Policy Papers

April 13, 2009

Modifications of the Fund's Conditionality Framework - Application to the Policy Support Instrument

Description: In connection with its recent review of the GRA Lending Toolkit and Conditionality—Reform Proposals, the Executive Board decided that the Fund would move to a review-based approach to monitor the implementation of structural reforms in the context of Fund-supported programs, including under PRGF or ESF arrangements.

April 10, 2009

Modification of Access Policies for the Poverty Reduction and Growth Facility and the Exogenous Shocks Facility

Description: The paper proposes a doubling of access limits on concessional lending to ensure that the Fund can respond effectively to the needs of low-income countries (LICs) severely affected by the current world economic downturn. Pending adoption of broader reforms to the LIC facilities architecture, higher access limits under the Poverty Reduction and Growth Facility (PRGF) and Exogenous Shocks Facility-High-Access Component (ESF-HAC) would give the Fund greater flexibility in assisting LICs, which have become more exposed to global volatility over time. A doubling of access limits would restore them to their 1998 levels in percent of GDP and would be consistent with the approach taken in determining new access limits for General Resources Account (GRA) resources. It would also be in line with the projected doubling of medium-term demand for concessional resources.

April 9, 2009

Key Developments in IMF Policy Work--October 12, 2008-April 22, 2009

Description: This paper summarizes key developments in the Fund’s policy work since the 2008 Annual Meetings. Table 1 presents key conclusions of policy initiatives. Table 2 provides a progress report on implementation of the Fund’s surveillance priorities.

April 7, 2009

Staff Operational Guidelines on Dissemination of Technical Assistance Information

Description: TA information should be disseminated more widely. The more active sharing of TA information with donors and other TA providers will improve coordination, exploit synergies, and enable the Fund to prioritize and leverage its limited TA resources, thereby fulfilling key objectives under the Paris Declaration on Aid Effectiveness. Moreover, especially from the perspective of their own accountability to their governments and legislators, donors to the Fund’s TA program have a legitimate interest in receiving information on TA that is financed by them. For TA recipient countries, the wider dissemination of TA information among different government agencies will strengthen ownership and facilitate the more effective implementation of TA recommendations. More generally, through publication, the membership and the public at large will benefit from a better understanding of best practices, and the Fund’s experiences in the provision of TA.

March 27, 2009

Framework Administered Account for Selected Fund Activities - Central America, Panama, and the Dominican Republic Technical Assistance Center (CAPTAC-DR) Subaccount

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 a subaccount within the SFA. The subaccount for the Central America, Panama, and the Dominican Republic Technical Assistance Center (CAPTAC-DR) would be the first one established under the SFA. This paper requests Executive Board approval to establish the CAPTAC-DR subaccount (the “Subaccount”) under the terms of the SFA Instrument.

March 27, 2009

Framework Administered Account for Selected Fund Activities- Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Subaccount

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 a subaccount within the SFA. The subaccount for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Topical Trust Fund (“TTF”) would be the second one under the SFA. This paper requests Executive Board approval to establish the AML/CFT TTF subaccount (the “Subaccount”) under the terms of the SFA Instrument.

March 26, 2009

The FY2010-FY2012 Medium-Term Administrative, Restructuring, and Capital Budgets

Description: This paper presents for Executive Board approval proposals for the FY 10–12 medium-term administrative budget, and the FY 10 capital budget in the context of the FY 10–12 capital plan.

It also proposes to carry forward up to six percent of the unspent resources from the FY 09 administrative budget to help finance increased costs associated with the global financial crisis.

March 16, 2009

Policy for Country Contributions for Capacity Building-Implementation of Policy

Description: This paper provides an update on the implementation of the strengthened country contribution policy for capacity-building (the “Charging Policy”) and informs the Executive Board of management’s intentions to delay the date of effectiveness of some features of the Charging Policy.

March 13, 2009

GRA Lending Toolkit and Conditionality-Reform Proposals

Description: The Executive Board of the International Monetary Fund (IMF) considered a series of papers to reform the Fund's nonconcessional lending framework. This culminated in the approval of a major overhaul of the IMF’s lending framework, including the creation of a new Flexible Credit Line (FCL). The changes to the IMF’s lending framework which are described in GRA Lending Toolkit and Conditionality—Reform Proposalsand GRA Lending Toolkit and Conditionality—Reform Proposals—Revised Proposed Decisions include:
• modernizing IMF conditionality for all borrowers,
• introducing a new Flexible Credit Line,
• enhancing the flexibility of the Fund’s traditional stand-by arrangement,
• doubling normal access limits for nonconessional resources,
• simplifying cost and maturity structures, and
• eliminating certain seldom-used facilities.
The series of papers are: Review of Fund Facilities—Analytical Basis for Fund Lending and Reform Options, Conditionality in fund-Supported Programs—Purposes, Modalities and Options for Reform, Charges and Maturities and Proposals for Reform, Supplement 1 and Supplement 2, Review of Fund Facilities—Analytical Basis for Fund Lending and Reform Options, and Review of Limits on Access to Financing in the Credit Tranches and Under the Extended Fund Facility, and Overall Access Limits Under the General Resources Account provide the background on the earlier discussion of reforms in each of these areas.

March 6, 2009

The State of Public Finances-Outlook and Medium-Term Policies After the 2008 Crisis

Description: This paper quantifies the fiscal implications of the crisis, assesses the status of fiscal balances after the shock, and discusses the strategy to ensure fiscal solvency.

The focus is primarily on advanced and emerging economies, complementing the Board paper on the effect of the crisis on low-income countries. While, for practical purposes, some of the empirical evidence presented refers only to the G-20, information is provided also for other countries, and the analysis also applies to them. A Companion Paper provides supporting material. As a general caveat, the estimates presented are subject to a significant degree of uncertainty, and developments should be closely monitored as new information becomes available.

Notes: Companion Paper—The State of Public Finances: Outlook and Medium-Term Policies After the 2008 Crisis

The Size of the Fiscal Expansion: An Analysis for the Largest Countries