This section provides the background studies relating to dimensions of Fund policy on conditionality. Appendix 1 provides a review of Fund experience with coordination, both in a low-income country (LIC) setting (in African programs) and in an emerging market and advanced economy setting in the European Union (EU) and Euro Area (EA). Appendix 2 summarizes the recent changes to debt limits in LICs and provides an assessment of the implementation of this policy in the early stages (up to mid-February 2011). Appendix 3 reviews the experience of countries with the Flexible Credit Line (FCL) and Precautionary Credit Line (PCL)-supported programs. Appendix 4 examines the impact of the 2009 Special Drawing Rights (SDR) allocation on program design
its program countries. 5 Indeed, the IMF and its personnel rely on programcountryauthorities to (i) provide correct information, (ii) design sound economic, monetary, and structural policies, (iii) implement the IMF-supported program as presented in the letter of intent, and (iv) not to misuse available resources, particularly IMF resources. In turn, programcountryauthorities expect the IMF and its personnel, as their confidential adviser, to keep secret and not to mishandle some information that they made available to the institution.
This paper attempts to
This paper is an attempt to identify the determinants of trust between country authorities and IMF staff in the context of an IMF-supported program. Using an outcomes-based definition of trust, a game-theoretic model is developed to compute the level of trust between the two parties. The results and the analysis of trust-related issues emerging in a program context suggest that trust between country authorities and IMF staff exerts a positive impact on the likelihood of program success through its ability to improve the quality of the design, the efficiency of negotiation, and the effectiveness of implementation of an IMF-supported program. Some initiatives to secure such benefits and enhance trust in staff are proposed.
of the past ten years), a peer-reviewed assessment is undertaken if a request for a new arrangement is made. 9 These assessments review the appropriateness of the IMF’s overall approach and soundness of its advice in the context of previous IMF arrangements. This allows the design of any new arrangement to be informed by lessons learned from previous arrangements.
For all programs, countryauthorities will be given opportunities to express their views on program design and performance after the conclusion of the program, both during the Article IV mission
of six months to four years, and could be extended within the four year maximum. PCIs of less than one year would require at least one scheduled review. There would be no limit on the number of successor PCIs.
13. The process for requesting a PCI would be analogous to Fund financial arrangements . Countries would express an interest in a PCI, after which staff and country authorities would begin discussions on the scope and content of the program. Countryauthorities would present a Policy Statement setting out their program objectives and specific commitments in
credit risk than other types of cross-border debt.
Facilitating risk sharing among private and public domestic and foreign creditors and insurers. In exceptional cases and as part of a credible adjustment program, countryauthorities could use part of their foreign exchange reserves to provide guarantees for new credit extended by the private sector. Authorities should make a commitment that trade-related external credit would not be affected by any future foreign exchange transfer and convertibility restrictions or debt moratorium or rescheduling. Some market
This paper sets out Management’s response to the Independent Evaluation Office’s (IEO) evaluation report on Self-Evaluation at the IMF. The implementation plan proposes specific actions to address the recommendations of the IEO that were endorsed by the Board in its September 18, 2015 discussion of the IEO’s report, namely: (i) adopt a broad policy or general principles for self-evaluation in the IMF, including its goals, scope, outputs, utilization, and follow-up; (ii) give country authorities the opportunity to express their views on program design and results, and IMF performance; (iii) for each policy and thematic review, explicitly set out a plan for how the policies and operations it covers will be self-evaluated; (iv) develop products and activities aimed at distilling and disseminating evaluative findings and lessons. The implementation of some of these proposed actions is already underway. The paper also explains how implementation will be monitored.
credible adjustment program, countryauthorities could use part of their foreign exchange reserves to provide guarantees for new credit extended by the private sector. It was suggested that authorities should make a commitment that trade-related external credit would not be affected by any future foreign exchange transfer and convertibility restrictions or debt moratorium or rescheduling. Some market participants argued that explicit provision of “de jure” seniority of trade credit would be valuable.
B. Efforts by the official sector
24. By providing temporary
The global financial safety net (GFSN) has become larger and more decentralized, creating a need for greater coordination. The expanded GFSN has created multiple sources of official financing for countries in need of support to address balance of payments shocks. Enhanced coordination among these layers would facilitate a more efficient use of global resources and provide better incentives for implementing sound policies. A new non-financing Policy Coordination Instrument (PCI) would address gaps in the GFSN and the Fund’s toolkit. The new Policy Coordination Instrument is designed for countries that are seeking to unlock financing from multiple sources and/or to demonstrate a commitment to a reform agenda. It would enable a closer policy dialogue between the Fund and countries, more regular monitoring of economic developments and policies, as well as Board endorsement of those policies. It would be available for all member countries. The key design features draw on Fund financing arrangements and the Policy Support Instrument (PSI), with some important differences. These include no qualification criteria, a review-based approach for monitoring of conditionality, and a more flexible review schedule. The PCI is part of a broader set of Fund policy proposals to improve coordination with RFAs, enhance liquidity provision for members, and ensure the cohesion of the Fund’s toolkit. The IMFC and the G20 called for further work to strengthen the GFSN and to improve cooperation between the Fund and regional financing arrangements (RFAs). In response, the Fund has produced a diagnostic of the GFSN and the Fund’s toolkit and identified important gaps. Introduction of the PCI, when considered together with the other proposals, will help to move towards a GFSN with improved coverage, more reliable support, and better coordination between the various layers.
International Monetary Fund. Asia and Pacific Dept
. Nauru is also facing challenges common to small islands: a narrow production base, remote location, high cost of public goods, small population, insufficient infrastructure, and climate change. Despite its relatively high per capita income, Nauru’s income inequality and health indicators are worse than peers. Nauru is classified as a fragile state by AsDB.
Poverty and Inequality
Sources: World Bank Group, United Nations Development Program, and Country Authorities.
Income and Health Indicator
Sources: United Nations Development Program, Country