## TWELFTH PERIODIC MONITORING REPORT (ppea2022053)

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### Overview and scope
- Assesses progress over the past year on 88 actions contained in ten Management Implementation Plans (MIPs).
- The Twelfth PMR covers ten MIPs containing 88 actions:
  - two new MIPs in response to recent IEO evaluations issued after the Eleventh PMR (containing 31 actions);
  - seven MIPs in response to other evaluations (containing the 35 actions that were classified as open after the Eleventh PMR);
  - and the reformulation MIP (containing 22 new actions).
- Evaluations addressed: Growth and Adjustment in IMF-Supported Programs (2021, new); IMF Collaboration with the World Bank on Macro-Structural Issues (2020, new); 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); The Role of the Fund as Trusted Advisor (2013); and Implementation Plan in Response to the Executive Board-Endorsed Categorization of Open Actions in Management Implementation Plans (new, the “reformulation” MIP, 2022).

### Implementation status — key statistics
- Total actions assessed: 88.
- Actions deemed satisfactorily implemented: 39.
- Actions remaining open: 49.
- Of the 49 open actions, 12 are more than one year past their implementation due dates but are nevertheless making progress.
- Pace of implementation: slightly faster than in the Eleventh PMR and significantly exceeds the annual average of about 15 implemented actions registered before 2020.
- Note: Many of the 15 actions envisaged in the MIP on Growth and Adjustment in IMF-Supported Programs remain open because most actions have target implementation dates in the future.

### Major implemented actions (strategic completions and milestones)
- Completion of the Review of the Institutional View on the Liberalization and Management of Capital Flows (implemented March 21, 2022).
- Consideration by the Executive Board of the Review of Data Provision to the Fund for Surveillance Purposes (IMPLEMENTATION DATE: March 2022).
- Completion of the Tenth Review of IMF’s Data Standards Initiatives (IMPLEMENTATION DATE: February 2022).
- Completion of the IMF Strategy for Fragile and Conflict-Affected States (discussed early March 2022).
- Publication of an updated Guidance Note for Surveillance under Article IV Consultations (IMPLEMENTATION DATE: May 2022).
- Publication of a Guidance Note on Information Sharing between IMF and World Bank Staff (IMPLEMENTATION DATE: February 2022).
- Endorsement by the Board of the Budget Augmentation Framework and the FY2023-2025 Medium-Term Budget.
- Reformulation of eight off-track actions (postponed due to reprioritization) occurred in March 2022 through the reformulation MIP.

### Open actions, delays, and implementation challenges
- 49 actions remain open after the Twelfth PMR.
- 12 open actions are more than one year past their implementation due dates and classified as overdue but making progress; these 12 overdue actions are contained in six MIPs.
- Slower progress areas:
  - Financial sector workforce analysis and talent inventory — incomplete due to delays in implementing the workforce planning module, and workload and bandwidth issues.
  - Statistical updates — update of statistical manuals advanced but expected to take a few more years.
  - Data management and guidance — unifying area department data management guidelines remains a medium-term objective; plan to clarify “official statistics” vs data used by departments awaits issuance of a DPF Guidance Note.
  - Country Engagement Strategy (CES) roll-out — a staff Guidance Note to support roll-out planned by October 2022.
  - Social protection strategy implementation — follow-up guidance note postponed until FAD completes background papers.
- Reprioritization due to the pandemic delayed several Board items and guidance notes, though much analytical work has been published or is near publication.

### Development of a slippages framework
- IEO initial attempt prioritized recommendations based on underlying enterprise risk profile in context of the IEO Evaluation of IMF Engagement with Small Developing States (SDS).
- Staff view enterprise-risk–based analysis as premature while the Fund’s Enterprise Risk Management (ERM) framework is still being developed.
- Core guiding principles identified; timeline for developing slippages framework will follow ERM roll-out. ERM framework scheduled for Board discussion in CY2022 Q4; main ERM components planned to be rolled out in CY 2023.
- Roles: accountable departments assess implications of slippages on enterprise risk; ORM will provide guidance/training; OIA will act as observer while framework under development.

---

### Surveillance Guidance Note (SGN), Operational Guidance Note (OGN), and program design
- MANAGEMENT ACTION (Surveillance Guidance Note): Clarify that Article IV Staff Reports and Fund-supported programs are expected to address implications of key policy measures on growth and stability where macro-critical (Status: Implemented; Accountable: SPR; Original target date: FY23-H1; Implementation date: May 2022).
- Revised OGN will:
  - Recommend program documents discuss realism of baseline growth projections leveraging realism tools embedded in debt sustainability frameworks (1a).
  - Recommend Policy Notes include contingency plans where appropriate (1b).
  - Provide updated guidance regarding social spending, drawing on work to operationalize the Strategy for IMF Engagement on Social Spending (1c).
- SGN content expectations for staff reports:
  - assess ongoing fiscal policy;
  - identify vulnerabilities and challenges to stability;
  - provide fiscal policy advice integrated into overall policy mix;
  - take into account trade-offs between debt sustainability and supporting growth, and between efficiency and equity.
- Fiscal and macro assessments should consider:
  - fiscal space based on the Fund’s fiscal space framework;
  - initial conditions and fiscal risks;
  - inter-temporal policy trade-offs;
  - the size of fiscal multipliers.

### Management actions on conditionality, CD, and guidance (selected)
- Management Action 1.3: Review the role of Fund-supported programs in fostering growth in the next Review of Conditionality (Accountable: SPR, LEG; Original target date: By end-FY24).
- Management Action 1.4: Set up a training program for country authorities on the Sovereign Risk and Debt Sustainability Framework (Status: Open; Accountable: SPR, ICD; Original target date: By mid-FY24).
- Management Action 2.1: Revised OGN to encourage greater attention to growth-oriented reforms while keeping structural conditionality parsimonious (Status: Open; Accountable: SPR; Original target date: By FY23-H1).

### Resilience and Sustainability Trust (RST)
- Executive Board approved establishment of the RST on April 13, 2022, with effect from May 1, 2022.
- Plan: have the RST operational by end- 2022, starting with pilot countries.
- RST objective: enhance economic resilience and sustainability, initial lending focus on climate change and pandemic preparedness.
- MANAGEMENT ACTION 2.3: Implement broad principles for coordination with the World Bank or other IFIs under the RST (Status: Open; Accountable: SPR; Original target date: When the Trust is operational; expected mid-FY23).

---

### Models, toolkits, forecasting platforms, and timelines
- ICD/RES/ITD model and tool development timeline highlights:
  - Debt Dynamics Toot (DDT), Comprehensive Adaptive Expectations Model (CAEM), Canonical Semi-structural Gap Model — target: end-FY23.
  - Quarterly Adaptive Expectations Model (QAEM) and Canonical Structural DSGE model — target: end-FY24.
  - ICD’s Financial Programming Environment (FPE) — Original target date: By end-FY24 (Status: Open; Accountable: ICD, ITD).
  - Panel nowcast toolkit beta — Original target date: By end-FY23 (Status: Open; Accountable: RES, AFR).
- IMFE (Integrated Macroeconomic Forecasting Environment):
  - Revised production version expected ready for July 2023.
  - Final version expected to be available to all country desks by end FY24.
- DIGNAD model (Debt, Investment, Growth, and Natural Disasters):
  - DIGNAD toolkit expected to be completed in the fall of 2022.
- Country Data Annex (CoDA):
  - Operationalize CoDA by the end of FY24 and offer it to country teams on a voluntary basis during review of Policy Notes and Article IVs (MANAGEMENT ACTION 3.5: Status: Open; Accountable: SPR, RES).
- Diagnostics Gateway:
  - MANAGEMENT ACTION 3.6: Original target date: By end-FY25 (Status: Open; Accountable: AFR, SPR, ITD).

Key exact tool target dates:
- GaR 2.0 ORIGINAL TARGET DATE: BY end-FY23 (Status: Open; ACCOUNTABLE: MCM, ITD, ICD).
- CoDA ORIGINAL TARGET DATE: By end-FY24.
- Diagnostics Gateway ORIGINAL TARGET DATE: By end-FY25.

---

### IMF collaboration with the World Bank on macro-structural issues and climate
- MIP envisages 16 actions in response to three IEO recommendations; Progress metric: 75% Implemented (12 out of 16 actions); four remain open facing no obvious challenges.
- Climate Advisory Group (CAG): interdepartmental, chaired by FAD and SPR; first joint meeting with WB staff representatives: December 2021 (MANAGEMENT ACTION 1.1: Implemented; IMPLEMENTATION DATE: December 2021).
- Budget augmentation for climate under FY23-FY25 Medium-Term Budget:
  - climate change absorbing resources equivalent to 37 percent of the overall proposed augmentation;
  - augmentation for climate change-related activities would amount to close to US$20 million over FY23-FY25 to cover an increase of around 65 FTEs during the same period (after synergies), relative to 60 existing FTEs.
- Steady-state capabilities envisaged include:
  - around 45-50 Article IVs per year focused on climate issues;
  - 8 FSAPs per year covering climate risks;
  - increase in in-depth CD coverage to about 25 countries per year and 5 CMAPs.
- Training and outreach:
  - Internal “Climate Change 101” online course launched October 2021; Climate Bootcamps launched April 2022; fungible economists expected to complete all three parts by October 31, 2022.
  - External edX modules: first module launched April 2022 with over 2,300 participants; second module launched June 2022; third module launched July 2022.

Bank-Fund coordination outputs:
- MoU on Fund-Bank hosting of the Coalition of Finance Ministers for Climate Change Secretariat signed September 21, 2021 (MANAGEMENT ACTION 1.5: Implemented).
- MANAGEMENT ACTION 1.6: Coordination on HLAG analytic efforts (Status: Implemented; IMPLEMENTATION DATE: June 2021).

---

### Financial surveillance, macrofinancial integration, and human resources
- Implementation status in response to Financial Surveillance IEO:
  - MIP envisaged 16 actions; 12 implemented (75% Implemented).
  - New SGN (May 2022) provides guidance to implement CSR recommendations and emphasizes macrofinancial analysis as integral to Article IVs (MANAGEMENT ACTION 1.2: Implemented; IMPLEMENTATION DATE: May 2022).
- RES developed monthly corporate Distance to Insolvency (DI) indicators:
  - Broader country coverage: 89 countries (compared with 71 for the CVU).
  - Extended time coverage: from 1990 to 1978 through the present.
  - Frequency: monthly (compared with annual for CVU).
  - MANAGEMENT ACTION 4.3 (corporate vulnerability tool): Status: Overdue but progressing; ORIGINAL TARGET DATE: By April 2021; EXPECTED COMPLETION DATE: End-CY2022.
- HR strategy and talent inventory for financial expertise:
  - Workday roll-out provides Talent Cards and Career Profiles; monitoring prioritized for A14 fungible macroeconomists as of April 2022, to expand over FY23.
  - Expert Track expected to commence by end of the current fiscal year.
  - MANAGEMENT ACTION 5.1 (brief Board on HR strategy): Status: Overdue but progressing; ORIGINAL TARGET DATE: by January 2020; EXPECTED COMPLETION DATE: End-FY2024.
  - MANAGEMENT ACTION 5.3 (enhanced talent inventory): Status: Overdue but progressing; ORIGINAL TARGET DATE: by November 2020; EXPECTED COMPLETION DATE: End-FY2024.
  - MANAGEMENT ACTION 5.4 (publish implementation details of new HR strategy): Status: Open; ORIGINAL TARGET DATE: By April 2022; EXPECTED COMPLETION DATE: FY24.

---

### Fragile and Conflict-Affected States (FCS) strategy, CES rollout, and CD
- IMF Strategy for Fragile and Conflict-Affected States approved early March 2022; Strategy phased in starting in FY22 with acceleration FY23–FY25.
- CES scope and timeline:
  - CES to cover six pillars (fragility drivers; constraints to reform implementation; policies and reforms; sequenced CD priorities; partnerships; risk identification).
  - Staff Guidance Note to support CES roll-out to be prepared by October 2022.
  - Expectation: about half of FCS (about 20 countries) will have completed CES by April 2024; CES across all FCS expected completed by end-FY25.
- Budget augmentation for FCS over FY23-FY25:
  - Increase of US$21.2 million for FCS over FY23-FY25, relative to an existing US$76 million.
  - Direct country support deliverables include 4 additional resident representatives; increase in field staffing to an average of 2 local economist per FCS field office (requiring 40 local economist hires); 10 additional FTEs at ADs at HQ; 10 additional RCDC advisors or in-country long-term experts; additional US$3 million for RCDC administrative costs.
- Capacity development for FCS:
  - FY23-25 Medium Term Budget envisages increase of Fund-financed CD of US$17 million over FY23-FY25 (about one quarter of total augmentation).
  - About 43 percent (~12 FTEs) of the augmentation allocated to FCS will contribute to increase in Fund-financed CD.
  - Ten additional long-term advisors planned.

---

### Data Provision Framework (DPF), Data Standards Initiatives (DSI), and statistical manuals
- DPF Review implementation: Presented to the Board March 2022; staff revising some proposals; completion expected around the end of 2022, subject to convergence of views.
- Tenth Review of the IMF’s Data Standards Initiatives (IMPLEMENTATION DATE: February 2022) updated encouraged data categories and introduced a “force majeure” clause for SDDS and SDDS Plus.
- Participation and modernization:
  - e-GDDS: 68 of 111 e-GDDS participants published data through NSDP, including 27 FCS and small states.
  - SDDS: currently 50 members subscribe; as of September 1st, 2022 the number of SDDS countries is 48 and SDDS Plus countries is 29.
  - SDDS Plus adherents more than tripled to 27 since Ninth Review (subsequent movements noted).
- Assessment of Data Adequacy for Surveillance:
  - Pilot launched October 2019 with 20 cases; new framework operational January 2023; technical note to be finalized in Q3 FY23; questionnaire comprises 31 questions.
  - New assessment introduces four categories: A, B, C, D (Category C new).
- Statistical manuals update:
  - Update of the 2008 System of National Accounts (SNA) targeted release date: March 2025.
  - Updates to the Balance of Payments (BOP) and IIP manuals expected to be finalized in 2025.
  - MANAGEMENT ACTION 3.4 (STA engage area departments and issue revised Manuals): Status: Overdue but progressing; EXPECTED COMPLETION DATE: CY 25.

### STA support for LICs and data capacity
- STA CD programs deliver close to 200 missions a year for fiscal statistics; field presence via GFS LTX in almost all RCDCs.
- Achievements under trust funds:
  - FSSF helped 26 LLMICs enhance compilation of primary statistics underlying the Balance Sheet Analysis (BSA), surpassing target of 25 LLMICs as of March 2022.
  - Since FY2018, 24 LLMICs have started to compile Financial Sector Indicators (FSIs), target 29.
  - As of end-2002, 37 LLMICs report additional FSIs, including for nonbank institutions.
- MANAGEMENT ACTION 3.5 (align CD activities to membership needs): Status: Implemented; IMPLEMENTATION DATE: February 2022.

---

### Diversity, tenure, handover, and research quality reforms
- 2025 Diversity Benchmarks WG (constituted September 2019) proposed Institutional Goals:
  - For all employees: 50 percent women and at least 30 percent from URRs.
  - For B4-B5 group: 50 percent women and at least 30 percent from URRs.
- FY2020–FY2021 outcomes:
  - Share of women in managerial roles improved 1.6 percentage points to 34.5 percent in FY 2021.
  - For A9-A14/15 level, overall share of women hired in CY2021 about 40 percent.
- Reformulation MIP on tenure and handover:
  - Reformulation covered eight off-track actions resulting in 22 new actions; 15 remain open; 7 implemented (32% Implemented).
  - Target three-year average tenure for country assignments continued; intermediate operational target: median tenure for mission chiefs at 2.7 years.
  - Workday CIS implementation completed in April 2022 (Status: Implemented; IMPLEMENTATION DATE: April 2022).
  - New recruitment guideline published June 2022 to encourage internal selection of candidates meeting minimum 2-year tenure on country desk assignments.
- Handover and objective-setting actions:
  - New Action 2.3: Revise Fund-wide Guidance Note on Objective Setting in the APR to include handover examples (Status: Open; ORIGINAL TARGET DATE: October 2022).
  - New Action 2.4: Regular monitoring via survey of mission chiefs and desk economists to assess handover standards, with expectation for higher satisfaction for at least two successive years by end-January 2026 (Status: Open; ORIGINAL TARGET DATE: January 2026).
- Research quality and working-paper review:
  - Peer-learning event on WP review conducted May 19, 2022 (MANAGEMENT ACTION 5.1: Implemented).
  - Actions planned: revise COM guidelines (Status: Open; ORIGINAL TARGET DATE: June 2022), create identification numbers for SIPs and external page (Status: Open; ORIGINAL TARGET DATE: October 2022), migrate interdepartmental WP review to e-Review by May 2023 (Status: Open; ORIGINAL TARGET DATE: May 2023).

