## ppea2024055

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---

### EXECUTIVE SUMMARY — Overall assessment and high-level findings
- The Fourteenth Periodic Monitoring Report (PMR) assesses progress over the past year on 91 actions contained in eleven MIPs.
- Implemented vs open:
  - Actions assessed: 91.
  - Actions satisfactorily implemented: 49.
  - Actions open after this PMR: 42.
  - Overdue actions (past their target implementation dates): 13.
- Implementation pace:
  - A record number of 49 actions (out of 91) are deemed to have been satisfactorily implemented, with 42 actions remaining open.
  - The pace of implementation/closure in the Fourteenth PMR is more than double that of the previous PMR (24 closed actions), and much higher than the pre-pandemic annual average (17 closed actions).
- Faster implementation particularly notable in MIPs on:
  - The IMF’s Emergency Response to the COVID-19 Pandemic
  - The IMF and Capacity Development
  - IMF Engagement with Small Developing States
  - Behind the Scenes with Data at the IMF

### Drivers of progress and workload context
- Pandemic winding-down: the winding down of work on the COVID-19 pandemic allowed staff to refocus on several strategic actions that had been postponed.
- Workload and capacity constraints:
  - Implementation continued to be affected by multiple demands on staff and capacity considerations.
  - Faster pace occurred despite continued competing work pressures and capacity constraints.
- Priority guidance: Going forward, prioritization of implementation efforts is emphasized as key to maintaining a high pace of implementation in an environment characterized by elevated workloads and multiple demands on Fund staff.

### Strategic reviews and products completed since Thirteenth PMR
- Completed strategic reviews and products include:
  - Capacity Development Strategy Review (CDSR) — completed by the Executive Board in April 2024.
  - Review of Implementation of the 2018 Framework for Enhanced Fund Engagement on Governance.
  - Operational Guidance Note (OGN) on Program Design and Conditionality — issued January 30, 2024 (published externally).
  - Operational Guidance for IMF Engagement on Social Spending Issues — issued February 2024.
  - Update of the Staff Guidance Note on the IMF’s Engagement with Small Developing States (SDS-SGN) — issued July 2024.
  - Interim Review of the Resilience and Sustainability Trust (RST) — completed May 2024.
  - Finalization of the Review of Data Provision to the Fund for Surveillance Purposes (DPF Review).

### Open and overdue actions — status highlights and examples
- Distribution:
  - Of the 42 open actions, 13 are past their target implementation dates.
  - Overdue actions are contained in eight MIPs.
- Selected overdue/overdue-but-progressing actions and timelines (verbatim figures preserved):
  - Workforce planning for Capacity Development:
    - Action: Further update the workforce planning materials for selected CD management job families/functions and incorporate CD department feedback into the workforce planning tool (Adaptive Insights).
    - Accountable: HRD in consultation with ICD and CD departments.
    - ORIGINAL TARGET DATE: April 2024.
    - EXPECTED COMPLETION DATE: End-FY2026.
    - OIA Commentary: Partially complete; workforce planning tool in Workday launched in FY2023; “talent marketplace” pilot beginning October 2024; whole review process expected completed by end-FY2026.
  - Mission chief and country team turnover analysis:
    - Action: Prepare an analysis of issues surrounding mission chief and country team turnover, propose policy options and targets, and present to the Board.
    - Accountable: HRD.
    - ORIGINAL TARGET DATE: End-December 2023.
    - EXPECTED COMPLETION DATE: End-FY2025.
    - OIA Commentary: Partially complete; an analysis was circulated to the Board in February 2024; HRD will continue consultations and develop possible adjustments to the tenure metric and target by end-FY2025.
  - Migration of interdepartmental review of Working Papers to e-Review:
    - Accountable: ITD, SPR.
    - ORIGINAL TARGET DATE: May 2023.
    - EXPECTED COMPLETION DATE: CY2025.
    - OIA Commentary: Work in progress; DWR project approved in May 2023; full system expected to be deployed in three releases in 2025.
  - Review the role of Fund-supported programs in fostering growth (RoC):
    - Accountable: SPR, LEG.
    - ORIGINAL TARGET DATE: By end-FY2024.
    - EXPECTED COMPLETION DATE: By end-CY2025.
    - OIA Commentary: Preparatory work underway; next RoC now expected to be completed in CY2025.
  - GaR 2.0:
    - Accountable: MCM, ITD, ICD.
    - ORIGINAL TARGET DATE: By end-FY2023.
    - EXPECTED COMPLETION DATE: End-CY2024.
    - OIA Commentary: Partially complete; computer programs completed; roll-out expected finalized by end-2024; hybrid course tentatively FY2025.
  - Country Data Annex (CoDA) tool:
    - Accountable: SPR, RES.
    - ORIGINAL TARGET DATE: By end-FY2024.
    - EXPECTED COMPLETION DATE: By end-FY2025.
    - OIA Commentary: Partially complete; technical problems resolved; tool being piloted.
  - Board briefing on capital flows, CFMs, and crises:
    - Accountable: MCM, RES.
    - ORIGINAL TARGET DATE: Q4 CY2021.
    - EXPECTED COMPLETION DATE: Q4 CY2024.
    - OIA Commentary: Substantially complete; presentation scheduled for late May 2024 delayed; underlying research conducted and related papers published or forthcoming.
  - Publication on IMF website of indices of capital account openness (AREAER):
    - Accountable: MCM.
    - ORIGINAL TARGET DATES: Q4 CY2021 and Q4 CY2023.
    - EXPECTED COMPLETION DATE: End-CY2024.
    - OIA Commentary: Partially complete; work on binary and change indices with a working paper expected published on AREAER website by end-CY2024.
  - STA revised manuals (BPM7 and 2025 SNA):
    - Accountable: STA.
    - EXPECTED COMPLETION DATE: Spring of CY2025.
    - OIA Commentary: Partially complete; significant progress made; outreach to compilers began end-2023; Community Hub planned to support implementation.

### Key summary statistics and timelines (verbatim)
- Total actions assessed: 91.
- Actions satisfactorily implemented: 49.
- Actions open after this PMR: 42.
- Overdue actions (past their target implementation dates): 13.
- Noted timelines and milestones preserved verbatim:
  - “Talent marketplace” pilot: beginning October 2024.
  - Completion of job architecture review and workforce plan process: end-FY2026.
  - HRD tenure metric adjustments: end-FY2025.
  - ISR cancelled and folded into 2026 CSR.
  - GaR 2.0 roll-out: end-2024; hybrid course tentatively in FY2025.
  - CoDA expected fully operational: end-FY2025.
  - RoC expected completion: CY2025.
  - Publication of AREAER indices and working paper: end-CY2024.
  - STA revised manuals release: Spring of CY2025.
  - Broadening of Inequality Advisory Group ToR: before end-FY2025.

### Slippages framework — pilot, status, and next steps
- Prototype and pilot:
  - Prototype slippages framework described in Thirteenth PMR; anchored in the Fund’s Enterprise Risk Management (ERM) Framework and leveraging ERM tools and processes.
  - Pilot being run in the MIP on The IMF’s Emergency Response to the COVID-19 Pandemic (ERP MIP).
- Current pilot status:
  - So far, there have been no actual slippages in the implementation of actions envisaged in the piloted ERP MIP; therefore, no ex-post update of ex-ante assessments is necessary at this stage.
- Expectations and next steps:
  - As part of the PMR process, departments accountable for specific management actions are expected to update ex-ante enterprise risk assessments included in the MIP in the event of actual slippages or delays.
  - Recommendation for moving forward with the slippages framework on a more permanent basis is expected following:
    - full implementation of the ERP pilot,
    - an assessment of lessons from the pilot, and
    - an amendment of relevant decisions.
  - The Fifteenth PMR is expected to provide an assessment of progress in implementing the ERP MIP, drawing on ex-ante risk assessments and any ex-post updates if slippages occur.

### Selected MIP highlights — Emergency Response, Lending Facilities, and PRGT/RST/GRA
- The IMF’s Emergency Response to the Covid-19 Pandemic (2023) — MIP:
  - MIP envisages 19 actions, of which 11 have been implemented; six of the 11 closed actions were implemented during the MIP process.
  - Management commitments and statuses (selected):
    - MANAGEMENT ACTION 1.1 (early participatory Board consultation in crises): Status: Closed. Accountable: Management.
    - MANAGEMENT ACTION 1.2 (Review impact of pandemic-related lending; PRGT Financing and Resources updates): Status: Closed. Accountable: FIN/SPR. Original target: Regular updates; Next Informal Board in September 2023.
    - MANAGEMENT ACTION 1.4 (Comprehensive review of GRA access limits): Status: Open. Accountable: FIN/LEG/SPR. Original target date: Following the 16th quota review.
    - MANAGEMENT ACTION 1.6 and 1.7 (HR crisis response and operationalization): Status: Open. Accountable: HRD (in consultation). Original target dates: by end-FY2025.
    - MANAGEMENT ACTION 1.8 (surge capacity roster and crisis simulation schedule): Status: Closed. Accountable: CSF with HRD. Original target date: by end-FY2024.
- PRGT, RST, and GRA access updates (verbatim figures preserved):
  - PRGT 2021 Board approvals included a 45 percent increase in the normal and cumulative PRGT access limits; elimination of hard caps on exceptional access for the poorest PRGT eligible countries; maintenance of zero interest rates on all PRGT borrowing; two-stage funding strategy with a first-stage target SDR 12.6 billion loan resources and SDR 2.8 billion subsidy resources, of which SDR 2.3 billion were to be obtained through bilateral contributions.
  - PRGT update (staff, September 2023): first-stage target of SDR 2.3 billion for PRGT subsidy resources agreed in 2021 was reached later in 2023.
  - RST resource update: total usable loan resources once all pledges made effective would only barely meet near-term demand at the baseline access level.
  - GRA access limits history and recent actions:
    - 2016 levels: 145 percent of quota annually and 435 percent of quota cumulatively.
    - March 2023 temporary changes approved: 200 percent of quota annually and 600 percent of quota cumulatively, in place for 12 months.
    - February 2024 staff paper proposed extension; Board approved extension: GRA annual access limit of 200 percent of quota and cumulative limit of 600 percent of quota extended until end-2024.
  - 16th quota review effectiveness conditions and deadline preserved verbatim:
    - Members provide consent to their own quota increases by November 15, 2024, and that two effectiveness conditions are met by the required deadline:
      - (i) a general condition that no quota increase can become effective unless members currently having not less than 85 percent of total quotas have consented in writing to the increase in their quotas; and
      - (ii) the condition that no quota increase under the 16th Review can become effective unless participants in the New Agreements to Borrow (NAB) have provided the consents necessary for the effectiveness of the NAB rollback.

### Capacity Development (CD) — CDSR conclusions and follow-up actions
- CDSR completed April 2024 — focus areas: prioritization, integration, financing, impact and evaluation, field presence, and human resources.
- Comparative advantages of Fund CD identified (verbatim):
  - (i) a close integration between CD, surveillance, and lending;
  - (ii) convening power in member countries and among development partners;
  - (iii) the standalone demand-driven nature of Fund CD;
  - (iv) diagnostic and assessment tools;
  - (v) policy-oriented macro training.
- Management actions and timelines (selected):
  - MANAGEMENT ACTION 1.2: CD Guidance Note to operationalize CDSR recommendations.
    - Status: Open.
    - ACCOUNTABLE: Lead ICD in consultation with departments.
    - ORIGINAL TARGET DATE: December 2024.
    - EXPECTED COMPLETION DATE: End-April 2025.
  - CD Hub:
    - Launched to Fund staff in May 2023; OED version launched in February 2024; review of OED version after one year of use.
  - CD funding proposals:
    - Proposed CD stabilization mechanism: a pool of highly flexible, untied resources to insure against external funding risks; explore multi-partner regional/thematic vehicles and diversification of financing sources.
- HR and CD staffing:
  - CD staffing increased by about 70 percent in the last decade.
  - Specialist economists made up to 20 percent of economist staff, mainly at senior economist and senior financial sector expert levels.
  - Workforce tools and talent inventory:
    - Workforce tool in Workday launched in FY2023.
    - Of 39 workforce analysis notes, 11 updated, including nine notes covering approximately 85 percent of the specialist population.
    - Management Action 7.4 (workforce planning materials for selected CD job families) — Status: Overdue but progressing. ORIGINAL TARGET DATE: April 2024. EXPECTED COMPLETION DATE: End-FY2026.

### IMF engagement with Small Developing States (SDS) — SDS-SGN and implementation
- SDS-SGN issued July 2024.
- MIP envisages 23 actions; 19 remained open after Thirteenth PMR; 13 have been implemented since.
- SDS-SGN key content and guidance highlights (verbatim concepts preserved):
  - Country Engagement Box required for SDS in Article IV staff reports to outline engagement strategy; for SDS that are also FCS, Country Engagement Strategy supersedes the Box.
  - Toolkits: use of LIC-DSF and SRDSF; total of 20 SDS use the LIC-DSF and 14 SDS use the SRDSF.
  - Traction measures: tailor structural benchmarks, engage in contingency planning, account for data limitations, integrate CD into surveillance.
- RST/RSF interim review (May 2024) outcomes:
  - During first 17 months, 18 RSF arrangements approved with financial commitments amounting to SDR 6.3 billion.
  - An additional 30-35 countries have expressed interest in accessing the Trust’s financing.
  - Interim review suggested exploring UCT-quality programs with more targeted conditionality aligned with SDS capacity.

### Program design, realism tools, and the OGN on Program Design and Conditionality
- OGN on Program Design and Conditionality (circulated January 2024; published externally January 30, 2024) — core points:
  - Emphasizes realism of macroeconomic projections and provides an Annex on realism tools.
  - Staff should discuss realism using, at minimum:
    - (i) fiscal adjustment and growth realism tools under the SRDEF and LIC DSF;
    - (ii) real growth and output gap realism tools under the SRDSF;
    - (iii) realism tool assessing consistency between public investment and growth under the LIC DSF.
  - Contingency planning (CP) guidance: recommend including CPs in Program Notes, where appropriate and subject to confidentiality.
  - Social spending guidance: both GRA and PRGT programs should seek to protect social spending where relevant; PRGT-supported program shall indicate how the program advances poverty reduction and growth objectives.
  - Structural conditionality guidance: require assessment of criticality, depth, sequencing, and mapping structural benchmarks with CD findings where possible.
- Implementation milestones:
  - MANAGEMENT ACTION 2.1 (lessons from pandemic to inform RoC): Status: Open. ACCOUNTABLE: SPR. ORIGINAL TARGET DATE: by end-FY2025. TARGET COMPLETION DATE: by end-CY2025.
  - MANAGEMENT ACTION 1.3 (Review role of Fund-supported programs in fostering growth in next RoC): Status: Overdue but progressing. ORIGINAL TARGET DATE: By end-FY2024. EXPECTED COMPLETION DATE: By end-CY2025.

### Data, standards, and STA actions
- DPF Review finalization and Data Adequacy Assessment (DAA):
  - Board endorsed new DAA framework in December 2023 on a lapse-of-time basis.
  - Fund-wide implementation of new DAA started February 1, 2024.
- STA manuals and outreach:
  - Update of BPM7 and 2025 SNA reaching final stage; updated manuals scheduled for release in spring of 2025 (Spring of CY2025).
  - Outreach to compilers began end-2023; first round virtual seminars December 2023–April 2024; second round of in-person seminars planned to kick off in first quarter of FY2026 after BPM7 and 2025 SNA release in March 2025.
  - STA, with ITD, establishing a Community Hub for macroeconomic statisticians; initial internal user testing late 2024; expected public release in or around May 2025.
- Data governance and publication gating:
  - Fund-wide metadata model for economic and financial data in iData finalized December 2022.
  - New IMF Data portal internal soft launch scheduled June 2024; external launch planned September 2024.
  - Publication gating on iData requires metadata indicating whether data come from national authorities or represent IMF calculations/estimates.

### Human Resources (HR) Strategy, tenure metrics, and tenure monitoring
- HR Strategy pillars recapped; Board briefed on status July 9, 2024.
- Tenure monitoring and findings:
  - Mission-chief average tenure rose from 2.3 years to 2.6 years between April 2014 and April 2023; median tenure has hovered around 2.5 years, below the 3-year target.
  - Intermediate operational target communicated: target median tenure for mission chiefs at 2.7 years.
  - New actions and timelines:
    - Prepare analysis and propose policy options and targets on mission chief and country team turnover — Status: Overdue but progressing. ORIGINAL TARGET DATE: December 2023. EXPECTED COMPLETION DATE: By end-FY2025.
    - Enhanced monitoring through Accountability Framework and handover practices have been implemented and are being disseminated.
- Diversity and inclusion benchmarks (verbatim figures preserved):
  - FY2025 benchmarks comprise eight targets — two related to gender and six for underrepresented regions (URRs).
  - Share of women in managerial grades: 35.1 percent at end-FY2023 (compared with a 2025 benchmark of 40 percent).
  - Share of URR staff in managerial grades: 24.0 percent at end-FY2023 (compared with a benchmark of 28 percent).
  - Senior management (B4 & B5 grades): share of women doubled from 16.3 percent in FY2013 to 38.6 percent in FY2023; representation of URR nationals rose from 10.0 percent to 17 percent.

### Structure of the Fourteenth PMR and next steps
- The Fourteenth PMR comprises three sections:
  - Overview (this section).
  - Section II: detailed implementation status of management actions.
  - Section III: progress on the development of the slippages framework.
- Next PMR expectations and Board decision:
  - The Fifteenth PMR will assess progress in implementing the ERP MIP and consider ex-post updates to ex-ante risk assessments if actual slippages occur.
  - The Board reviewed and endorsed the assessment of implementation progress as proposed in the Fourteenth PMR.

*Source: OIA, Fourteenth Periodic Monitoring Report (excerpts provided).*

### EXECUTIVE SUMMARY

### ppea2024055 - EXECUTIVE SUMMARY

### Overall assessment and high-level findings
- The Fourteenth Periodic Monitoring Report (PMR) assesses progress over the past year on 91 actions contained in eleven MIPs.
- A record number of 49 actions (out of 91) are deemed to have been satisfactorily implemented, with 42 actions remaining open.
- The pace of implementation/closure in the Fourteenth PMR is more than double that of the previous PMR (24 closed actions), and much higher than the pre-pandemic annual average (17 closed actions).
- Progress has largely been made across the board since the Thirteenth PMR, with particularly faster implementation for actions in the MIPs on:
  - The IMF’s Emergency Response to the COVID-19 Pandemic
  - The IMF and Capacity Development
  - IMF Engagement with Small Developing States
  - Behind the Scenes with Data at the IMF

### Drivers of progress and workload context
- Notwithstanding continued heavy workload and capacity constraints from important global challenges, the winding down of work on the COVID-19 pandemic allowed staff to refocus on several strategic actions that had been postponed.
- Implementation over the last year continued to be affected by multiple demands on staff and capacity considerations.
- The faster pace of implementation recorded in this PMR occurred against a backdrop of continued competing work pressures and capacity constraints.
- Going forward, prioritization of implementation efforts is emphasized as key to maintaining a high pace of implementation in an environment characterized by elevated workloads and multiple demands on Fund staff.

### Strategic actions completed since the Thirteenth PMR
- Completed strategic reviews and products include:
  - Capacity Development Strategy Review
  - Review of Implementation of the 2018 Framework for Enhanced Fund Engagement on Governance
  - Operational Guidance Note on Program Design and Conditionality
  - Operational Guidance for IMF Engagement on Social Spending Issues
  - Update of the Staff Guidance Note on the IMF’s Engagement with Small Developing States (SDS-SGN)
  - Interim Review of the Resilience and Sustainability Trust (RST)
  - Finalization of the Review of Data Provision to the Fund for Surveillance Purposes

### Open and overdue actions
- Of the 42 open actions, thirteen are past their target implementation dates; most of these continue to progress at varying paces.
- Examples of overdue actions and their status:
  - HRD is working to finalize a proposal to introduce adjustments on the country team tenure matrix and target, following the recent completion of a staff analysis in this area.
  - Preparation of a background paper to take stock of how the Fund has integrated select macro-structural areas in surveillance, including collaboration with other institutions—progress ongoing.
  - Briefing the Board on the interplay between capital flows, Capital Flow Management Measures (CFMs), and crises—limited progress over the last 12 months and delayed again owing to other work priorities.
  - Publication on the Fund external website of indices of capital account openness—limited progress over the last 12 months and delayed again owing to other work priorities.
  - Update of statistical manuals—advanced significantly and expected to be finalized in spring CY2025.
  - Social protection follow-up: after issuance of a Guidance Note to assist implementation of the social spending strategy, staff intends to broaden the scope of the terms of reference of the existing Inequality Advisory Group to include social spending and inclusion issues.

