Policy Papers
2006
March 24, 2006
Review of Low-Income Country Debt Sustainability Framework and Implications of the Multilateral Debt Relief Initiative (MDRI)
Description: This paper reviews the experience with the joint IMF-World Bank Debt Sustainability Framework for low-income countries, including cooperation between the staffs, and highlights the implications of the Multilateral Debt Relief Initiative.
March 23, 2006
Precautionary Arrangements - Purposes and Performance
Description: This paper compares experience under precautionary and non-precautionary programs over the period 1992-2005, with a view to answering two questions: Are there systematic differences between precautionary and non-precautionary programs in terms of policies, conditionality, or macroeconomic outcomes? And, if so, are these attributable to the nature of the arrangement or to the economic problems facing the member and the circumstances that led it to seek the Fund’s support? The paper finds that countries with weak initial macroeconomic performance tend to request drawing programs whereas those with stronger macroeconomic fundamentals, but facing economic uncertainties, favor precautionary programs. While significant differences exist in the behavior of key macroeconomic variables (output growth and inflation) at the outset of the programs, these differences tend to disappear over the following two to three years, and can be largely explained by the different initial conditions facing the member.
March 23, 2006
Fund-Supported Programs and Crisis Prevention
Description: This paper examines the theoretical foundations for, and empirical evidence of, Fund support in preventing capital account crises. At a theoretical level, Fund supported programs can lower the crisis probability in two ways. First, such programs provide the member with additional external reserves, making a run for the exit by private creditors less likely. Second, such programs induce and signal better economic policies, though this needs to be supported by conditionality.
March 22, 2006
Review of Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries
Description: Immediately following the effectiveness of the decisions on the Multilateral Debt Relief Initiative (MDRI) and the Exogenous Shocks Facility (ESF), debt relief totaling SDR 2.3 billion was delivered to 19 qualifying members, including 17 countries under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative and two non-HIPCs, on January 6, 2006, with financing from the HIPC Umbrella sub-accounts and the newly established MDRI Trusts.
March 21, 2006
Heavily Indebted Poor Countries Initiative - Statistical Update
Description: This document updates the information provided in the September 2005 Heavily Indebted Poor Countries (HIPC) Initiative – Status of Implementation report. It deals exclusively with the enhanced HIPC Initiative, and does not consider the implications of the Multilateral Debt Relief Initiative (MDRI).
March 20, 2006
Review of Ex Post Assessments and Issues Relating to the Policy on Longer-Term Program Engagement
Description: This review assesses the experience gained to date in carrying out the longer-term program engagement (LTPE) policy and preparing the ex post assessments (EPAs). It discusses the main characteristics of LTPE members and the findings of the EPAs, analyzes the role of the EPAs in the Fund’s due diligence, and provides recommendations for improving their effectiveness.
March 20, 2006
The Multilateral Debt Relief Initiative - Progress Report on Implementation
Description: Reports on the implementation of the MDRI since December 2005, in line with the request made by Directors that a progress report be presented to the Board before the 2006 Spring Meetings. Includes a focus on the implementation of the initiative in the Fund, and covers implementation in other multilateral institutions.
March 16, 2006
Inflation Targeting and the IMF
Description: Inflation targeting is becoming the monetary policy framework of choice in a growing number of emerging market and developing countries. This paper examines the experience of non-industrial inflation targeting countries to review the implications for the Fund’s approach to surveillance, technical assistance, and the design of conditionality in Fund-supported programs. For this examination, the paper uses macroeconomic data, technical assistance reports, and a new survey of central banks in selected emerging markets.
March 2, 2006
Democratic Republic of Congo - Evaluation of the Technical Assistance Program (May 2001 to April 2004) and of Areas for Further Assistance to the Central Bank of Congo
Description: This report discusses the results of the evaluation of the MFD technical assistance program with the BCC. The evaluation covered the period May 2001-April 2004 and focused on foreign exchange and monetary operations, internal audit, accounting, banking supervision. It was conducted during December 14-17, 2006 in conjunction with an MFD advisory mission. The mission examined the implementation of this program by two (2) resident experts (a general advisor to the Governor and a resident advisor responsible for internal audit), three (3) multitopic missions, and ten (10) short-term expert visits.1
February 17, 2006
The Fund's Medium-Term Income - Outlook and Options
Description: This paper puts forward a number of measures which, if implemented, would eliminate the income gap in FY07. However, these measure still leave a large financing gap moving forward. Therefore, further work is needed to examine mechanisms for financing the Fund’s operations in the medium-term in a manner that ensures that the Fund has a sound financial basis to operate without relying on sharp growth in lending.