## Eleventh Periodic Monitoring Report — EXECUTIVE SUMMARY ## Source details **Canonical URL:** [Eleventh Periodic Monitoring Report — EXECUTIVE SUMMARY](https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021070.pdf) ## Other formats - [Markdown version](/-/media/files/publications/pp/2021/english/ppea2021070.pdf.md) - [Structured JSON version](/-/media/files/publications/pp/2021/english/ppea2021070.pdf.json) --- ### Overview - The Eleventh Periodic Monitoring Report (PMR) assesses progress over the past 18 months on 72 actions contained in 10 Management Implementation Plans (MIPs). - The Eleventh PMR is dated August 25, 2021. - The Eleventh PMR covers 10 MIPs arising from IEO evaluations: IMF Advice on Capital Flows (2020); IMF Advice on Unconventional Monetary Policies (2019); IMF Financial Surveillance (2019); The IMF and Fragile States (2018); The IMF and Social Protection (2017); Behind the Scenes with Data at the IMF (2016); Self-Evaluation at the IMF: An IEO Assessment (2015); IMF Forecasts: Process, Quality, and Country Perspectives (2014); The Role of the Fund as Trusted Advisor (2013); Research at the IMF: Relevance and Utilization (2011). ### Key implementation metrics and trends - Total actions assessed in the Eleventh PMR: 72. - Actions deemed satisfactorily implemented: 29. - Actions remaining open: 35. - Actions being reformulated (under the Board-approved triage framework): 8. - Of the 35 open actions, 16 are more than one year past their implementation due dates. - Pace of implementation in the Eleventh PMR (29 actions closed) significantly exceeds the previous trend of about 15 implemented actions per year. - Faster implementation has continued to be observed for actions in more recent MIPs. ### Status by recent MIPs and implementation rates - IMF Advice on Unconventional Monetary Policies (2019): implementation rate of approximately 80 percent. - IMF Financial Surveillance (2019): implementation rate of approximately 60 percent. - IMF Advice on Capital Flows (2020) MIP was approved in May 2021; strong progress is already being observed on several actions. - Of the 10 MIPs in this PMR: three are new MIPs issued after the Tenth PMR (containing 41 actions) and seven are older MIPs (containing 31 actions that were classified as open after the Tenth PMR). ### Impact of COVID-19, reprioritization, and resource constraints - The ongoing COVID-19 pandemic caused reprioritization to meet urgent membership needs, delaying several workstreams and reviews. - Reprioritization and flat budgets over several years contributed to implementation delays, including postponement of important reviews integral to completing some MIP actions. - Despite these constraints, implementation progress in this reporting cycle exceeded historical annual rates. ### Specific delays and dependencies - Progress on the MIP responding to Behind the Scenes with Data at the IMF has been affected by delays linked to the Review of Data Provision to the Fund for Surveillance Purposes (DPF Review), which is projected for completion in March 2022. - The timing of the DPF Review was contingent on completion of the Comprehensive Surveillance Review (CSR), which was delayed until May 2021. - Further progress on the MIP responding to The IMF and Fragile States is contingent on completion of the Strategy for Enhanced Fund Engagement with Fragile and Conflict-Affected States (FCS Strategy). - A Guidance Note on Social Protection is a key dependency for further progress on the MIP responding to The IMF and Social Protection. ### Triage framework, prior assessments, and actions removed from PMR monitoring - The Board-endorsed triage framework (March 2019) categorizes longstanding open actions into five categories by root cause and prescribes tailored remedial steps: (1) continue monitoring; (2) needed different incentives; (3) insufficiently specific and needing clear measures of success; (4) long-term technical or cultural change better addressed outside binary open-closed classification; (5) full implementation no longer seen as valuable/duplicative/redundant. - Categories 2 and 3 actions should be reformulated; category 4 could be retired from PMR monitoring after five reporting cycles; category 5 should be retired immediately from PMR monitoring (while remaining subject to other oversight). - The Tenth PMR (December 2019) reviewed 62 actions: 16 implemented during that year and 46 remained open. - Following the Categorization Paper, 15 actions were approved by the Executive Board to be removed from further PMR monitoring and addressed through other institutional workstreams; the remaining 31 open actions from the Tenth PMR are included in the Eleventh PMR. - As part of the Categorization Paper, reformulation of eight off-track actions was expected in the last quarter of 2021 but reprioritization due to COVID-19 delayed reformulation. ### Impact assessment and next steps in monitoring - The Executive Board requested future PMRs to include, or be accompanied by, an assessment of the impact of slippages in implementation of open management actions. - OIA provides analysis in this PMR on actions more than one year past their target dates and plans to refine the impact assessment in future PMRs in collaboration with IEO, ORM, SPR, and other departments. - Staff expect to jointly present a practical approach for measuring the impact of slippages to Management and the Evaluation Committee of the Board before the end of this fiscal year. ### Preparation and methodology notes - OIA prepared the PMR after meetings with senior staff from IEO, SPR, and all departments accountable for implementing management actions. - The assessment relied on staff reports to the Executive Board and Management, research papers, official memoranda, and information from meetings with senior staff. - The assessment of implementation involves judgment, particularly where actions are qualitative in nature. ### PMR assessment of impact of slippages in implementation dates for MIPs - PMR constraints and assumptions: - IEO recommendations enhance learning culture and support Executive Board governance; MIP actions do not explicitly indicate relative importance or prioritization. - Many, but not all, MIP actions align with ORM risk mitigation actions; ex-post attribution of significance is beyond PMR scope. - General assumption: The risk and operational impact of delays tend to increase the longer an action stays overdue. - Recommended follow-up: Further discussion with IEO, ORM, and SPR to design processes that better define “impact” ex-ante as part of the MIP process. ### Causes and patterns of slippages - Timetabling interpreted as “indicative” rather than “precise,” especially for structural changes. - Departments may re-sequence or reprioritize actions as new demands arise; MIP timetables do not always factor in contingencies. - Significance of individual actions can diminish if related actions addressing the same recommendation have been implemented; analyze proposed actions collectively. ### Summary status and key statistics (open actions) - Of the 35 open actions in this PMR: - 16 are more than one year past their implementation due dates and have been classified as overdue but progressing. - 8 actions are being reformulated. - These 16 overdue-but-progressing and 8 reformulation actions are contained in seven MIPs. - Timing and dependency-related notes: - Several actions were contingent on the CSR and FSAP Review, which were finalized in May 2021. - Expected completion and sequencing for some actions were delayed by COVID-19 pandemic interruptions and by reassignment of ownership following reorganizations. ### Selected highlights by evaluation / MIP - IMF Financial Surveillance (2019): - Two actions overdue but progressing. - One action on allocation of sufficient resources for financial surveillance was contingent on CSR and FSAP Review (finalized May 2021). - Early FY23-25 medium term budget proposals envisage a targeted structural augmentation for new initiatives including CSR-related resource requirements. - Overdue action on comprehensive workforce analysis and enhanced talent inventory now expected to take longer; technology roll-out through Workday; completion of talent profiles expected to rely on voluntary staff completion and will be required for certain senior job applications. - The IMF and Fragile States (2018): - Two overdue actions have made substantial progress. - Five actions remain open: two classified as overdue but progressing and all on course to be implemented over the next year. - FCS strategy planned for presentation to the Executive Board by end-2021 will address open actions, including proposals for balanced internal/external CD funding and a flexible instrument for external financing (multi-donor trust fund). - MCM presented a staff paper on building financial capacity in May 2021; STA staff paper on statistical capacity is planned for FY23. - CPM for fungible macroeconomists announced July 2020; starting July 2023, promotions from A14 to A15 will require country team or equivalent experiences in low-income countries and/or fragile states. - The IMF and Social Protection (2017): - Two open actions are overdue but progressing. - Guidance Note to assist implementation of Strategy for IMF engagement on Social Spending delayed by COVID-19; sectoral background notes on pensions, social assistance, health, and education being prepared and expected to form core of consolidated guidance note. - Second overdue action: formation of advisory group to support country teams once guidance note is finalized. - Behind the Scenes with Data at the IMF (2016): - Eighteen actions were proposed; four implemented prior to Tenth PMR; one retired due to duplication with The IMF and Fragile States evaluation. - Remaining 13 open actions are either more than one year past due or being reformulated. - Nine actions currently overdue: four relate to policy reviews on data provision and standards; original due dates were ambitious given sequencing needs and pandemic interruptions. - DPF Review completed in March 2022 scheduling; DPF, Tenth Review of IMF’s Data Standards Initiatives, and Review of Standards and Codes Initiative were deliberately sequenced to follow CSR. - Several data-management actions reassigned to STA after absorption of Economic Data Team; these actions now require significantly more effort and time than previously anticipated. - The Role of the Fund as Trusted Advisor (2013): - Work on diversity and inclusion continues. - Action to raise share of nationals from underrepresented regions among senior staff and set targets for representation of women at senior levels was extended for an additional five PMR monitoring cycles with Executive Board approval. ### Selected overdue actions (examples, original target date, expected completion date as of July 31, 2021) - IMF Financial Surveillance — Brief the Executive Board on the HR strategy, including on the ongoing workforce analysis for financial sector experts - Accountable Department: HRD - Original Target Date: Jan-20 - Expected Completion date (as of July 31, 2021): FY22 - OIA’s Commentary: Preparatory work underway. Progress was slowed down partly due to the delays in implementing the new HR system, along with a workforce planning module, as well as ongoing work pressures. - IMF Financial Surveillance — The FY2021-23 Medium-term Budget discussion will consider the on-going FSAP Review and CSR and reflect on medium-term tradeoffs. - Accountable Department: OBP - Original Target Date: Apr-20 - Expected Completion date (as of July 31, 2021): Q4 FY22 - OIA’s Commentary: Substantially complete. Full assessment of the financing needs was not possible before the CSR and FSAP Review. Needs have now been identified, and proposals are being made. - The IMF and Fragile States — Staff to report to management on the case for a dedicated Multi-Donor Trust Fund (MDTF) or a coordinated set of bilateral projects for FCS to target CD gaps. - Accountable Department: ICD with Others - Original Target Date: Sep-19 - Expected Completion date (as of July 31, 2021): End-2021 - OIA’s Commentary: Preparatory work underway. The FCS strategy is expected to make proposals for a balanced mix of financing for CD in FCS. - Behind the Scenes with Data at the IMF — Next Review of Data Provision to the Fund for Surveillance Purposes (DPF) will propose how to incorporate results of new assessments of data adequacy for surveillance into a revised Statistical Issues appendix (SIA). - Accountable Departments: SPR, STA - Original Target Date: FY19 - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Substantially complete. Action was contingent on completion of the CSR, which was delayed until May 2021 due to the pandemic. ### Progress on selected MIPs and implementation examples - IMF Advice on Capital Flows (2020): - MIP envisaged 11 actions; 2 implemented. - Implementation metric: 18% implemented (2 out of 11 actions). - Management Action 1.1: review of the Institutional View (IV) — Status: Open; Informal presentation on July 21, 2021; Board discussion set for January 2022. - Management Action 2.1: briefing on progress on operationalization and analytical work related to the IPF — Status: Implemented; Original target date: Q2 CY2021. Key findings: modeling confirmed fiscal policy should be used alongside, rather than in place of, IPF tools; key metrics being assembled into a comprehensive dataset. - Other actions on indices, taxonomy, model refinements, and analytical briefs — mix of Implemented and Open with specified original target dates ranging from Q4 CY2021 to Q1 CY2022. - IMF Advice on Unconventional Monetary Policies (2019): - MIP envisaged 14 actions; 11 implemented. - MMU established with 6.5 Full Time Equivalents (FTEs); implemented research outputs and models; MMU produced seven analytical papers (four published as working papers, three near completion). - Management action implementation summary: 79% implemented (11 out of 14 actions). - Key activities: development of small open economy model, larger-scale models for UMP and negative interest rates, outreach, internal Monetary Policy Advisory Group, external visiting scholars, Board briefings, and development of a “recession playbook”. - CSR, FSAP review, and IMF Financial Surveillance: - CSR completed May 2021 prioritized surveillance around confronting risks, preempting spillovers, fostering economic sustainability, and providing unified policy advice. - IPF briefings to the Board in May 2020, September 2020, and May 2021; core finding: appropriate policy mix depends on shocks, country characteristics, and initial conditions; does not rationalize indiscriminate use of multiple tools. - IMF Financial Surveillance MIP: 16 actions envisaged; 10 implemented; status snapshot: 63% implemented (10 out of 16 actions). - FSAP review: proposals to expand SIFS jurisdictions from 29 to 47; proposed participation frequency: 32 jurisdictions once every five years, 15 jurisdictions once every ten years; Directors welcomed update and expansion. ### Human resources, talent inventory, and career frameworks - Workforce and talent inventory: - Plans to capture talent profiles and build a comprehensive talent inventory underway with Workday rollout; workforce analysis for financial sector experts slated for FY22. - Based on a narrow definition, number of financial sector experts increased from 97 in FY15 to 132 in FY21. - Fungible Macroeconomist (FM) Career Path and Mobility Framework introduced July 2020; from July 2023 promotions from A14 to A15 will require LIC/FS country team or equivalent experiences (specified options). - Management Action 5.3: enhanced talent inventory — Status: Open; ORIGINAL TARGET DATE: by November 2020; EXPECTED COMPLETION DATE: FY23. - Enhanced Performance Management and budgets: - Enhanced Performance Management effective May 1, 2019; some aspects delayed due to COVID pressures. - Current estimated direct spending on financial surveillance in functional departments: $47 million per year (average for FY17-20, in FY20 U.S. dollars), reaching close to $60 million in FY21. - FY20 overall budget for MCM (including transitional funds): US$87.4 million. - FY21 overall budget for MCM (including transitional funds): US$90.6 million. - FY22 budget envisages net increase in structural resources for MCM of US$2.8 million; transitional resources of US$1.3 million; crisis resources of US$3.8 million (expressed in FY21 US dollars). - Medium-Term Budget FY23-25 proposals envisage targeted structural augmentation; formal proposals expected October 2021. ### Fragile and conflict-affected states (FCS) and CD funding - FCS Strategy: - Full-fledged FCS Strategy planned for presentation to the Executive Board by end-2021. - Objectives: renew vision, tailor surveillance/CD/program design, clarify Fund role, and set measures to adapt engagement across fragility spectrum. - Country Engagement Strategies (CES) piloted in five countries. - Lending and arrears cases (Somalia and Sudan): - Somalia arrears cleared March 25, 2020; subsequent ECF/EFF arrangements and interim assistance. - Sudan: HIPC Decision point reached June 29, 2021; total debt relief in present value terms US$23.3 billion; complemented by traditional debt relief US$25.3 billion, bringing total to more than US$50 billion NPV once Completion Point reached. - IMF approved a new 39-month ECF for Sudan for about US$2.5 billion. - CD financing proposals: - Proposals for a dedicated MDTF for FCS remain under consideration; MANAGEMENT ACTION 5.2 (MDTF case) — Status: Overdue but progressing; ORIGINAL TARGET DATE: Sep-19; EXPECTED COMPLETION DATE: End-2021. - MANAGEMENT ACTION 5.3 (STA/MCM staff paper on building capacity in FCS) — Status: Overdue but progressing; ORIGINAL TARGET DATE: Dec-19; EXPECTED COMPLETION DATE: FY23. ### Social protection, guidance, and communications - Social protection MIP: response to five recommendations envisaged eight actions; status: 75% implemented (6 out of 8 actions). - Guidance Note to operationalize IMF engagement on social spending delayed by COVID-19; sectoral background papers being prepared. - MANAGEMENT ACTION 1.2 (guidance note) — Status: Overdue but progressing; ORIGINAL TARGET DATE: End-2019; EXPECTED COMPLETION DATE: End-FY22. - Communications (COM) allocated resources and coordinated external communications; MANAGEMENT ACTION 4.1 (enhance external communications) — Status: Implemented; EXPECTED COMPLETION DATE: End-CY 2021. ### Data strategy, DPF Review, and STA activities - DPF Review: - Work substantially completed in 2020 but stalled due to COVID reprioritization; DPF Review tentatively scheduled for March 2022 after CSR completion. - Immediate data priorities identified: public sector data, foreign exchange intervention (FXI) data, and indicators for macrofinancial analysis. - MANAGEMENT ACTION 2.1: CSR operationalized in DPF Reviews — EXPECTED COMPLETION DATE: End-FY22. - Tenth Review of Data Standards Initiatives (DSI) expected Spring 2022; aims to merge/align SDDS, SDDS Plus, and e-GDDS and advance cloud-based dissemination. - STA role and manuals: - Major revision of the Statistics Manuals (medium-term); SNA/BPM updates scheduled for publication in 2025. - MANAGEMENT ACTION 3.4: STA to engage with area departments and issue revised Statistics Manuals — EXPECTED COMPLETION DATE: End-CY2022. - Data governance and management: - Data Governance Group (DGG) working on common metadata model and Catalogue of Time Series cleanup — EXPECTED COMPLETION DATE: End-FY22. - Several data management actions are being reformulated; others marked overdue but progressing. ### Cross-cutting implementation metrics and Board decisions - Overall implementation snapshots by evaluation: - IMF Advice on Capital Flows (2020): 18% implemented (2 out of 11 actions). - IMF Advice on Unconventional Monetary Policies (2019): 79% implemented (11 out of 14 actions). - IMF Financial Surveillance (2019): 63% implemented (10 out of 16 actions). - The IMF and Fragile States (2018): 58% implemented (7 out of 12 actions). - The IMF and Social Protection (2017): 75% implemented (6 out of 8 actions). - Behind the Scenes with Data at the IMF (2016): 28% implemented (5 out of 18 actions) for the subset reported. - Research at the IMF: 86% implemented (6 out of 7 actions). - Self-Evaluation at the IMF: 100% implemented (9 out of 9 actions). - The Role of the Fund as Trusted Advisor: 81% implemented (13 out of 16 actions). - IMF Forecasts: 82% implemented (10 out of 11 actions). - Board endorsement: - The Board reviewed the implementation status of Management Actions in Response to Board-Endorsed IEO Recommendations and endorsed the assessment proposed in the Eleventh PMR. *Source: Eleventh Periodic Monitoring Report — EXECUTIVE SUMMARY (Office of Internal Audit), August 25, 2021.* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Overview - The Eleventh Periodic Monitoring Report (PMR) assesses progress over the past 18 months on 72 actions contained in 10 Management Implementation Plans (MIPs). - The Eleventh PMR is dated August 25, 2021. - The Eleventh PMR covers 10 MIPs arising from IEO evaluations: IMF Advice on Capital Flows (2020); IMF Advice on Unconventional Monetary Policies (2019); IMF Financial Surveillance (2019); The IMF and Fragile States (2018); The IMF and Social Protection (2017); Behind the Scenes with Data at the IMF (2016); Self-Evaluation at the IMF: An IEO Assessment (2015); IMF Forecasts: Process, Quality, and Country Perspectives (2014); The Role of the Fund as Trusted Advisor (2013); Research at the IMF: Relevance and Utilization (2011). ### Key implementation metrics and trends - Total actions assessed in the Eleventh PMR: 72. - Actions deemed satisfactorily implemented: 29. - Actions remaining open: 35. - Actions being reformulated (under the Board-approved triage framework): 8. - Of the 35 open actions, 16 are more than one year past their implementation due dates. - Pace of implementation in the Eleventh PMR (29 actions closed) significantly exceeds the previous trend of about 15 implemented actions per year. - Faster implementation has continued to be observed for actions in more recent MIPs. ### Status by recent MIPs and implementation rates - Strong progress reported on: - IMF Advice on Unconventional Monetary Policies (2019): implementation rate of approximately 80 percent. - IMF Financial Surveillance (2019): implementation rate of approximately 60 percent. - IMF Advice on Capital Flows (2020) MIP was approved in May 2021; strong progress is already being observed on several actions. - Of the 10 MIPs in this PMR: three are new MIPs issued after the Tenth PMR (containing 41 actions) and seven are older MIPs (containing 31 actions that were classified as open after the Tenth PMR). ### Impact of COVID-19, reprioritization, and resource constraints - The ongoing COVID-19 pandemic caused reprioritization to meet urgent membership needs, delaying several workstreams and reviews. - Reprioritization and flat budgets over several years contributed to implementation delays, including postponement of important reviews integral to completing some MIP actions. - Despite these constraints, implementation progress in this reporting cycle exceeded historical annual rates. ### Specific delays and dependencies - Progress on the MIP responding to Behind the Scenes with Data at the IMF has been affected by delays linked to the Review of Data Provision to the Fund for Surveillance Purposes (DPF Review), which is projected for completion in March 2022. - The timing of the DPF Review was contingent on completion of the Comprehensive Surveillance Review (CSR), which was delayed until May 2021. - Further progress on the MIP responding to The IMF and Fragile States is contingent on completion of the Strategy for Enhanced Fund Engagement with Fragile and Conflict-Affected States (FCS Strategy). - A Guidance Note on Social Protection is a key dependency for further progress on the MIP responding to The IMF and Social Protection. ### Triage framework, prior assessments, and actions removed from PMR monitoring - The Board-endorsed triage framework (March 2019) categorizes longstanding open actions into five categories by root cause and prescribes tailored remedial steps: (1) continue monitoring; (2) needed different incentives; (3) insufficiently specific and needing clear measures of success; (4) long-term technical or cultural change better addressed outside binary open-closed classification; (5) full implementation no longer seen as valuable/duplicative/redundant. - Categories 2 and 3 actions should be reformulated; category 4 could be retired from PMR monitoring after five reporting cycles; category 5 should be retired immediately from PMR monitoring (while remaining subject to other oversight). - The Tenth PMR (December 2019) reviewed 62 actions: 16 implemented during that year and 46 remained open. - Following the Categorization Paper, 15 actions were approved by the Executive Board to be removed from further PMR monitoring and addressed through other institutional workstreams; the remaining 31 open actions from the Tenth PMR are included in the Eleventh PMR. - As part of the Categorization Paper, reformulation of eight off-track actions was expected in the last quarter of 2021 but reprioritization due to COVID-19 delayed reformulation. ### Impact assessment and next steps in monitoring - The Executive Board requested future PMRs to include, or be accompanied by, an assessment of the impact of slippages in implementation of open management actions. - OIA provides analysis in this PMR on actions more than one year past their target dates and plans to refine the impact assessment in future PMRs in collaboration with IEO, ORM, SPR, and other departments. - Staff expect to jointly present a practical approach for measuring the impact of slippages to Management and the Evaluation Committee of the Board before the end of this fiscal year. ### Preparation and methodology notes - OIA prepared the PMR after meetings with senior staff from IEO, SPR, and all departments accountable for implementing management actions. - The assessment relied on staff reports to the Executive Board and Management, research papers, official memoranda, and information from meetings with senior staff. - The assessment of implementation involves judgment, particularly where actions are qualitative in nature. *Source: Eleventh Periodic Monitoring Report — EXECUTIVE SUMMARY (Office of Internal Audit), August 25, 2021.* ### 10. The PMR’s assessment of the impact of slippages in the implementation dates for MIP ### 10. The PMR’s assessment of the impact of slippages in the implementation dates for MIP ### Assessment constraints, assumptions, and recommendations - PMR assessment is conducted within constraints and assumptions: - IEO recommendations are intended to enhance the learning culture within the Fund and support the Executive Board's institutional governance and oversight responsibilities. - IEO recommendations endorsed by the Executive Board, and actions included in MIPs approved by the Board, do not explicitly indicate relative importance or prioritization. - Many, but not all, MIP actions align with risk mitigation actions identified by the ORM; ex-post attribution of significance of an action as intended in the MIP is beyond the PMR scope. - General PMR assumption on delays: - The risk and operational impact of delays tend to increase the longer an action stays overdue. - Recommended follow-up: - Further discussion with IEO, ORM, and SPR is needed to design processes that will better define “impact” ex-ante as part of the MIP process to add value to assessments of subsequent slippages. ### Causes and patterns of slippages - Timetabling and interpretation: - Framework guiding MIP preparation calls for accountable departments to “provide an appropriate timetable for implementation”. - Departments have largely interpreted timetables as “indicative” rather than “precise”, especially for structural changes where expected progress is harder to project. - Re-sequencing and reprioritization: - Departments sometimes need to course-correct, re-sequence, or reprioritize actions as lessons are learned or new institutional demands arise. - Timetables in MIPs do not always factor in these contingencies. - Diminishing significance of individual actions: - The significance of an individual action tends to diminish if other related actions responding to the same recommendation have already been implemented. - Importance of analysing multiple proposed actions for a single recommendation collectively rather than individually. ### Summary status and key statistics - Of the 35 open actions in this PMR: - 16 are more than one year past their implementation due dates and have been classified as overdue but progressing. - 8 actions are being reformulated. - These 16 overdue-but-progressing and 8 reformulation actions are contained in seven MIPs. - Timing and dependency-related notes: - Several actions were contingent on the CSR and FSAP Review, which were finalized in May 2021. - Expected completion and sequencing for some actions were delayed by COVID-19 pandemic interruptions and by reassignment of ownership following reorganizations. ### Status by evaluation / MIP (selected highlights) - IMF Financial Surveillance (2019): - Two actions overdue but progressing. - One action on allocation of sufficient resources for financial surveillance was contingent on CSR and FSAP Review (finalized May 2021). - Early FY23-25 medium term budget proposals envisage a targeted structural augmentation for new initiatives including CSR-related resource requirements. - Overdue action on comprehensive workforce analysis and enhanced talent inventory now expected to take longer, with technology roll-out through Workday; completion of talent profiles expected to rely on voluntary staff completion and will be required for certain senior job applications. - The IMF and Fragile States (2018): - Two overdue actions have made substantial progress. - Five actions remain open: two classified as overdue but progressing and all on course to be implemented over the next year. - FCS strategy planned for presentation to the Executive Board by end-2021 will address open actions, including proposals for balanced internal/external CD funding and a flexible instrument for external financing (multi-donor trust fund). - MCM presented a staff paper on building financial capacity in May 2021; STA staff paper on statistical capacity is planned for FY23. - Career path and mobility framework (CPM) for fungible macroeconomists announced July 2020; starting July 2023, promotions from A14 to A15 will require country team or equivalent experiences in low-income countries and/or fragile states. - The IMF and Social Protection (2017): - Two open actions are overdue but progressing. - Guidance Note to assist implementation of Strategy for IMF engagement on Social Spending delayed by COVID-19; sectoral background notes on pensions, social assistance, health, and education being prepared and expected to form core of consolidated guidance note. - Second overdue action: formation of advisory group to support country teams once guidance note is finalized. - Behind the Scenes with Data at the IMF (2016): - Eighteen actions were proposed; four implemented prior to Tenth PMR; one retired due to duplication with The IMF and Fragile States evaluation. - Remaining 13 open actions are either more than one year past due or being reformulated. - Nine actions currently overdue: four relate to policy reviews on data provision and standards; original due dates were ambitious given sequencing needs and pandemic interruptions. - DPF Review completed in March 2022 scheduling; DPF, Tenth Review of IMF’s Data Standards Initiatives, and Review of Standards and Codes Initiative were deliberately sequenced to follow CSR. - Several data-management actions reassigned to STA after absorption of Economic Data Team; these actions now require significantly more effort and time than previously anticipated. - The Role of the Fund as Trusted Advisor (2013): - Work on diversity and inclusion continues. - Action to raise share of nationals from underrepresented regions among senior staff and set targets for representation of women at senior levels was extended for an additional five PMR monitoring cycles with Executive Board approval. ### Table 1 — Selected list of overdue actions (original target date, expected completion date as of July 31, 2021, and OIA commentary) - IMF Financial Surveillance — Brief the Executive Board on the HR strategy, including on the ongoing workforce analysis for financial sector experts - Accountable Department: HRD - Original Target Date: Jan-20 - Expected Completion date (as of July 31, 2021): FY22 - OIA’s Commentary: Preparatory work underway. Progress was slowed down partly due to the delays in implementing the new HR system, along with a workforce planning module, as well as ongoing work pressures. - IMF Financial Surveillance — The FY2021-23 Medium-term Budget discussion will consider the on-going FSAP Review and CSR and reflect on medium-term tradeoffs. - Accountable Department: OBP - Original Target Date: Apr-20 - Expected Completion date (as of July 31, 2021): Q4 FY22 - OIA’s Commentary: Substantially complete. Full assessment of the financing needs was not possible before the CSR and FSAP Review. Needs have now been identified, and proposals are being made. - The IMF and Fragile States — Staff to report to management on the case for a dedicated Multi-Donor Trust Fund (MDTF) or a coordinated set of bilateral projects for FCS to target CD gaps. - Accountable Department: ICD with Others - Original Target Date: Sep-19 - Expected Completion date (as of July 31, 2021): End-2021 - OIA’s Commentary: Preparatory work underway. The FCS strategy is expected to make proposals for a balanced mix of financing for CD in FCS. - The IMF and Fragile States — Prepare a staff paper for Board discussion with analysis of experience and lessons from building financial and statistical capacity in FCS. - Accountable Departments: MCM, STA - Original Target Date: Dec-19 - Expected Completion date (as of July 31, 2021): FY23 - OIA’s Commentary: Partially complete. MCM's briefing on financial capacity completed. A staff working paper by STA, a precursor to the Board briefing, is underway. - The IMF and Social Protection — Staff will issue a follow-up guidance note to support the strategic framework for social protection. - Accountable Departments: FAD, SPR - Original Target Date: Dec-19 - Expected Completion date (as of July 31, 2021): FY22 - OIA’s Commentary: Preparatory work underway. Sectorial background papers, the foundation of the guidance note, have been drafted. Progress was slowed down by reprioritization towards urgent pandemic-related activities on social spending. - The IMF and Social Protection — An advisory group will be formed after issuance of the guidance note to provide support to country teams in operationalizing work on social protection. - Accountable Department: FAD - Original Target Date: After guidance note - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Not started. Action depends on completion of guidance note. - Behind the Scenes with Data at the IMF — Comprehensive Surveillance Reviews (CSR) and their interim reports will continue to guide priorities regarding the Fund’s evolving data and statistical needs for bilateral and multilateral surveillance activities; operationalized in Reviews of Data Provision to the Fund for Surveillance Purposes (DPF). - Accountable Departments: SPR, STA - Original Target Date: Dec-17 - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Substantially complete. Action was contingent on completion of the CSR, which was delayed until May 2021 due to the pandemic. Two briefings of the Board to solicit inputs have been completed, and an early draft of the Board paper has been drafted. - Behind the Scenes with Data at the IMF — The Tenth Review of the IMF’s Data Standards Initiatives will seek to further align data provision by member countries with the broader initiative to promote publication of data required for surveillance by the Fund. - Accountable Departments: SPR, STA - Original Target Date: FY19 - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Preparatory work underway. Review was scheduled to follow the DPF review. Preparatory work is underway, alongside the work on the DPF review. - Behind the Scenes with Data at the IMF — The Tenth Review of the IMF’s Data Standards Initiatives will seek to merge frameworks of SDDS, SDDS Plus, and e-GDDS to improve country provision of relevant, timely and quality data. - Accountable Departments: SPR, STA - Original Target Date: FY20 - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Preparatory work underway. The Tenth Review of DSI is expected to make proposals for enhanced publication, but implementation is expected to take several years and will depend on countries' voluntary adoption. - Behind the Scenes with Data at the IMF — Review of Standards and Codes Initiative will aim to strengthen integration with Fund surveillance and capacity development; new Data ROSC will help guide future capacity development and methodological work. - Accountable Departments: SPR, STA - Original Target Date: FY18 - Expected Completion date (as of July 31, 2021): FY23 - OIA’s Commentary: Preparatory work underway. Level of effort required has turned out to be substantially more than anticipated. Pilot cases have been completed; process to be formalized with DPF guidance note. Streamlining of Data ROSC is underway. - Behind the Scenes with Data at the IMF — STA will engage in more pro-active and structured consultation with area departments on methodological work to support surveillance priorities for LICs; enhanced guidance for compiling data on LICs. - Accountable Department: STA - Original Target Date: Not indicated - Expected Completion date (as of July 31, 2021): End-CY22 - OIA’s Commentary: Preparatory work underway. STA has ramped up support for area departments and continues to do so. Codification of guidance on compiling data on LICs is expected to take several years through the DPF guidance note and update to the statistical manuals. - Behind the Scenes with Data at the IMF — Ongoing efforts to align capacity development with Fund and membership needs; CD geared toward closing data gaps. - Accountable Department: STA - Original Target Date: Not indicated - Expected Completion date (as of July 31, 2021): FY23 - OIA’s Commentary: Preparatory work underway. STA has increased work on building statistical capacity in countries, mainly through dedicated CD trust funds. A staff working paper by STA, a precursor to a Board briefing, is underway. - Behind the Scenes with Data at the IMF — Unify area department data management guidelines. - Accountable Departments: STA, Area Departments - Original Target Date: Not indicated - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Preparatory work underway. Following initial delays, oversight was transferred to the Data Governance Group. Actions were then broken down into multi-year milestones, and progress is being made. - Behind the Scenes with Data at the IMF — Next Review of Data Provision to the Fund for Surveillance Purposes (DPF) will propose how to incorporate results of new assessments of data adequacy for surveillance into a revised Statistical Issues appendix (SIA), and review requirement to discuss SIA in the main body of the Article IV staff report. - Accountable Departments: SPR, STA - Original Target Date: FY19 - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Substantially complete. Action was contingent on completion of the CSR, which was delayed until May 2021 due to the pandemic. - Behind the Scenes with Data at the IMF — Develop plan to clarify distinction between “official statistics” and data used by area and functional departments in surveillance activities. - Accountable Departments: STA, ITD - Original Target Date: 9/1/2017 - Expected Completion date (as of July 31, 2021): End-FY22 - OIA’s Commentary: Substantially complete. A plan for clarifying data sources in Fund publications has been drafted and is pending review and operationalization in the context of the DPF Review. - The Role of the Fund as Trusted Advisor — Implement measures to raise the share of nationals from underrepresented regions among senior staff and set targets for representation of women at senior levels. - Accountable Departments: HRD, with Others - Original Target Date: Steps begin in 2013 - Expected Completion date (as of July 31, 2021): FY25 - OIA’s Commentary: Partially complete. Monitoring has been extended for five PMR cycles, and HRD continues to provide periodic updates to the Board in the context of the 2025 Diversity and Inclusion benchmarks. *Source: OIA, Eleventh Periodic Monitoring Report (data as of July 31, 2021).* ### 19. This section discusses the progress made in implementing the management actions ### 19. This section discusses the progress made in implementing the management actions ### Key definitions and status key - Implemented. Actions that have been substantially addressed as intended, or another form of disposition has been endorsed by the Board. - Open. Actions that: (i) are planned with no obvious obstacles or delays; (ii) are ongoing; or (iii) have been implemented in form, but their outcomes are yet to materialize. - Overdue but progressing. A sub-category of open actions, these are more than one year past their target implementation date, but nevertheless continue to make progress. - Implementation Challenge. Actions that have not been implemented or have stalled following partial implementation. In this PMR, all applicable actions relate to those that previously received Executive Board approval to be reformulated, in line with the Board-approved triage framework for long-standing open management actions. ### A. IMF Advice on Capital Flows (2020) — summary of evaluation findings - The IEO evaluation found the Institutional View (IV) on the Liberalization and Management of Capital Flows (2012) represented a considerable step forward, providing staff with a stronger conceptual template for engaging on capital flow volatility risks while recognizing long-term benefits of financial integration. - Most countries’ policy approaches were generally in line with the IV; countries largely avoided using unconventional tools as substitutes for warranted macroeconomic adjustment. - Concerns highlighted included: - Pre-emptive use of capital flow measures (CFMs). - Fine labeling distinctions between very similar measures that have led to disagreements with authorities. - The role of foreign exchange intervention. - Use of capital account measures outside of a “crisis or imminent crisis” context. - Impact of CFMs on distributional and other social objectives. - Technical challenges with reliance on some metrics and quantification of thresholds. - Evaluation recommendations included: revisit the IV in light of recent experience and research; build monitoring, analysis, and research of capital account issues; strengthen multilateral cooperation on capital flow policy issues. ### A — Management Implementation: overall progress - In response to four recommendations in the IEO evaluation, the MIP envisaged 11 actions, of which two have been implemented. - 18% implemented (2 out of 11 actions) ### IEO Recommendation 1: Revisit the Institutional View - Directors: broadly agreed on the need to revisit the IV while underscoring core principles remain valid; emphasized safeguards against misuse of CFMs and evenhanded application across countries. - Management Action 1.1: - Staff will undertake a review of the IV on the basis of research and experience (including from the COVID crisis) and make an informal presentation to the Executive Board to discuss preliminary proposals in 2021 Q3. Staff intends to complete the review in the second half of 2021. - Status: Open - Accountable: LEG, MCM, RES, SPR - Original target date: Informal briefing – Q3 CY2021; Review of IV – Second half of CY2021 - Progress update: - On July 21, 2021, staff made an informal presentation to the Executive Board to discuss preliminary proposals for the IV. - Staff intend to complete the review of the IV in the second half of 2021. - The Board discussion has been set for January 2022. - The IV review will: re-examine combinations of policies to respond to capital flow shocks proposed in the IV; revisit policy on CFMs and CFM/MPMs on inflows; elaborate concepts bearing on assessments and advice on CFMs; define conditions when capital account liberalization may be premature; provide guidance on operational implementation issues. - The review is expected to preserve core IV principles (presumption that capital flows can bring substantial benefits and that CFMs should not substitute for warranted macroeconomic adjustment). - Executive Directors provided additional suggestions for consideration. ### IEO Recommendation 2: Build monitoring and research on capital account issues - Directors: broadly supported strengthening monitoring, analysis, and research as part of a Fund-wide medium-term agenda. - The MIP envisaged six actions to address this recommendation. - Management Action 2.1: - Staff will brief the Executive Board through an informal presentation on progress on operationalization and analytical work related to the IPF. - Status: Implemented - Accountable: RES, MCM, SPR - Original target date: Q2 CY2021 - Progress update on IPF briefing (May 2021): - Substantial progress in requested dimensions; modeling confirmed fiscal policy should be used alongside, rather than in place of, IPF tools (FXI, macroprudential and CFMs). - Modeling showed cross-border spillovers from fiscal policy vs. FXI can be notably different. - Persistent use of CFMs or FXI may lead to resource misallocation and slow market development over the long run. - Additional frictions outside models can influence appropriate mix of IPF tools. - Staff identified key metrics for country characteristics featured in IPF models and are close to assembling a comprehensive dataset. - Staff are working on safeguards to minimize risks of inappropriate use of IPF policies. - Further preliminary policy implications (including Executive Director inputs) to be discussed in IV review later in 2021. - Management Action 2.2: - Staff will brief the Executive Board on analytical work being undertaken on the interplay between capital flows, CFMs and crises. - Status: Open - Accountable: MCM, RES - Original target date: Q4 CY2021 - Planned analysis to examine: (i) impact of preemptive CFMs on financial stability and growth; (ii) effects of pre-emptive tightening of inflow CFMs on probability of future inflow surges; (iii) role of CFMs in preventing build-up of leverage in the financial sector; (iv) impact of long-standing CFMs on probability of crises; (v) impact of introducing outflow CFMs during crises on sovereign debt ratings; (vi) interaction of MPMs with other policies, including CFMs. - No obstacles anticipated. - Management Action 2.3: - MCM will hire 1.5 additional staff to work on the AREAER. - Status: Implemented - Accountable: MCM - Original target date: Q2 CY2021 - Progress: One Research Assistant hired to be onboarded in August 2021 (to work primarily on yearly AREAER update); another Research Assistant previously half-time reassigned full time to yearly AREAER update. - Management Action 2.4: - Staff will publish on the IMF external website indices of capital account openness using the AREAER database. - Status: Open - Accountable: MCM - Original target date: Binary and change indices by Q4 CY2021; indices also accounting for type of CFMs by Q4 CY2023 - Progress: Plans on course to publish two forms of indices by end-2021 (a binary index based on existing controls and another incorporating changes to controls over time); by end-2023 staff expect to construct and publish indices accounting for diversity in type of CFMs; eventual extension to cover all member countries once tested. No obstacles anticipated. - Management Action 2.5: - Staff will publish an update of the IMF Taxonomy of CFMs on the IMF external website. - Status: Open - Accountable: MCM, SPR - Original target date: End-CY2021 - Progress: Plans on course; taxonomy expected to contain information about measures assessed by Fund staff as CFMs or CFM/MPMs and discussed in published staff reports since adoption of the IV. No obstacles anticipated. - Management Action 2.6: - Staff will explore refinements to capital account-related aspects in the EBA models (informal presentation to the Executive Board). - Status: Open - Accountable: RES, SPR - Original target date: Q1 CY2022 - Progress: Informal presentation on “External Balance Assessment (EBA) Model Refinements” tentatively planned for Q1 CY2022; exercise will reassess drivers of current account balances and real effective exchange rates and examine alternative indicators of capital account openness (not main focus). No obstacles anticipated. ### IEO Recommendation 3: Strengthen multilateral cooperation on capital flow policy issues - Directors: agreed need to strengthen multilateral cooperation; called for close collaboration with other multilateral organizations, with due regard to different mandates and memberships. - The MIP envisaged four actions to address this recommendation. - Management Action 3.1: - Staff will brief the OECD as the review of the IV takes place and once it is completed. Following the completion of the review, staff will brief the Executive Board on the IV and the OECD Codes of Liberalization. Staff will also invite OECD staff to present their revised Codes of Liberalization at the IMF’s Capital Flows Group forum and hold jointly with the OECD a workshop on capital flow-related research. - Status: Open - Accountable: LEG, MCM, SPR - Original target date: Brief to the OECD – Q4 CY2021; Brief to the Board – Q4 CY2021; OECD staff presentation – Q2 CY2021; Joint workshop – Q4 CY2022 - Progress: Outreach to OECD staff underway; on April 27 the Capital Flows Group hosted an OECD Secretariat presentation; arrangements underway for a reciprocal IMF briefing to the OECD and subsequently to the Executive Board. No obstacles anticipated. - Management Action 3.2: - Staff will present a proposal through a Board paper to consider the use of the assessment letter framework to respond to OECD requests for information. - Status: Open - Accountable: LEG, MCM, SPR - Original target date: Q1 CY2022 - Progress: Plans to propose amendment to current assessment letters policy to cover the OECD; recent amendments to OECD Codes envisage OECD may ask for the Fund’s view “on any questions relating to the balance of payments and the state of the monetary reserves of a member” and on “any questions relating to the liberalization of capital movements”. No obstacles anticipated. - Management Action 3.3: - Staff will address inadvertent and unintended tensions between the IV and the Basel III framework as part of the review of the IV. - Status: Open - Accountable: MCM, SPR - Original target date: Second half of CY2021 - Progress: The IV review is expected to examine cases of potential tensions with the Basel III framework and propose ways to address them (e.g., where Basel III reciprocity recommendations could result in CFMs outside crisis circumstances). No obstacles envisaged. - Management Action 3.4: - Staff will prepare a departmental paper on “NBFIs and Market-Based Intermediation”, to support the participation of Fund staff in discussions at international working groups at the FSB and SSB. - Status: Open - Accountable: MCM - Original target date: Q2 CY2021 - Progress: Departmental paper under preparation; MCM staff envisage completion in the Fall of 2021. ### B. IMF Advice on Unconventional Monetary Policies (2019) — context and implementation summary - The IEO evaluation found the Fund’s response to the 2008 global financial crisis was wide-ranging and in many respects impressive, including early support and validation to major advanced economy central banks on UMP, development of a macroprudential toolkit, analysis of cross-border spillovers, and introduction of the IV. - Shortcomings identified: limited deep expertise on monetary policy issues within the Fund; insufficient appreciation of policy challenges faced by emerging market countries from financial spillovers and volatile capital flows; long-standing limits on traction in encouraging international policy cooperation. - Evaluation recommendations included: build a small core group of top monetary policy experts; deepen work on costs and benefits of UMP and related policies; ensure Fund is at forefront of spillover analysis and advice on capital flows; consider steps to deepen and enrich bilateral surveillance. - Summary of progress: In response to four recommendations in the IEO evaluation, the MIP envisaged 14 actions, of which 11 have been implemented. The remainder face no obvious challenges and are expected to be implemented in reasonable time. *Source: ppea2021070 - 19. This section discusses the progress made in implementing the management actions* ### 31. A new Monetary Modeling Unit (MMU) in the MCM, which was created in 2019, is now ### A new Monetary Modeling Unit (MMU) in the MCM, which was created in 2019, is now ### MMU staffing and mandate - The MMU is fully staffed with a strength of 6.5 Full Time Equivalents (FTEs). - The unit is overseen by a Deputy Director with deep monetary expertise. - Staff composition: economists with strong knowledge of both monetary policy and macroeconomic modeling, and practical experience, including at central banks. - Core modeling mandate: develop models that capture monetary policy transmission, foreign exchange intervention (FXI), capital flow management (CFM) tools, macroprudential tools, and large-scale assessments of unconventional monetary policy (UMP) including