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World
Bank-Civil Society Initiative (WB-CSI)
About the International
Monetary Fund (IMF)
The International Monetary Fund (IMF) plays a large role in developing-country
policymaking, particularly in the case of lower-income countries. Fund
policy recommendations, frequently a condition of lending, can cover a
number of areas and range beyond monetary and exchange rate policies into
privatization, trade liberalization, tax reform, and financial sector
reform, to name a few examples. Policies in all these areas can have important
implications for the poor majority in the countries that InterAction members
seek to serve.
In addition, since
1999 the World Bank and the IMF have begun coordinating more closely their
work with low-income countries, through the poverty
reduction strategy papers (PRSP). Countries eligible for
concessional lending through the World Bank’s International
Development Association (IDA) are generally eligible for
concessional IMF lending through the IMF’s Poverty Reduction and
Growth Facility (PRGF), formerly called the Enhanced Structural Adjustment
Facility (ESAF). Loans made through the PRGF are meant to be shaped by
the priorities set out in a country’s PRSP, but frequently this proves
more the exception than the rule.
The
IMF and Low-Income Countries: What should be the Fund’s Role?
The
International Monetary Fund has begun rethinking its role
in low-income countries. A recent Fund paper raises the question of “how
the Fund can best support low-income members and contribute to intensified
global efforts towards the achievement of the Millennium Development Goals.”
At the same time, a recent Oxfam paper maintains that if the Fund is to
truly help achieve the MDGs, it needs to increase flexibility in its economic
targets, cease to operate on the assumption that aid flows to developing
countries will remain at their current abysmally low levels, and function
as “one partner in a broad alliance for poverty reduction, and not
as the all powerful on/off switch for aid and debt relief.” On
November 19th, 2003, a panel discussion hosted by InterAction considered
the merits of these arguments and others relating to the financing needs
of low-income countries.
Presentation
from June 25: Fiscal Adjustment in IMF-Supported Programs,
Commentary from Country Experience
On June 25th, Marcelo Selowsky, the Assistant Director of the Independent
Evaluation Office of the IMF met at InterAction with a Honduran Civil
Society contingency as well as a number of Civil Society members from
Washington to discuss a recently published IEO study on fiscal adjustment
in IMF-supported programs. The study takes up the question of whether
the budget deficit (or surplus) targets recommended by the IMF follow
a “one-size-fits-all” model. In particular, the study addresses
the question of whether excessively cautious projections of foreign aid
lead to unnecessary reductions in public spending. View
the presentation given by Marcelo Selowsky outlining the conclusions of
the report.
Resources/Documents:
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