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A quarterly magazine of the IMF
  MARCH 1999
Volume 36, Number 1

An Agenda for the 21st Century
Alassane D. Ouattara
Africa is at a crossroads. Will it continue to open up its political systems to broader participation and reform its economies to integrate them more fully into the global economy, or will it revert to political and economic practices that have delayed its integration into the economic mainstream?

Adjustment and Growth in Sub-Saharan Africa: The Unfinished Agenda
Evangelos A. Calamitsis
After a prolonged crisis, sub-Saharan African countries have been broadening their reform efforts and enjoying improved economic growth rates. The gains they have made are fragile, however, and to achieve sustained progress they need to strengthen their current reform programs and resolve the serious conflicts threatening the region.

Sub-Saharan Africa: Economic Policy and Outlook for Growth
Ernesto Hern�ndez-Cat�
In recent years, improved policies in many sub-Saharan African countries have led to better economic performance. As policymakers in the region work to sustain high growth rates and reduce poverty, how can they most effectively meet the challenge of globalization and create a favorable environment for domestic and foreign private investment?

Impact of the Asian Crisis on Sub-Saharan Africa
Elliott Harris
Most sub-Saharan African countries have been largely unaffected by the Asian crisis. What accounts for this relatively favorable outcome, and what steps should these countries consider taking to reduce poverty and increase economic growth in a more uncertain global environment?

European Union

The Monetary Policy of the Eurosystem
Otmar Issing
On January 1, 1999, Europe entered a new era with the adoption of a single currency—the euro—by 11 of the European Union's 15 member states. In this article, a member of the European Central Bank's Executive Board describes the framework for conducting monetary policy in the euro area.

Banking sector issues

What Deposit Insurance Can and Cannot Do
Ricki Tigert Helfer
A deposit insurance system can contribute to financial stability, but only if it is adequately funded and if other safeguards—such as a strong bank supervision program—are also in place.

Capital Flows

Economic Policy Implications of Global Financial Flows
Manuel Guiti�n
Globalization presents fresh challenges to the world economy, and its implications have yet to be fully assimilated at the national level. At the same time, the lack of a lender of last resort creates a vacuum in the international institutional structure.

Systemic Aspects of Recent Turbulence in Mature Markets
Garry Schinasi
The recent turbulence in mature financial markets appeared out of proportion to the events that triggered it. This experience suggests that both private and public financial institutions should display a much greater awareness of potential financial vulnerabilities and disruptions.

Foreign Direct Investment in Developing Countries
Padma Mallampally and Karl P. Sauvant
Foreign direct investment has grown at a phenomenal rate since the early 1980s, and the world market for it has become more competitive. Developing countries are becoming increasingly attractive investment destinations, in part because they can offer investors a range of "created" assets.

A Trade Policy Perspective on Capital Controls
Ludger Schuknecht
Capital is tradable in the same way many goods and services are: it can be imported or exported at prices that reflect international demand and supply. Much trade analysis is thus valid for capital movements, and experience with trade restrictions provides insights into how different capital controls might work.

Other Topics

Corporate Restructuring and Governance in East Asia
Magdi Iskander, Gerald Meyerman, Dale F. Gray, and Sean Hagan
Corporate restructuring and improved corporate governance are essential parts of economic reform programs under way in many countries. How can corporations be restructured to promote growth and reduce excessive debt without placing undue burdens on taxpayers? What framework is needed to promote better corporate governance?

Contingent Government Liabilities: A Hidden Fiscal Risk
Hana Polackova
Many governments have faced serious fiscal instability as a result of their contingent liabilities—that is, fiscal obligations contingent on the occurrence of particular events. But these obligations are not budgeted and accounted for, nor are they considered in conventional fiscal analysis.

Private Infrastructure, Public Risk
Mateen Thobani
Whether developing countries reap the full benefits of privatizing infrastructure will depend on how risks are allocated. If governments assume risks that should be borne by investors, they may reduce incentives for efficiency and incur significant liabilities. But steps can be taken to decrease risk and improve the measurement and budgeting of guarantees.


Letter from the Editor

Book Reviews

Global Squeeze: The Coming Crisis for First-World Nations
by Richard C. Longworth

The Global Crisis in Foreign Aid edited by Richard Grant and Jan Nijman—Doris Ross

Les banques � l'�re de la mondialisation by Zuhayr Mikdashi—Anne-Marie Gulde

The Geography of Money by Benjamin J. Cohen—Omotunde E.G. Johnson