---

### Budget augmentation, reprioritization, and staffing for macrofinancial surveillance and priorities
- Reprioritization averaged about 4 percent of aggregate envelope in recent budgets.
- Board approved budget augmentation implemented through annual increases averaging 2 percent each year during FY23 to FY25 relative to FY22.
- Macrofinancial surveillance allocation:
  - Accounts for 12 percent of total budget augmentation over FY23-FY25.
  - Augmentation for macrofinancial surveillance amounts to US$ 8.7 million over the three-year period (relative to US$ 83 million in FY22) after synergies.
  - Provides for an increase of 23 FTEs (from 168 FTEs in FY22).
  - FY23 Budget provides for an increase of US$3.5 million in new spending on macrofinancial surveillance, enabling about 10 FTEs of the 23 FTEs envisaged.
- Augmentation for FCS over FY23–FY25: US$21.2 million (relative to an existing US$76 million).

---

### Monitoring, reporting, and Board decisions
- Several Management Actions implemented with exact implementation dates preserved (examples included above).
- Expected completion dates cited in the report include: FY2024; End-CY2022; End-FY2024; FY2025; CY2025; Late FY2024; FY2023 (3Q FY2023); Q4 CY2021.
- Example implementation-count summary: Implemented (1 out of 15 actions) for the MIP responding to Growth and Adjustment in IMF-Supported Programs (2021).
- Proposed Board decision: The Board reviewed and endorsed the assessment of implementation progress as proposed in the Twelfth PMR.

*Source: OIA; TWELFTH PERIODIC MONITORING REPORT (ppea2022053).*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Overview and scope
- The Twelfth Periodic Monitoring Report (PMR) assesses progress made over the past year on 88 actions contained in ten Management Implementation Plans (MIPs).
- The Twelfth PMR covers ten MIPs containing 88 actions: two new MIPs in response to recent IEO evaluations issued after the Eleventh PMR (containing 31 actions); seven MIPs in response to other evaluations (containing the 35 actions that were classified as open after the Eleventh PMR); and the reformulation MIP (containing 22 new actions).
- The ten MIPs addressed arise from the following evaluations: Growth and Adjustment in IMF-Supported Programs (2021, new); IMF Collaboration with the World Bank on Macro-Structural Issues (2020, new); 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); The Role of the Fund as Trusted Advisor (2013); and Implementation Plan in Response to the Executive Board-Endorsed Categorization of Open Actions in Management Implementation Plans (new, the “reformulation” MIP, 2022).

### Implementation status — key statistics
- Total actions assessed: 88.
- Actions deemed satisfactorily implemented: 39.
- Actions remaining open: 49.
- Of the 49 open actions, 12 are more than one year past their implementation due dates but are nevertheless making progress.
- The pace of implementation in the Twelfth PMR is slightly faster than that in the Eleventh PMR and significantly exceeds the annual average of about 15 implemented actions registered before 2020.
- Many of the 15 actions envisaged in the MIP on Growth and Adjustment in IMF-Supported Programs remain open because most actions have target implementation dates in the future.

### Major implemented actions (strategic completions and milestones)
- Completion of the Review of the Institutional View on the Liberalization and Management of Capital Flows.
- Consideration by the Executive Board of the Review of Data Provision to the Fund for Surveillance Purposes.
- Completion of the Tenth Review of IMF’s Data Standards Initiatives.
- Completion of the IMF Strategy for Fragile and Conflict-Affected States.
- Publication of an updated Guidance Note for Surveillance under Article IV Consultations.
- Publication of a Guidance Note on Information Sharing between IMF and World Bank Staff.
- Endorsement by the Board of the Budget Augmentation Framework and the FY2023-2025 Medium-Term Budget.

### Progress by thematic area and notable advances
- Strong progress since the Eleventh PMR on actions in response to: IMF Collaboration with the World Bank on Macro-Structural Issues; IMF Advice on Capital Flows; The IMF and Fragile States; and Behind the Scenes with Data at the IMF.
- Reformulation of eight off-track actions (postponed due to reprioritization) occurred in March 2022 through the reformulation MIP. Implementation of the reformulated action addressing tenure of country teams and mission chiefs in country assignments is on track.

### Open actions, delays, and implementation challenges
- 49 actions remain open after the Twelfth PMR.
- 12 open actions are more than one year past their implementation due dates but are progressing.
- Slower progress noted in areas related to:
  - Financial sector workforce analysis and talent inventory — incomplete due to delays in implementing the workforce planning module, and workload and bandwidth issues.
  - Statistical updates — update of statistical manuals has advanced with effective coordination across agencies worldwide but is expected to take a few more years.
  - Data management and guidance — work on unifying area department data management guidelines remains a medium-term objective; a plan to clarify the distinction between “official statistics” and data used by area and functional departments in surveillance activities awaits issuance of a Guidance Note on Data Provision to the Fund for Surveillance Purposes (DPF).
  - Country Engagement Strategy (CES) roll-out — a guidance note to support roll-out needs to be prepared.
  - Social protection strategy implementation — a follow-up guidance note has been postponed until FAD completes a series of background papers.

### Development of a slippages framework
- In response to the Executive Board’s call for a framework to assess the impact of slippages in implementation, an initial attempt by IEO prioritized recommendations based on underlying enterprise risk profile in the context of the IEO Evaluation of IMF Engagement with Small Developing States (SDS).
- Staff view enterprise-risk–based analysis as premature while the Fund’s Enterprise Risk Management (ERM) framework is still being developed.
- Staff continue to advance work on a slippages framework and have identified core guiding principles; the timeline for developing the slippages framework will follow closely that of the broader institutional ERM framework, and resource implications will need careful assessment.

### Assessment and outlook
- Notwithstanding challenges from the COVID-19 pandemic and the shock from the war in Ukraine and its spillover effects, significant progress was made since the Eleventh PMR.
- Several implemented actions were strategic and addressed important reviews and delayed issues that had been postponed due to reprioritization at the start of the pandemic.
- Continued focus and vigilance are required to preserve and build on momentum given competing work priorities and resource and bandwidth constraints.

*TWELFTH PERIODIC MONITORING REPORT, September 28, 2022*

### 8.      Several important reviews and key steps that had been postponed following the onset

### 8.      Several important reviews and key steps that had been postponed following the onset

### Major implemented actions (completed over the last year)
- Completion of the Review of the Institutional View on the Liberalization and Management of Capital Flows.
- Consideration by the Executive Board of the Review of Data Provision to the Fund for Surveillance Purposes.
- Completion of the Tenth Review of the IMF’s Data Standards Initiatives.
- Completion of the IMF Strategy for Fragile and Conflict-Affected States.
- Publication of an updated Guidance Note for Surveillance under Article IV Consultations.
- Publication of a Guidance Note on Information Sharing between IMF and World Bank Staff.
- Endorsement by the Board of the Budget Augmentation Framework and the FY23-25 Medium-Term Budget.
- Reformulation of eight off-track actions (postponed due to reprioritization) took place in March 2022.

### Overall progress and status counts
- Of the 49 actions that remain open after this PMR, 12 are more than one year past their implementation due dates and have been classified as overdue but reasonable progress is being made.
- The 12 overdue actions are contained in six MIPs.
- Figure and source mentions (as in source): Figure 2. Status of Management Actions; Source: OIA.

### Overdue actions summarized by MIP (highlights)
- IMF Advice on Capital Flows (2020)
  - 1 action overdue: staff will brief the Executive Board on the interplay between capital flows, CFMs, and crises.
  - Original target: Q4 CY2021. Expected completion date (as of July 31, 2021): FY2024.
  - OIA commentary: Substantially complete. Due to reprioritization, this Board item has been delayed. However, the results of this work have already been published or will be published soon.

- IMF Financial Surveillance (2019)
  - 3 actions overdue:
    - Roll out an upgraded corporate vulnerabilities surveillance tool that expands country and firm coverage.
      - Original target: April-2021. Expected completion date: End-CY2022.
      - OIA commentary: Substantially complete. RES has developed a new set of monthly indicators for corporate vulnerability for internal use on the RES intranet.
    - Brief the Executive Board on the HR strategy, including ongoing workforce analysis for financial sector experts.
      - Original target: Jan-2020. Expected completion date: End-FY2024.
      - OIA commentary: Partially complete. Staff analysis/presentations focused on a narrow definition mainly including financial experts in MCM; work on a more comprehensive definition is underway.
    - 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.
      - Accountable: HRD. Original target: Nov-2020. Expected completion date: FY2024.
      - OIA commentary: Partially complete. HRD prioritized monitoring Career Profiles by A14 fungible macroeconomists; over FY23 monitoring will expand to all fungible macroeconomists. Refinements for financial sector experts will follow full implementation of LIC FCS policy and leveraging completion of the Expert Track.

- The IMF and Fragile States (2018)
  - 1 action overdue but progressing: Area Departments FCS country teams to prepare Country Engagement Strategy (CES) as part of staff reports for Art. IV and new program requests.
    - Original target: Starting from Q1 2019. Expected completion date: End-CY2022.
    - OIA commentary: Partially complete. A number of FCS teams have started CES work. A staff Guidance Note will be prepared by October 2022 to support roll-out. It is expected that half of FCS (about 20 countries) will have completed CES by April 2024.

- The IMF and Social Protection (2017)
  - 2 actions overdue but progressing:
    - Issue a follow-up Guidance Note to support the strategic framework for social protection addressing aspects of three IEO recommendations.
      - Accountable: FAD, SPR. Original target: Dec-2019. Expected completion date: End-FY2024.
      - OIA commentary: Preparatory work underway; sectoral background papers being prepared (two completed).
    - Form an advisory group after issuance of the guidance note to support country teams in operationalizing social protection work.
      - Accountable: FAD. Original target: After guidance note in 2020. Expected completion date: After guidance note by end-FY2024.
      - OIA commentary: Preparatory work underway. FAD will continue support; staff plans to leverage the existing Inequality Advisory Group and broaden its terms of reference if necessary.

- Behind the Scenes with Data at the IMF (2016)
  - 4 actions overdue but making progress:
    - Review of Standards and Codes Initiative to strengthen integration with Fund surveillance and capacity development; new Data ROSC to guide future capacity development and methodological work; a revised DPF Guidance Note to operationalize the New Assessment of Data Adequacy for Surveillance.
      - Accountable: SPR, STA. Original target: FY2018. Expected completion date: 3Q FY2023.
      - OIA commentary: Partially complete. Pilot cases completed; process to be formalized with a technical note for country teams. Streamlining of Data ROSC underway.
    - STA to engage area departments on methodological work to support surveillance priorities for LICs and issue revised Statistical Manuals for national accounts and BOP/IIP with LIC considerations.
      - Accountable: STA. Original target: Not indicated. Expected completion date: CY2025.
      - OIA commentary: Partially complete. Updated manuals expected to be finalized in 2025; STA developing more user-friendly methodological advice access for area economists.
    - Unify area department data management guidelines.
      - Accountable: STA, Area Departments. Original target: Not indicated. Expected completion date: Late FY2024.
      - OIA commentary: Partially complete. Oversight transferred to the Data Governance Group; actions broken into multi-year milestones with progress being made.
    - Develop plan to clarify distinction between “official statistics” and data used by area and functional departments in surveillance activities; operationalize via revised DPF Guidance Note.
      - Accountable: STA, SPR, LEG. Original target: Sep-2017. Expected completion date: FY2024.
      - OIA commentary: Substantially complete. A plan has been drafted and awaits issuance of the DFP Guidance Note.

- The Role of the Fund as Trusted Advisor (2013)
  - 1 action overdue and extended:
    - 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: HRD, with Others. Original target: Steps begin in 2013. Expected completion date: FY2025.
      - OIA commentary: Partially complete. Monitoring extended for five PMR cycles; HRD provides periodic updates to the Board in the context of the 2025 Diversity and Inclusion benchmarks. Significant progress on several benchmarks, but important challenges remain.

### Specific timing and numeric highlights (preserve original values)
- 49 actions remain open after this PMR.
- 12 actions are more than one year past their implementation due dates and classified as overdue.
- Overdue actions are contained in six MIPs.
- Expected completion dates cited in the report include: FY2024; End-CY2022; End-FY2024; FY2025; CY2025; Late FY2024; FY2023 (3Q FY2023); Q4 CY2021.
- One implementation-count summary shown: Implemented (1 out of 15 actions) for the MIP responding to Growth and Adjustment in IMF-Supported Programs (2021).
- Management Action example: MANAGERIAL action 1.1 accountable to SPR, original target date FY23-H1 (status: Open).

### Implementation challenges and forward plans
- Reprioritization of activities due to the pandemic delayed several Board items and guidance notes, though much analytical work has been published or is near publication.
- Workforce and talent inventory enhancements depend on rollout of the new human resource system, Workday, and completion of related HR strategies.
- Development and operationalization of consolidated guidance notes (e.g., CES guidance, social protection guidance, DPF Guidance Note) are planned with specific internal deadlines (staff Guidance Note by October 2022; CES coverage target: about 20 countries by April 2024).
- Data-related methodological work (revised Statistical Manuals, unified data management guidelines, clarification of data sources in Fund publications) is being pursued as multi-year projects with front-loaded milestones.

*Source: OIA, TWELFTH PERIODIC MONITORING REPORT*

### 19.      The plan remains to revise the OGN by FY23-H1, covering all the above-mentioned

### ppea2022053 - 19.      The plan remains to revise the OGN by FY23-H1, covering all the above-mentioned

### Revised Operational Guidance Note (OGN) and Program Design
- The OGN will recommend that program documents discuss prominently the realism of baseline growth projections by at a minimum leveraging the realism tools embedded in debt sustainability frameworks, including the tool to assess the consistency between fiscal adjustment and growth under a range of plausible fiscal multipliers. (1a)
- The OGN will recommend that Policy Notes (PN) should include – where appropriate and subject to confidentiality – contingency plans, including if baseline growth falls significantly short of program projections. (1b)
  - The OGN will clarify that the PN review process and program discussions with authorities should cover policy tradeoffs in achieving adjustment and growth. 
- The OGN will provide updated guidance regarding social spending, drawing on the ongoing work to operationalize the Strategy for IMF Engagement on Social Spending. (1c)
- Management action: Clarify in the revised Surveillance Guidance Note (SGN) that Article IV Staff Reports of members and Fund-supported programs are expected to address the implications of key policy measures on growth and stability over the medium term where macro-critical, as defined in the 2012 Integrated Surveillance Decision.
  - Status: Implemented
  - Accountable: SPR
  - Original target date: FY23-H1
  - Implementation date: May 2022

### Surveillance Guidance Note (SGN): content and expectations
- The SGN (circulated to the Board in late May 2022) recognizes that key macroeconomic policies implemented in the context of Fund-supported programs are likely to have important bearings in the medium term, and that their implications for growth and stability (for example, of fiscal consolidation) should be addressed in Article IV reports.
- The SGN’s section on Policies underlines that staff reports should:
  - assess ongoing fiscal policy;
  - identify vulnerabilities and challenges to stability;
  - provide fiscal policy advice well integrated into the overall policy mix.
- The SGN requires policy advice to take into account relevant trade-offs, including between debt sustainability and supporting growth, and between efficiency and equity.
- Fiscal and macro assessments should consider:
  - fiscal space based on the Fund’s fiscal space framework;
  - initial conditions (state and composition of public finances, available fiscal space, fiscal risks);
  - inter-temporal policy trade-offs (e.g., between short-term cyclical conditions and medium-term sustainability objectives);
  - the size of fiscal multipliers.

### Macro-structural policies, structural reforms, and CD integration
- The SGN indicates that identifying key bottlenecks to inclusive growth determines where structural reforms would have greatest impact on stability and growth.
- Staff should:
  - carefully assess the impact of structural reforms and integrate the reform agenda in the outlook and fiscal discussions;
  - consider impacts of structural policy on fiscal positions and complementarities/trade-offs among policies.
- The SGN notes that many structural reforms (e.g., labor and product market reforms) can positively impact output and thereby fiscal positions and debt dynamics over the medium term; conversely, targeted fiscal support may facilitate reforms under weak cyclical conditions.
- Operational Guidelines for Integrating CD with Surveillance and Lending are being incorporated into surveillance and program guidance (notably the 2022 SGN) to emphasize that all country teams should develop a CD strategy when capacity constraints are linked to macro-critical issues.

### Management actions on conditionality, CD, and guidance
- Management Action 1.3: Review the role of Fund-supported programs in fostering growth in the next Review of Conditionality (RoC) and discuss the appropriateness of the 2002 Conditionality Guidelines in that regard.
  - Accountable: SPR, LEG
  - Original target date: By end-FY24
  - Note: The next RoC is expected to be completed by end-FY24 (as planned in the MIP).
- Management Action 1.4: Set up a training program for country authorities on the Sovereign Risk and Debt Sustainability Framework, including its realism tools.
  - Status: Open
  - Accountable: SPR, ICD
  - Original target date: By mid-FY24
- Management Action 2.1: Revised OGN to encourage Fund-supported programs to pay greater attention to supporting deep, more growth-oriented reforms while keeping structural conditionality parsimonious and prioritized.
  - 1a. Explain that country teams indicate in the PN the depth of each Structural Condition (SC) according to past RoC criteria to guide sequencing.
  - 1b. Recommend inclusion of an annex table mapping structural benchmarks with CD findings and planned CD from the Fund and other providers.
  - Status: Open
  - Accountable: SPR
  - Original target date: By FY23-H1
- Management Action 2.2: Implement the 2021 Operational Guidelines for Integrating CD with Surveillance and Lending and report on progress in the 2023 CD Strategy Review.
  - Status: Open
  - Accountable: SPR, ICD in collaboration with other CD and Area Departments
  - Original target date: By end-FY23
  - Note: CD Strategy Review concept note to be discussed by the Board in November 2022; mid-point meeting in mid-2023; formal Board meeting targeted for November 2023.