### Scope of this PMR and background on monitoring
- This Fourteenth PMR covers 11 MIPs containing 91 actions:
  - One new MIP in response to a recent IEO evaluation issued in September 2023 (containing 19 actions).
  - Nine MIPs in response to older evaluations (containing 65 actions that were classified as open after the Thirteenth PMR).
  - The MIP that in March 2022 reformulated eight off-track actions (containing 7 open actions after the Thirteenth PMR).
- The MIPs considered arise from IEO evaluations including:
  - The IMF’s Emergency Response to the COVID-19 Pandemic (new, 2023)
  - The IMF and Capacity Development (2022)
  - IMF Engagement with Small Developing States (2022)
  - Growth and Adjustment in IMF-Supported Programs (2021)
  - IMF Collaboration with the World Bank on Macro-Structural Issues (2020)
  - IMF Advice on Capital Flows (2020)
  - IMF Financial Surveillance (2019)
  - The IMF and Social Protection (2017)
  - Behind the Scenes with Data at the IMF (2016)
  - The Role of the Fund as Trusted Advisor (2013)
- The MIP corresponding to the IEO’s evaluation on Fragile States (2018) has been retired from PMR monitoring as all remaining actions were completed in the Thirteenth PMR.

### Changes to overdue-action definition and implications
- Starting with this PMR, OIA broadened the definition of overdue actions to include all actions not completed by the originally agreed-upon implementation due dates.
- In recent PMRs, OIA had focused on overdue actions more than one year past target dates, allowing a one-year grace period because COVID-19-related reprioritization had hindered implementation.
- With the return to a post-pandemic normal, OIA considers the one-year grace period no longer necessary.

### Slippages framework: pilot and next steps
- The Thirteenth PMR described the development of a prototype slippages framework to assess the impact of slippages in implementing open management actions; the prototype is anchored in the Fund’s Enterprise Risk Management (ERM) Framework and leverages ERM tools and processes, where appropriate.
- After Board endorsement of the ERM framework in December 2022, the prototype slippages framework is being piloted in the MIP on The IMF’s Emergency Response to the COVID-19 Pandemic (ERP MIP), as proposed by several Executive Directors.
- As part of the Fourteenth PMR process, departments accountable for specific management actions are expected to update ex-ante enterprise risk assessments included in the MIP in the event of actual slippages or delays.
- So far, there have been no actual slippages in the implementation of actions envisaged in the piloted ERP MIP; therefore, no ex-post update of ex-ante assessments is necessary at this stage.
- A recommendation for moving forward with the slippages framework on a more permanent basis is expected following full implementation of the ERP pilot, an assessment of lessons from the pilot, and an amendment of relevant decisions.

### Key dates and approvals
- Executive summary date: October 10, 2024
- The prototype ERM framework endorsement: December 2022
- OIA assumed responsibility for preparing the PMR from SPR in February 2014.
- Early milestones referenced: January 2007 (Executive Board instituted the PMR), July 2018 (Third External Evaluation of the IEO), March 2019 (Board endorsement of triage framework), December 2019 (Categorization Paper), March 2022 (reformulation MIP), September 2023 (new IEO evaluation).

*Prepared by the Office of Internal Audit; Approved By Ashlene van der Colff.*

### 5.      To prepare the Fourteenth PMR, OIA held meetings with senior staff from SPR and the

### 5.      To prepare the Fourteenth PMR, OIA held meetings with senior staff from SPR and the

### Overall assessment and context
- Of the 91 actions being assessed in the Fourteenth PMR, 49 actions have been satisfactorily implemented, while 42 remain open.
- The 49 implemented actions include eight reported as overdue (or one year past their target implementation dates) in the Thirteenth PMR.
- The Fourteenth PMR is presented against multiple global challenges, including conflicts in Ukraine and the Middle East, geoeconomic fragmentation, weak medium-term growth prospects, and macro financial pressures stemming from rising debt fragilities and higher interest rates.
- Winding down of COVID-19 pandemic work allowed staff to refocus on strategic issues, accelerating implementation: the pace of implementation in the Fourteenth PMR increased markedly relative to the Thirteenth PMR, and was much faster than the pre-pandemic trend of on average 17 implemented actions per year.
- Progress since the Thirteenth PMR shifted back to strategic actions involving important reviews and key policy steps, including completion of: the Capacity Development Strategy Review; the Review of Implementation of the 2018 Framework for Enhanced Fund Engagement on Governance; a final stock-taking of the Implementation of Governance Measures in Pandemic-Related Spending; the Operational Guidance Note on Program Design and Conditionality; the Operational Guidance for IMF Engagement on Social Spending Issues; an update of the Staff Guidance Note on IMF’s Engagement with Small Developing States (SDS-SGN); the Review of Precautionary Instruments; the Interim Review of the Resilience and Sustainability Trust (RST) and Review of Adequacy of Resources; the Interim Review of Access Limits under the Poverty Reduction and Growth Trust (PRGT) and Initial Considerations for Access Limits under the General Resources Account (GRA); the Review of Cumulative Access Limits under the Fund’s Emergency Financing; and the finalization of the Review of the Data Provision to the Fund for Surveillance Purposes (DPF Review).

### Definition and distribution of overdue actions
- Starting with this PMR, OIA broadened the definition of overdue actions to include all actions that are past their target implementation due dates (previously focused on those more than one year past due).
- Of the 42 actions that remain open after this PMR, 13 actions are past their target implementation dates.
- These 13 overdue actions are contained in eight MIPs.
- Relevant departments continued to make progress on overdue actions at varying paces.

### Progress on selected overdue actions and timelines (by MIP)
- The IMF and Capacity Development
  - Action: Further update the workforce planning materials for selected CD management job families/functions and incorporate CD department feedback into the workforce planning tool (Adaptive Insights).
  - Accountable: HRD in consultation with ICD and CD departments.
  - Original Target Date: April 2024.
  - Expected Completion Date: End-FY2026.
  - OIA Commentary: Partially complete. The workforce planning tool in the Workday System was launched in FY2023. A Career Advisory Group has been established to address and enhance career opportunities for SCS and specialist staff. A “talent marketplace” will be piloted beginning October 2024. Workforce analysis notes for CD management job families are in progress. The whole review process covering the Fund’s job architecture is expected to be completed by end-FY2026.

- Implementation Plan in Response to the Executive Board-Endorsed Categorization of Open Actions in MIPs (the “reformulation” MIP)
  - Action: Prepare an analysis of issues surrounding mission chief and country team turnover, propose policy options and targets, and present to the Board.
  - Accountable: HRD.
  - Original Target Date: End-December 2023.
  - Expected Completion Date: End-FY2025.
  - OIA Commentary: Partially complete. An analysis was circulated to the Board in February 2024; HRD will continue consultations and develop possible adjustments to the tenure metric and target by end-FY2025.
  - Action: Monitor progress using the annual OED survey regarding satisfaction with country teams’ handling of confidential data.
  - Accountable: SPR.
  - Original Target Date: June 2024.
  - Expected Completion Date: CY2026.
  - OIA Commentary: Partially complete. The 2023 OED survey showed over 90 percent of respondents satisfied with handling of confidential information. The ISR was cancelled and folded into the 2026 CSR, where assessment in this area may occur.
  - Action: Migrate the interdepartmental review of Working Papers to e-Review (Document Workflow and Review/DWR project).
  - Accountable: ITD, SPR.
  - Original Target Date: May 2023.
  - Expected Completion Date: CY2025.
  - OIA Commentary: Work in progress. DWR project approved in May 2023; full system expected to be deployed in three releases in 2025.

- Growth and Adjustment in IMF-Supported Programs
  - Action: Review the role of Fund-supported programs in fostering growth in the next Review of Conditionality (RoC).
  - Accountable: SPR, LEG.
  - Original Target Date: By end-FY2024.
  - Expected Completion Date: By end-CY2025.
  - OIA Commentary: Preparatory work underway; next RoC now expected to be completed in CY2025.
  - Action: Develop analytical tools: GaR 2.0.
  - Accountable: MCM, ITD, ICD.
  - Original Target Date: By end-FY2023.
  - Expected Completion Date: End-CY2024.
  - OIA Commentary: Partially complete. The GaR 2.0 computer programs have been completed; roll-out expected to be finalized by end-2024. A hybrid course on the GaR (MCM and ICD) is tentatively scheduled for release in FY2025.
  - Action: Develop the Country Data Annex (CoDA) tool.
  - Accountable: SPR, RES.
  - Original Target Date: By end-FY2024.
  - Expected Completion Date: By end-FY2025.
  - OIA Commentary: Partially complete. CoDA faced technical problems that have been resolved; tool is being piloted and is expected to be fully operational by the end of FY2025.

- IMF Collaboration with the World Bank on Macro-structural Issues
  - Action: Background paper in context of ISR to take stock of how the Fund has integrated select macro-structural areas (notably climate) into surveillance and collaboration with the World Bank.
  - Accountable: SPR in collaboration with other departments.
  - Original Target Date: By FY2024.
  - Expected Completion Date: CY2026.
  - OIA Commentary: Preparatory work underway. ISR cancelled and folded into 2026 CSR; the background paper is likely to be included as part of the CSR.

- IMF Advice on Capital Flows
  - Action: Staff will brief the Executive Board on the interplay between capital flows, CFMs, and crises.
  - Accountable: MCM, RES.
  - Original Target Date: Q4 CY2021.
  - Expected Completion Date: Q4 CY2024.
  - OIA Commentary: Substantially complete. Presentation to the Board was scheduled for late May 2024 but delayed due to high workload; underlying research work has been conducted and related papers published or forthcoming.
  - Action: Publish on the IMF external website indices of capital account openness using the AREAER database.
  - Accountable: MCM.
  - Original Target Dates: Q4 CY2021 and Q4 CY2023.
  - Expected Completion Date: End-CY2024.
  - OIA Commentary: Partially complete. Other work priorities delayed completion. Work on binary and change indices, together with a working paper, is now expected to be completed and published on the AREAER website by end-CY2024.

- The IMF and Social Protection
  - Action: Form an advisory group after issuance of the guidance note on social spending to support country teams operationally.
  - Accountable: FAD, SPR.
  - Original Target Date: After guidance note in 2020.
  - Expected Completion Date: Before end-FY2025.
  - OIA Commentary: Preparatory work underway. Operational Guidance for IMF Engagement on Social Spending Issues completed in February 2024. Staff plans to leverage the existing Inequality Advisory Group and broaden its Terms of Reference before end-FY2025.

- Behind the Scenes with Data at the IMF
  - Action: STA to issue revised Statistical Manuals to provide international methodological guidance, including for LICs.
  - Accountable: STA.
  - Original Target Date: Not indicated.
  - Expected Completion Date: Spring of CY2025.
  - OIA Commentary: Partially complete. Significant progress made in updating the BOP/IIP Manual and the System of National Accounts, including considerations for LICs. Outreach to compilers began end-2023. STA, with ITD, is establishing a Community Hub for macroeconomic statisticians to support implementation, with particular focus on countries with limited resources.

- The Role of the Fund as Trusted Advisor
  - Action: 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 Date: Steps begin in 2013.
  - Expected Completion Date: N/A.
  - OIA Commentary: Work in progress. In February 2020, the Board extended monitoring for five PMR cycles. Diversity benchmarks were revised upwards twice and many previous benchmarks were met; important challenges remain.

### Remaining open and overdue actions — summary statistics
- Total actions assessed: 91.
- Actions satisfactorily implemented: 49.
- Actions open after this PMR: 42.
- Overdue actions (past their target implementation dates): 13.
- Overdue actions are contained in eight MIPs.
- Noted timelines and milestones:
  - “Talent marketplace” pilot: beginning October 2024.
  - Completion of job architecture review and workforce plan process: end-FY2026.
  - HRD tenure metric adjustments: end-FY2025.
  - ISR cancelled and folded into 2026 CSR.
  - GaR 2.0 roll-out: end-2024; hybrid course tentatively in FY2025.
  - CoDA expected fully operational: end-FY2025.
  - RoC expected completion: CY2025.
  - Publication of AREAER indices and working paper: end-CY2024.
  - STA revised manuals release: Spring of CY2025.
  - Broadening of Inequality Advisory Group ToR: before end-FY2025.

### Structure of the Fourteenth PMR
- The Fourteenth PMR comprises three sections:
  - Overview (this section).
  - Section II: detailed implementation status of management actions.
  - Section III: progress on the development of the slippages framework.

*Source: OIA, Fourteenth Periodic Monitoring Report (excerpts provided).*

### SECTION II. IMPLEMENTATION STATUS OF

### SECTION II. IMPLEMENTATION STATUS OF MANAGEMENT ACTIONS

### Key definitions and overview
- Closed: Actions that have been substantially addressed as intended, or another form of disposition has been endorsed by the Board. This category also includes actions that have not been implemented but there is proper justification to close them.
- Open: Actions that: (i) are planned with no obvious obstacles or delays; and (ii) are ongoing.
- Overdue but progressing: A sub-category of open actions, these are actions that are past their target implementation date, but continue to make progress.

### A. The IMF’s Emergency Response to the Covid-19 Pandemic (2023) — evaluation summary
- Scope: Examined Fund adaptation of lending framework, processes for formulating the economic outlook and policy advice, and internal HR and budgetary practices during the emergency phase (January 2020 to April 2021) of the COVID-19 pandemic.
- Principal conclusions:
  - The Fund adopted a pragmatic strategy using existing emergency financing instruments and urged use of precautionary instruments; the response was effective and agile.
  - Reliance on the existing toolkit had costs due to rapid response: constrained consultation with the membership, limited take-up of precautionary facilities, and insufficient analysis of risks.
  - Staff revised the global economic outlook quickly; initial growth forecasts were too pessimistic and the surge in 2021 inflation had been missed.
  - Fiscal advice to “spend but keep the receipts” was judged bold and appropriate; a policy tracker launched to share policy information was appreciated.
  - Tailoring of financing to country circumstances was limited; variation existed across countries in application of policy guidance.
  - Corporate response showed remarkable adaptability but involved strains: work pressures, HR management challenges, budget issues, and logistical strengths and challenges.
  - Key takeaway: pragmatic response but lessons warrant review of some policies and procedures to prepare for future global crises.

### Progress on the MIP responding to the IEO evaluation
- MIP totals and status:
  - The MIP envisages 19 actions, of which 11 have been implemented.
  - Six of the 11 closed actions were implemented during the MIP process.
  - At this stage, the remaining eight actions face no obvious challenges and are expected to be implemented in reasonable time.
- IEO Recommendation 1: Develop special policies and procedures that could be quickly activated to address particular needs and circumstances of global crises.
  - Board reaction: Broad or qualified support; all Directors favored consultation with the Board in the early stages of future crises. Some supported special crisis procedures; others were skeptical. Directors warned against rigid or automatic processes and suggested a menu of options for early Board decision.
  - Agreement that further evaluation of pandemic-related lending impact should occur before deciding on temporary modifications to the lending framework.
  - No consensus on more proactive temporary flexibility for the Fund’s budget; some noted carryforward mechanism functioned well during the pandemic.
  - Merit seen in reinforcing crisis management team and adapting HR response to facilitate redeployment of resources during crises.
  - MIP envisages eight actions to address this recommendation, of which five actions have been implemented.
- Specific management actions (selected highlights and status):
  - MANAGEMENT ACTION 1.1 — Participatory consultation with the full Board at an early stage of a global crisis on the strategy and broad set of institutional steps to help member countries deal with very challenging circumstances.
    - Management commits to call early participatory Board meetings to discuss response strategy in early stage of global crises.
    - Status: Closed.
    - Accountable: Management.
  - MANAGEMENT ACTION 1.2 — Activation of temporary modifications to the lending framework; Review impact of pandemic-related lending and its implications on the Fund’s lending capacity.
    - Status: Closed.
    - Accountable: FIN/SPR.
    - Original target: Regular updates on PRGT Financing and Resources. Next Informal Board in September 2023.
  - MANAGEMENT ACTION 1.3 — Review of temporary increase of GRA access limits.
    - Status: Closed.
    - Accountable: FIN/LEG/SPR.
    - Original target date: Before March 2024 if circumstances warrant. If not, the temporary increase of GRA access limits will automatically expire in March 2024, as already agreed by the Board.
  - MANAGEMENT ACTION 1.4 — Comprehensive review of GRA access limits.
    - Status: Open.
    - Accountable: FIN/LEG/SPR.
    - Original target date: Following the 16th quota review.
  - MANAGEMENT ACTION 1.5 — Activation of a framework for temporary budget flexibility.
    - Mechanism to secure needed additional resources in crisis time has already been identified and updated following experience during the pandemic. No further action planned at this stage.
    - Status: Closed.
    - Accountable: OBP.
  - MANAGEMENT ACTION 1.6 — Steps to facilitate the HR response: include crisis-relevant skills in Talent Inventory.
    - HRD updated the Talent Inventory to include macro financial experiences (shared with OMD and departments in April 2024). HRD will include program experience in the inventory and review additional crisis-related relevant skills.
    - Status: Open.
    - Accountable: HRD, in consultation with other departments.
    - Original target date: by end-FY2025.
  - MANAGEMENT ACTION 1.7 — HRD will review how it could best operationalize a coordinating role in reallocation of staff and implement more agile recruitment procedures in times of crisis.
    - Status: Open.
    - Accountable: HRD, in consultation with other departments.
    - Original target date: by end-FY2025.
  - MANAGEMENT ACTION 1.8 — Reinforce the CMT through developing a strategy for surge capacity and calibrating the crisis response strategy; prepare a roster of potential external expert resources.
    - Actions: Comprehensive list of surge support resources completed and schedule of crisis simulation exercises covering the next two years developed.
    - Status: Closed.
    - Accountable: CSF, in consultation with HRD.
    - Original target date: by end-FY2024.

### PRGT, RST, and GRA access considerations and updates
- PRGT reforms and funding strategy (2021 Board approvals):
  - 45 percent increase in the normal and cumulative PRGT access limits.
  - Elimination of hard caps on exceptional access for the poorest PRGT eligible countries.
  - Maintenance of zero interest rates on all PRGT borrowing.
  - Two-stage funding strategy: first stage targeted securing SDR 12.6 billion for loan resources and SDR 2.8 billion in subsidy resources, of which SDR 2.3 billion were to be obtained through bilateral contributions from PRGT donors and the rest from internal Fund resources.
- PRGT update (staff, September 2023):
  - PRGT lending grew rapidly since the pandemic and 2021 reforms; cumulative lending commitments for 2020-24 possibly reaching just below the high case scenario considered in 2021.
  - Three main conclusions:
    - Some progress on fundraising, but more urgent action needed, especially on subsidy resources.
    - Demand outlook for PRGT lending remained elevated and was adding to the subsidy gap. Without action, the Fund’s capacity to make new fully funded-PRGT lending commitments could fall drastically over the medium term.
    - Increasing PRGT longer-term lending capacity would require substantial additional resources; the PRGT review scheduled for Board consideration in October 2024 is expected to provide an updated assessment of the long-term lending envelope based on LIC financing needs.
  - Note: The first-stage target of SDR 2.3 billion for PRGT subsidy resources agreed in 2021 was reached later in 2023.
- RST resource update (staff):
  - Total usable loan resources once all pledges made effective would only barely meet near-term demand at the baseline access level. Higher access levels or requests from additional countries would require new pledges and contributions.
- GRA access limits history and recent actions:
  - 2016 levels: 145 percent of quota annually and 435 percent of quota cumulatively.
  - March 2023 temporary changes approved: 200 percent of quota annually and 600 percent of quota cumulatively, in place for 12 months.
  - December 7, 2023 Board discussion: Most Executive Directors looked forward to a staff proposal regarding extension of access limits in early 2024, underpinned by a thorough analysis.
  - February 2024 staff paper proposed extension; Board approved extension:
    - GRA annual access limit of 200 percent of quota and cumulative limit of 600 percent of quota were extended until end-2024.
    - Extension aimed to enhance Fund’s ability to respond to members facing large shocks and ensure predictability of access policies.
    - Impact of the extension on Fund resources and liquidity is expected to be limited in the baseline and manageable if risks materialize.
  - Comprehensive review of GRA access limits will also take into consideration the outcome of the 16th quota review.
    - Completion of the 16th quota review requires members provide consent to their own quota increases by November 15, 2024, and that two effectiveness conditions are met by the required deadline:
      - (i) a general condition that no quota increase can become effective unless members currently having not less than 85 percent of total quotas have consented in writing to the increase in their quotas; and
      - (ii) the condition that no quota increase under the 16th Review can become effective unless participants in the New Agreements to Borrow (NAB) have provided the consents necessary for the effectiveness of the NAB rollback.
    - Once the above general conditions are met, a member’s quota increase will be in effect after that member has provided its consent to, and paid for, its quota increase.

