Speech

Farewell Speech to the Executive Board, By Alexandre Barro Chambrier, IMF Executive Director

October 30, 2002

Mr. Chairman

1. Thank you very much for your kind and generous words.

2. After eight years on the Executive Board, the time has come for me to leave. During my term of office, I hope that I have been able to make my views known on many issues. However, as it is the tradition, we all try to impart some last-minute wisdom to our colleagues, and I propose to do the same.

3. Let me begin by saying how privileged I feel to have had the opportunity to serve this institution as well as the 24 member countries of my constituency. I wish to thank my Gabonese authorities for giving me the opportunity to serve in this position and especially President Bongo for his encouragement and his confidence in me. I truly feel that the last eight years here have been fulfilling, and have given me the opportunity to gain valuable experience in the workings of international cooperation.

4. When I started my term as Executive Director, I was one of the youngest Board members, clearly fascinated by this prestigious environment. Coming from a forestry background, I found my involvement in issues with a global impact a most stimulating experience. I certainly changed a lot in the process. And I am very pleased to say that the IMF also changed dramatically. Without a doubt, the Fund today is very different from the one that I joined in 1994. Over the past eight years, a number of important events occurred that we have had to deal with. The Mexican, Asian, Brazilian, as well as the Turkish, crises just to name the major ones. We also had to deal with the financial and economic crisis in Russia, which is now trying very hard and gradually succeeding in becoming a economy. We are presently dealing with the Argentine crisis, and I am confident that a satisfactory solution will be found, one that will ensure a permanent solution to the economic and financial difficulties that this country had to endure. In each of the crisis cases, while trying to assist those countries, the Fund also learned and adapted itself. In so doing, it not only helped strengthen the global economic environment, but also it became stronger as an institution by developing new tools to prevent or attenuate crises. I am of the view that the Fund has played a very constructive role in protecting and strengthening the international monetary system, and I believe that you all will have to continue making this great institution even more responsive to the needs of the membership.

5. The Fund has also changed markedly in response to the major challenges and needs of developing countries, particularly in Africa. In this regard, I remember vividly the many exciting discussions we have had around this table on the ESAF/PRGF and the HIPC Initiative. I still recall the strong arguments of some colleagues who reminded us that the Fund is a monetary institution and, as such, should leave structural adjustment issues in the hands of the World Bank. But I always believed that the Fund needs to be relevant to all its members, whether developed or developing. Therefore, I am pleased that we were able to achieve consensus on strengthening ESAF and in turn creating the PRGF. It is indeed very important that the Fund has accepted as its goals to help contribute to the reduction of poverty and the promotion of sustainable development in Africa and other developing countries. I am also pleased to have participated in the creation of the HIPC followed by the enhanced HIPC which is giving hope to low-income countries that there is a light at the end of the tunnel.

6. Another episode that comes to mind is the visit of the Meltzer Commission members to the Fund, when, in a spontaneous reaction, I told Professor Jeffrey Sachs that he did not know enough about the problems and issues facing Africa, and that he should be more careful in his prescriptions for the Fund. Since that time, I am pleased to note that he appears relatively friendlier and less confrontational in his approach to this institution. And our dialogue is becoming more constructive, which is a good thing for all concerned.

7. The Fund, however, is still subject to much criticism, with many still blaming us for being too rigid and conservative in our approach. Recently, I was surprised to see that even my daughter was reading the book of Mr. Stiglitz, which apparently is becoming a best seller thanks to its attacks on globalization and the IMF. I must say that I did my best in explaining to my daughter that she should not believe everything that she reads in that book, but I am not sure that I have been completely successful. I am referring to this matter to suggest that greater efforts are still needed to improve the public image of the Fund, in spite of the good job being done by EXR. I believe that we can make more progress in improving the Fund's image by removing the perceptions that the institution always stands for austerity and that it often applies double standards in dealing with its members. We should also be encouraging the political leadership of our stronger members to address more forcefully some of the misunderstandings and misperceptions regarding the Fund's role and activities, and also to correct economic policies that are harmful to the development of the low-income countries. Here, agricultural subsidies and protection come to mind, and I would like to acknowledge the courage of our Managing Director for taking up this issue. Mr. Chairman, I commend you for your efforts, and I ask you to please continue the fight, because success will mean a better quality of life for a very large number of people in the developing world.

8. We can also improve matters by further widening our contacts in member countries. In recent years, IMF missions have made significant efforts to reach out to the private sector and civil society. I welcome this approach, but much more can be done to get the views of society at large and all the critical elements of the decision-making process. Recently, under the leadership of the Managing Director, we have reviewed the IMF's conditionality guidelines to streamline them, and we are making ownership an important element of our assistance. I applaud these changes, but it is important to ensure that the message is followed closely in the field. Too often I hear from my authorities about the disconnect that there is between the PRSP process and the PRGF discussions. In many cases, the authorities feel that faster growth, although ambitious, is clearly needed.