### Resilience and Sustainability Trust (RST) and Bank-Fund coordination
- Executive Board approved establishment of the RST on April 13, 2022, with effect from May 1, 2022.
- Plan: have the RST operational by end- 2022, starting with pilot countries.
- RST objective: enhance economic resilience and sustainability by supporting policy reforms that reduce macro-critical risks associated with select longer-term structural challenges and augment policy space and financial buffers.
- Initial RST lending focus: climate change and enhancing pandemic preparedness; other challenges to be added over time.
- Five key areas of coordination with the World Bank for RST operations: (i) diagnostics; (ii) policy priorities; (iii) conditionality; (iv) implementation supervision; and (v) program documentation.
- Management Action 2.3: Implement broad principles for coordination with the World Bank or other IFIs under the RST.
  - Status: Open
  - Accountable: SPR
  - Original target date: When the Trust is operational; expected mid-FY23
- Executive Board consideration of RST arrangements will follow notification by the Managing Director that the RST is operational (sufficient RST Loan Account resources and robust financial systems in place). Fundraising initiated immediately after establishment.

### Models, toolkits, and timelines for forecasting and scenario analysis
- As part of technical assistance on macro-frameworks, ICD staff is developing/improving models/tools including:
  - Debt Dynamics Toot (DDT)
  - Comprehensive Adaptive Expectations Model (CAEM)
  - Quarterly Adaptive Expectations Model (QAEM)
  - Canonical Semi-structural Gap Model
  - Canonical Structural DSGE (Dynamic Stochastic General Equilibrium) model
- Target dates for model development:
  - end-FY23 for the DDT, the CAEM, and the Canonical Semi-structural Gap Model
  - end-FY24 for the QAEM and the Canonical Structural DSGE model
- Management Action 3.1 / 3.2: Develop and make available to staff new analytical tools to improve growth forecasts, assess the adjustment-growth relationship, and conduct risk scenario analysis.
  - 1a. ICD’s Financial Programming Environment (FPE) — Open; Accountable: ICD, ITD; Original target date: By end-FY24
  - 1b. A beta version of the panel nowcast toolkit — Open; Accountable: RES, AFR; Original target date: By end-FY23

### IMFE / forecasting platforms, nowcasts, and specialized toolkits
- ICD and ITD are developing the IMFE project (Integrated Macroeconomic Forecasting Environment).
  - IMFE will manage macroeconomic frameworks and projections, introduce built-in user-friendly capabilities to generate alternative risk and policy scenarios, and link to a broad range of forecasting tools.
  - IMFE prototype refined with pilot countries in EUR, WHD, and MCD.
  - Revised production version expected ready for July 2023.
  - Final version expected to be available to all country desks by end FY24.
- RES and AFR developments:
  - RES (with AFR) is developing a panel nowcast toolkit to nowcast GDP for countries that do not publish quarterly GDP data by pooling many countries and inferring unobserved quarterly GDPs from statistical relations and high-frequency indicators.
  - Preliminary results presented November 2021; improvements ongoing.
  - Aim: operationalize a beta version of the toolkit by end-FY23.
- DIGNAD model (RES):
  - Debt, Investment, Growth, and Natural Disasters (DIGNAD) model assesses macroeconomic effects of natural disasters and related policy trade-offs, focusing on growth and debt.
  - Integrated in the Climate Macroeconomic Assessment Program (CMAP); extended to evaluate long-run implications of recurring natural disasters, climate change, and adaptation.
  - An Excel-based interface is being developed to broaden usability by users lacking Matlab/Dynare expertise.
  - DIGNAD toolkit expected to be completed in the fall of 2022.
- FAD work:
  - FAD developed an Excel-based macroeconomic framework to assess development strategies and the financial resources needed to achieve the SDGS.
  - Work underway with ICD on interface stage to increase usability; expected to be completed shortly.

### Board and Director-level guidance and expectations
- IEO Recommendation 2: IMF-supported programs should pay greater attention to supporting deep, more growth oriented structural reforms, with more effective CD support and more effective collaboration with partners.
  - Directors broadly concurred, emphasized keeping structural conditionality parsimonious and prioritized, and the need to assess integration of CD and surveillance with program design and implementation.
  - The MIP envisages five actions to address this recommendation.
- IEO Recommendation 3: The Fund should continue to invest in building a toolkit of models and monitors for analysis of the adjustment-growth relationship and assessing growth-related development in program context.
  - Directors agreed and welcomed available models, encouraged use/adaptation to country circumstances, and supported investment in the Research Department’s structural reform database.
  - The MIP envisages six actions to address this recommendation.
- Management Action 2.4: Review experience with Bank-Fund Collaboration (BFC) in Fund-supported programs as part of a Board paper on the effectiveness of BFC.
  - Status: Open
  - Accountable: SPR
  - Original target date: By end-FY25
- Management Action 2.5: Create an operational Guidance Gateway for staff access to latest guidelines, including on collaboration with external partners.
  - Status: Open
  - Accountable: KMU, SPR, ITD
  - Original target date: By end-FY25

_Excerpted from ppea2022053 - 19.      The plan remains to revise the OGN by FY23-H1, covering all the above-mentioned_

### 34.      The 2.0 version of the GaR tool will improve the original GaR tool, following the

### The 2.0 version of the GaR tool will improve the original GaR tool, following the comments and suggestions received from external referees

### GaR 2.0 development, features, and timeline
- Purpose: Improve the original Growth-at-Risk (GaR) tool incorporating external referees’ comments and suggestions.
- Planned refinements and features:
  - Refinements in the estimation technique.
  - More statistical options for density fit (including multimodality).
  - A battery of new tests for model diagnostics.
- Implementation steps:
  - Computer programs to support the tool are currently being developed.
  - Internal testing using country cases once programs are finished.
  - MCM to work with ITD to translate programs into a user-friendly interface.
- Training and integration:
  - An ICD Vulnerability Diagnostics course includes a module illustrating GaR usage to assess tail risks in the real sector due to changes in financial conditions and a workshop dedicated to adapting GaR to country data and quantifying downside risks stemming from macro-financial factors.
  - ICD plans to update the relevant part of this course once GaR 2.0 is released.
- Schedule and accountability:
  - MANAGEMENT ACTION 3.4: The growth-at-risk model version “GaR 2.0”.
  - Status: Open
  - ACCOUNTABLE: MCM, ITD, ICD
  - ORIGINAL TARGET DATE: BY end-FY23
  - MCM is on track to finish the project by end-FY23.

### Country Data Annex (CoDA) and Diagnostics Gateway
- CoDA tool objectives:
  - Help country teams assess the quality of macroeconomic frameworks by identifying large deviations and checking consistency of policy advice.
  - Compare current macroeconomic framework projections of key variables to those in the latest published staff report and World Economic Outlook submission to highlight differences.
- Implementation path:
  - Currently runs as an Excel-based tool; the Excel version will be phased out.
  - Long-run plan: run CoDA on a different software platform and integrate with the IData platform with equivalent functionality.
  - Operationalization plan: operationalize CoDA by the end of FY24 and offer it to country teams on a voluntary basis during the review phase of Policy Notes and Article IV reports.
  - SPR plans outreach among country teams.
  - No obstacles envisaged at this stage.
- Schedule and accountability:
  - MANAGEMENT ACTION 3.5: The Country Data Annex (CoDA) tool.
  - Status: Open
  - ACCOUNTABLE: SPR, RES
  - ORIGINAL TARGET DATE: By end-FY24
  - MANAGEMENT ACTION 3.6: Create a Diagnostics Gateway to improve accessibility to analytical tools and facilitate country analysis, including on growth.
  - Status: Open
  - ACCOUNTABLE: AFR, SPR, ITD
  - ORIGINAL TARGET DATE: By end-FY25

### Key statistics and exact targets related to tools and timelines
- GaR 2.0 ORIGINAL TARGET DATE: BY end-FY23
- CoDA ORIGINAL TARGET DATE: By end-FY24
- Diagnostics Gateway ORIGINAL TARGET DATE: By end-FY25

---

### IMF collaboration with the World Bank on macro-structural issues and climate

### Overall assessment and progress
- Evaluation findings:
  - IMF collaboration with the World Bank on macro-structural issues (inequality, gender, energy/climate, macro-structural reforms) has been broad but uneven; relatively few cases of in-depth collaboration were identified.
  - Collaboration deeper on debt and financial sector issues where roles are well defined.
- MIP response:
  - In response to three IEO recommendations, the MIP envisages 16 actions; one additional recommendation (on Board strategic role) is expected to be addressed by setting up a Joint Liaison Committee-COGAM Forum (LCF).
  - Of the sixteen actions, four remain open and face no obvious challenges.
  - Progress metric: 75% Implemented (12 out of 16 actions).

### Climate-specific coordination structures and outputs
- Climate Advisory Group (CAG):
  - An interdepartmental group chaired jointly by FAD and SPR.
  - Meets every other month; every third meeting can include World Bank staff representatives for matters of general interest.
  - First joint meeting with WB staff representatives: December 2021.
  - MANAGEMENT ACTION 1.1: Semi-annual meetings between the Fund’s Climate Advisory Group and World Bank counterparts.
    - Status: Implemented
    - ACCOUNTABLE: IMF’s Climate Advisory Group
    - ORIGINAL TARGET DATE: First meeting by end-September 2021
    - IMPLEMENTATION DATE: December 2021
- Bank-Fund coordination and stock-taking:
  - MANAGEMENT ACTION 1.2: Background paper in the context of the Interim Comprehensive Surveillance Review (CSR) to take stock of Fund integration of select macro-structural areas (notably climate).
    - Status: Open
    - ACCOUNTABLE: SPR in collaboration with other departments
    - ORIGINAL TARGET DATE: By FY2024
  - MANAGEMENT ACTION 1.3: IMF Board paper on the Effectiveness of Bank-Fund Collaboration to review experience and assess need for tailored institutional frameworks.
    - Status: Open
    - ACCOUNTABLE: SPR in collaboration with other departments
    - ORIGINAL TARGET DATE: By FY2025
  - The background paper for the ISR will be completed by SPR in collaboration with other departments by FY23-FY24; a follow-up Board paper by FY25 will address these issues comprehensively.
  - The revised SGN issued in May 2022 provides staff-level guidelines consistent with the climate strategy, expected to be implemented in full from FY26.

### IMF Climate Strategy resource implications and targets
- Budget augmentation:
  - Based on the IMF Climate Strategy, the Budget Augmentation Framework envisages climate change absorbing resources equivalent to 37 percent of the overall proposed augmentation.
  - The augmentation for climate change-related activities would amount to close to US$20 million over FY23-FY25 to cover an increase of around 65 FTEs during the same period (after synergies), relative to 60 existing FTEs.
- Steady-state capabilities enabled by augmentation:
  - (i) A significant increase in country support to around 45-50 Article IVs per year to cover, among other issues, mitigation policies for the 20 largest emitters of greenhouse gases every three years and adaptation and resilience for the 60 most vulnerable countries every four years.
  - (ii) Transition risk to a low-carbon economy prioritized by need.
  - (iii) 8 FSAPs per year covering climate risks, regulatory, and supervisory assessments.
  - (iv) An increase in in-depth CD coverage to about 25 countries per year, as well as 5 CMAPs.
  - (v) Additional climate work in regional surveillance reports and other Board papers.
  - (vi) Development of a climate-related macroeconomic course and climate modules into existing courses.
  - (vii) Training and support to staff through a “Climate 101” course and a “Climate Bootcamp”.
- Key partners: World Bank, European Commission, OECD, various UN agencies, International Energy Agency, World Trade Organization, regional development banks, NGOs, FSB, BIS, NGFS, SFWG.

### Capacity building, courses, and tools
- ICD training and materials:
  - FY22 blended training developed and launched for staff by ICD in collaboration with COM, FAD, MCM, RES, SPR, STA.
  - Internal Economics Training Climate Change 101 online course launched in October 2021.
  - Follow-up interactive Climate Bootcamps launched in April 2022 focusing on specific tools and data.
  - Fungible economists are expected to complete all three parts of the course by October 31, 2022. All other Fund staff and contractual employees are strongly encouraged to take the course.
  - Course supplemented with an email helpdesk.
  - FY23 plans include four Bootcamps on climate risk data, carbon pricing assessment tools (CPAT), CGE models for climate scenarios, and climate stress testing of the financial sector.
  - Several tools presented in Bootcamps were developed jointly with the World Bank and other organizations.
- External online modules and outreach:
  - ICD adapted internal training into online modules on the Macroeconomics of Climate Change for government officials and the general public.
  - First module “Science, Economics, and Policies” launched on edX in April 2022 and attracted over 2,300 global participants.
  - Second module “Mitigation Strategies” launched in June 2022.
  - Third module “Transitioning to Net Zero” launched in July 2022.
  - Subsequent modules expected to be released on a near-monthly basis for the rest of 2022.
  - Four interactive microlearning videos to be published on selected climate topics.
  - FY23 plans include developing the curriculum for the new “Macroeconomics of Climate Change” external training course leveraging Climate Change 101 material and online learning solutions.
- Model development and applications:
  - ICD, in collaboration with WHD, developed a DSGE model to assess climate risks (natural disasters) and adaptation and mitigation policies.
  - The DSGE model has been applied in Surveillance and Program Review work for St. Vincent, St. Lucia, and Costa Rica; an extended version introducing migration will be applied to Guatemala.
  - A team comprising AFR, ICD, and RES is developing a model-based framework for quantitative assessment of macroeconomic and distributional effects of climate change and transition risks in low-income countries; the framework will include a user-friendly interface for policy scenario analysis.

### Bank-Fund coordination outputs and MoU
- Coalition of Finance Ministers for Climate Change Secretariat:
  - The MoU on Fund-Bank hosting of the Secretariat was finalized and signed on September 21, 2021.
  - The MoU formalizes the Secretariat’s function and specifies that Fund staff would provide some administrative support while the bulk of work would continue to be undertaken by the Bank.
  - MANAGEMENT ACTION 1.5: Produce and sign an MoU delineating respective roles of the Bank and the Fund in the context of the Coalition of Finance Ministers for Climate Change.
    - Status: Implemented
    - ACCOUNTABLE: FAD
    - ORIGINAL TARGET DATE: H2-21
    - IMPLEMENTATION DATE: September 2021
- High-Level Advisory Group on Sustainable and Inclusive Recovery and Growth (HLAG):
  - MANAGEMENT ACTION 1.6: Coordinate analytical efforts of Bank and Fund staff in the context of the HLAG.
    - Status: Implemented
    - ACCOUNTABLE: SPR
    - ORIGINAL TARGET DATE: April 2021-December 2022
    - IMPLEMENTATION DATE: June 2021

---

*TWELFTH PERIODIC MONITORING REPORT, INTERNATIONAL MONETARY FUND*

### 44.      The High-Level Advisory Group on Sustainable and Inclusive Recovery and Growth

### 44. The High-Level Advisory Group on Sustainable and Inclusive Recovery and Growth

### HLAG purpose and composition
- Launched in June 2021.
- Consists of prominent representatives from academia and high-level officials, including management and senior staff from the Fund and the World Bank.
- Aim: advance understanding of key policy and institutional issues to inform a response to multiple interconnected challenges – COVID-19 and climate change, which are exacerbating poverty and inequality, and structural weaknesses that existed before the pandemic.
- Climate issues figure prominently, including policy and analytical notes with global implications produced by its members. Both the Bank and the Fund provide input.

### MCM briefing on climate risks in FSAPs (early March 2022)
- Objective: lay out staff’s current approach to assessing banking sector stability risks from climate change in FSAPs.
- Purpose: inform Fund surveillance and capacity development by evaluating the magnitude of risk and potential pressures on the financial system stemming from:
  - physical climate shocks, and
  - the transition to a low-carbon economy.
- Emphasis: climate risk analysis raises awareness of the need for banks to develop tools to manage risks and for financial sector supervisory authorities to supervise those risks adequately.
- Methodological note: while based on stress testing methodologies, climate risk analysis should not be understood as a standard stress test because:
  - uncertainty regarding climate modeling, and
  - long simulation horizons.
- Steady-state expectation: 8 FSAPs per year would cover climate risk, regulatory, and supervisory assessments.

### Methodologies, pilots, and analytical focus
- Focus: methodologies used for climate stress testing; presentation included results from a few climate risk analyses conducted in recent FSAPs to illustrate different approaches and challenges.
- Analytical approaches presented:
  - Physical risk: the physical impact of climate changes.
  - Transition risk: changes in climate policy, technological advances, and consumer and market sentiment during the adjustment to a lower carbon economy.
- Pilots highlighted:
  - need for additional and more granular climate risk data;
  - complexities of modeling climate risk and integrating analysis into macro-financial scenarios and stress testing;
  - importance of sustainable green and inclusive recovery.

