## Ex Post Assessments of Members with a Longer-Term Program Engagement—Revised Guidance Note

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### A. Members Subject to an EPA and Timing of EPAs
- An EPA is required for all members considered as having LTPE, defined as having in place a Fund-supported financial arrangement for at least seven of the past ten years.
- Time spent under the Policy Support Instrument (PSI) and precautionary arrangements, including the precautionary use of Flexible Credit Line (FCL) or the precautionary use of the GRA or PRGF-ESF/PRGT resources that remain undrawn throughout the arrangement, does not count towards LTPE.
- If a member ultimately draws upon an arrangement that had been considered precautionary at the time of approval, the entire length of the arrangement would count towards LTPE.
- For canceled arrangements, only the time until their cancellation is counted.
- SPR will establish annually, in consultation with area departments, the list of members with LTPE and the list of members for which an EPA is expected to be considered by the Board during the following one-year period; these lists will be included in the annual report on the incidence of LTPE and published on the Fund’s external website.
- For members identified as meeting the LTPE definition and for whom an EPA has not been prepared in the past five years:
  - If a successor arrangement is contemplated, EPAs should be prepared in time to be considered by the Board prior to a request for a new arrangement.
  - EPAs should preferably be prepared (in draft form) and circulated to departments prior to the policy note for an Article IV consultation when the existing arrangement is substantially complete and before negotiations begin on a successor arrangement.
  - Where not possible, a draft EPA should be prepared prior to the preparation of the policy note for the final review of the existing arrangement.
  - In exceptional cases, the EPA could be considered in a stand-alone Board meeting.
  - If no successor arrangement is contemplated, an EPA should be prepared such that it is considered by the Board with the first post-program Article IV consultation.
  - All members identified as meeting the LTPE definition in the annual report should have an EPA, even if the member has fallen below the seven-out-of-ten year threshold between the expiration of the arrangement and Board consideration of the EPA.
- For any member that continues to meet the LTPE definition, there should be an interval of at least five years between successive assessments.
- Two EPA document types per the Omnibus Paper on Easing Work Pressures:
  - “EPA report” — prepared for the first time LTPE is assessed for the member.
  - “EPA update” — a streamlined subsequent assessment, if qualifications described in ¶8 are met.
- For countries that graduate from Fund-supported programs within the five-year period after completing an EPA, a new EPA is not required; however, if a member remains above the seven-out-of-ten year threshold at the end of the five-year interval and a successor arrangement is contemplated, an EPA (updated version, if qualified) would need to be completed.

### B. Content of EPA Reports
- Purpose: provide “an analysis of the economic problems facing the country, a critical and frank review of progress during the period of Fund-supported programs, and a forward-looking assessment that takes into account lessons learned, and presents a strategy for future Fund engagement”.
- EPAs should be concise, analytically oriented, selective, and focused on issues critical for program design and performance and policy priorities for successor programs.
- EPAs should assess appropriateness of the Fund’s overall approach, soundness of its advice, and prospects for graduating from Fund programs, including an explicit exit strategy where appropriate.
- “EPA report” issues to be considered (reflecting on the past):
  - Why has the country had an LTPE with the Fund? What was the rationale for Fund engagement?
  - What were the goals of the programs and to what extent were they achieved?
  - Has LTPE interfered with or contributed to (i) building technical capacity; (ii) strengthening domestic institutions; (iii) domestic policy ownership and formulation?
  - How accurate were program projections of key assumptions and objectives, and were the risks correctly identified?
  - In hindsight, was the macroeconomic and structural policy content of the program appropriate to meet the program’s objectives? Was Fund conditionality appropriately set in terms of addressing critical macroeconomic issues and engendering the appropriate sequencing and speed of reforms? Were economic policies modified in response to exogenous shocks or to other changing circumstances?
  - Was program implementation in line with expectations? To the extent that implementation capacity and ownership considerations affected implementation, were these appropriately taken into account in program conditionality and technical assistance?
  - How did Bank-Fund collaboration (as well as cooperation with other MDBs and official bilateral creditors) affect the achievement of program objectives?
- “EPA report” issues to be considered (looking forward):
  - What are the lessons learned from this analysis, including for program design and future engagement?
  - What is the rationale for continued program engagement, and what are the risks? How would we judge whether continued program engagement was succeeding or failing?
  - What are the future priorities for the program?
- Length guidance:
  - EPA reports should remain below 5,000 words (excluding tables of content, list of acronyms, tables and appendices).
  - EPA updates are expected to be around 2,500 words (not more than half the length of a full report).
- “EPA updates”:
  - Streamlined and concise, focusing on whether staff drew on lessons from the first EPA, macroeconomic performance since then (including results under a Fund-supported program), and priority areas for any future program.
  - An “EPA report” (full) would be needed if, during the period relevant for the update, a program has been canceled or interrupted for more than six months.
  - The Executive Board must be informed of the upcoming preparation of a streamlined EPA at the penultimate review of the current arrangement—or at an informal country matters session, if no current arrangement exists—up to six months in advance of the required EPA, allowing Directors to request a comprehensive EPA on a case-by-case basis.
- Multiple-country EPA option available where common characteristics justify it.
- Transitional suspension: a one-year suspension, until August 30, 2010, on the requirement for an EPA update for members with LTPE if the original report was issued more than five years earlier; affected countries include, over 2009 and 2010, Albania, Benin, Cameroon, Chad, Gambia, Kyrgyz Republic, Madagascar, Malawi, and Mauritania—if these members request a successor program.