9. Mr. Chairman, Dear colleagues, for the HIPC and other low-income countries to reduce poverty, they have to increase their growth performance in a sustainable manner. We cannot afford to continue business as usual. If so, most African countries will fall further behind; and the Millennium Development Goals, whose attainment is now deemed unlikely by some observers, will prove outright impossible. That is why in my Board interventions, I have often pleaded for higher sustainable growth rates. I think that programs should set the needed growth rate for the individual country, and then design the appropriate macroeconomic policies as well as the structural policies to achieve that rate.

10. Mr. Chairman, Dear colleagues, our review of the HIPC Initiative has shown that the issue of debt remains complex, and that progress is slower than we had expected. It is important that the HIPC Initiative lead to a situation of debt sustainability at the completion point. This is a necessary condition for future macroeconomic stability and growth, and all efforts should be aimed at achieving this objective. Similarly, we need to give attention to the debt problems of some middle-income countries before they start to have systemic impacts, and that we find new and innovative ways to address the debt overhang of these countries.

11. Let me take this opportunity to share with you some other thoughts on Fund-supported programs in countries of my constituency. There is no doubt that important progress has been made in many areas, as we have seen regularly during our reviews of programs with individual countries. But to me the most important progress has been the culture of financial discipline that the Fund is cultivating in the low- and middle-income countries. Countries are now increasingly mobilizing domestic resources more efficiently. Expenditure management is improving and budgets are becoming more transparent. As this discipline is developed, countries will cease to be prolonged users. And I think that this is where it becomes essential for the Fund to develop an exit strategy for countries under program. Technical assistance becomes very important and, in this regard, I commend management for deciding to set up two AFRITACs, one of which was successfully inaugurated in recent days. However, the need for technical assistance is such that it will be important that the Fund move quickly to establish the other centers as soon as possible. At the same time, the countries will need to ensure that the trained staff remain in their posts, and that more attention is given to the reform of the civil service to improve its efficiency.

12. The Fund should also make even more effective use of its Resident Representatives. Their position gives them a better understanding of the country's situation and they can provide important inputs in the design of programs. But we need to choose the Resident Representatives carefully, and make sure that they have not only the technical competence to help the authorities, but also the political sensitivity to assess well the domestic situation, and thus be in a better position to advise the missions.

13. Good governance has rightly taken on added importance in Fund-supported programs. At a time when we are fighting poverty, it is absolutely essential to ensure that domestic resources as well as external assistance are well managed. But in this regard let me say that the main issue is not the number of laws that are passed to fight corruption, but how the laws are actually implemented. The weak judicial system in many countries is often the root cause of poor governance, and more attention should be given to help these countries strengthen their judicial system

14. Overall, I must say that my eight years here as representative of 24 African countries have given me a much better perspective about the prospects of Africa. I leave the Fund today feeling more optimistic about the future of Africa, but this does not mean that I do not see the major challenges that remain. I think that the Bretton Woods Institutions have been very helpful to the continent, and they should remain engaged in helping the countries to accelerate the implementation of policies and measures needed to restore and consolidate macroeconomic stability and effective public resource management. Moreover, for many countries, it is becoming critical that there is an acceleration of "second generation" reforms in such areas as health and education, the legal framework, the financial system, and regional integration. The successful implementation of these reforms will determine not only the future of individual African countries but also of Africa as a whole in the quest for faster growth and successful integration into the global economy. In many countries that have shown a commitment to the adjustment process, a growing momentum for reform has developed, but these countries need external assistance. As the African leaders have noted in the NEPAD Initiative, they are resolved to ensure good governance, and the building of democratic institutions. They want to work in partnership with donors to help them create the foundations for strong and sustainable growth through the pursuit of sound policies. I am confident that the Fund will make it a priority to work closely with these countries to ensure that the objectives of the NEPAD are fulfilled.

15. Another issue on which I wish to make a brief comment is that of improving the representation of the poorer countries, in particular of Africa, on the Executive Board. The revision of quota exercise is leading to a loss in the voting power of Africa on the Board, at a time when the Fund is getting more and more involved in this continent. It is important that the cooperative nature of the Fund be preserved, and this may mean that we need to adapt the quota formulae to ensure equitable representation.

16. The issue of staff diversity has come up repeatedly in recent times, and an informative report has been published which indicates that there is a problem among some of our staff as regards promotions and other personnel matters. I know that our management is dedicated to making progress on this very sensitive issue, and I hope that satisfactory ways will be found to ensure that everyone is receiving an equal treatment, as regards their career paths in the Fund.