### Bank-Fund collaboration on climate issues
- Internal collaboration mechanisms:
  - Inter-Departmental Climate Group: key mechanism for close collaboration across Fund departments.
  - Fund designated a senior staff member as a focal point to coordinate work with World Bank counterparts.
- External collaboration:
  - World Bank: cooperation to improve scenario design while Fund maintains primary role in stability assessments; Bank expertise aided catastrophe modeling for physical risk (examples include Philippines and Mexico FSAPs).
  - Network for Greening the Financial System (NGFS): Fund participated as observer in NGFS work on climate risk modeling and scenario design; Fund co-led on disclosure and engaged on regulation and supervision; staff leveraged NGFS knowledge on climate and macro scenarios and intends to use NGFS-designed scenarios for deriving carbon taxes.
- Ongoing and future actions: MCM staff will continue collaboration with the Inter-Departmental Climate Group, disseminate climate data and tools to Article IV teams for bilateral surveillance, continue collaboration with the WB on scenario modeling, and leverage NGFS experience.

### Carbon Pricing Assessment Tool (CPAT) collaboration
- CPAT is a joint tool of the Fund and the WB.
- Development contacts: weekly technical meetings and monthly project lead meetings (first meeting August 2021).
- Focus of meetings: methodology of the tool and timeline for publication and delivery.

### Management actions (implemented items and accountability)
- Management Action 1.7 — Bank-Fund Collaboration on Climate Issues
  - Action: Joint work on climate risks in FSAPs: Prepare a Board briefing based on the early experience with identifying relevant material on climate-related risks in FSAPs.
  - Status: Implemented
  - Accountable: MCM
  - Original target date: March 2022
  - Implementation date: March 2022
- Management Action 1.8 — Bank-Fund Collaboration on Climate Issues
  - Action: Joint work on climate modelling: Organize quarterly technical-level meetings between relevant Bank and Fund staff to discuss refinements and applications of the Carbon Pricing Assessment Tool (CPAT).
  - Status: Implemented
  - Accountable: FAD, RES
  - Original target date: First meeting by end-September 2021
  - Implementation date: August 2021
- Management Action 2.1 — Incentives for Bank-Fund Collaboration
  - Action: Prepare an updated version of the Guidance Note for Departments/SPMs on how the new HR performance management system could be used by Departments to incentivize Bank-Fund collaboration.
  - Status: Implemented
  - Accountable: HRD
  - Original target date: Q4-2021
  - Implementation date: Fall 2021
- Management Action 2.3 — Supporting Staff Exchanges
  - Action: Launch intranet feature(s) highlighting the positive experiences of Fund staff returning to the Fund after external assignments, including at the Bank.
  - Status: Implemented
  - Accountable: COM/HRD
  - Original target date: April 2022
  - Implementation date: July 2022
- Management Action 3.1 — Information and Knowledge Sharing
  - Action: Prepare a joint Bank-Fund Staff Guidance Note summarizing best practices in information and document sharing processes in place.
  - Status: Implemented
  - Accountable: SPR, FAD, MCM, ADs, ITD, KMU
  - Original target date: By end-2021
  - Implementation date: February 2022
- Management Action 3.2 — Information and Knowledge Sharing
  - Action: Provide staff with access to up-to-date and comprehensive information on current rosters of managerial, technical, and operational focal points in both institutions in the areas of tax administration and climate.
  - Status: Implemented
  - Accountable: SPR, FAD, MCM, ITD
  - Original target date: By end-2021
  - Implementation date: December 2021
- Management Action 3.3 — Information and Knowledge Sharing
  - Action: Make Microsoft Teams platform available for external collaboration, including with Bank staff, after security accreditation.
  - Status: Implemented
  - Accountable: SPR, ITD, KMU
  - Original target date: By end-2021
  - Implementation date: July 2021
- Management Action 3.4 — Information and Knowledge Sharing
  - Action: In designing the new IMF Intranet, explore feasibility of having different access levels for non-Fund staff users, including a privileged access for Bank staff.
  - Status: Implemented
  - Accountable: ITD, KMU
  - Original target date: By end-2021
  - Implementation date: July 2022

### Information-sharing, rosters, and platforms
- A roster compiled in December 2021 served as the basis for organizing the first meeting between the Climate Advisory Group (CAG) and the World Bank; the participant list (equivalent with the roster) was shared with all CAG members. The roster is regularly updated by departments.
- FAD–World Bank collaboration on CD and tax:
  - FAD provides up-to-date information on CD projects and holds bi-weekly meetings to organize joint PCT events and discuss tax-related issues.
  - Under the Platform for Collaboration on TAX (PCT), an Online Integrated Platform provides information on CD projects by the four PCT partners (IMF, OECD, UN, and World Bank).
  - FAD reports are regularly shared with Bank colleagues upon demand; Bank staff may share reports, with sharing direction tending to be more intensive from the Fund to the Bank.
  - FAD staff peer review Bank project documents with a tax component upon request.
- Since late July 2021, MS Teams and OneDrive enable Fund staff collaboration with external parties, including World Bank staff, with guidance available under the “External Collaboration” tab.
- New intranet project includes a “Bank-Fund Collaboration Space” with high-level requirements finalized in July; expected delivery in the last phase of the intranet project (summer of 2023).

*Source: ppea2022053 - 44.      The High-Level Advisory Group on Sustainable and Inclusive Recovery and Growth*

### 58.      On July 21, 2021, staff made an informal presentation to the Executive Board to

### ppea2022053 - 58.      On July 21, 2021, staff made an informal presentation to the Executive Board to

### Institutional View (IV) review — objectives and conclusions
- Review concluded by the Executive Board on March 21, 2022.
- Review aims:
  - Bring the IV up to date with advances in theoretical and empirical research and policy experiences.
  - Be informed by the Integrated Policy Framework (IPF), the IEO’s evaluation, and IMF staff’s implementation experience.
- Core principles preserved:
  - Overall presumption that capital flows can bring substantial benefits for countries.
  - CFMs, while useful in certain circumstances, should not substitute for warranted macroeconomic adjustment.
- Two changes introduced:
  - Recognition that CFM/MPMs on debt inflows used in a preemptive manner (i.e., in the absence of a capital inflow surge) may be appropriate in the presence of stock vulnerabilities, most notably elevated currency mismatches that increase vulnerability to systemic financial risks in the event of capital flow reversals.
  - Special treatment for certain categories of CFMs that, because of their special nature, should not be subject to the appropriateness assessments applicable to other CFMs under the IV.
- IV policy advice unchanged for:
  - Managing capital inflow surges.
  - Managing disruptive outflows.
  - Capital account liberalization.
- Additional guidance provided for assessments important to implementation:
  - Assessment of macro-criticality.
  - Identification of capital flow surges, imminent crises, and premature liberalization.

### Executive Directors’ views and guidance
- Directors underlined core IV principles remain valid: capital flows desirable and potentially beneficial.
- Emphasis on first-line defenses: strong macroeconomic frameworks, sound financial regulation and supervision, structural reforms, and market development to reduce market imperfections.
- Support for preemptive use of CFM/MPMs on debt inflows in some circumstances.
  - Caveat: if preemptive CFM/MPMs produce adverse spillovers, staff should examine alternative policy actions to achieve domestic objectives while minimizing outward spillovers, in line with the Integrated Surveillance Decision.
- Agreement on special treatment for certain CFMs:
  - Such measures should not be assessed for appropriateness under the IV.
  - They remain CFMs if they meet the IV definition and should be discussed in surveillance if macro-critical or likely to generate significant spillovers.

### Management actions, timelines, and implementation status (selected)
- MANAGEMENT ACTION 1.1:
  - Action: Staff review of the IV and informal presentation to the Executive Board in 2021 Q3; complete review in second half of 2021.
  - Status: Implemented.
  - Accountable: LEG, MCM, RES, SPR.
  - Original target dates: Informal briefing – Q3 CY2021; Review of IV – Second half of CY 2021.
  - Implementation date: March 2022.
- MANAGEMENT ACTION 2.2:
  - Action: Staff will brief the Executive Board on analytical work on interplay between capital flows, CFMs and crises.
  - Status: Overdue but progressing.
  - Accountable: MCM, RES.
  - Original target date: Q4 CY2021.
  - Expected completion date: FY2024.
- MANAGEMENT ACTION 2.4:
  - Action: Staff will publish indices of capital account openness using the AREAER database.
  - Status: Open.
  - Accountable: MCM.
  - Original target dates: Binary and change indices by Q4 CY2021; indices also accounting for type of CFMs by Q4 CY2023.
- MANAGEMENT ACTION 2.5:
  - Action: Staff will publish an update of the IMF Taxonomy of CFMs on the IMF external website.
  - Status: Implemented.
  - Accountable: MCM, SPR.
  - Original target date: End-CY2021.
  - Implementation date: June 2022.
- MANAGEMENT ACTION 2.6:
  - Action: Staff will explore refinements to capital account-related aspects in the EBA models (informal presentation to the Executive Board).
  - Status: Implemented.
  - Accountable: RES, SPR.
  - Original target date: Q1 CY2022.
  - Implementation date: March 2022.
- MANAGEMENT ACTION 3.1:
  - Action: Staff will brief the OECD as the IV review takes place and once completed; brief the Executive Board on the IV and the OECD Codes of Liberalization; invite OECD staff to present and hold a joint workshop.
  - Status: Open.
  - Accountable: LEG, MCM, SPR.
  - Original target dates: Brief to the OECD – Q4 CY2021; Brief to the Board – Q4 CY2021; OECD staff presentation – Q2 CY 2021; Joint workshop – Q4 CY2022.
- MANAGEMENT ACTION 3.2:
  - Action: Staff will present a proposal through a Board paper to consider use of the assessment letter framework to respond to OECD requests for information.
  - Status: Open.
  - Accountable: LEG, MCM, SPR.
  - Original target date: Q1 CY2022.
  - Expected completion date: End CY 2022.
- MANAGEMENT ACTION 3.3:
  - Action: Staff will address inadvertent and unintended tensions between the IV and the Basel III framework as part of the IV review.
  - Status: Implemented.
  - Accountable: MCM, SPR.
  - Original target date: Second half of CY2021.
  - Implementation date: March 2022.
- MANAGEMENT ACTION 3.4:
  - Action: Staff will prepare a departmental paper on “NBFIs and Market-Based Intermediation”.
  - Status: Implemented.
  - Accountable: MCM.
  - Original target date: Q2 CY 2021.
  - Implementation date: September 2021.

### Monitoring, indices, and EBA model refinements
- Brief to the Executive Board originally planned for Q4 CY2021 rescheduled to FY24 due to competing priorities and staff workload; presentation expected to focus on progress on analytical work and continuation of IPF empirical work.
- Plans to publish indices of capital account openness on the IMF external website:
  - Two forms expected: a binary index based on existing controls and another that incorporates changes to controls over time.
  - Expected completion and publication on the AREAER website by early 2023 (delay due to unanticipated IT issues).
  - By end-2023, staff expected to construct and publish indices accounting for diversity in the type of CFMs; over time staff intends to extend dataset to cover all member countries.
- EBA model refinements (informal presentation March 2022):
  - Changed the variable used for measurement of capital account openness.
  - Explored alternative measures: Quinn, Chinn and Ito Financial Account Restriction Index (FARI) and de facto financial integration measure (sum of foreign assets and liabilities as percent of GDP).
  - Decision: Replace the Quinn index used in previous EBA versions with the FARI index produced by MCM based on the annual AREAER questionnaire.
  - Rationale: Favorable statistical results and FARI availability for full membership, enabling a single capital control measure for both EBA and EBA-lite.
  - Further details to be provided in a forthcoming IMF Working Paper on 2022 EBA refinements.

### Taxonomy, reciprocity, and Basel alignment
- Taxonomy update of CFMs posted on the IMF external website under IMF Data ("Capital Flow Management Measures Taxonomy" under “Additional IMF Data Resources”).
  - Taxonomy contains information about measures assessed as CFMs or CFM/MPMs and discussed in published staff reports since adoption of the IV.
- IV review established special treatment: certain CFM/MPMs implemented in line with internationally agreed prudential standards, including mutually agreed reciprocity arrangements, will not be assessed for appropriateness under the IV.
  - Objective: Mitigate risk that measures implemented according to Basel Framework and reciprocity agreements be assessed as inconsistent with the Fund’s capital flow management framework.
  - Staff will not assess under the IV:
    - Measures implemented in accordance with certain Basel prudential standards outlined in the review.
    - Multilateral, regional, or bilateral agreements among countries to reciprocate macroprudential measures where a country implements a macroprudential measure that is the same, or substantially the same, as the measure in effect in another country to address a financial stability risk related to specific exposures in the other country.
- The Fund supports post-global financial crisis reforms and calls for further international and regional cooperation to expand reciprocity of MPMs beyond countercyclical capital buffers.

### Non-bank financial intermediation (NBFI) and outreach
- Departmental paper published in September 2021 titled “Investment Funds and Financial Stability – Policy Considerations” (originated as “NBFIs and Market-Based Intermediation”).
  - Serves as basis for MCM participation in FSB committees and working groups.
  - Informed MCM inputs to FSB Steering Committee, Steering Committee on NBFIs, Standing Committee on the Assessment of Vulnerabilities, and Working/Expert Groups staffed by MCM (Technical Expert Group on Money Market Funds, Workstream on Dealer Behavior, FSB-IMF Working Group on US dollar Funding and Emerging Market Economy Vulnerabilities).
- Outreach to OECD:
  - Capital Flows Group hosted OECD Secretariat presentation on April 27, 2021.
  - Staff briefed OECD on June 22, 2022, at OECD Advisory Task Force on Codes meeting.
  - Joint-workshop on capital flows-related research scheduled for October 17, 2022.
  - Briefing to the Executive Board on the IV and OECD Codes of Liberalization planned for November 2022.
- Staff plans to propose an amendment to the assessment letters policy to cover the OECD; presentation planned for December 2022.

### IMF Advice on Unconventional Monetary Policies (UMP) — response and actions
- IEO evaluation findings:
  - Fund’s response to 2008 crisis was wide-ranging and in many respects impressive.
  - Fund provided early support/validation to advanced economy central banks on UMP, helped develop macroprudential toolkit, analyzed cross-border spillovers, introduced IV on managing capital flows.
  - Shortcomings: limited deep expertise on monetary policy issues, insufficient appreciation of challenges to emerging markets from spillovers and volatile capital flows, and limits on traction in international policy cooperation.
  - Recommendations: build cutting-edge expertise, deepen work on costs/benefits of UMP and related policies, strengthen spillover analysis and advice on capital flows, and consider deeper bilateral surveillance engagement.
- IEO Recommendation 1 response:
  - Directors supported building expertise; MCM created a flexible arrangement instead of an external advisory group: longer-term external advisors, shorter-term rotating visiting scholars, and an Internal Monetary Policy Advisory Group meeting monthly.
  - MCM hired two eminent economists (former senior central bank officials): Mr. Lars Svensson and Mr. Andrew Levin; later added Mr. Roberto Chang as a third expert with emerging market expertise.
  - MCM contemplates adding a fourth advisor with LIC expertise pending return to more normal working conditions.
- MANAGEMENT ACTION 1.2:
  - Action: A press release to announce remit and composition of a high-level external advisory group.
  - Status: Implemented.
  - Accountable: MCM.
  - Original target date: September 2020.
  - Implementation date: September 2022.
- Summary of progress on UMP-related actions:
  - In response to four IEO recommendations, the MIP envisaged 14 actions, all 14 implemented (100% Implemented; 14 out of 14 actions).

