## _060816

## Source details

**Canonical URL:** [_060816](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2016/_060816.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2016/_060816.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2016/_060816.pdf.json)

---

### Policy priorities — Overview and Work Program
- GPA called on member countries to reinforce commitment to strong, sustainable, inclusive, job-rich, and more balanced global growth through a three-pronged approach: monetary, fiscal, and structural actions.
- Fund support: clarify contours of available policy space; provide more tailored financial support and capacity development; address new challenges.
- GPA approach: agile, integrated, and member-focused.
- Spring 2016 Work Program (next 12 months):
  - Translates Spring 2016 GPA and IMFC communiqué into an Executive Board agenda for 12 months with emphasis on granular analyses to arrive at a well-balanced policy mix.
  - Key work streams to be presented to the Board:
    - Assessment of fiscal space and unconventional monetary policies to guide Article IV consultations.
    - Macrofinancial linkages.
    - Trade policy.
    - Update to the institutional view on capital flows.
    - Emerging issues: natural disasters and climate change in small states, inequality in developing countries, governance.
    - Strengthening the international monetary system: SDR allocation and role of the SDR, developing the global financial safety net (GFSN), and several works on sovereign debt.
  - Several projects will be presented in Article IV reports and potential Staff Discussion Notes (SDNs) not reflected in the Work Program.
  - Increased program engagement expected to create new work pressures.

### Conjuncture and risks
- Growth developments:
  - Growth in advanced economies: moderate.
  - Emerging and developing economies: slowing further.
- Key downside risk drivers:
  - Weak worldwide demand.
  - Commodity exporters particularly hard hit after terms of trade collapses; negative impact on commodity exporters appears to be more than offsetting positive impact on importers.
  - Financial conditions have tightened in many economies despite partial recovery.
  - Large fluctuations of major currencies by historical standards and periodic capital flow volatility.
  - Low productivity growth predating the crisis may fail to recover to average historical levels.
  - China transitioning to more sustainable growth with potential global spillovers.
  - Geopolitical conflicts, terrorism, refugee flows, potential U.K. exit from the European Union, and global epidemics as additional risks.
- Governance of GPA and Board engagement:
  - Joint Board sessions on WEO, GFSR, and Fiscal Monitor in September 2016 and March 2017.
  - WEMD Updates in July 2016 and January 2017.
  - Formal discussion on Macroeconomic Developments and Prospects in Low-Income Developing Countries in November 2016.
- Balance of risks and spillovers:
  - Early Warning Exercise in September 2016 and April 2017 to discuss low-probability/high-impact risks.
  - October 2016 WEO spillover chapter to focus on transitions and disruptions shaping global outlook, including spillovers from China’s slowdown and migration-related spillovers.

### Addressing policy challenges — Monetary, macro-financial, and exchange rate policies
- Central aim: clarify contours of available policy space and move toward a more balanced and potent policy mix to support demand, bolster resilience, and deepen structural reforms.
- Monetary policy guidance:
  - Monetary policy should remain accommodative in advanced economies with negative output gaps and low inflation.
  - Monetary policy space is strained; unconventional policies’ implications and spillovers are uncertain.
  - Exchange rates should be flexible when feasible.
- Planned Board engagement and analytical work:
  - Staff to analyze easing the zero lower bound constraint on policy rates, including impact of negative interest rates on monetary transmission and bank profitability; staff will brief the Board in due course.
  - Analysis of spillovers from prolonged unconventional monetary policies; findings to be reflected in Article IV consultations.
  - Work on transmission of external shocks and relative effectiveness of policy tools (monetary policy, FX intervention, regulatory measures) within an integrated framework; integration into Article IV consultations.
  - ESR scheduled for July 2016 to update global imbalances and provide multilaterally consistent assessments; enhancements to EBA tools including treatment of commodity terms of trade and income balance.
  - March 2017: Board engagement on Review of the Multiple Currency Practices (MCP) Policy—Preliminary Considerations.
- Capital flow management:
  - Review of IMF institutional view on liberalization and management of capital flows after three years of application.
  - July 2016: Board engagement on Handling Capital Flows: Review of Country Experiences and Emerging Issues.
  - December 2016: formal Board discussion to follow.
  - Future work to integrate capital flow management and macroprudential policies.
- Macro-financial surveillance and vulnerabilities:
  - December 2016: Board discussion on Approaches to Macro-Financial Surveillance (mainstreaming macro-financial analysis; early cases among 67 countries).
  - October 2016 GFSR chapter to study interactions between monetary policy transmission and financial structure, including nonbank growth effects.
  - Develop tools to assess risks from rising corporate and household indebtedness and unfinished bank balance sheet repair; focus on fiscal approaches to minimize excessive private leverage and effective corporate debt resolution components.
- De-risking and correspondent banking:
  - Ongoing dialogue with authorities, standard setters, industry, FSB, World Bank.
  - Staff to deepen analysis of extent, scope, and macroeconomic impact of reductions in financial services; Board briefing in June 2016 on SDN findings.
  - February 2017: Board discussion on Recent Trends in Correspondent Banking Relationships—Initial Considerations.
- Data gaps:
  - August 2016: First Progress Report of DGI-2 to Board including final action plans for G-20 and relevant international organizations.
  - September 2016: presentation of DGI-2 action plans to G-20 Finance Ministers and Central Bank Governors.
  - July 2016: paper on IMF Collaboration with the FSB on Data for Global-Systematically-Important Banks to be circulated.
- Regulatory reforms and FSAPs:
  - Board briefings in July and December 2016 on Latest Developments in Regulatory Reforms.
  - Board discussion of the FSAP assessment for the United Kingdom in June 2016.
  - Second half of 2016: seven mandatory FSAP assessments (Finland, Germany, Ireland, Mexico, Russia, Sweden, Turkey) and four non-mandatory assessments (Belarus, Lebanon, Madagascar, Zambia).
  - Early 2017: three FSAPs planned (Netherlands mandatory; Guyana and New Zealand non-mandatory).
  - November 2016: Board discussion on Ensuring Financial Stability in Countries with Islamic Financial Systems.
  - March 2017: Board briefed on Managing Systemic Financial Sector Distress.

