Drawing on the recommendations of the International Monetary and Financial Committee at its meeting in April, the work program contains a wide range of topics in key areas of the IMF’s responsibilities.
At the same time, the work program—the first in the term of Horst Köhler, IMF Managing Director and Chairman of the Executive Board—gives particular attention to the reform of the IMF itself. “Our aim in the coming months should be to articulate our vision for the future role of the IMF and to bring a sharp focus and a clear sense of mission to the work of the organization in the context of a well-defined understanding of the division of labor with other agencies and forums,” Köhler said in a statement to the Executive Board. “Our work should establish the IMF—specifically the Executive Board—as the driving force in the debate on the reform of the IMF, thereby giving it a greater stature in the debate on strengthening the international monetary and financial system. This will require the IMF, under the overall guidance of the Executive Board, to take stock of the full range of reform proposals and to articulate guiding principles from them.”
The work program, Köhler said, should be based on first principles, including making the IMF as effective as possible in realizing the objective of achieving prosperity worldwide; identifying clear priorities in the IMF’s activities and keeping the IMF focused on its key competencies; achieving an appropriate balance between conditionality attached to the use of IMF resources and the ownership of policy programs by member countries; broadening the debate on the role of the private sector, so as to promote its potential for acting as the main engine for stimulating productivity and growth in the developing countries; and strengthening the cooperation between the IMF and other international agencies and forums, based on a clear division of labor to enhance efficiency and accountability.
The priorities within the work program follow below.
Review of IMF facilities and conditionality
Work in this area will build on previous work programs, focusing on such features of nonconcessional IMF facilities as maturities, rates of charge, and eligibility criteria. Items for consideration include a proposed modification of the Contingent Credit Lines, along with possible changes in Stand-By and Extended Arrangements. The Board will also begin a broad review of the application of conditionality based on past experience with IMF-supported programs, particularly in the area of structural reforms but also with regard to fiscal, monetary, and exchange rate policies. This review is expected to be extensive, with papers being considered both before and after the Annual Meetings. Other issues covered by the review will include access policy, early repurchase, and misreporting.
Financial sector issues
The IMF’s efforts to promote the smoother functioning of private financial markets will include developing a dialogue with financial market participants, analyzing market developments, and encouraging members to provide reliable, up-to-date information to the public. The 2000 International Capital Markets Report will put into perspective the rationale for deepening the IMF’s work on such financial sector issues. The Board will examine issues in the assessment of offshore financial centers and will carry forward its work on the involvement of the private sector in preventing and resolving financial crises. A key question will be the extent to which IMF support can be relied on to generate an early return of private capital to countries that have undergone crises and the extent to which concerted private sector involvement should be sought. Other papers will address the corporate restructuring process, the development of debt workout principles, and collective action provisions in international sovereign bonds.
Debt relief and poverty reduction
In presenting the new work program to the Executive Board, Köhler stressed that making the debt-relief initiative for Heavily Indebted Poor Countries (HIPC) a success is among the most important tasks that the IMF is currently undertaking. In the period ahead, the Board will have opportunities to review progress with the HIPC Initiative and to discuss the development of Poverty Reduction Strategy Papers, which encapsulate the strategy underlying PRGF [Poverty Reduction and Growth Facility] programs in individual countries. The Board will also review papers on financing the PRGF-HIPC Trust.
Surveillance and transparency
The work program will advance recent work on how the IMF discharges its key responsibility of surveillance, taking into account the lessons from both internal and external evaluations. In the recent internal biennial surveillance review, it was agreed that the primary focus of bilateral surveillance should be on the IMF’s traditional mandate—monetary stability, balance of payments sustainability, and growth-oriented economic policies. For noncore issues, a macroeconomic relevance test should be applied. Central issues in advance of the Annual Meetings will include the lessons to be drawn from the pilot project for the release of Article IV staff reports and the link between strengthened IMF surveillance and the work under way on financial sector issues, as well as on standards and codes. The review of the release of Article IV reports will include a wider discussion of IMF transparency, taking into account the wide range of IMF information released into the public domain. Additional work in the period after the Annual Meetings will involve a broad review of surveillance initiatives and the IMF’s experience with governance.
Standards and codes
In the next few months, most work in this area will consist of the implementation of policies already in place—in particular, the program of voluntary, experimental reports on standards and codes for individual countries. In the months after the Annual Meetings, experience with this program and with working with other standard-setting bodies will be evaluated. Papers will also be prepared on various aspects of the codes on monetary and financial transparency, fiscal transparency, and data dissemination.
Other agenda items
Among the other topics that the Executive Board will consider in the coming months are
• the fall 2000 World Economic Outlook,
• establishment of an independent evaluation office in the IMF,
• report of the Quota Formula Review Group, and
• Article IV consultations with individual members and requests for IMF financial resources.