Instrument would be amended to: (i) rename the Economic Development Document (EDD) as the “Poverty Reduction and Growth Strategy” (PRGS); 1 (ii) require observance of PRGS documentation requirements to members receiving support under SCF arrangements with an initial duration exceeding two years; (iii) extend the deadline for meeting the PRGS requirement from the first review to the second review; and (iv) for countries receiving support under an ECF arrangement that have limited institutional capacity for meeting the PRGS requirements by the second review, allow for the
meeting the PRGS requirement specified in subparagraph (i) above, the member may request approval by the Executive Board of an extension of the deadline for issuance of the PRGS up until the fourth review under the ECF arrangement. Any request for an extension shall be made no later than the time of the request for completion of the second review. A member may request approval of a further extension of the deadline for issuance of the PRGS up until the sixth review under the ECF arrangement, provided that: (A) the member can provide adequate justifications based on
expressed broad support for strengthening program links to poverty reduction, including by requiring a PRGS whenever an SCF arrangement or PSI has an initial duration exceeding two years. They supported greater flexibility in the timing of PRGS requirements, including extensions for countries that need to focus limited institutional capacity on near-term measures to enhance economic and political stability. Directors welcomed the thorough review of the financing framework to provide concessional financial support to LICs. They concurred with the assessment that the
, and PSI, while providing more flexibility on the timeline for producing an EDD . It is proposed that SCF arrangements with an initial duration exceeding two years have the same EDD (PRGS) requirements as the ECF arrangement. To provide flexibility to country authorities, it is proposed to extend the current deadline for meeting the EDD (PRGS) requirement by the first program review to the second program review. As noted above, there are circumstances where a country seeking support under the ECF may need to focus limited institutional capacity on near
1. The outlook for LICs is adversely affected by the global slowdown, internal fragility, natural disasters, and rising debt vulnerabilities. Key global risks include an escalation of trade tensions and a sudden, sharp tightening of financial conditions. Domestic conflicts, humanitarian crises, and cross-border tensions have elevated economic and political pressures faced by many LICs in the Middle East, Africa and Latin America. At the same time, public debt and debt service have continued to rise for a large share of PRGT-eligible countries, with growing recourse to bilateral and commercial financing on market-based terms.1 Given tighter financial conditions and larger exposure to commercial debt, many LICs are faced with debt roll-over risks, increased debt servicing costs, and mounting risks to debt sustainability, jeopardizing the gains made after HIPC debt relief.