### IEO Recommendation 2: Reinforce institutional preparedness for global crises and large shocks
- Board views and MIP response:
  - Directors broadly supported enhancing emergency and precautionary lending instruments and integrating pandemic lessons in forthcoming reviews.
  - Review of the 2018 Framework for Enhanced Fund Engagement on Governance seen as an opportunity to strengthen initiatives helping members combat corruption and improve governance via surveillance, lending, and tailored capacity building.
  - Importance of strengthening Fund collaboration with the World Bank and other multilaterals emphasized.
  - Directors acknowledged potential usefulness of a “crisis playbook” based on tabletop exercises, while avoiding duplication.
  - Continued exploration recommended on whether and how the lending toolkit may need enhancement to better serve the membership flexibly.
  - MIP envisages 11 actions to address this recommendation, of which six actions have been implemented.

*Source: OIA*

### 36.      No obstacles on the implementation of this action are envisaged at this stage. Staff has

### ppea2024055 - 36.      No obstacles on the implementation of this action are envisaged at this stage. Staff has

### Implementation status and timelines
- No obstacles on the implementation of this action are envisaged at this stage.
- Staff has already started the underlying analytical work for the Review of Program Design and Conditionality (RoC).
- Initial informal engagement with the Board is expected to take place in early CY2025, and the 2025 RoC would be completed in a formal Board meeting later in CY2025.
- The OGN on Program Design and Conditionality, issued in January 2024, has already been informed by lessons from the pandemic.
- Key target dates preserved exactly:
  - ORIGINAL TARGET DATE: by end-FY2025
  - TARGET COMPLETION DATE: by end-CY2025
  - ORIGINAL TARGET DATE for MANAGE ACTION 2.5: by end-FY2025
  - ORIGINAL TARGET DATE for MANAGEMENT ACTION 2.6: by December 2023 contingent on Stage 1 fundraising
  - ORIGINAL TARGET DATE for MANAGEMENT ACTION 2.7: by October 2023
  - ORIGINAL TARGET DATE for MANAGEMENT ACTION 2.9: starting FY2024, next review in 2028, with a possible interim update prior to the formal review.
  - ORIGINAL TARGET DATE for MANAGEMENT ACTION 2.10: by end-FY2025
  - ORIGINAL TARGET DATE for MANAGEMENT ACTION 2.11: by end-FY2025
  - Approximate time for a possible interim update of the 2018 Framework: April 2026
  - Formal Board meeting on the review of PRGT Facilities and Financing is currently planned for the fall of 2024.

### Management actions and accountability (selected)
- MANAGEMENT ACTION 2.1:
  - Objective: Lessons from the pandemic will inform the upcoming review of conditionality and design of Fund-supported programs.
  - Status: Open
  - ACCOUNTABLE: SPR
- MANAGEMENT ACTION 2.2:
  - Objective: Review of emergency financing policy and practice; lessons embedded in planned reviews; review of implementation of the 2018 framework for enhanced Fund engagement on governance completed (Formal Board in April 2023); steps to strengthen implementation identified.
  - Status: Closed
  - ACCOUNTABLE: FAD/LEG/SPR
- MANAGEMENT ACTION 2.3:
  - Objective: Final stocking of implementation of governance safeguards in emergency financing during the pandemic carried out in July 2023; identified actions to strengthen governance safeguards, including considering corruption risks arising in other emergencies beyond COVID-19.
  - Status: Closed
  - ACCOUNTABLE: FAD/LEG/SPR
- MANAGEMENT ACTION 2.4:
  - Objective: Review of access limits under emergency financing (Formal Board in June 2023). Extends the temporary increase in cumulative access limits for EF, based on “looking-forward” assessment of borrowing space.
  - Status: Closed
  - ACCOUNTABLE: FIN/LEG/SPR
- MANAGEMENT ACTION 2.5:
  - Objective: Review of PRGT Facilities and Financing (FY2025) to review the facilities, including the RCF, and financing options to ensure the PRGT’s self-sustainability.
  - Status: Open
  - ACCOUNTABLE: FIN/LEG/SPR
  - ORIGINAL TARGET DATE: by end-FY2025
- MANAGEMENT ACTION 2.6:
  - Objective: Before the review of the PRGT Facilities and Financing, an ad-hoc review of PRGT access limits may be carried out depending on progress of Stage 1 fundraising.
  - Status: Closed
  - ACCOUNTABLE: FIN/LEG/SPR
  - ORIGINAL TARGET DATE: by December 2023 contingent on Stage 1 fundraising
- MANAGEMENT ACTION 2.7:
  - Objective: Further development of the toolkit of precautionary instruments; review aims to make existing precautionary arrangements more flexible, accessible, and attractive (Informal Board July and September 2023, Formal Board October 2023).
  - Status: Closed
  - ACCOUNTABLE: FIN/LEG/SPR
  - ORIGINAL TARGET DATE: by October 2023
- MANAGEMENT ACTION 2.8:
  - Objective: Develop an initiative building on the upcoming review of the 2018 Framework for Enhanced Fund Engagement on Governance; final stocktaking of implementation of governance safeguards in emergency financing during the pandemic carried out in July 2023.
  - Status: Closed
  - ACCOUNTABLE: FAD/LEG/SPR
- MANAGEMENT ACTION 2.9:
  - Objective: Implement steps identified in the review of implementation of the 2018 framework for enhanced Fund engagement on governance.
  - Status: Open
  - ACCOUNTABLE: FAD/LEG/SPR and Area departments
  - ORIGINAL TARGET DATE: starting FY2024, next review in 2028, with a possible interim update prior to the formal review.
- MANAGEMENT ACTION 2.10:
  - Objective: As part of the 2024/25 review of the PRGT Facilities and Financing, staff will explore ways to further strengthen the coordination with partners, especially the World Bank.
  - Status: Open
  - ACCOUNTABLE: SPR with relevant departments
  - ORIGINAL TARGET DATE: by end-FY2025
- MANAGEMENT ACTION 2.11:
  - Objective: Develop table-top exercises and a crisis playbook; compile existing crisis protocols into a crisis playbook to codify Management’s commitment to early participatory consultation with the Board in the event of a global crisis.
  - Status: Open
  - ACCOUNTABLE: SPR with relevant departments
  - ORIGINAL TARGET DATE: by end-FY2025

### PRGT access limits, fundraising, and related Board decisions
- December 2023 Interim Review of Access Limits Under the PRGT:
  - Board approved a temporary increase in the annual access limit under the PRGT from 145 percent of quota to 200 percent of quota until end-2024.
  - Board approved a temporary increase in the cumulative access limit from 435 percent of quota to 600 percent of quota until end-2024.
  - Most Directors concurred that the per arrangement cap on PRGT resources under the blending policy also be raised from 145 percent of quota to 200 percent of quota until end-2024.
- Footnote: The Interim Review was carried out once substantial progress had been made with PRGT fundraising toward the SDR 2.3 billion first-stage target for subsidy resources agreed in 2021.
- Board and Directors’ views:
  - Many Directors stressed that PRGT funding remained a concern needing comprehensive action to reach a self-sustained PRGT.
  - Directors highlighted the critical importance of the comprehensive review of PRGT Facilities and Financing.

### Review of precautionary instruments — key observations and proposals
- Executive Board conclusion in October 2023 on Review of the Flexible Credit Line, the Short-term Liquidity Line, and the Precautionary Liquidity Line and Proposals for Reform.
- Precautionary instruments in the GRA identified in the review:
  - (i) precautionary Stand-By Arrangement (SBA) — fully relies on ex-post conditionality;
  - (ii) Flexible Credit Line (FCL) and Short-term Liquidity Line (SSL) — rely exclusively on ex-ante conditionality (i.e., qualification), as well as mid-term review for 2-year FCLs;
  - (iii) Precautionary and Liquidity Line (PLL) — generally combines elements of ex ante and ex post conditionality.
  - Precautionary SBAs are included in the “precautionary arrangements” toolkit, although not a separate instrument from disbursing SBAs.
- Staff focus areas:
  - Qualification framework: reinforce safeguards and ensure a robust framework guided by applicable criteria, core indicators, and thresholds, based on transparency and predictability.
    - Safeguards proposals: Board briefings after significant economic policy changes; a Memorandum of Understanding for budget support drawings of FCLs; follow-up briefings on drawdowns of FCLs and PLLs approved on a precautionary basis.
    - Qualification-related proposals: better reflection of Anti-Money Laundering/Combating the Financing of terrorism (AML/CFT); alignment with the 2018 Governance Framework; recalibration of the public debt sustainability requirement for precautionary exceptional access PLLs.
  - Toolkit design: increase flexibility and ensure adequate firepower.
    - Key proposals preserved verbatim:
      - (i) not requiring articulation of exit expectations in precautionary FCL arrangements for access levels not exceeding 200 percent of quota;
      - (ii) raising the SLL access limit to 200 percent of quota;
      - (iii) introducing explicit provisions on concurrent FCL/SLL use;
      - (iv) raising all PLL-specific access limits and caps by 20 percent from current levels.
    - Reforms included to facilitate synchronized take-up of the SLL.
  - Management of the toolkit: maintain the Fund’s sound management by:
    - (i) continuing to require Board approval of arrangements in all cases, while streamlining administrative procedures;
    - (ii) revisiting, but not proposing changes to the financial aspects of Fund commitment of financing under precautionary arrangements;
    - (iii) assessing the risks to the Fund of implementing the paper’s key proposals, the potential implications for Fund resources, and the risks of inaction.
- Executive Directors’ response:
  - Broad support for reform proposals.
  - Emphasis on preserving strong signaling power of FCL, SLL and PLL arrangements via clear and transparent qualification framework applied evenhandedly.
  - Support for integrating AML/CFT assessment into effective financial sector supervision criterion; reliance on the 2028 Governance Framework to identify governance and corruption vulnerabilities; recalibration of debt sustainability assessments for precautionary exceptional access PLLs.
  - Support for proposed FCL and SLL reform package and increases in PLL access limits.
  - Welcome for strengthened safeguards around use of FCL, SLL and PLL arrangements and appreciation for proposals to reduce number of Board meetings and streamline administrative procedures.

### Governance framework implementation and related actions
- Further progress since Executive Board discussion in April 2023 on implementing the 2018 Governance Framework.
- Actions with significant progress:
  - (i) Stock taking of governance measures and lessons from pandemic-related emergency financing implementation (July 2023).
  - (ii) Inclusion of specific governance-related guidance in the Guidance Notes for the Fund’s Engagement with FCS and for the Resilience and Sustainability Facility (RSF).
  - (iii) Stronger integration of governance issues in analytical work, including review.
  - (iv) Addition of two members, on a voluntary basis, to an assessment of transnational aspects of corruption, now covering more than half of the G20 members.
  - (v) Expansion of governance diagnostics (GD) and further leveraging GD to inform Article IV recommendations, program design, capacity building, and country engagement strategies.
  - (vi) Inclusion of political economy analysis in recent GDs.
  - (vii) Completion of a fresh round of membership-wide assessments of corruption and governance vulnerabilities, leveraging recent quantitative data from Third-Party Indicators and qualitative information collected by staff, supplemented with information provided by the World Bank for a number of countries.
- Other related progress:
  - (i) Preparation of systemic tracking of Article IV recommendations.
  - (ii) Strengthening collaboration with other international organizations: World Bank, OECD, UNODC.
  - (iii) Reflection of nexus between governance and digitalization through CD requests featuring digitalization, including GovTech.
  - (iv) Provision of CD on anti-corruption, assistance to implement measures in Fund-supported programs, and support to supreme audit institutions.
  - (v) Strengthening implementation of the framework regarding judicial reform, emphasizing institutional reforms to address judicial independence and integrity.

### Crisis playbook and table-top exercises
- MIP proposes developing a crisis playbook alongside flexible modalities for its updating by end-FY2025.
- Purpose and scope:
  - Build upon existing crisis protocols and table-top exercises.
  - Cover economic and financial crises and crises triggered by non-economic events, such as the pandemic.
  - Be a succinct, internal document, updated flexibly at initiative of staff or management.
  - Lay out general principles of crisis response and provide examples for flexible application.
  - May include comparative analysis of crisis preparedness approaches used by peer institutions (other IFIs, central banks, etc.).
- Current status:
  - Staff is in early stages of preparation; playbook expected to be compiled by end-FY2025.
  - Playbook will include Management’s commitment to early participatory consultation with the Board in the event of a global crisis.
  - Larger scale exercises involving the Board and other financial institutions could be considered on a longer timeframe if necessary resources become available.
  - Conducting well planned and executed exercises would require acquiring appropriate expertise and substantial additional resources not covered under existing workstreams.

### The IMF and Capacity Development (CD) — evaluation response and actions
- IEO evaluation (The IMF and Capacity Development, 2022) findings:
  - Overall positive assessment: IMF CD generally relevant, valued, and effective in supporting member countries build institutional capacity.
  - Fund CD seen as highest quality in core areas; better tailored to recipient needs in recent years.
  - Substantial effort to integrate CD with surveillance and programs.
  - Identified challenges and seven recommendations seeking to:
    - (i) enhance CD prioritization;
    - (ii) deepen information available to Executive Directors and opportunities for strategic oversight;
    - (iii) further strengthen integration of CD with surveillance and programs;
    - (iv) boost CD ownership and effective delivery;
    - (v) bolster monitoring and evaluation framework;
    - (vi) reinforce sustainability and flexibility of the CD funding model;
    - (vii) gear HR policies and incentives to ensure needed expertise in core and new CD topics.
- MIP response and actions:
  - MIP envisages 23 actions in response to seven IEO recommendations.
  - After the Thirteenth PMR, 19 actions remained open; since then, nine have been implemented.
  - Of the 10 actions that remain open, one is overdue but making progress.
- IEO Recommendation 1 (excerpted response):
  - Recommendation: Further enhance the strategic framework for IMF CD to provide clearer guidance for prioritization and allocation.
  - Directors broadly supported the recommendation; key themes for the CD Strategy Review.
  - Agreement on strengthening role of Committee on Capacity Building (CCB), including updating Terms of Reference.
  - Regional Strategy Notes (RSNs) should continue to drive prioritization at the country level with improved rigor and consistency.
  - Mixed views on developing Country Engagement Strategies (CES) for all heavy CD users due to cost implications and relation to FCS Strategy implementation.
  - MIP envisages four actions to address this recommendation; three remained open after the Thirteenth PMR, of which one has been implemented.

_International Monetary Fund — FOURTEENTH PERIODIC MONITORING REPORT (excerpted content)_

### 55.      The CDSR, which was completed by the Executive Board in April 2024, highlighted that

### ppea2024055 - 55.      The CDSR, which was completed by the Executive Board in April 2024, highlighted that

### CDSR purpose and scope
- The CDSR was completed by the Executive Board in April 2024.
- The review focused on six areas for further improvements in CD: prioritization, integration, financing, impact and evaluation, field presence, and human resources.

### Comparative advantages of Fund CD (as identified in CDSR)
- (i) a close integration between CD, surveillance, and lending;
- (ii) convening power in member countries and among development partners;
- (iii) the standalone demand-driven nature of Fund CD, which allows the Fund to link members’ domestic policy agendas effectively with global trends and direct CD to support key reforms;
- (iv) diagnostic and assessment tools;
- (v) policy-oriented macro training.
- These comparative advantages were analyzed in a background paper that maps the Fund’s position vis-à-vis other CD providers.

### MANAGEMENT ACTION 1.1 — Strategic and prioritization framework (Closed)
- Action: CDSR will make recommendations to enhance the clarity and transparency of the strategic and prioritization framework, specifically:
  - 1a. Propose more detailed guiding principles on the objectives of Fund CD.
  - 1b. Map the Fund’s comparative expertise in the CD space, taking into account evidence on impact, the changing pattern of demand, and complementarities with other providers.
  - 1c. Assess progress toward integrating CD with surveillance and lending, analyze synergies and trade-offs between CD, surveillance, and program work, and propose practical avenues to further improve strategic aspects of member country engagements.
  - 1d. Examine the desirable size of CD spending relative to other core activities of the Fund, given the changing needs of the membership, evolving coverage of Fund surveillance, development of other providers in similar fields, and technological developments.
- ACCOUNTABLE: ICD in consultation with the Interdepartmental Contact Group (ICG) and External Advisory Group (EAG).
- ORIGINAL TARGET DATE: December 2023.

### Integration of CD with surveillance and lending — progress and proposals
- Integration increased significantly in the past decade.
- Following the 2018 CDSR, operational guidelines for integrating CD with surveillance and lending were identified and integrated within the 2022 Guidance Note for Surveillance under Article IV Consultations.
- Area departments (ADs) have a well-articulated leading role in country engagement and prioritization, embedded in management systems developed under the CDMAP.
- Metrics of integration:
  - Direct references to CD in staff reports have increased.
  - The share of staff reports with a dedicated CD annex has grown.
- Supporting instruments:
  - Regional Strategy Notes (RSNs) and CD Country Strategy Notes (CSNs) have been valuable, though consistency of CSNs remains an issue.
  - Increased participation of CD personnel in surveillance and program design has contributed to greater integration and coordination with development partners.
- Proposals to strengthen integration included:
  - Clear guidance on AD leadership of RTACs.
  - HR reforms to enhance mobility of specialized economists.
  - More purposeful acknowledgement of the importance of shorter-term CD for surveillance and lending traction.
  - Implementing the 2021 staff guidelines on integration into the CD guidance note.
  - Increase visibility of CD integration by improving CD coverage in staff reports for heavy users and streamlining documentation.

### Size of CD spending — findings and forward guidance
- Current structure of country operations:
  - Surveillance takes up around 40 percent of the Fund’s country operations.
  - CD and lending represent the rest and are broadly similar in size.
- CDSR view:
  - Present size of CD within the structure of country operations appears in line with the Fund’s mandate, while ensuring scope for flexibility in annual CD spending.
  - CD spending appears broadly aligned with members’ demand; broad-based and persistent excess demand is limited.
  - Post-pandemic priorities shifting back to structural reforms and long-term capacity building imply the size of CD supporting these reforms is expected to increase.
  - Recent budget adjustments to accommodate the Fund’s transformation strategies provided a model for flexibility in CD size.
- Going forward (proposed):
  - Broadly maintain the size of CD spending relative to the Fund’s other main activities, while emphasizing the need for flexibility.
  - Remain near the pre-pandemic baseline of around 30 percent of the Fund’s main activities, allowing for year-to-year variations according to changing global conditions and member demand and more structural responses to any persistent gaps.
  - Addressing new priorities does not always require additional resources, but specific gaps might require one-off increases beyond typical annual adjustments.
  - Proposed adjustments should be carefully justified, with the CCB playing a critical advisory role; distinguish permanent and temporary adjustments; and fully consider scope for reprioritization within current envelopes.

### Board discussion and Director views
- Executive Directors noted sustained progress implementing prior CD strategy reviews and broadly supported CDSR proposals.
- Directors endorsed an agile, demand-driven CD focused on the Fund’s comparative advantages and well-integrated with surveillance and lending.
- Directors concurred that the current size of CD relative to surveillance and lending was broadly appropriate, emphasizing prioritization to meet evolving member needs.
- Directors stressed:
  - Close collaboration with authorities in setting priorities to ensure ownership.
  - Further deepening CD integration with surveillance and lending, including improved coverage of those efforts in staff reports for heavy CD users.

