Fragile and Conflict-Affected States (FCS)
Fragile and conflict-affected states (FCS) are home to nearly 1 billion people facing severe challenges, including weak institutions, limited public services, extreme poverty, forced displacement, and war. Fragility and conflict are closely linked to climate change, food insecurity, and persistent gender inequalities. FCS account for almost half the low-income countries, where intense conflicts along with institutional and social fragilities can hinder progress toward middle-income status. Given their vulnerabilities, these countries are at a significant risk of falling behind in achieving their development objectives. Moreover, the implications of fragility and conflict are macro-critical: they destabilize balance of payments positions, disrupt trade and financial flows, and hinder the development of productive resources. Crises originating in FCS can also affect economic outcomes in neighboring countries and regions.
Addressing these challenges requires country-tailored engagement that reflect the drivers of fragility, political economy dynamics, and reform constraints, in close coordination with partners. Against this backdrop, the IMF has stepped up its engagement with fragile states, including through its 2022 FCS Strategy. This Strategy provides robust, tailored, and longer-term support to help vulnerable countries achieve macroeconomic stability, build resilience, promote sustainable and inclusive growth, and exit fragility. While focused primarily on FCS, it is also relevant for countries at risk of fragility or conflict, whether because of domestic factors or external shocks and spillovers.
The IMF’s FCS strategy was developed through an extensive consultation process. The Fund has received feedback from over 55 organizations, including the World Bank, regional development banks, the United Nations system, civil society organizations (CSOs), think tanks, and academia.
The IMF has had a long-standing engagement with fragile and conflict-affected states. Since 2020, 25 FCS have received about US$50 billion in emergency financing or as commitments under UCT-quality arrangements. Fund policy advice in the context of Article IV consultations has taken into account capacity constraints that may limit the traction and feasibility of policy implementation. CD has been made available to meet the demand and needs of FCS, responding to local circumstances and absorptive capacity. The FCS Strategy builds on this experience and lessons learned, providing a framework and a set of measures that will allow the Fund to better support its most vulnerable members. These include:
