1887

Reform of the International Monetary System

Some Points of Special Interest to Developing Countries of the Commonwealth

image of Reform of the International Monetary System

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Development and the Link

All of the major issues involved in international monetary reform are political as well as economic, and of none of them is this more clearly true than of the proposal to associate, to link, the issuance of SDRs and SDR-like assets with the development needs of the developing countries. To the authorities of these countries the association seems sensible enough; with them the over-riding needs of development make it natural that financial institutions, including in many cases their own central banks, should be involved in provision for development requirements. But this, of course, is just the point which gives rise to profound and sincere worries on the part of authorities in certain other countries who have staunchly defended the integrity of national monetary systems by drawing a firm line between the processes of creation of money and the insatiable demands of political leaders espousing worthy causes.

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