1140 Intergovernmental organizations Chapter IX International Monetary Fund (IMF) During 1992, the International Monetary Fund according to IMF policy. Access to the Fund’s (IMF) increased its assistance to the formerly cen- general resources under the enlarged. access policy trally planned economies in transition to market- had been subject to annual limits of 90 or 110 per based systems and focused on initiatives to im- cent of quota, three-year limits of 270 or 330 per prove prospects for the world economy. cent of quota and cumulative limits of 400 or 440 IMF provided the machinery for, and promoted, per cent of quota. Once borrowed resources were international monetary cooperation through sur- fully used, ordinary resources were substituted to veillance of the exchange-rate policies of its mem- meet commitments. The substitution was applica- ber States. Surveillance was carried out through ble until 30 September 1992. In November, the consultations analysing the economic and finan- Ninth General Review of Quotas took effect, in- cial conditions of IMF members and regular dis- creasing the amount of IMF quotas to 144.8 bil- cussions on the world economic outlook. lion special drawing rights (SDRs) from SDR 97.4 IMF operates on a fiscal year; fiscal year 1992 billion. covered the period from 1 May 1991 to 30 April The structural adjustment facility (SAF), 1992. launched in 1986,a provided balance-of-payments As at 31 December 1992, IMF membership assistance on concessional terms to support stood at 175, with the admission of Armenia, Azer- medium-term macroeconomic adjustment and baijan, Belarus, Croatia, Estonia, Georgia, structural reform in low-income countries facing Kazakhstan, Kyrgyzstan, Latvia, Lithuania, the protracted balance-of-payments problems. The en- Marshall Islands, the Republic of Moldova, the hanced structural adjustment facility (ESAF), es- Russian Federation, San Marino, Slovenia, Swit- tablished in 1987b and operational since 1988— zerland, the former Yugoslav Republic of Macedo- similar in objective, conditions for eligibility and nia, Turkmenistan, Ukraine and Uzbekistan. (See programme features to SAF, but differing in scope Annex I for complete membership.) and strength of structural policies, terms of access levels, monitoring procedures and sources of funding—was extended by the Executive Board for IMF facilities and policies a fourth year, to November 1993, its cut-off date. The Fund’s financial support assisted member The Board agreed to examine options and modal- States to regain a viable balance of payments com- ities for a possible successor facility. bined with economic growth and exchange-rate The compensatory and contingency financing stability. The facilities and policies through which facility (CCFF) provided resources to members to it provided such support differed, depending on the nature of the macroeconomic and structural cover temporary export shortfalls and excesses in cereal import costs arising from events beyond problems to be addressed and the terms and de- their control, and helped with IMF arrangements gree of conditionality attached to them. to maintain the momentum of reforms in the face Stand-by arrangements, typically covering of adverse external shocks, such as declines in ex- periods of one to two years, focused on specific port prices or increases in import prices and fluc- macroeconomic policies, such as exchange-rate tuations in interest rates. and interest-rate policies, aimed at overcoming balance-of-payments difficulties. Extended ar- Under the buffer stock financing facility, IMF rangements, which supported medium-term pro- provided resources to help finance members’ con- grammes generally running for three years, were tributions to approved buffer stocks of com- available to overcome more intractable balance- modities. of-payments difficulties, attributable to structural as well as macroeconomic problems. IMF’s enlarged access policy was used to in- Financial assistance crease the resources available under stand-by or In 1992, much of IMF’s financial support went extended arrangements for programmes needing to its new members, the previously centrally substantial Fund support. It was financed with or- dinary resources and resources borrowed for that aYUN 1986, p. 1159. purpose, the combination of which was determined bYUN 1987, p. 1252. International Monetary Fund 1141 planned economies of Eastern Europe and the suc- Liquidity cessor States of the former USSR, to establish ef- As at 30 April 1992, the Fund’s adjusted and fective monetary arrangements and integrate them uncommitted usable resources totalled SDR 20.9 into the international monetary system. IMF ap- billion, compared with SDR 23.8 billion the previ- proved a first credit-tranche arrangement for the ous fiscal year. The decline resulted from the ex- Russian Federation and stand-by arrangements for clusion of two currencies from the operational Estonia and Latvia. budget and the excess of purchases (drawings) over The number of IMF arrangements in effect in- repurchases (repayments) during 1991/92. creased by one over 1991 to 51 at the end of 1992, IMF's liquid liabilities declined to SDR 25.6 bil- with total commitments of SDR 29.8 billion. As at lion as at 30 April 1992 from SDR 26.2 billion a 31 December 1992. there were 22 stand-by arrange- year earlier, representing reserve tranche positions ments (Albania, Barbados, Brazil, Bulgaria, Czech- of SDR 21.9 billion and loan claims on the Fund oslovakia, Dominican Republic, Egypt, El Salvador, of SDR 3.7 billion, a decline of SDR 0.6 billion. The Estonia, Gabon, Guatemala, India, Jordan, Lat- ratio of the Fund’s adjusted and uncommitted us- via, Lithuania, Morocco, Nicaragua, Panama, able resources to its liquid liabilities—the liquidity Philippines, Romania, Russian Federation, Uru- ratio—declined by 12 per cent over the course of guay); 7 extended arrangements (Argentina, Hun- 1991/92 to 81.6 per cent, owing largely to the high gary, Jamaica, Mexico, Poland, Venezuela, Zim- level of new commitments, including commit- babwe); 4 SAF arrangements (Burkina Faso, ments of ordinary resources to be substituted for Comoros, Ethiopia, Rwanda); and 18 ESAF arrange- borrowed resources. ments (Bangladesh, Bolivia, Burundi, Guinea, Guyana, Honduras, Kenya, Lesotho, Malawi, Mali, SDR activity Mauritania, Mozambique, Nepal, Sri Lanka, Togo, Total transfers of SDRs during fiscal 1992 Uganda, United Republic of Tanzania, Zimbabwe). declined to SDR 13.4 billion from SDR 14.8 billion In April 1992, 11 low-income developing countries in fiscal 1991, representing decreases in transfers were added to the list of countries eligible to make among participants and prescribed holders (SDR purchases under ESAF (Albania, Angola, Côte 5.8 billion); transfers from participants to the d’Ivoire, Dominican Republic, Egypt, Honduras, General Resources Account (SDR 3.8 billion); and Mongolia, Nicaragua, Nigeria, Philippines, transfers from the General Resources Account to Zimbabwe). participants and prescribed holders (SDR 3.8 bil- Total IMF disbursements to its members lion). SDRs used in operations involving SAF, declined to SDR 5.3 billion in 1992 from SDR 8.2 ESAF, Trust Fund loans and the Supplementary billion in 1991. Disbursements under the General Financing Facility Subsidy Account amounted to Resources Account declined to SDR 4.8 billion SDR 149 million in fiscal 1992. in 1992 from SDR 7.4 billion in the previous year. Disbursements under stand-by arrange- Policy on arrears ments rose to SDR 3.1 billion in 1992 from SDR Overdue financial obligations to IMF continued 2.6 billion in 1991, whereas disbursements under to be a serious concern in fiscal 1992, although extended arrangements declined to SDR 0.9 bil- their increase and the rate of growth were the lion from SDR 1.9 billion. Disbursements under lowest since fiscal 1982. Total overdue obligations CCFF also declined, to SDR 0.6 billion from SDR rose from SDR 3.4 billion at the end of fiscal 1991 3 billion in 1991, when many countries drew on to SDR 3.5 billion at the end of fiscal 1992, almost the facility in the wake of oil price increases all of which was due from members in arrears to resulting from events in the Persian Gulf. Under IMF by six months or more; the number of such SAF, disbursements declined to SDR 20 million members increased from 9 to 10. As at 30 April in 1992 from SDR 149.9 million the year before, 1992, eight members were ineligible to use IMF and those under ESAF declined to SDR 524.3 general resources; one member, previously million from SDR 633 million. Repurchases declared ineligibile, cleared its overdue obligations under the General Resources Account decreased and regained eligibility. in 1992, to SDR 4.2 billion from SDR 4.7 billion in 1991. IMF continued to implement a strengthened cooperative strategy to resolve members’ arrears In response to a rising number of countries seeking problems. The strategy involved increased efforts IMF support and increased demand for its resources, to ensure that all members using IMF resources the Board of Governors authorized a 50 per cent were able to meet their obligations when they fell increase in the size of quotas under the Ninth General due and remedial and deterrent measures, includ- Review of Quotas, which took effect in November ing a tightening of the timing of procedures for 1992, bringing the total of IMF quotas to SDR 144.8 dealing with members in arrears. Under IMF’s billion. rights-accumulation programme, established in 1142 Intergovernmental organizations 1990, members could obtain future financing from at headquarters, including one course specifically the Fund once they cleared their arrears. By April directed at centrally planned economies in tran- 1992, the Executive Board had endorsed rights- sition. The Institute conducted 19 courses and 4 accumulation programmes for three member seminars overseas for government officials, of States. Moreover, with the entry into force on 11 which 10 courses provided training in the former November 1992 of the Third Amendment of IMF’s USSR and Eastern Europe.