*Source: ppea2022053 - 58; https://www.imf.org/-/media/files/publications/pp/2022/english/ppea2022053.pdf*

### 71.      An IAPOC index of monetary policy frameworks has been developed by RES, as part of

### 71.      An IAPOC index of monetary policy frameworks has been developed by RES, as part of

### IAPOC index and toolkit
- An IAPOC index of monetary policy frameworks has been developed by RES as part of the work related to governance and transparency.
- The work was presented in the NBER Summer Institute and was published as a working paper in January 2022.
- The data toolkit was developed and became internally available in May 2022, and externally in June 2022.
- MANAGEMENT ACTION 1.5:
  - The Independence, Accountability, Policy and Operational Strategy, and Communications (IAPOC) toolkit, with the data and methodology paper, will be published.
  - Status: Implemented
  - ACCOUNTABLE: RES
  - ORIGINAL TARGET DATE: Fall 2020
  - IMPLEMENTATION DATE: June 2022

### IEO Recommendation 2 — Playbook on UMP and related policies
- Recommendation: Deepen work on the costs and benefits of UMP and related policies to develop a playbook on policy responses to use in future downturns.
- Directors broadly supported developing a playbook while avoiding over-prescriptive approaches and preserving flexibility for country-specific conditions.
- The MIP envisaged five actions, of which one was still open after the 11th PMR. This action has been implemented.
- Although a thematic briefing on the components of a playbook has not been presented to the Board, numerous Board engagements on the costs and benefits of UMP and related policies constitute elements of a playbook for central banks.
- Notable Board briefings and presentations:
  - Briefing on the merits of new monetary frameworks: February 2021 (discussed changes in the Fed and ECB frameworks).
  - Briefing covering effectiveness, limits, risks, and spillovers of unconventional monetary policies: April 2021.
  - Board briefing on closer fiscal–monetary interaction: July 2021.
  - Presentation “Central Bank Exit Strategies”: March 2022 (companion paper forthcoming in FY23 Q2).
- MANAGEMENT ACTION 2.5:
  - A thematic briefing on the components of a playbook will be presented to the Board.
  - Status: Implemented
  - ACCOUNTABLE: MCM
  - ORIGINAL TARGET DATE: Summer 2021
  - IMPLEMENTATION DATE: March 2022

### IMF Financial Surveillance — summary of progress
- The IEO evaluation found substantial upgrades to the Fund’s financial surveillance after the global financial crisis but noted uneven quality and impact.
- Areas needing strengthening: financial and macrofinancial analysis in Article IV consultations, traction of multilateral surveillance, Fund contribution to the global regulatory agenda, and expansion of financial and macrofinancial research and tools.
- In response to six recommendations in the IEO evaluation, the MIP envisaged 16 actions, of which 6 remained open after the 11th PMR. Since then, two actions have been implemented; three of the other four actions are overdue but progressing; the remaining open action is expected to be implemented within reasonable time.
- 75% Implemented (12 out of 16 actions)

### Article IV guidance and macrofinancial integration
- Following Board approval of the CSR, staff issued a new SGN in May 2022 that contains practical steps to implement CSR recommendations, including on financial surveillance. The note supersedes the 2015 Guidance Note and its supplement.
- The SGN:
  - Recaps the four priorities identified in the 2021 CSR: confronting risks and uncertainties; preempting and mitigating spillovers; ensuring economic sustainability; adopting a more unified approach to policy advice.
  - Provides guidance on sharpening focus and selectivity of Article IV staff reports.
  - Discusses surveillance content for fiscal policy, macrofinancial analysis and financial policies, monetary policy, external sector policies, and macrostructural policies.
  - Describes the Article IV consultation cycle and process, drafting and publication guidelines, and treatment of confidential information.
- MANAGEMENT ACTION 1.2:
  - Publish an updated guidance note on surveillance under Article IV consultations containing practical steps to implement the Board-approved CSR recommendations, including on financial surveillance.
  - Status: Implemented
  - ACCOUNTABLE: SPR
  - ORIGINAL TARGET DATE: by April 2021
  - IMPLEMENTATION DATE: May 2022
- The SGN indicates macrofinancial analysis is integral to Article IV consultations in both baseline and risk assessments and emphasizes:
  - Identifying key macroeconomic linkages and ensuring consistency between financial conditions and the baseline macroeconomic outlook.
  - Evaluating how effectively the financial system facilitates intermediation and supports growth; assessing potential disruptions to intermediation and their effects on the baseline outlook.
  - Considering balance sheet health of households, corporate, and government sectors where possible.
  - Discussing how financial deepening or structural changes affect long-term growth when macro critical.
  - Including a systemic risk analysis that identifies and quantifies risks to financial stability, with FSAP risk analysis as an important resource.
  - Tailoring coverage of digital money to country circumstances and suggesting several surveillance topics.

### Enhancing analytical tools — corporate vulnerability indicators
- IEO Recommendation 4: Enhance the IMF’s analytical tools and strengthen efforts to be a global center of excellence on financial and macrofinancial research.
- RES developed a new set of monthly indicators for corporate vulnerability measuring corporate distance to insolvency (DI) from 1978 to the present.
- Key features of the new DI indicator set:
  - Country-level DI indicators calculated at a monthly frequency for all publicly traded firms in a country, following Atkenson et al. (2017).
  - Indicators include mean, median, other percentiles of DI, and the fraction of distressed firms suggested by a low DI value.
  - DI requires only equity prices and not accounting or market value information for assets or liabilities, allowing broader firm and country coverage and longer historical span.
  - Broader country coverage: 89 countries compared with 71 for the CVU.
  - Longer time coverage: extended from 1990 to 1978 through the present.
  - Frequency: monthly frequency compared with an annual frequency for CVU indicators.
  - The set will be available for internal use in the RES intranet and will be periodically updated.
- MANAGEMENT ACTION 4.3:
  - Roll out an upgraded version of the corporate vulnerabilities surveillance tool that expands country and firm coverage vis-à-vis the current version.
  - Status: Overdue but progressing
  - ACCOUNTABLE: RES
  - ORIGINAL TARGET DATE: By April 2021
  - EXPECTED COMPLETION DATE: End-CY2022

### HR strategy, talent inventory, and financial expertise
- IEO Recommendation 5: Intensify efforts to attract, develop and retain a deeper pool of financial talent and ensure fungible macroeconomists have knowledge and support to integrate financial analysis into Article IV consultations.
- Directors emphasized ensuring country teams can integrate financial and macrofinancial analysis and noted targeted HR Strategy enhancements could help develop needed expertise.
- Progress and tools:
  - HRD developed a database of missions and relevant codes related to financial sector work linked to staff information, including participation in FSAPs and MCM CD missions and tenure in country teams for MCM staff.
  - Workday roll-out provides Talent Cards and Career Profiles for all employees; Talent Cards summarize corporate/work experience, education, qualifications, skills, career interests, certifications, training, publications, etc.
  - Completion of Career Profile is voluntary but required to apply for vacancies, mobility, promotion, and other talent activities; monitoring prioritized for A14 fungible macroeconomists as of April 2022.
  - Over FY23, monitoring will expand to include all fungible macroeconomists, with specialist economists included subsequently.
  - An Expert Track is expected to commence by end of the current fiscal year to provide career paths for specialists, including financial sector experts.
- MANAGEMENT ACTION 5.1:
  - Brief the Executive Board on the HR strategy, including on the ongoing workforce analysis for financial sector experts.
  - Status: Overdue but progressing
  - ACCOUNTABLE: HRD
  - ORIGINAL TARGET DATE: by January 2020
  - EXPECTED COMPLETION DATE: End-FY2024
- 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.
  - Status: Overdue but progressing
  - ACCOUNTABLE: HRD
  - ORIGINAL TARGET DATE: by November 2020
  - EXPECTED COMPLETION DATE: End-FY2024
- MANAGEMENT ACTION 5.4:
  - Publish implementation details of the new HR strategy, which will include strategic workforce planning supported by a talent inventory of staff (with expertise profiles, including macrofinancial), a career mobility framework, and an expert track.
  - Status: Open
  - ACCOUNTABLE: HRD
  - ORIGINAL TARGET DATE: By April 2022
  - EXPECTED COMPLETION DATE: FY24

### IEO Recommendation 6 — resources for financial surveillance
- Recommendation: Consider devoting significant additional resources to financial surveillance.
- Directors agreed the Fund should devote adequate resources to strengthen financial surveillance.
- The MIP envisaged one action, which was overdue but progressing at the end of the 11th PMR. This action has been implemented.

*Source: ppea2022053 - 71.      An IAPOC index of monetary policy frameworks has been developed by RES, as part of (TWELFTH PERIODIC MONITORING REPORT).*

### 83.      In the last decade, the Fund has expanded some activities, including macrofinancial

### 83.      In the last decade, the Fund has expanded some activities, including macrofinancial

### Budget reprioritization and augmentation
- Recent Fund budgets reprioritized an average of about 4 percent of the aggregate envelope, releasing resources for expanded activities in response to evolving needs within a flat real budget context.
- Reprioritization provided space to expand core work and address new priority areas, including mandatory FSAPs, external sector and spillover work, governance, broader macro-structural work, and macrofinancial surveillance.
- Reprioritization within a flat budget has reached a limit, with work pressures increasing to unsustainable levels during the pandemic.
- In its Fall 2021 communique, the IMFC called on the Fund to help members achieve a durable and inclusive structural transformation, including stepped-up work on macro-financial risks and macro-critical implications of climate change, digital money, fragility, and inequality.
- In early December 2021 the Board approved a budget augmentation to be implemented through annual increases in the real net administrative budget averaging 2 percent each year during FY23 to FY25 relative to FY22, returning to a flat real budget trajectory thereafter.
- The augmentation allows for a ramp up in the new areas, as well as for strengthening macrofinancial surveillance.

### Macrofinancial surveillance: allocation, staffing, and implementation
- Macrofinancial surveillance accounts for 12 percent of the total budget augmentation over the FY23-FY25 period.
- After synergies, the augmentation for macrofinancial surveillance amounts to US$ 8.7 million over the three-year period (relative to US$ 83 million in FY22).
- The augmentation provides for an increase of 23 FTEs (from 168 FTs in FY22).
- Over 80 percent of these additional resources (19 FTEs) would provide direct country support with the goal of eliminating identified gaps in the depth and integration of macrofinancial linkages, systemic risk analysis, and macroprudential policy advice.
- The remaining resources (4 FTEs) would help better integrate and deepen macrofinancial analysis of systemic risk.
- In the steady state, resources for direct country support would be split between ADs (11 FTEs) and FDs (8 FTEs), with staff deepening skills in MCM and then rotating to ADs.
- The FY23-25 Medium Term Budget document indicates that in the steady state about 30 percent of the augmentation will support work on digital money and strengthening macrofinancial surveillance.
- Staff will regularly report to the Board on progress against the issue-specific strategies, with a Board update on the macrofinancial surveillance strategy scheduled for FY24 Q4.
- The FY23 Budget provides for an increase of US$3.5 million in new spending on macrofinancial surveillance, equivalent to about 40 percent of the three-year augmentation approved in December 2021.
- The FY23 increase will allow for an increase of about 10 FTEs of the 23 FTEs envisaged for the three-year period.
- Fungible economists with macrofinancial expertise will be recruited into MCM for onboarding and support to country teams; MCM staff will rotate to area departments to support mainstreaming.
- SPR and MCM will conduct in-reach to help disseminate and familiarize desks with tools and models for macrofinancial analysis.
- The additional staffing is expected to help eliminate gaps in the depth and integration of macrofinancial analysis (found in about 60 Article IVs at the time of the CSR), particularly in systemic risk analysis and macroprudential policy advice.

### IMF engagement with Fragile and Conflict-affected States (FCS) — strategy and principles
- The IEO evaluation (The IMF and Fragile States (2018)) found the IMF made important contributions in fragile states but that outcomes fell short of full potential and that adaptation had not always been sufficiently bold or sustained.
- The IEO recommended: a strong public signal of commitment to fragile states; institutional mechanisms for coordination; individual country strategies integrating policy advice, financial support, and capacity building; improving financing instruments; enhancing delivery of capacity development; strengthening IMF teams; and pragmatic ways to increase presence on the ground while minimizing staff risk exposure.
- Following COVID-related delays, in early March 2022 the Executive Board discussed the staff paper on The IMF Strategy for FCS.
- The Strategy argues fragility and conflict have macro-critical implications: destabilizing balance of payments positions, disrupting trade and financial flows, and hindering productive resource development; crises in FCS can threaten macroeconomic stability and growth prospects in neighboring countries and regions.
- The Strategy proposes principles of engagement to leverage the Fund’s mandate and comparative advantage to help authorities achieve better macroeconomic outcomes, emphasizing greater tailoring, distributional aspects, and calibrating pace and timing of structural reforms to political economy dynamics and institutional capacities.
- The Strategy proposes rolling out Country Engagement Strategies (CES) across FCS and improving Fund modalities of engagement to better serve FCS needs.
- Surveillance and analytics should address more systematically the macro-critical implications of fragility and conflict; field presence should be expanded to improve country-specific capacity development; existing flexibility in the lending framework should be used to improve program design tailored to each FCS.
- For FCS facing an urgent BOP need but where a UCT-quality program is not feasible, the Strategy supports the use of emergency financing instruments provided that requirements are met.
- The Strategy emphasizes enhancing partnerships, including strengthening collaboration with the World Bank; it will adopt the methodology, thresholds, and criteria of the Bank’s FCS list to achieve greater consistency and share diagnostics more systematically.
- The Strategy will be phased in starting in FY22, with implementation gradually accelerating between FY23 and FY25; progress will be monitored through a set of indicators, starting with a Staff Guidance Note.

### Country Engagement Strategies (CES): scope, delivery, and timeline
- The CES will provide an assessment of fragility and conflict drivers and serve as a high-level longer-term strategic anchor for Fund engagement with FCS.
- Pilot CES have been valuable in tailoring modalities of engagement in FCS and strengthening surveillance, lending, and CD integration.
- All CES should cover to varying degrees six pillars:
  - (i) a candid assessment of fragility and conflict drivers;
  - (ii) an overview of possible constraints to reform implementation;
  - (iii) an overview of policies and reforms;
  - (iv) an outline of sequenced CD priorities integrated with surveillance and lending objectives;
  - (v) the scope for partnerships;
  - (vi) an identification of the main risks to Fund engagement (including for CD delivery and program success) stemming from fragility and conflict-related constraints in the near term (1-3 years) and the medium/long term (3-5 years).
- CES will provide the critical context for policy advice and reform strategy underpinning Fund engagement on surveillance, CD delivery, and lending; the Strategy presents a Table linking CES with the core IMF functions.
- CES will be developed through a broad consultative process led by Area Department country teams, involving sustained engagement with country authorities; consultations with Functional Departments and RCDCs; external consultations with partners; and engagement with CSOs, the private sector, members of parliament, and other civil society actors.
- The preparation of CES will result in two output documents:
  - (i) the full-fledged stand-alone CES, a confidential staff-level assessment covering the six pillars; and
  - (ii) for each new or updated CES, a summary to be incorporated in the relevant Policy Note and Staff Report (Article IV or program document).
- A Staff Guidance Note on the Implementation of the FCS Strategy, to be prepared by October 2022, will support CES roll-out, providing further details on operational aspects and the basis for considering this action implemented.
- Based on pilot cases, a number of FCS teams have started work on CESs; circumstances permitting, about half of FCS (about 20 countries in total) are expected to have completed a CES within 18 months of issuance of the updated Staff Guidance Note — by April 2024.
- Thereafter, CES will be updated at least once every three years, with more frequent updates when warranted.
- A survey of FCS Mission Chiefs will take stock of initial lessons learned on CES successes and areas for improvement — by October 2024.
- CES across all FCS are expected to be completed by end-FY25.

### Capacity development (CD) for FCS: funding, staffing, and implementation
- Directors supported strengthening the impact of Fund CD support to fragile and conflict situations, including increasing use of on-the-ground experts, employing realistic impact assessment tools, and ensuring adequate financial resources for CD work in these countries.
- Directors saw merit in a multi-donor trust fund for FCS, provided a business case could be made while protecting RTAC funding; they agreed on the importance of effective coordination with other TA providers.
- Options to achieve a balanced mix of internal and external funding of CD while maintaining flexibility in external funding are being explored to increase the share of CD delivery to FCS consistent with absorption capacity.
- In June 2021, ICD presented options regarding the CD funding model to the Committee on Capacity Building (CCB) to identify a medium-term strategy and funding model ensuring predictable internal funding and a strategy for well-aligned, flexible, and sustainable external funding.
- On April 15, 2022, the ICD Director sent a memorandum on “External Fundraising for Capacity Development: Update and Outlook” exploring a dedicated FCS CD Initiative modeled on the Fund’s COVID-19 Crisis CD Initiative (CCCDI).
- The proposed FCS Initiative would allow donors to support IMF CD in FCS while complementing existing financing vehicles, involve more flexibility on donor fund use (including hiring long-term experts in RCDCs), allow streamlined reporting, and provide donors additional visibility; the proposed initiative is not yet operational.
- Next steps before fundraising: finalize preparation of appropriate work programs by interested departments and establish a robust internal coordination framework.
- The Budget augmentation framework approved in December 2021 envisages an increase of Fund-financed CD of US$17 million over FY23-FY25, equivalent to about one quarter of the total augmentation.
- Half of the proposed increase for CD will focus on higher field presence in FCS and greater funding stability for RCDCs facing financing issues; the remainder would help increase CD related to climate change and digital money as part of respective strategies.
- About 43 percent, roughly 12 FTEs, of the share of augmentation allocated to work in FCS will contribute to the increase in Fund-financed CD.
- Ten additional long-term advisors, either in RCDCs or in-country, will help increase responsiveness to FCS-specific CD needs.
- These resources will support engagement across all FCS members in core CD areas: domestic revenue mobilization, expenditure reviews, public financial management, monetary and exchange rate policy and operations, financial market development, statistics, country-specific macro frameworks, forecasting and policy analysis.

*Source: ppea2022053 - 83.      In the last decade, the Fund has expanded some activities, including macrofinancial*

### 95.      After the maintenance of a flat financing envelope on a real basis since FY19, the

### 95.      After the maintenance of a flat financing envelope on a real basis since FY19, the

### Externally financed capacity development (CD) — FY23–FY25 strategy
- The FY23-25 strategy allows for an increase in the aggregate externally funded CD envelope of 9 percent, with a return to a stable path in FY26.
- Additional IMF02 funding will be sought through the CCB process and is expected to fund up to 20 additional CD experts in RCDCs or directly in FCS, along with related HQ-based backstopping.
- The increase in externally financed CD complements additional resources available through the IMF01 augmentation, supporting maintenance of the balance of CD spending with other Fund outputs.
- The strategy envisages improved complementarity, quality, and tailoring of capacity building through closer upfront coordination of CD efforts across partners, including expanding the range of partners and strengthening collaboration with the World Bank in FCS.

