhile, the role of multilateral development banks is being deeply rethought, as some traditional functions appear no longer to be needed (or in demand). However, resources are needed for other lending functions of internationally agreed importance, such as for poverty eradication and global environmental investment. Policy makers in developing countries have taken to heart the need for increased reliance on private sources of finance, financial-sector development and increased rates of domestic saving. They have reduced budget deficits, cut back inflation and liberalized their economies. They might be exhorted to do more and they can be helped to do more through technical assistance. But they also need international financial support. A serious UN discussion on finance for development could address all these concerns and seek to ensure able for the next generation. Reform it for sure, but strengthen it and protect it because the world needs it.

How serious is the attack on international financial cooperation?

Both Bretton Woods institutions are going through major institutional challenges.5 The World Bank continues to grapple with its reform agenda largely out of the glare of constant press attention, even though one of the factors that propelled the Bank to take action was the very public "fifty years is enough" campaign of a group of nongovernmental organizations at mid-decade. However, there had also been highly critical in-house assessments of World Bank lending activities and these have perhaps had an even larger influence. The new President of the World Bank, James Wolfensohn, has thus sought to dig deeply into the institutional soul of the Bank and redefine what it is all about a process that is still going on. Over the past few years, the Bank has thus been a rather self-absorbed giant, questioning how it has operated and seeking to develop a new organizational culture that makes it more a development institution than a bank. Indeed, its lending commitments fell in fiscal 1996 and 1997 and it has not been a major player in the Asian crisis, although it has provided large loans on an emergency basis.

Across the street from the World Bank lies the IMF. It was called upon to solve whatever international financial emergency arose in the 1990s, in the process moving well beyond traditional balance-of-payments adjustment questions to such matters as the transition from plan to market in eastern Europe and the former Soviet Union and issues of proper "governance" that are deeply political and institutional. Perhaps reflecting the degree to which the institution has been stretched, IMF has most recently been subjected to unprecedented attacks on what are perceived to have been its heavy-handed and uniform prescriptions to solve problems it did not understand. It is also not clear yet that the prescriptions are working; certainly they are not working in the way expected (although in fairness to the Fund, Governments have not always followed the prescribed reform programmes).6 The recent gathering of "the high and the mighty" at the World Economic Forum at Davos, Switzerland put the Fund in a spotlight. As one journalist summed up the meeting, "businessmen complained that its decisions in Asia had undermined confidence instead of restoring it, and labour representatives said the Fund had protected wealthy bankers at the expense of struggling workers".7

The attack on IMF seems to be extremely important because it is spread wide and seems to be deeply felt. Also, the Fund really needs national legislatures to approve the increase in financial resources to which member Governments committed themselves in 1997, and these approvals cannot be taken for granted any more, particularly in the United States.

The Fund is the "jewel in the crown" of the international system of finance for development. Originally, IMF was established to maintain global financial stability and thereby promote world economic growth and trade. Its focus in the early post-war decades was very much on balance-of-payments difficulties of the developed economies. No longer. It now exclusively supports balance-of-payments adjustment in developing and transition economies. Private creditors and investors in developed countries (as well as official export-credit agencies have global financial system and policy "failures". This is the service at provides and this is the service that the private financial markets-let alone academic commentators-are now questioning intensely.

An extreme but telling illustration of the new sentiment was the call to abolish the IMF in February 1998 by two former Secretaries of the Treasury of the United States, George Shultz (who was also Secretary of State) and William Simon, and the former Chairman of Citicorp, Walter Wriston.8 Actually, the view of Mr. Schultz is more nuanced, as he would merge IMF with the World Bank and turn the annual Fund/Bank meetings into World Bank/World Trade Organization meetings.9 This is not, thankfully, the consensus view. Indeed, 139 leaders of the US establishment-including two former presidents (Jimmy Carter and Gerald Ford), 45 former high-level officials and legislators and 92 corporate leaders-signed an open letter to the US Congress urging it to honour US financial commitments to IMF.10 However, while these leaders asked that IMF not be stripped of the financial resources it requires, they also made a strong and clear statement that "we need new architecture of the global financial 'institutions ".11

