Public Information Notice: IMF Reviews the Fund's Transparency Policy - Issues and Next Steps

October 10, 2003

Public Information Notices (PINs) are issued, (i) at the request of a member country, following the conclusion of the Article IV consultation for countries seeking to make known the views of the IMF to the public. This action is intended to strengthen IMF surveillance over the economic policies of member countries by increasing the transparency of the IMF's assessment of these policies; and (ii) following policy discussions in the Executive Board at the decision of the Board.

The Executive Board of the International Monetary Fund (IMF) discussed the Fund's transparency policy on June 27, 2003 and September 12, 2003 based on a staff report entitled The Fund's Transparency Policy-Issues and Next Steps.


In January 2001, the Executive Board adopted a decision on the voluntary publication of country documents and more systematic publication of policy papers and associated Public Information Notices (PINs). This decision followed a number of steps taken since 1994 to enhance transparency of the Fund as an institution and to increase the availability of information about the Fund and its members' policies. The decision defined the key elements of the Fund's publication policy and established the guiding principles to improve provision of information to markets and to the broader public, to safeguard the frankness of policy discussions with members, to maintain the appropriate balance between transparency and confidentiality, and to continue to improve the quality of staff reports. In the discussion reviewing the transparency policy in June 2002, it was agreed to reconsider a possible move to a policy of presumed publication for Article IV consultation reports and staff reports on the use of Fund resources in June 2003.1 The current review focused on this issue and several others that have arisen in the implementation of the policy.

Since the June 2002 review, publication rates have broadly continued to rise for most regions and most types of documents. The publication rates of Article IV staff reports continued to increase and reached 66 percent for stand-alone reports, and 71 percent for combined Article IV-Use of Fund Resources (UFR) staff reports, although publication rates continue to be uneven across regions. Nearly three quarters of the Fund's membership have agreed to publish at least one country staff report, and over 90 percent of members have published a PIN. Nearly all country policy intention documents (Letters of Intent/Memoranda of Economic and Financial Policies and Poverty Reduction Strategy Papers) have been published. In the period since the June 2002 review, about 57 percent of UFR staff reports were published. Three quarters of stand-alone UFR staff reports for normal access cases were published, while the publication rate for exceptional access cases declined to 21 percent in the recent period (from 36 percent in the last review).

The publication rates of policy papers and associated policy PINs continued to increase. Since the time the Board approved a presumption for the publication of policy papers and PINs in November 2002, all but one policy paper and associated PIN have been published. The share of staff reports with deletions declined to 8 percent from 12 percent, in part reflecting a much lower rate of deletions from stand-alone UFR reports. The share of reports with corrections increased from 53 to 57 percent. In response to guidance in the previous review, the vast majority (73 percent) of corrections during the period since the June 2002 review were made before Board discussions.

Executive Board Assessment

Directors welcomed the opportunity to review the implementation of the Fund's transparency policy and to discuss the next steps. They considered the key issue for this transparency review to be whether to move to a policy of presumed publication of country staff reports. Directors acknowledged that progress had been made in publication rates for most types of documents and in most regions under the policy of voluntary publication, reflecting the broad acceptance among the membership of the benefits of transparency.

Most Directors noted that progress in publication rates has been slow and unevenly distributed across regions, and that further impetus is needed by moving to a policy of presumed publication. These Directors noted that publication of country reports would help strengthen surveillance and provide for greater accountability of the Fund. Extending the presumed publication policy to all documents related to the use of Fund resources would help put into context members' requests for the use of Fund resources as set forth in their published Letters of Intent (LOIs)/Memoranda on Economic and Financial Policies (MEFPs), and explain the basis for management's recommendation that the Board approve these requests.

Many other Directors, however, pointed out that the information provided by the staff showed that the present voluntary approach is effective and that it is not clear that a policy of presumed publication would achieve significant additional gains in publication rates. These Directors suggested that a move to presumed publication could undermine the candor of discussions and documents and the advisory role of the Fund.

All Directors emphasized that candor in the Fund's dialogue with members and in reporting to the Board will remain essential for effective surveillance. They looked forward to the opportunity to discuss the potential conflict between transparency and candor in the next Biennial Review of Surveillance, in light of the increased coverage expected in staff reports of such topics as vulnerability, debt sustainability, currency mismatches, and other balance sheet and capital account developments.

Most Directors noted the significant declines from already low levels of publication rates of staff reports for the use of Fund resources with exceptionally high access. They emphasized the critical importance of transparency for strengthening confidence in these cases, as they typically involve capital account crises where a high premium is placed on increasing public understanding and market support of the program strategy. However, many other Directors were concerned that, given the high degree of market sensitivity in exceptional access cases, publication of these reports might conflict with the need for frank assessments of the risks involved.

On balance, the Board agreed on a set of measures to enhance transparency further. It was agreed to establish a policy of voluntary but presumed publication for all UFR and Post-Program Monitoring (PPM) staff reports, to be effective as soon as the amendments to the Transparency Policy Decision have been circulated to and approved by the Executive Board.