### Recent analytical and presentation work on FCS capacity building
- MCM informal Executive Board presentation (May 2021): Building Capacity on Monetary and Financial Policies in Fragile and Conflict-Affected States — briefed on ongoing CD activities in FCS, outlook, challenges, and lessons learned; analyzed trends and modalities of TA delivery to derive lessons for future central bank and financial system reforms (including financial market development and debt management).
- STA working paper No. 2022/045 (published late February 2022): Building statistical capacity in FCS
  - Findings based on internal data:
    - STA’s CD program has prioritized technical assistance and training to FCS and these interventions have yielded only slightly weaker results than in other states.
    - Persistent needs due to insufficient resources allocated by FCS to the statistical function, inadequate inter-agency coordination, and pervasive impact of shocks exogenous to the statistical system.
  - Main policy recommendations from the WP:
    - (i) tailor CD to countries’ level of fragility;
    - (ii) increase the use of long-term experts stationed in the RCDCs;
    - (iii) make training to FCS an integral part of CD, especially during the early phases of fragility;
    - (iv) build on the training experience to advance blended learning;
    - (v) continue to leverage the potential of remote delivery of CD even when travel resumes;
    - (vi) advance FCS participation in the IMF’s Data Standards as a key objective;
    - (vi) coordinate with the WB and other CD providers, and within the Fund, to help address low absorptive capacity.
  - The WP would form the basis for a presentation to the Board tentatively planned for FY23, depending on availability of resources and priorities.

### Management and Board actions — key implementation notes
- MANAGEMENT ACTION 5.3: Prepare a staff paper for Board discussion with analysis of experience — Implemented  
  - ACCOUNTABLE: MCM and STA  
  - ORIGINAL TARGET DATE: December 2019
- MCM informal presentation and STA WP constitute implemented analytical inputs and lessons from building financial and statistical capacity in FCS.  
  - IMPLEMENTATION DATES: May 2021 and February 2022

### Human resources, career pathways, and incentives for FCS work
- July 2020: management launched a new career path and mobility framework (CPM) for fungible macroeconomists at grades A12-A14 and a CPM for FMs covering grades A11-A14.
- Promotion requirement effective July 2023 (without exception): promotions from A14 to A15 will require country team or equivalent experiences in low-income countries and/or fragile states, satisfied 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 LICs/FS.
- An Interdepartmental Committee (the LIC/FS Advisory Group) will systematically review FMs’ experiences for LIC/FS requirements.

### FCS Strategy implementation and staffing adjustments
- The FCS Strategy aims to:
  - shift the perception of FCS work within the Fund;
  - nurture and attract the right skills mix;
  - provide adequate support for staff health and safety.
- Metrics and monitoring:
  - Metrics to assess increase in experienced internal candidates applying for FCS and LIC vacancies to be established and assessed two years after 2020 policy implementation.
  - Departments will publish annually aggregated metrics related to staff ratings and promotions for FCS versus non-FCS starting in FY24; metrics will be designed for the FY23 performance cycle and account for policy effective date of July 2023.
  - A Fund-wide special recognition scheme will be explored to highlight contributions to key organizational priorities.
- Planned initiatives (with target timings):
  - (i) new promotion policy to attract experienced fungible macroeconomist staff to work on FCS and LICs – effective July 2023;
  - (ii) an FCS learning curriculum to support implementation – due in FY23;
  - (iii) activation of the FCS Community of Practice – due in FY2023;
  - (iv) increased transparency on ratings and promotion decisions at an aggregate level for FCS vs non-FCS staff – due in FY24.

### Augmentation for FCS over FY23–FY25 (resource envelope and deliverables)
- The augmentation document envisages an increase of US$21.2 million for FCS over FY23-FY25, relative to an existing US$76 million.
- Direct country support deliverables include:
  - 4 additional resident representatives;
  - increase in field staffing to an average of 2 local economist per FCS field office (requiring 40 local economist hires);
  - strengthened support for CD–surveillance integration through 10 additional FTEs at ADs at HQ;
  - expansion of in-depth and regionally provided CD support through 10 additional RCDC advisors or in-country long-term experts;
  - additional US$3 million to cover administrative costs at RCDCs.
- Other activities funded through the augmentation:
  - centralized analysis of the drivers of fragility (including climate change and natural disasters) and enhanced collaboration with other partners (2 FTEs);
  - specific training through the dedicated FCS curriculum (1 FTE).
- Implementation approach: process expected to be backloaded, leaving space to adjust based on experience.

### Social protection guidance and operational support
- IEO evaluation (The IMF and Social Protection, 2017) recommended establishing a strategic framework to guide Fund work on social protection, provide tailored policy advice, and adopt more effective program design and conditionality approaches; strengthen collaboration with other partners; and enhance external communications.
- Management Implementation Plan (MIP) response:
  - Of eight envisaged MIP actions in response to five IEO recommendations, six had been implemented as of the 11th PMR; two actions remained overdue but progressing.
- MANAGEMENT ACTION 1.2: Staff will issue a follow-up guidance note to support the strategic framework for social protection — Overdue but progressing  
  - ACCOUNTABLE: FAD and SPR  
  - ORIGINAL TARGET DATE: End-2019  
  - EXPECTED COMPLETION DATE: End-FY24
- Progress on guidance note and background papers:
  - Staff issued a note in September 2020: “How to Operationalize IMF Engagement on Social Spending During and After the COVID-19 Crisis”.
  - A background paper on pensions has been published in the Fund website under the Technical Notes and Manuals series; a background note on social safety nets is in the process of publication in the same series.
  - Two other background papers (Health and Education) are expected to be finalized by the end of FY23.
  - The guidance note will be completed during FY24 and will rely on the four background notes to support staff decisions on when and how to engage on social spending in different country settings.
- MANAGEMENT ACTION 1.3: An advisory group will be formed after issuance of the guidance note to provide support to country teams in operationalizing work on social protection — Overdue but progressing  
  - ACCOUNTABLE: FAD  
  - ORIGINAL TARGET DATE: After issuance of the guidance note in 2020  
  - EXPECTED COMPLETION DATE: End-FY24
- Operational approach:
  - Staff view creating an additional advisory group as risking duplication; current support includes a team in FAD that advises country teams during the review process and an Inequality Advisory Group (chaired by FAD and AFR) established in September 2019.
  - After publication of the Guidance Note (expected by end-FY24), a dedicated group within FAD will continue to support country teams, and the existing Inequality Advisory Group will be leveraged to monitor and report on progress, broadening terms of reference if necessary.

### Data strategy and recent Board-level activity
- IEO evaluation (Behind the Scenes with Data at the IMF, 2016) recommended a long-term overarching data strategy, defining and prioritizing IMF data needs, reconsidering STA’s role, reexamining staff incentives, and clarifying responsibility for data quality.
- MIP response: 18 actions envisaged; many remained open after the 11th PMR with ongoing progress and several reforms implemented.
- MANAGEMENT ACTION 2.1: Comprehensive Surveillance Reviews (CSR) and interim reports will continue to guide priorities regarding the Fund’s evolving data and statistical needs — Implemented  
  - ACCOUNTABLE: SPR, STA  
  - ORIGINAL TARGET DATE: December 2017
- Recent Board consideration:
  - March 2022: Executive Board considered the Review of the DPF, delayed due to COVID-related institutional reprioritization; the DPF Review was aligned with CSR priorities and considered shortly after the Review of the Data Standards Initiatives (DSI). The Executive Board provided strategic guidance on key issues discussed in the DPF Review during informal engagements in March 2019 and March 2022.

*Source: ppea2022053 - 95.      After the maintenance of a flat financing envelope on a real basis since FY19, the (TWELFTH PERIODIC MONITORING REPORT, INTERNATIONAL MONETARY FUND)*

### 2021. Staff information was supplemented with a comprehensive survey of member authorities in

### ppea2022053 - 2021. Staff information was supplemented with a comprehensive survey of member authorities in

### Data Provision Framework (DPF) Review — scope, proposals, and Board discussion
- Review proposed a substantial, but manageable, update of the overall envelope of data requirements in the areas of the public sector, foreign exchange intervention, and macro financial data.
- Review did not propose expanding the perimeter of required data to sustainability indicators (demographic shifts, technological change, inequality, socio-political and geopolitical developments, and climate change); the Fund would continue to draw on data from external sources for these areas.
- Two enhancements to the underlying framework were elaborated:
  - A new, more structured and transparent Assessment of Data Adequacy for Surveillance, with more granularity in the classification of data adequacy, expected to facilitate policy dialogue and improve prioritization of capacity development.
  - Maintain the long-standing practice of not applying the remedial framework to members not providing information listed in Article VIII, Section 5 of the Fund’s Articles of Agreement that the Fund considers outdated; address cases involving provision of inaccurate data or serious delays at a later stage as resources allow.
- Directors:
  - Agreed on the need to update the overall envelope on data provision in public sector and macro financial indicators, while some Directors sought more time to verify feasibility for some public sector data.
  - Many Directors supported expanding mandatory provision on foreign exchange interventions and central bank swaps/repos; many other Directors expressed reservations and asked for more flexibility.
  - Endorsed introduction of a more structured and transparent assessment of data adequacy for surveillance.
  - Underscored taking account of country capacity and pandemic constraints when refining proposals.
  - Agreed to return as soon as possible to conclude the data provision policy review.
- Implementation timing and status:
  - IMPLEMENTATION DATE: March 2022 (as presented to the Board).
  - Staff revising some DPF proposals related to foreign exchange intervention, central bank swaps/repos, and public sector data while keeping other elements unchanged following Board endorsement.
  - Completion of the DPF review expected around the end of 2022, subject to convergence of views at the Executive Board.

### Data Standards Initiatives (DSI) — Tenth Review alignment with DPF and outcomes
- The Executive Board concluded the Tenth Review of the IMF’s Data Standards Initiatives (DSI) in late February 2022; the DSI is closely aligned with the DPF Review.
- DSI framework purpose: promote data transparency by encouraging voluntary publication of key macroeconomic and financial data subject to commitments relating to coverage, periodicity, and timeframe.
- Three tiers: enhanced General Data Dissemination System (e-GDDS), Special Data Dissemination Standard (SDDS), and SDDS Plus — tailored to countries’ capacity and periodically evaluated by the Executive Board.
- DSI leverages CSR and DPF proposals when considering new data needs; provides frame of reference for reasonable expectations on timeliness and periodicity of data provision to the Fund for surveillance, since the DPF does not mandate minimum timeliness or maximum periodicity.
- Tenth Review updates:
  - Parsimonious and principles-based expansion of encouraged data categories covering selected aspects in public debt, macrofinancial indicators, foreign exchange intervention, climate change-related policy, and gender-disaggregated labor market statistics.
  - Strengthened monitoring of the e-GDDS; encouraged SDDS subscribers to modernize data publication technology to align publication technologies across tiers.
  - Introduced a “force majeure” clause in the SDDS and SDDS Plus frameworks to permit suspension of nonobservance procedures when deviations arise from unforeseen circumstances beyond authorities’ control (e.g., severe natural disasters or a pandemic).
- Implementation actions and dates:
  - MANAGEMENT ACTION 2.2: 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. Implemented. ACCOUNTABLE: SPR, STA. ORIGINAL TARGET DATE: FY19. IMPLEMENTATION DATE: February 2022.
  - MANAGEMENT ACTION 2.3: Tenth Review will seek to merge SDDS, SDDS Plus, and e-GDDS frameworks, including new technologies for data provision (such as open data). Implemented. ACCOUNTABLE: SPR, STA. ORIGINAL TARGET DATE: FY20. IMPLEMENTATION DATE: February 2022.

### e-GDDS, SDDS, and SDDS Plus — participation, modernization, and performance
- e-GDDS:
  - Since the e-GDDS implementation, 68 of 111 e-GDDS participants published data through National Summary Data Pages (NSDP), including 27 FCS and small states.
  - Six e-GDDS participants have graduated to the SDDS following the Ninth Review.
  - All e-GDDS countries with NSDP have adopted machine readable (SDMX) technology.
  - Recommendations from the Tenth Review for e-GDDS:
    - Focus on certain key data not yet ready for dissemination to inform CD priorities.
    - Enhance Fund staff engagement through informal annual consultations with e-GDDS coordinators.
    - Leverage e-GDDS thresholds to help countries track progression.
    - Introduce biennial metadata certification of all e-GDDS countries.
    - Start publication of an annual summary report of e-GDDS performance by staff on the Dissemination Standards Bulletin Board.
- SDDS:
  - Currently 50 members subscribe to the SDDS.
  - Since the Ninth Review, six new members subscribed to the SDDS and 19 former SDDS subscribers moved up to the SDDS Plus.
  - SDDS subscribers are required to disseminate 19 data categories.
  - Of the 50 SDDS subscribers, only three have an NSDP with machine readable (SDMX) technology (a requirement for SDDS Plus).
  - SDMX adoption requires technical support and has been slowed by the pandemic in some cases.
  - Tenth Review specifies SDDS countries should develop, with Fund staff support, a three-four-year plan to modernize their NSDPs by mid-2026.
- SDDS Plus:
  - Number of adherents more than tripled to 27 countries since the Ninth Review.
  - Dissemination of SDDS Plus data categories has advanced, with only a few countries retaining transition plans.
  - Footnotes in the Review note subsequent movements: Hungary and the United Kingdom moved up from SDDS to SDDS Plus; as of September 1st, 2022 the number of SDDS countries is 48 and the number of SDDS Plus countries is 29, including all G7 countries.

### Assessment of Data Adequacy for Surveillance and integration with surveillance/CD
- Pilot and development:
  - In October 2019, STA, supported by SPR and LEG, launched 20 pilot cases to test a draft questionnaire to guide the new assessment of data adequacy.
  - New assessment aims to offer flexibility and adaptability, a more structured view, enhance policy dialogue with authorities, and increase transparency on how data weaknesses hinder analysis; it should focus discussions on where targeted CD is most beneficial and urgent.
- Operationalization:
  - STA will prepare a technical note for area department country teams to implement the new framework approved by the Board in March 2022 (SM/22/35); framework becomes operational in January 2023.
  - Technical note to be finalized in Q3 FY23 and will provide comprehensive guidance; the framework is based on a questionnaire comprising 31 questions.
- Reports on the Observance of Standards and Codes (ROSCs):
  - STA adopted a modular approach focusing on operational data for surveillance and assessing relevant sets of data compiling institutions, macroeconomic statistics, and/or quality dimensions of the Data Quality Assessment Frameworks.
  - Examples:
    - Panama (2020): ROSC scope limited to some quality dimensions for five datasets (National Accounts, Consumer Price Statistics, Government Finance Statistics, BOP/IIP and MFS) after authorities highlighted governance and legal framework issues.
    - Mexico (2021): authorities requested ROSC update to focus on ensuring coherence among National Accounts, Government Finance Statistics, and External Sector Statistics; ROSC covered all quality dimensions but limited to four of seven datasets.
  - MANAGEMENT ACTION 2.4: Review of the Standards and Codes Initiative will aim to strengthen integration with Fund surveillance and CD activities. A new data quality module in the revised ROSC will guide future CD and methodological work to facilitate data provisioning to the Fund. Status: Overdue but progressing. ACCOUNTABLE: SPR, STA. ORIGINAL TARGET DATE: FY18. EXPECTED COMPLETION DATE: 3Q FY23.

### Updates to statistical manuals, methodological work, and relevance for LICs
- STA is updating national accounts and balance of payments manuals to enhance relevance for Fund surveillance and policy analysis; updates address data gaps in digitalization and financial innovation, globalization, external sustainability, well-being and sustainability, and informal economic activity — supporting CSR priorities.
- Work program three-pronged approach:
  - (i) technical research on prioritized issues;
  - (ii) broad consultation on thematic areas;
  - (iii) ensure overall consistency across economic statistics system.
- Timing and progress:
  - Update of the 2008 System of National Accounts (SNA) is on track for the targeted release date of March 2025.
  - Consultations on specific issues largely on schedule and expected to conclude in 2023.
  - Updates to the Balance of Payments (BOP) and International Investment Position (IIP) manuals expected to be finalized in 2025.
  - STA circulated the presentation “Updates to the International Statistical Standards (BPM and SNA) to the Board (for information) on May 4, 2022.
- Relevance for LICs and thematic priorities:
  - Informal economy is a priority, especially for LICs in Africa and Asia; Inter-secretariat Working Group on National Accounts and IMF’s Committee on Balance of Payments Statistics established the Informal Economy Task Team (IETT) to develop recommendations; global consultation completed in April 2022.
  - Sustainability and climate-change related indicators will be relevant for LICs with climate risks.
  - Enhancing household distribution measures will be important to address inequality.
  - Long-standing issue of measuring unpaid work is being re-examined as part of the National Accounts update.
  - Digitalization programs present opportunities (payments systems, financial intermediation and inclusion, agriculture, transportation) and challenges (financial stability, monetary policy, CFMs, financial integrity, measurement).
- MANAGEMENT ACTION 3.4: 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; STA to issue revised Statistics Manuals (medium-term project) including specific considerations for LICs. Status: Overdue but progressing. ACCOUNTABLE: STA. EXPECTED COMPLETION DATE: CY 25.