Other prominent actors in global financial markets have separately called for major reform of the international financial machinery. Henry Kaufman, who gained his fame many years ago at Salomon Brothers, recommended establishment of "a new institution, alongside a reorganized International Monetary Fund and World Bank to overcome the inadequacies of current national and international structures for supervising and regulating financial institutions and markets".12 And at the end of December, before the second -round difficulties in the Republic of Korea and Indonesia, George Soros wrote that "the international financial system is suffering a systemic breakdown ... The private sector is notoriously inefficient in the international allocation of credit ... [which] need[s] to be supervised ... and regulated by an international authority".13

Academic critics of the IMF have burgeoned and the attacks have come equally from the political right wing and left. The chief economics correspondent of 7he New York Times, Peter Passell, began a recent assessment with the query, "Does anybody like the International Monetary Fund?"14 If he found anyone, he did not name him. Rather, he cited the concerns of several mainstream economists and noted that "...no one with the power to force reforms has seriously challenged the substance of IMF policy or the Fund's secretive, authoritarian style in overseeing more than half the world's economies. That is about to change...... The concerns are being expressed not only by the usual gadflies, such as Jeffrey Sachs at Harvard, but by the more dispassionate authorities, such as Richard N. Cooper at Yale and Peter B. Kenen at Princeton.

It is important to stress that IMF is not averse to reform. It even has its own reform agenda, which will be touched on below. The Fund does seem to be sensitive, however, to how it is criticized, as one recent experience demonstrates. In that case, Joseph Stiglitz was cited in The Wall Street Journal as criticizing the austerity embodied in the IMF prescriptions for the Asian countries in crisis.15 Professor Stiglitz is Chief Economist and Senior Vice President of the World Bank, as well the former head of the Council of Economic Advisors of the President of the United States; but more importantly, 'in the view of many in the academic field, he is the premier theorist in the world of how financial markets work. However, in the view of the IMF Treasurer, David Williams, who was quoted the same Journal article, exchanging views "isn't unhealthy ,but we shouldn't have closely related institutions coming out with different macroeconomic analyses". Hello! What's this? What happened to transparency? Do we really need to perpetuate the myth of IMF infallibility?

The kernel of the Stiglitz critique is that the sharply contractionary macroeconomic targets set for the Asian economies by the IMF -- and thus the austerity imposed-were irrelevant to the real problem, which was financial market failure owing to inadequate government regulation. The problem, as he said on another occasion, was not that Asian Governments misdirected credit, but that they failed to stop private markets from misdirecting credit.16 He was here picking a fight with the "Washington consensus", a package of policies that have been the basis for IMF adjustment programmes.

While the Fund agrees completely with the need for strengthened financial market supervision, it has maintained its strict macroeconomic prescriptions, albeit easing up in selected cases (eg., in the current programmes for Republic of Korea, Russia and Thailand in recent months). The difficulty seems to be that once countries opt for fully open currency markets, they need to adopt macroeconomic policies that financial investors deem to be required and the Washington consensus appears to the markets as having "austerity" as its first principle. The Managing Director of IMF has himself said in a speech on 6 February that "the first order of business was, and still is, to restore confidence in the currency", which is why interest rates had to be raised.17 However, he claimed that observers have misperceived the IMF programmes in Asia: "the centrepiece of each programme is not a set of austerity measures to restore macroeconomic balance, but a set of far-reaching structural reforms...... People find that confusing.

In any event, one aspect of the structural package has become particularly contentious, namely, steps to be taken toward liberalization of financial and currency markets. The post-crisis version of the Washington consensus was first detailed in a talk during the IMF Annual Meetings in Hong Kong in September 1997 by Stanley Fischer, First Deputy Managing Director of IMF, and another distinguished academic economist on leave at the Bretton Woods institutions. He said that capital-account liberalization had to be phased appropriately, "which means retaining some capital controls in transition".18 He favoured "market-based" controls, such as Chile maintains, to quantitative limitations on flows and he left unclear how long the transition would be. However, it would presumably not be a very long period as the IMF Interim Committee had decided in April 1997 to seek to amend the Fund's Articles of Agreement so as to bring capital movements under its jurisdiction and make the liberalization of international capital movements "a central purpose of the Fund". As Professor Fischer put it, "the prime goal of the amendment would be to enable the Fund to promote the orderly liberalization of capital movements". By the 6 February speech of the IMF Managing Director noted above, this had been further refined to a "properly sequenced and cautious liberalization".