negative interest rates and alternative frameworks (e.g., average inflation targeting). ### Models and analytical developments - Developed a workhorse small open economy model capturing key features of monetary policy transmission, FX intervention, and CFMs. - Extended the model by incorporating fiscal policy and moving to a multi-country setting. - Developed larger-scale models to assess: - Effects of UMP, - Negative interest rates, - Alternative frameworks including average inflation targeting. - MMU staff have engaged in estimation of models and are working on approaches to incorporate macroprudential tools into modeling frameworks. - MMU worked with EUR in applying an estimated closed economy version to assess prospective changes to the ECB’s monetary policy framework; an open economy version is used to assess policy spillovers. ### Research outputs and publications - The MMU has produced seven analytical papers since inception: - Four published as working papers and three close to completion. - Papers include: - “A Quantitative Model for the IPF” (WP 20/122). - “The Costs of Macroprudential Deleveraging in a Liquidity Trap” (WP 20/89). - “Monetary and Macroprudential Policy with Endogenous Risks” (WP 20/236). - “Equilibrium Foreign Currency Mortgages” (WP 21/84). - “Navigating the Global Lockdown: Macrofinancial Policy Trade-Offs under COVID-19”. - “Monetary Policy Strategies for the European Central Bank”. - “An estimated Model for the IPF”. - Selected findings from MMU and related MCM research: - WP 20/122 shows FXI and CFMs may improve policy tradeoffs under certain conditions, especially for economies with less well-anchored expectations, substantial foreign currency mismatch, and higher vulnerability to shocks likely to induce capital outflows and exchange rate pressures. - WP 20/236 extends the New Keynesian model to include endogenous risk, showing macroprudential measures can mitigate the intertemporal risk-return tradeoff created by vulnerability. - “Monetary Policy Strategies for the European Central Bank” develops a behavioral DSGE model assessing whether UMP tools (asset purchases, forward guidance, negative rates) suffice for efficient macroeconomic stabilization in low nominal and real interest rate contexts; finds these instruments may be insufficient and considers alternative frameworks including average inflation and price level targeting. - March 2021: stocktaking paper on negative interest rates published as IMF Departmental paper (2021/003) and presented in a Joint IMF-IMFS Webinar. - February 2021: presentation to the Board on “Monetary Policy Framework Reviews” with high-level overview of framework reviews of major central banks, focusing on work by the US Federal Reserve Board. ### Outreach, advisory arrangements, and capacity-building - Creation of an external advisory group delayed due to COVID-19; MCM plans to issue terms of reference no later than end-2021. - In the interim, MCM hired two eminent economists as visiting scholars to provide advice on monetary policy issues: Mr. Lars Svensson and Mr. Andrew Levin. Both have been senior central bank officials and have distinguished academic credentials. - An internal Monetary Policy Advisory Group was created in Fall 2020, including senior staff representatives from all area departments and several functional departments; it meets regularly and has had engaging discussions on core monetary policy issues. - Events and conferences: - The Michel Camdessus Central Banking Lecture (first virtual) held in two half day sessions on July 14, 2020 and July 22, 2020, focused on monetary policy challenges in a low-interest-rate environment. - Conference on Advances in Monetary Economics organized by MCM; July 19, 2021 AME Conference hosted by MCM and RES covered monetary policy and inequality, monetary policy and financial markets, and coordination of monetary and fiscal policies. - RES developed an IAPOC index of monetary policy frameworks; presentation at the NBER Summer Institute and expected working paper publication by Fall 2021, including data and methodology; RES working with ITD to develop an online toolkit. ### Work on Unconventional Monetary Policy (UMP), negative rates, and a “playbook” - IEO Recommendation 2: deepen work on costs and benefits of UMP to develop a playbook for future downturns—Directors broadly supported developing a playbook while avoiding over-prescription and allowing flexibility for country-specific conditions. - Staff activities and findings: - MMU work and WP 20/122 indicate FXI and CFMs can improve policy tradeoffs under particular conditions. - Research shows macroprudential tightening can dampen impact of global financial shocks on GDP growth in emerging markets but is not costless (it lowers activity when financial conditions are favorable) and may have cross-country spillovers. - Spring 2020 WEO Chapters 2 and 3 analyzed policy challenges with limited policy space and found central banks still have scope to use UMP tools but side effects and threats to independence remain concerns. - April 2020 GFSR Chapter 4 analyzed effects of very low interest rates on banks’ net interest margins; discussed policies to mitigate medium-term vulnerabilities and ensure adequate credit flow, including macroprudential use. - November 2020 Board informal briefing on “Distributional Effects of Monetary Policy” concluded monetary policy should remain focused on macroeconomic stability but should not ignore distributional considerations; recommended highlighting that secular changes in inequality and long-run interest rates are caused by structural factors and that distributional effects can be mitigated by targeted policies. - September 2020 Board briefing on low/negative interest rates noted including NIRP in UMP packages can be beneficial to lessen intensity of other tools and mitigate their side effects; net benefits of NIRP vary across countries depending on financial system characteristics. - April 2021 Board briefing by MCM and RES on UMPs discussed costs and benefits of conventional and UMP tools, development of a playbook, cross-country experience, model analysis of forward guidance, asset purchase programs, new central bank lending operations, and negative interest rate policies; highlighted spillovers from AE policy (notably US) to EMDE bond yields and investor risk tolerance for EMDE assets, and that spillovers are typically larger for economies with higher financial openness. - Ongoing work aims to produce a “recession playbook” summarizing lessons learned from modeling, empirical work, and COVID notes that summarize policy advice and assess feasibility of UMP in EMDEs, including asset purchase programs. ### IMF governance, transparency, and Board engagements - July 2020: Executive Board approved a new IMF Central Bank Transparency Code (CBT). - CBT five-pillar framework: central bank governance, policies, operations, outcomes, and official relations. - CBT intended to support capacity building, technical assistance, Financial Sector Stability Reviews, surveillance, use of Fund resources, and enhanced Fund engagement in governance. - Modular approach allows voluntary and proportional application considering country-specific circumstances. - Ongoing and scheduled Board activities: - Board presentations in February 2021 and planned presentation in December 2021 on Monetary Frameworks and Tools. - July 2021: MCM partnered with SPR and FAD in an informal Board briefing on effective monetary-fiscal coordination. ### Management actions and implementation status (selected) - MANAGEMENT ACTION 1.1: The new Monetary Policy Modeling Unit (MMU) in MCM will be fully staffed. - Implemented - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: End-2019 - 79% implemented (11 out of 14 actions) - Implemented up to 10th PMR; Overdue but progressing; Implemented in 11th PMR; Reformulation; Open (these words appear in the source reporting on implementation status) - MANAGEMENT ACTION 1.2: A press release will announce the remit and composition of a high-level external advisory group. - Open - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: September 2020. - EXPECTED COMPLETION DATE: End-2021. - MANAGEMENT ACTION 1.3: An internal Monetary Policy Advisory Group will be created. - Implemented - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: Mid-2020 - MANAGEMENT ACTION 1.4: The 2020 Michel Camdessus Lecture event will be broadened to a full-day conference with a focus on monetary policy issues, including UMP. - Implemented - ACCOUNTABLE: MCM, RES - ORIGINAL TARGET DATE: Fall 2020. - MANAGEMENT ACTION 1.5: The Independence, Accountability, Policy and Operational Strategy, and Communications (IAPOC) toolkit, with the data and methodology paper, will be published. - Open - ACCOUNTABLE: RES - ORIGINAL TARGET DATE: Fall 2020. - EXPECTED COMPLETION DATE: End-FY22. - MANAGEMENT ACTION 2.1: The MMU will issue at least two of the following research products: a small open economy model capturing key features of monetary policy transmission and FX intervention, a medium-size model incorporating macroprudential tools, and a larger scale model allowing for analysis of UMP, including negative interest rates and spillovers. - Implemented - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: April 2020 - MANAGEMENT ACTION 2.2: A thematic briefing on the distributional impact of monetary policy will be presented to the Board. - Implemented - ACCOUNTABLE: SPR, MCM, RES - ORIGINAL TARGET DATE: May 2020 - MANAGEMENT ACTION 2.3: An informal Board briefing on UMP and related policies will be presented to the Board. - Implemented - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: May 2020 - MANAGEMENT ACTION 2.4: The Central Bank Transparency Code will be presented to the Board. - Implemented - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: May 2020 - MANAGEMENT ACTION 2.5: A thematic briefing on the components of a playbook will be presented to the Board. - Open - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: Summer 2021 - EXPECTED COMPLETION DATE: End-CY2021. *Source: ppea2021070 (excerpt).* ### 44. The CSR, completed in May 2021, provided recommendations for strengthening ### ppea2021070 - 44. The CSR, completed in May 2021, provided recommendations for strengthening ### Spillovers and Surveillance: CSR priorities and proposals - CSR completed in May 2021 prioritized Fund surveillance around four key priorities: (i) confronting risks and uncertainties; (ii) preempting and mitigating adverse spillovers; (iii) fostering economic sustainability; and (iv) providing unified policy advice. - CSR noted evolving and intensifying cross-border spillovers due to shifts in: - patterns in the trade of goods and services, global value chains; - new types of financial intermediaries; - relocation of foreign direct investment; - new patterns of migration and remittances; - digital and financial technologies increasing speed of policy and risk transmission, with cyber risk as a new frontier. - COVID-19 demonstrated how global interconnectedness can amplify disease outbreaks’ economic impact. - CSR emphasis on actions: - Prioritize identification of potential sources of adverse spillovers and approaches to pre-empt/mitigate them. - Address gaps and uncertainties via analytical work and continue efforts to improve data and tools. - Bring in more cross-country perspectives; strengthen information sharing, peer learning, and internal coordination via centralized repository of spillover case studies and policy responses. - Leverage Fund convening power to encourage dialogue between spillover producing and receiving countries. - Clarify scope of Fund coverage of spillovers in surveillance in the upcoming Guidance Note on Surveillance under Article IV Consultations. - Specific CSR proposals: - Spillovers Forum: an informal closed-door annual meeting of the membership to discuss incipient policy issues with potentially large spillovers. - Development of a spillover tool to improve understanding of key spillovers and propagation channels and enable coordinated institutional spillover analysis. - Executive Directors broadly agreed spillovers tool and Spillovers Forum would help strengthen work on spillovers. - MANAGEMENT ACTION 3.1: - The CSR will present proposals to further strengthen spillover analysis and coverage in Article IV surveillance. - Status: Implemented - ACCOUNTABLE: SPR - ORIGINAL TARGET DATE: April 2020 ### Integrated Policy Framework (IPF) and multilateral spillovers - Staff briefed the Executive Board on IPF in May 2020, September 2020, and May 2021. - IPF aims to provide a systematic analytical approach to selecting an appropriate policy mix for managing large and volatile capital flows and preserving macroeconomic and financial stability in the face of domestic and external shocks. - IPF jointly considers monetary, exchange rate, macroprudential and capital flow management policies and their interactions with each other and other policies. - May 2020 presentation implications: - COVID-19 underscored need to account for multilateral spillovers; - seek international support for a well-functioning global financial system, including orderly debt restructuring; - strengthen the global safety net. - September 2020 briefing “Toward an Integrated Policy Framework” published as IMF Policy Paper No. 2020/046 and will serve as input into forthcoming IV review planned for the second half of 2021. - Paper’s core finding: appropriate policy mix depends on nature of shocks, country characteristics, and initial conditions; does not rationalize indiscriminate use of multiple tools or support deployment in all circumstances, and reliance on such tools should not substitute for warranted economic adjustment. - May 2021 presentation focused on progress on operationalization and analytical work related to the IPF. - MANAGEMENT ACTION 3.2: - Update the Board on progress on the Integrated Policy Framework (IPF). - Status: Implemented - ACCOUNTABLE: SPR, RES, MCM - ORIGINAL TARGET DATE: Spring and Summer 2020 ### Unconventional monetary policy (UMP) spillovers and GFSR coverage - Effects of UMP on financial stability, including emerging market policy developments and capital flows, regularly discussed in recent GFSRs. - April 2020 GFSR (Chapter 3), October 2020 GFSR (Chapter 2), and April 2021 GFSR (Chapter 1) analyzed determinants of capital flows, portfolio flows volatility effects on local markets, and risks of further portfolio outflows relative to EM country fundamentals and vaccine access. - Fall 2020 GFSR emphasized pandemic impact on financial conditions, aggressive UMP use, and emerging market policy developments. - Since June 2020 GFSR, global financial conditions remained accommodative due to continued policy support in advanced economies and generally eased in emerging markets. - Many emerging market central banks deployed asset purchases for the first time, aiding access to capital markets and bank funding. - Chapter 2 (Fall GFSR): asset purchases by emerging market central banks helped domestic bond markets absorb outflow pressure and contributed to government financing needs. - SPR created first repository of asset purchases programs (APPs) announcements and implementation by EMDEs during COVID; dataset published in a working paper in January 2021 with empirical analysis of APP effectiveness. - MANAGEMENT ACTION 3.3: - The GFSR will include a box or chapter on UMP financial spillovers. - Status: Implemented - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: Fall 2020 ### Traction of Fund surveillance and country engagement (CSR findings) - CSR examined traction of Fund surveillance and methods to assess it: implementation analysis of past Fund advice, surveys of authorities’ views, case studies, sentiment analysis, assessment of uptake of Fund surveillance products and relevance in local policy debate. - CSR findings: - Traction of Fund advice was reasonably strong and had risen over time, but longstanding challenges persisted with weaker traction in some membership segments. - Receptiveness systematically lower in AEs and in larger and financially open economies. - Fund advice better received for fiscal and financial sector policies; less so for monetary and external issues. - COVID-19 intensified bilateral dialogue despite temporary suspension of Article IV consultations. - Policy tracker was a popular new product; membership valued cross-country experiences and Fund insight into global and regional developments and remote communication technology. - CSR recommendations to improve traction: - Strengthen analytical underpinnings and bring in relevant cross-country experiences. - Respond to country-specific challenges continuously and balancedly by discussing alternative policy options and tradeoffs. - Better integrate policy advice with capacity development. - Maintain continuous dialogue inside and outside Article IV cycles, leveraging new technologies and complementary surveillance modalities. - Improve public communication to contribute to national and international debate. - Implement MS Teams and OneDrive and enable collaboration with external participants to facilitate ongoing engagement. - MANAGEMENT ACTION 1.1: - The CSR is exploring ways to enhance the traction of Fund surveillance. - Status: Implemented - ACCOUNTABLE: SPR - ORIGINAL TARGET DATE: April 2020 ### IMF financial surveillance, FSAP integration, and macrofinancial capacity - IEO evaluation (Financial Surveillance 2019) found substantial upgrade in Fund’s financial surveillance since the global financial crisis, including high-quality FSAP assessments and new diagnostic tools; Article IV surveillance stepped up attention to macrofinancial linkages. - Evaluation noted uneven quality and impact of financial surveillance and recommended: - strengthen financial and macrofinancial analysis in Article IV consultations, including closer integration with FSAP; - increase traction of multilateral surveillance via greater rigor and transparency