IMF Executive Board Reviews Implementation of IMF Commitments in Support of the 2030 Agenda for Sustainable Development
IMF News, June 3, 2019
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- Published: June 3, 2019
Context
- Press Release No. 19/194
- Date: June 3, 2019
- The Executive Board discussed a staff paper on May 3, 2019, examining experience with implementation of the IMF’s commitments to support the 2030 Development Agenda.
- Background: In 2015, international agreements relevant to the 2030 Agenda included the Addis Ababa Action Agenda, the Sustainable Development Goals (SDGs), and the Paris Agreement under the UNFCCC.
- The Board in 2015 agreed the IMF’s primary contribution would be delivering on its core mandate of maintaining macroeconomic and financial stability, while targeting expanded policy engagement and technical support in specific areas to help countries accelerate sustainable development.[1]
IMF commitments and areas of expanded support
- The IMF committed to increase support, primarily for developing countries, in:
- (i) strengthening national tax systems;
- (ii) tackling large infrastructure gaps;
- (iii) promoting economic inclusion;
- (iv) development of domestic financial markets;
- (v) intensified engagement in fragile and conflict-affected states;
- (vi) improving economic statistics;
- (vii) expanding the financial safety net for developing countries;
- (viii) addressing macroeconomic aspects of climate change.
- Additional initiatives since 2015 included developing methodologies to quantify the fiscal costs of achieving individual goals and increasing IMF engagement in tackling corruption vulnerabilities.
Key findings from the assessment
- IMF support for strengthening tax systems increased by 46 percent between 2015 and 2018;
- Support for building state capacity to manage public investment increased, with detailed diagnostics of public investment management capacity undertaken in over 50 countries;
- The volume of new analytical work on economic inclusion has increased, while coverage of inequality, gender, and financial inclusion in IMF operational work has expanded steadily;
- IMF support for development of domestic financial markets increased by 13 percent between 2015 and 2018;
- IMF technical support for fragile and conflict-affected states has risen, accounting for about one-quarter of all IMF capacity development support—although there is more to be done to strengthen the effectiveness of IMF engagement with these countries; [2]
- IMF support for building statistical capacity has increased by about one-third since 2014;
- Limits on access to the IMF’s concessional lending facilities were increased by 50 percent in 2015, and were further increased by one-third as of end-May 2019; [3]
- Engagement on climate change issues has focused on (i) policy advice to contain carbon emissions (energy price reform, carbon pricing) and (ii) work to support resilience-building in countries vulnerable to large-scale natural disasters and climate change. [4]
Implementation, financing, and operational implications
- The substantial scaling-up of technical support since 2015 was facilitated by increased financing from bilateral donors, which is set to level off around current levels.
- Emphasis on the need to shift efforts to producing greater impact from existing resources through:
- better prioritization of projects; and
- applying lessons learned from the recent scaling-up experience.
Executive Board assessment and recommendations
- Directors welcomed the opportunity to review implementation and agreed the Fund has a critical role consistent with its mandate and expertise.
- Directors commended significant increases in technical assistance for strengthening tax systems and welcomed intensified Fund engagement on international taxation issues relevant to developing countries.
- On public investment and debt:
- Directors agreed scaling up of investment in public infrastructure is needed in many developing countries,
- emphasized that public spending trajectories should be consistent with maintaining or regaining a sustainable debt position,
- welcomed increased use of the Public Investment Management Assessment as a tool to guide efforts to increase the efficiency of public investment,
- emphasized the importance of strengthening debt management capacity and called for expanded Fund support for country-owned efforts to build such capacity.
- On inclusion, financial markets, and collaboration:
- Directors welcomed substantive work on macro-critical elements of inclusion and increased coverage of inequality, gender, and financial inclusion in surveillance work;
- welcomed increased technical support for developing financial markets;
- supported collaboration with the World Bank based on a clear division of responsibilities between the two institutions on financial sector issues.
- On climate, statistics, governance, and fragile states:
- Directors supported the Fund’s work on climate change and countries exposed to natural disasters;
- welcomed the increase in Fund support for development of statistical capacity, expected to deliver significant improvements in national economic and sociodemographic statistics;
- underscored the importance of full implementation of the Fund’s 2018 framework for engagement on governance issues for improving development outcomes;
- welcomed intensified engagement in fragile and conflict-affected states focused on macroeconomic stability and building core state capacities, and considered this critical for ending global poverty (SDG 1);
- looked forward to an assessment of the effectiveness of the Capacity-Building Framework piloted in 2017 and called for full and timely implementation of the 2018 Management Implementation Plan to increase effectiveness of Fund engagement in fragile and conflicted-affected countries.
- Cross-cutting lessons and managerial priorities:
- Maintain country ownership of reform programs over time;
- Ensure strategic and effective collaboration with development partners, including the World Bank;
- With limited scope for further large increases in support due to budget constraints, focus on enhancing the impact and efficiency of Fund assistance by drawing on the recent review of the Fund’s capacity development strategy and making full use of the results-based management framework;
- Align the HR strategy accordingly;
- Implement an appropriately measured communications strategy.
IMF Press Release No. 19/194 — June 3, 2019
