International monetary reform and the less developed countries

Abstract

The present article discusses the implications of international monetary reform for the development of the less developed countries (LDCs). The author first considers liquidity and the proposal for a “link” between monetary reform and the provision of development finance. Monetary reform, and in particular the provision of additional liquidity for countries outside the Group of Ten is then dealt with. The author then looks at the proposal that LDCs share in increases of unconditional liquidity. Finally, the proposal to forge a “link” between reserve creation and aid is considered and the benefits and disadvantages from the point of view of both LDCs and advanced countries are analysed. It is argued that this proposal offers an opportunity of giving substantial encouragement to the development of the LDCs while guaranteeing the donor countries against any ill effects on their balance of payments positions.

JEL: F33, F34