and strengthen Fund contribution to global regulatory agenda in areas of expertise; - intensify efforts to become a global center of excellence on financial and macrofinancial research (expand research, enhance tools, develop staff expertise); - consider increasing resource envelope for financial surveillance to meet goals and mandate. - Summary of Progress – IMF Financial Surveillance: - In response to six IEO recommendations, the MIP envisaged 16 actions, of which 10 have been implemented. - Of the remaining six open actions, two are overdue but progressing and the remainder are on course to be implemented on or within a year of original due dates. - Status snapshot: 63% implemented (10 out of 16 actions) - IEO Recommendation 1 response and CSR follow-up: - Directors supported strengthening financial and macrofinancial analysis in Article IV surveillance; Comprehensive Surveillance and FSAP reviews provide opportunity for related suggestions. - MIP envisaged two actions. - CSR specifics on deepening macrofinancial analysis: - Significant but uneven progress integrating macrofinancial analysis into Article IV staff reports. - Areas for additional effort: well-articulated view about systemic financial risk grounded in rigorous vulnerability analysis; more consistent follow-up of FSAP findings; more forward-looking systemic risk analysis; expand analysis of vulnerabilities beyond banks; deepen knowledge on side effects of macroprudential policy and its interactions. - “2021 CSR – Background Paper on Systemic Risk and Macroprudential Policy Advice in Article IV Consultations” and “2021 CSR - Modalities for Modernizing Surveillance” provided detailed discussions. - Assessment: half of all Article IV reports presented gaps in macrofinancial analysis. - Proposal: an additional 24 FTEs with macrofinancial expertise would translate into about 80 percent coverage of these gaps; remaining gaps could be closed through training and reprioritization. - Directors called for further systemic risk analysis efforts, closer integration of FSAP findings with Article IV consultations, and expanding macrofinancial talent at the Fund while considering budget constraints. - MANAGEMENT ACTION 1.1: - The CSR, in conjunction with the FSAP Review, will present proposals on how to further strengthen financial and macrofinancial analysis in Article IV surveillance, including, inter alia, a proposal to increase MCM resources that would support Area Departments. - Status: Implemented - ACCOUNTABLE: SPR in coordination with MCM - ORIGINAL TARGET DATE: Spring 2020 ### FSAP review and resource/scoping considerations - 2021 FSAP review findings: - Progress on operationalizing strengthened analytics in FSAPs and more risk-based scoping. - Proposal to further strengthen risk-focused scoping by using greater flexibility in FSAP’s three-pillar framework (risk analysis, oversight, safety nets) to prioritize most systemically important risks. - Recommendations: deploy new tools to help country teams’ risk analysis, pilot increased cross-country participation, improve FSAP follow-up, and reflect authorities’ views in FSSAs. - Executive Directors agreed greater flexibility in scoping FSAPs is appropriate, balancing current coverage with emerging risks and tailoring to country specifics. - Emphasized need to increase efficiency, dissemination, ease of use of FSAP toolkit, and ease data constraints. - MANAGEMENT ACTION 1.2: - Publish an updated guidance note on surveillance under Article IV consultations containing practical steps to implement Board-approved CSR recommendations, including on financial surveillance. - Status: Open - ACCOUNTABLE: SPR - ORIGINAL TARGET DATE: by April 2021 - EXPECTED COMPLETION DATE: Q1 CY2022 - IEO Recommendation 2: - Revisit approach to allocating FSAP resources to achieve more flexible, dynamic, and risk-based allocation across countries and issues. - Directors broadly agreed to revisit allocation approach and review scope and focus across FSAPs to better tailor assessments to country circumstances, risks, and regulatory gaps. - MIP envisaged one action. *Source: Excerpt from ppea2021070 - CSR and related IMF reviews, May 2021 (as provided in the content unit).* ### 52. In the context of the FSAP review, staff revisited country participation in the FSAP ### ppea2021070 - 52. In the context of the FSAP review, staff revisited country participation in the FSAP ### FSAP participation and risk-based surveillance - Proposed expansion of jurisdictions with Systemically Important Financial Sectors (SIFS) from the current 29 members to 47 members. - Under the new approach: - 32 jurisdictions with relatively more systemically important financial sectors would participate in FSAPs more frequently (once every five years). - 15 jurisdictions with relatively less systemically important financial sectors will participate in FSAPs less frequently (once every ten years). - The increase in gross resource requirements to accommodate the larger set of mandatory FSAPs would be met by resource efficiencies elsewhere in MCM. - Executive Directors: - Welcomed the update and expansion of the list of jurisdictions with SIFS that are subject to periodic mandatory FSAPs. - A few Directors recalled that Fund policy requires the periodic review of the country list and assessment frequency. - Management action (excerpt): - MANAGEMENT ACTION 2.1: The FSAP Review will present proposals on country participation and on better balancing the standardization and customization of finance stability assessments. — Implemented. - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: Spring 2020 ### Publications, collaboration with international standard setters, and regulatory work - MCM staff publications: - “From Basel I to Basel III: Sequencing Implementation in Developing Economies” (WP/18/127, published in 2019). - “Strengthening Bank Regulation and Supervision: National Progress and Gaps” (Departmental Paper No. 21/05, published in March 2021). - Upcoming and recent Board/regulatory coverage: - Regular updates to the Executive Board on regulatory issues routinely cover these topics. - Next such update, expected to focus on regulatory policy developments during the COVID crisis, planned for October/November 2021. - Collaboration and contributions: - Continued and deepened collaboration with the Financial Stability Board (FSB) and other international standard setting bodies (Basel Committee on Banking Supervision, International Association of Insurance Supervisors, International Organization of Securities Commissions). - Staff participate in several groups, including co-chairing a working group on proportionality at the Basel Committee. - IMF prepared an annex on Enhanced Supervision and Heightened Supervisory Expectations included in an FSB report on evaluation of TBTF reforms for systemically important banks, published in April 2021. - IMF and FSB have continued to share and review proposed outlines for respective EWE presentations to have complementary analyses; FSB generally covered more immediate threats while the Fund examined longer-term financial stability implications. - Management action (excerpt): - MANAGEMENT ACTION 3.1: Staff will prepare a Board paper on “Adapting National Prudential Approaches to the International Reform Agenda: Lessons from Experience”. — Implemented. - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: April 2020 ### GFSR, methodological annexes, and analytic transparency - The Fall 2019 GFSR, “Lower-for-Longer”, published online data annexes for all chapters and seven methodological annexes, including Technical Notes on Asset Valuation Models; Credit Quality Assessment of the Corporate Sector; Investment Fund Stress Testing; explanation for the Sample of Emerging Market State-Owned Enterprises; technical annexes for Non-US Banks’ USD Funding, Econometric Methodology, and methodology for Non-US Banks’ US dollar Balance Sheet and Funding Fragility Measures. - Online annexes with additional details on data and methodologies continued in subsequent GFSRs. - Text and figures in GFSRs have been made more accessible to target audiences. - Management actions (excerpts): - MANAGEMENT ACTION 3.2: The 2019 Fall GFSR will publish online annexes with additional details on data and methodologies, subject to copyright and confidentiality constraints. — Implemented. - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: Fall 2019 - MANAGEMENT ACTION 4.1: Hold a conference on macrofinancial linkages. — Implemented. - ACCOUNTABLE: RES - ORIGINAL TARGET DATE: April 2020 ### Conferences and outreach on macrofinancial research - Third Annual Macrofinancial Research Conference (virtual) on September 15-16, 2020; topics included monetary policy transmission; risk taking by financial intermediaries; political economy of financial regulation; leaning against the wind: tradeoffs and optimal policy; financial frictions and aggregate demand; technology in lending and credit market competition; macrofinancial policy considerations at the time of COVID-19. - Fourth Annual Macrofinancial Research Conference planned for September 29-30, 2021; expected topics: redistributive effects of financial policies; real and financial drivers of global imbalances; technology in finance; sustainable finance solutions to climate change; credit markets, innovation and growth; macrofinancial aspects of COVID-19. - MANAGEMENT ACTION 4.2: Hold a conference on “Rethinking Financial Stability: The FSAP at 20”. — Implemented. - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: October 2019 - “Rethinking Financial Stability: The FSAP at 20” conference took place on October 14-15, 2019; first day technical (advances in stress testing), second day policy oriented (risk analysis, risk prevention and mitigation, financial safety nets and crisis management). ### Analytical tools, trackers, and FSAP analytical foundations - Corporate vulnerability surveillance tool: - Last upgraded in 2018 to improve some indicators and presentation. - Rollout of a new upgraded version to expand country coverage delayed due to pandemic-related work demands and reprioritization of RES’s work program. - MANAGEMENT ACTION 4.3: Roll out an upgraded corporate vulnerabilities surveillance tool that expands country and firm coverage. — Open. - ACCOUNTABLE: RES - ORIGINAL TARGET DATE: by April 2021 - EXPECTED COMPLETION DATE: End-FY22 - Systemic Risk Tracker: - Rolled out in December 2019 and subsequently updated. - Consolidates available data covering the entire membership at quarterly frequency since 1995 from existing Fund toolkits and databases; provides an economy-wide snapshot by sector and type of underlying risk. - A monthly Financial Markets Monitor module facilitates monitoring of risks between quarterly tracker updates. - MANAGEMENT ACTION 4.4: Roll out a tool that tracks indicators of financial risks across the membership to help strengthen consistency of systemic financial risk assessments and facilitate follow-up of FSAP-identified vulnerabilities. — Implemented. - ACCOUNTABLE: SPR - ORIGINAL TARGET DATE: December 2019 - FSAP Review proposals to strengthen analytical foundations: - Improve efficiency of core risk analysis tools and apply new standardized tools (including corporate and household stress testing and bank-sovereign linkages). - Enhance macroprudential stress testing by improving modeling of interaction between solvency, liquidity, contagion risks, and macrofinancial feedback effects. - Expand coverage of nonbanks, focus on cross-sectoral interactions and nonbanks’ potential impact on markets. - Use stress tests to aid calibration of macroprudential policies. - Develop financial stability analysis frameworks for emerging risks such as climate change and technological change in financial services. - A detailed description of proposals is included in “2021 FSAP Review – Background Paper on Quantitative Analysis”. - MANAGEMENT ACTION 4.5: The FSAP Review will present proposals to strengthen the FSAP’s analytical foundations. — Implemented. - ACCOUNTABLE: MCM - ORIGINAL TARGET DATE: Spring 2020 - MCM simplified analytical tools and support: - Examples: Global Bank Stress Test and Universal Bank Stress Test Tool (the latter still under development). - Since 2019, policy position notes added to the KE on regulatory sandboxes, foreign exchange settlement risk, and regulation/supervision of e-money issuers. - COVID notes: MCM published nine notes to support countries and country teams on financial sector policy response. - MCM working on updating its intranet page to improve accessibility and applicability of analytical tools for country teams. - All GFSRs from April 2019 have continued to use the growth-at-risk (GaR) framework, with refinements: - (i) better aligning forecast densities with information contained within the global growth projections provided in the WEO; and - (ii) broadening the scope to facilitate scenario analysis. - MCM continues to assist country desks and FSAP teams in tailoring the framework for specific uses (e.g., macrofinancial assessments, stress-test scenarios). ### Human resources, talent inventory, and career frameworks for financial expertise - IEO Recommendation 5: Intensify efforts to attract, develop and retain a deeper pool of financial talent, and ensure area department fungible macroeconomists have knowledge and support to integrate financial and macrofinancial analysis into Article IV consultations. - Executive Board briefed on HR strategy in November 2019; additional workforce planning and work on financial sector experts in progress. - Talent inventory and workforce analysis: - Robust workforce analysis for financial sector experts limited by absence of comprehensive data on skills, expertise, and experiences. - Narrow definition (financial sector experts with FSE titles) used in some analyses; broader definition that includes fungible macroeconomists is harder to quantify without a comprehensive talent inventory. - Plans to capture talent profiles and build a comprehensive talent inventory are underway with the modernization of HR processes and systems; categorization of skills depends on full rollout of Workday. - Workforce analysis for financial sector experts slated for FY22. - Based on the narrow definition, number of financial sector experts increased from 97 in FY15 to 132 in FY21. - MANAGEMENT ACTION 5.1: Brief the Executive Board on the HR strategy, including on the ongoing workforce analysis for financial sector experts. — Overdue but progressing. - ACCOUNTABLE: HRD - ORIGINAL TARGET DATE: by January 2020 - EXPECTED COMPLETION DATE: FY22 - Career tools and mobility frameworks: - In July 2020, Management launched new career tools and guidance. - 13 career playbooks introduced: one for each of the four job families under the Economics job function and nine for the Specialized Career Streams job functions. - Within the Economics job function, financial sector experts constitute one of the four job families, along with macroeconomists, fiscal sector experts, and statistics experts. - Playbooks supported by Job Family and Career Framework (JFCF) and technical competency model (TCM). - MANAGEMENT ACTION 5.2: Launch an enhanced career mobility framework along with a career playbook for all job families, including for financial sector experts. — Implemented. - ACCOUNTABLE: HRD - ORIGINAL TARGET DATE: by January 2020 - Fungible Macroeconomist (FM) Career Path and Mobility Framework (CPM): - Recognizes staffing challenges in macrofinancial area, LIC/FS, and non-core areas. - Recommends six elements: updated guidelines on expected experiences; responsiveness to institutional needs as prerequisite for promotion to A15; tenure rules and benchmarks; introduction of staff profiles and talent inventory; establishment and use of talent pools; enhanced mobility support. - Some elements completed, others under development. - Expectations for FMs: - FMs at grades A12-14 expected to gain wide range of experiences across topics/policy areas, regional/country contexts, and forms of country engagement (examples: real, fiscal, monetary, external, and financial sectors; regional/multilateral surveillance; global solutions; policy formulation/review; economic and financial research). - For advancement to A15, A14 FMs will be required to have experience with at least one LIC/FS country assignment or equivalent. - MANAGEMENT ACTION 5.3: Complete an enhanced talent inventory of staff to include talent profiles for financial sector experts and data on macrofinancial (and other) experiences of fungible macroeconomists. — Open. - ACCOUNTABLE: HRD - ORIGINAL TARGET DATE: by November 2020 - EXPECTED COMPLETION DATE: FY23 - Workday rollout and Talent Cards: - Technology to facilitate enhanced talent inventory rolled out with implementation of Workday. - Talent Cards available for all employees to complete; Talent Card summarizes corporate/work experience, education, qualifications, skills, career interests, certifications, training, publications, etc. - Work experience fields include areas of expertise and type of assignments (e.g., advanced economies, fragile states, LICs, event management, etc.) as well as duration and countries covered. - Portions of talent profile pre-populated from previous HR system; staff expected to voluntarily complete remaining profile elements. - Completion of talent profiles intended to be required for application to certain senior job positions; over time expected to develop a full talent inventory. - For economics job functions, required experiences clearly defined and easier to track; for specialized career streams, more work needed to define required experiences due to wide disparity across job functions. *Source: ppea2021070 - 52. In the context of the FSAP review, staff revisited country participation in the FSAP (IMF PDF content).