*Italic: Content derived from the supplied IMF document excerpts.*

### 120.      Enhanced guidance for compiling data on LICs also continues to be provided. The IMF’s

### ppea2022053 - 120.

### Guidance and capacity development for LICs
- The Balance of Payments Committee developed a “Strategy to Compile External Sector Statistics in Countries with Low Statistical Capacity”, prioritizing compilation of balance of payments and international investment position components based on policy needs and the structure of the economy.
- On fiscal statistics, a comprehensive CD program (close to 200 missions a year) delivered by IMF staff and outside experts is the main instrument to provide enhanced guidance for data compilation in LICs.
- Field presence: GFS LTX presence in almost all RCDCs; STA has joined a number of regional outreach events organized by FAD focusing on fiscal data transparency.
- STA provided TA and training on compiling MFS and FSI, including targeting LICs, and has offered regional workshops for the Financial Access Survey (FAS) since 2018, mainly targeting LICs and other lower-middle income countries.
- STA nominated country coordinators for all the LICs identified as having data shortcomings that significantly hamper surveillance and has adopted a risk-based approach to review.
- STA’s review list includes countries with data shortcomings that significantly hamper surveillance, and other countries based on evolving IMF surveillance and program needs, focusing primarily on FCS and/or program or debt restructuring cases, and countries in the vulnerability exercise.
- A special notes series covers compilation topics relevant to LICs.

### STA tools, guidance, and outreach to area departments
- Important STA efforts include:
  - (i) development with ITD of a Macroeconomic Statistics Compilers’ Hub to enhance knowledge exchange and collaboration;
  - (ii) proactive statistical guidance in response to urgent challenges faced by area department economists, including during the COVID-19 pandemic;
  - (iii) several guidance notes and FAQs advising on the statistical treatment of important topics, such as the recording of the SDR allocation;
  - (iv) development of a communication strategy to inform area department economists about the update of the international statistical manuals;
  - (v) reactivation of “How to” notes, which focus on methodological issues typically raised in TA missions;
  - (vi) launching of an annual global survey of compilation and dissemination practices on national accounts and price statistics;
  - (vii) establishment of an email helpdesk to provide a one-stop shop for internal users;
  - (viii) enhancement of internal training offerings to Fund economists; and
  - (ix) development of the Climate Change Indicators (CID) Dashboard, which includes a readily accessible metadata section.
- STA delivered an Internal Economic Training Bootcamp for Fund staff to explain the nature of the data in the Dashboard.
- STA economists have joined area departments program missions (e.g., Ecuador, Panama), and CD missions have been scheduled in tandem with area department visits (e.g., Suriname).
- STA designed the Interface for Country Reviews to facilitate knowledge sharing by leveraging expertise of STA economists and reviewers of country documents.

### Strengthening the link between CD and surveillance; trust funds and outcomes
- A pilot exercise carried out in October 2019 with 20 country teams provided indications to focus discussions with authorities where targeted CD would be most beneficial.
- STA’s CD activities are partly supported by two multi-partner vehicle trust funds: The Financial Sector Stability Fund (FSSF) and the Data for Decisions Fund (D4D), designed to help finance CD activities, especially in low-and middle-income countries, including fragile states.
- As of March 2022, CD under the FSSF had helped 26 LLMICs to enhance the compilation of primary statistics underlying the Balance Sheet Analysis (BSA), surpassing the project target of 25 LLMICs.
- Since FY2018, 24 LLMICs have started to compile Financial Sector Indicators (FSIs), against a target of 29 LLMICs.
- As of end-2002, 37 LLMICs report additional FSIs, including for nonbank institutions.
- Work under all modules and submodules of the D4D Fund has been moving ahead; the D4D Fund gained flexibility following donors’ consent to allow staff to re-calibrate spending without prior consultation to react to fast-changing demands.
- Recent achievements in data dissemination through the Fund’s e-GDDS, SDDS, and SDDS Plus have been remarkable, with the initiatives now having a combined nearly universal voluntary participation by members.

### Management actions and implementation status (selected)
- MANAGEMENT ACTION 3.5:
  - The ongoing efforts to align CD activities with Fund and membership needs will continue. CD will increasingly be geared toward closing data gaps hampering surveillance, ratcheting up data quality and broadening data dissemination to help detect economic vulnerabilities and risks, and improve economic decision-making.
  - [In the context of the IEO report on the IMF and Fragile States, staff will prepare a comprehensive assessment on lessons from building statistical capacity in FCS for Board discussions, including work undertaken to align CD activities with Fund and membership needs especially in LICs.]
  - Status: Implemented
  - ACCOUNTABLE: STA
  - ORIGINAL TARGET DATE: Not indicated
  - IMPLEMENTATION DATE: February 2022

- 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: Late FY 24

- 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 requirements to discuss the SIA in the main body of the Article IV staff report.
  - Status: Implemented
  - ACCOUNTABLE: SPR, STA
  - ORIGINAL TARGET DATE: FY19
  - IMPLEMENTATION DATE: March 2022

- MANAGEMENT ACTION 5.1:
  - Building on the implementation of the previous recommendation, a plan will be developed 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, SPR, LEG
  - ORIGINAL TARGET DATE: September 2017
  - EXPECTED COMPLETION DATE: FY 2024

### Data adequacy framework and DPF Review outcomes
- The current framework requires country teams to judge whether data are adequate for surveillance, broadly adequate, or have serious shortcomings that significantly hamper surveillance; assessments are documented in the Statistical Issues Appendix (SIA) and discussed in Article IV reports.
- The DPF Review paper recommended adopting a new, more structured and transparent assessment of data adequacy based on a questionnaire consisting of 30 questions, offering a principles-based approach and more granularity.
- The new framework introduces four categories of data adequacy for surveillance: A, B, C, and D (with Category C new compared with the current framework). Categories A and B denote data are adequate or broadly adequate; Categories C and D denote that data weaknesses hamper surveillance to some degree or significantly.
- Using the data adequacy questionnaire will require country teams to assess facts and offer judgements covering five key sectors: national accounts, price indices, government finance statistics, external sector statistics, and financial statistics.
- The DPF Review proposed that the new assessment be introduced in Article IV consultations initiated after January 1, 2023 (until then, the current framework remains in place).
- The DPF Review paper also updated the envelope of data requirements in public sector, foreign exchange intervention, and macro financial data, defined transition periods, and proposed that certain macro financial indicators be required only from members designated by the Fund as having systemically important financial sectors.
- The Review paper was discussed by the Board in March 2022 but has not yet been completed because some members expressed concerns regarding a few of the variables being added for mandatory provision; staff is working to address these concerns.

### Clarifying the distinction between “IMF data” and “official data”; metadata work
- Directors supported clarifying the distinction between “IMF data” (used for Fund surveillance) and “official data” (official statistics provided by authorities to STA that are not vetted by the Fund), and supported review of incentives for staff to candidly assess and discuss data issues in Article IV and FSAP reports.
- A disclaimer has been added to the DSBB clarifying that the Fund offers no assurances, expressed or implied, regarding the data and metadata published 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 Country Surveillance Data (CSD), WEOCSD team has been checking submissions by country desks to ensure the requirement to identify the sources of historical data in the metadata field for all indicators is met; the team reports compliance 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 DPF Guidance Note to be prepared by SPR, LEG and STA upon completion of the DPF review and shared with the Executive Board (FY24) will further clarify expectations with respect to the sources of data and estimates.
- The revised SGN under Article IV Consultations issued in May 2022 ratified that the use of third-party indicators should follow principles of best practices by ensuring transparency; TPIs should supplement, not replace, open and well-documented discussion with authorities.
- The TPI Digest was updated in October 2021 (internal document); the 2021 update added four new indicators: Enterprise Surveys, the Global Financial Inclusion Database (Global Findex), COVID-19 Community Mobility Reports, and the Gender Inequality Index (GII). The Digest is expected to be reviewed/updated annually through a Fund-wide consultation process.
- The Data Governance Group (DGG) established an inter-departmental working group to create a common metadata model for the Fund, including dimensions to account for source and usage rights.
- A draft metadata model has been developed by a DGG working group; expected deadline for implementation of the metadata schema is April 2023.
- Objective to use the metadata model in iData for internal and external dissemination by late FY24.
- A proper implementation plan (including resource needs) is to be developed to gradually standardize metadata elements of Fund’s databases to conform to metadata standards.

*Source: ppea2022053 - 120.*

### 132.      The 2025 Diversity Benchmarks Working Group (WG) constituted in September 2019

### ppea2022053 - 132.      The 2025 Diversity Benchmarks Working Group (WG) constituted in September 2019

### 2025 Diversity Benchmarks Working Group (WG) — mandate and proposals
- WG constituted in September 2019 to:
  - assess progress against the 2020 Diversity Benchmarks,
  - formulate the new 2025 Benchmarks,
  - recommend policy solutions.
- Report on the 2025 Diversity Benchmarks presented to the Board in November 2020.
- WG proposals based on EPIC anchors: benchmarks should be equitable, principled, inclusive, and clear in formulation and implementation.
- Equity and inclusion rationale led WG to favor including A1-A8 staff and longer-term (one year or longer) contractual employees, which previously had not been part of the diversity architecture.
- WG recommendations:
  - Continue quantitative diversity benchmarks as stock measures for the three URR regions – Sub-Saharan Africa, MENA+, and East Asia – for continuity, simplicity, and feasibility.
  - Introduce Institutional Goals (IGs) representing how the Fund should look in gender and representation over the longer term. IGs would cover two groups:
    - (i) all staff (including A1-A8 support staff and longer-term contractual employees, no matter the grade);
    - (ii) the Fund-wide senior management teams (B4s and B5s).
  - Redefine and simplify Diversity Benchmarks, modifying and increasing benchmarks on managerial women and URR managers.
- Four IGs were proposed with specific numeric targets:
  - 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.

### FY2020–FY2021 Diversity and Inclusion Report — status against FY2025 benchmarks
- Executive Board discussion in January 2022 reviewed end-FY2021 status against FY2025 benchmarks.
- Progress noted:
  - Progress made in 5 of the 8 benchmarks, including on individual contributor level (A9-A14/15) staff from URRs.
  - Commitment to implement measures to raise the share of nationals from underrepresented regions among senior staff and set targets for representation of women at senior levels has been respected.
- Measures implemented to further D&I objectives:
  - Sponsorship Program Pilot.
  - Revised Terms of Reference of the D&I Council to facilitate more systematic engagement with key Fund committees (e.g., Economic Committee, Review Committee, Senior Review Committee) and relevant Working/Advisory Groups.
  - Completion of certification of EDGE (Gender Equality by independent third party) at a higher level.
  - Closer monitoring of departmental progress with more granular discussions and data in the Accountability Framework and through departmental D&I action plans.
- Specific outcomes and gaps at end-FY2021:
  - At A9-A14/15 level, the Fund exceeded benchmarks for nationals from East Asia and Sub-Saharan Africa (SSA) but continued to struggle to meet the benchmark for the Middle East and North Africa (MENA+) region.
  - Managerial level (A14/15-B5): new benchmark framework increased targets for both representation of women and URRs.
  - At end-FY2021, the Fund was considerably below managerial benchmarks across the board, but:
    - share of women in managerial roles improved 1.6 percentage points to 34.5 percent in FY 2021,
    - even stronger performance at the most senior levels (B4 and B5).
  - Projected pathway: "If this pace were to continue, the Fund could meet the FY2025 benchmark of 40 percent representation of women in managerial roles."
- Recruitment and pipeline issues:
  - Hiring trends showed improvement in the share of MENA+ nationals recruited, particularly in FY2021, but overall progress remained slow.
  - Challenges in recruiting a sufficient share of women to maintain a robust pipeline for managerial roles long-term.
  - Women continued to be promoted at higher rates than men, but considerable differences exist in promotion rates between women from URRs and women from all other regions combined.
- Near-term focus (over the following two years as indicated in the Report):
  - Leverage anticipated additional positions and higher number of retirements to improve staff diversity.
  - Monitor rates of promotion, implement actions to ensure equitable opportunities, and improve the accountability mechanism.

### Recruitment and retention experience (CY2021) — updated recruitment trends and implications
- Board paper in mid-April 2022 on “Staff Recruitment and Retention Experience in CY2021” provided updated recruitment information.
- Key recruitment metrics:
  - Overall share of women hired at the A9-B5 level in CY2021 was about 40 percent, similar to CY2020.
  - Share of URR hires increased, reflecting enhanced sourcing efforts, especially through the mid-career economist program, with progress across all three URR regions.
  - Net recruitment inflow (external hires minus separations) identified as an important indicator of progress toward numerical diversity benchmarks.
  - 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.
- Challenges and strategic staffing notes:
  - Significant further institutional efforts required to achieve and maintain diversity benchmarks for underrepresented nationals, especially for MENA+ region.
  - Additional staffing resources for the augmentation present an opportunity to improve diversity through external hiring and consolidate gains from the last two years.
  - Midcareer and EP sourcing channels need to be used to offset potential net losses from hiring specialists, given possible lack of diversity in the talent pool required for staffing augmentation in areas such as climate and digital money.
  - HRD has enhanced coordination and centralized information in the recruitment team to focus on candidate identification (diversity and skills) and candidate communication.
  - HRD intends to run the augmentation hiring process similarly to the mid-career pipeline where feasible, with personnel hired centrally for departments — this process has been more agile and included D&I targets as part of the strategy.

### Implementation Plan in Response to the Executive Board-Endorsed Categorization of Open Actions in MIPs (2022) — reformulation and progress
- Reformulation covered eight off-track actions corresponding to five IEO recommendations under four MIPs, resulting in 22 new actions.
- Overall status summary:
  - In response to five recommendations in the IEO evaluation, this MIP envisages 22 new actions, of which 15 remain open.
  - "At this stage, these recommendations face no obvious challenges and are expected to be implemented in reasonable time."
  - Progress snapshot: 32% Implemented (7 out of 22 actions).
- IEO Recommendation 1 (Role of the Fund as Trusted Advisor) — strengthen continuity of Fund-member relationships by addressing tenure of country assignments:
  - Original MIP Action: Target three-year average tenure for country assignments, monitored by HRD.
  - Rationale: Tenure has hovered around two and a half years; structural constraints/tradeoffs hinder longer tenure.
  - Reformulated summary: Continue targeting three-year average tenure while introducing a framework to extend tenure beyond the two-year minimum for different country groups, enhance monitoring and accountability for country team turnover, and assess barriers to longer tenure.
  - Directors broadly endorsed reformulation with calls for realism and nuance.
  - New actions and timelines (selection):
    - 1.1 Revise recruitment guidelines for Heads of Departments and senior hiring managers in Area Departments (ADs) to limit intradepartmental hiring of candidates for mission chiefs who have not met the minimum tenure of 2 years in their current assignments by end- (status: Open). ACCOUNTABLE: HRD, ADs. ORIGINAL TARGET DATE: June 2023.
    - 1.2 Complete implementation of the Country Information System (CIS) in Workday to better capture data on tenure of country team members, in addition to that of mission chiefs by end-April 2022. Status: Implemented. ACCOUNTABLE: HRD. ORIGINAL TARGET DATE: April 2022. IMPLEMENTATION DATE: April 2022.
    - 1.3 Enhance monitoring of metrics, including by analytical country groups, with emphasis on FCS and SDS, at the summer Accountability Framework (AF) discussions by end-June 2022; while targeting median tenure for mission chiefs at 2.7 years as an intermediate operational target; compile and disseminate best practices by end-December 2022. Status: Open. ACCOUNTABLE: HRD, ADs. ORIGINAL TARGET DATE: December 2022.
    - 1.4 Start annual reporting to the Board of data on mission chief and desk-economist tenure, including by analytical country groups, with emphasis on FCS and SDS, through HRD’s Recruitment and Retention Paper and/or Board briefings, by end-December 2022. Status: Open. ACCOUNTABLE: HRD, ADs. ORIGINAL TARGET DATE: December 2022.
    - 1.5 Prepare an analysis of issues surrounding mission chief and country team turnover, including recent trends and drivers and their effect on tenure in country assignments. Propose policy options and targets, if necessary, aligned with other HR policies and present to the Board by end-December 2023. Status: Open. ACCOUNTABLE: HRD. ORIGINAL TARGET DATE: December 2023.
  - Implementation notes and milestones:
    - Revision of recruitment guidelines published on the Fund website in June 2022. The revised guidelines allow staff to apply to any vacancy in their current department if they meet job standards; area departments are strongly encouraged to select internal candidates who have met minimum 2-year tenure on country desk assignments to minimize disruption of country teams.
    - HRD began collecting data on tenure for the end-year Accountability Framework cycle; departments provided tenure data in June 2022. First set of data to be shared with management in early fall as part of AF close-out; departments to provide an update in December 2022. HRD will brief management once a year starting June 2023.
    - Workday CIS implementation completed in April 2022; names and roles of country team members (including desk and functional economists) are updated in Workday CIS.
    - Monitoring of metrics made available in the June 2022 Accountability Framework. HRD to discuss modalities with Strategic HR Partners to ensure staff median tenure in country assignments is above the 2-year minimum. Dissemination of best practices among ADs planned by end-December 2022.
- IEO Recommendation 2 (IMF Forecasts: Process, Quality, and Country Perspectives) — enhance processes and incentives for learning from past forecast performance and improve handover practices:
  - Original MIP Action: Issue guidelines establishing minimum requirements and practices for handover of country assignments.
  - Rationale: 2015 staff survey showed weak compliance with data management guidelines and handover practices across ADs; high staff dissatisfaction.
  - Reformulated summary: Foster knowledge sharing to identify minimum requirements for successful handover; disseminate best practices; set standard procedures for handover; establish regular monitoring.
  - New actions and timelines (selection):
    - 2.1 Conduct a peer-learning event on area departments’ handover practices and disseminate key conclusions and background materials among area departments by April 2022. Status: Open. ACCOUNTABLE: KMU, ADs. ORIGINAL TARGET DATE: April 2022.
    - 2.2 Drawing on lessons from the peer-learning event, set area departments’ standard procedures for country assignment handover and disseminate handover procedures on area departments’ websites by July 2022. Status: Open. ACCOUNTABLE: KMU, ADs. ORIGINAL TARGET DATE: July 2022.
  - Implementation notes and milestones:
    - KMU collaborated with SPR, Area Departments and the Office of Innovation and Change (OIC) to conceptualize a peer-learning event. KMU and OIC to host a first event in the fall to share internal good practices; analyze outcomes and consider additional events. Key conclusions and background materials to be disseminated among ADs.
    - An intranet web resource is planned to provide Fund-wide access to existing AD internal handover practices and requirements for successful handover; this will accompany the peer-learning event.
    - AFR updated handover guidelines, circulated them for comments, and plans to post them after front office clearance. AFR linked handover guidelines to data management reforms, with an information manager officer checking macro framework compliance and producing a semi-annual compliance report requiring remedial measures as needed.
    - IMFE project being developed by ICD designed to enhance management of macro-frameworks by desk economists, improve compliance with data management guidelines, ease recording of Common Surveillance Indicators, and facilitate successful country-assignment handovers.