It was also agreed that, in exceptional access cases, the Managing Director will generally not recommend Board approval of a program or completion of a review unless the authorities consent to the publication of the associated staff report. This new publication policy for UFR staff reports in exceptional access cases will apply to new arrangements approved on or after July 1, 2004 that contain exceptional access, and to existing arrangements that, by reason of augmentation after July 1, 2004, will result in exceptional access. Exceptional access arrangements (i.e., those on the same terms and conditions and timing) in place as of July 1, 2004 will be grandfathered. One Director expressed the view that it would be preferable for the Managing Director's recommendation not to depend on the publication of the staff report but on a more comprehensive assessment of the adequacy of the country's transparency policy.

The Board also agreed to move to voluntary but presumed publication for all Article IV staff reports, Article IV Public Information Notices (PINs) and related Article IV papers (Selected Issues papers, Statistical Annexes and Appendices prepared as background material for Article IV consultations). If a member did not wish a PIN to be published, a brief press release would be issued promptly by the Fund to inform the public that the Board had concluded the consultation. These changes will be effective July 1, 2004; until July 1, 2004, existing policies will continue to apply.

Directors considered the possibility of moving to a policy of presumed publication for Reports on the Observance of Standards and Codes (ROSCs) and Financial System Stability Assessments (FSSAs). While a number of Directors stressed the value of better informing the public and markets through a policy of presumed publication of these documents, other Directors referred to the voluntary nature of standards and codes, and cautioned that presumed publication could affect participation in the Financial Sector Assessment Program (FSAP). Against this background, Directors decided to retain the existing policy of voluntary publication, while encouraging members to publish these reports.

In the recent FSAP review, a few Directors proposed that the FSAP technical notes (FTNs) constituting background material for the FSAP process should be circulated to the Board to better inform Directors. Directors agreed that, when FTNs raise issues of sufficient relevance to surveillance, they should be included in the background material for Article IV consultations, and thus would be subject to the Fund's publication policy on Article IV and related reports. Whenever such notes are prepared jointly with World Bank staff, their circulation and publication would be coordinated with the World Bank. Publication of FTNs that are not circulated to the Board as background documentation for Article IV consultations would continue to follow the practice applied to technical assistance reports. When the authorities request publication and management consents to it, FTNs would be circulated to the Board prior to publication and subsequently published on the Fund's external website.

Directors discussed the modalities of voluntary but presumed publication for various Fund documents. It was agreed that, under the presumed publication policy, publication would be expected to occur within 30 calendar days of Board consideration of the relevant papers. If the member has not decided on its publication intentions by the time of the Board meeting, the Secretary will remind the member to communicate its publication intentions to the Fund within 30 calendar days following the Board meeting. In this context, Directors emphasized that presumption of publication requires the explicit consent of the member prior to publication, without which the report would not be published.

Directors re-examined the issue of allowing deletions of highly politically sensitive material, and the removal of material that would undermine the ability of the authorities to implement policies or would render implementation more costly. While many Directors continued to favor the extension of the deletions policy to highly politically sensitive material, the majority of the Board did not support such a move, noting the practical difficulties of designing an objective test of "high political sensitivity" to implement such a policy, and the risks of undermining the candor and comprehensiveness of Board documents. Directors urged the staff to continue to avoid language that would exacerbate domestic political challenges to implementing reforms.

Against this background, Directors generally agreed that the continued application of the current deletions policy is appropriate, with the scope of deletions covering highly market-sensitive information, including not only exchange and interest rate matters, but also highly market-sensitive material in vulnerability assessments and the banking and fiscal areas. Directors also agreed that, when third party analysis is presented in a staff report, the source should be indicated, or a staff assessment of such analysis should also be included in the paper.

Directors expressed concern that, in the context of increased publication, there could be an intensification of pressures to delete significant elements of documents on grounds of high market sensitivity. They agreed that management may recommend to the Board to withhold publication of the relevant documents when deletions of highly market-sensitive material would undermine the overall assessment of the Fund and its credibility.

Directors agreed to apply the broad principles for deletions and corrections that are now in place for country staff reports to policy papers prepared by the staff. Modifications to such policy papers before publication would be limited to factual corrections and deletions of highly market-sensitive material and of country-specific references. If Directors considered that there was a danger of confusion when the summing up differed from the staff recommendations, the published version of the staff policy paper would indicate clearly in the text those staff positions that the Board had not endorsed.

On administrative papers, while a number of Directors favored a move to presumed publication, most agreed that publication should continue to be considered on a case-by-case basis. In all cases, staff recommendations regarding the publication of these papers will be explained to Executive Directors when the paper is circulated.

On other publication-related matters, Directors supported publication of the Board agenda at the same time as it is made available to Executive Directors, with the indication that the agenda is tentative and subject to change. They asked the staff to elaborate on the modalities.

Amendments to the Transparency Policy Decision reflecting the changes agreed to above will be prepared and circulated to the Executive Board for approval. Except for those changes that are to become effective on July 1, 2004, such changes will become effective upon the Board's approval of the amendments to the decision.

The next review of the Fund's transparency policy is expected to take place by June 2005.

1 See IMF Publication Information Notice No. 02/111, September 27, 2002, IMF Reviews Experience and Next Steps in the Fund's Transparency Policy.


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