I welcome the report of the Independent Evaluation Office (IEO) on the IMF and Fragile States. The report recognizes that the Fund has made important contributions in restoring macroeconomic stability, building core institutions, and catalyzing donor support across a diverse range of countries in fragile and conflict situations. The IEO’s analysis and findings provide a thorough stock-taking and resonate with staff. Accordingly, I broadly support the IEO’s recommendations to make the Fund’s engagement with countries in fragile and conflict situations more impactful.
The thrust of the report’s recommendations to strengthen the institutional framework for self-evaluation, adapt it over time to changing circumstances, and better disseminate lessons from self-evaluation are well taken. I believe, however, that there is considerable scope to address these recommendations by refining and building on existing processes and initiatives already underway rather than by introducing substantial new architecture. I see limited value added relative to the costs in following through with the report’s two other key recommendations; namely, to conduct self-assessment for every IMF-supported program and to set out plans ex ante to self-evaluate every policy and thematic review.
The report and its recommendations should also be careful to not impinge upon areas that are still unfolding, such as the RST, crisis response, and CD provision, to avoid unnecessary duplication of efforts and ensure that a coherent and evenhanded framework is in place. I offer qualified and/or partial support to the recommendations, as discussed below, to serve better our SDS members.
The IEO evaluation contains a wealth of analysis and background material that will be invaluable as staff embarks on the preparation of the 2023 CD Strategy Review. The overall assessment is very positive, highlighting the achievements authorities have made with the help of Fund CD and the value they continue to place on this area of Fund work. The report also acknowledges the significant strides that have been made in improving governance and management of CD in recent years.
This evaluation assesses the IMF’s work on countries in fragile and conflict-affected situations (FCS), addressing both (i) its engagement through surveillance, lending, and capacity development and (ii) the frameworks and procedures for its engagement. It finds that the IMF has provided unique and essential services to FCS to restore macroeconomic stability and rebuild core macroeconomic institutions as prerequisites for state building, playing a role in which no other institution can take its place. In this critical role, it is broadly acknowledged to have had a high impact. While the IMF has provided relatively little direct financing, it has catalyzed donor support through its assessment of a country’s economic policies and prospects. Notwithstanding this positive assessment, the IMF’s overall approach to its FCS work seems to have been conflicted. Not only has it failed consistently to make hard choices necessary to achieve full impact from its engagement in countries where success requires patient and dedicated attention over the long haul, but past efforts have not been sufficiently bold or adequately sustained, and the staff has tended to revert to treating fragile states using IMF-wide norms, rather than as countries needing special attention. The report proposes six recommendations to improve the effectiveness of the IMF’s FCS work: (i) to issue a statement of high-level commitment to FCS work for IMFC endorsement; (ii) to create an effective institutional mechanism with the mandate and authority to coordinate and champion such work; (iii) to develop comprehensive strategies for individual FCS; (iv) to adapt its lending toolkit to deliver more sustained financial support to FCS; (v) to take practical steps to increase the impact of its capacity development support to FCS; and (vi) to take steps to incentivize high-quality and experienced staff to work on individual FCS and find pragmatic ways of increasing field presence in high risk locations.
A recovery is underway, but the economic fallout from the global pandemic could be with us for years to come. With the crisis exacerbating prepandemic vulnerabilities, country prospects are diverging. Nearly half of emerging market and developing economies and some middle-income countries are now at risk of falling further behind, undoing much of the progress made toward achieving the UN Sustainable Development Goals.
This Work Program (WP) translates the strategic directions and policy priorities laid out in the Fall 2017 Global Policy Agenda (GPA) and the International Monetary and Financial Committee (IMFC) Communiqué into an Executive Board agenda for the next twelve months, with a focus on the next six months. The Managing Director’s GPA, fully supported by the IMFC, called on members to take advantage of the window of opportunity from the more favorable conjuncture to tackle key policy challenges by undertaking well-sequenced reforms to increase productivity, reduce policy uncertainty and future risks, and improve governance. Reforms should also aim to harness the benefits of technology and economic integration and ensure that their benefits are widely shared. Tackling challenges to the global economy continues to require cooperation and joint action across the membership.
This Work Program (WP) translates the policy priorities and strategic directions laid out in the Spring 2017 Global Policy Agenda (GPA) and the International Monetary and Financial Committee (IMFC) Communiqué into an Executive Board agenda for the next twelve months. The Managing Director’s GPA, welcomed by the IMFC, called on members to continue using supportive policies based on a three-pronged approach to sustain the recovery, to work together within the multilateral framework toward strong and more balanced growth, and to provide economic opportunities for all. It outlined how the Fund would support the membership by promoting efforts to sustain the recovery, lift productivity and increase resilience, and by promoting sustainable policies toward a more inclusive global economy, while facilitating multilateral solutions to global challenges. Where the work extends beyond traditional areas, the WP will focus on macro-relevant issues that are systemically important or relevant for many countries and amenable to change through economic policies.
Since the October 2017 report to the IMFC, the IEO has completed an evaluation of the IMF’s work in fragile states and an update of its 2007 evaluation of IMF exchange rate policy advice. The office continued work on two evaluations, on IMF financial surveillance and on IMF advice on unconventional monetary policies, as well as an update of the 2008 evaluation of structural conditionality. It also launched an update of IEO’s 2008 Evaluation of IMF Governance. The IEO welcomes recent steps taken by the IMF to follow through on Board-endorsed recommendations of its 2016–17 evaluations.