*Source: ppea2022053 - 132. The 2025 Diversity Benchmarks Working Group (WG) constituted in September 2019 — TWELFTH PERIODIC MONITORING REPORT*

### 143.      The proposed timeline remains valid. HRD will communicate the FY24 objective setting in

### ppea2022053 - 143.

### Handover practices and objective setting
- The proposed timeline remains valid. HRD will communicate the FY24 objective setting in the early fall, including examples on how to set objectives related to handover practices.
- New Action 2.3: Revise the Fund-wide Guidance Note on Objective Setting in the APR to include examples on how to set objectives related to handover practices in the case of mission chiefs and desk economists by October 2022. Status: Open. ACCOUNTABLE: HRD ADs. ORIGINAL TARGET DATE: October 2022.
- New Action 2.4: Establish a regular monitoring mechanism through a survey of mission chiefs and desk economists to assess progress with implementation of country assignment handover standards and gauge staff satisfaction and refine standard procedures, as necessary, by October 2023. Inform management about survey results and describe measures that departments have already taken to improve handover and any additional intended steps, starting in January 2024. Monitor progress using the annual surveys, with the expectation that the number of respondents expressing satisfaction with handover procedures will be considerably higher than a majority for at least two successive years, by end-January 2026. Status: Open. ACCOUNTABLE: KMU, ADs. ORIGINAL TARGET DATE: January 2026.

### Data management reforms (IEO Recommendation 3)
- Original MIP Actions: Incentivize the use of the Common Surveillance Database (CSD); update the Catalogue of Time Series; metadata clean up; and adopt Fund-wide data management standards.
- Rationale for Reformulation: First two actions not aligned with “SMART” principles; metadata cleanup task spans 200 databases; adopting data standards was too broad and long-term.
- Summary of Proposed Reformulation: Update the Catalogue of Time Series (CTS) drawing from the 2020 review; embed metadata cleanup in DGG milestones; break down “adopting data standards”; provide substantive metadata standards milestones; document in the Enterprise Business Vocabulary (EBV).
- Directors’ Response: Supported reformulation; noted many actions remain open with implementation challenges.

Findings, progress, and timelines:
- 3.1: Present an annual report on the use of the Common Surveillance Database to the Data Governance Group (DGG). Report to include statistics on submissions of data and metadata from country teams and monitor CSD’s role for flagship publications. First report to be posted on the DGG site by February 2022. Status: Implemented. ACCOUNTABLE: RES, STA. ORIGINAL TARGET DATE: February 2022. IMPLEMENTATION DATE: May 2022.
- Usage reporting: A report with usage statistics of the CSD has been published by RES on the CSD Operational Portal page. Tables showing number of users accessing the CSD through EDI since 2019 via the Economic Data Interface (EDI) portal are posted on the “Working with CSD” site and linked from the DGG Website. Once iData becomes operational in late FY24, it will provide access to the CSD along with related usage statistics.
- 3.2: Implement the updated CTS (“4.0 version”) in STA databases by April 2022. Final report on CTS clean-up project to be posted on DGG site by June 2022. DGG to sign off by end of FY 2022. Status: Implemented. ACCOUNTABLE: RES, STA, ITD. ORIGINAL TARGET DATE: June 2022. IMPLEMENTATION DATE: September 2022.
- 3.3: Complete the recording of the current Common Surveillance Indicators (CSI), to be documented in the CSI Status Report by April 2022. DGG to oversee and post CSI status report to the CSD Operations portal. Status: Open. ACCOUNTABLE: STA, RES. ORIGINAL TARGET DATE: April 2022.
- CSI recoding progress: Significant progress with 135 out of 199 countries reaching full compliance as of June 2022. CSI recoding is multi-year, included in FY23 DGG work program. Expected deadline for implementation now April 2023.
- 3.4: Finalize the ontology and metadata schema and document these in the Fund’s EBV by April 2022. iData will leverage the metadata schema for internal and external dissemination. Status: Open. ACCOUNTABLE: STA, KMU. ORIGINAL TARGET DATE: April 2022.
- CTS and ontology work: STA finalized implementation of CTS 4.0; all indicators in STA databases disseminated via EcOS are coded using CTS 4.0. DGG signed off on CTS clean-up project; final report posted and circulated in September 2022. KMU integrated elements of CTS into the IMF Business Ontology in FY2022; Ontology stored in git code repository in the IMF Azure DevOps. KMU to present the Ontology to the DGG in a dedicated seminar in fall 2022.
- Metadata schema status: Development ongoing; DGG Metadata Governance Working Group to continue in FY23. KMU collaborated to map core metadata elements to the Enterprise Reference Metadata Schema (ERMS) and the EBV. Expected deadline for implementation of metadata schema and pilot with selected datasets now April 2023. Objective to use new metadata model in iData for internal and external dissemination by late FY24.

### Confidential information framework (IEO Recommendation 4)
- Original MIP Action: Staff expected to inform country authorities on Fund’s policy on treatment of confidential information; encourage informal/brainstorming discussions with authorities.
- Rationale for Reformulation: No mechanism existed to assess staff’s treatment of confidential information; informal discussions difficult to monitor.
- Summary of Proposed Reformulation: Increase transparency on Fund’s framework and policies on treatment of confidential information and re-disseminate guidance to staff regarding engagement with country authorities.
- Directors’ Response: Agreed with reformulation; some suggested staff should inform authorities when sharing confidential information.

Findings, actions, and timelines:
- External webpage: Created on the Fund’s framework for treatment of confidential information. The Fund provides a “comfort letter” spelling out the framework; information added on IMF web pages for the Transparency Factsheet and Key Trends in Implementing the Fund’s Transparency Policy (imf.org) (under “related links” or “notes").
- Communication plan and memorandum: SPR, LEG and COM agreed on a communication plan to raise awareness. A memorandum alerting staff to the newly created webpage and reiterating guidance was prepared and sent in September.
- 4.1: Create external IMF webpage with information on Fund’s policy including standardized comfort letter by June 2022. Status: Implemented. ACCOUNTABLE: LEG, SPR, COM. ORIGINAL TARGET DATE: June 2022. IMPLEMENTATION DATE: July 2022.
- 4.2: Re-disseminate guidance to staff on the framework and encourage leveraging the new website in surveillance, program, and capacity development discussions by June 2022. Prepare communication plan by June 2022. Status: Implemented. ACCOUNTABLE: LEG, SPR, COM. ORIGINAL TARGET DATE: June 2022. IMPLEMENTATION DATE: September 2022.
- 4.3: In the revised Guidance Note for Surveillance under Article IV Consultations, encourage staff to share relevant aspects of the Fund’s framework for treatment of confidential information with country authorities during Article IV consultations conducted with program and non-program member countries, by April 2022. Status: Implemented. ACCOUNTABLE: SPR. ORIGINAL TARGET DATE: April 2022. IMPLEMENTATION DATE: May 2022.
- SGN revisions (May 2022): Notes Fund has a fully developed framework for treatment of confidential information; staff should ensure common understanding of classifications: Public, For Official Use, Confidential, or Strictly Confidential. SGN references Box 14 and Transparency Policy Guidance Note (section II.E. and Appendix IX) for treatment and disclosure rules. Management and staff cannot withhold information required by Articles of Agreement or Board policies from the Executive Board, though confidentiality vis-à-vis the public remains. Paragraphs 40-44 and Appendix IX of the Transparency Policy Guidance Note provide further detail.
- Monitoring: No obstacles envisaged. 2021 survey included questions on satisfaction with country teams’ handling of confidential data. Next survey expected in 2023. New Action 4.4: Monitor progress using the annual OED survey, expecting respondents expressing satisfaction with country teams’ handling of confidential data will be considerably higher than a majority for at least two successive years, by June 2024. Progress to be assessed in the next Interim Surveillance Review, by end-FY24. Status: Open. ACCOUNTABLE: SPR. ORIGINAL TARGET DATE: April 2024.

### Research quality and working paper (WP) review (IEO Recommendation 5)
- Original MIP Action: Adopt new procedures to ensure the quality of working papers.
- Rationale for Reformulation: Guidelines on WP publication introduced in 2012; monitoring quality of individual WPs beyond guidelines not feasible or meaningful given resources.
- Summary of Proposed Reformulation: Identify and disseminate good practices on departmental review of WPs; update Fund guidelines on WP publication and departmental review procedures; increase transparency and accountability for interdepartmental review of WPs; improve outlets for disseminating country analytical work.
- Directors’ Response: Broad endorsement; emphasis on robust review processes and sufficient time to engage with ED offices.

Findings, actions, and timelines:
- Peer-learning event: SPR and COM organized a peer-learning event on May 19, 2022. Departments shared practices and discussed requirements for robust and transparent WP review and approval processes. Survey ahead of the event suggested a strong departmental preference for a “decentralized approach” to clearing WPs (division chiefs or relevant managers authorize distribution). AFR, RES and WHD presentations included practices like presenting WPs in seminars before publication and notifying EDs before publication. AFR implemented a Research Advisory Group for quality control and clearance for two years.
- 5.1: Conduct a peer-learning event on departments’ practices for WP review by May 2022. Status: Implemented. ACCOUNTABLE: COM, RES, SPR, With ADs and FDs. ORIGINAL TARGET DATE: May 2022. IMPLEMENTATION DATE: May 2022.
- Post-event follow-up: SPR circulated existing guidelines (on COM’s publication submission portal), presentations, key takeaways, and a matrix of pros and cons of WP review practices. COM will issue revised Fund guidelines for publication of WPs. Departments expected to revise and post their own WP review and approval procedures on their websites by December 2022.
- 5.2: Update COM guidelines on publication of WPs to strengthen review requirements, clarify procedures for information-sharing with EDs, and reduce publication delays. Disseminate revised guidelines to staff by June 2022. Status: Open. ACCOUNTABLE: COM with ADs and FDs. ORIGINAL TARGET DATE: June 2022.
- SIPs and dissemination: Two Divisions in COM are setting up the SIPs as a series in the metadata system, working to get ISSN codes and setting up a new page in SiteCore (IMF.org) via ITD ticketing. The October 2022 timeline remains valid.

*Source: TWELFTH PERIODIC MONITORING REPORT — INTERNATIONAL MONETARY FUND*

### 159.      No obstacles on the implementation of this action are envisaged at this stage. Several

### 159.      No obstacles on the implementation of this action are envisaged at this stage. Several

### New Actions and Timelines (implementation status)
- 5.3. Create identification numbers to allow indexing of published Selected Issues Papers (SIPs) and create a page on the IMF’s external website for published SIPs, to improve visibility of staff’s analytical work other than WPs and enable searching in external research bibliographic databases (IDEAS/RePEc), by October 2022.  
  - Status: Open  
  - ACCOUNTABLE: COM  
  - ORIGINAL TARGET DATE: October 2022

- 5.4. Review and revise departments’ procedures for the review and approval of WPs, as necessary, in light of the peer-learning exercise and post the procedures on departments’ websites, by December 2022.  
  - Status: Open  
  - ACCOUNTABLE: ADs and FDs  
  - ORIGINAL TARGET DATE: December 2022

- 5.5. Migrate the interdepartmental review of WPs to e-Review, including the posting of authors’ responses to comments prior to final approval by authoring department, to improve transparency and accountability, as part of Module 4 under the Integrated Digital Workplace (iDW) program, by May 2023.  
  - Status: Open  
  - ACCOUNTABLE: ITD, SPR  
  - ORIGINAL TARGET DATE: May 2023

### Progress on the development of a slippages framework (findings and constraints)
- Executive Directors requested that future PMRs include an assessment of the impact of slippages in the implementation of open management actions to focus reviews on the most material developments year-to-year and promote greater accountability.
- Directors agreed it is important to define “impact” ex-ante as part of the MIP process and to analyze multiple actions proposed in response to a single recommendation collectively rather than individually.
- Many Directors suggested ORM could assess the impact of slippages on enterprise risk, but developing a fully-fledged framework is challenging.
- OIA provided further analysis of actions more than one year past target implementation dates, conducted within constraints and assumptions: IEO recommendations and MIP actions do not explicitly indicate relative importance or prioritization based on risk considerations; ex-post attribution of significance or importance is beyond PMRs’ scope.
- Developing and applying the slippages framework is likely to be an iterative learning process; design and operational modalities need anchoring in the broader institutional Enterprise Risk Management (ERM) framework.
- OIA will act as an observer to preserve independence and will provide updates on progress in the PMR.

### Box 1 — Update on Ongoing Work in Developing a Slippages Framework (core elements and guiding principles)
- Collaborative work: IEO, ORM, SPR and OIA (as observer) met to discuss core elements of a risk assessment framework; IEO assessed enterprise risk implications of IMF engagement with Small Developing States (SDS) and rated risks of shortcomings in effectiveness as moderate.
- Management view: ERM framework work in progress; assessments should be based on sound methodology, clear qualification criteria for risks, and systematically applied rating scales; Management will continue work to anchor slippages assessments to ERM.
- Guiding Principles:
  - The framework should be consistent with and anchored in the ERM framework and leverage ERM tools and processes, as appropriate.
  - The framework should focus on the most critical slippages and avoid undue complexity while supporting risk-based prioritization; “slippages” needs a more precise definition.
  - Individual actions should be evaluated in combination with other actions to develop an integral view of risk mitigation with respect to specific IEO recommendations.
  - The framework will need to be applied ex-ante as part of the MIP process, rather than ex-post after slippages occur.

### Roles and Responsibilities (as identified)
- Risk ownership: departments accountable for specific MIP actions; sometimes multiple departments accountable for a single action.
- Accountable department(s): will assess implications of possible slippages on enterprise risk and prioritize actions per the institutional ERM framework and guidance.
- Accountable department(s) will utilize ERM tools where possible; ORM will provide guidance and training to departments to facilitate preparation of departments’ impact assessments of slippages.
- Following the Board-endorsed ERM framework, IEO can provide its assessment of enterprise risk in each evaluation and discuss mitigation via recommendations; eventually IEO can comment on MIP effects on risk assessment.
- While framework under development, OIA will act as observer; once framework is Board-approved and operational, OIA will independently assess progress of open actions and prepare the PMR including status of MIPs and a summary assessment of slippages’ impact. SPR will facilitate information and data provision to OIA as needed.

### Next steps and sequencing
- Timeline for developing a “prototype” slippages framework will follow closely the timeline for approval and mainstreaming of the ERM framework.
  - ERM framework currently scheduled for Board discussion in CY2022 Q4.
  - Main ERM components planned to be rolled out in CY 2023.
- Staff plans to develop the prototype for application on a new MIP as a pilot project once the ERM framework is rolled out; pilot selection will depend on the IEO evaluation calendar and projects in the evaluation pipeline.
- Lessons from the pilot will inform a Board approval request (separate from the PMR process) to formalize the slippages framework; subsequent roll-out will follow Board approval.
- Emphasis on pragmatic, non-transactional approach focusing on groups of actions addressing specific IEO recommendations based on risk considerations to avoid undue burden on departments.
- Detailed estimates of additional resources needed are difficult at this stage; further interdepartmental consultations required and resource implications depend on ERM roll-out and completion of the pilot project.

### Institutional decision (proposed)
- Proposed decision for Executive Board adoption by majority of votes cast:
  - 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 Twelfth Periodic Monitoring Report (PMR) on the Status of Management Implementation Plans (MIPs) in Response to Board-Endorsed Independent Evaluation Office (IEO) Recommendations (SM/22/231).

*Source: Twelfth Periodic Monitoring Report (excerpt).*

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_Source: https://www.imf.org/-/media/files/publications/pp/2022/english/ppea2022053.pdf_