* ### 66. In September 2018, Management announced the Fund’s Enhanced Performance ### ppea2021070 - 66. In September 2018, Management announced the Fund’s Enhanced Performance ### Enhanced Performance Management and Career Tools - Management announced the Fund’s Enhanced Performance Management approach in September 2018 as the first milestone of the HR Strategy. - Framework elements: - Continuous cycle of setting and reviewing objectives. - Sustained performance support, coaching, and feedback throughout the year. - Comprehensive year-end assessment for staff’s overall performance. - Implementation timeline and delays: - New framework became effective starting May 1, 2019. - Aspects delayed to accommodate work pressures arising from the COVID crises. - July 2020 career tools and guidance: - New JFCF designed to enrich and support career development. - JFCF three main deliverables supporting career management: - Updated job architecture demonstrating how jobs are organized in the Fund. - Integrated Competency Framework (ICF) providing insights on competencies and specialty knowledge needed for roles under each family. - Career Playbooks to help staff navigate careers and explore development options. - ICF competencies grouped as Behavioral, People Management and Technical. - Expected to strengthen the quality of career guidance, performance management, and learning development for staff and managers. - Fungible Macroeconomist (FM) Career Path and Mobility Framework (CPM) issued July 2020: - New benchmark encouraging a maximum tenure on a country team of 3.5 years (in addition to the current minimum assignment tenure of 2 years) encouraged from July 2020. - Interdepartmental mobility required after seven years in the same department for A14/B3s; expanded to include A12-A13 FMs. - Mobility remains predominantly market based, with enhanced mobility support (new staff profile, talent inventory, institution-wide talent pools). - Mobility framework includes policy requirements that incentivize work on low-income countries and/or fragile states (covered in paragraph 78). - Strategic workforce planning and expert track: - Work on strategic workforce planning expected to take longer than expected due to ongoing work pressures and change management challenges. - New technology for systematic and comprehensive workforce analysis expected to be deployed in December 2021 as part of the new HR technology solution. - New system expected to include more data on skills (and experiences) enabling more granular identification of skills gaps. - Proposal for an expert track under consideration to provide a career path to certain specialists (including financial sector experts) with expectation to support Fund work and build institutional capacity; positions would be based on validated need for long-term expertise. ### Internal Economics Training (IET) and Macrofinancial Capacity Building - IET event counts in the macrofinancial area offered by ICD: - Increased from 18 in FY18 to 20 in FY19. - Declined to 4 in CY 2020 due to the pandemic. - Training formats and clinics: - Clinics and hands-on workshops became integral to the IET program. - Clinic on the GaR tool delivered in FY19. - Clinic on the updated GaR postponed until FY22 due to the pandemic. - Clinic on systemic risk analysis delivered in FY20 and another in FY21. - Clinics on financial inclusion (as part of macro-structural clinics) delivered in FY18-FY19. - MANAGEMENT ACTION 5.5: - Offer 19 training events in the macrofinancial area in 2019, up from 17 in 2018. - Status: Implemented. - ACCOUNTABLE: ICD. - ORIGINAL TARGET DATE: by end-2019. ### Financial Surveillance: Resources, Budgets, and Future Proposals - Recent provisioning and estimates: - Current estimated direct spending on financial surveillance in functional departments: $47 million per year (average for FY17-20, in FY20 U.S. dollars), reaching close to $60 million in FY21. - Financial surveillance work by area departments estimated through Fund-wide surveys at close to $15 million in FY21. - Within estimates, bilateral financial surveillance (including FSAPs) is around $30-33 million per year. - FY21 Budget provisions for MCM: - Increase in structural and transitional resources for MCM for FY21 for financial surveillance/FSAPs, cybersecurity, fintech (including digital currencies), and the Monetary Policy Modeling Unit. - Expressed in FY20 US dollars: - Net increase in structural resources for MCM for FY21 amounted to US$1.6 million. - Transitional resources for FY21 amounted to US$2.3 million. - FY20 overall budget for MCM (including transitional funds): US$87.4 million. - FY22 Budget provisions for MCM: - Provides additional spending on financial surveillance, including macroprudential stress testing, new data requirements for surveillance, and strengthening of selected country teams. - Overall budget envisages increase in MCM’s structural and transitional resources to support area departments on crisis-related topics, debt issues, and financial surveillance/FSAPs, focusing on crisis-related risks, cybersecurity, fintech, the IPF, and climate change. - Expressed in FY21 US dollars: - Net increase in structural resources envisaged in the FY22 budget for MCM amounts to US$2.8 million. - Transitional resources amount to US$1.3 million. - Crisis resources to US$3.8 million. - FY21 overall budget for MCM (including transitional funds): US$90.6 million. - Medium-Term Budget FY23-25 proposals: - Early proposals envisage a targeted structural augmentation to address new initiatives following a decade of flat real budgets, including resource requirements arising from the CSR and FSAP Review. - Formal proposals for structural budget augmentation expected in October 2021, following an informal presentation in July 2021. - Augmentation expected to focus on work on climate change and digital money, strengthening macrofinancial work in bilateral surveillance, reinforcing support to FCS, and work on inclusion and gender. - CSR proposals to enhance bilateral macrofinancial surveillance through expanding macrofinancial talent (24 FTEs) expected to be reflected in proposed structural budget augmentation request. - Implementation would involve mobility from MCM to area departments to broaden macrofinancial expertise across country teams. - MANAGEMENT ACTION 6.1: - The FY21-23 Medium-Term Budget discussion will consider the on-going FSAP Review and CSR and reflect on medium-term trade-offs. - Status: Overdue but progressing. - ACCOUNTABLE: OBP. - ORIGINAL TARGET DATE: February-April 2020. - EXPECTED COMPLETION DATE: Q4 FY22. ### The IMF and Fragile States: Institutional Arrangements, Strategy, and Country Engagement - IEO evaluation findings (summary): - IMF made important contributions in fragile states: restoring macroeconomic stability, building core macroeconomic policy institutions, catalyzing donor support. - Evaluation found Fund’s approach to fragile states seemed conflicted and outcomes fell short of potential. - Scope for improvements: strong public signal of commitment, institutional mechanisms to promote and coordinate work, develop individual country strategies integrating policy advice, financial support, and capacity building; improve financing instruments; enhance capacity development delivery; strengthen teams working on fragile states; seek pragmatic ways to increase presence on the ground while minimizing staff risk exposure. - MIP actions and status summary: - In response to six recommendations in the IEO evaluation, the MIP envisaged 12 actions. - Seven remained open after the Tenth PMR; two additional actions implemented since the Tenth PMR. - As of this report, five actions remain open: two overdue but progressing and three on course to be implemented on or within a year of their original due date. - Implementation rate shown as 58% implemented (7 out of 12 actions). - Institutional coordination: - High-Level Interdepartmental Committee on Fund Engagement in FCS established late 2018; chaired by Director of SPR; comprises Directors of AFR, FAD, HRD, ICD, MCD, and MCM; other departments invited as warranted. - Objectives: advocate for and promote implementation of measures to improve Fund engagement in fragile and conflict situations, improve coordination across the Fund and with outside agencies. - Committee activities suspended in 2020 due to pandemic; reinvigorated in February 2021 and meeting roughly on a bi-weekly basis since then. - Significant recent work preparing the Fund’s FCS engagement strategy, including defining priority actions for next three years. - An interdepartmental FCS Technical Taskforce set up; chaired by newly hired Deputy Director of ICD leading the Fund’s work on FCS; task force oversees seven working groups focusing on priorities identified by the IEO (preparation of FCS engagement strategy and updating 2012 staff guidelines on FCS work). - MANAGEMENT ACTION 2.1: - Establish a high-level committee that will report twice a year in a formal meeting with management to seek management guidance to the action plan. - Status: Implemented. - ACCOUNTABLE: SPR (with other departments). - ORIGINAL TARGET DATE: October 2018. - MANAGEMENT ACTION 2.3: - Staff will prepare a Board paper on Review of FCS Engagement. - Status: Open. - ACCOUNTABLE: SPR (with other departments). - ORIGINAL TARGET DATE: End-2020. - EXPECTED COMPLETION DATE: End-CY2021. - FCS Strategy development: - Full-fledged FCS Strategy planned for presentation to the Executive Board by end-2021, following delays due to the COVID pandemic. - Strategy aims to: - Provide a renewed vision for the Fund’s role across the fragility and conflict spectrum. - Articulate how the Fund’s comparative advantage, core competencies, mandate, and instruments can be leveraged. - Clarify tailoring of surveillance, macroeconomic policy advice, CD provision, and program design to manifestations of fragility and conflict. - Spell out the Fund’s role relative to other partners (development, humanitarian, peace and security agencies) based on mandates and complementarities. - Set out specific measures to adapt the Fund’s engagement at each stage of the fragility and conflict spectrum. - Initial proposals prepared with lessons from past engagement and analytical contributions from RES. - Informal Board presentation on July 6 received positive feedback from Directors. - Another informal Board briefing planned for September 2021 prior to formal Board consideration by end of 2021. - Country Engagement Strategies (CES): - CES pilot deployed for five countries: Afghanistan, Central African Republic, Djibouti, Haiti, and Madagascar; medium-term CES formalized in papers discussed at the Board. - Earlier attempts for Djibouti, Iraq, and Somalia. - Interim staff guidance for CES preparation provided in early 2019; staff used different approaches depending on country circumstances. - Preliminary experience indicates CES valuable in enhancing engagement with authorities and stakeholders. - FCS Technical Taskforce organized meetings to exchange lessons and conducted a stocktaking and a survey of mission chiefs. - CES rollout envisaged to be gradual with timeline to be established in the FCS Strategy. - ICD, in coordination with other departments, delivered a training program in FY21 to develop skills and expertise of Fund staff working on FCS; program to be further enhanced in line with FCS Strategy with practical, hands-on approach. - MANAGEMENT ACTION 3.1: - Area department FCS country teams to prepare as part of staff reports for Art. IV and new program requests a succinct country engagement strategy that discusses country fragility, surveillance and CD priorities, and, if applicable, the complementary role for Fund financial support. - Status: Open. - ACCOUNTABLE: Area Departments (monitored by SPR). - ORIGINAL TARGET DATE: Starting from Q1 2019. - EXPECTED COMPLETION DATE: End-CY2021. ### Lending Toolkit and Arrears Clearance in Fragile States - IEO Recommendation 4: adapt lending toolkit to deliver more sustained financial support to fragile states and respond to arrears clearance windows. - Somalia and Sudan arrears clearance and debt relief progress: - Somalia: - July 2019: Executive Board completed 2019 Article IV Consultation; Second Review Under Staff-Monitored Program and Request for a New Staff-Monitored Program; and Review of Overdue Financial Obligations to the Fund and Further Review Following Declaration of Ineligibility. - February 2020: IMF and World Bank considered Somalia eligible for assistance under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. - Somalia’s arrears to IDA cleared on March 5, 2020 through bridge financing provided by Norway, reimbursed with proceeds of a Development Policy Grant. - Arrears to the African Development Bank cleared on March 5, 2020 through bridge financing from the United Kingdom and a contribution from the EU; bridge loan from the UK reimbursed by proceeds of a Policy Based Operation Grant. - Somalia’s arrears clearance to the Fund took place on March 25, 2020 and involved a bridge loan from Italy. - Somalia paid the increase in its quota under the 14th General Review through implementation of a second bridge loan from the same lender. - Followed by decision to approve 3-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), as well as interim assistance under the enhanced HIPC Initiative on Somalia’s debt service falling due to the Fund. - First ECF review completed on November 18, 2020. - On March 24, 2021, the Executive Board granted additional interim assistance to cover Somalia’s debt service obligations to the Fund for the period March 25, 2021 through March 24, 2022. - MANAGEMENT ACTION 4.2: - Report [to the Executive Board] efforts to mobilize broad creditor support for FCS with external arrears to official creditors, including arrears to the Fund, in the context of the upcoming reviews of overdue financial obligations for Sudan and Somalia. - Status: Implemented. - ACCOUNTABLE: FIN and SPR. - ORIGINAL TARGET DATE: March 2019. *Eleventh Periodic Monitoring Report, ppea2021070* ### 77. On September 23, 2020, the Executive Board endorsed the Upper Credit Tranche ### ppea2021070 - 77. On September 23, 2020, the Executive Board endorsed the Upper Credit Tranche ### Sudan: SMP, HIPC, arrears clearance, and IMF financing - On September 23, 2020, the Executive Board endorsed the Upper Credit Tranche quality of a new Staff-Monitored Program (SMP) approved by management for Sudan. - Purpose: The new government of Sudan requested the SMP to establish a track record of policy and reform implementation, which constitutes one of the key requirements to qualify for HIPC debt relief. - On March 24, 2021 the Executive Board considered: - The First Review Under the Staff-Monitored Program, - The Review of Overdue Financial Obligations to the Fund, - The Complaint with Respect to the Suspension of Voting Rights. - On March 23 and March 26, 2021, respectively, the Executive Boards of the World Bank and the IMF discussed Sudan’s Preliminary Document on the Enhanced Heavily Indebted Poor Countries Initiative; they agreed Sudan could be eligible for assistance under the Enhanced HIPC Initiative based on the preliminary assessment. - On June 22, 2021 the Fund secured sufficient financing pledges to provide comprehensive debt relief to Sudan, with the support of 101 IMF member countries. - On June 29, 2021 Sudan reached the HIPC Decision point and qualified to receive total debt relief under the HIPC Initiative of US$23.3 billion in present value terms. - This amount is described as over three times the next largest HIPC case. - Complemented by traditional debt relief initiatives for US$25.3 billion, bringing total debt relief to more than US$50 billion in net present value terms (over 90 percent of Sudan’s total external debt) once the Completion Point is reached, with the participation of the majority of Sudan’s creditors. - IMF financing and arrangements: - The IMF Executive Board approved a new 39-month Extended Credit Facility Arrangement (ECF) for Sudan for about US$2.5 billion to support implementation of the authorities’ reform agenda. - Sudan’s arrears to IDA were cleared on March 26, 2021 through bridge financing provided by the United States, reimbursed with the proceeds of a Development Policy Grant primarily funded from IDA’s Arrears Clearance Set Aside in IDA19. - Arrears to the African Development Bank Group were cleared on May 12, 2021 through bridge financing provided by the United Kingdom and contributions from Sweden and Ireland. The bridge loan from the UK was reimbursed via the proceeds of a Policy Based Operation Grant. - Arrears to the Fund were cleared on June 29, 2021 with the assistance of bridge financing from France, which was reimbursed using front-loaded access under the IMF financial arrangement. ### IEO Recommendation 5: Strengthening Fund capacity development (CD) in Fragile and Conflict Situations (FCS) - Directors supported practical steps to strengthen the impact of the Fund’s CD support to countries in fragile and conflict situations, including: - Increasing the use of on-the-ground experts. - Employing realistic impact assessment tools. - Ensuring adequate financial resources are available for CD work in these countries. - Directors saw merit in a multi-donor trust fund for FCS, conditional on a business case and protection of RTAC funding. - Directors emphasized the importance of effective coordination with other TA providers. - Management Implementation Plan (MIP) status: - The MIP envisaged three actions; two remained open after the Tenth PMR. These remain overdue but are making progress. - Progress and proposals: - Proposals for a dedicated Multi Donor Trust Fund (MDTF) for FCS to target CD gaps have yet to gain broad-based support. - Options to achieve a more balanced mix of internal and external funding of CD and a more flexible funding instrument for external financing are being explored as part of the upcoming FCS strategy. - These efforts are expected to increase the share of CD delivery to FCS, consistent with absorption capacity. ### Management Action 5.2 and 5.3 (MDT FCS and STA/MCM papers) - MANAGEMENT ACTION 5.2: - Action: Report to management on the case for a dedicated Multi Donor Trust Fund (MDTF) or a coordinated set of bilateral projects for FCS to target CD gaps. - Status: Overdue but progressing - ACCOUNTABLE: ICD (with other departments) - ORIGINAL TARGET DATE: September 2019 - EXPECTED COMPLETION DATE: End-2021 - MANAGEMENT ACTION 5.3: - Action: Prepare a staff paper for Board discussion with analysis of experience and lessons from building financial and statistical capacity in FCS. - Status: Overdue but progressing - ACCOUNTABLE: MCM and STA - ORIGINAL TARGET DATE: December 2019 - EXPECTED COMPLETION DATE: FY23 ### IEO Recommendation 6: Incentivizing experienced staff to work in FCS and increasing field presence - Directors supported incentivizing high-quality and experienced staff to work on individual countries in fragile and conflict situations, ensuring adequate resources, and pragmatically increasing field presence while protecting staff safety. - Management actions and policy: - In July 2020 management launched a new career path and mobility framework (CPM) for fungible macroeconomists at grades A12-A14 and a CPM for FM for grades A11-A14. - From July 2023, promotions from A14 to A15 will require country team or equivalent experiences in low-income countries and/or fragile states, fulfilled by one of: - (i) country team assignment(s) for a minimum of two years (not required to be continuous) on LICs/FS; - (ii) a minimum of five CD missions focused on LICs/FS country work (considered equivalent to the minimum of two years on a country team); - (iii) a combination of a minimum of one year LICs/FS country team assignment(s) and three CD missions focused on LIC/FS country work; - (iv) a minimum of two years of equivalent external experience on LIC/FS, e.g., midcareer experience with Central Bank, Ministry of Finance, International Financial Institution, or International Organization at the professional level in LIC/FS. - The framework for FMs establishes supporting mechanisms and resources to acquire the recommended experiences and fulfill mobility requirements. - The FCS strategy will continue to examine career incentives/paths, team support at headquarters, recruitment for FCS, and solutions to incentivize experienced economists to join FCS teams. - Institutional arrangements: - An Interdepartmental Committee will systematically review experiences of FMs to determine if they meet LIC/FS requirements. - Draft terms of reference for a LIC/FS Advisory Group (AG) were prepared in November 2020. - AG responsibilities: clarify which LIC/FS operational experiences meet policy requirements at the institutional level and for individual staff cases. - AG status: operational; significant progress in operational guidelines, departmental consultation, and vetting process development. - AG composition: representatives at grade A15-B3 from area and functional departments; Division Chief of HRD’s Organizational Effectiveness unit as ex-officio member; members nominated by departments and approved by the Director of HRD based on operational knowledge, LIC/FS expertise, judgment, corporate citizenship, embodiment of Fund core values, and diversity (gender, nationality). - MANAGEMENT ACTION 6.1: - Action: The HR Strategy Review will look into strategic workforce and career planning, including recruitment, and consider actions to ensure the Fund has appropriate staff expertise and experience to work effectively in fragile states, including introducing a “career” playbook to incentivize staff to work on FCS. - Status: Open - ACCOUNTABLE: HRD - ORIGINAL TARGET DATE: Progress assessed at end-2020 in the review of FCS engagement - EXPECTED COMPLETION DATE: FY23 ### The IMF and Social Protection: strategy, guidance, capacity building, and communications - IEO evaluation findings (2017): Fund stepped up attention to social protection but engagement varied across countries; mixed implementation outcomes; recommendation to establish strategic framework, provide tailored advice, adopt effective program design/conditionality approaches, strengthen collaboration with development partners, and enhance external communications. - Summary of MIP progress: - Response to five recommendations envisaged eight actions. - Four actions implemented as of the Tenth PMR, including establishing a strategic framework for Fund involvement in social protection. - Two additional actions implemented since then; two actions remain overdue but are making progress. - Status indicator: 75% implemented (6 out of 8 actions). - IEO Recommendation 1: Establish a clear strategic framework to guide Fund involvement in social protection. - Directors agreed; a Board paper was envisaged to delineate scope, objectives, and boundaries. - MIP envisaged three actions; two remained open after the Tenth PMR and are now overdue but making progress. - Guidance note and COVID-19 response: - Following Board endorsement of the Strategy for IMF engagement on Social Spending, a guidance note was expected by end-2020 to assist implementation; delayed due to reallocation of resources to COVID-19 response. - In September 2020 staff issued “How to Operationalize IMF Engagement on Social Spending During and After the COVID-19 Crisis”: - Distinguishes three phases of COVID-19 crisis impact: containment, stabilization, and recovery. - Emphasizes country-team judgement and flexibility to identify applicable stage. - Highlights collaboration with international financial institutions involved in health and social protection. - FAD FY21 activities on social spending and capacity building: - Developed, disseminated and supported a Social Protection Tool for country-level engagement. - Developed and delivered a new course on IMF Engagement on Social Safety Nets to IMF staff. - Delivered joint FAD/World Bank seminars on country-level engagement on social protection during COVID and beyond, tailored to different area departments. - Issued a series of COVID fiscal notes on policies for protecting vulnerable groups from adverse effects of COVID. - Conducted formal monitoring through the review process of IMF engagement on social spending issues prior to and during COVID. - Preparing background papers on pensions, social safety nets, health, and education to provide granular advice; the pensions paper circulated to departments and expected to be published before the 2021 Annual Meetings; other background notes expected over FY22 if resources permit. - The final Guidance Note content will be determined after background notes completion. - Advisory arrangements: - A social protection team in FAD provides advice to country teams on engagement on social spending in the review process. - An Inequality Advisory Group chaired by FAD and AFR was established in September 2019 to support country teams on inequality, share knowledge, and facilitate collaboration. - MANAGEMENT ACTION 1.2: - Action: Staff will issue a follow-up guidance note to support the strategic framework for social protection. - Status: Overdue but progressing - ACCOUNTABLE: FAD and SPR - ORIGINAL TARGET DATE: End-2019 - EXPECTED COMPLETION DATE: End-FY22 - MANAGEMENT ACTION 1.3: - Action: An advisory group will be formed after issuance of the guidance note to provide support to country teams in operationalizing work on social protection. - Status: Overdue but progressing - ACCOUNTABLE: FAD - ORIGINAL TARGET DATE: After issuance of the guidance note in 2020 - EXPECTED COMPLETION DATE: End-FY22 - IEO Recommendation 2: Provide tailored advice based on in-depth country analysis. - Directors broadly agreed; MIP envisaged one action which remained open after the Tenth PMR and has since been implemented. - FAD capacity building and training: - A course on IMF Engagement with Social Safety Nets (SSN) delivered by ICD and FAD in December 2020. - Course content: case studies illustrating macrocritical channels for SSN spending—fiscal sustainability, spending adequacy, and spending efficiency—and use of the Social Protection and Labor Assessment Tool (SPL-AT). - Another course on social spending planned for FY22. - FAD involvement in joint seminars with the World Bank and issuance of COVID fiscal notes to protect vulnerable groups. - IEO Recommendation 4: Realistically explain the Fund’s approach to social protection in external communications. - Directors supported clarity to sharpen external communications and avoid reputational risks. - MANAGEMENT ACTION 2.1: - Action: Staff will receive training [on social protection issues] if needed. - Status: Implemented - ACCOUNTABLE: FAD, ICD - ORIGINAL TARGET DATE: After issuance of the guidance note in 2020 - COM actions on communications: - COM allocated significant resources and deployed coordinated communication products to enhance external communications on IMF approach to social protection. - Strategy launched June 2019 with public event and Managing Director speech in Geneva. - COM organized civil society engagements with Executive Directors and Fund leadership during Annual and Spring Meetings. - COM collaborates with area departments for highlighting macrocritical social spending issues in country press releases. - Of 71 countries that received COVID-19 financial assistance (as of June 2021), nearly all included references to social spending issues in press releases, and more than 50 highlighted these issues for prominence. - Examples of external communications highlighting social spending: Bangladesh, Costa Rica, Egypt, Moldova, and South Africa. - MANAGEMENT ACTION 4.1: - Action: More staff resources will be allocated to enhance external communications in this area; appropriate communications products will be developed with departments. - Status: Implemented - ACCOUNTABLE: COM - EXPECTED COMPLETION DATE: End-CY 2021 ### Behind the Scenes with Data at the IMF: summary of progress - IEO findings (2016): Progress on data provision to the Fund and internal data management, but key obstacles remained; recommended a long-term data strategy, defining/prioritizing data needs, reconsidering STA role, reexamining staff incentives, and clarifying responsibility for data quality. - MIP response and progress: - In response to five recommendations, the MIP envisaged 18 actions; 13 remained open after the Tenth PMR. - Of these 13 open actions: - Four actions are being reformulated in line with the Board-approved triage framework for long-standing open actions. - The remaining nine are overdue, partly due to delays in prerequisite actions, but are making progress. - IEO Recommendation 2: Define and prioritize the Fund’s data needs and support data provision by member countries. - Directors agreed the Fund’s minimum data requirements should be carefully prioritized, considering benefits, costs, and budgetary implications. - Directors encouraged fuller use of publicly available data and leveraging data from other institutions. - The MIP envisaged four actions; all remained open after the Tenth PMR. These are now overdue but making progress. *Italic: ppea2021070 - 77. On September 23, 2020, the Executive Board endorsed the Upper Credit Tranche (source content unit).* ### 87. Work on the Review of the DPF was substantially completed in 2020, but progress was ### Work on the Review of the DPF was substantially completed in 2020, but progress was temporarily stalled by institutional reprioritization in light of the COVID-related crisis work, especially in those involving collaboration with SPR. ### Review of Data Provision to the Fund (DPF) — progress and timing - Work on the DPF Review was substantially completed in 2020 but was temporarily stalled by institutional reprioritization due to COVID-related crisis work, especially collaboration with SPR. - The DPF Review could only be completed after the CSR to take account of surveillance priorities identified in the CSR. - The CSR was delayed until May 2021 because of the COVID-19 crisis; the DPF Review is now tentatively scheduled for March 2022. - The DPF Review will aim to operationalize new data requirements emerging from surveillance priorities identified by the CSR, which emphasized that a modern surveillance framework needed to be timely, topical, targeted, better interconnected, and better informed. - Immediate data priorities identified (in line with CSR): public sector data, foreign exchange intervention (FXI) data, and indicators for macrofinancial analysis. - Data related to economic sustainability (inequality, climate change, demographics, technological advances, socio-political and geopolitical developments) were not proposed to become mandatory at this stage; staff could continue to rely on external sources for these. - Proposed public sector data enhancements: broaden coverage of public sector debt beyond central government and enhanced reporting on debt composition by creditor and instrument type. - Accountability and status snapshot (as presented): - MANAGEMENT ACTION 2.1: Comprehensive Surveillance Reviews (CSR) guide priorities; operationalized in DPF Reviews. - ACCOUNTABLE: SPR, STA - ORIGINAL TARGET DATE: December 2017 - EXPECTED COMPLETION DATE: End-FY22 - 28% implemented (5 out of 18 actions) - Implementation status labels appearing in source: Implemented up to 10th PMR; Overdue but progressing; Implemented in 11th PMR; Reformulation; Open ### Engagement with the Board and proposed assessment enhancements - Staff engaged informally with the Board in March 2019 and March 2021 to seek inputs on the DPF Review. - The DPF Review will: - Reflect on developments in countries’ provision of data since the 2012 review. - Propose a new, more structured assessment of data adequacy for surveillance. - Identify immediate data priorities informed by the CSR. - Analysis reported in March 2021: data provision, proxied by common indicators required for surveillance, had improved over time supported by CD; timeliness broadly aligned with Fund data dissemination standards. - Staff proposed adding more granularity and clarity to the assessment of data adequacy for surveillance to improve transparency on data weaknesses. - Based on Directors’ feedback, staff will firm up proposals before the formal Board meeting to consider the DPF Review in March 2022. ### Tenth Review of the IMF’s Data Standards Initiatives (DSI) - The Tenth Review of DSI is expected to be completed in Spring 2022 and will: - Report on lessons from members’ voluntary publication of data. - Explore options for advancing the “global data commons” — a cloud-based network of official country websites publishing data used for surveillance under common technological parameters. - Explore ways to encourage participation in voluntary data dissemination standards (e-GDDS/SDDS/SDDS Plus) and publication of additional indicators (including debt data transparency). - Timing impacted by cascading delays to the CSR and the DPF Review. - Technology and publication proposals: - Work with SDDS subscribers to adopt SDMX for publication of data series and machine-to-machine reading; SDMX already used by SDDS Plus countries and about 60 percent of e-GDDS participants. - Discuss evolution of the three tiers (e-GDDS, SDDS, SDDS Plus) and factors affecting migration across tiers. - Expect migration to cloud-based dissemination to accelerate; implementation of proposals expected to take several years. - Accountability and status snapshot: - MANAGEMENT ACTION 2.2 (and linked MANAGEMENT ACTION 3): Tenth Review of DSI to align data provision with surveillance needs, merge/align SDDS/SDDS Plus/e-GDDS frameworks and adopt new technologies for data provision. - ACCOUNTABLE: SPR, STA - ORIGINAL TARGET DATE: FY19 (for 2.2) and FY20 (for 3) - EXPECTED COMPLETION DATE: End-FY22 (for 2.2) and End-FY22 (for 3) - Status label: Overdue but progressing ### Standards and Codes, New Assessment of Data Adequacy, and STA integration - STA introduced the New Assessment of Data Adequacy for Surveillance (2017) to require country teams to specify factors behind views on how data deficiencies hinder reliability of analyses. - October 2019 pilot: STA, supported by SPR and LEG, tested a draft questionnaire with 20 pilot country cases. - Pilot findings: assessment is helpful in highlighting data weaknesses that raise risk of errors in analyses and policy advice; should focus CD discussions on the most beneficial and urgent areas. - Operational details for full roll-out of the new assessment expected to be formalized in the DPF Review and a subsequent guidance note. - STA has begun preparing more targeted Data ROSC reports; two cases noted: Panama (completed) and Mexico (in train). - In Panama, Data ROSC recommendations informed a statistical reform plan (including SDDS subscription) and program conditionality. - MANAGEMENT ACTION 2.4: Review of the Standards and Codes Initiative to strengthen integration with surveillance and CD; new data quality module in revised Data ROSC to guide future CD and methodological work. - ACCOUNTABLE: SPR, STA - ORIGINAL TARGET DATE: FY18 - EXPECTED COMPLETION DATE: FY23 - Status: Overdue but progressing ### STA role, methodological work, and manuals update - IEO Recommendation 3: Reconsider role and mandate of Statistics department; Directors supportive of STA devoting more attention to providing services to the Fund and closer collaboration with area departments. - STA’s revised mandate integrates statistical support for Fund operations and traditional role vis-a-vis membership and global statistics community. - Planned outputs and timeline: - Major revision of the Statistics Manuals (medium-term project) to provide methodological guidance for national accounts and balance of payments, including considerations for LICs. - Ongoing update of International Statistical Standards (ISS): update of System of National Accounts 2008 (2008 SNA) and Balance of Payments and International Investment Position Manual, sixth edition (BPM6). - Work on the SNA/BPM updates scheduled for publication in 2025; work remains on track. - Under first phase of ISS project, ten technical task teams undertake research