Interim Committee communiqué: Ministers welcome measures to reduce poverty, call for reforms to sustain global recovery

• Pages: 317-320

Page 317

The Interim Committee held its fifty-third meeting in Washington, D.C., on September 26, under the Chairmanship of Gordon Brown, Chancellor of the Exchequer of the United Kingdom. The Committee expresses its appreciation to the outgoing Chairman, Carlo Azeglio Ciampi, formerly Minister of the Treasury of Italy and currently President of Italy, for his invaluable contribution to the Committee's work.

Global economic and financial conditions

The Committee welcomes the improvement in global economic and financial conditions since the beginning of this year. It has reviewed the challenges required to ensure that the recovery is sustained.

In many emerging market economies and developing countries, raising growth rates on a lasting basis will require not only sustained growth in industrial countries but also key structural reforms. These include banking reform, corporate restructuring, tax reform and tax administration, establishment of effective legal systems, protection of property rights, and improved governance.

- Recovery is taking hold in crisis-affected countries in Asia, aided by supportive fiscal policies, accommodative monetary policies, and a return of financial market confidence. Financial sector restructuring is generally moving ahead, but further efforts are needed to complete the task. In addition, corporate restructuring and institutional reforms should be accelerated. Indonesia's recovery has been interrupted by structural and political problems that will need to be resolved speedily in order for economic recovery and reform to resume. China and India have weathered the crisis relatively well and economic performance has been sustained, but significant challenges in some areas remain to be addressed.

- In Russia, the Committee welcomes the efforts of the IMF to work with the Russian authorities to encourage macroeconomic stabilization, the continuation of reforms, and the further integration of Russia into the global economy. While acknowledging the recent initial measures to restructure the banking system, strengthen the integrity of financial policies and institutions, and improve governance and transparency, the Committee stresses the urgent need for further progress. It calls on the IMF to work with the Russian authorities to strengthen reforms in these and other areas that are important for economic growth.

- In Brazil, strict implementation of the IMF-supported program has restored confidence, and the outlook for some other countries in Latin America has also improved. In many other countries in this region, adjustment and reform efforts still require further strengthening.

- In the Middle East and Africa, countries that have benefited from the improvement in commodity prices, particularly for oil, have a renewed opportunity to accelerate progress on fiscal consolidation and diversification of their economies.

IMF Board of Governors approves transformation of Interim Committee

On September 30, the IMF announced that the IMF Board of Governors had approved the IMF Executive Board's proposal to transform the Interim Committee. The text of Press Release No. 99/47, which is also available on the IMF's website (www. imf.org), follows.

The IMF Board of Governors adopted a Resolution approving a proposal of the Executive Board to transform the Interim Committee of the Board of Governors on the International Monetary System into the International Monetary and Financial Committee of the Board of Governors.

In addition to the name change, which adds "and financial" as part of the Committee's terms of reference, there is now an explicit provision for preparatory meetings of representatives of the Committee members (deputies). The new Committee will continue to advise and report to the Board of Governors with respect to the functions of the Board of Governors in

- supervising the management and adaptation of the international monetary and financial system, including the continuing operation of the adjustment process, and in this connection reviewing developments in global liquidity and the transfer of real resources to developing countries;

- considering proposals by the Executive Board to amend the Articles of Agreement; and

- dealing with sudden disturbances that might threaten the system.

In addition, the Committee shall advise and report to the Board of Governors on any other matters on which the Board of Governors may seek the advice of the Committee.

The members of the International Monetary and Financial Committee are Governors of the IMF, ministers, or others of comparable rank, reflecting the composition of the Executive Board: each country that appoints, and each group that elects, an Executive Director appoints a member of the Committee. The...