INTERNATIONAL MONETARY FUND
Did you know that...• Private capital represents more than 80 per cent of foreign investments in developing countries, as compared to 50 per cent at the beginning of the decade.
• Twelve countries received three quarters of foreign direct investments in 1996.Cheap rice
Ahmed Rija is a street vendor. He sells sunflower seeds. He lives with his wife and six children in Maan, Jordan.
"For the last few years, we have been receiving coupons to buy basic foodstuffs such as sugar, rice and powder milk cheaply. In general, I receive enough to feed all the family. Also, if it isn't enough, we can buy some of the more expensive products. It used to be that even wealthy families would benefit from State subsidies. Everybody could buy really cheap rice. Nowadays, only poor families get the coupons. I think it's much fairer!"
In order to cut down their budget deficit, the IMF advises governments to better target their subsidies. In Jordan, only essential goods for the neediest families are now subsidized.
I don't miss the Ministry
Daniel Watson runs a general store in Accra, Ghana. Previously, he worked for the Ministry of Finance.
"When I was told that I was going to lose my job, I totally panicked. I couldn't sleep anymore. I wondered how I was going to feed my family. I might not have earned much at the Ministry, and sometimes, the government just "forgot" to pay us, but it was still better than nothing. And thinking that I would be among 32,000 other former civil servants looking for jobs did not make things easier. In the end, though, things turned out all right. With the indemnities and the loan facilities provided, and with the help of an uncle, I set up this little business which runs pretty well. One thing is sure. I don't miss the Ministry!"
To avoid some of the negative fallouts from the reduction in the number of civil servants, the IMF advised the Ghanaian government to set up a programme to assist in the reinsertion of dismissed civil servants. The whole process was highly beneficial, as not only was the State able to save on its operating budget, but the released civil servants in-vested their wages in the national economy, setting up numerous small enterprises, businesses or farms.
obviously neither my workers nor my suppliers, and certainly not the restaurant next door, would accept crowns. I have to be sure that I will be able to exchange these crowns for yens at a relatively stable rate. The whole international trade relies on this."
Bicycles for Crowns Yasunari Kurushima exports bicycles from the Kyoto area, in Japan.
"It's quite simple. Let me give you an example. I just sold 100 bicycles to a client in Copenhagen for a value of some three million yens. If my client, Mr. Lars Hansen should pay me in Danish crowns, I could not do anything with them, since
The IMF's role is to ensure that exchange rates for currencies remain as stable as possible. Without stability, there is no trade.
The IMF in brief
The IMF's mandate is to:
• Promote international cooperation on monetary issues;
• Facilitate the balanced growth of international trade;
• Provide governments with financial resources to correct payments' imbalances;
• Ensure that the programmes adopted do not adversely affect the poorest sectors of society.International Monetary Fund (IMF)
700 19th Street, N.W.
Washington, DC 20431
USA
Tel.: (1-202) 623-7000
Website: http://www.imf.org
E-mail: publicaffairs@imf.org