### Addressing policy challenges — Fiscal policies
- Fiscal role and guidance:
  - Fiscal policy should do more in some cases; monetary policy cannot bear the entire burden.
  - Countries with fiscal space should ease fiscal policy to support demand; others with high debt and low public savings need credible medium-term consolidation plans.
  - Emphasize more efficient and growth-friendly fiscal frameworks, public investment efficiency, and social insurance design.
  - Building fiscal capacity is a key challenge for fragile states.
- Fiscal workstreams and Board items:
  - Fiscal space:
    - Staff to develop considerations on assessing fiscal space (state of economy, debt and growth dynamics, financing costs, spending needs, fiscal rules and frameworks).
    - June 2016: Board briefing on Assessing Fiscal Space: An Initial Consistent Set of Considerations.
    - May 2017: Board briefing on Social Insurance in a Changing World.
  - Containing leverage:
    - October 2016: Board briefing on Tax Policy, Leverage, and Macroeconomic Stability.
    - October 2016 Fiscal Monitor to examine fiscal policy’s role in limiting excessive leverage and facilitating deleveraging after financial crises.
  - Infrastructure policy support and tools:
    - Pilot initiative to increase public investment efficiency and identify options to sustainably scale up infrastructure spending.
    - Tools/models: Public Investment Management Assessment (PIMA); PPP Fiscal Risk Assessment Model (P-FRAM); Debt-Investment-Growth modeling framework (DIG); Debt Sustainability Assessments (DSA).
    - Several tools developed with the World Bank; pilot country experiences to be shared with the Board.
  - Domestic revenue mobilization:
    - Continued Fund support for boosting domestic revenue mobilization, tax policy/legal frameworks, and capacity strengthening.
    - Work on international taxation issues in close collaboration with World Bank and via joint platform with OECD, UN, World Bank.
    - Approximately 25 countries identified as pilot cases for intensified Article IV coverage on domestic revenue mobilization.
    - Platform for Collaboration on Tax launched in April to formalize discussions, capacity-building, and joint guidance; meetings three times a year and a major conference once every two years.
    - Joint outputs: tools for taxation of multinational enterprises; support to fix gaps/loopholes; mechanisms to exchange information on profit shifting and illicit financial flows; joint policy papers on taxation and the informal economy.
  - Fiscal management in fragile states:
    - March 2017: Board briefing on Building Fiscal Capacity in Fragile States (framework for building fiscal management capacity; sequencing of reforms; transparency requirements; modes of technical assistance).

### Addressing policy challenges — Structural reforms (summary)
- Structural reforms expected to contribute more to stimulate global growth; some reforms improve productivity and potential output and can contribute to near-term growth when implemented with demand-supporting policies.
- Staff to increase focus on structural reforms in Article IV consultations, taking into account country-specific macroeconomic conditions, stage of development, cyclical position, and policy space.
- Toolkit on structural reforms to guide country teams; comprehensive dataset to incorporate structural reform indices in the real and financial sectors for all countries.
- Deliverable timing:
  - Follow-up paper (May 2017) building on October 2015 Board paper to update on progress.
  - Ongoing work to assess fiscal costs and gains of labor and product market reforms and implications for design of fiscal rules.

---

### Delivering on structural reforms and supporting trade — Macro-structural reforms and trade
- Macro-structural reforms:
  - Staff will strengthen analytical underpinnings of operational work on macro-structural reforms, with focus on emerging markets and developing countries.
  - Construct a comprehensive dataset incorporating structural reform indices in the real and financial sectors for all countries.
  - Deliverables:
    - Follow-up paper in May 2017 updating Board on progress.
    - Ongoing assessment of fiscal costs and gains of labor and product market reforms and implications for fiscal rules.
- Reinvigorating trade:
  - Analytical work to investigate trade slowdown:
    - One of the October 2016 WEO analytical chapters to examine extent of trade slowdown across economies/products, role of weak post-crisis recovery, and long-term factors holding back trade growth.
    - Reference Note on the Trans-Pacific Partnership (TPP)—Conceptual Framework to be circulated to the Board in July 2016.
    - Broader Reference Note on Trade and Trade Policy Issues to be circulated in November 2016, updating the 2010 Reference Note on Trade Policy.
- Strengthening institutions — Capacity development:
  - Continued tailored technical assistance and training to complement policy analysis and advice; strengthened monitoring of results.
  - Revamped curriculum and synergies between training, TA, and surveillance.
  - Supplementary information in FY 2016 Administrative and Capital Expenses and Output Cost Estimates (to be issued in July).
  - Briefing on Evolution of Fund Capacity Development Since 2013 and Initial Reflections on the 2017-18 Capacity Development Review scheduled in February 2017.
- Strengthening institutions — Governance and transparency:
  - Review of the Role of the Fund in Governance Issues (January 2017) to take stock of handling governance/corruption issues in surveillance and program work and assess implementation of the 1997 guidelines.
  - Staff actions on entity transparency: address transparency in Article IVs and programs; conduct AML/CFT assessments and FSAPs; provide capacity development; contribute to design of further guidance on transparency standards.
- Emerging issues and initiatives:
  - Climate change: tool to evaluate fiscal and other measures for meeting mitigation pledges; November 2016 Board discussion on Small States’ Resilience to Natural Disasters and Climate Change: Role for the IMF; regional analysis with focus on sub-Saharan Africa.
  - Demographic transitions and migration: briefing on SDN on Emigration and its Impact on Eastern Europe in June; study Harnessing the Demographic Dividends in sub-Saharan Africa.
  - Gender: continue integration of gender analysis when macrocritical following pilot exercises in eight countries; Financial Access Survey pilot for gender-related statistics; analytical work on gender inequality, income inequality, and growth.
  - Inclusion: November 2016 Board briefing on Understanding Inequality in Developing Countries; March 2017 briefing on Update on the IMF’s Deliverables for the 2030 Developmental Agenda; regional analyses including Central and Southeastern Europe and Middle East and North African economies.
  - Technology (fintech): interdepartmental working group; objective to produce a Board paper in late 2017 on the impact of new technology on finance; broader work on technology’s effects on labor markets, macro policies, and statistics.

