ABSTRACT
There is no unified world monetary system and hence no uniform infrastructure for international trade. However, the division of the world into two blocs was based not on de facto currency convertibility, but on whether a given nation was willing to accept convertibility as a future goal. Thus, the economically strong countries, i.e., those whose currencies are convertible and thus may be used as payments and reserve media, and countries whose currencies are still a long way from achieving convertibility exist side by side in the institutions created by the Bretton Woods Agreement (the IMF and the World Bank). The long membership of nations with nonconvertible currencies in the IMF derives from Article XIV of the IMF statutes, which grants all member states a transitional period for achieving convertibility. The net effect of Article XIV has been to perpetuate the membership of numerous countries without convertible currencies. (1) In quite another light, the CMEA nations (with the exception of Romania, 1972) declined participation in the international monetary and credit institutions because they could not reconcile convertibility with their economic system.
