Visit to Washington D.C., 14 - 17 April 1998

From 14^th –17^th April I will be visiting Washington to represent Australia at the half-yearly meetings of the Boards of Governors of the International Monetary Fund and the World Bank and also to attend a special meeting of finance ministers and central bank governors called in response to financial crises in the Asian region.

At the broadest level, these two meetings will consider the outlook for the world economy, the impact of the Asian crisis, and the lessons from that crisis for governments, and for the policies and organisation of the international financial institutions.

The US-hosted meeting of the finance ministers/treasurers and central bank governors of 22 major economies will permit more intensive discussion, in a smaller group, of some of the key lessons for preventing or moderating future crises and ensuring the international financial institutions evolve to met the challenges revealed in the recent Asian crises.

The meeting of the Interim Committee of the IMF will consider such issues as:

• The global economic outlook (including forecasts to be published shortly after the meeting in the IMF’s twice-yearly ‘World Economic Outlook’).
• The likely impact on our region and the world of the difficulties besetting some of the Asian economies; and the causes of, and remedies for, those crises.
• Lessons for the prevention, management and resolution of future crises, including:
• the means for creating better awareness by governments and markets of relevant information;
• the opportunities for more fiscal transparency by governments;
• the scope for better surveillance by the IMF of its members;
• the role of the private sector in crisis resolution; and
• the question of whether the ‘architecture’ of the international financial institutions needs to evolve in the light of changes in the global economy.
• The Committee will also consider the implementation (in conjunction with the World Bank) of the Fund’s part in the scheme to reduce the debt burdens of the most heavily indebted poor countries to sustainable levels – the so-called HIPC Initiative.
• Finally, the meeting will consider the role of the IMF in achieving well-sequenced, manageable liberalisation of global capital movements.

The meeting of the Development Committee of the World Bank will consider such issues as:

• Implementing the recommendations of a task force that considered the appropriate roles for the various multilateral development banks (such as the World Bank itself and, in our region, the Asian Development Bank).
• Implications of the Asian crisis for the Bank’s operations;
• A capital increase for the Multilateral Investment Guarantee Agency.
• The implementation (in conjunction with the IMF) of the Bank’s part in the scheme to reduce the debt burdens of the most heavily indebted poor countries to sustainable levels – the so-called HIPC Initiative.
• The World Bank’s net income prospects.

US Treasury Secretary Rubin will be hosting an ad hoc meeting of a so-called ‘G-22’ to discuss, in a smaller group of key finance ministers/treasurers and central bank governors, the lessons for the prevention, management and resolution of future crises.

The 22 economies are Australia, the G-7 economies, Russia, China, India, Brazil, Mexico, Argentina, Korea, Indonesia, Malaysia, Thailand, Hong Kong, South Africa, Poland and Singapore.

The involvement of the Australian Treasurer in this smaller group will provide an ideal opportunity to explain Australia’s perspectives both on key issues in the current crisis and the broader issues of how to reduce the probabilities of such crises in future, and the severity of any crises that do still occur.

8 April 1998