and make recommendations; end of first phase (March 2022) followed by an information session to update the Board tentatively scheduled for mid-2022. - MANAGEMENT ACTION 3.4: STA to engage in more pro-active and structured consultation with area departments on methodological work to support surveillance priorities for LICs; issue revised Statistics Manuals. - ACCOUNTABLE: STA - EXPECTED COMPLETION DATE: End-CY2022 - Status: Overdue but progressing ### Capacity development (CD), trust funds, and operationalization - STA rolling out New Assessment of Data Adequacy for Surveillance after DPF Review completion in March 2022; eight LICs included among 20 pilot country teams. - STA efforts to improve access to methodological advice: - Quick Reference Notes, proactive statistical guidance during COVID-19, one-stop shop/knowledge depot via revamped intranet site (launched March 2020), consultation in preparing the Climate Change Indicators Dashboard (CID). - STA nominated country coordinators for all countries with major data weaknesses to assist country teams with Statistical Information Annex updates, statistics scorecards, and statistical advice. - CD ramp-up supported by two multi-partner trust funds: - Financial Sector Stability Fund (FSSF) and Data for Decisions Fund (D4D); both close to being fully funded and implementation continued despite travel restrictions. - FSSF: two statistics workstreams on track to meet objectives of quasi-universal coverage of low- and lower-middle-income countries in reporting FSIs and undertaking partial or full balance sheet analysis (BSA) by the end of FY22. - D4D: about two thirds of LLMICs have benefited from D4D CD on fiscal and debt statistics; progress on high frequency indicators, national accounts benchmarking and rebasing, and Residential Property Price Indices advancing well. - STA preparing a working paper on CD in Fragile and Conflict-Affected States (FCS), to be followed by a Board presentation in FY23. - MANAGEMENT ACTION 3.5: Align CD activities with Fund and membership needs; CD geared to close data gaps hampering surveillance, improve data quality and dissemination. - ACCOUNTABLE: STA - EXPECTED COMPLETION DATE: FY23 - Status: Overdue but progressing ### Data management standards, governance, and incentives - IEO Recommendation 4: Reexamine staff incentives in data management; Directors supported strengthening staff incentives and accountability for data management and candid assessment of data issues in Article IV and FSAP reports. - Of six MIP actions under Recommendation 4, four are being reformulated; two are overdue but making progress. - MANAGEMENT ACTION 4.1: Adopt Fund-wide data management standards (to be reformulated). - ACCOUNTABLE: STA - ORIGINAL TARGET DATE: 2017 - Unifying area department data management guidelines is being implemented via the Data Governance Group (DGG) established mid-2018. - DGG broke down unification into multi-year objectives with front-loaded milestones. - FY22 work program focus: develop a standard metadata model for Fund databases and clean up the Catalogue of Time Series. - Both activities expected to be completed by end-FY22. *Source: Excerpts from the Eleventh Periodic Monitoring Report (PP/EA2021070) as provided in the supplied content.* ### 99. In accordance with the Executive Board’s decision on the Categorization Paper, this ### ppea2021070 - 99. In accordance with the Executive Board’s decision on the Categorization Paper, this ### Data and Statistics: Reformulation, Metadata, and Data Provision for Surveillance - Management action statuses and details: - MANAGEMENT ACTION 4.2: Unify area department data management guidelines. - Status: Overdue but progressing - ACCOUNTABLE: STA, Area departments - ORIGINAL TARGET DATE: Not Indicated - EXPECTED COMPLETION DATE: End-FY22 - MANAGEMENT ACTION 4.3: Undertake metadata cleanup. - Status: To be reformulated - ACCOUNTABLE: STA, area departments - ORIGINAL TARGET DATE: Not indicated - MANAGEMENT ACTION 4.4: Update the Catalogue of Time Series (CTS). - Status: To be reformulated - ACCOUNTABLE: STA - ORIGINAL TARGET DATE: Not indicated - MANAGEMENT ACTION 4.5: Incentivize use of the Common Surveillance Databases. - Status: To be reformulated - ACCOUNTABLE: STA, RES - ORIGINAL TARGET DATE: Not indicated - Management action linking data adequacy assessments into surveillance: - MANAGEMENT ACTION 4.6: The next Review of Data Provision to the Fund for Surveillance Purposes (DPF) will also propose how to incorporate results of the new assessments of data adequacy for surveillance (revised ROSC) into a revised statistical issues appendix (SIA), and review the requirement to discuss the SIA in the main body of the Article IV staff report. - Status: Overdue but progressing - ACCOUNTABLE: SPR, STA - ORIGINAL TARGET DATE: FY 19 - EXPECTED COMPLETION DATE: End-FY22 - Clarification of IMF vs official data: - MANAGEMENT ACTION 5.1: Develop a plan to clarify the distinction between “official statistics” and data used by area and functional departments in surveillance activities. [A revised DPF Guidance Note, following the 2020 Review of the DPF, will clarify expectations of staff with respect to the sources of data and estimates used by the Fund in surveillance activities.] - Status: Overdue but progressing - ACCOUNTABLE: STA, ITD - ORIGINAL TARGET DATE: September 2017 - EXPECTED COMPLETION DATE: End-FY22 - Operational and technical developments: - A draft plan for clarifying data in Fund publications is pending review and operationalization in the context of the DPF Review. - A disclaimer has been added to the DSBB to clarify that the Fund does not endorse the data on the DSBB. - A Guidance Note on Third-party Indicators (TPIs) was endorsed by the Board in July 2018 to clarify principles for the use of TPIs in Fund publications. - For the CSD, the WEOCSD team has been checking submissions to ensure metadata fields identify sources of historical data; compliance is reported to area department representatives every month. - For the WEO external database, the last full year of actual data is noted in the accompanying metadata; data after this year constitute IMF staff estimates. - The DGG has established an inter-departmental working group to create a common metadata model for the Fund, including dimensions for source and usage rights; expected to become operational with iData (next generation economic data platform). ### Self-Evaluation at the IMF: Implementation of IEO Recommendations - IEO findings and MIP response: - The IEO report on Self-Evaluation at the IMF (2015) found ad hoc approaches to self-evaluation, gaps in coverage, weaknesses in quality, and shortcomings in instilling and disseminating lessons; recommended an overall policy for self-evaluation. - In response to four recommendations in the IEO evaluation, the MIP envisaged nine actions; one remained open after the Tenth PMR and has since been implemented. - Implementation milestone: - MANAGEMENT ACTION 4.2: Develop a common evaluation framework, including self-evaluation, for IMF CD. - Status: Implemented - ACCOUNTABLE: ICD - ORIGINAL TARGET DATE: Not indicated - Implementation metric reported: 100% implemented (9 out of 9 actions) - Recent updates to evaluation framework: - In September 2020, staff issued an Updated Common Evaluation Framework (CEF) for IMF CD and an Operational Guidance Note. - The updated CEF emphasizes learning from evaluations, simplifies evaluation approach, de-emphasizes counterfactuals, and bases evaluations on (i) Results-Based Management (RBM) log frames and (ii) consistent application of the revised OECD DAC criteria (relevance, impact, effectiveness, efficiency, sustainability). - Guidance covers evaluation phases and application of OECD DAC criteria in IMF context. ### IMF Forecasts: External Evaluations, Learning, and Handover Processes - IEO findings and MIP response: - IEO (2014) found IMF forecasts had no significant biases overall but noted over-predictions of GDP growth during regional/global recessions and in crises; recommended learning from past forecast performance, guidance for desk economists, and enhanced transparency. - In response to five recommendations, the MIP envisaged 11 actions; two remained open after the Tenth PMR. Subsequently, one action was implemented and one action is being reformulated. - Reported implementation statistic: 82% implemented (10 out of 11 actions) - External evaluation and research: - MANAGEMENT ACTION 1.1: Commissioned studies will be undertaken on a regular schedule, every 5-8 years, starting in 2015. - Status: Implemented - ACCOUNTABLE: RES - ORIGINAL TARGET DATE: End 2015 - A RES-commissioned study on WEO forecasting performance was completed in late 2018 and its results were published as an online annex to a RES staff WP by RES in August 2021. - The WP title: “An Evaluation of World Economic Output Growth Forecasts, 2004-17”. - Findings summarized in the WP: - Differences in accuracy of WEO forecasts across country groups during 2004–2017 can be largely explained by differences in volatility of actual growth. - For most countries, precision and unbiasedness of WEO forecasts improved relative to the pre-2014 period. - More efficient use of available information (estimated output gap, projected terms of trade, growth forecasts of trading partners) can improve forecast accuracy for some economies. - The RES-commissioned study analyzed predictive accuracy of WEO forecasts of GDP growth and inflation over 1990–2016 and compared WEO forecasts to Consensus Economics and simple time-series models. - The RES-commissioned study was conducted by Professor Timmermann of the University of California San Diego. - Handover guidance: - MANAGEMENT ACTION 2.4: Issue guidelines establishing minimum requirements and recommending best practices for the handover of country assignments. - Status: To be reformulated - ACCOUNTABLE: SPR, KMU - ORIGINAL TARGET DATE: End 2016 ### The Role of the IMF as Trusted Advisor and Diversity & Inclusion Progress - IEO findings and MIP response: - The IEO evaluation (2013) found improved Fund image post-crisis but highlighted needs to enhance quality of advice, continuity of relationships, and address perceived lack of evenhandedness. - In response to six recommendations, the MIP envisaged 16 actions; three remained open after the Tenth PMR. Two actions are being reformulated; one action is overdue and has been extended for five additional PMR cycles. - Reported implementation statistic: 81% implemented (13 out of 16 actions) - Specific management actions on staff continuity and representation: - MANAGEMENT ACTION 2.1: Target three-year average tenure for country assignments to be monitored by HRD. - Status: To be reformulated - ACCOUNTABLE: HRD - ORIGINAL TARGET DATE: Steps begin in 2013 - MANAGEMENT ACTION 2.2: Implement measures to raise the share of nationals from underrepresented regions among senior staff and set targets for representation of women at senior levels. - Status: Overdue but progressing - ACCOUNTABLE: HRD (with others) - ORIGINAL TARGET DATE: Steps begin in 2013 - Diversity and Inclusion reporting and 2025 Diversity Benchmarks: - Executive Board discussed the 2020 Diversity and Inclusion Update and the Report on the 2025 Diversity Benchmarks in November 2020. - As of end-April 2020, the Fund had achieved four of the nine 2020 diversity benchmarks (two for gender and two for underrepresented regions). - Gender benchmarks: - The Fund met the management-level (B-level) benchmarks for gender, surpassing the 30 percent target for women, and met the 25 percent target for women in the Economist career stream. - Under-Represented Regions (URRs) benchmarks: - Progress towards B-level benchmarks for URRs was slower, with only two out of the six benchmarks met. - Benchmarks not achieved included the share of A9-B5 staff from East Asia and the MENA+ regions, and the share of B-level staff from Sub-Saharan Africa and East Asia. - Women from URRs accounted for only 6.5 percent of B-level staff, compared to 24.8 percent of women for the combined total from other regions. - 2025 Diversity Benchmarks Working Group (WG) recommendations: - WG favored including A1-A8 staff and longer-term (one year or longer) contractual employees in the diversity architecture. - WG proposed Institutional Goals (IGs) to represent how the Fund should look in terms of gender and representation over the longer term; IGs would be monitored and tracked but separate from formal benchmarks. - IGs would cover (i) all staff (including A1-A8 support staff and longer-term contractual employees) and (ii) Fund-wide senior management teams (B4s and B5s). - WG proposed to redefine and simplify Diversity Benchmarks; managerial women and URR manager benchmarks were modified and increased. *Eleventh Periodic Monitoring Report (excerpts as provided)* ### 111. During the Board discussion, Directors broadly supported the proposals presented by ### ppea2021070 - 111. During the Board discussion, Directors broadly supported the proposals presented by ### Board discussion on 2025 Diversity Benchmarks - Directors broadly supported the proposals presented by the WG for the 2025 Diversity Benchmarks and emphasized that achieving the IGs and the Diversity Benchmarks should remain at the forefront of the Fund’s agenda. - Directors noted progress in some areas but expressed disappointment at the long-standing underperformance of three URR benchmarks. - Directors looked forward to strong engagement and regular reviews to update the Board on progress under the proposed policies and initiatives. - Four IGs were proposed: - For all employees: 50 percent should be women and at least 30 percent should be from URRs. - For the B4-B5 group: 50 percent should be women and at least 30 percent should be from URRs. - The proposals consisted of: - Defining two grade groups (managerial and non-managerial staff). - Redefining the six URR benchmarks – two for each region – based on the new grade groups. - Reducing the number of gender benchmarks to two (from three) by eliminating the distinction between SCS and economists, and by adding a new benchmark for the professional non-managerial group at A9-A13 (SCSs)/A14 economists. ### Staff Recruitment and Retention Experience in CY2020 — findings versus benchmarks - CY2020 hiring and diversity outcomes: - The overall share of women professionals hired at the A9-B5 level was 40 percent (unchanged from 2019). - MENA+ staff accounted for 6 percent of all hires (4 percent in 2019). - Both figures were below the 50 percent recruitment benchmark for women and the 10 percent target for MENA+ professional staff. - Net recruitment inflow (external hires minus separations) was highlighted as an important indicator of progress toward numerical diversity benchmarks. - URR nationals at the A9-B5 level: - The net inflow of URR nationals at the A9-B5 level more than doubled in CY2020 due to higher gross hiring and relatively stable separation rates. - Gross hiring of URR nationals at A9-B5 level increased significantly by over half, driven largely by crisis related hiring, with progress being made across all three related regions. - The report concluded that significant further institutional efforts are required to achieve and maintain the diversity benchmarks for underrepresented nationals, especially for the MENA+ region. ### Research at the IMF — Relevance and Utilization; IEO findings and management actions - IEO evaluation findings: - IMF Research was widely read and included many high-quality products. - IMF research, outside of the analytical chapters in the flagships, was of uneven quality and perceived to be message driven. - Some country authorities indicated that important and relevant issues were not always adequately covered, at times due to lack of consultation with the authorities. - Management actions and reformulation: - One action in response to IEO Recommendation 4 remained open after the Tenth PMR and is being reformulated in line with the Board-approved triage framework for long-outstanding actions. - In accordance with the Executive Board’s decision on the Categorization Paper, this action is being reformulated to make it more effective and measurable. - Management action (excerpted): - Staff will be expected to inform the authorities of the Fund’s policy on the treatment of confidential information. - Staff will be encouraged to have informal/brainstorming discussions with country authorities during the policy discussions. - Status: To be reformulated. ACCOUNTABLE: Not indicated. ORIGINAL TARGET DATE: Steps begin in 2013. - IEO Recommendation 4 (research quality): The MIP envisaged two actions, one of which remained open after the Tenth PMR and is being reformulated in line with the triage framework. - Management Action 4.1: Adopt new procedures to ensure the quality of working papers. Status: To be reformulated. ACCOUNTABLE: Not indicated. ORIGINAL TARGET DATE: Not indicated. ### Implementation status and Board decision - Progress summary (Research at the IMF): - In response to four recommendations, the MIP envisaged seven actions, of which one remained open after the Tenth PMR; this action is now being reformulated in line with the triage framework. - Implementation status snapshot: - 86% implemented (6 out of 7 actions) - Implemented up to 10th PMR - Overdue but progressing - Implemented in 11th PMR - Reformulation - Open - Proposed Board decision: - The Board reviewed the implementation status of Management Actions in Response to Board-Endorsed IEO Recommendations and endorsed the assessment of their implementation progress as proposed in the Eleventh Periodic Monitoring Report (PMR) on the Status of Management Implementation Plans (MIPs) in Response to Board-Endorsed Independent Evaluation Office (IEO) Recommendations (SM/21/156). *ppea2021070 - 111. During the Board discussion, Directors broadly supported the proposals presented by* --- _Source: https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021070.pdf_