1999 Annual Meetings: Governors welcome recovery from crisis, endorse debt relief for poorest countries

• Pages: 305-308

Page 305

A far-reaching commitment to provide increased debt relief to the poorest developing countries was endorsed by the governors of the World Bank and the IMF at their fifty-fourth Annual Meetings, held in Washington, D.C. from September 28 to September 30. The governors also welcomed the progress many countries have made in recovering from the financial crises that had affected their economies in 1997-98 and early 1999, even though in a number of cases deep problems still remain.

The Annual Meetings opened on September 28 with the address of Mahesh Acharya, Finance Minister of Nepal, who chaired the meetings (see page 312). His remarks were followed by the opening addresses of IMF Managing Director Michel Camdessus and World Bank President James Wolfensohn.

Recovery from crisis

In his address, Camdessus stressed that "the recovery comes from the intense effort, the wisdom, and, most emphatically, the sense of cooperation of all concerned." Building on this theme, he emphasized that, "in the new world of globalization, cooperation is a must." A second lesson, he said, "is that we always run the risk, when economic prospects have improved, of moving too slowly to implement the reforms that are needed. There is still an urgent need for action."

At the opening session of the 1999 Annual Meetings are (left to right) World Bank President James Wolfensohn, Annual Meetings Chair Mahesh Acharya, and IMF Managing Director Michel Camdessus.

It is important, Camdessus said, to move ahead with building "a safer, more robust, more adaptable architecture" of the monetary and financial system. Essential elements of this new architecture, he observed, are measures to prevent crises, enhance transparency, improve financial sector stability, and define global standards to underpin stable, fair, efficient, and transparent markets. Ultimately, the Managing Director said, "finances and markets are about people and for people." With the transformation of the Enhanced Structural Adjustment Facility (ESAF) into the Poverty Reduction and Growth Facility (PRGF); the deeper, faster, and broader debt relief provided by the new Initiative for Heavily Indebted Poor Countries (HIPC); and the strong link established between debt relief and increased expenditure on human development, he said, "the IMF is now well equipped to give a new impulse to the fight against poverty."

This theme was echoed by the central bank governors and finance ministers of the IMF's 182 member coun-Page 306tries, who, in their addresses, were unanimous in welcoming the progress toward recovery in the crisis economies. At the same time, a number of speakers recognized the continuing problems that, despite progress, affect the Russian economy and the recent threats to Indonesia's economic stability. Speakers also welcomed the progress that had been made in Brazil and other countries of Latin America in recovering from the recent crisis. Representatives of developing countries, in particular, welcomed the progress that had been made on the debt issue and stressed the urgent need to move forward in the fight against world poverty.

Action on debt

Announcing a significant commitment, U.S. President Bill Clinton said in the plenary session on September 29 that he was directing his administration to move to forgive 100 percent of the debt owed to the United States by the heavily indebted poor countries when they commit to using the money to finance basic human needs. A similar commitment was later made by Gordon Brown, the U.K. Chancellor of the Exchequer.

Under the terms of the agreement on debt, which is now...