International Monetary Fund. Independent Evaluation Office
The second Annual Report of the IEO summarizes the findings and recommendations of two completed evaluation projects: on the IMF’s experience with the Poverty Reduction Strategy Papers and the Poverty Reduction and Growth Facility and the role of the IMF in Argentina, 1991-2001. It also discusses the status of ongoing evaluations, and identifies potential candidates for the menu from which future IEO work programs will be chosen.
Using narrative-based country-case studies, war episodes in the Middle East were examined to assess their economic impact on conflict and neighboring economies. The paper found that conflicts led to a contraction in growth, higher inflation, large fiscal and current account deficits, loss of reserves, and a weakened financial system. Post-conflict recovery depended on the economic and institutional development of the country, economic structure, duration of the war, international engagement, and prevailing security conditions. The net economic impact on neighboring countries varied according to their initial economic conditions, number and income level of refugees they hosted, economic integration, and external assistance.
The Lebanese authorities have requested follow-up Emergency Post-Conflict Assistance with an access of 12.5 percent of quota to support their economic program. The 2006 war with Israel led to a political stalemate and repeated outbreaks of domestic fighting until the formation of a national unity government in July 2008. Macroeconomic conditions have improved, but fuel and food prices have boosted inflation. Financial market developments have been favorable, despite the global financial crisis, which has had little effect on Lebanon.
This paper explores how the Fund's instruments and practices might be adapted to support sound policies in low-income members, in particular those that do not have a need or want to use Fund resources.