The Role Of The IMF In Low-income Countries

1
The Role Of The IMF In Low-income Countries

• 2006 Annual Meetings Singapore
• September 2006
• Mark Plant
• International Monetary Fund

2
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

3
Outline Of Presentation

• Three new macroeconomic challenges
• New tools
• Open questions

4
Three New Macroeconomic Challenges

• Widening gaps
• Scaled up aid / absorb and spend
• No more debt? the challenge of borrowing

5
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

6
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

7
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?

8
References

• The MDs Medium-Term Strategy
• http//www.imf.org/external/pp/longres.aspx?id548
  
• PRGF-supported Program Design
• http//www.imf.org/external/np/pp/eng/2005/080805r
  .htm
• Debt Sustainability Analysis
• To be published