##s and broadens in a sound financial environment. the imf and the world bank have an important role to play with regard to crisis prevention and crisis resolution. i welcome the progress made in this area : · the imf ’ s surveillance will be further strengthened. · transparency will be enhanced. · more and more countries are realizing the benefits of the financial sector assessment program. · and the rules governing access to the fund ’ s financial resources in capital account crises have been strengthened. going forward, the focus should be on implementing these measures. v. ladies and gentlemen, the world bank and the developing countries are facing major challenges too. · let me begin with the doha round. i find it inappropriate that industrial countries spend hundreds of billions of dollars each year to protect their own products. these subsidies are several times larger than the amount of development assistance. this makes it difficult to exploit the virtues of globalisation for the benefit of all. it would be extremely unfortunate if the failure of the cancun negotiations would lead to trade conflicts. again, there is no reasonable alternative to the multilateral approach. · second, the “ millennium development goals ” reaffirmed at monterrey are a guideline for german policy. achieving these goals requires joint efforts. well - targeted financial aid to developing countries can only be successful if combined with good governance and sound institutions. · last but not least, a remark on quotas and voting rights. i know that many countries are seeking higher voting shares. yet, the proper functioning of the imf and the world bank as financial institutions requires that a strong link is maintained between member countries ’ quota shares and their capacity to contribute to the financial resources as reflected by their economic weight. however, i believe there is certainly some justification for an increase in basic votes. thank you for your attention.

make economic sense in terms of efficiency. there is sometimes talk of “ friendshoring ”, i. e. preferentially sourcing intermediate products from countries regarded as allies. and of “ nearshoring ”, in which deliveries from nearby countries play a greater role. fundamentally overhauling supply chains would be a time - consuming and cost - intensive process. in principle, however, government intervention in international trade beyond laying down general rules requires special justification and should remain the exception. it should be borne in mind that restricting trade always entails welfare losses. these can be considerable, depending on the trading partner ’ s importance. [ 8 ] regional free trade agreements could play an important role, as they can make it easier for european enterprises to diversify their trading partners. this brings me to the second major challenge facing german industry : the change in energy supply. this may entail considerable costs, especially in the transitional period until enterprises have got to grips with the elimination of nuclear energy and russian energy sources and switched to green alternatives. 4 price competitiveness and profitability of the german economy but what scope do german enterprises have to bear these burdens? in this context, it is worth looking at two indicators : price competitiveness and profitability. price competitiveness is one of the key factors affecting germany ’ s export performance. if we compare the price competitiveness of the german economy with 27 selected industrial countries, we see a positive, longer - term development – the price competitiveness of german suppliers has exceeded its long - term average for around 12 years now ( see chart 5 ). a second important indicator of enterprises ’ resilience is their profitability, i. e. the annual result before taxes as a percentage of turnover ( see chart 6 ). earnings in the manufacturing sector are more volatile, meaning that in times of crisis, earnings fall much more sharply, but also recover more quickly afterwards. this is what happened during the financial and economic crisis as well as the coronavirus pandemic. on the whole, the profitability of german enterprises recovered remarkably rapidly in each case. before russia ’ s war of aggression against ukraine, the profitability of the economy as a whole and of the manufacturing sector climbed to a high level by historical standards. of course, the war and the associated rise in energy prices will not have left profitability unscathed ( see chart 7 ). this applies to industrial enterprises in particular. [ 9 ] gas was already more expensive in europe and in germany than