### A more resilient international monetary system and GFSN
- Stocktaking identified reform areas: crisis prevention and adjustment mechanisms; enhanced global cooperation on issues affecting global stability; and a large and coherent GFSN.
- Mechanisms for crisis prevention and adjustment:
  - Review of the Low-Income Countries Debt Sustainability Framework: Board engagement in September 2016; formal Board discussion in December 2016.
  - Update of Application of the Medium-Term Debt Management Strategy (May 2017) to review MTDS experience in several low-income countries.
- State-contingent financial instruments (SCFIs):
  - Board discussion in January 2017: The Role of State-Contingent Financial Instruments in Preventing and Resolving Sovereign Debt Crises.
- Debt restructuring:
  - Debtor-Creditor Engagement in Sovereign Debt Restructurings: Board engagement in November 2016, including discussion of the Fund’s Lending-into-Arrears policy for private creditors.
- Governance reform and quota/funding reviews:
  - Board engagement on Quotas—Data Update and Simulations in the summer (database through 2014).
  - Board discussions on progress on the Fifteenth Review in September 2016 and March 2017.
  - Discussions on the future of borrowed resources (expiration of 2012 bilateral agreements and the New Arrangements to Borrow) in the summer and October 2016.
- Contributing to a coherent GFSN — Lending toolkit and monitoring:
  - Board briefing on New Facilities: Filling Gaps in the Global Financial Safety Net in June 2016.
  - Financial Safety Net for Developing Countries—Further Consideration (September 2016) to assess tailoring program engagement with PRGT-eligible countries.
  - Poverty Reduction and Growth Trust—Review of Interest Rate Structure (September 2016) to determine PRGT interest rates for 2017-18.
  - Annual Update on Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries to be circulated in April 2017.
  - May 2017: Board discussion on Eligibility to Use the Fund’s Facilities for Concessional Financing (PRGT eligibility framework and list).
  - Board discussion on Strengthening the Framework for Post-Program Monitoring in July 2016 to examine scope for strengthening PPM content and review thresholds.
  - November 2016: Board engagement on Social Objectives in PRGT Supported Programs: What Works?.
- Role of the SDR:
  - Board engagement in June 2016: The Case for a General Allocation of SDRs During the Eleventh Basic Period.
  - Board briefed on the Experience with the Use of the SDR in July 2016.
  - The Role of the SDR: Initial Considerations engaged in January 2017.
  - Board briefed on Transition to the New SDR Basket—Update on Fund and Member Operations (date TBD) regarding operational considerations for inclusion of the renminbi.

---

### Adequate financial, human, and technological resources
- Budget, compensation, and finances:
  - Executive Directors engaged early on budget process.
  - Starting September 2016: Budget Committee meeting to engage on the FY 16 Budget Outcome and FY 17 Implementation.
  - Fall information note: Roadmap to Budget, Compensation, and Income covering interrelated work strands and upcoming decisions.
  - Subsequent meetings to address contours of the FY 2018-20 medium-term budget, initial budget proposals, and the formal budget meeting, aiming for substantive discussion before the Spring Meetings.
  - 2017 Review of Staff Compensation and paper on Staff Recruitment and Retention Experience in CY 2016 to be discussed in early March 2017.
  - Fund’s Income Position for FY2017 and FY2018–19 planned to be discussed on same day as Budget meeting in April 2017.
- Audit and investment policies:
  - External Audit Committee briefings in July 2016 and January 2017.
  - Staff briefing on the Fund’s Financial Statements and Other Audit Related Matters in June 2016.
  - June 2016: Board engagement on Review of the Investment Strategy for the Trust Accounts—Initial Considerations.
- Managing human resources:
  - 2016 Diversity and Inclusion Annual Report to be discussed in November 2016 reviewing progress toward 2020 diversity benchmarks.
  - Board discussion in January on main elements of The Fund’s HR Strategy.
- HQ1 Renewal:
  - Renovation continuing; first phase covering second floor, atrium and lower levels nearing completion in 2016.
  - HQ1 Renewal Project Quarterly Progress Reports to update the Board.
- Managing risks:
  - Work Program integrates risk assessment within strategic planning, accountability framework, and budget cycle with emphasis on stronger risk ownership and cross-department integration.
  - Board will discuss the 2016 Risk Report in October 2016 and Risk Report—Spring Update in March 2017.
- Learning and knowledge management:
  - November 2016: Board briefed on Implementation of the IMF Communications Strategy.
  - January 2017: Board informed of delayed Article IV consultations via Annual Report on Delayed Article IV Consultations.
  - IEO evaluations:
    - The IMF and the Crisis in Greece, Ireland, and Portugal: An Evaluation by the IEO planned for Board discussion in July 2016.
    - Evaluation of The IMF and Social Protection planned for March 2017.
    - Management implementation plan for Behind the Scenes with Data at the IMF: An IEO Evaluation to be prepared in summer 2016.
  - Interdepartmental group to deliver Management recommendations on knowledge management by end-July 2016; report expected to include actions to make high-quality web-based information available and improve internal search, clarify roles, and consider a permanent knowledge management structure.
- Implementation of the Fall 2015 Work Program:
  - Implemented broadly as planned with Executive Board briefings on regional outlooks and policy topics.
  - Most policy meetings concluded on schedule though some experienced substantial delays; several country items—particularly program reviews—also experienced delays.

*Source: _060816*

### 1. Policy priorities. The Managing Director’s Global Policy Agenda (GPA) presented

### 1. Policy priorities. The Managing Director’s Global Policy Agenda (GPA) presented

### Overview and key message
- The GPA called on member countries to reinforce commitment to strong, sustainable, inclusive, job-rich, and more balanced global growth through a three-pronged approach: monetary, fiscal, and structural actions.
- The Fund will support members by clarifying the contours of available policy space, providing more tailored financial support and capacity development, and addressing new challenges.
- The GPA follows the approach of being agile, integrated, and member-focused.

### Spring 2016 Work Program (next 12 months)
- Translates Spring 2016 GPA and IMFC communiqué into an Executive Board agenda for 12 months.
- Emphasis on granular analyses to arrive at a well-balanced policy mix for member countries.
- Key work streams and topics to be presented to the Board:
  - Assessment of fiscal space and unconventional monetary policies to guide Article IV consultations.
  - Macrofinancial linkages.
  - Trade policy.
  - Update to the institutional view on capital flows.
  - Emerging issues: natural disasters and climate change in small states, inequality in developing countries, governance.
  - Strengthening the international monetary system (IMS): papers on SDR allocation and role of the SDR, developing the global financial safety net (GFSN), and several works on sovereign debt.
- Several projects will be presented in Article IV reports and potential Staff Discussion Notes (SDNs), which are not reflected in the Work Program.
- Increased program engagement expected to create new work pressures.

### Projected workload
- Overall workload in the next 12 months is expected to increase.
- Workload on policy and administrative items projected to be broadly comparable to the Fall 2015 Work Program.
- A pilot exercise to assess resource implications of the Board’s Work Program is underway; the Board will be briefed on this work this Fall.

### Conjuncture and risks (I. Conjuncture and Risks)
- Growth developments:
  - Growth in advanced economies: moderate.
  - Emerging and developing economies: slowing further.
- Key causes and features of downside risks:
  - Weak worldwide demand.
  - Commodity exporters particularly hard hit after terms of trade collapses.
  - Negative impact on commodity exporters appears to be more than offsetting positive impact on importers.
  - Financial conditions have tightened in many economies despite partial recovery.
  - Large fluctuations of major currencies by historical standards and periodic capital flow volatility.
  - Low productivity growth predating the crisis may fail to recover to average historical levels.
  - China transitioning to more sustainable growth with potential global spillovers.
  - Geopolitical conflicts, terrorism, refugee flows, potential U.K. exit from the European Union, and global epidemics as additional risks.
- Governance of GPA and Board engagement:
  - GPA to synthesize messages from flagship products, review implementation over past six months, identify emerging policy challenges/solutions, and review Fund’s support role.
  - Global economic developments to be discussed in joint Board sessions on the World Economic Outlook (WEO), Global Financial Stability Report (GFSR), and Fiscal Monitor in September 2016 and March 2017.
  - World Economic and Market Developments (WEMD) Updates in July 2016 and January 2017.
  - Formal discussion on Macroeconomic Developments and Prospects in Low-Income Developing Countries in November 2016.
- Balance of risks and spillovers:
  - Early Warning Exercise in September 2016 and April 2017 to discuss low-probability/high-impact risks.
  - October 2016 WEO spillover chapter to focus on transitions and disruptions shaping global outlook, including spillovers from China’s slowdown and migration-related spillovers.

### Addressing policy challenges (II. Addressing Policy Challenges)
- Central aim: clarify contours of available policy space and move toward a more balanced and potent policy mix to support demand, bolster resilience, and deepen structural reforms.

