May 31, 2000
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The International Monetary Fund (IMF) today releases a summary of the work program adopted by its Executive Board that broadly defines the Board's agenda for the period leading up to the IMF Annual Meeting in Prague, September 26-28. Drawing on the recommendations of the International Monetary and Financial Committee (IMFC) at its meeting in April, the work program contains a wide range of topics in key areas of the Fund's responsibilities.
At the same time, the work program—the first in the term of Horst Köhler, IMF Managing Director and Chairman of the Executive Board—gives particular attention to the reform of the IMF itself. "Our aim in the coming months should be to articulate our vision for the future role of the Fund and to bring a sharp focus and a clear sense of mission to the work of the organization in the context of a well-defined understanding of the division of labor with other agencies and fora," Mr. Köhler said in a statement to the Executive Board. "Our work should establish the Fund—specifically the Executive Board—as the driving force in the debate on the reform of the IMF, thereby giving it a greater stature in the debate on strengthening the international monetary and financial system. This will require the Fund, under the overall guidance of the Executive Board, to take stock of the full range of reform proposals and to articulate guiding principles from them."
The work program, Mr. Köhler said, should be based on first principles, including: making the Fund as effective as possible in realizing the objective of achieving prosperity world-wide; identifying clear priorities in the Fund's activities and keeping the Fund focused on its key competencies; achieving an appropriate balance between conditionality attached to the use of Fund resources and the ownership of policy programs by member countries; broadening the debate on the role of the private sector, so as to promote its potential for acting as the main engine for stimulating productivity and growth in the developing countries; and strengthening the cooperation between the Fund and other international agencies and fora, based on a clear division of labor to enhance efficiency and accountability.
The priorities within the work program include the following (the order does not reflect any ranking of importance):
• Review of Fund facilities and conditionality:
Work in this area will build on previous work programs, focusing on such features of non-concessional Fund facilities as maturities, rates of charge, and eligibility criteria. Items for consideration include a proposed modification of the CCL, along with possible changes in stand-by and extended arrangements. The Board will also begin a broad review of the application of conditionality based on past experience with Fund-supported programs, particularly in the area of structural reforms but also with regard to fiscal, monetary and exchange rate policies. This review is expected to be extensive, with papers being considered both before and after the Annual Meetings. Other issues covered by the review will include access policy, early repurchase, and misreporting.
• Financial sector issues:
The Fund's efforts to promote the smoother functioning of private financial markets will include developing dialogue with financial market participants, analyzing market developments, and encouraging members to provide reliable up-to-date information to the public. The 2000 International Capital Markets Report will put into perspective the rationale for deepening the Fund's work on such financial sector issues. The Board will examine issues in the assessment of offshore financial centers and will carry forward its work on the involvement of the private sector in preventing and resolving financial crises. A key question will be the extent to which Fund support can be relied on to generate an early return of private capital to countries that have undergone crises, and the extent to which concerted private sector involvement should be sought. Other papers will address the corporate restructuring process, the development of debt workout principles, and collective action provisions in international sovereign bonds.
• Debt relief and poverty reduction initiatives:
In presenting the new work program to the Executive Board, Mr. Köhler stressed that making the debt relief initiative for Heavily Indebted Poor Countries (HIPC) a success is among the most important tasks that the Fund is currently undertaking. In the period ahead, the Board will have opportunities to review progress with the HIPC Initiative and to discuss the development of Poverty Reduction Strategy Papers, which encapsulate the strategy underlying PRGF programs in individual countries. The Board will also review papers on financing the PRGF-HIPC Trust.
• Surveillance and transparency:
The work program will advance recent work on how the Fund discharges its key responsibility of surveillance, taking into account the lessons from both internal and external evaluations. In the recent internal biennial surveillance review, it was agreed that the primary focus of bilateral surveillance should be on the Fund's traditional mandate—monetary stability, balance of payments sustainability, and growth-oriented economic policies. In non-core issues, a macroeconomic relevance test should be applied. Central issues in advance of the Annual Meetings will include the lessons to be drawn from the pilot project for the release of Article IV staff reports, and the link between strengthened Fund surveillance and the work under way on financial sector issues as well as on standards and codes. The review of the release of Article IV reports will include a wider discussion of Fund transparency, taking into account the wide range of Fund information released into the public domain. Additional work in the period after the Annual Meeting will involve a broad review of surveillance initiatives and the Fund's experience with governance.
• Standards and codes:
In the next few months, most work in this area will consist of the implementation of policies already in place, in particular the program of voluntary, experimental reports on standards and codes for individual countries. In the months after the Annual Meeting, experience with this program and of working with other standard-setting bodies will be evaluated. Papers will also be prepared on various aspects of the codes on transparency in monetary and financial, transparency, fiscal transparency, and data dissemination.
Among the other topics that the Executive Board will consider in the coming months are:
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The IMF's Executive Board consists of the 24 officials appointed or elected by the IMF's 182 member countries with the Managing Director as Chairman. The Board meets regularly to assess economic developments at the national, regional and global levels; to discuss and decide on the IMF's loans to member countries; and to consider broad policy issues concerning the international financial system.
This is the third occasion on which a summary of the work program has been released to the media (see News Briefs 99/38 of July 2 1999, and 99/73 of October 28, 1999).
