Policy Papers

September 14, 2006

Report of the Managing Director to the International Monetary and Financial Committee on IMF Quota and Voice Reform

Description: The April 2006 Communiqué of the IMFC called upon the Managing Director to work with the IMFC and the Executive Board to come forward with concrete proposals on IMF quota and voice reform for agreement at the Singapore Annual Meetings in September 2006. An intensive work program on quotas and voice was launched, involving IMF management and staff consultations with a broad spectrum of the membership and discussions in the Executive Board, building on earlier discussions of this issue, including in the context of the IMF’s medium-term strategy. Specific reform proposals were discussed on several occasions by the Executive Board, most recently on August 31, 2006. I am pleased that the Executive Board reached agreement on a comprehensive program of reforms, and recommended that the Board of Governors adopt, by September 18, 2006, a resolution that provides for a two-year plan of action.

September 14, 2006

Progress Report on the Activities of the Independent Evaluation Office

Description: Since its April 2006 Report, the IEO has continued work on three ongoing evaluations. It has considered and discussed a broad list of possible future evaluations with a wide range of stakeholders and announced its decision to add four of these to the IEO work program in the financial year 2007. IEO has also started to follow up on the recommendations of the report of the independent external evaluation of the IEO.

September 14, 2006

Provisional Agenda for the Fourteenth Meeting of the International Monetary and Financial Committee (IMFC)

Description: Provisional agenda for the Fourteenth Meeting of the International Monetary and Financial Committee, which is to be convened on Sunday, September 17, 2006 in the Suntec Singapore International Convention and Exhibition Centre in Singapore.

September 8, 2006

Mauritius - Assessment Letter in the Context of the Aid for Trade Initiative

Description: This note presents the IMF staff’s assessment of recent macroeconomic developments in Mauritius and the authorities’ reform strategy to address the negative impact of the loss of preferential access for the textile and sugar sectors and to raise potential growth. Drawing on the findings of an IMF staff visit to Mauritius in August 2006, it also updates the most recent staff report on the 2005 Article IV consultation discussed by the Executive Board on December 2, 2005 (published as Country Report No. 06/209.

Notes: Assessment letters or statements may be prepared for member countries with Fund-supported programs; receiving Fund emergency assistance; with staff-monitored programs; or surveillance-only cases. They are typically produced for use by the country with multilateral or bilateral donors or creditors, in particular the World Bank and other International Financial Institutions.

August 30, 2006

Treatment of Exchange Rate Issues in Bilateral Surveillance - A Stocktaking

Description: Review the quality of the Fund staff’s analysis and policy advice on exchange rate issues. The Fund is sometimes criticized for not taking a sufficiently clear position on several exchange rate issues, ranging from the assessment of the level of exchange rates to the description of exchange rate policies, and their adequacy. Is this criticism valid, and in what respect? Answering these questions is critical as exchange rate issues are at the heart of the Fund’s surveillance mandate.

August 30, 2006

Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries

Description: This paper provides a semi-annual review of the status of financing for PRGFESF lending, HIPC-MDRI debt relief, and subsidization of emergency assistance to PRGF-eligible members. The last update was issued to the Executive Board in March 2006.

August 29, 2006

Cross-Country Experience with Restructuring of Sovereign Debt and Restoring Debt Sustainability

Description: The paper is organized as follows: Section II provides a cross-country overview of the economic conditions, including the composition of sovereign debt and its dynamics prevailing prior to the debt operations, and a discussion of the scope and outcomes—in terms of the debt relief provided by creditors—of the debt restructurings. Section III analyzes the debt profile, liquidity position, DSAs and accompanying stress tests, and an EWS to assess whether debt sustainability has been restored in each country case. Conclusions are set out in Section IV.

August 21, 2006

Initiative for Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI) - Status of Implementation

Description: This report reviews progress and issues in implementing the enhanced Heavily Indebted Poor Countries (HIPC) Initiative and reports on the implementation of the Multilateral Debt Relief Initiative (MDRI) by IDA, the IMF, and AfDF. It concludes that the volume of debt relief has increased significantly since the inception of the HIPC Initiative in 1996, thereby reducing HIPCs’ debt service burdens and allowing them to finance increased poverty reduction efforts. It also provides updated information on the costs of debt relief under the HIPC Initiative and the MDRI. Finally, it reviews the status of creditor participation and delivery of debt relief under the two initiatives, highlighting the challenges to increase the participation by non–Paris Club official bilateral and commercial creditors in the HIPC Initiative.

August 17, 2006

Initiative for Heavily Indebted Poor Countries - Issues Related to the Sunset Clause

Description: This paper responds to the Boards’ request to present a proposal addressing country eligibility under the HIPC Initiative sunset clause and discuss related issues. It builds on an informal note to the Boards which explored a number of options to deal with the sunset clause of the HIPC Initiative, which is scheduled to take effect at end-2006. It addresses the concerns raised by Directors in their discussion of the note in July 2006 and proposes that the sunset clause be allowed to take effect and the countries that are assessed to have met the income and indebtedness criteria based on end-2004 data be grandfathered. In response to concerns raised by Directors, it also discusses the issue of a permanent exit from the Initiative for countries wishing to do so.

August 16, 2006

Review of the Fund's Strategy on Overdue Financial Obligations

Description: This paper reviews progress under the Fund’s strengthened cooperative strategy on overdue financial obligations since the last review and proposes to extend the availability of the rights approach by another year, to end-August 2007. Section II reviews recent developments regarding overdue financial obligations to the Fund through end-June 2006. Progress under the Fund’s strategy on arrears and developments in the protracted arrears cases are discussed in Section III. A draft decision to extend the availability of the rights approach until end-August 2007 is provided in Section IV.