US embassy cable - 03THEHAGUE2353

UNCLAS SECTION 01 OF 02 THE HAGUE 002353 
 
SIPDIS 
 
 
E.O. 12968 N/A 
TAGS: EFIN, EAID, NL, IMF, IBRD 
SUBJECT: Bank/Fund Meetings: Dutch Positions 
 
 
The Dutch government has announced that it will support the 
following positions at the September 21-22 Bank/Fund 
Meetings in Dubai. 
 
1. Enhancing Crisis Prevention 
--------------------------- 
-- Adoption by the IMF on a trial basis of a "balance sheet 
approach" in the context of regular Article IV 
consultations. 
 
-- Issuing Article IV reports without the country being 
examined signing off. 
 
-- Making more explicit in the "public notes" when countries 
do not follow IMF advice. 
 
-- Holding up "precautionary arrangements" as good signaling 
instruments to promote good policies and calm markets. 
However, the Dutch oppose exceptional lending under this 
sort of arrangement. 
 
2.  Progress on Crisis Resolution 
--------------------------------- 
-- Ensuring faithful and consistent application of strict 
conditions for exceptional access to IMF credit. 
Discussions over Argentina will be an important test in this 
regard.  The Dutch believe the private sector has to play a 
concrete role in solving the BOP problems of countries in 
crisis. 
 
-- Supporting the "contractual approach" to debt stocks 
based on the G-10 standard. 
 
-- Making codes of conduct more meaningful including through 
fora where debtor and creditor country authorities can 
interact. 
 
3.  Support for Low Income Countries 
-------------------------------- 
-- Increasing the effectiveness of programs through more 
realistic growth prognoses and alternate scenarios and more 
precisely spelling out the crucial policy measures that 
should be taken. 
 
-- Supporting better coordination between the Fund, 
bilateral donors, and multilateral institutions. 
 
4.  Quotas 
---------- 
 
-- Opposing a general quota increase 
 
5.  Funding for Development 
--------------------------- 
 -- Mobilizing sufficient funding for development including 
through overall increases and increased effectiveness of 
ODA. 
 
-- Encouraging more extensive and effective peer reviews 
 
-- Stressing that OECD members should confirm to the UN 
"norm" of allocating.7 percent of their GNP to ODA 
 
6.  Representation and Participation of Developing Countries 
and Countries in Transition in IMF/World Bank Decisionmaking 
--------------------------------------------- -- 
 
--  Opposing a third African seat on the Board of Governors 
as this could cost the Netherlands its seat. 
 
-- Supporting a gradual increase in the number of basic 
votes to correspond with the original share of basic votes 
in the total voting weight. 
 
7.  Progress Report on Trade 
---------------------------- 
 
-- Underscoring the importance of continued trade 
liberalization and the role of the World Bank in its 
analytical work in support of free trade. 
 
-- Calling for the Bank/Fund to include trade policy as a 
theme of their surveillance activities. 
 
8.  Monitoring Achievement of MDG 
------------------------------ 
 
-- Increasing dialogue between developed and developing 
countries on achievement of the MDG 
 
9.  PSRP/HIPC Progress Reports 
-------------------------- 
 
-- Underscoring the significance of the PSRP process and the 
importance of each country's assuming responsibility for its 
own development. 
-- Expressing continued concern with the tenability of the 
debt burden of HIPC countries. 
 
10.  Implementation of the World Bank Group Infrastructure 
Plan 
--------------------------------------------- ------------- 
 
-- Supporting this action plan and calling for more support 
for investment in poverty-reducing infrastructure. 
 
 
Sobel