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Third World Countries

Volume 35: debated on Thursday 27 January 1983

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asked the Chancellor of the Exchequer if he is satisfied that the resources of the International Monetary Fund, augmented in accordance with recent decisions by the interim committee, will be sufficient to meet any demands arising as a result of the substantial external debts of a large number of Third world countries.

The interim committee agreed in Toronto that the increase in quotas should be large enough to enable the fund to perform its functions effectively in the 1980s, and I hope to take this rather further when the committee meets again in Washington next month. Meanwhile, Ministers of the group of 10 have already agreed that the general arrangements to borrow should be increased from SDR 6ยท4 billion to SDR 17 billion. In future the GAB will be available not only to participants but also to the fund for lending to other members at times when the fund is faced with inadequate resources and balance of payments problems threaten the stability of the international monetary system. An increase in quotas, together with these enhanced borrowing arrangements, should provide adequate resources for the fund to meet the needs of prospective borrowers.