The Less Developed Countries and the International Monetary System

The disarray in the international monetary system since the currency upheavals of 1971 has generated greatly increased interest, on the part of the less developed countries, in its functioning and reform. The 1972 UN Conference on Trade and Development provided a forum within which this new interest was first vigorously expressed and agreement as to increased Third World participation in the international deliberations which aimed at the reconstruction of the Bretton Woods system was there achieved. Spokesmen for the less developed world were to be found in the IMF’s ‘Group of Twenty’, arguing anew the merits of the old proposal for linking development assistance with the creation of increased liquidity, in the form of special drawing rights (SDRs) at the International Monetary Fund (IMF). At the same time the less developed countries formed their own monetary discussion group—the ‘Group of Twenty-four’ (eight representatives from each of Africa, Asia and Latin America)—to promote their joint interests in a monetary world in which the key decisions have typically been made without consideration for them.