17. Before ending let me acknowledge many debts of gratitude.

18. My job in the Fund would have been much more difficult if it were not for the support and advice of many colleagues. I would like to mention first of all the two Managing Directors that I have had the privilege to work with: Michel Camdessus, who impressed me with his determination to create a more equitable world, and to show that the Fund has a human face. I will not forget his assistance and support when we held the Libreville Conference of African Head of States, where the ideas of poverty reduction in Fund-supported programs were developed. Horst Kohler, who has shown so much courage and leadership in the time that he has been here. Horst has especially impressed me by the sensitivity he has shown to the plight of the countries in my constituency, and by his willingness to listen and to adapt. I have been with him in his visits to Burkina Faso, the Democratic Republic of the Congo, Mali, Senegal and more recently to Mauritania, and I have very much appreciated his capacity to understand quickly the constraints on growth, and to have frank discussions with the authorities. The Fund is in good hands with Horst at the helm. I owe a large debt to my friend Alasanne Ouattara, who explained to me the inner workings of the Fund, and gave me so much good advice when I took up my position. I have also a great debt to Stanley Fischer, whose human skills are as large as his professional skills; to Anne Krueger, who has impressed us all by her strong determination, and her willingness to listen; to my good friend, Eduardo Aninat, who has always been ready to receive my authorities, sometimes at short notice, and who has done so much to make the AFRITACs a reality; and to Shige Sugisaki, who has impressed me with his relentless patience, respect for others, and making always sure that we have a consensus. There is another person to whom I owe much. This is Mr. Mamoudou Toure, who has also served as Minister of Finance of Senegal, and former Director of the African Department. To him I have a large debt of gratitude for his constant support and advice. Even now I continue to benefit from his wise counsel. I very much appreciate his confidence and trust in me.

19. Among my colleagues, I will be remiss if I do not mention our Dean, Abbas Mirakhor, who has been a model of fairness and dedication, and who has come to my rescue so many times during some difficult Board discussions on some of my countries. I will also remember Cyrus Rustomjee, with whom I have had stimulating discussions on many issues facing our continent, and who contributed much to our meetings in presenting the views of Africa. I wish him much success in his future career. I owe much to my other colleagues of the G-11 who have always brought me their support whenever I needed them. I have also debts of gratitude to other colleagues, some are here, others have left the Board. I will not try to name them, as I am afraid to miss someone.

20. On the staff, I would like to thank the Directors of the African and the Middle East Departments, both past and present. I would like to thank them for the excellent working relationships we have developed. Let me therefore record my appreciation for Mr. Calamitsis, Mr. Gondwe, and Mr. Paul Chabrier. To Mr. Bio Tchane whom I have known before he came to the Fund, I wish him the very best in his tasks, and I am confident that the African Department is in good hands with him. My best wishes also go to Mr. Abed of the Middle East Department.

21. But, on the whole, I must pay tribute to the high quality of our staff. I have always been impressed by their depth of knowledge and understanding, be it at the Board when they are replying to Directors' questions or in other fora. Personally, I have found the staff extremely helpful and always willing to share their experience and knowledge with me. I also salute their dedication and professionalism which have no equal. Time and again, our staff have proved the truth of Narvekar's principle, that if you take care of the staff, they will take care of you.

22. Let me also take this opportunity to thank the Secretary and his office for the support and willingness to accommodate my requests for schedule changes and other matters. In particular, I owe special thanks to the Executive Board Services, who has guided me through the rules and regulations of the Fund since I took office, and who has been so patient with my demands and needs.

Last but not least, I would like to thank our Board assistants who try to be "invisible". In a very quiet and gracious manner, they take and move our messages but more importantly they make sure that we get our coffee and cookies on time.

23. I would like to thank Ms. Lundsager and her authorities for the collaboration and support I have received in the U.S. I have very much enjoyed the hospitality provided by this country to me and my family, and for the chance to see how this great democracy works.

24. I would also like to mention that Damian Ondo Mane has been a very supportive Alternate, and I wish him the very best in the difficult task that awaits him as Executive Director. At this time, I can only ask you to provide him the same support that you have given to me and also to Mr. Rutayisire, the new Alternate who is present here today.

25. I would like to thank my advisors and assistants who have produced quality work, and who have been patient with me. They have been my "dream team" during these years and have provided me with the most able assistance. Some are not with the office anymore, and I would like to note here my special appreciation for the excellent work that they have done. In particular I wish to mention the names of Malangu Kabedi, Joseph Ntamatungiro, Samba Thiam and Moussa Yaya. Their contributions to the Office have been exceptional. I thank them and everyone in the office for their willingness to give up, on many occasions, their personal time in order to meet the demands of the Office and the Constituency. In this connection, I must say a special thank you to my very able Administrative Assistant, Brigitte, who has helped me to organize my work and my multiple travels. She has been a model of patience and efficiency, and I am much indebted to her. I would also like to thank Eliane and Germaine, who have spent long hours at night to help me inform my authorities of our deliberations.

26. Finally, let me thank all of you for your friendship and the honor of having worked with you. For those who are moving to other careers, I wish you the very best, and for others who will stay, I wish you much success in your deliberations.

27. As for me, one part of a very challenging and illuminating experience is coming to an end, one that I will treasure for the rest of my life. In closing, let me echo Saint Paul in saying that "I have run with perseverance and have finished the race". Whether I have finished the race succesfully or not is not for me to say - I will leave it to my colleagues and my constituent members to be the judge.

Thank you and au revoir.