World monetary and financial system : issues for reform

In this book, the authors start with an account of how the Bretton Woods system broke down during 1971-73 and discuss the working of floating exchange rates since then. The state of the world economy, and the main concerns of industrial and developing countries are pointed up next: they are: slowdown of growth and high unemployment levels, external account imbalances, and the enormous size of the debt of a number of developing countries; the non dynamism in trade and increasing protectionism At the same time, there are two favourable developments : con trol of inflation, and continuing integra tion of international financial markets. The oil market situation is in a state of flux.

It is in such an uncertain milieu that India has to deal with its external account deficits, increasing debt, and may also need to borrow more from the inter national market.

The functions and working of the IMF and the World Bank group are reviewed, with a view to indicating needed reforms, including an appropriate understanding of adjustment prog rammes for economic growth, regular creation of SDRS and their allocation to the IMF Fund, and a modified voting pattern in these international institutions. The suggestion is renewed for setting up a South Bank, with realistic objectives.