The essential point in the context of the present discussion is that the criticism of the Fund appears to have stung. The response strategy that seems most likely to strengthen the institution in the end is to admit fallibility, welcome debate, eschew defensiveness, adopt reform and move on. Already, the management of the Fund has shown a willingness to learn from its critics, and so, too, have the Fund's Governors. Thus, finance ministers and central bank governors of the G-7 called for a "profound and broad-ranging debate ... making full use of a number of forthcoming international fora that permit discussion with representatives of emerging market economies" (para. 16).19 In addition, the ministers of the Group of 24 in their meeting in Caracas agreed on 9 February to seek establishment of a task force "comprising industrial and developing countries" to undertake a wide-ranging review of several issues in international financial cooperation and developments.20 This would be an ad hoc forum, while "the meetings of the Interim and Development Committees in April [also] provide opportunities to carry this work forward" (G-7 communiqué; para. 16).

Finance is not only for finance ministers

One might be so bold as to suggest that besides the undoubtedly important discussions among a limited number of finance ministers and their aides 'in the Interim and Development Committees or in ad hoc meetings, the universal forum of the United Nations might also be an appropriate venue for international reflection on finance. What is at issue are not just technical aspects of finance, but finance in its relation to economic, social, indeed, sustainable development. A recent statement by the Managing Director of the activities that IMF undertakes today should ring bells of recognition in the halls of the United Nations:

"To begin with the institution now advises and provides temporary financing to countries facing a much wider range of problems and circumstances [than 'in its earlier years]. Consequently, the scope of its policy concerns has broadened beyond sound money, stable exchange rates, and open markets to encompass a number of other elements that also contribute to economic growth and a stable financial system. Among these are:

• the deregulation of domestic economics and the establishment of a more level playing field for private sector activity;

• stronger financial systems and the development of effective regulation and supervision;

• reductions in unproductive government spending, such as costly military build-ups;

• increased spending on basic human needs, such as primary health and education, on adequate social protection for the poor, the unemployed, and other vulnerable groups, and on key environmental problems;

• greater transparency and accountability in government and corporate affairs; and

• a more effective dialogue on economic policy with labour and the rest of civil society."21

Assessments of the progress of international cooperation in these areas virtually beg to be made in a forum that is broader than the machinery governing IMF itself. These are not, of course, the only salient areas in finance for development and IMF is not the only component of international financial cooperation. One might also wish to address concerns, for example, about promptly finishing the business of according sufficient debt relief to heavily indebted poor countries, bolstering the capacity of multilateral development institutions to carry out their mandates through adequate provision of core resources, and reinvigorating and guiding bilateral official development resources towards the priorities embodied in the United Nations conferences of the 1990s.

In short, a major international assessment of finance for development is warranted at this time. As Britain's Chancellor of the Exchequer recently wrote, "this is a complex subject, and real reforms will need the backing of a much wider group than the G-7".22 The United Nations can make a contribution, the preparatory process that the General Assembly will set in motion in 1998 explicitly aims to bring tall stakeholders into the discussion: the North and the South, the private sector and the public, civil society and governments. In the end, technical decisions about reform will be made in technical forums, but forging a broad consensus is a job for the United Nations, especially as we are now in a less ideological, more pragmatic time. If Governments so decide, it can happen at the United Nations.

Endnotes

1. Consensus-building took place through several parallel strands, including the private financial sector. Bank shareholders and management-let alone regulators-lost patience with the repeated reschedulings of loans of dubious market value. Market sentiment was expressed through falling share prices of major banks (in particular, relative to the share prices of smaller banks) and falling prices for developing country debt in the secondary market, which grew as banks sought to offload some of their holdings of non-performing sovereign-risk loans.

2. Oscar R. de Rojas, "International finance and the United Nations", in Barry Herman and Krishnan Sharma, eds., International Finance and the Developing Countries in a Year of Crisis: 1997 Discussions at the United Nations (Tokyo: United Nations University Press, 1998), pp. 46-47.

3. However, the G-7 retained one aspect of macroeconomic coordination, as it became the exclusive forum for exchange rate management of the world's major currencies (not, significantly, the IMF).

4. The attention and at least tacit support of the foreign policy establishment of the major powers also seems to be required. In the current situation in Asia, much has been made of some of the more salutary political changes, but one should not forget that the countries in crisis have also been a major market for the world's arms exporters in recent years. Anecdotal evidence already suggests that the social costs of adjustment in the region are going to be high and widespread. No one should want to see any tinder set afire in this region.

