Press Release No. 02/9

Press Release: IMF's Independent Evaluation Office Announces Evaluation of Prolonged Use of IMF Financial Resources

February 11, 2002

Mr. Montek Singh Ahluwalia, Director of the International Monetary Fund's Independent Evaluation Office (IEO), today announced the initial outline of the evaluation of repeat use of IMF resources:

Prolonged use of IMF resources is neither a recent nor a rare phenomenon, regardless of how it is defined, according to the IEO's terms of reference for the evaluation. The evaluation will assess what, if anything, should be done to limit the prevalence of prolonged use of IMF resources. By examining the IMF's role in a group of countries that have had especially intractable adjustment problems, the evaluation should also cast light on broader questions of program design and the appropriate balance between lending arrangements and surveillance activities.

The draft issues paper/terms of reference, which sets out the key questions and proposed methodologies for the evaluation, has been posted on the IEO's website (http://www.imf.org/external/np/ieo/index.htm). Comments from external observers are invited by March 6. A final version of the issues paper/terms of reference will be posted on the IEO's website by mid-March. Any written submissions that external observers would like to make on the topics and questions raised in the final draft of the issues paper/terms of reference are invited by May 3.

As part of the evaluation, detailed case studies of three country cases (Pakistan, Philippines, and Senegal) will be undertaken, in addition to an empirical analysis of a broader range of prolonged users. These three countries, which have been among the most prolonged users of IMF resources over the last 30 years, also represent a mix of users of concessional and nonconcessional facilities. The case studies will involve a detailed review of IMF internal documents, as well as country visits to seek the views of the authorities and a wide range of other stakeholders. The country visits are expected to take place in late March or early April.

In assessing ways to limit ineffective prolonged use, the evaluation will examine issues involving the design of IMF-supported programs, internal governance within the Fund, and the design and use of lending facilities.

The evaluation of prolonged use will be one of the first three projects by the IEO that are to be completed in FY 2003.¹ The other two projects are (i) an examination of fiscal adjustment in IMF-supported programs in a select group of low- and middle-income countries; and (ii) an evaluation of the role of the IMF in three recent capital account crisis cases (Brazil, Indonesia, and Korea). A short-list of 12 other projects, from which the projects to be undertaken in FY 2004 and FY 2005 will be chosen has also been established. The full list can be seen on the IEO's website (http://www.imf.org/external/np/ieo/index.htm).

The IEO is inviting the members of the public to subscribe to IEO documents through the automatic e-mail notification system on the IMF's website (http://www.imf.org/external/cntpst/index.aspx).

IEO Contacts: