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.
Since the collapse of the Bretton Woods monetary system of fixed exchange rates in the early 1970s, there have been several attempts to create new monetary arrangements among major trading nations: the Jamaica Accords, the Plaza Accord, efforts at economic summit meetings to coordinate domestic economic policies; the Louvre Accord, which sought to stabilize currency relationships within a vague set range, failed. All these efforts have been improvisations (often informal and confidential) in contrast to the elaborate, transparent framework of Bretton Woods.
The Intergovernmental Group of Twenty-Four on International Monetary Affairs (G-24) was established in November 1971 to increase the negotiating strength of the developing countries in discussions with the International Monetary Fund on reform of the international monetary system. Developing countries felt that they should meet regularly as a group, as the developed countries had been doing for some time in the Group of Ten (G-10). Technical support from UNDP was agreed in 1975, and took the principal form of analytical papers prepared by experts on issues in the fields of international money and finance. The UNCTAD secretariat and certain other countries continue to support the 24 countries in this work.
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.