This paper proposes a comprehensive Strategy to strengthen IMF support to FCS in accordance with the Fund’s mandate and comparative advantage. The Strategy is a response to the Board-endorsed recommendations of the 2018 Independent Evaluation Office (IEO) Report on The IMF and Fragile States. To achieve these goals, the Strategy will benefit from additional resources reflected in the FY23-25 Medium-Term Budget, as per the budget augmentation framework discussed by the Board in December 2021. The Strategy also provides measures to better support staff working on FCS. Given the inherent risks in FCS engagement, the Strategy will be phased in starting in FY22, with implementation gradually accelerating between FY23-FY25.
This paper proposes an approach to making the MTS operational as it relates to the Fund’s work in LICs that would define more precisely the Fund’s responsibility and accountability in the PRSP and donor collaboration processes. The proposed activities are not “new,” but represent an intensification of existing work and its extension to the all LICs as appropriate. This would help clarify expectations as to the Fund’s role, and establish a consistent institutional approach to collaborating with donors and other stakeholders on the ground.