Policy Papers
2021
December 1, 2021
Issues in Restructuring of Sovereign Domestic Debt
Description: As emerging and developing economies accumulate more domestic sovereign debt, it is likely to play a larger role in the resolution of future sovereign debt crises. This paper analyzes when and how to restructure sovereign domestic debt in unsustainable debt cases while minimizing economic and financial disruptions. Key to determining whether or not domestic debt should be part of a sovereign restructuring is weighing the benefits of the lower debt burden against the fiscal and broader economic costs of achieving that debt relief. The fiscal costs may have to be incurred in the context of restructuring because of the need to maintain financial stability, to ensure the functioning of the central bank, or to replenish pension savings. A sovereign domestic debt restructuring should be designed to anticipate, minimize, and manage its impact on the domestic economy and financial system. Casting the net wide across claims can help boost participation in the restructuring by lowering the relief sought from each creditor group. A strategy that engages creditors constructively, and as transparently as possible, that relies on market-based incentives, and that presents the exchange as part of a consistent macroeconomic plan typically works best.
November 30, 2021
Eleventh Periodic Monitoring Report on The Status of Management Implementation Plans In Response To Board-Endorsed IEO Recommendations
Description: The Eleventh Periodic Monitoring Report (PMR) on the Status of Management Implementation Plans (MIPs) in Response to Board-Endorsed Independent Evaluation Office (IEO) Recommendations assessed the progress made over the past 18 months on 72 actions contained in 10 MIPs. Significant progress has been made with the implementation of management actions, despite challenges that have arisen from the ongoing COVID-19 pandemic. Overall, 29 of the 72 actions for which implementation progress is assessed in the Eleventh PMR were deemed to have been satisfactorily implemented, while 35 remain open, and eight actions are being reformulated in line with the Board-approved triage framework for long-standing open actions. Despite the effect of reprioritization to make space for the urgent needs of the membership resulting from the pandemic, the pace of implementation observed in the Eleventh PMR, with the 29 actions closed, significantly exceeds the previous trend of about 15 implemented actions per year. Of the 35 open actions, 16 are more than one year past their implementation due dates. The reprioritization of activities owing to the COVID-19 pandemic and resource constraints on account of several years of flat budgets led to delays in the implementation of several actions, partly because of the postponement of important reviews.
November 24, 2021
The Fund's Income Position for FY 2021 - Actual Outcome
Description: This paper reports on the Fund’s income position for FY 2021 following the closing of the Fund’s accounts for the financial year and completion of the external audit. Overall FY 2021 net income amounted to SDR 4.8 billion or SDR 0.7 billion higher than estimated in April, mainly reflecting a larger than anticipated gain reported under IAS 19 (the accounting standard for employee benefits) and endowment returns exceeding earlier projections.
October 29, 2021
FY2021—Output Cost Estimates and Budget Outturn
Description: The paper presents highlights from the FY 2021 budget, followed by a discussion of outputs based on the Fund Thematic Categories and of inputs.
October 28, 2021
Annual Update on SDR Trading Operations
Description: This paper provides an update on the status of the SDR trading market and operations. In over three decades, SDRs have been exchanged for freely usable currencies in transactions by agreement primarily through the Voluntary Trading Arrangements (VTAs). The VTAs are bilateral arrangements between the Fund and SDR participants or prescribed holders, in which the VTA members agree to buy and sell SDRs within certain limits. A fraction of transactions by agreement—sales or acquisitions of SDRs—were arranged directly between parties.
October 14, 2021
Progress Report to The IMFC on The Activities of The Independent Evaluation Office of The IMF
Description: Since the 2021 Spring Meetings, the IEO has concluded its evaluation on Growth and Adjustment in IMF-Supported Programs and has made significant headway in three other evaluations. Good progress has also been made in following up on past IEO evaluations. However, it was disappointing that the recent implementation plan aimed at strengthening IMF collaboration with the World Bank on climate and other macro-structural issues did not include a commitment to one key Board-endorsed recommendation, specifically to develop a concrete framework for Bank-Fund collaboration on climate issues.
October 13, 2021
The Managing Director's Global Policy Agenda Annual Meetings 2021: Vaccinate, Calibrate, Accelerate
Description: Urgent policy action is needed to control the pandemic, limit scarring, and transform the global economy. The global recovery continues, thanks to unprecedented monetary, fiscal, and financial support over the past year. However, pandemic-induced divergences are persisting, driven by stark differences in access to vaccines and policy space. The Fund will continue to support the membership deal with these ongoing and new challenges. Our priorities are to: vaccinate the world population to stem the spread of pandemic; calibrate policies to limit scarring, support the recovery, and counter growing divergences within and between countries; and accelerate the transformation of the global economy to achieve a more inclusive, greener, and digital recovery.
October 12, 2021
Implementation Plan in Response To The Board-Endorsed Recommendations From The IEO Evaluation Report On IMF Collaboration With The World Bank On Macro-Structural Issues
Description: This Management Implementation Plan (MIP) focuses on further strengthening collaboration between the IMF and the World Bank on strategic macro-structural issues. In macro-structural areas, the Fund and the Bank have complementary roles. The Bank provides structural and development-focused assessments and recommendations, while the Fund focuses on integrating macro relevant structural issues in the macroeconomic frameworks and policies. In some areas, including financial sector and public debt sustainability assessments, Bank-Fund collaboration modalities are well established. In other areas, such as climate change, Fund staff is developing comprehensive strategies on how the IMF can step up its engagement and collaboration with external partners, including with the World Bank, to better serve its membership. This MIP proposes concrete steps aimed at further enhancing: • Bank-Fund collaboration on strategic macro-structural issues, with an initial focus on the climate workstream; • Fund staff’s incentives for collaboration with external partners, including the Bank • Access to and exchange of information and knowledge between Bank and Fund staff.
October 8, 2021
Catastrophe Containment and Relief Trust—Fourth Tranche of Debt Service Relief in The Context of The Covid-19 Pandemic and Approval of Additional Beneficiary Member Countries
Description: The paper provides brief updates for each CCRT-eligible country on its policy responses to the pandemic and on staff’s assessments of these policies, the use of resources freed up by debt service relief, and the implementation of governance safeguards commitments. The paper also provides an update on the financial situation of the CCRT. The generous support from 17 donor countries and the EU has mobilized SDR 609 million in new pledges since the onset of the pandemic.
September 16, 2021
Joint IMF-WBG Staff Note: DSSI Fiscal Monitoring Update
Description: The COVID-19 pandemic put significant pressures on fiscal accounts during 2020 through a contraction of revenues and increased spending needs to tackle the pandemic and its economic fallout. In response to these pressures, the countries benefitting from the Debt Service Suspension Initiative (DSSI) have faced difficult choices to reprioritize spending, especially capital spending, even as they allowed higher overall fiscal deficits. This note summarizes the findings from the update of the fiscal monitoring system for the COVID-19 Debt Service Suspension Initiative (DSSI). The DSSI was endorsed by the G20 Finance Ministers on April 15, 2020 and extended twice in October 2020 (until end-June 2021) and April 2021 (until end-2021). During May–December 2020 (the first phase), 43 countries participated, and 42 countries have formally requested their participation in the initiative during January–June 2021 (the second phase, as of July 30, 2021).