The external financial pressures on developing countries are of an unparalleled intensity. Severe difficulties in meeting debt service payments are widespread. Some statistics indicate a net flow of resources from the less developed countries to the developed countries, as efforts to repay years of credit continue.
In 1993 the Commission on the Future of the Bretton Woods Institutions established that the international monetary system in its current form, with freely floating exchange rates, had encouraged short-term volatility and currency misalignments. The instabilities had become especially apparent in 1992 and 1993 with the expensive ejection of the UK from the European exchange rate mechanism and the effective breakup of the latter in August 1993. These events were largely due to failure to coordinate financial and economic policies of Europe, North America and Japan and severely affected all the countries concerned.