### CD Guidance Note — status and timeline
- The CD Guidance Note is expected to be completed by end-April 2025.
- Planning allowed approximately a year for completion after finalization of the CDSR.
- The note will cover topics referred to in CDSR actions, including operationalizing CDSR recommendations and updating/integrating several existing staff guidelines on CD, CD-surveillance integration, and results-based management (RBM).
- MANAGEMENT ACTION 1.2:
  - Prepare a new CD Guidance Note that will operationalize recommendations of the CD Strategy Review as well as updating/integrating several existing staff guidelines on CD, including those on CD-surveillance integration and results-based management (RBM).
  - Status: Open.
  - ACCOUNTABLE: Lead ICD in consultation with departments.
  - ORIGINAL TARGET DATE: December 2024.
  - EXPECTED COMPLETION DATE: End-April 2025.
- MANAGEMENT ACTION 1.4:
  - Update staff guidance on the Country Strategy Note (CSN) and Regional Strategy Note (RSN) in line with findings of CDSR and include in CD Guidance Note to ensure their consistency and coverage.
  - ACCOUNTABLE: ICD in consultation with departments.
  - ORIGINAL TARGET DATE: December 2024.
  - EXPPECTED COMPLETION DATE: End-April 2025.
  - Status: Open.

### Board information, CD Hub, and midpoint review
- CD HUB:
  - Launched to Fund staff in May 2023.
  - Version for Executive Directors (OED) and their staff launched in February 2024.
  - OED version facilitates access to CD data and information per the 2022 Dissemination Policy.
  - OED CD Hub excludes project-by-project level information and provides overall status of past CD engagements dating back to inception of CDMAP in FY2022 on a regional, thematic, and country basis.
  - A link to the OED version has been placed in the IMF Connect Capacity Development page, in collaboration with SEC.
  - A review of the OED version will take place after one year of use.
  - A Q&A session for interested Board members took place on February 27, 2024.
- MANAGEMENT ACTION 2.1:
  - Establish a mid-point review of the CDSR to provide the Board with an opportunity to offer strategic guidance in between five-year reviews.
  - Status: Open.
  - ACCOUNTABLE: ICD led in consultation with departments.
  - ORIGINAL TARGET DATE: May 2026.
- MANAGEMENT ACTION 2.2:
  - Provide the Board with access to CD results information through new regularly updated reporting dashboards based on CDMAP data.
  - Status: Closed.
  - ACCOUNTABLE: ICD in collaboration with SEC and ITD.
  - ORIGINAL TARGET DATE: December 2023.

### CD ownership, program integration, and coordination with partners
- IEO Recommendation 3: Reinforce measures to promote CD ownership, along with tighter integration with surveillance and lending, tailoring to country circumstances and promoting collaboration as key drivers of CD effectiveness.
  - Directors supported this recommendation and stressed enhancing guidance to staff on integrating CD in a program context.
- CDSR findings:
  - Close integration of Fund CD with surveillance and lending is central to its comparative advantage, especially in crisis situations.
  - Area department-prioritization has served the Fund well; AD teams regularly use CD to enhance country engagement and traction.
  - Prioritization decisions reflect surveillance and lending priorities and individual country circumstances, as shown in CSNs.
  - CD is helpful in improving traction with authorities and informing design and implementation of Fund programs.
  - The CDSR recommended increasing visibility of CD integration by improving coverage in staff reports for heavy users and streamlining documentation.
- Ownership measures proposed:
  - For programmatic CD, explicit discussion and agreement with authorities on targeted results before commencing a project.
  - CD teams to seek authorities’ explicit endorsement of the RBM log frame for programmatic CD projects during design or initial implementation, with regular review through the project lifecycle.
- Coordination with development partners:
  - Fund has mechanisms: joint missions (World Bank, European Commission), country level coordination mechanisms with HQ and field participation, steering committees of RCDCs and Global Thematic Funds (including the Debt Management Facility, a joint initiative with the World Bank), and global initiatives such as the Platform for Collaboration on Tax.
  - Coordination is especially critical for climate and digital money topics.
  - New initiatives include a forthcoming joint Domestic Resource Mobilization Initiative with the World Bank.
  - The report included Boxes on Mainstreaming Emerging Priorities (gender, climate change, and GovTech initiatives and digital money) describing CD efforts and coordination.
- MANAGEMENT ACTION 2.3:
  - Take stock of CSR and CES implementation and explore harmonized approaches to ensuring the adequate coverage of CD issues in Article IV staff reports; reflect approaches in the CD Guidance Note.
  - Status: Open.
  - ACCOUNTABLE: ICD led in consultation with departments.
  - ORIGINAL TARGET DATE: December 2024.
- MANAGEMENT ACTION 3.1:
  - CDSR will make recommendations to enhance CD ownership, surveillance and program integration and traction, and coordination with CD providers.
  - Status: Closed.
  - ACCOUNTABLE: ICD in consultation with the ICG and EAG.
  - ORIGINAL TARGET DATE: December 2023.
- MANAGEMENT ACTION 3.2:
  - Prepare a CD Guidance Note that operationalizes CD Strategy recommendations and enhances guidance on integration of CD with surveillance and lending with measures on leveraging and navigating CD in a program context to support CD ownership and implementation while considering capacity constraints.
  - Status: Open.
  - ACCOUNTABLE: Lead ICD in consultation with departments.
  - ORIGINAL TARGET DATE: December 2024.
  - TARGET COMPLETION DATE: End-April 2025.

### Field presence and RCDCs — findings and issues
- IEO Recommendation 4: Leverage further the advantages of Regional Capacity Development Centers (RCDCs) and put them on a sustainable footing.
  - Directors agreed, highlighting field presence and governance of RCDCs, clarifying HQ and RCDC roles, and increasing Fund financing of RCDCs to ensure more stable funding.
- CDSR findings on field presence and RCDCs:
  - Field presence, in particular RCDCs, had become fundamental to the Fund’s CD.
  - Growth of the RCDC network has allowed more intensive programmatic support of reform implementation and made training more accessible.
  - RCDCs have been instrumental in assisting the Fund to coordinate better with development partners.
  - Longstanding strategic and governance issues need to be addressed as the RCDC network became bigger and more heterogeneous.
- Key issues requiring consideration:
  - Coverage (geographic and topical): coverage extensive, albeit with some gaps and overlaps; key outstanding gap being Latin America with respect to training.
  - Funding: RCDCs were almost entirely dependent on external financing for their CD delivery and were organized around five-year phases, creating peaks in funding demand and potential funding uncertainty.
  - Governance: variety of governance models in place; key distinction between RTCs and RTACs reflecting different mandates and staffing structures.
  - Delivery augmentation: RCDC delivery increasingly supplemented by co-located experts financed by thematic funding vehicles, bilateral donors, and in some cases by the Fund’s own budget, enabling continuity of delivery in an ad-hoc manner.

*International Monetary Fund — FOURTEENTH PERIODIC MONITORING REPORT*

### 73.       The report included several proposals to address the abovementioned issues. First, it

### ppea2024055 - 73.       The report included several proposals to address the abovementioned issues. First, it

### RCDCs and field presence
- Findings and proposals:
  - Recommended that RCDCs be recognized as integral part of the Fund, not temporary funding vehicles, implying they need to be managed within the mainstream systems to safeguard the Fund’s CD field presence and ensure internal coordination.
  - Proposed clarifying governance structures for RCDCs to ensure full integration into overall CD governance, management, and planning:
    - RTACs would continue to be led by ADs.
    - RTCs would remain under ICD leadership with close partnership with ADs and other CDDs.
    - The role of steering committees would be enhanced.
  - Seek opportunities to increase regional CD footprint, recognizing IMF01 budget constraints are increasingly binding.
  - Consider broadening the scope of functions located in the field.
  - Reflect on RCDCs’ coverage, relative size, and location every five years as part of the Committee for Capacity Building’s strategic guidance function.
- Board reaction:
  - Executive Directors agreed field presence through RCDCs had become fundamental to the Fund’s CD model.
  - Supported clarifying RCDC governance, regular review of RCDC coverage, and modifications to financing and administrative frameworks to adopt RCDCs as an integral part of the CD strategy.
- Implementation action:
  - MANAGEMENT ACTION 4.1: CDSR will make recommendations to enhance the Fund’s field presence, strengthen RCDC governance and place their financing issues on a more sustainable footing. — Closed
    - ACCOUNTABLE: ICD in consultation with the ICG and EAG.
    - ORIGINAL TARGET DATE: December 2023.
  - MANAGEMENT ACTION 4.2: Prepare a CD Guidance Note that will include further guidance on RCDC governance, roles of HQ and field, good practices on knowledge exchange mechanisms, and other issues arising from the IEO and strategy recommendations. — Open
    - ACCOUNTABLE: ICD leads in consultation with area and functional departments.
    - ORIGINAL TARGET DATE: December 2024.
    - EXPECTED COMPLETION DATE: End-April 2025.

### Monitoring and Evaluation (M&E), Results-Based Management, and CDMAP
- Findings:
  - Enhancing CD impact requires refinements in prioritization, deepening ownership, and improvements in monitoring and evaluation despite progress from RBM and CDMAP.
  - Results frameworks were developed for all projects within CDMAP but consistency across workstreams could be improved.
  - Strategic results frameworks that articulate and track results at a higher level are constructed mainly on an ad-hoc basis.
  - Formal agreement to results frameworks has been used in some areas but is not widespread.
  - Training effectiveness is monitored via surveys and testing; scope exists to harmonize training evaluation across departments and improve feedback into course curricula.
  - The Common Evaluation Framework updated in 2022 provides a sound basis, but the intention to reinvigorate internal evaluations had been less successful partly due to pandemic-related resource pressures.
  - Monitoring and evaluation information is not used systematically in strategy setting or resource allocation.
  - Limited resources for internal evaluations and absence of top-down guidance constrained strategic value.
- Proposed responses in CDSR:
  - Improve strategic focus of monitoring by providing guidance on developing consistent and comparable strategic results frameworks that aggregate results across projects.
  - Seek to increase the number of internal evaluations within the current resource envelope and broaden their scope to include more analytical approaches that yield strategic insights.
  - Create formal mechanisms to ensure monitoring and evaluation data feed into strategic development.
  - Continue efforts to enhance CD dissemination and communication.
- Board reaction:
  - Directors welcomed progress and concurred with enhancements to the results management framework and standardized mechanisms for M&E results to inform CD priorities.
- Implementation actions:
  - MANAGEMENT ACTION 5.1: The CD strategy will make recommendations to enhance the Fund’s monitoring and evaluation (M&E) system to improve strategic planning and execution of CD. The Strategy will cover strategic selection and use of evaluations as a tool for CD prioritization and learning from and operationalizing evaluation results (including a synthesis of evaluation findings). — Closed
    - ACCOUNTABLE: ICD in consultation with the ICG and EAG.
    - ORIGINAL TARGET DATE: December 2023.
  - MANAGEMENT ACTION 5.2: Prepare a CD Guidance Note that will provide operational guidance on RBM and other M&E issues raised in Strategy review. — Open
    - ACCOUNTABLE: Lead ICD in consultation with area and functional departments.
    - ORIGINAL TARGET DATE: December 2024.
    - EXPECTED COMPLETION DATE: End-April 2025.
  - MANAGEMENT ACTION 5.5: Undertake advisory review of CDMAP processes and functionality to identify opportunities for efficiency and user experience gains. — Closed
    - ACCOUNTABLE: OIA in consultation with ICD and other departments.
    - ORIGINAL TARGET DATE: December 2023.
  - MANAGEMENT ACTION 5.6: Prepare and propose a follow-up CDMAP capital project to incorporate lessons of review and implementation requirements of CDSR to improve system performance and user experience. — Open
    - ACCOUNTABLE: ICD.
    - ORIGINAL TARGET DATE: December 2024.
- CDMAP advisory review (completed May 2024):
  - CDMAP has strengthened availability of information to support decision-making and enabled greater transparency on CD activities.
  - The CD Hub improved staff’s (and the Board’s) access to CD data.
  - Post-program stabilization efforts improved system performance, but latency and system issues remain; comprehensive remediation likely requires a follow-up capital project.
  - Some recommendations (process streamlining, system performance, alignment with financial and budgeting systems and controls) can inform scoping for the follow-up capital project; end-user support, training, and reporting recommendations can be addressed individually.
  - Work on the follow-up CDMAP capital project proposal is ongoing; target start date is October 2024.

### CD funding, external financing, and proposed stabilization mechanism
- Findings on funding structure:
  - Fund CD relies on both internal and external funding.
  - The Fund’s own budget covers a large share of analytical work and a majority of CD management and administration spending.
  - Internal funding is the most flexible source for direct delivery as it is not tied to specific regions and can be moved between subject areas.
  - Fund-financed budgets have remained broadly constant in real terms over the past decade, with a pandemic-related dip in spending.
  - Around two-thirds of direct spending on CD is financed by partners and RCDC member countries.
  - Almost half of this external funding comes from vehicles tied to specific regions, mainly through the RCDC network.
  - Thematic funds now account for around a quarter of external financing.
  - The recent budget augmentation allocated 25 percent of resources to CD to fund HQ-based staff and long-term experts and RCDC administrative spending and specific topical CD areas.
- Risks identified:
  - External financing brings risks: competition for resources, risks of divergent priorities between members and donors, administrative and governance complexity, and limited fungibility across topics and regions leading to shortfalls in specific areas.
  - RCDCs are particularly exposed to such risks.
  - The fundraising environment is getting more difficult; shifts or decline in donor funding for particular regions or topical areas could impact the Fund’s ability to deliver CD.
  - Misalignment of priorities is greater with more reliance on tied external financing.
  - Some regions (MCD, WHD) faced difficulties meeting increased delivery given lack of suitable external financing.
  - Partnership with Saudi Arabia to establish a new Regional Office in Riyadh would ease CD funding constraints in the MCD region.
- Proposed staff responses:
  - Broadening external funding vehicles and diversifying financing sources.
  - Fundraising should focus on multi-partner regional and thematic vehicles with flexible country coverage rather than bilateral donor or single country-designated vehicles where possible.
  - The Global Public Finance Partnership (GPFP) Initiative regarded as an example for increasing flexibility and minimizing financing risks.
  - For RCDCs, regional funding should be more systematically complemented with thematic funds.
  - Establish a CD stabilization mechanism: a pool of highly flexible, untied financial resources to insure against external funding risks and improve ability to direct CD to highest institutional priorities.
    - Potential uses: insure against fundraising shortfalls, ensure adequate CD to support Fund financial arrangements, finance CD for emerging institutional priorities.
    - Potential financing sources could include contributions from donors, potentially facilitated in the future by the use of internal Fund resources, provided such contributions are structured in line with the untied nature of the mechanism.
- Board reaction:
  - Executive Directors agreed external financing will continue to play a key role and encouraged staff to mitigate risks and increase flexibility and diversity of funding sources, including regional and thematic vehicles.
  - Directors supported exploring future establishment of a CD stabilization mechanism.
- Implementation action:
  - MANAGEMENT ACTION 6.1: CDSR will consider funding issues, including those related to flexibility and sustainability, particularly in the context of RCDCs. The Review will:
    - 1a. Review the CD funding model, and explore new funding options, including further increasing the internal funding for CD, and consider risk mitigating strategies.
    - 1b. Assess the relative costs and benefits of various forms of engagement by HQ and field-based experts and field presence; explore policies (including HR and budget) to support further field presence.
    - 1c. Explore whether changes are needed in the mandates, internal governance, and financing structures of RCDCs.
    — Closed
      - ACCOUNTABLE: ICD in consultation with the ICG and EAG.
      - ORIGINAL TARGET DATE: December 2023.

### HR, incentives, and CD staffing
- Findings:
  - Directors agreed with calibrating HR policies and incentives to maintain and enhance CD expertise and ensure CD receives appropriate priority as an integral aspect of country engagement.
  - Timing of implementation of some elements needs alignment with broader HR reforms; options on flexible working arrangements could be considered.
  - MIP envisages four actions to address the IEO recommendation on HR; all remained open after the Thirteenth PMR; two of four have been implemented; of remaining open actions, one is overdue but making progress.
  - CDSR found CD staffing had increased by about 70 percent in the last decade reflecting overall growth of CD.
  - Specialist economists made up to 20 percent of economist staff, mainly at the senior economist and senior financial sector expert level.
  - The relative role of field-based long- and short-term experts had intensified.
- Board reaction:
  - Directors looked forward to proposals in the MIP on staff incentives to work on CD and noted that raising recognition and opportunities for CD specialists would require behavioral and cultural changes.

*Fourteenth Periodic Monitoring Report — excerpt provided in source content.*

### 90.      The CDSR made some considerations regarding the HR CD model. These included: (i) the

### ppea2024055 - 90. The CDSR made some considerations regarding the HR CD model

### HR and CD specialist career-path considerations
- The CDSR noted: (i) the career path for specialists economists is somewhat narrower than for fungible economists, reflecting their specialization and the structure of CD departments; and (ii) the decentralized model applied to long-term experts creates governance challenges and operational inefficiencies. These positions are categorized differently across departments, which affects interdepartmental mobility.
- Over several years the Fund implemented policies to enhance the environment for CD personnel, including:
  - creation of additional SE positions to reduce reliance on contractual appointments;
  - eased movement to the field allowing a limited number of economists to be posted to RCDCs as experts without change in employment status;
  - implementation of new workforce tools;
  - some reforms underway to the local employment framework.
- The report noted a need to further strengthen the Fund’s policies and address CD-related governance issues to safeguard the quality and agility of Fund CD. Recalibration of policies and practices would require a multi-year Fund-wide effort sequenced with other HR and budgetary priorities.

### Short- and medium-term HR policy adjustments proposed
- Proposed actions that do not require fundamental policy changes:
  - (i) further bolstering the career paths (including mobility) for SEs by opening up competitive vacancies for all qualified employees (not just fungible macroeconomists);
  - (ii) allowing for temporary mobility assignments to area departments;
  - (iii) opening a limited number of relevant jobs to both specialists and fungible macroeconomists;
  - (iv) enabling specialists to have some opportunities as fungible economists for upward mobility for positions they are qualified for.
- The report noted these measures would enhance opportunities for SEs and obviate the need for a separate expert track previously envisaged.
- Management Action 7.1: CDSR will consider a number of issues, including those relating to the intention and career tracks of CD specialists, program managers and administrators and improvement of staff incentives to work on CD. This review of HR issues focused on CD will need to account for the interdependencies and alignment with other HR policies and initiatives. — Status: Closed. Accountable: ICD in consultation with the ICG and EAG. Original target date: December 2023.

### Strategic review and Board discussion
- Staff will undertake a strategic review of CD personnel structures in HQ and the field and of potential implications for HR policies; review to be coordinated with broader work on IMF field presence. Staff intends to initiate this strategic review within the five-year period covered by the CDSR (2024-2029).
- During the Board discussion, Directors:
  - emphasized importance of appropriate HR policies to maintain quality and continuity of CD expertise and incentivize staffing;
  - supported initiating a strategic review of the HR framework for staff working on CD over the medium term to complement existing HR initiatives (e.g., local employment framework);
  - emphasized desirability of increasing mobility and career progression possibilities for specialized economists and CD experts, including by adjusting policies and practices for these career streams.

### Recruitment, specialist track decisions, and managerial considerations
- HRD actions and developments:
  - steps to reduce unnecessary or outdated barriers limiting specialist economists’ progress, including opening vacancies formerly focused on fungible economists (e.g., RCDC roles) to broaden lateral and upward options for SEs;
  - increased flexibility to allow specialist and fungible economists to take on CD roles with improved arrangements;
  - a career forum including opportunities for SE staff, and a career marketplace tool offering opportunities to all staff, on track to be launched in FY2025;
  - identification of recruitment guidelines and policies to support more transition across career streams.
- Creation of a new specialist track within the current framework is being explored with interested departments to open more career opportunities versus the “expert track” and would replace the need for such a track. Management agreed a separate expert track is no longer needed and noted potential untenable span of control implications for managers if implemented.
- Management Action 7.2: Finalize proposal for establishing enhanced expert track. — Status: Closed. Accountable: HRD. Original target date: May 2025.
- The Board agreed that proposals to address specialist mobility and career were sufficient and obviate the need for an expert track; past unsuccessful pilot experience and cost-benefit analysis precluded creation of an expert track. OIA views the action as closed.