### C. Choice of Team Leader and Composition of EPA Team
- First EPA for a member:
  - Undertaken by an interdepartmental team and led by a mission chief from a department other than the home area department.
  - Team should include representatives from the area department and one each from SPR and at least one other functional Department (in most cases FAD, FIN, MCM, RES, and/or STA).
- Team nominations and selection:
  - Team leader is nominated by the home area department.
  - SPR representative generally nominated by the SPR Senior Personnel Manager, excluding the review officer or the economist assigned to the country unless assignment < one year.
  - Functional department representatives selected by the home area department, but representative chosen by the functional department, and will not normally include the department’s review officer or economist assigned to the country unless assignment < one year.
- EPA update teams:
  - Expected to be smaller than first EPA teams; preferable for the team leader to be from a department other than the home area department.
  - If a successor arrangement is being considered or significant Fund policy issues are involved, SPR participation might be useful.
  - Team leader should not be the current or previous mission chief.
- Consultation and external inputs:
  - Teams expected to consider views of the resident representative and the World Bank; these representatives are not required full team members and the World Bank does not “sign off” on the report.
  - EPA teams may draw on outside experts, with due regard to confidentiality.
  - Reports normally prepared at headquarters; teams encouraged to consult donors, outside experts, market participants, and country authorities as resources permit.
  - EPA team leader may visit the country before finalizing the report on an as-needed basis, especially for the first EPA report.

### D. Review and Presentation
- Presentation formats:
  - First EPA should be a stand-alone report.
  - EPA updates could be included as an appendix or supplement to another staff report.
  - If member with LTPE also had exceptional access and an Ex Post Evaluation (EPE) is required, consideration could be given to presenting the EPA with the EPE in a single document, ensuring both exercises’ issues are adequately covered.
- Review and clearance:
  - Draft EPA reviewed by departments; final content decisions are the responsibility of the EPA team leader.
  - Report should be sent to management prior to or concurrently with the policy note for the mission during which the EPA will be discussed.
  - Cover note conveying the EPA to management is signed by the head of the home area department and the SPR review officer and should set out main conclusions and any dissenting views.
  - Draft EPA discussed with the authorities; factual corrections and other appropriate revisions may be made before Board circulation; any change must be flagged to the area department and SPR and approved by management.
  - Authorities’ response should be included in the EPA report, preferably as an Annex; following EPA discussions, authorities can provide a statement regarding the EPA staff report and Executive Board Assessment, which may be published with related documents.
- Board discussion timing:
  - EPA report would generally be discussed by the Board jointly with either the Article IV consultation or the last program review; in rare cases, a stand-alone Board meeting could be held.
- Post-Board changes and publication:
  - After issuance to the Board and before publication, any changes must adhere to the transparency policy on corrections and deletions.
  - Publication of the EPA report and its PIN is voluntary but presumed; procedure for consent is on a non-objection basis (non-objection basis comes into effect on March 17, 2010).
  - Absent objection, a PIN would be issued after the Board meeting and the EPA report published promptly thereafter.
  - Cases for PINs and statements:
    - If EPA discussion combined with an Article IV consultation, only one PIN issued covering both; background section includes one to two paragraphs providing EPA background; summing up includes short references to EPA discussion focused on forward-looking policy lessons.
    - After meetings combining UFR and EPA discussions, both a PIN and a press release with the chairman’s statement are issued; chairman’s statement will refer to the UFR discussion and not to the EPA; the PIN on the EPA will be concise with background and summing up focused on past policies and lessons for future challenges.
    - For stand-alone EPA meetings or multi-country EPAs, a PIN will be issued covering the ground as above; in multi-country cases, consent to publish needed from all concerned members.
  - A brief sentence stating the Board’s views on possible future Fund involvement may be included in the PIN, especially if the EPA report references a potential successor arrangement.
  - For an EPA update subsumed in another report, the summing up should usually refer to it; when part of an Article IV discussion, mentioning the EPA update in the background section of the PIN is optional. When part of a UFR discussion, the chairman’s statement should not mention the EPA update.
  - If authorities do not consent to publication of a PIN, a brief factual statement will be issued to inform the public that the discussion took place and included an EPA.

*Source: _022510a*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2010/_022510a.pdf_