#### A. Monetary, Exchange Rate, and Macro-Financial Policies
- Managing monetary policy trade-offs:
  - Monetary policy should remain accommodative in advanced economies with negative output gaps and low inflation.
  - Monetary policy space is strained; unconventional policies’ implications and spillovers are uncertain.
  - Exchange rates should be flexible when feasible.
  - Global imbalances narrowed via terms of trade developments, but net creditor/debtor stock positions continue to expand.
- Policy response and planned Board engagement:
  - Staff to analyze easing the zero lower bound constraint on policy rates, including impact of negative interest rates on monetary transmission and bank profitability; staff will brief the Board in due course.
  - Analysis of spillovers from prolonged unconventional monetary policies, with findings reflected in Article IV consultations (e.g., EUR cross-country selected issues papers).
  - Work on transmission of external shocks and relative effectiveness of policy tools (monetary policy, FX intervention, regulatory measures) within an integrated framework; integration into relevant Article IV consultations.
- External balances and exchange rates:
  - External Sector Report (ESR) scheduled for July 2016 to update global imbalances and provide multilaterally consistent assessments of external sector positions and policies of large economies.
  - Enhancements to External Balance Assessment (EBA) tools, including treatment of commodity terms of trade and income balance.
  - March 2017: Board engagement on Review of the Multiple Currency Practices (MCP) Policy—Preliminary Considerations (assessing exchange and payment systems developments since 1981).
- Capital flow management:
  - Review of the IMF’s institutional view on liberalization and management of capital flows after three years of application.
  - July 2016: Board engagement on Handling Capital Flows: Review of Country Experiences and Emerging Issues.
  - December 2016: formal Board discussion to follow.
  - Future work will integrate capital flow management and macroprudential policies for a holistic view.

- Enhancing macro-financial surveillance:
  - December 2016: Board discussion on Approaches to Macro-Financial Surveillance (mainstreaming macro-financial analysis; early cases among 67 countries).
  - October 2016 GFSR analytical chapter to study interactions between monetary policy transmission and financial structure, including whether growth of nonbanks dampens monetary policy shocks.
  - Work to develop analytical tools to assess risks from rising corporate and household indebtedness and unfinished bank balance sheet repair; focus on fiscal approaches to minimizing excessive private leverage and identifying components of effective corporate debt resolution frameworks.

- De-risking and correspondent banking:
  - Ongoing dialogue with authorities, standard setters, industry, and international organizations (FSB, World Bank).
  - Staff to deepen analysis of extent, scope, and macroeconomic impact of reductions in financial services; Board briefing in June 2016 on SDN findings.
  - February 2017: Board discussion on Recent Trends in Correspondent Banking Relationships—Initial Considerations.

- Data gaps:
  - August 2016: First Progress Report of the Second Phase of the G-20 Data Gaps Initiative (DGI-2) to be issued to the Board, including final action plans for G-20 and relevant international organizations.
  - September 2016: presentation of DGI-2 action plans to the G-20 Finance Ministers and Central Bank Governors for endorsement.
  - July 2016: paper on IMF Collaboration with the Financial Stability Board on the Data for Global-Systematically-Important Banks to be circulated.

- Managing vulnerabilities and regulatory reforms:
  - Board briefings in July and December 2016 on Latest Developments in Regulatory Reforms.
  - Board discussion of the FSAP assessment for the United Kingdom in June 2016.
  - Second half of 2016: seven mandatory FSAP assessments (Finland, Germany, Ireland, Mexico, Russia, Sweden, Turkey) and four non-mandatory assessments (Belarus, Lebanon, Madagascar, Zambia).
  - Early 2017: three FSAPs planned (Netherlands mandatory; Guyana and New Zealand non-mandatory).
  - November 2016: Board discussion on Ensuring Financial Stability in Countries with Islamic Financial Systems.
  - March 2017: Board briefed on Managing Systemic Financial Sector Distress (summarizing Fund policy advice on managing systemic financial sector crises).

#### B. Fiscal Policies
- Harnessing fiscal policy for growth and resilience:
  - Fiscal policy should do more in some cases; monetary policy cannot bear entire burden.
  - Countries with fiscal space should ease fiscal policy to support demand; others with high debt and low public savings need consolidation plans.
  - More efficient and growth-friendly fiscal frameworks can support demand and resilience; improvements in public investment efficiency and social insurance design are highlighted.
  - Building fiscal capacity is a key challenge for fragile states.
- Specific fiscal workstreams and Board items:
  - Fiscal space:
    - Staff to develop considerations on how to assess fiscal space (state of economy, debt and growth dynamics, financing costs, spending needs, fiscal rules and frameworks).
    - June 2016: Board briefing on Assessing Fiscal Space: An Initial Consistent Set of Considerations.
    - May 2017: Board briefing on Social Insurance in a Changing World.
  - Containing leverage:
    - October 2016: Board briefing on Tax Policy, Leverage, and Macroeconomic Stability.
    - October 2016 Fiscal Monitor to examine fiscal policy’s role in limiting excessive leverage in public and private sectors and facilitating deleveraging after financial crises.
  - Infrastructure Policy Support:
    - Pilot initiative to increase efficiency of public investment and identify options to sustainably scale up infrastructure spending.
    - Tools and models include:
      - Public Investment Management Assessment (PIMA).
      - PPP Fiscal Risk Assessment Model (P-FRAM).
      - Debt-Investment-Growth modeling framework (DIG).
      - Debt Sustainability Assessments (DSA).
    - Several tools developed in cooperation with the World Bank; pilot country experiences to be shared with the Board.
  - Domestic revenue mobilization in developing countries:
    - Continued Fund support for boosting domestic revenue mobilization, including advice on tax policy/legal frameworks and capacity strengthening for national tax administrations.
    - Work on international taxation issues in close collaboration with the World Bank and via the joint platform with OECD, UN, and World Bank.
    - Approximately 25 countries identified as pilot cases for intensified Article IV coverage on domestic revenue mobilization.
    - Platform for Collaboration on Tax: joint effort (IMF, OECD, UN, World Bank Group) launched in April to formalize discussions, capacity-building, and joint guidance; meetings three times a year and a major conference once every two years.
    - Joint outputs include tools for taxation of multinational enterprises, support to fix gaps/loopholes, mechanisms to exchange information on profit shifting and illicit financial flows, and joint policy papers on taxation and the informal economy.
  - Fiscal management in fragile states:
    - March 2017: Board briefing on Building Fiscal Capacity in Fragile States (framework for building fiscal management capacity; sequencing of reforms; transparency requirements; modes of technical assistance).

