Public Information Notice: IMF Executive Board Reviews the Role of the Fund in Low-Income Countries Over the Medium Term, September 10, 2003

Role of the Fund in Low-Income Member Countries over the Medium Term—Issue Paper for Discussion, July 21, 2003

Debt Sustainability in Low-Income Countries—Towards a Forward-Looking Strategy, May 5, 2003

Fund Assistance for Countries Facing Exogenous Shocks

Prepared by the Policy Development and Review Department
(In consultation with the Area, Finance, and Fiscal Affairs Departments)


Approved by Timothy Geithner

August 8, 2003

Use the free Adobe Acrobat Reader to view the full text (658 kb pdf file).

Contents

Executive Summary
 

I.  

Introduction
 

II.  

Impact of Exogenous Shocks
 

A

Incidence of Exogenous Shocks
 

B.

Economic Impact of Exogenous Shocks

III.

Policy Actions to Reduce Vulnerability to Shocks

IV.  

Financing and Adjustment in Response to a Shock

V.  

Availability of External Assistance
 

A.

Existing Sources of External Financing
 

B.

Strengthening Existing External Financing

VI.  

The Role of the Fund
 

A.

Helping Member Countries Prepare for Shocks
 

B.

Helping Member Countries Respond to Shocks
 

C.

Current Fund Instruments for Financing for Shocks
 

D.

Possible Enhancements of Fund Financing for Shocks

VII.  

Issues for Discussion
Text Boxes
1.   Impacts of Exogenous Shocks: Evidence from Five Case Studies
2.   Emergency Natural Disaster Assistance
3.   Compensatory Financing Facility: 2000 Review
Figures
1.   Large Natural Disasters in Developing Countries
2.   Various Vulnerability Rankings and Average GDP per Capita, 1996-2000
Tables
1.   Size and Frequency of Negative Shocks in Export Prices and Terms of Trade
2.   Trends in Natural Disasters: Frequency, People Affected, and Damages
3.   Frequency and Cost of Natural Disasters Across Countries
4.   Size and Frequency of Negative Shocks in Export Prices and Terms of Trade Across Countries
5.   Total Humanitarian Assistance, 1990-2000
6.   Concentration of Emergency Assistance for Natural Disasters
7.   Characteristics of Emergency and Rehabilitation Assistance from Various Donors and Creditors
8.   Characteristics of Major Compensatory Financing Mechanisms for Trade Shocks
9.   Fund Involvement in Countries that Experienced Terms of Trade Shocks, 1981-1999
10.   Fund Involvement in Countries that Experienced Large Natura Disasters, 1977-2001
Annexes
I.   Case Studies of Countries Affected by Exogenous Shocks
II.   Impact of Shocks on Poverty—A Summary of Recent Research
III.   Ex-Ante Mechanisms for Mitigating Exogenous Shocks
IV.   International Financing Mechanisms for Addressing Exogenous Shocks
 

Bibliography