IMF Conference

The country-level advice that the IMF offered to its developing country member states in 2010 was still characterized by an ‘one size fits all’ approach.

Presenter:

Iyanatul (“Yan”) Islam
Chief, Country Employment Policy Unit
Employment Policy Department
International Labour Organization

Discussants:

Atish (“Rex”) Ghosh
Assistant Director, Research Department
Chief, Systemic Issues Division
International Monetary Fund

Andy Berg
Assistant Director, Research Department
Chief, Development Macro Division
International Monetary Fund

Moderator:

Caroline Pearce
Head of Policy
Global Campaign for Education

Fiscal adjustment loomed large (48 out of 50 cases), with an implicit preference for low fiscal deficits (usually 2 per cent of GDP) and low public debt to GDP ratios (usually 40 per cent of GDP).

• There were ample references to poverty reduction, but the discussion was usually rudimentary.
• In the case of employment, there were no references to MDG 1b or to the social protection floor.
• Lack of job creation was usually attributed to high public sector wages and labor market rigidities.

What lessons can one draw for the future Article IV consultations?

• Monitoring of debts, deficits and inflation should be tailored to country-specific circumstances rather than being linked to a formulaic approach.
• The discussion of fiscal issues needs a more explicit development dimension. This means a more regular and rigorous analysis of the sustainable financing of the MDGs and the social protection floor.
• More emphasis is needed on the poverty-employment link.

These conclusions are based on a content analysis of 2009-2010 IMF documents for a sample of 30 low income and 20 middle income countries, supplemented by drawing on a separate assessment of IMF Article IV consultations for 25 low and middle income countries.