Policy Papers
2012
August 24, 2012
Macroeconomic Policy Frameworks for Resource-Rich Developing Countries
Description: This paper aims to widen the prism through which Fund policy analysis is conducted for resource-rich developing countries (RRDCs). While all resource-rich economies face resource revenue exhaustibility and volatility, RRDCs face additional challenges, including lack of access to international capital markets and domestic capital scarcity. Resource exhaustibility gives rise to inter-temporal decisions of how much of the resource wealth to consume and how much to save, and revenue volatility calls for appropriate fiscal rules and precautionary savings. Under certain conditions, it would be optimal for a significant share of a RRDC’s savings to be in domestic real assets (e.g., investment in domestic infrastructure), though absorptive capacity constraints need to be tackled to promote efficient spending and short-run policies are needed to preserve macroeconomic stability. The objective of this paper is to develop new macro-fiscal frameworks and policy analysis tools for RRDCs that could enhance Fund policy advice.
August 24, 2012
Macroeconomic Policy Frameworks for Resource-Rich Developing Countries - Background Paper 1
Description: This paper provides deeper insights on a few themes with regard to the experience with macroeconomic management in resource-rich developing countries (RRDCs). First, some stylized facts on the performance of these economies relative to their non-resource peers are provided. Second, the experience of Fund engagement in these economies with respect to surveillance, programs, and technical assistance is assessed. Third, the experience of selected countries with good practices in the management of the natural resource wealth is presented. Fourth, the experience of IMF advice in helping RRDCs set up resource funds is discussed. Finally, the main themes and messages from the IMF staff consultation with external stakeholders (CSOs, policy makers, academics) are presented.
August 22, 2012
Macrofinancial Stress Testing - Principles and Practices
Description: The recent financial crisis drew unprecedented attention to the stress testing of financial institutions. On one hand, stress tests were criticized for having missed many of the vulnerabilities that led to the crisis. On the other, after the onset of the crisis, they were given a new role as crisis management tools to guide bank recapitalization and help restore confidence. This spurred an intense debate on the models, underlying assumptions, and uses of stress tests. Current stress testing practices, however, are not based on a systematic and comprehensive set of principles but have emerged from trial-and-error and often reflect constraints in human, technical, and data capabilities.
August 20, 2012
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. The level and structure of arrears to the Fund has remained broadly unchanged since the last review. Total arrears to the Fund at end-June 2012 amounted to SDR 1,302.3 million, a decline of SDR 1.6 million from the end-June 2011 level. While payments to the Fund by Sudan and Zimbabwe exceeded new obligations falling due, Somalia’s arrears increased further. All overdue obligations to the Fund at end-June 2012 were due to the protracted arrears cases. Three members remain in protracted arrears to the Fund—Somalia, Sudan, and Zimbabwe. Sudan accounted for the bulk of the arrears to the Fund (76 percent).
August 16, 2012
Fiscal Regimes for Extractive Industries—Design and Implementation
Description:
Better designed and implemented fiscal regimes for oil, gas, and mining can make a substantial contribution to the revenue needs of many developing countries while ensuring an attractive return for investors, according to a new policy paper from the International Monetary Fund. Revenues from extractive industries (EIs) have major macroeconomic implications. The EIs account for over half of government revenues in many petroleum-rich countries, and for over 20 percent in mining countries. About one-third of IMF member countries find (or could find) resource revenues “macro-critical” – especially with large numbers of recent new discoveries and planned oil, gas, and mining developments.
IMF policy advice and technical assistance in the field has massively expanded in recent years – driven by demand from member countries and supported by increased donor finance. The paper sets out the analytical framework underpinning, and key elements of, the country-specific advice given.
Also available in Arabic: النظم المالية العامة للصناعات الاستخراجية: التصميم والتطبيق
Also available in French: Régimes fiscaux des industries extractives: conception et application
Also available in Spanish: Regímenes fiscales de las industrias extractivas: Diseño y aplicación
August 7, 2012
Fiscal Transparency, Accountability, and Risk
Description: This paper surveys that state of fiscal transparency in the wake of the current crisis and looks at what can be done to improve it. It examines the relationship between fiscal transparency and fiscal outcomes; reviews progress in promoting greater fiscal transparency over the past decade; considers the lessons of the recent crisis for existing fiscal transparency standards, practices, and monitoring arrangements; and makes a series of recommendations for renewing the global fiscal transparency effort in the wake of the crisis.
August 2, 2012
Eligibility to Use the Fund's Facilities for Concessional Financing - Republic of South Sudan
Description: Having become a Fund member in April 2012, South Sudan can now be considered for PRGT eligibility. In February 2012, the Executive Board reviewed the framework for eligibility to use the Fund’s concessional financing facilities and the list of PRGT-eligible countries. During that review, Directors agreed to maintain the PRGT eligibility framework with a modification of the population threshold used to define small countries. Directors also decided to keep the list of PRGT-eligible countries unchanged. Under the framework to assess PRGT eligibility, decisions on entry onto the list of PRGT-eligible countries can be adopted in the period between reviews. As noted in the staff paper for the 2012 review of PRGT eligibility, given the available data, it was expected that South Sudan would be proposed for entry onto the PRGT-eligibility list after it had joined the Fund. Accordingly, this paper proposes that South Sudan now be added to the list of PRGT-eligible countries.
August 2, 2012
Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas—Status of Acceptances and Consents
Description:
This status report reviews progress toward implementation of the 2010 Governance and Quota Reforms. It updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment” or “Seventh Amendment”) as set out in the Board of Governors Resolution No. 66-2.
For the proposed quota increases under the 14th General Review of Quotas to become effective, members having not less than 70 percent of the total of quotas on November 5, 2010 must consent to the increases in their quotas and the proposed Board Reform Amendment must have entered into force. The proposed Board Reform Amendment enters into force once the Fund certifies that three-fifths of the members (i.e., currently 113 members) representing 85 percent of the total voting power have accepted the proposed amendment.
July 30, 2012
List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months
Description: The following table lists the IMF members for which the Article IV consultation or the mandatory financial stability assessment has been delayed by more than 18 months. The delay is counted past the scheduled expected date, plus applicable grace period.
July 26, 2012
Review of Facilities for Low-Income Countries
Description: The 2009 reforms have broadly achieved their objective of closing gaps and creating a streamlined architecture of facilities that is better tailored to the diverse needs of LICs. Supported by the financing package to boost the PRGT’s lending capacity for 2009–14 and the accompanying doubling of access, the Fund was able to mount an effective response to LICs’ needs during the global financial crisis.