§ Mr. Mathew BanksTo ask the Chancellor of the Exchequer if he will make a statement about the recent spring meetings of the International Monetary Fund and World bank.
§ Mr. Kenneth ClarkeI attended the spring meetings of the International Monetary Fund and World bank on 26 and 27 April.
In the interim committee of the IMF, I spoke mainly about the quality of surveillance by the IMF, its finances and the need for further action on developing country debt.
Consideration of the IMF's surveillance of its members' economies was timely given recent events in Mexico. I welcome the IMF's intention to learn lessons from this experience. I made four proposals: first, for a greater frankness by the IMF in its assessment of members' economies; secondly, a better flow of information from countries both to the IMF and financial markets; thirdly, greater selectivity by the IMF in which economies to subject to close and continual monitoring; and, fourthly, the establishment of an independent evaluation unit at the IMF. The first three of these points were reflected in the committee's communiqué.
On IMF finances, I said that the IMF should have sufficient resources to use its existing facilities at agreed access limits. Resources should not be provided in advance for exceptional circumstances such as Mexico, but where necessary the IMF's first recourse should be activation of the established credit line of the general arrangements to borrow. I did not rule out an increase in IMF quotas if and when justified.
I welcomed the agreement of the Paris Club to offer "Naples Terms" to the poorest countries on bilateral official debt along the lines set out by my right hon. Friend the Prime Minister in 1990. I noted that implementation was now the key issue. I also followed up the initiative I launched last autumn on debt owed to multilateral institutions. The committee agreed to a further study of the IMF's enhanced structural adjustment facility. I will press for greater certainty and increased concessionality of lending for the poorest most indebted countries financed by sale and investment of the proceeds of a small amount of the IMF's gold stocks.
63WI also took part in the interim committee's discussion of the world economy and looked forward to the review of international institutions at the forthcoming G7 summit in Halifax, Nova Scotia.
In the development committee of the IMF and World bank, in addition to elaborating on my proposals on debt owed to the World bank, I noted the potential that exists for increasing the proportion of infrastructure in developing countries financed by the private sector, drawing on the UK's experience of privatisation and the private finance initiative.
As is customary, there was a meeting of G7 Finance Ministers and central bank governors prior to the spring meetings. Copies of the G7's communiqué and of the interim and development committee's, as well as my speeches to the committees, have been placed in the Library of the House.