The IMF thanks the organizations and individuals who provided comments for the online consultation on the review of the IMF-World Bank debt sustainability framework for low income countries.The online consultation ended on September 16, 2016. If you have any questions, please send an e-mail to IMFConsultation@imf.org.
Consultation on the review of the IMF-World Bank debt sustainability framework for low income countries
August 2016
Background
The low income countries debt sustainability framework (LIC DSF) remains the cornerstone of assessing risks to debt sustainability in LICs. It has key operational implications for setting IMF and World Bank debt conditionality and for the allocation of concessional financing by some multilateral development institutions.
Established in 2005, the LIC DSF has been periodically reviewed (2006, 2009, 2012) as the financing landscape for LICs is constantly evolving, changing the nature of the risks facing them.
Against this background and in a context where many countries will be seeking funding to boost public investment, the 2016 review will be ambitious and will seek to better align the DSF with the evolving nature of risks facing these countries.
It is expected that the review will be presented to the Executive Boards of the IMF and World Bank in December 2016.
Questions for Consultation
The attached note presents staffs’ preliminary findings and consideration of reforms to inform the review and generate an open dialogue on the key topics for this reform to improve the LIC DSF.
While we welcome feedback on any aspect of LIC DSA, we are specifically interested in your feedback on the following issues:
Assessing the DSF performance
Do you agree with assessment made of LIC DSF performance?
Where has the LIC DSF performed well?
Where have there been gaps in the LIC DSF performance?
Are there aspects of the LIC DSF that make it too complex and which need simplification?
Improving the identification of risks
Do you see scope to look more closely at the realism of projections underlying the LIC DSF? If so, what aspects of the economic projections would it be particularly important to examine?
Have stress tests been well enough tailored to account for the diverse sources of risks facings LICs? If not, what would be the key risks that the DSF stress tests should aim to better assess?
Improving the determination of risk ratings
Do you think that there is merit in adding more granularity to the assessment of countries at moderate risk of debt distress? (e.g. by qualifying them as moderate/low or moderate/high)
How should the LIC DSF account for risks related to public debt?
Procedures and next steps
The IMF’s Communications Department (COM) will receive the comments and post a summary of them. Senders can request for their comments to be private. Any interested stakeholder can submit their input through the following channels:
When submitting your comments via email, please include the following information so that your comments are registered: name of sender; organization you represent (if any); country; phone number; and e-mail address.
Comments should be submitted no later than Friday September 16th.
The feedback received during this consultation will inform the final version of the LIC Debt Sustainability Framework Review, which the IMF and the World Bank plan to submit to their Executive Boards in December 2016.