#### C. Structural Reforms
- Structural reforms are expected to contribute more to stimulate global growth; some reforms improve productivity and potential output and can contribute to near-term growth when implemented with demand-supporting policies.
- (Text continues beyond provided content.)

*Source: Based on the Spring 2016 Global Policy Agenda and Spring 2016 Work Program materials.*

### 10. Delivering on structural reforms and supporting trade. The need for structural

### 10. Delivering on structural reforms and supporting trade. The need for structural

### Macro-structural reforms
- Staff will increase focus on structural reforms in Article IV consultations, taking into account country-specific macroeconomic conditions—stage of development, cyclical position, and policy space for reforms.
- A toolkit on structural reforms will be developed to guide and support country teams working on macro-structural issues.
- Staff will strengthen analytical underpinnings of Fund operational work on macro-structural reforms, with particular analytical focus on macro-structural issues in emerging markets and developing countries.
- Work will construct a comprehensive dataset that incorporates structural reform indices in the real and financial sectors for all countries.
- Deliverables and timing:
  - Building on the October 2015 Board paper, a follow-up paper (May 2017) will update the Board on progress.
  - Ongoing work will assess fiscal costs and gains of labor and product market reforms and derive possible implications for the design of fiscal rules.

### Reinvigorating trade
- Rationale: Trade promotes growth and development; the observed slowdown in trade limits diffusion of knowledge and productivity gains.
- Analytical work:
  - One of the October 2016 WEO analytical chapters will investigate the extent of the trade slowdown across different economies and products, the role of the weak post-crisis recovery in economic activity, and long-term factors holding back trade growth.
  - A Reference Note on the Trans-Pacific Partnership (TPP)—Conceptual Framework will be circulated to the Board in July 2016 to summarize TPP content and identify channels through which TPP may impact different types of economies.
  - This work contributes toward a broader Reference Note on Trade and Trade Policy Issues to be circulated to the Board in November 2016 and will update the 2010 Reference Note on Trade Policy following last year’s Review of the Role of Trade in the Work of the Fund.

### Strengthening institutions — Capacity development
- The Fund will continue tailored technical assistance and training to complement policy analysis and advice and will strengthen monitoring of results.
- Efforts to build synergies between training, TA, and surveillance will continue, including through a revamped curriculum.
- Board engagement and timing:
  - Supplementary information on capacity development activities will be provided in the FY 2016 Administrative and Capital Expenses and Output Cost Estimates (to be issued in July).
  - A briefing on the Evolution of Fund Capacity Development Since 2013 and Initial Reflections on the 2017-18 Capacity Development Review will be scheduled in February 2017.

### Strengthening institutions — Governance
- Governance is essential for well-functioning markets; poor governance threatens market integrity, distorts competition, and endangers development.
- Staff will concentrate on governance aspects most closely related to Fund surveillance over macroeconomic policies.
- Review and timing:
  - Staff will undertake a Review of the Role of the Fund in Governance Issues (January 2017) to take stock of how governance/corruption issues are handled in surveillance and program work and assess implementation of the 1997 guidelines across the membership.

### Strengthening institutions — Entity transparency
- Opaque legal persons and arrangements can enable obfuscation of illicit behavior and hiding of assets.
- Staff actions:
  - Address transparency issues in relevant Article IV consultations and Fund-supported programs.
  - Conduct AML/CFT assessments and FSAPs.
  - Provide capacity development for effective implementation of international standards.
  - Contribute to design of further guidance on standards on transparency.

### Strengthening institutions — International taxation
- Staff’s work on domestic resource mobilization will address tax evasion and avoidance, including across national borders (see ¶9, 4th bullet).

### Strengthening institutions — Standards and codes
- The Standards and Codes Initiative focuses on policy and data transparency; financial sector regulation and supervision; and market integrity.
- Board engagement and timing:
  - In September 2016, the Board will be engaged in Standards and Codes: Update and Developments.
  - A formal Board meeting on the Review of the Standards and Codes Initiative (joint with the World Bank) is planned for May 2017.

### Emerging issues — Climate change
- Staff will continue integrating climate change and energy issues in surveillance.
- A tool to evaluate fiscal and other measures for meeting climate mitigation pledges is being developed and will be reflected in relevant Article IV reports.
- Board engagement and analysis:
  - In November 2016, the Board will discuss Small States’ Resilience to Natural Disasters and Climate Change: Role for the IMF.
  - Staff will undertake regional analysis, particularly on natural disasters and climate change in sub-Saharan Africa.

### Emerging issues — Demographic transitions and migration
- Staff will analyze the impact of economic emigration on private sector activity, competitiveness, public finances, growth and convergence of sending countries.
- Board engagement and deliverables:
  - A briefing on a forthcoming SDN on Emigration and its Impact on Eastern Europe will be provided in June.
  - Staff will release a study, Harnessing the Demographic Dividends in sub-Saharan Africa, examining drivers, necessary policies, and quantification of dividends.

