Opening Remarks of the First Deputy Managing Director Gita Gopinath

IMF News, April 28, 2022

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The global economy faces "a combination of shocks and policy challenges rarely seen before."
Key immediate shocks identified:
- War in Ukraine creating major stresses for the global economy, weakening the post-pandemic recovery and putting macroeconomic stability at risk.
- Sharply higher uncertainty, trade disruptions, higher energy, food, and other commodity prices adding to inflation pressures, refugees, and tighter financial conditions.
Longer-term, unprecedented challenges include:
- Increased inequality
- Escalating fragility and conflict
- A growing digital divide
- The existential threat of climate change
Low-income countries are particularly vulnerable, and "the poorest are the most exposed of all."

CD is designed to be country-tailored and aligned with surveillance and lending priorities to help member countries tackle immediate and longer-term challenges.
Delivery channels:
- Headquarters in Washington
- 17 Regional Capacity Development Centers
- Network of long-term experts in the field
Technology and delivery since the pandemic:
- 178 member countries have received CD through 4,000+ remote engagements, a majority benefiting low-income countries and fragile and conflict-affected states.
- The COVID-19 Crisis Capacity Development Initiative (CCCDI) launched last year with several partners to provide additional CD for emergency pandemic-related needs.
Core CD expertise areas emphasized:
- Public financial management systems
- Budgeting and revenue administration
- Tax policy
- Governance

Tax administration and revenue:
- Work to strengthen tax administrations to provide sustainable funding for critical budgetary spending.
- Support for digital solutions to reduce physical interactions, improve tax collections, and reduce fraud (examples: Chad and Rwanda).
- Assistance to design business continuity plans for tax administrations (examples: Bolivia, Maldives, and Mongolia).
Budgetary spending oversight:
- Strengthening targeting, monitoring, and auditing of emergency COVID-related budgetary spending (example: supporting the Mozambican Supreme Audit Agency to identify legal and institutional constraints hindering audits of COVID-19 emergency spending).
Central bank and financial sector support:
- Modernizing frameworks for exchange rate, inflation, and debt management to respond to global inflationary shocks and tighter financial conditions.
- Strengthening banking supervision to improve financial stability amid large swings in capital flows and to support financial inclusion.
- Regional peer-learning: supported a regional, peer-learning approach to compile and report on financial soundness indicators in 12 countries across Africa.
Statistics and data:
- Working with statistical agencies to improve economic data collection and dissemination for informed policymaking.

Stepping up CD on transformational frameworks to tackle longer-term challenges:
- Climate change
- Green and inclusive growth
- Special focus including fragile and small island states
Increasing CD on:
- Climate change
- Gender
- Digital money
Following the new strategy on Fragile and Conflict-affected States (FCS), plans to ramp up support by expanding field presence and putting more experts in regional centers.
Kristina Kostial, the IMF’s Coordinator for Climate, to discuss the IMF’s new Climate Strategy later in the meeting.

Emphasis on strong partnership and support—financial, technical, and strategic—enabling IMF CD work.
Objective: partner to provide impactful CD so countries can:
- Rebuild and strengthen institutions to respond to current massive challenges
- Lay foundations for long-term resilience and green and inclusive growth
The dialogue is positioned as an opportunity to listen, learn from member experiences, and gather perspectives on how CD can help countries balance difficult trade-offs and strengthen institutional resilience.

Opening Remarks of the First Deputy Managing Director Gita Gopinath, At the IMF's Third Capacity Development Dialogue, April 28, 2022.