### Talent inventory, macro-financial experience, and workforce tools
- Analysis findings integrated into the Talent Inventory:
  - there are around 200 fungible macroeconomists (FMs) with macro financial experience across the Fund;
  - nearly two-thirds of them are in FDs (40 percent in MCM, followed by SPR and RES) and 30 percent are in ADs;
  - close to 80 percent of all FMs in MCM and nearly 20 percent in ICD and RES have macro financial experience.
- HRD has shared results with Management, HoDs, and SHRPs of all departments and plans broader socialization later this year.
- HRD will use a completed FAD’s skills analysis to incorporate a broader scope of CD experiences in the talent inventory and plans road shows to promote tool usage.
- Workforce tool updates and coverage:
  - Workforce tool in Workday launched in FY2023, incorporating CD department feedback during soft launch;
  - Of 39 workforce analysis notes (based on job function and family), 11 notes have been recently updated, including nine specifically for specialists (these nine notes cover approximately 85 percent of the specialist population).
- Management Action 7.3: Complete the enhancement of the Talent Inventory to include macro-financial experience of fungible economists and continue to enhance the CD Strategy. — Status: Open. Accountable: HRD. Original target date: May 2025.
- Management Action 7.4: Further update the workforce planning materials for selected CD management job families/functions and incorporate CD department feedback into the workforce planning tool (Adaptive Insights). — Status: Overdue but progressing. Accountable: HRD in consultation with ICD and CD departments. Original target date: April 2024. Expected completion date: End-FY2026.

### Career advisory and job architecture actions for administrative/resource roles
- HRD is working with departments on career paths for administrative and resource management roles in CD as part of the CD strategy.
- A Career Advisory Group established to enhance career opportunities, focusing on guidance and development of Specialized Career Streams (SCS) and Specialists by improving incentives and providing opportunities through interdepartmental visibility.
- The mechanism will discuss talent management and mobility, including job-family reviews to address classification issues as part of a broader review of the Fund’s job architecture.
- A “talent marketplace” pilot will begin October 2024.
- The whole review process covering the Fund’s job architecture would be completed by end-FY2026.

---

### IMF engagement with Small Developing States (SDS) — SDS Staff Guidance Note (SDS-SGN) and progress
- IEO evaluation findings: Fund stepped up engagement with SDS over the last decade but identified concerns adversely affecting value added and traction, including staffing difficulties with high turnover; financing architecture not well suited to SDS needs; institutional constraints in many SDS hampering CD traction and impact.
- The IEO proposed four recommendations with operational suggestions: recalibration of Fund’s approach to SDS, better use of lending framework, operational steps to increase traction of surveillance and CD, and further HR and budgetary commitments to support SDS engagement.
- Progress metrics:
  - The MIP envisages 23 actions, of which 19 remained open after the Thirteenth PMR. Of these 19 actions, 13 actions have been implemented.
  - In response to IEO Recommendation 1, the MIP envisages nine actions, of which eight remained open after the Thirteenth PMR. Of these eight actions, four actions have been implemented.
- Management Action 1.1: Update the 2017 SDS-SGN and accompanying Quick Reference Card for Reviewers to enhance engagement with SDS across modalities, in line with applicable Fund policies. The update will include guidance on Surveillance, CD, Lending, CMAPs/CCDRs integration, Use of Toolkits, Coordination with partners, and Traction. — Status: Closed. Accountable: SDS-WG (Lead SPR with Inputs/Review from other area and functional departments). Original target date: End-September 2024.

### Content and guidance of the SDS-SGN (issued July 2024)
- The SDS-SGN was issued by staff in July 2024.
- Surveillance and Analytical Work section includes:
  - Tailoring Surveillance Policies and Challenges and Opportunities in Engaging with SDS (including enhancing traction and addressing data gaps).
  - Tailoring must comply with policies applicable to entire membership (Guidance Note for Surveillance under Article IV Consultations).
  - For SDS in fragile situations, tailoring should follow IMF Strategy for FCS (2022) and Staff Guidance Note (2023).
  - A Country Engagement Box is required for SDS in Article IV staff reports to outline engagement strategy, key factors for policy focus, and complementarity/sequencing of surveillance, lending, and CD. For SDS that are also FCS, the Country Engagement Strategy supersedes the Box.
- Use of toolkits:
  - DSA and ESA include built-in features allowing tailoring to SDS characteristics.
  - Fund has two DSA frameworks: Sovereign-Risk and Debt Sustainability Framework for Market Access Countries (SRDSF) and joint Bank-Fund DSA for LICs (LIC-DSF).
  - A total of 20 SDS use the LIC-DSF, while the remaining 14 SDS use the SRDSF.
  - Fund’s framework for ESA is anchored on EBA/EBA-lite methodologies, and all SDS use EBA-lite.
  - Assessment of Reserve Adequacy (ARA) metric helps gauge adequacy of foreign reserves.
  - SDS-SGN instructs staff to utilize features in existing tools to account for limited data quality, elevated vulnerability to natural disasters and climate change, and reliance on a few economic sectors. SDS-SGN includes Boxes with more details on ESA and DSA use for SDS.
- Traction and engagement practices:
  - Tailored approaches are essential to enhance traction and address SDS-specific policy challenges.
  - Staff should ensure continuity of policy advice and integration across publications and tools while remaining focused and selective.
  - Providing alternative scenarios and analytical work on trade-offs could be useful; fostering partnerships with authorities, maintaining continuous dialogue, integrating CD into surveillance, addressing data gaps and building capacity, and improving outreach to public and stakeholders can help advance policy action.
- Coordination with development partners:
  - SDS-SGN emphasizes coordination with international institutions, development partners and CSOs.
  - Given SDS economic structures, sectoral expertise from WB, MDBs, and regional development banks can be valuable.
  - Limited capacity of SDS to host missions and CD/TA requires close coordination to avoid overburdening authorities.
  - SDS-SGN notes IMF’s main role is to assess macroeconomic conditions and advise on actions to restore macroeconomic stability and encourages staff collaboration with WB, Regional Financing Arrangements, bilateral donors, and other development partners on CD (example: joint IMF and development partner teams using TADAT assessments to support reform planning and development partner coordination in several SDSs).

*Source: ppea2024055 (excerpts from Fourteenth Periodic Monitoring Report)*

### 106.      The SDS-SGN’s section on CD includes a subsection that emphasizes that integrating

### ppea2024055 - 106.      The SDS-SGN’s section on CD includes a subsection that emphasizes that integrating

### Integration of Capacity Development (CD) with Surveillance and Lending
- CD integration with surveillance and lending is critical to maximize the impact of CD; area department teams should lead coordination efforts.
- In line with the 2018 and 2024 Reviews of the Fund’s Capacity Development Strategy, SDS-SGN highlights:
  - importance of area and capacity delivery departments collaborating on identifying capacity constraints and CD priorities and through the lifecycle of CD projects;
  - inclusion of a CD assessment in the surveillance and program process.
- Fund teams should engage in regular dialogue, coordination, and information sharing on CD with other development partners.
- Mechanisms to enhance integration listed in the SDS-SGN:
  - Country Engagement Box and Country Engagement Strategies;
  - resource allocation and Results-Based Management (RBM) processes;
  - internal CD dashboards;
  - leveraging field staff (Resident Representatives and RCDCs);
  - participation of country teams in clearing CD briefs and reviewing CD outputs.

### CD Guidance on Climate Change and Related Tools
- SDS-SGN subsection on Developing CD in Areas of Special Interest to SDS provides guidance on climate change and lists available products.
- Fiscal management CD products include:
  - help integrate climate considerations into fiscal management;
  - assess the impact of climate change on public infrastructure through the C-PIMA;
  - develop disaster risk strategies and financing;
  - support climate change fiscal risk management;
  - analyze the impact of carbon pricing and other mitigation policies using the Climate Policy Assessment Tool.
- Climate Policy Diagnostics focus on assessing macro-fiscal issues including enabling institutions, mitigation policies, and adaptation policies.
- Other climate-related CD products and tools:
  - integration of climate issues into the Fund’s financial sector-related CD agenda;
  - use of the climate change indicators dashboard, macroeconomic statistics, and innovative data collection techniques;
  - guidance on legal frameworks, financial integrity safeguards, governance and anti-corruption considerations relating to climate change;
  - tools and models to integrate climate change and climate policies into macroeconomic frameworks.

### Lending and Program Design for SDS
- SDS-SGN describes facilities and instruments relevant for SDS, non-financing instruments and track record building, characteristics of the Resilience and Sustainability Facility (RSF), and program design considerations.
- Key observations and guidance:
  - No specific facility is dedicated to SDS, but staff have ample choice of instruments and flexibility within current lending policies to meet SDS needs.
  - Overarching policy objectives of most SDS—sustainable growth and resilience building—can be supported by careful tailoring of program design and conditionality.
  - When designing programs, staff are encouraged to:
    - account for limited policy space and capacity constraints faced by SDSs;
    - account for vulnerabilities to exogenous shocks, including by engaging early on contingency planning;
    - tailor structural benchmarks to guide sequenced reform agendas that account for limited capacity;
    - consider the quality and timeliness of data provided under the program given limited statistical capacity;
    - consider ahead of time measures to facilitate program performance for highly volatile economies, including greater use of Indicative Targets in monitoring performance.

### Management Actions, Implementation Status, and Events
- MANAGEMENT ACTION 1.2: Strengthen traction and engagement with SDS.
  - AFR, APD, and WHD to each hold an annual High-Level Regional Engagement Event with SDS in their respective constituencies.
  - Status: Closed.
  - ACCOUNTABLE: AFR, APD and WHD.
  - ORIGINAL TARGET DATE: End-December 2024.
- Implementation notes:
  - WHD organized ministerial meetings for Caribbean authorities during the 2023 Annual Meetings and the 2024 Spring meetings; another ministerial meeting planned during the 2024 Annual Meetings; Caribbean Forum in Barbados planned early December 2024 on “Managing the Green Energy Transition.”
  - APD organized a high-level two-day conference in February 2024 with strong participation by Pacific Island Countries (PIC) authorities and continued tradition of a high-level meeting at the Annual Meetings.
  - AFR organized a high-level roundtable for Sub-Saharan African Small Developing States at the 2024 Spring Meetings focused on climate finance; ministers and governors from all six SSA SDS participated.
  - No obstacles on implementation envisaged at this stage.
- MANAGEMENT ACTION 1.3: Run one survey of SDS country authorities to assess traction across engagement modalities.
  - Status: Open.
  - ACCOUNTABLE: SDS-WG (Lead SPR, with inputs/review by the rest of the SDS/WG).
  - ORIGINAL TARGET DATE: End-March 2025.
- MANAGEMENT ACTION 1.5: SDS-WG will report to Management on progress on MIP Implementation via an annual memorandum in 2023 and 2024.
  - Status: Open.
  - ACCOUNTABLE: SDS-WG (Lead SPR with Inputs/Review from others).
  - ORIGINAL TARGET DATE: End-December 2024.
- MANAGEMENT ACTION 1.6: SDS-WG to meet with the Board’s Small States Working Group (SSWG) once a year in each 2023 and 2024.
  - Status: Closed.
  - ACCOUNTABLE: SDS-WG (Lead SPR with Inputs/Review from others).
  - ORIGINAL TARGET DATE: End-December 2024.
  - Note: Staff met with the SSWG on September 21, 2023 and September 12, 2024.
- MANAGEMENT ACTION 1.7: Launch an “SDS Week” internal learning and capacity-building event for staff working with SDS.
  - Status: Open.
  - ACCOUNTABLE: SDS-WG (Lead: SPR with Inputs/Review from others in SDS/WG + COM support).
  - ORIGINAL TARGET DATE: End-December 2024.
- MANAGEMENT ACTION 1.8: Launch and run a new analytical seminar on SDS (internal audience), with sessions twice per year.
  - Status: Closed.
  - ACCOUNTABLE: SDS-WG.
  - ORIGINAL TARGET DATE: End-December 2024.
  - Implementation: SDS Analytical Seminar Series launched in September 2023; seminars in September 2023, November 2023, and two in June 2024. Topics included rules-based fiscal responsibility frameworks (RES/WHD), Multidimensional Vulnerability Index (UN), “Impact Dynamics of Natural Disasters and the Case of PICs,” and “ECCU: Potential Benefits and Adoption Challenges of CBDC in a Currency Union.” Video recordings available on the Intranet.
- MANAGEMENT ACTION 1.9: Prepare a Medium-Term Review, delivered through a Board paper, on the Fund’s engagement with SDS including implementation of MIP commitments.
  - Status: Open.
  - ACCOUNTABLE: SDS-WG (Lead: SPR with Inputs/Review from others).
  - ORIGINAL TARGET DATE: End-December 2028.

### Country Engagement Box (CES Box) Guidance and Use
- February 2024: SPR circulated guidance memorandum on a Country Engagement Box for SDS to be included in Article IV reports; guidelines came into effect in July 2024 when the Guidance Note on SDS was finalized.
- Purpose and frequency:
  - The Box seeks to foster integration of surveillance, lending, and CD; recognize domestic constraints; tailor Fund engagement to SDS conditions; and increase support for implementation.
  - Should present, at a high-level, key factors leading staff to formulate engagement modalities and provide a succinct summary of critical, country-specific issues without duplicating the PN or SR.
  - Integration in Article IV process: prepared once every three years for countries on an annual cycle or every other Article IV consultation for countries on a 24-month cycle.
  - Staff should discuss main elements with authorities to build shared understanding of medium-term priorities.
- Scope and preparation:
  - Tailor scope and depth to each country’s circumstances.
  - No Box required for SDS that are also fragile and conflict-affected states, as CES for FCS supersedes the Box.
  - Area Departments responsible for preparation with inputs from Functional Departments.
- Content recommendations:
  - Start from staff’s overarching assessment of authorities’ medium-term policy objectives based on available strategic documents.
  - Discuss main domestic constraints (capacity, institutional, financing) and specify staff engagement plan.
  - Include high-level considerations on policy areas needing focus, policy objectives, and complementarity/sequencing of Fund engagement in surveillance, lending, and CD.
  - In coordination with CD departments and authorities, identify a selective list of CD areas expected to have the largest impact.
  - Discuss collaboration with other stakeholders, focusing on enhancing synergies and avoiding duplication.

### Financial Sector Stability Review (FSSR) and RST/RSF Developments
- FSSR:
  - Staff discussed with donors on expanding eligibility list for FSSR.
  - Phase II started in May 2024; Phase I to run in parallel until December 2024 to complete ongoing projects.
  - Donors agreed to consider applications for SDS country FSSRs on a case-by-case basis rather than wholesale expansion.
  - MANAGEMENT ACTION 2.1: Publish guidance for Area Departments to include a concise “Country Engagement” Box for all SDS in Article IV staff reports once every three years.
    - Status: Closed.
    - ACCOUNTABLE: SDS-WG (SPR to lead with inputs/review of other departments).
    - ORIGINAL TARGET DATE: End-March 2024.
- RST/RSF:
  - External events to SDS authorities on the lending toolkit held in early 2024 (January 2024 with AFR/WHD; February 2024 with APD) to introduce Fund lending architecture and RST in detail; included peer-learning with Barbados and Seychelles.
  - Interim Review of the RST completed by the Board in May 2024:
    - During the first 17 months of operation, 18 RSF arrangements were approved by the Board with financial commitments amounting to SDR 6.3 billion.
    - These arrangements focused on climate-change related challenges and will soon include pandemic preparedness.
    - An additional 30-35 countries have expressed interest in accessing the Trust’s financing.
  - MANAGEMENT ACTION 3.1: Organize one external seminar to familiarize SDS authorities with Fund lending, including UCT lending toolkit and RSF/RST.
    - Status: Closed.
    - ACCOUNTABLE: SDS-WG (SPR to lead with inputs/review of other departments).
    - ORIGINAL TARGET DATE: End-December 2023.
  - MANAGEMENT ACTION 3.2: The 18-month interim review of the RST will include initial experiences on implementation, including for SDS.
    - Status: Closed.
    - ACCOUNTABLE: SPR (with inputs/review of other departments).
    - ORIGINAL TARGET DATE: End-June 2024.
- MANAGEMENT ACTION 2.4: During the Phase II FSSR Donor-Funding Round in FY2024, propose an expansion of the eligibility list for SDS to at least half of the 22 SDS not currently in the list.
  - Status: Closed.
  - ACCOUNTABLE: MCM.
  - ORIGINAL TARGET DATE: End-April 2025.

### IEO Recommendations and Board/Directors Feedback
- IEO Recommendation 2: Enhance operational focus and traction of IMF work on SDS in surveillance and CD by adapting processes and tools, deepening integration across Fund activities, recognizing domestic constraints, and increasing support for implementation.
  - Directors generally supported the recommendation and agreed actions should leverage flexibility in core tools; emphasized diagnostic tools and tailoring; highlighted need for collaboration with the World Bank; considered CES rollout “as needed” for non-fragile SDS; supported flexibility in prioritizing surveillance and CD (including FSAP/FSSR, CMAPs); open to cluster/regional approaches where cost-effective.
  - MIP envisages four actions to address this recommendation; two remained open after the Thirteenth PMR and have since been implemented.
- IEO Recommendation 3: Consider how to use IMF’s lending framework to better address needs and vulnerabilities of SDS.
  - Directors saw scope to tailor UCT-quality programs for SDS with greater focus on growth and resilience, build awareness of benefits of UCT-quality programs, and ensure RST addresses eligible members’ needs including SDS.
  - Many Directors noted need to consider leveraging RST financing to address structural constraints and build resilience; some supported increasing access limits under the Large Natural Disaster window while others did not.
  - MIP envisages three actions to address this recommendation; all remained open after the Thirteenth PMR, and two have been implemented.

*Source: ppea2024055 (excerpt).*

### 122.      To enhance the RST’s effectiveness, the interim review paper proposed some design

### ppea2024055 - 122.      To enhance the RST’s effectiveness, the interim review paper proposed some design

### Interim review — RST design modifications and financial outlook
- Proposed design modifications included:
  - Modifications regarding the rules around early rephasing and disbursement against early completion of RMs.
  - Elimination of the possibility of dual-purpose reforms.
  - Ensuring continuity of the RSF arrangement when there is a need to switch across qualifying concurrent UCT-quality programs.
- The interim review assessed the adequacy of the Trust’s resources, including:
  - An update on fundraising progress.
  - An assessment of the Trust’s financial outlook, based on updated near-term demand estimates.
- Timeline and next review:
  - The interim RST review was completed in May 2024.
  - The RST comprehensive review is currently expected to take place in FY2026.

### Small Developing States (SDS): Box findings and implications
- The Box title: “Small Developing States: A Need for Tailored Solutions”.
- Key findings on usage and limitations:
  - The Fund’s emergency financing instruments (RFI and RCF) are well-suited to deal with urgent balance of payments needs arising from natural disasters and SDS have used them frequently, partly due to the absence of ex-post conditionality.
  - SDS demand for RSF has been limited owing to:
    - (i) SDS capacity constraints to implement reforms, which restricts RSF utilization;
    - (ii) the RSF’s emphasis on macro-critical policy reforms which might not be the most immediate need for SDS facing the brunt of natural disasters;
    - (iii) the fact that RSF financing is very limited in comparison with the immense challenges faced by SDS arising from natural disasters and that the RSF-supported reform package may not catalyze the type of financing SDS require.
- Empirical note:
  - To date, three SDS have requested an RSF arrangement (Barbados, Seychelles, and Cabo Verde). While these three SDSs have had a positive experience with the RSF, there is a desire to raise the access cap and for more flexibility in reform design.
- Interim review conclusion for SDS:
  - A broader, more tailored approach than the RSF may be needed to effectively address the unique challenges faced by SDS in building resilience in natural disasters.
  - This would require more targeted capacity development to expand authorities’ ability to coordinate financing and technical assistance and to develop early warning systems and Disaster Risk Management and Financing frameworks.
  - The paper suggests exploring the possibility of UCT-quality programs with more targeted conditionality aligned with SDS capacity as a requisite for RSF arrangements.

