Policy Papers
2011
April 13, 2011
Statement by the Managing Director to the International Monetary and Financial Committee on the Global Economy and Financial Markets
Description: The recovery is solidifying. However, old policy challenges still need to be fully addressed and new challenges are arising, especially on account of rising commodities prices. In many advanced economies the handoff from public to private demand is proceeding. But unemployment remains high and weak public balance sheets and still vulnerable financial sectors mean that the recovery is subject to downside risks. In many emerging market economies, overheating and financial imbalances present growing policy concerns. Monetary policy should stay accommodative in advanced economies, but needs further tightening in a number of emerging and developing economies to rein in inflationary pressure and rapid credit growth. Additionally, in emerging surplus economies, real exchange rate appreciation is needed to help contain inflation and support global demand rebalancing. In most economies, the time has come to begin fiscal adjustment by implementing measures to steadily reduce debt ratios toward more prudent levels. Moreover, financial sector repair and reform need to accelerate. Absent major progress on all these fronts, the recovery will remain vulnerable and job creation will continue to fall short of requirements in many parts of the world.
April 13, 2011
Statement by the Managing Director to the International Monetary and Financial Committee on the Fund’s Policy Agenda
Description: Since the IMFC last met, the global economic recovery has gathered strength and financial conditions have kept improving; but members continue to face multiple and diverse challenges—slow growth, high unemployment, and fiscal and financial vulnerabilities in many advanced economies; and rapid credit growth and overheating pressures in some emerging markets. Rising food and energy prices have returned, further constraining policies. Meanwhile, global imbalances show no sign of abating, and volatility in cross border financial flows and exchange rates remains high. The outlook has been further challenged recently by unpredictable shocks: the tragic events in Japan and developments across the Middle East and North Africa. The latter also contain an important lesson for policy makers, namely that the quality of growth—especially its ability to combat unacceptably high unemployment and inequality—is critical to the sustainability of growth.
April 8, 2011
Progress Report on the Activities of the Independent Evaluation Office
Description: Since its last report in October 2010, the Independent Evaluation Office (IEO) has completed its evaluation of IMF Performance in the Run-Up to the Financial and Economic Crisis: IMF Surveillance in 2004–07 and has begun work on two new evaluations. The IEO expects to submit its evaluation of Research at the IMF: Relevance and Utilization to the Executive Board shortly.
April 8, 2011
Provisional Agenda for the Twenty-Third Meeting of the International Monetary and Financial Committee
Description: A joint meeting of IMFC and G-20 Members will be held on Friday, April 15 on The Governance of Multilateral Surveillance from 7:00 p.m. until 8:30 p.m. in HQ1 Meeting Halls A & B.
April 7, 2011
Review of the Fund's Income Position for FY 2011 and FY 2012
Description: This paper reviews the Fund’s income position for FY 2011 and FY 2012. The paper updates projections provided at the FY 2011 midyear review and sets out related proposed decisions for the current and next financial years. A companion paper provides an update on the consolidated medium-term income and expenditure framework.
April 1, 2011
Update on the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries
Description: Significant progress has been made towards meeting the fund-raising targets for the PRGT, but additional resources will be needed to complete the 2009 LIC financing package. So far, fourteen members have pledged about SDR 9.8 billion in new loan resources, compared to the target of SDR 10.8 billion (including provision for a liquidity buffer to facilitate encashment). New borrowing agreements totaling SDR 7.7 billion have been signed with ten lenders. Six of these agreements provide loan resources in SDRs, and five creditors also participated in the voluntary encashment regime.
March 31, 2011
Statement by the Managing Director on Updating the Strategic Directions in the Medium-Term Budget - Executive Board Meeting - April 20, 2011
Description: In early 2008, the Fund launched ambitious reforms to enhance its ability to deliver the economic and financial analysis, member support, and multilateral collaboration essential to promote global stability. The reform agenda called for: (i) stronger surveillance through sharpened multilateral and regional tools, analysis of macro-financial and international linkages, and greater use of cross-country work in bilateral surveillance; (ii) sharper policy advice for low-income countries, with emphasis on areas of core Fund expertise; (iii) improved capacity building efforts to be augmented by more external fund-raising; and (iv) a modernized governance structure to enhance the Fund’s legitimacy and better reflect its role as a universal institution capable of facilitating global cooperation and action. With the onset of the global financial crisis later in 2008, the Fund also committed to reforming its lending toolkit, including overhauling its concessional support instruments, to ensure that its facilities fully met members’ evolving needs.
March 30, 2011
FY2012-FY2014 Medium-Term Budget
Description: With the global financial landscape still unsettled, temporary spending looks set to remain at current levels over the next few years. Lending commitments and crisis-management activities have surged since the onset of the crisis: by the end of December 2010, there were 60 program and financial arrangements in place, compared with 40 at the time of the Fund’s restructuring in early 2008. The higher lending has generated a sharp but temporary rise in income, but has also required an increase in temporary spending. This expenditure will unwind over time, but only marginally over the FY 12–14 MTB period.
March 24, 2011
Framework Administered Account for Selected Fund Activities - Denmark Subaccount for Selected Fund Activities
Description: In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund Activities (the “SFA Instrument”). The financing of activities under the terms of the SFA Instrument is implemented through the establishment and operation of subaccounts within the SFA. This paper requests Executive Board approval to establish the Denmark Subaccount for Selected Fund Activities (the “Subaccount”) under the terms of the SFA Instrument.
March 23, 2011
Strengthening the International Monetary System - Taking Stock and Looking Ahead
Description:
The current IMS has survived for over forty years, underpinning strong growth in GDP and in the international exchange of goods and capital, one of its core objectives. As a result, interdependence among the world’s economies has grown dramatically, making the existence of a sound system ever more important.
At the same time, the system has exhibited many symptoms of instability—frequent crises, persistent current account imbalances and exchange rate misalignments, volatile capital flows and currencies, and unprecedentedly large reserve accumulation.
These symptoms have come to a head since the 2008 crisis and brought renewed international momentum to the idea of attempting to reform the IMS. Yet the debate so far suggests little consensus on the underlying problems, let alone on the solutions.
This paper identifies four root causes to these problems: inadequate global adjustment mechanisms to prevent inconsistent or imprudent policies among systemic countries; lack a comprehensive oversight framework for growing cross-border capital flows, covering both source and recipient countries; inadequate systemic liquidity provision mechanisms; and structural challenges in the supply of safe assets.