Interim Committee Press Conference Ciampi, Camdessus Emphasize Need to Strengthen IMF Resources in Current Circumstances

• Pages: 315-316

Page 315

Mr. Ciampi: The world economy has worsened since the Committee's April meeting. The downside risks to the current outlook have increased significantly, but the Committee noted some positive features, including continuing generally solid growth in the industrial countries of North America and Western Europe, the maintenance of growth in China and India, the strengthening in recent years of economic fundamentals and underlying growth performance in several developing and transition countries, and the fact that protectionist pressures have so far been kept in check. It is a unanimous view that forceful actions are required on the part of member countries over a broad range of policies.

The communiqué addresses the Russian financial crisis, with the encouragement of the Committee to the new government to take immediate measures to reestablish confidence in the ruble, restore the payment mechanism, and work with creditors to develop a cooperative solution to Russia's debts. The international community, including the international financial institutions, stands ready to support convincing and effective measures to stabilize and reform the Russian economy.

Another important point I want to stress is the reaffirmation of China's commitment not to devalue its currency, which has provided an important anchor to the region.

The press communiqué stresses the importance of the role that industrial countries have to play in sustaining global growth. It notes that Japan has to take prompt and resolute action to strengthen its banking system and to provide sufficient sustained fiscal stimulus to revive domestic demand and to restore confidence until the recovery is well established.

The communiqué discusses the strengthening of the architecture of the international monetary system. The roles of the various institutional components of the system, including the possibility for strengthening or transforming the Interim Committee, also need a thorough review. The communiqué also considers several relevant points: standards, transparency, the private sector's contribution, and capital movements, which is a very important paragraph. On other IMF policies and operations, the opening section states: "The Committee expressed serious concern over the IMF's tight liquidity position. It stressed the critical importance in current conditions of augmenting the IMF's resources and urged all members to accelerate the process leading to the implementation of the...