### Board discussion and Director views
- Directors affirmed support for the RST to provide long-term catalytic financing to assist countries’ reform efforts to reduce risks to prospective BOP stability.
- Consensus points from Directors:
  - Reforms under the RST should be grounded in countries’ existing climate strategies and address macro-critical country-specific challenges through policies in areas of the Fund’s mandate and expertise.
  - Arrangements had primarily focused on climate change challenges; Directors looked forward to a forthcoming expansion of focus into pandemic preparedness.
  - Importance of continued collaboration with development partners, including the World Bank and other MDBs.
  - General support for proposals to enhance operational flexibility and clarity of the RSF.
  - Emphasis on reinvigorated near-term fundraising for the Trust to meet strong demand for RSF arrangements and ensure the RST’s ability to sustain lending activities.
- Directors looked forward to the comprehensive RST review in FY2026 and made several suggestions on areas to consider.

### IEO Recommendation 4 and HR management commitments for SDS engagement
- IEO Recommendation 4: The Fund should adopt further HR management commitments to increase continuity and effectiveness of staff’s engagement with SDS. Steps would aim at:
  - improving incentives to work on SDS assignments,
  - reduce turnover,
  - avoid gaps in coverage,
  - minimize disruptions from handovers,
  - strengthen Fund’s presence on the ground.
- Directors agreed with the recommendation and welcomed the MIP on the Board-Endorsed Recommendations on Categorization of Open Actions.
- Many Directors suggested extending promotion policy developed to incentivize staff working on FCS to all SDS.
- The MIP envisages seven actions to address this IEO recommendation, of which six remained open after the Thirteenth PMR; of these six, five actions have been implemented.

### Management actions related to SDS continuity, status, and timelines
- MANAGEMENT ACTION 3.3:
  - Objective: Three-year review of the RST to delve deeper into SDS experiences (design aspects, interactions with lending toolkit, ability to catalyze additional financing).
  - Status: Open.
  - ACCOUNTABLE: SPR/FIN/LEG (with inputs/review of other departments).
  - ORIGINAL TARGET DATE: End-December 2025.
  - EXPECTED COMPLETION DATE: FY2026.
- MANAGEMENT ACTION 4.1:
  - Objective: Analysis on mission chief and country team turnover to explicitly discuss SDS experience.
  - Status: Closed.
  - ACCOUNTABLE: SDS-WG (Lead HRD with Inputs/Review from others).
  - ORIGINAL TARGET DATE: End-December 2023.
- MANAGEMENT ACTION 4.2:
  - Objective: SDS-WG annual report to Management to update on engagement by Area Departments, including mission chief turnover, handover, team rotation, and frequency of missions with SDS.
  - Status: Closed.
  - ACCOUNTABLE: SDS-WG (Lead SPR with Inputs/Review from others).
  - ORIGINAL TARGET DATE: End-December 2024.
- MANAGEMENT ACTION 4.4:
  - Objective: Monitor support to SDS by Functional Departments (FDs), including metrics on CD/TA provision, mission participation, and other support; reported as part of Annual Memo to Management on MIP Implementation.
  - Status: Closed.
  - ACCOUNTABLE: FAD, ICD, LEG, MCM, SPR, STA.
  - ORIGINAL TARGET DATE: End-December 2023.
- MANAGEMENT ACTION 4.5:
  - Objective: Review the LIC/FCS promotion policy two years after full implementation, with implications for SDS explicitly considered.
  - Status: Open.
  - ACCOUNTABLE: HRD.
  - ORIGINAL TARGET DATE: End-December 2025.
  - EXPECTED COMPLETION DATE: FY2026.
- MANAGEMENT ACTION 4.6:
  - Objective: Area Department teams to hold at least one physical mission per year to SDS (including staff visits); exceptions to be explained in Annual Monitoring Report by SDS-WG to Management.
  - Status: Closed.
  - ACCOUNTABLE: ADs.
  - ORIGINAL TARGET DATE: End-December 2024.
- MANAGEMENT ACTION 4.7:
  - Objective: Submit for CCB consideration a well-costed proposal to expand the number of long-term macroeconomic experts (LTX) in RTACs dedicated to support SDS members, in close coordination with Area Department teams.
  - Status: Closed.
  - ACCOUNTABLE: AFR, APD, WHD, ICD.
  - ORIGINAL TARGET DATE: End-December 2023.

### Findings on mission-chief and desk-economist tenure
- Mission-chief tenure:
  - Analysis circulated (EBAP/24/10) indicates that since 2013 mission-chief tenure had increased slowly and unevenly, rising from an average of 2.3 years to 2.6 years between April 2014 and April 2023.
  - SDS mission-chief tenure remained shorter: average: 2.3 years.
  - SDS mission chiefs had lower seniority: 88 percent at grades A14 and A15, compared with the Fund averages (2.6 years and 44 percent, respectively).
  - Share with tenure above 3 years: G20 countries almost 40 percent; SDS corresponding share 20 percent.
  - The share of tenure under two years for mission chiefs fluctuated between 30 and 40 percent for all country groups, with the share for SDS slightly higher than 30 percent.
- Desk-economist tenure:
  - Lower for LIC, FCS, SDS, and PIC members compared to the Fund as a whole.
  - LIC desk-economist tenure: mean: 2.2 years; median: 2.1 years.
  - FCS desk-economist tenure: Mean: 2.3 years; median: 2.0 years.
  - SDS desk-economist tenure: mean: 2.5 years; median: 2.4 years.
  - Francophone African countries desk-economist tenure: mean: 2.5 years; median 2.8 years.
  - PICs desk-economist tenure: mean: 1.8 years; median: 2 years.
  - The share of tenure under two years for desk economists varied significantly by country group; shorter tenure was less common in G-20 countries compared to SDS and others.

### Capacity development, missions, and resource proposals
- 2023 Annual Progress Report to Management on MIP implementation:
  - 19 of 27 SDS teams observed mission chief and team member changes in 2023; all teams reported a smooth handover.
  - For all SDS at least one physical mission was conducted in 2023.
- November 2023 survey of FDs support to ADs — four main takeaways:
  - (i) All SDS were covered by the review process in 2023, with variation in depth of review activities.
  - (ii) FDs deployed a total of 15 economists (including one-offs) to seven SDS teams and offered substantial CD support to SDS, with a total of 521 CD activities provided. Most CD support was provided by FAD, MCM, and STA; 313 of the 521 CD activities were channeled through Regional Capacity Development Centers (RCDCs).
  - (iii) SDS benefitted substantially from Fund general training courses.
  - (iv) FDs provided direct support to AD teams by customizing core surveillance tools and collaborating on analytical studies.
- Proposals to expand LTX in RTACs:
  - AFR, APD and WHD submitted a proposal in December 2023 to the Committee for Capacity Building to expand long-term macroeconomic experts (LTXs) in RCDCs: one LTX in AFR and two LTXs in APD; WHD did not propose an LTX at this time.
  - The proposal faced concerns on budget risks and competing demands; LTX placements will continue via established planning mechanisms driven by members’ demand, area departments’ prioritization, and funding availability.

### Growth and Adjustment in IMF-Supported Programs (IEO evaluation, 2021) — findings and operational response
- IEO evaluation focus: How well IMF-supported programs helped sustain economic growth while delivering adjustment needed for external viability (period 2008-19).
- Key evaluation findings:
  - Fund’s increasing attention to growth in IMF-supported programs delivered some positive results.
  - No evidence of a consistent bias towards excessive austerity.
  - Program growth outcomes consistently fell short of program projections.
  - Identified need for better application of policy instruments to support growth outcomes and to enhance countries’ capacity to sustain activity while undertaking needed adjustment.
  - Recommended greater attention to growth implications of programs and social/distributional consequences; support for deep, growth-oriented structural reforms with capacity development and partner collaboration; and continued development of models and monitors to assess growth and distributional implications.
- MIP response status:
  - In response to three recommendations, the MIP envisaged 15 actions, of which 12 remained open after the Thirteenth PMR. Of these 12 actions, six actions have been implemented since then. Of the six actions still open, three are overdue but making progress.
- IEO Recommendation 1: Attention to growth implications of Fund-supported programs should be more thorough, systematic, realistic, and sensitive to social and distribution consequences.
  - Directors broadly supported the recommendation and agreed on improving realism of forecasts, fiscal multiplier assumptions, contingency planning for growth shortfalls, and strengthening monitoring of social and distributional aspects.
- MANAGEMENT ACTION 1.1 (OGN on program design and conditionality):
  - Objective: Revise the operational guidance note (OGN) on program design and conditionality to ensure a thorough, systematic, and realistic discussion of program implications for growth in program documents.
  - Specifics:
    - 1a. OGN will recommend program documents discuss realism of baseline growth projections by leveraging realism tools embedded in debt sustainability frameworks, including the tool to assess consistency between fiscal adjustment and growth under a range of plausible fiscal multipliers.
    - 1b. OGN will recommend that Policy Notes include – where appropriate and subject to confidentiality – contingency plans if baseline growth falls significantly short of program projections.
  - Status: Closed.
  - ACCOUNTABLE: SPR.
  - ORIGINAL TARGET DATE: FY2023-H1.
- Implementation milestone:
  - In January 2024, staff circulated for the Executive Board’s information the OGN on Program Design and Conditionality.
  - The OGN:
    - Serves as a comprehensive reference and primer on program design and conditionality.
    - Expands on previous operational guidance notes (2003-2014), incorporating lessons from the 2018-19 Review of Conditionality and other policy developments.
    - Highlights operational advice to: (i) improve realism of macroeconomic forecasts and contingency analysis; (ii) improve focus, depth, implementation, and tailoring of structural conditions with due consideration to growth effects; and (iii) strengthen ownership by aligning program objectives with authorities’ reform plans where possible and consistent with resolving BOP problems.

*International Monetary Fund — FOURTEENTH PERIODIC MONITORING REPORT (excerpt).*

### 137.      The OGN includes a section on the realism of macroeconomic projections. It indicates

### ppea2024055 - 137.      The OGN includes a section on the realism of macroeconomic projections.

### Realism of macroeconomic projections — core findings
- The OGN indicates that optimistic growth assumptions, partly driven by an underestimation of the impact of policy adjustment and overestimation of structural reform payoffs, understate the financing and adjustment required to achieve program objectives, with consequences for program implementation and success.
- Unrealistic financing assumptions could lead to underestimation of needed adjustment and give rise to distortionary and undesirable financing measures.
- The OGN discusses various tools available to staff to prepare baseline projections (an Annex on realism tools provides a detailed analysis).
- The OGN focuses on tools provided in debt sustainability frameworks (DSFs), indicating that these tools allow staff to assess, inter alia, the realism of planned fiscal adjustment and the consistency of fiscal adjustment and growth assumptions under a range of plausible fiscal multipliers.
- The OGN was published externally on January 30, 2024.

### Tools and required use in program documents
- Staff should discuss prominently in program documents the realism of baseline growth projections by leveraging, at a minimum:
  - (i) the fiscal adjustment and growth realism tools under the SRDEF and LIC DSF;
  - (ii) the real growth and output gap realism tools under the SRDSF; and
  - (iii) the realism tool assessing the consistency between public investment and growth under the LIC DSF.
- If the tools flag large differences from cross-country or the country’s historical experience, staff should provide explanations; this discussion should be included in the “Outlook and Risks” section of PNs and SRs.
- Use of realism tools is a requirement for Fund arrangement requests and program reviews with significant growth deviations relative to previous projections.
- For PRGT program countries, the LIC DSF framework requires long-term growth projections, which should be discussed jointly with the World Bank and covered under “Outlook and Risks”.
- Staff is strongly encouraged to use additional tools, depending on data availability and country circumstances.

### Contingency planning (CP) guidance
- The OGN recommends including contingency plans in program PNs, where appropriate and subject to strict confidentiality.
- Broad goal: staff and authorities reach understandings on a set of policies for contingencies; size and specificity of understandings should depend on risks and country circumstances.
- CPs should ideally:
  - outline a relevant adverse scenario based on a set of domestic and external shocks;
  - elaborate on how key program variables/targets/objectives, including financing gaps, external position, and public debt, would be impacted;
  - discuss potential policy responses to achieve recalibrated program targets/objectives in the adverse scenario and restore stability.
- For countries vulnerable to currency runs and sudden stops to capital flows, CPs should consider merits of FX intervention and CFMs that could temporarily restore stability to allow time for an appropriate set of policies to be implemented.
- In general, CPs would be recommended for UCT-quality Fund-supported programs based on country needs, risks, and capacity constraints.
- CPs are expected to be discussed in a box in the PN or included as an Annex, where appropriate. Discussions with authorities on CPs will be relayed to Management and reviewers in back-to-office reports and/or the SR cover memo to management.

### Fiscal policy conditionality and social spending
- Social spending is defined to comprise spending on social protection (social insurance and social assistance programs), and education and health.
- Where relevant, both GRA and PRGT-supported programs should seek to protect social spending and mitigate adverse effects of program measures on the poor and vulnerable.
- A PRGT-supported program shall indicate how the program advances the member’s poverty reduction and growth objectives, in line with the objectives and policies of the program.
- Objectives and related conditionality should be tailored to country-specific circumstances; conditionality on social spending should reflect the criticality of measures and implementation capacity, particularly in fragile states.
- The note argues that mitigating the adverse effects of adjustment and improving spending adequacy can usually be addressed by including quantitative conditionality, with coverage of social spending floors being explained in program documents and linked to program objectives and predictable financing.
- Programs should consider structural measures, where relevant, to strengthen social safety nets and improve the quality of social spending in the medium term.

### Structural conditionality: selection, depth, sequencing, and assessment
- Selection and prioritization of structural reforms should be based on staff’s assessment of criticality for program success.
- Staff should explain how structural conditionality will help achieve program objectives and assist in resolving the member’s BOP problem.
- Assessments should judge potential economic impact of reforms, including growth and employment implications, facilitation of external rebalancing, distributional consequences, and fiscal effects.
- PNs and SRs should apply conservative assumptions and distinguish clearly between short-, medium- and long-term effects on growth and employment.
- The OGN highlights the need to include structural conditionality with adequate depth (low, medium, high categories, per past ROCs) and to factor sequencing and speed of execution into program design, with implications for program length and financing.
- PNs should present a clear and comprehensive assessment of proposed structural conditionality, ideally using an evaluation matrix; the matrix could be included in the PN or country engagement strategy.
- PNs for new Fund arrangement requests and at each review should indicate for each structural condition its depth and rationale. SRs should include a concise discussion of criticality, packaging, sequencing, communication of reforms, and proposed CD support.
- The OGN recommends inclusion of an annex table mapping, whenever possible, structural benchmarks with CD findings and planned CD from the Fund and other multilateral organizations.

### Capacity development (CD) integration and evidence on progress
- The CDSR notes CD integration with surveillance and lending has improved significantly over the past decade.
- Operational guidelines for integrating CD with surveillance and lending (post-2018 CDSR) were integrated within the 2022 SGN to emphasize that country teams should develop a CD strategy when institutional and capacity constraints are macro-critical.
- Area departments now have a leading role in country engagement and prioritization, embedded in management systems developed under the CDMAP.
- Direct references to CD in staff reports increased: the share of staff reports with a dedicated CD annex rose from 19 percent in 2018 to over 30 percent in 2022, with a ratio of about 60 percent among heavy users.
- Establishment of Country Engagement Strategies (CESs) for FCS countries that embed the CD strategy has been helpful.
- CDSR proposals for improvement include:
  - (i) enhancing visibility of area department-led prioritization and streamlining documentation requirements;
  - (ii) improving coverage of CD issues in the main text of Article IV staff reports by increasing use of CD strategy annexes (required for all heavy users); and
  - (iii) strengthening internal incentives and capacity for integration, including guidance on AD leadership of RTACs, HR reforms to enhance mobility of specialized economists, and increased acknowledgment of shorter-term CD for surveillance and lending traction.

### Bank-Fund coordination, climate, pandemic preparedness, and training
- The Broad Principles for Bank-Fund Coordination in RST Operations were approved in April 2022; the RSF Guidance Note operationalizes these principles and provides guidance on engaging with other IFIs and Development Partners.
- The Interim Review of the RST and Review of Adequacy of Resources was discussed by the Executive Board in May 2024 and contained an in-depth discussion on collaboration with development partners, including the World Bank and other MDBs.
- The FY2024 Update on Operationalization of the Fund’s Climate Strategy was discussed by the Executive Board on May 14 and emphasized leveraging World Bank and other MDB expertise.
- Joint Statement by the Managing Director and the President of the World Bank on “World Bank Group and IMF Deepen Joint Effort to Scale Up Climate Action” was published on May 31, 2024.
- Coordination with other IFIs in RSF arrangements has focused on climate-related challenges; staff issued a Board paper in early October on broad principles of Bank-Fund-WHO coordination for pandemic preparedness.
- SPR Debt Policy (SPRDP) Division delivered two training courses in 2024: Kazakhstan (CCAMTAC) in January and Vienna (JVI) in May.
- Two more training courses are confirmed for FY2025: Singapore (October 2024, in cooperation with STI) and Botswana (February 2025, in cooperation with MEFMI and AFRITAC South).
- ICDMF has indicated willingness to support SPR in delivering more training, resources permitting.
- The SPR-sponsored project to build a Common Review System (CRS) and include the Operational Guidance Gateway was approved in May 2023; the full system is planned to be deployed in three releases in 2025.

### Management actions, statuses, and timelines (selected)
- 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.
  - Status: Overdue but progressing
  - ACCOUNTABLE: SPR, LEG.
  - ORIGINAL TARGET DATE: By end-FY2024.
  - EXPECTED COMPLETION DATE: By end-CY2025.
- 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: Closed
  - ACCOUNTABLE: SPR, ICD.
  - ORIGINAL TARGET DATE: By mid-FY2024.
- MANAGEMENT ACTION 2.1:
  - Encourage Fund-supported programs to pay greater attention to supporting deep, more growth-oriented reforms while keeping structural conditionality parsimonious and prioritized.
  - Sub-actions include: (1a) require PN indication of depth of each Structural Condition (SC) per past RoC criteria; (1b) recommend inclusion of annex table mapping structural benchmarks with CD findings and planned CD.
  - Status: Closed
  - ACCOUNTABLE: SPR.
  - ORIGINAL TARGET DATE: By FY2023-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: Closed
  - ACCOUNTABLE: SPR, ICD in collaboration with other CD and Area Departments.
  - ORIGINAL TARGET DATE: By end-FY2023.
- MANAGEMENT ACTION 2.3:
  - Implement the broad principles for coordination with the World Bank or other relevant IFIs under the Resilience and Sustainability Trust (RST).
  - Status: Closed
  - ACCOUNTABLE: SPR.
  - ORIGINAL TARGET DATE: When the Trust is operational; expected mid-FY2023.
- MANAGEMENT ACTION 2.4:
  - Review the experience with Bank-Fund Collaboration (BFC) in Fund-supported programs as part of the Board paper on the effectiveness of BFC.
  - Status: Open
  - ACCOUNTABLE: SPR.
  - ORIGINAL TARGET DATE: By end-FY2025.
- MANAGEMENT ACTION 2.5:
  - Create an operational Guidance Gateway for staff to access the latest guidelines, including on collaboration with external partners.
  - Status: Open
  - ACCOUNTABLE: KMU, SPR, ITD.
  - ORIGINAL TARGET DATE: By end-FY2025.
  - EXPECTED COMPLETION DATE: CY2025.

### Reviews, deliverables, and upcoming milestones
- The next Review of Conditionality (RoC) is expected to be completed in CY2025 and will provide an in-depth review of the role of Fund-supported programs in fostering growth and the appropriateness of the conditionality guidelines.
- The Board paper on the effectiveness of Bank-Fund collaboration will be folded into the Board paper to be prepared ahead of the 2025 UN Conference on Financing for Development, to be completed around May/June 2025.
- The PRGT Review is expected to reflect on how the Fund, the World Bank, and other donors and creditors can best work together to support LICs; the report on Macroeconomic Developments and Prospects for LICs was published in April 2024.
- Staff has started to develop preliminary views for the Board paper on Bank-Fund collaboration and the 2025 UN Financing for Development conference.