### Emerging issues — Gender
- Integration of gender analysis in surveillance will continue when macrocritical, following pilot exercises in eight countries.
- Staff will assess potential for compiling gender-related statistics through a Financial Access Survey pilot.
- Analytical work will focus on the relationship between gender inequality, income inequality, and growth in a large sample of countries and on gender budgeting initiatives.

### Emerging issues — Inclusion
- In November 2016, the Board will be briefed on Understanding Inequality in Developing Countries to examine inequality in low-income and developing countries, the growth-equity nexus, and policy options.
- Operational work on income inequality in surveillance will expand beyond nine pilot countries and leverage World Bank and other resources.
- Timing and regional work:
  - In March 2017, the Board will be briefed on Update on the IMF’s Deliverables for the 2030 Developmental Agenda.
  - Staff will analyze income inequality regionally in Central and Southeastern Europe and take stock of inclusive growth efforts in Middle East and North African economies.

### Emerging issues — Technology
- An interdepartmental working group on finance and technology (fintech) will monitor developments, foster coordination, and deepen engagement with stakeholders.
- Objective: produce a Board paper in late 2017 on the impact of new technology on finance.
- Broader work will examine technology’s effects on labor markets, macro policies, and statistics.

### A more resilient international monetary system — Carrying out the reform agenda
- Strengthening mechanisms for adjustment and liquidity provision is needed to shore up the IMS.
- The stocktaking Strengthening the International Monetary System—a Stocktaking identified key reform areas: crisis prevention and adjustment mechanisms; enhanced global cooperation on issues affecting global stability; and a large and coherent global financial safety net (GFSN).

### Mechanisms for crisis prevention and adjustment — Frameworks for assessing and mitigating risk
- High and rising debt ratios in advanced economies and emerging markets, and the slowdown in China, elevate debt vulnerabilities.
- Deliverables and timing:
  - Review of the Low-Income Countries Debt Sustainability Framework will engage the Board in September 2016 and include a formal Board discussion in December 2016. The review will assess the framework’s ability to anticipate debt developments and derive risk ratings and consider a tailored approach for heterogeneous risks.
  - Update of the Application of the Medium-Term Debt Management Strategy (May 2017) will review MTDS experience in several low-income countries over the last three years and distill lessons.

### Mechanisms for crisis prevention and adjustment — State-contingent financial instruments (SCFIs)
- SCFIs can complement crisis prevention tools by making sovereign balance sheets safer and discouraging excessive leverage.
- Deliverable and timing:
  - The Board will discuss The Role of State-Contingent Financial Instruments in Preventing and Resolving Sovereign Debt Crises in January 2017, assessing the case for SCFIs, recent issuance experience, and barriers to greater issuance.

### Mechanisms for crisis prevention and adjustment — Debt restructuring
- December 2015 reform of the arrears policy for official creditors aimed to strengthen incentives for collective action among official bilateral creditors.
- Deliverable and timing:
  - Debtor-Creditor Engagement in Sovereign Debt Restructurings: A Review of Existing Modalities and Possible Reforms will be engaged with the Board in November 2016, including discussion of the Fund’s Lending-into-Arrears policy for private creditors.

### Enhanced global cooperation on issues and policies
- Governance reform, including entry into force of the 14th General Review of Quotas, strengthens the Fund’s effectiveness and legitimacy.
- Work on the Fifteenth Review and related items:
  - Board engagement on Quotas—Data Update and Simulations in the summer (illustrative simulations and updated database through 2014).
  - Board discussions on the report to the Board of Governors on progress on the Fifteenth Review in September 2016 and March 2017.
  - Discussions on the future of borrowed resources (expiration of 2012 bilateral agreements and the New Arrangements to Borrow) in the summer and October 2016, respectively.

### Contributing to a coherent GFSN — Lending toolkit
- Since the global financial crisis, the Fund overhauled its lending toolkit; the GFSN has expanded via central bank swap lines and regional financial arrangements.
- Challenges: uneven and costly safety net coverage, weak incentives for sound policies, and reluctance to approach the Fund.
- Deliverable and timing:
  - The Board will be briefed on New Facilities: Filling Gaps in the Global Financial Safety Net in June 2016.

### Contributing to a coherent GFSN — Concessional lending
- Follow-up on Financing for Development: Enhancing the Financial Safety Net for Developing Countries.
- Deliverables and timing:
  - Financial Safety Net for Developing Countries—Further Consideration (September 2016) will assess scope for tailoring program engagement with PRGT-eligible countries, including precautionary financial support and use of the General Resources Account.
  - Poverty Reduction and Growth Trust—Review of Interest Rate Structure (September 2016) will review PRGT interest rate structure and determine PRGT interest rates for 2017-18.
  - Annual Update on the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries will be circulated to the Board in April 2017.
  - In May 2017, the Board will discuss the Eligibility to Use the Fund’s Facilities for Concessional Financing, reviewing the framework for eligibility to the PRGT and the list of PRGT-eligible members.

### Contributing to a coherent GFSN — Monitoring and cooperation
- Staff will develop principles of engagement and cooperation with Regional Financial Arrangements (RFAs) and consider creating a new monitoring instrument for all Fund members to catalyze financing and signal commitment to reforms.
- Deliverable and timing:
  - The Board will discuss Strengthening the Framework for Post-Program Monitoring in July 2016 to examine scope for strengthening PPM content and review thresholds.

