minimizing severity of such crises, when they occur. some clarity and transparency about the target of surveillance would be in order. in this respect, the fund has to take a view on whether the fund ’ s assessment is meant for national governments in its role as a confidential advisor, or for the market players who in any case rely on alternative avenues for assessing publicly available information. it needs to be mentioned that immediate market reactions to sensitive information may have serious implications on members ’ efforts to address a problem in hand or their plans for addressing an impending crisis. our view is that the fund should preserve its role as a confidential adviser and the fund ’ s assessment should be to help national authorities in reducing the recognition lag and recommending measures that could help in containing vulnerability. however, we are not opposing the dissemination of relevant information giving due consideration to the specific circumstances that members and the fund are dealing with. the role of the ccl and precautionary arrangements in crisis prevention the contingent credit line ( ccl ) was expected to play a critical role to serve as a precautionary line of defense, reducing vulnerability and bolstering investor confidence in eligible emerging market economies. unlike other existing fund facilities, the objective behind ccl was to prevent crises by making available adequate liquidity upfront to a member with sound fundamentals so as to deal with the pressure of contagion. ccl, however, has not been used by any member so far because of a number of concerns, including : ( a ) the entry problem - i. e. the fear that access under ccl would convey a negative signal to the market, ( b ) the exit problem - i. e. the uncertainty about the withdrawal of eligibility, ( c ) insufficient automaticity, and ( d ) stringent pre - qualifying norms. the very fact that no country has so far requested the fund for using ccl resources suggest that it did not serve the intended purpose and it should be allowed to expire in november 2003. while we support the option of allowing the facility to expire, however, if there is a distinct possibility of evolving workable strategies in the near future, we are willing to go along with a consensus for further review. the existing precautionary arrangements could be suitably modified so as to enhance the capacity of the members to prevent capital account crises. we suggest that since the objective behind a modified precautionary arrangement is to prevent a capital account crisis, the access limit

of multilateral agencies to meet the financing and adjustment needs of low income countries affected by exogenous shocks. enhanced financing may be warranted depending on the intensity of shocks. progress with the hipc initiative the hipc initiative has existed for some time, with the prime motive of alleviating the unsustainable external debt burden of low income countries. despite a commendable coordinated programme of various multilateral / bilateral creditors, hipc initiatives faced difficulties due to inadequacy of resource, global economic slowdown, delay in implementation of policy reforms in highly indebted countries, and litigations by non - participating creditors for recovery of dues. there is a critical need for recognising country specific constraints and work out an agenda for reducing the debt burden of hipc countries. however, debt restructuring in these countries must look beyond outright write - off of debt and explore innovative measures such as debt - equity swaps, use of export proceeds to donor countries to retire debt, and stepping up investment opportunities in these countries. progress reports imf quotas and governance recent measures to increase administrative and technical support to the executive directors of the developing and transition countries are welcome. however, the present quota formulas do not reflect a position that is truly representative of a country ’ s profile in the world economy. despite increasing recognition of this fact, the consensus to bring about the required reform continues to elude us. we, therefore, believe that the responsibility rests primarily with the developed countries who, as the majority shareholders, must demonstrate the will to reform the international financial architecture in line with the changed realities. the quota review exercise in future should ensure adequate, equitable and appropriate representation of developing countries. such a broader representation of the developing countries would enhance the acceptability, ownership and effectiveness of the imf ’ s programs and policies. while arriving at the quotas, the gdp must be computed on a ppp basis, as this is a more representative measure to define the relative position of a country in the world economy. lack of data availability has often been cited as one of the significant hurdles to the adoption of the ppp based approach. we suggest that the fund should work on how this deficiency could be satisfactorily addressed. combating money laundering and financing of terrorism the indian government vehemently opposes all forms of terrorism and all activities abetting it. we fully endorse the un security council ’ s resolutions on combating the financing of terrorism ( cft )