*Source: ppea2024055 - 137. The OGN includes a section on the realism of macroeconomic projections.*

### 154.      As noted in previous PMRs, ICD, in collaboration with ITD, is actively developing the

### ppea2024055 - 154.

### Integrated Macroeconomic Forecasting Environment (IMFE) / Financial Programming Environment (FPE)
- ICD, in collaboration with ITD, is actively developing the IMFE project, a new analytical platform to manage macroeconomic frameworks and prepare projections.
- The tool aims to introduce built-in user-friendly capabilities to generate alternative risk and policy scenarios and to link the macroeconomic framework to a broad range of forecasting tools to ensure consistency while allowing for tailoring to country specific circumstances.
- A fully working version of the IMFE is being piloted, with much improved functionality since the start of the project.
- The IMFE has five pilots that were active during FY2024: Finland, Guyana, Philippines, South Africa, and Zimbabwe.
- The preparation of macro frameworks for area department teams and their feedback has contributed significantly to developing the IMFE software.
- Outreach in several departments has generated considerable interest; in FY2025 the team started a project with EUR to increase the number of pilot cases.
- The IMFE continues to be actively developed, with releases every three weeks.
- OIA is of the view that this action can be categorized as closed.
- Footnote: The Macroeconomic Forecasting Environment (FPE) project has been renamed Integrated Macroeconomic Forecasting Environment (IMFE).

Accountable: ICD, ITD.
Original target date: By end-FY2024.

### Growth-at-Risk (GaR) 2.0
- The 2.0 version of the GaR tool is expected to be rolled-out by the end of 2024.
- GaR 2.0 improvements:
  - Refinements in the estimation technique.
  - More statistical options for density fit (including multimodality).
  - A battery of new tests for model diagnostics.
- A hybrid course on the GaR (MCM and ICD) will be modeled as a standalone course and is tentatively scheduled to be released in F25.

Management action status:
- MANAGEMENT ACTION 3.4: 1d. Model version “GaR 2.0”. Overdue but progressing.
- Accountable: MCM, ITD, ICD.
- Original target date: By end-FY2023.
- Expected completion date: End-CY2024.

### Country Data Annex (CoDA)
- The Country Data Annex (CoDA) tool will help country teams assess the quality of their macroeconomic frameworks by contributing to identify large deviations and check the consistency of policy advice.
- RES and SPR collaborated to create the CoDA tool.
- The previous PMR planned to operationalize CoDA by the end of FY2024 and offer it to country teams on a voluntary basis during the review phase of Policy Notes and Article IV reports.
- Work on CoDA was delayed due to technical aspects requiring further internal discussions; these technical difficulties have been resolved and the tool is now essentially ready.
- The tool is currently being piloted and will be fully operational by the end of FY2025.

Management action status:
- MANAGEMENT ACTION 3.5: 1e. The Country Data Annex (CoDA) tool. Overdue but progressing.
- Accountable: SPR, RES.
- Original target date: By end-FY2024.
- Expected completion date: By end-FY2025.

### Diagnostics Gateway / Common Review System
- 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-FY2025.
- The Diagnostic Gateway is in scope for the Common Review System Project. The current plan is to release a version toward end-FY2025.

### IMF Collaboration with the World Bank on Macro-Structural Issues
- IEO evaluation assessed IMF collaboration with the World Bank on macro-structural issues (inequality, gender, energy/climate, macro-structural reforms) and found collaboration broad but uneven; relatively few cases of in-depth collaboration were identified.
- Evaluation recommended developing concrete frameworks in areas where collaboration brings strategic returns (such as climate), improving internal incentives to collaborate, improving access to and exchange of information and knowledge across institutions, and strengthening the IMF Board’s strategic role in overseeing external collaboration.
- The MIP envisages 16 actions in response to three recommendations; a Fourth recommendation on strengthening the IMF Board’s strategic role falls outside Fund management’s purview and is expected to be addressed by a Joint Liaison Committee-COGAM Forum (LCF).
- Of the sixteen actions, three remained open after the Thirteenth PMR. None of these actions has been implemented. One of these three actions is overdue but making progress.

IEO Recommendation 1:
- Directors broadly supported select macro-structural collaboration where roles are complementary and strategic returns are greatest; climate is a strong candidate.
- The MIP does not include a commitment to develop an over-arching tailored framework for climate; instead it provides for a Board paper to review effectiveness of Bank-Fund collaboration.
- Following stock-taking of experiences, staff will revisit the need and feasibility of tailored institutional collaboration frameworks on climate and other areas.
- MIP envisages eight actions to address this recommendation; two remained open after the Thirteenth PMR and no further actions have been implemented since then. One of the two remaining open actions is overdue but progressing.

### Interim Surveillance Review (ISR) / Comprehensive Surveillance Review (CSR)
- Due to significant work pressures, the Interim Surveillance Review has been cancelled and folded into the 2026 Comprehensive Surveillance Review.
- The CSR content is still under discussion, but it will be a more significant exercise than the ISR.
- The background paper focus is expected to be on progress in implementation of actions related primarily to Bank-Fund collaboration, strategic coordination, and capacity building on climate issues.

MANAGEMENT ACTION 1.2:
- Bank-Fund Strategic Coordination and Stock-Taking: Background paper in the context of the Interim Comprehensive Surveillance Review (ISR) will take stock of how the Fund has integrated select macro-structural areas (notably climate) into its surveillance, including how it has collaborated with other institutions such as the World Bank.
- Status: Overdue but progressing.
- Accountable: SPR in collaboration with other departments.
- Original target date: By FY2024.
- Expected completion date: CY2026.

MANAGEMENT ACTION 1.3:
- IMF Board paper on the Effectiveness of Bank-Fund Collaboration to review experience on select macro-structural areas (notably climate), assess need for tailored institutional frameworks, effectiveness of high-level strategic collaboration, experience with HRD guidance on improving incentives for collaboration, and progress on information and knowledge sharing.
- Status: Open.
- Accountable: SPR in collaboration with other departments.
- Original target date: By FY2025.
- Expected completion date: May/June 2025.
- No obstacles envisaged at this stage; the paper will be folded into the Board paper for the upcoming UN Conference on Financing for Development.

Additional note:
- In September 2023, ahead of the G20 Leaders’ Summit, the Fund and the Bank issued a joint statement committing to strengthen collaboration on climate change, renewed high debt vulnerabilities, digital transition, revenue mobilization, and financial and policy support to vulnerable countries.

### IMF Advice on Capital Flows
- IEO evaluation found the Institutional View (IV) of 2012 provided a stronger conceptual template but flagged concerns including pre-emptive use of capital flow measures, labeling distinctions, role of foreign exchange intervention, use of capital account measures outside crisis contexts, distributional impacts, and technical challenges with metrics and thresholds.
- Evaluation recommended revisiting the IV, building up monitoring/analysis/research of capital account issues, and strengthening multilateral cooperation.

MANAGEMENT ACTION 2.2:
- Staff will brief the Executive Board on analytical work on the interplay between capital flows, CFMs and crises.
- Status: Overdue but progressing.
- Accountable: MCM, RES.
- Original target date: Q4 CY2021.
- Expected completion date: Q4 CY2024.
- Progress: Presentation scheduled for late May 2024 could not be completed due to high workload; underlying research conducted and several related papers have been published or are forthcoming. Work covers use of inflow CFMs outside crises and outflow CFMs inside and outside crises.

Indices and AREAER:
- Work on a binary index based on existing controls and a change index based on changes to controls over time was delayed.
- Development of the AREAER website feature to calculate and store the indices took longer due to ITD team familiarity issues after reorganization.
- Release of indices was delayed to ensure accompanying working paper explains interpretation and use.
- The work on these two indices, together with the Working Paper, is now expected to be completed and published on the AREAER website by end-CY2024.

MANAGEMENT ACTION 2.4:
- Staff will publish on the IMF external website indices of capital account openness using the AREAER database.
- Status: Overdue but progressing.
- Accountable: MCM.
- Original target date: Binary and change indices by Q4 CY2021; indices also accounting for type of CFMs by Q4 CY2023.
- Expected completion date: Binary and change indices by end-December 2024.

### IMF Financial Surveillance (2019) and Financial Talent
- IEO evaluation found post-global financial crisis initiatives substantially upgraded Fund’s financial surveillance, FSAPs provided high-quality assessments, Fund developed diagnostic tools and new policy approaches, and Article IV surveillance increased attention to macro financial linkages.
- Evaluation noted uneven quality and impact, need to strengthen financial and macro financial analysis in Article IV consultations through closer integration with FSAP, increase traction of multilateral surveillance via greater rigor and transparency, and intensify research to become a global center of excellence on financial and macro financial research.
- Evaluation recommended consideration of increasing the resource envelope for financial surveillance.

IEO Recommendation 5:
- Directors emphasized ensuring country teams have knowledge and support to integrate financial and macro financial analysis into Article IV consultations.
- Targeted enhancements from the HR Strategy can help staff develop necessary expertise.
- MIP envisaged five actions; three remained open after the Thirteenth PMR. These three actions have been implemented.

*Source: ppea2024055 - 154.*

### 164.      The Board was briefed on the status of the HR Strategy on July 9, 2024. The HR strategy

### ppea2024055 - 164.      The Board was briefed on the status of the HR Strategy on July 9, 2024. The HR strategy

### Human Resources (HR) Strategy: overview and Board briefing
- The HR strategy was developed in 2017-2018 and was supported by four pillars:
  - (i) attract top, diverse talent broadly representative of the Fund’s membership;
  - (ii) develop and grow talent and capabilities to meet the membership’s economic needs;
  - (iii) create a diverse and inclusive workplace that innovates collaboratively to develop economic solutions, while attending to staff well-being and ensuring a high duty of care;
  - (iv) remain agile and adaptive by leveraging data and technology to make the most informed decisions about people.
- The Board was briefed on the status of the HR Strategy on July 9, 2024.
- The July brief highlighted that external shocks and the pandemic transformed the Fund’s work, requiring:
  - more granularity in policy advice;
  - greater and faster lending;
  - more tailored peer-based capacity development.
- HR was able to change course during the pandemic and deliver on its commitments.

### Workforce analysis, Talent Inventory, and progress on HR actions
- HRD has completed the monitoring of fungible macroeconomists with macro financial experience.
- HRD’s work program includes augmenting the Talent Inventory with crisis experiences drawing on lessons from macro-financial experiences.
- OIA’s view: this action is substantially complete and can be closed.
- Since 2021, HRD has updated 11 workforce analysis notes.
- HRD is streamlining and simplifying production of workforce analysis notes by:
  - simplifying the template;
  - producing the notes based on job families;
  - leveraging the newly introduced WFP tool;
  - implementing LOT-based approval.
- These measures aim to increase frequency and efficiency.
- Talent Inventory updates will be socialized with departments in the coming months.

### Expert track and specialist economists (SEs)
- HRD and departments are working on measures to bolster the career paths of SEs (specialist economists).
- Management decision: not to pursue an enhanced expert track because:
  - it would require additional budgetary resources that cannot be justified given experience with an unsuccessful pilot and related cost-benefit analysis in a constrained budget environment;
  - introducing the expert track would increase the span of control for Managers.
- Published parts of the strategy (already released as noted in the source) include:
  - Enhanced Performance Management Approach (May 2019);
  - the new Job Family and Career Framework (July 2020), comprising an updated job architecture, an Integrated Competency Framework, and Career Playbooks;
  - Leadership Development and Career Succession;
  - the Fungible Macroeconomist Career Path and Mobility Framework, which introduced revised policy requirements for fungible macroeconomists for promotions from A14 to A15 starting July 2023 (e.g., country team or equivalent experiences in low-income countries and/or fragile states);
  - the official launch of the Workforce Planning Tool in Adaptive using Workday Data;
  - most of the Workforce Analysis Notes for Specialist Economists.

### Management actions and status (HR-related)
- MANAGEMENT ACTION 5.1: Brief the Executive Board on the HR strategy, including on the ongoing workforce analysis for financial sector experts.
  - Status: Closed
  - ACCOUNTABLE: HRD.
  - ORIGINAL TARGET DATE: by January 2020.
- MANAGEMENT ACTION 5.3: Complete an enhanced talent inventory of staff to include talent profiles for financial sector experts and data on macro financial (and other) experiences of fungible macroeconomists.
  - Status: Closed
  - ACCOUNTABLE: HRD.
  - ORIGINAL TARGET DATE: by November 2020.
- 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 macro financial), a career mobility framework, and an expert track.
  - Status: Closed
  - ACCOUNTABLE: HRD.
  - ORIGINAL TARGET DATE: By April 2022.

### IMF and Social Protection: evaluation findings and operational guidance
- IEO evaluation (2017) findings summarized:
  - The Fund stepped up attention to social protection, but engagement varied across countries and implementation outcomes were mixed.
  - Engagement in some countries was deep (bilateral surveillance, technical assistance, program work with detailed analysis), while in others it was limited.
  - Variation partly reflected lack of a uniform staff view on the IMF’s role in social protection.
  - In program contexts, social protection concerns were almost always taken into account, but implementation success was mixed due to capacity constraints, differences in country commitments, and perceptions by authorities of insufficient attunement to local conditions.
  - Recommendation: establish a strategic framework to guide the Fund’s work on social protection, provide tailored policy advice, adopt more effective approaches for program design and conditionality, strengthen collaboration with other partners, and enhance external communications about the Fund’s approach and boundaries.
- MANAGEMENT ACTION 1.2: Staff will issue a follow-up guidance note to support the strategic framework for social protection.
  - Status: Closed
  - ACCOUNTABLE: FAD and SPR.
  - ORIGINAL TARGET DATE: End-2019.
- 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.
  - Status: Overdue but progressing
  - ACCOUNTABLE: FAD and SPR.
  - ORIGINAL TARGET DATE: After issuance of the guidance note in 2020.
  - EXPECTED COMPLETION DATE: End-FY2025

### Operational Guidance for IMF Engagement on Social Spending Issues (February 2024)
- Staff issued the Operational Guidance for IMF Engagement on Social Spending Issues in February 2024.
- The guidance note:
  - builds on previous staff work, including How-To-Notes on IMF Engagement on Social Spending During and in the Aftermath of the COVID-19 Crisis and Technical Notes and Manuals on IMF Engagement on Pensions, Social Safety Nets, Health, and Education;
  - will be periodically updated to reflect evolving social spending issues and Fund knowledge;
  - provides operational guidance implementing the Strategy on IMF Engagement on Social Spending endorsed in June 2019;
  - focuses on when and how to engage on social spending issues in surveillance and Fund-supported programs by:
    - clarifying scope, identifying key challenges, and laying out a roadmap for staff engagement;
    - providing practical guidance to assess macro-criticality of social spending issues and determine extent of engagement in surveillance and programs;
    - discussing key considerations in formulating policy advice and designing social spending conditionality, including social spending floors;
    - outlining approaches to strengthen and leverage collaboration with external stakeholders and to design outreach strategies.

### Inequality Advisory Group (IAG) and scope expansion
- The IAG, chaired by FAD and AFR, was established in September 2019 to support country teams on inequality issues and facilitate collaboration with internal and external experts.
- The IAG’s scope is expected to be broadened to include social spending and more generally social inclusion issues (e.g., redistributive taxation, financial inclusion).
- Following the Operational Guidance Note, FAD and AFR (co-chairs) in consultation with SPR will prepare a proposal to broaden the IAG Terms of Reference and seek approval before end-FY2025.
- Rationale: staff view creating an additional advisory group risks duplications and uncertainties.
- A dedicated group within FAD will continue to support country teams in operationalizing social spending work in the context of the standard review process.

### Behind the Scenes with Data at the IMF: evaluation and actions
- IEO (2016) findings summarized:
  - Noteworthy progress on countries’ provision of data to the Fund and internal data management, but important obstacles remained.
  - Data problems sometimes adversely affected IMF surveillance and lending.
  - Recommendations: design and implement a long-term overarching data strategy, define and prioritize the IMF’s data needs, reconsider the role and mandate of STA, reexamine staff incentives, and clarify Fund responsibility for data quality.
- MIP response: in reaction to five IEO recommendations, the MIP envisaged 14 actions (with some overdue earlier); progress summary indicates most actions have been implemented or are progressing.

### Data Adequacy Assessment (DAA) framework and Article IV consultations
- In December 2023, the Board endorsed on a lapse-of-time basis the introduction of a new Data Adequacy Assessment (DAA) framework in Article IV consultations.
- Staff separated approval of the new DAA framework from the DPF Review (completed by the Board in April 2024).
- Fund-wide implementation of the new DAA framework started on February 1, 2024.
- Implementation supported by bilateral support to country teams, outreach to authorities, and issuance of a technical note for country teams available on a dedicated intranet site.
- The new DAA introduces:
  - a streamlined questionnaire complemented with data quality factsheets;
  - country team assessments informed by data quality characteristics relevant for surveillance;
  - greater granularity in classification of data adequacy;
  - more transparent discussion of data issues in Article IV reports;
  - fine-tuning of the DAA questionnaire and fact sheet over time based on feedback.

### Management action on data and standards
- MANAGEMENT ACTION 2.4: The review of the Standards and Codes Initiative will aim to strengthen its integration with Fund surveillance and CD activities. The new data quality module in the revised Data Report on the Observance of Standards and Codes (ROSC) will help guide future CD and methodological work with member countries to facilitate data provisioning to the Fund. A revised DPF Guidance Note, following the Review of the DPF, will operationalize the New Assessment of Data Adequacy for Surveillance.
  - Status: Closed
  - ACCOUNTABLE: SPR, STA.
  - ORIGINAL TARGET DATE: FY18.

### Role and mandate of the Statistics Department (STA) and standards updates
- Directors supported reconsidering STA’s role, noting STA was devoting more attention to services for the Fund and closer collaboration with area departments was anticipated.
- Update of the Balance of Payments and International Investment Position Manual (BPM7) and the 2025 SNA is reaching its final stage without delays.
- The updated manuals are scheduled to be released in the spring of 2025.
- The updates aim to adjust statistical methodology to better support surveillance needs, including LICs, and will expand to better account for:
  - digitalization;
  - globalization;
  - economic implications of climate change;
  - well-being;
  - external sustainability;
  - the informal economy.
- These updates will support priorities identified in the Comprehensive Surveillance Review.

### STA consultations, outreach, and implementation support
- All BPM7 and 2025 SNA chapters have undergone global consultation; full versions are currently undergoing a final global consultation.
- After consultation with the IMF Committee on Balance of Payments Statistics and the Advisory Expert Group on National Accounts, the manuals will be presented for final approval to the IMF Chief Statistician and Director (BPM7) and the 2025 United Nations Statistical Commission session (2025 SNA).
- Outreach to compilers, including LICs, began at the end of 2023:
  - Two-round outreach strategy: first round virtual, second round in person.
  - Target audience: external sector statistics and national accounts compilers for both rounds; senior officials for the second round.
  - First round: seven virtual seminars from December 2023 through April 2024.
  - STA is working with ICD to develop short videos on the update of the standards, scheduled to be released in the fall.
  - Second round of in-person seminars planned to kick off in the first quarter of FY2026 after BPM7 and the 2025 SNA are released in March 2025.
- STA is developing a broader implementation strategy to support countries in planning implementation of the new standards, including compilation guidance on:
  - crypto assets;
  - capitalizing data;
  - measurement of natural resources;
  - marketing assets.
  - Compilation guidance is under development and will be released during FY2025-26.
- Fund-wide engagement:
  - Several staff from Fund departments other than STA have been directly involved in updates to the international statistical standards.
  - Fund-wide consultations have been conducted on topics including crypto assets and net international reserves.
  - STA will engage in further in-reach events to explain forthcoming changes to desk economists, including those working on LICs.

*Italic: Content summarized from ppea2024055 - 164.      The Board was briefed on the status of the HR Strategy on July 9, 2024. The HR strategy*

### 175.      Other related training events have also taken place. A workshop on trade in services and

### 175. Other related training events have also taken place.

### Training and capacity-building activities
- A workshop on trade in services and digital trade funded by the Data for Decisions (D4D) fund was conducted at ATI for selected countries from the AFR and MCD regions in July 2024.
- A joint BPM/SNA D4D training for the AFR region took place in June 2023.
- Two additional D4D training events on trade in services and digital trade were conducted for selected countries from AFR, APD, MCD and EUR regions in May 2024.
- On sustainability and climate change statistics:
  - STA concluded the first HQ course on macro-relevant environment and climate change statistics, with over 60 percent of the participants coming from LICs.
  - The HQ course followed training courses previously conducted in the MCD, WHD, and AFR regions.
  - Under the Swiss State Secretariat for Economic Affairs (SECO) project, STA undertook diagnostic missions on macro-relevant environment and climate change statistics for a set of pilot countries, including a LIC/FCS (Mozambique), and held a training workshop in collaboration with the UN Statistical Institute for Asia and the Pacific (SIAP) for the 10 countries participating in the project.

