Press Release: The IMF Executive Board Approves Post Program Monitoring for Individual Member Countries
May 25, 2005
Extension of Post Program Monitoring to Cover the Use of PRGF Resources
March 4, 2005
Poverty Reduction Strategy Papers
The Poverty Reduction and Growth Facility (PRGF)--A Factsheet
Poverty Reduction Strategy Papers (PRSP)--A Factsheet
Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative--A Factsheet
Post-Program Monitoring—Proposed Decisions
Prepared by the Policy Development and Review and Legal Departments
(in consultation with other Departments)
May 11, 2005
1. The Executive Board adopted a decision on March 14, 2005 to expand Post-Program Monitoring (PPM), inter alia, to cover the use of PRGF resources.1 Under the new framework, the Managing Director will report to the Executive Board in all cases where a member has outstanding credit from the GRA, or from the PRGF Trust, or a combination thereof, in excess of 100 percent of quota. For those cases above the threshold where, in his view, PPM is not warranted, the Managing Director will inform the Executive Board that PPM is not recommended and no decision will be proposed. In cases, either above or below the threshold, where the Managing Director is recommending PPM, an Executive Board decision calling upon the member to engage in PPM with the Fund will be proposed. This paper sets out the Managing Director's recommendations in implementing the new framework, including proposed decisions for those members where PPM is recommended. As indicated in paragraph 6 of SM/05/86, the proposed decision includes those members with whom PPM has already been taking place and where it is recommended that it continue under the new framework.
2. PPM is already taking place with Indonesia, Jordan, and the Philippines. For Indonesia and Jordan, Fund credit outstanding is expected to remain above 100 percent of quota until August 2008 and December 2005, respectively, and the Managing Director recommends continuation of PPM.2 With respect to the Philippines (whose outstanding credit is below 100 percent of quota), continuation is recommended for one additional year in light of the fiscal position.
3. Six other members have outstanding credit in excess of 100 percent of quota as of March 31, 2005 and are not at present under a Fund arrangement: Armenia, Brazil, Cameroon, Madagascar, Pakistan, and Turkey (see Table 1). The Managing Director does not recommend PPM for Armenia, Madagascar, and Turkey because successor arrangements are expected to be in place within six months. For Cameroon, PPM is not recommended because a Staff-Monitored Program (SMP) was recently put in place for the period through end-2005. Regarding Pakistan, and as was indicated by management and supported by most Directors in December, PPM is not recommended because of the strength of its policies and external position and the brief period during which outstanding obligation would remain above the threshold. The Stand-By Arrangement for Brazil expired on March 31, 2005 with outstanding credit of 506 percent of quota. Fund credit outstanding is expected to remain above 100 percent of quota through May 2007. As no successor arrangement is envisaged, the Managing Director is recommending PPM for Brazil.
The following draft decisions, which may be adopted by a majority of the votes cast, are proposed for adoption by the Executive Board.
Brazil, Indonesia, Jordan, and the Philippines are expected to engage in post-program monitoring with the Fund in accordance with Decision No. 13454-(05/26); in the case of the Philippines, this expectation applies through April 30, 2006.
1Extension of Post-Program Monitoring to Cover the Use of PRGF Resources (SM/05/86, 3/14/2005).
2PPM will normally cease when the member's outstanding credit falls below the threshold of 100 percent of quota.