Selected Decisions and Selected Documents of the IMF, Thirty- Eighth Issue -- The Acting Chairís Summing UpóEligibility to Use the Fundís Facilities for Concessional Financing, Executive Board Meeting 12/17, February 17, 2012

Prepared by the Legal Department of the IMF
As updated as of February 29, 2016

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ARTICLE V, SECTION 12(f)
Special Disbursement Account

The Acting Chair’s Summing Up—Eligibility To Use the Fund’s Facilities for Concessional Financing

Executive Board Meeting 12/17, February 17, 2012

Executive Directors welcomed today’s discussion on eligibility to use the Fund’s facilities for concessional financing, reviewing the eligibility framework that was established in 2010 as well as the list of countries eligible for concessional financing under the Poverty Reduction and Growth Trust (the PRGT-eligibility list). Directors agreed that, based on the application of the framework, no members are currently eligible for entry or graduation, and decided to keep the list of PRGT-eligible countries unchanged in this review, noting that the framework allows for interim updates where warranted by the existing criteria and requirements. Directors also agreed to increase the population threshold used to define small states to 1.5 million, aligning it with the definition adopted by the World Bank.

Directors emphasized the need to maintain a transparent and rules-based framework for PRGT eligibility that ensures uniformity of treatment among members. They generally recalled the importance of preserving the Fund’s scarce concessional resources for members with a low income level and related vulnerabilities, and continuing to closely align eligibility with the objectives of the PRGT and with IDA practices. A few Directors stressed that eligibility should not be constrained by the availability of concessional resources. A few other Directors were of the view that highly vulnerable small states that marginally exceed the relevant income threshold should be PRGT-eligible.

Directors agreed to advance the more comprehensive review of PRGT eligibility to early-2013. On the basis of extensive consultations and analytical work, the review could assess, among other things, the suitability of the various criteria and whether the balance between the criteria used in the framework remains appropriate. In particular, a number of Directors pointed out the shortcomings of the GNI per capita criterion in the case of small states, while some other Directors called for a careful assessment of the application of the short-term vulnerabilities criterion for graduation. The review would also consider whether additional or alternative variables could be used to better capture members’ circumstances, particularly those of small states. Many Directors called for the next review to assess further options to enhance the flexibility of the PRGT-eligibility framework to cover small and very small countries.

BUFF/12/21,

February 24, 2012

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