### Community Hub and digital platforms for statisticians
- STA, in collaboration with ITD, is establishing a Community Hub for macroeconomic statisticians to serve as a digital meeting place for the global community to share resources, network, and collaborate on projects.
- Development milestones:
  - Development began in earnest in January 2024 and has involved STA, ITD, ITD contractors, and Creative Lab.
  - Focus has been to complete an initial version of the Hub in late 2024 to begin internal user testing.
  - The Hub is expected to be released to the public in or around May 2025.

### Data management and governance advances
- IEO Recommendation 4: Re-examine the staff’s structure of incentives in the area of data management — Directors supported the recommendation and a review of incentives; six actions were envisaged in the MIP, of which one was overdue as of the Thirteenth PMR; this action has been implemented.
- Key achievements:
  - Adoption of the Fund-wide metadata model for economic and financial data in iData, finalized in December 2022 by an interdepartmental working group of the Data Governance Group (DGG).
  - The metadata model enables better comparability and increased consistency between datasets produced by area and functional departments in iData.
  - The new IMF Data portal has been launched internally to selected departments; it offers a comprehensive and consistent description of all elements included in the metadata model, such as country, source, and methodology.
  - A full internal soft launch is scheduled for June 2024, with an external launch planned for September 2024.
  - The metadata model has been integrated into the Enterprise Metadata Standards managed by KMU to align other Fund data management systems.
- For FY2025, DGG priorities include establishing guidelines for managing the lifecycle of datasets on the IMF portal, from creation to deletion; area departments will collaborate to identify best practices and common guidelines; KMU will collaborate as part of the Country Assignment Handover process.
- Management Action 4.2: Unify area department data management guidelines. Status: Closed. Accountable: STA, Area Departments. Original target date: Not Indicated.
- In mid-July 2024 STA presented to the Standing Committee on Data and Statistics a proposal to strengthen the Fund’s data governance framework; the Committee recommended a gradual approach and the DGG will prepare a proposal with strategic priorities for the next 3-5 years.

### Clarifying IMF responsibility for data quality and data labeling
- IEO Recommendation 5: Make clear the limits of IMF responsibility regarding the quality of disseminated data and clarify the distinction between “IMF data” and “official data” — Directors supported clarifying the distinction and building member capacity; one MIP action was overdue as of the Thirteenth PMR and has been implemented.
- Technical and operational developments:
  - STA prepared a technical note on the DAA distinguishing “official statistics” and data used by staff in surveillance activities; the note has been in operational use by staff since February 2024.
  - The 13th PMR indicated that completion of the DPF Review would anchor the production of the DPF Guidance Note; due to DPF Review delays, the Guidance Note is expected to be prepared over the next few months.
  - The technical note specifies the Statistical Issues Appendix (SIA) in staff reports for Article IV consultations will be replaced by a new Data Issues Annex (DIA) in the main body of the staff report, subject to Management review.
  - The DIA template includes a section for country teams to explain if data used in Article IV staff reports differ from official statistics, requiring explanation of reasons and the approach used to estimate data.
  - Data quality factsheets in the DIA template will be based on official data submitted to STA or published by the authorities, and not on data from third-party sources; availability of private sector data can be used in commentary to justify surveillance despite weak official statistics.
  - The technical note specifies that the Third-Party Indicators framework applies to the use of third-party sources for surveillance.
- Publication gating on iData:
  - A gating criterion for publication of IMF indicators on the new iData dissemination portal has been established, including citation of data sources.
  - For each published indicator (internal or external), data product stewards must indicate in the indicator metadata whether the data come from national authorities or represent an IMF calculation or an IMF estimate.
  - The gating process requires additional metadata that will allow users to assess the quality of the indicator.

### The Role of the IMF as Trusted Advisor and diversity efforts
- IEO evaluation (2013) emphasized improving quality of advice, continuity of relationships, and addressing perceptions of evenhandedness.
- IEO Recommendation 2: Strengthen continuity of the relationship between the Fund and member countries — Directors were mixed on medium-term strategic plans; many emphasized incentives for staff to act as trusted advisors and lengthening staff country assignments; the MIP envisaged six actions, one overdue as of the Thirteenth PMR.
- Diversity and inclusion (D&I):
  - Increasing representation of diverse staff is ongoing; classification “Overdue but progressing” retained to reflect continuous incremental efforts.
  - Benchmarks history: regional benchmarks established for 2014, revised upward in 2015 for 2020 and in 2020 for 2025; 2025 Diversity Benchmarks Working Group (WG) created in September 2019.
  - In February 2024, the Executive Board considered the FY2022-FY2023 Diversity and Inclusion Report, which included status at end-FY2023 against FY2025 benchmarks.
  - The FY2025 benchmarks comprise eight targets — two related to gender and six for underrepresented regions (URRs), two for each of the three URR regions. The staff groups included in the benchmarks are individual contributors (grades A9-A14/15), and managers (grades A14/15 Deputy Division Chief-B5). The framework also contains hiring targets and aspirational institutional goals covering staff and contractual employees with contracts longer than a year.
  - Benchmarks progress at end-FY2023:
    - On track to meet four of eight benchmarks: the three benchmarks for the share of URRs (EA, MENA+, and SSA) at the individual contributor level; and the share of EA in managerial roles.
    - On track to achieve between 80 and 90 percent of the remaining four benchmarks (majority for managerial roles).
    - Share of women in managerial grades: 35.1 percent at end-FY2023 (compared with a 2025 benchmark of 40 percent), up from 24.4 percent in FY2013.
    - Share of URR staff in managerial grades: 24.0 percent at end-FY2023 (compared with a benchmark of 28 percent), up from 15.1 percent in FY2013.
    - Regional managerial shares over the last decade:
      - EA managers: from 5.5 percent to 9.7 percent.
      - MENA+ managers: from 4.3 percent to 6.7 percent.
      - SSA managers: from 5.3 percent to 7.6 percent.
    - Senior management (B4 & B5 grades): share of women doubled from 16.3 percent in FY2013 to 38.6 percent in FY2023; representation of URR nationals rose from 10.0 percent to 17 percent.
  - Recruitment challenges:
    - Recruitment of women has been below the 50 percent flow target needed to close the gap to benchmarks; share of women hired into Individual Contributor roles slightly up over FY2018-2020 average but still below 45 percent.
    - Difficulty finding suitable and diverse employees with required skills in augmentation priority areas, particularly in climate and digital money, compounded by competition from other IFIs and the private sector.
    - Recruitment levels for nationals from URRs have been more robust; two benchmarks already achieved (EA and SSA) and the third (MENA+) on track.
  - Main challenges going forward: raise representation of women and URR nationals (particularly women from URRs) among managerial cohort; increase share of under-represented groups in external recruitments to maintain managerial pipelines at individual contributor level.
  - A two-year roadmap with actions across recruitment, talent development, equity & inclusion, and accountability & transparency has been developed.
  - The upcoming 2030 Benchmarks Working Group will consider extending timelines to 2030 and appropriate risk acceptance/tolerance levels rather than raising targets before existing ones are met.

### Implementation Plan in response to reformulated MIP actions
- The Implementation Plan reformulated eight off-track actions corresponding to five IEO recommendations under four MIPs; the reformulation aimed to be SMART and to tackle root causes.
- Summary of progress: In response to five recommendations, the MIP envisaged 22 new actions, of which seven remained open after the Thirteenth PMR. Since then, three of these actions have been implemented. Of the four actions still open, three are overdue but making progress.
- IEO Recommendation 1 (Trusted Advisor): Original MIP action to target three-year average tenure for country assignments monitored by HRD; reformulation proposes:
  - Continue targeting three-year average tenure while introducing a framework for extending tenure beyond the two-year minimum for different country groups.
  - Enhance monitoring and accountability for country team turnover.
  - Assess potential barriers to longer tenure.
- Directors broadly endorsed the reformulation; tenure of country teams and mission chiefs remains a key issue.

*Source: FOURTEENTH PERIODIC MONITORING REPORT*

### 188.      The enhanced monitoring of the metrics is ongoing through the Accountability

### ppea2024055 - 188.      The enhanced monitoring of the metrics is ongoing through the Accountability

### Enhanced monitoring of country-team tenure metrics
- Monitoring is ongoing through the Accountability Framework (AF) and includes a breakdown of mission chief tenure and desk tenure by country groups.
- Median tenure (for mission chiefs) has hovered around 2.5 years, below the 3-year target.
- Intermediate operational target communicated to departments: target median tenure for mission chiefs at 2.7 years.
- So far, only two departments meet the intermediate target: MCD, EUR.
- NEW ACTION AND TIMELINE (1.3):
  - Enhance monitoring of the respective metrics, including by analytical country groups, with emphasis on FCS and SDS, at the summer Accountability Framework (AF) discussions by end-June 2022.
  - Maintain expectation that departments should aim for the three-year average tenure; start targeting median tenure for mission chiefs at 2.7 years as an intermediate operational target.
  - Compile best practices of ADs on ensuring that staff median tenure in country assignments is above the minimum of two years and disseminate them among ADs, by end-December 2022.
  - Status: Closed.
  - ACCOUNTABLE: HRD, ADs.
  - ORIGINAL TARGET DATE: December 2022.

### Analysis of country-team tenure (HRD Board paper EBAP/24/10)
- Paper completed by HRD on February 5, 2024; contains breakdown by departments/regions and country groupings (e.g., LIC, FCS, SDS, G-20), and by grade and types of mobility.
- Key analytical findings:
  - Much of the variability in country-team tenure is associated with country-group membership and staff grade, for both mission chiefs and desk economists, and importantly with staff mobility and separations.
  - Share of tenure under two years varies significantly by country groups.
  - For mission chief tenure, the share of tenure under two years hovers between 30 and 40 percent for all country groups considered.
  - For desk economists, there is more variability in the “under 2 years” shares; shorter tenure is less common in G-20 countries compared to other groups.
  - Over the past decade, average mission-chief tenure has increased modestly and unevenly toward the target of three years.
  - Average mission chief tenure reached 2.6 years at the end of FY2023.
  - Mission chief tenure ranges between 2.2 to 2.8 years across departments.
  - Tenure remains notably low for staff working with small developing states (SDS) and fragile and conflict-affected states (FCS).
  - Desk-economist tenure is broadly in line with mission-chief tenure.
- Observed drivers and impacts:
  - Mission chief tenure significantly impacted by factors outside departmental control: separations and interdepartmental moves (including promotions and lateral moves).
  - Intradepartmental moves (mobility over which departments have appreciable discretion) accounted for 36 percent of mission-chief assignment closures.
  - Increased country-team tenure often conflicts with other institutional priorities: staff mobility and career development.

### Trade-offs, risks, and metric refinement
- Paper conclusions:
  - Trade-offs and risks exist for both business-as-usual and increased country-team tenure.
  - Overemphasis on mission-chief and desk-economist tenure metrics might overstate their value as proxies for the quality of Fund engagement.
  - Other influences on quality of engagement include: tenure of the country reviewer in the front office, overall rotation of the country team, hand-over and knowledge-transfer practices, complexity of engagement, and level of engagement desired by the authorities.
  - Increased tenure poses risks for mobility, agility, talent management, and retention.
- Implications and next steps:
  - Adjustments to the tenure metric and target might be merited.
  - HRD continues consultations with SHRPs, area departments, SDS-WG, and FCS Community of Practice.
  - HRD keeps refining the metric and target; will discuss follow-up recommendations with Management.
  - Final proposal expected to be submitted by end-FY2025.
- NEW ACTION AND TIMELINE (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 (including Career Framework and Path and HRL policy) and present it to the Board by end-December 2023.
  - Status: Overdue but progressing.
  - ACCOUNTABLE: HRD.
  - ORIGINAL TARGET DATE: December 2023.
  - EXPECTED COMPLETION DATE: By end-FY2025.

### Handover practices, KMU work, and monitoring
- Web and knowledge resources:
  - Dedicated webpage created on KMU intranet with background on the handover project, video recording and materials from October 2022 peer learning event.
  - TRM-KMU took stock of existing guidelines, templates, checklists, training, contacts and other resources in FY Q3-Q4 2024.
  - A Fund-wide intranet site “one-stop shop on Country Assignment Handover under ‘Knowledge Exchange’” launched in May 2024.
  - Site shared with staff via Summer Update, an Intranet News article, The Weekly Roundup, and Viva Engage between July and August 2024. TRM-KMU provided a banner and instructions to link to this site from departmental sites.
- Departmental dissemination and practices:
  - APD requires all staff with country assignments ensure a proper handover using standard templates posted on the department’s website.
  - AFR posted departmental assignment handover guidelines in October 2022.
  - MCD updated and published handover guidelines on its website in October 2023, and on the Fund-wide intranet website in April 2024.
  - WHD updated its handover guidance and posted it on the WHD website.
  - EUR arranges periods of overlap for desks and mission chiefs, negotiates transitions, and approves handover missions whenever possible.
- NEW ACTION AND TIMELINE (Drawing on #2.1):
  - Set area departments’ standard procedures for country assignment handover and disseminate handover procedures on area departments’ websites by July 2022.
  - Status: Closed.
  - ACCOUNTABLE: KMU, ADs.
  - ORIGINAL TARGET DATE: July 2022.

### KMU survey on handover implementation (December 15, 2023)
- Survey logistics and responses:
  - KMU launched a second survey on December 15, 2023, inviting responses from all roles in all country teams.
  - Invitation sent to 198 Country Team email aliases (containing 2134 members).
  - Received 301 responses: 52 percent were desks economists and 16 percent mission chiefs.
  - Results were reviewed and feedback incorporated through the Knowledge Leaders Team (KLT). Management informed of results in late April 2024 via memorandum, report, and Power BI app.
- Key survey findings:
  - (i) Varying handover experiences.
  - (ii) Processes are not uniform or still not rigorously enforced.
  - (iii) Importance of overlaps and direct communication.
  - (iv) Need for more incentives and recognition for effective handovers.
  - (v) Challenges related to data and knowledge management.
- Follow-up and monitoring:
  - Memo to management contains specific recommendations to address issues.
  - TRM-KMU will continue monitoring progress, gauge satisfaction through annual surveys, inform management, and foster implementation of process improvements until January 2026.
- NEW ACTION AND TIMELINE (2.4):
  - Complementing annual OED surveys, 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, refine procedures as necessary, by October 2023.
  - Inform management about survey results and describe measures departments have already taken 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.

### OED survey on handling confidential information and engagement
- 2023 SPR OED survey conclusions:
  - Survey concluded in early April 2024 on Offices of Executive Directors’ views of Fund engagement.
  - Participation rate: 48 percent in 2023 compared to 75 percent in 2022 and 83 percent in 2021.
  - Over 90 percent of respondents were satisfied with country teams’ handling of confidential information (higher than in 2022).
  - Satisfaction in EMs and SDSs improved considerably by nearly 20 percentage points, with EMs having reached nearly 100 percent.
  - 2022 survey had shown 76 percent satisfaction on handling confidential information, broadly even across departments.
  - Executive Directors generally reported no incidents and highlighted staff’s professionalism and understanding of sensitivities.
- Monitoring and review notes:
  - NEW ACTION AND TIMELINE (4.4):
    - Monitor progress using the annual OED survey, with the expectation that the number of 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 in strengthening engagement with country authorities on the treatment of confidential information to be assessed in the next Interim Surveillance Review (ISR), by end-FY2024.
    - Status: Overdue but progressing.
    - ACCOUNTABLE: SPR.
    - ORIGINAL TARGET DATE: June 2024.
    - EXPECTED COMPLETION DATE: CY2026.
  - Note: The ISR has been cancelled; elements will be folded into the 2026 Comprehensive Surveillance Review (CSR). Scope of CSR under discussion.

### Working Papers (WPs) quality and departmental review procedures
- Reformulation and departmental responses:
  - Original MIP action: Adopt new procedures to ensure the quality of WPs.
  - Most area and functional departments have reviewed and revised procedures for the review and approval of WPs.
  - AFR: Research Advisory Group (RAG) reviews proposed WPs, revised “publication guidelines” posted on AFR website; RAG ToRs and clearance policies listed on AFR website.
  - EUR: Processes fully aligned with COM’s updated rules; publication of all WPs with EUR-related content centrally cleared in collaboration with COM.
  - MCD: Updated guidelines posted on website in December 2022.
  - APD: Procedures not posted on department’s website but fully aligned with Fund-wide COM guidance.
  - WHD: Updated guidance on review of analytical work; expanded analytical Working Groups.
  - FAD: Procedures published in “Documents” section of FAD Administrative Manual on Intranet.
  - SPR, FIN, RES, MCM: Follow procedures in line with Fund-wide guidance; RES requires WP clearance by a member of senior staff (generally division chief).
- Departmental quality assurance practices:
  - MCM: Division Chief initially clears the paper, informed by inputs from other MCM divisions and other departments when relevant; Front Office runs WP through Department Director for a second sign off for quality assurance.
- NEW ACTION AND TIMELINE (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: Closed.
  - ACCOUNTABLE: ADs and FDs.
  - ORIGINAL TARGET DATE: December 2022.

*Fourteenth Periodic Monitoring Report — International Monetary Fund*

### 202.      This action was not completed by the original deadline of May 2023 because the

### 202.      This action was not completed by the original deadline of May 2023 because the

### Action summary and reason for delay
- The action was not completed by the original deadline of May 2023 because the timeline for the modernization project has been revised.
- The project to build a Common Review System was approved in May 2023.
- The full system is planned to be deployed in three releases in 2025.

### New action and timeline
- Action 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: Overdue but progressing
- ACCOUNTABLE: ITD, SPR.
- ORIGINAL TARGET DATE: May 2023.
- EXPECTED COMPLETION DATE: CY2025

### Context within the Fourteenth Periodic Monitoring Report — Slippages framework (Section III)
- Section III introduces the development of a slippages framework to assess the impact of slippages in the implementation of open management actions (paragraphs 203–206).
- Key points from paragraphs 203–206:
  - Executive Directors requested future PMRs include assessment of impact of slippages to focus Board review on the most material year-to-year developments and promote greater accountability.
  - Directors agreed it would be 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.
  - IEO recommendations and MIP actions do not explicitly indicate relative importance or prioritization based on risk considerations.
  - Directors welcomed ongoing efforts to develop a slippages framework, including guiding principles (see note 26).
  - Directors emphasized alignment with the broader institutional ERM framework, the need for details on timeline and resource implications, roles/responsibilities/accountability, piloting the framework in the ERP MIP, and ORM involvement.
  - Lessons from the pilot emphasize that the framework should be flexible yet robust, allow evaluation of individual actions in combination, and require ex-ante risk assessment during the MIP process with timely refresh after actual slippages.

### Progress on the pilot (Paragraph 207)
- The pilot has followed largely the prototype slippages framework principles and steps (see note 27).
- Over the past year, the management actions in the pilot ERP MIP have been implemented as scheduled without any actual slippages.
- Because there were no actual slippages, there was no need for a refresh of staff’s ex-ante risk assessment conducted during the MIP process.

### Next steps (Paragraph 208)
- The Fifteenth PMR is expected to provide an assessment of progress in implementing the ERP MIP, drawing on the ex-ante risk assessment in the MIP, updated as necessary to reflect the risk impact of actual slippages (if any).
- In preparing the Fifteenth PMR, OIA will request accountable departments to provide an ex-post update to their ex-ante risk assessments to reflect the enterprise risks from actual slippages so that the risk profile can be suitably refreshed in the PMR, taking account of aggravating and mitigating factors.
- A recommendation for moving forward with the slippages framework on a more permanent basis is expected to be issued following:
  - the implementation of the MIP on the ERP pilot,
  - an assessment of lessons from the pilot and the prototype slippages framework, and
  - an amendment of relevant decisions.

### Proposed decision
- The Board reviewed the implementation status of Management Actions in Response to Board-Endorsed IEO Recommendations and endorsed the assessment of their implementation progress as proposed in the Fourteenth Periodic Monitoring Report (PMR) on the Status of Management Implementation Plans (MIPs) in Response to Board-Endorsed Independent Evaluation Office (IEO) Recommendations (SM/24/ 264).

*FOURTEENTH PERIODIC MONITORING REPORT — INTERNATIONAL MONETARY FUND*

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_Source: https://www.imf.org/-/media/files/publications/pp/2024/english/ppea2024055.pdf_