The Role Of The IMF In Low-income Countries 2006 Annual Meetings – Singapore September 2006 Mark Plant International Monetary Fund
The Medium-term Strategy • Put forth by Managing Director and approved by Executive Board • Reiterates continued engagement by IMF in low-income countries • Stresses the need for focus on areas of comparative advantage – macroeconomics and financial sector expertise • Underscores new challenges of scaled-up aid and debt relief
Outline Of Presentation • Three new macroeconomic challenges • New tools • Open questions
Three New Macroeconomic Challenges • Widening gaps • Scaled up aid / – absorb and spend • No more debt? – the challenge of borrowing
New Tools – Principles Of Engagement • Remain engaged in low-income countries • Surveillance, technical assistance and lending • Align with Poverty Reduction Strategies (PRS), in support of the Millennium Development Goals (MDGs) • Focus on core areas of competence • Recognize need for international cooperation
New Tools • Poverty Reduction and Growth Facility • Policy Support Instrument • Exogenous Shocks Facility • Debt Sustainability Framework • Debt relief • Heavily Indebted Poor Countries (HIPC) Initiative • Multi-lateral Debt Relief Initiative (MDRI) • New lenders
Open Questions • How to achieve focus, flexibility and streamlining? • What resources does the Fund need – financial and human? • What role in PRS and donor coordination? • What role in debt decisions? • Rethink post-conflict/failed states strategy?
References • The MD’s Medium-Term Strategy • http://www.imf.org/external/pp/longres.aspx?id=548 • PRGF-supported Program Design • http://www.imf.org/external/np/pp/eng/2005/080805r.htm • Debt Sustainability Analysis • To be published