Transformation of Tribes and Analogous Social Formations

The first, most urgent, task is now to preserve these gains until such time as -the business upswing in the Western industrial world brings more fundamental relief to the debtor countries. The second, less immediate, but probably more formidable task is to look beyond the immediate period and to try to resolve the 'systemic' problems such as. the complexrelations between authorities and banks, the maturity profile of the outstanding international bank debt and international capital flows available to finance future current account deficits. On these issues the report is content to just indicate that "although the importance of these -issues speaks tor itself, the possible approaches to dealing with them depend so much on current developments that it would seem premature at this stage to put forward any formal recommendations for their solution. But it is vital that policy -makers, in their day- to-day handling of current problems, keep them in mind." The report goes on to explain the role of the central banking community, international organisations such as the IMF and the World Bank, the banks and the debtor countries in averting the immediate financial crisis and also in tackling the related problems in the medium-term. Though the Bank: recognises the role of the banks in external financing, it casts doubts on whether they could or should go on with unconditional balance of payments financing, as they have been doing in the past. According to the report, "a graduated. conditionally properly adjusted to each case would be a vast improvement over the bank's behaviour during these past few years.... It woud perhaps be possible to devise co-operative schemes between the IMF and private lenders, just as it is desirable that there should be even more co-financing between the World Bank and the banks." For enabling the IMF and the World bank to play an effective role, the report calls for increased resources to be put at the disposal of both institutions. The report draws a distinction between current account deficit and development finance. It favours current account deficits being financed by the IMF with the assistance of banks and the provision of development finance by World Bank.