Annual Report of the Executive Board for the Financial Year Ended April 30, 2002
Annual Report of the Executive Board, September 17, 2002
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Bibliographic details
- Published: September 17, 2002
- Series: Annual Report of the Executive Board
Highlights and Context
- Reviews the IMF's activities, resources, and policies during the financial year (May 1, 2002 through April 30, 2002), as well as developments in the world economy.
- Global environment:
- Global economy experienced a widespread slowdown during the 2001 calendar year.
- Contributing factors: downward adjustments in equity prices, a rise in energy prices, tightening of monetary policy in industrial countries in 2000, and the September 11, 2001 terrorist attacks.
- By early 2002 there were encouraging signs that growth was recovering, helped by actions of key central banks to lower interest rates.
IMF Lending
- Commitments under the IMF's regular loan facilities—Stand-By Arrangements and the Extended Fund Facility (EFF)—tripled, to SDR 39.4 billion in FY2002 from SDR 13.1 billion in FY2001.
- Parenthetical currency equivalents in source: SDR 39.4 billion (almost $50 billion) and SDR 13.1 billion (almost $17 billion).
- Largest commitments in FY2002:
- Standby Arrangement for Brazil: SDR 12.1 billion (of which SDR 10 billion provided under the Supplemental Reserve Facility (SRF)).
- Standby Arrangement for Turkey: SDR 12.8 billion.
- Precautionary financing:
- Actual drawings were made in only 16 of the 34 Standby and Extended Arrangements in place during the year.
- Undrawn balances as of end-April 2002: SDR 26.9 billion.
- IMF liquidity and resources:
- Net uncommitted usable resources at end-April 2002: SDR 64.7 billion ($82 billion).
- Liquidity ratio: 117 percent (compared with 168 percent a year previously).
- Concessional lending and HIPC/PRGF:
- Executive Board approved nine new PRGF arrangements totaling SDR 1.8 billion in FY2002.
- PRGF disbursements in FY2002: SDR 1.0 billion (compared with SDR 0.6 billion in FY2001).
- By end-April 2002, 26 HIPC-eligible members had been brought to their decision points under the enhanced HIPC Initiative and one under the original Initiative.
- IMF committed SDR 1.6 billion in grants under HIPC and disbursed about SDR 0.7 billion.
Surveillance
- IMF surveillance covers exchange rate policies and broader economic and financial policies at country, regional, and global levels.
- Biennial review (completed in large part in April 2002) found surveillance "working well" but identified areas for further work:
- Enhance coverage of institutional and structural issues, especially financial sectors.
- Improve analysis of debt sustainability.
- Trade and trade-liberalization role:
- Board discussion in September 2001 agreed IMF should stress successful launch of the Doha trade round, address trade issues in surveillance and IMF-supported programs, provide technical assistance groundwork for trade liberalization, and cooperate closely with the WTO and World Bank.
- Data and transparency:
- Reviewed Data Standards Initiatives and approved a Data Quality Assessment Framework, integrated with the Reports on the Observance of Standards and Codes (ROSCs).
- Continued promotion of transparency and public release of information via the IMF website.
Strengthening the International Financial System and Crisis Work
- Ongoing efforts since 1994–98 crises to strengthen the system and crisis prevention; recognition that not all crises can be avoided.
- Enhanced monitoring of external vulnerability using:
- Updated World Economic Outlook projections, early warning system models, detailed financing-requirements analyses, market information, and financial sector vulnerability assessments.
- Financial Sector Assessment Program (FSAP):
- By April 2002, 27 countries had completed FSAP participation and 50 others had committed to participate.
- Crisis resolution work program (four-point plan) aimed to:
- Increase IMF capacity to assess debt sustainability.
- Clarify policy on access to IMF resources.
- Strengthen tools for securing private sector involvement in crisis resolution.
- Examine a more orderly and transparent legal framework for sovereign debt restructurings.
- Sovereign debt restructuring proposals were set out by Anne O. Krueger in late 2001 and early 2002.
- Anti-money-laundering and combating financing of terrorism work acquired increased importance after September 11.
Lending Policies and Conditionality
- Ongoing review of conditionality emphasized:
- Reinforcing national ownership.
- Focusing on policies critical to achieving a program's macroeconomic goals.
- Setting a clearer division of labor between the IMF and other institutions, particularly the World Bank.
- Access policy:
- After review, the IMF maintained current annual and cumulative access limits, with a later review planned for policies involving high access.
Poverty Reduction and Debt Relief
- IMF actions and support:
- Continued concessional lending through PRGF and joint IMF-World Bank HIPC Initiative.
- IMF received about SDR 7 million in contributions from five members to subsidize the rate of charge on Post-Conflict Emergency Assistance.
- Joint review of the PRSP approach with the World Bank; PRSPs aim to put countries on a path to sustainable growth, poverty reduction, and toward achieving the UN's Millennium Development Goals.
- Joint sponsorship (with World Bank, Asian Development Bank, and European Bank for Reconstruction and Development) of an initiative to help seven low-income members of the Commonwealth of Independent States accelerate growth and poverty reduction.
- PRGF review in March 2002 highlighted needs to design pro-poor growth policies, improve quality and efficiency of government spending, coordinate program design with the World Bank, and enhance communication with authorities, donors, and civil society.
- At late FY2002 review, HIPC countries had received commitments of $40 billion (in nominal terms) in debt relief.
Technical Assistance, Training, and Capacity Building
- Technical assistance demand increased due to FSAPs, adoption of international standards, tracking indicators for HIPC, and anti–money-laundering work.
- Regional capacity-building:
- Caribbean Regional Assistance Center established in FY2002.
- Two more centers planned to open in late 2002 in East and West Africa under the IMF's Africa Capacity-Building Initiative.
- Training:
- IMF Institute increased training by about 9 percent over FY2001.
- A Joint Regional Training Center for Latin America was opened, bringing the number of such regional centers to five.
Organization, Budget, and Staffing Changes
- Senior staff and leadership changes in FY2002:
- Stanley Fischer (First Deputy Managing Director) and Michael Mussa (Economic Counsellor and Director of the Research Department) departed.
- Anne Krueger and Kenneth Rogoff succeeded them respectively.
- Jack Boorman stepped down as Director of the Policy Development and Review Department, retained position as Counsellor and became Special Advisor to the Managing Director; succeeded as PDR director by Timothy Geithner.
- Gerd Häusler joined as Counsellor and Director of the new International Capital Markets Department.
- Institutional developments:
- Independent Evaluation Office became operational.
- Internal budgeting process reviewed by a panel of external experts; some recommendations implemented, others planned for FY2003 and FY2004.
- Membership change after FY2002:
- On July 23, 2002, the Democratic Republic of East Timor became the 184th member of the IMF.
Annual Report of the Executive Board for the Financial Year Ended April 30, 2002
Content in this bundle
- IMF Annual Report 2002--file 1 of 5
- IMF Annual Report 2002--file 2 of 5
- IMF Annual Report 2002--file 3 of 5
- IMF Annual Report 2002--file 4 of 5
- IMF Annual Report 2002--file 5 of 5
References
- Disclaimer
- The FY 2004 Budget and the Medium-Term Framework
- [Photos of the
IMF at Work](https://www.imf.org/external/np/adm/pictures/caption3.htm)