5. These have been echoed in the smaller regional development banks and the operational activities of the United Nations, but the points to be offered here can be made in terms of the Bretton Woods institutions alone.

6. 'The Fund has also been attacked for deploying too much official money in rescue packages in which the funds served mainly to pay off retreating foreign private lenders. As this argument goes, the Fund should have instead pressured the creditors to roll over their loans, which it began to do in December in the Republic of Korea. However, the Fund strategy had been to restore confidence by showing lenders a large amount of money to back the crisis country. Only with the benefit of hindsight could it be known that the strategy would not stem the panic and that much of the money would actually be demanded.

7. Sue Kendal, "More questions than answers on future IMF role", Agence France-Presse wire service, 3 February 1998.

8. 'They concluded an "op-ed" piece with "The IMF is ineffective, unnecessary and obsolete ... Once the Asian crisis is over, we should abolish [it]" (George P. Shultz, William E. Simon and Walter B. Wriston, "Who needs the IMF?", Wall Street Journal, 3 February 1998).

9. George Schultz, "Merge the ME and the World Bank", The International Economy, January/February 1998, pp. 14-16.

10. The letter also called for payment of $1 billion in back dues to the United Nations, approval of fast-track authority for new trade negotiations and preservation of the Administration's flexibility in using the Exchange Stabilization Fund at the US Treasury (published as a two-page advertisement in The New York Times, 11 February 1998).

11. Michel Camdessus, the Managing Director of IMF, has himself used the phrase "a new architecture" to describe international reforms that IMF advocates. The term complements another favoured metaphor, "pillar", although this new architecture has a varying number of pillars. On 6 February, Mr. Camdessus said he thought seven pillars would be a pleasing number, but he only found six. In a speech on 7 February, he found his seventh, although in a 13 February speech, he was back to six (the seventh pillar was "more equitable representation of all countries" on the boards of multilateral institutions and was mentioned in his address to the Extraordinary Ministerial Meeting of the Group of 24 in Caracas; the other speeches were to audiences in New York and Washington-all three speeches are on the IMF web page, www.imf.org).

12. Henry Kaufman (President, Henry Kaufman & Co.), "The Asian financial crisis: causes, consequences and preventing future financial disorders", one-page note circulated at the Ministerial Meeting of the Intergovernmental Group of Twenty Four, Caracas, Venezuela, 7-9 February 1998.

13. He proposed establishment of an entity he called an International Credit Insurance Corporation, which would guarantee market lending to borrowers in a country up to a limit based on the Corporation's assessment of debt carrying capacity and subject to continuing country provision of complete and timely data on its financial exposure (George Soros [Chairman, Soros Fund Management and Chairman, Open Society Institute], "Avoiding a breakdown: Asia's crisis demands a rethink of international regulation", Financial Times, 31 December 1997).

14. Peter Passell, "Economic scene", The New York Times, 12 February 1998.

15. Bob Davis and David Wessel, "World Bank, IMF at odds over Asian austerity", The Wall Street Journal (New York), 8 January 1998.

16. Joseph Stiglitz, "More instruments and broader goals: moving toward the post-Washington consensus", The 1998 WIDER Annual Lecture, Helsinki, 7 January 1998, pp. 2-3 of script.

17. Michel Camdessus, "The IMF and its Programmes in Asia", Remarks at the Council of Foreign Relations, New York, 6 February 1998 (Stiglitz, in the above-cited lecture, argues that such interest rate increases can be "counterproductive" and worsen the crisis).

18. Stanley Fischer, "Capital account liberalization and the role of IW", presentation to IMF Seminar on Asia and the Hong Kong, 19 September 1997.

19. An annex to the communiqué lists several areas of reform to strengthen the international monetary system.

20. "Caracas Declaration 11", adopted by the Ministers of the Intergovernmental Group of Twenty Four, meeting in extraordinary session for their fifty-eighth meeting, Caracas, 9 February 1998.

21. Michel Camdessus, "The role of the IMF: past, present, and future", remarks at the Annual Meeting of the Bretton Woods Committee, Washington, D.C., 13 February 1998.

22. Gordon Brown, "Debt and development: time to act, again", The Economist, 21 February 1998, p. 78.

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