### Contributing to a coherent GFSN — Program design
- Ongoing review of program design to ensure Fund lending supports sound policies that protect the poor.
- Deliverable and timing:
  - In November 2016, the Board will be engaged on Social Objectives in PRGT Supported Programs: What Works?, assessing emphasis on mitigating social impacts of macroeconomic policies through social safeguards.

### Role of the SDR
- The allocation of SDRs contributes to the supply of global reserve assets.
- Deliverables and timing:
  - The Case for a General Allocation of SDRs During the Eleventh Basic Period will be engaged with the Board in June 2016 to examine long-term global need for reserve assets and whether an SDR allocation is warranted.
  - The Board will be briefed on the Experience with the Use of the SDR in July 2016.
  - The Role of the SDR: Initial Considerations will be engaged with the Board in January 2017 to discuss ways the SDR can strengthen the IMS.
  - The Board will be briefed on Transition to the New SDR Basket—Update on Fund and Member Operations (date TBD) regarding operational considerations surrounding introduction of the renminbi in the SDR basket.

*Source: _060816 - 10. Delivering on structural reforms and supporting trade. The need for structural*

### 18. Adequate financial, human, and technological resources. Providing agile,

### 18. Adequate financial, human, and technological resources. Providing agile, integrated and member-focused support

### Budget, compensation, and finances
- Executive Directors will be engaged early on the budget process.
- Starting in September 2016 there will be a Budget Committee meeting to engage on the FY 16 Budget Outcome and FY 17 Implementation, covering processes, technical issues, and emerging budget issues.
- In the fall, staff will issue an information note on the Roadmap to Budget, Compensation, and Income, covering the various interrelated work strands and upcoming decisions.
- Interactions with Executive Directors will influence timing of subsequent meetings, including:
  - contours of the FY 2018-20 medium-term budget;
  - the initial budget proposals; and
  - the formal budget meeting,
  with a view of having the substantive discussion take place before the Spring Meetings.
- The 2017 Review of Staff Compensation, complemented by a paper on Staff Recruitment and Retention Experience in CY 2016, will be discussed in early March 2017 (earlier than in the past) to allow better integration of findings into the budget discussion.
- The Fund’s Income Position for FY2017 and FY2018–19 is planned to be discussed on the same day as the Budget meeting in April 2017.

### Audit and investment policies
- The External Audit Committee will continue to provide oversight over the Fund’s financial statements through regular briefings (July 2016 and January 2017).
- Staff will provide a briefing on the Fund’s Financial Statements and Other Audit Related Matters in June 2016.
- In June 2016, the Board will be engaged on the Review of the Investment Strategy for the Trust Accounts—Initial Considerations.

### Managing human resources
- The 2016 Diversity and Inclusion Annual Report, to be discussed in November 2016, will review progress toward the 2020 diversity benchmarks and consider inclusion and flexibility in the work environment.
- The Board will discuss in January the main elements of The Fund’s HR Strategy, as agreed in the recent discussion on staff compensation.

### HQ1 Renewal
- The renovation of HQ1 continues, with the first phase covering the second floor, atrium and lower levels nearing completion in 2016.
- The HQ1 Renewal Project Quarterly Progress Reports will continue to update the Board on progress made with the HQ1 Renewal Project.

### Managing risks
- The Work Program integrates risk assessment within the Fund’s strategic planning, accountability framework, and budget cycle.
- Emphasis on stronger risk ownership and integration of risks across departments, and greater feedback between high-risk areas, management action, and regular Board engagement to align Fund strategy with identified risks.
- The Board will discuss the 2016 Risk Report in October 2016, followed by the Risk Report—Spring Update in March 2017.

### Learning and knowledge management
- The Fund will continue learning from past experience and outside evaluations, deploying internal resources in line with emerging priorities.
- Outreach and membership:
  - In November 2016, the Board will be briefed on the Implementation of the IMF Communications Strategy.
  - In January 2017, the Board will be informed of delayed Article IV consultations through the Annual Report on Delayed Article IV Consultations.
- Independent Evaluation Office (IEO):
  - The IMF and the Crisis in Greece, Ireland, and Portugal: An Evaluation by the Independent Evaluation Office is planned for Board discussion in July 2016.
  - An evaluation of The IMF and Social Protection is planned for March 2017.
  - A management implementation plan will be prepared in summer 2016 for Behind the Scenes with Data at the IMF: An IEO Evaluation.
- Knowledge management:
  - An interdepartmental group has been tasked to deliver Management recommendations in this area by end-July (2016).
  - The group's report is expected to include actions to make available high-quality, web-based information on critical topics and to improve internal search.
  - The report will encompass steps to clarify roles and responsibilities of different departments and staff in managing knowledge and consider the need for a permanent knowledge management structure.

### Implementation of the past Work Program
- The Fall 2015 Work Program has been implemented broadly as planned.
- Executive Board meetings were scheduled to brief Directors on:
  - the economic outlook for the Middle East and Central Asia;
  - monetary and exchange rate policies in the Caucasus and Central Asian countries; and
  - the costs and mitigating strategies for corruption.
- Most policy meetings were concluded on schedule although some encountered substantial delays to extend consultations with the membership on complex policy issues.
- Several country items—in particular program reviews—also experienced delays.

*Source: _060816 - 18. Adequate financial, human, and technological resources. Providing agile,*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2016/_060816.pdf_