This paper reviews the progress report on implementation of the National Strategy for Socio-Economic Development (NSSED) during 2004 in Albania. The NSSED established a multiyear plan to combat poverty and strengthen governance. The main implication of the Integrated Planning System for the NSSED is that it will evolve into a comprehensive strategic planning framework. Its focus will accordingly shift toward medium to long-term planning, ensuring that a coherent, costed, mutually consistent sector and cross-cutting strategies are developed that serve as the policy basis for the annual Medium-Term Budget Program process.
Articles in Finance and Development generally deal with the world’s economic problems as they appear to the generals in the operations room, or to senior officials in the field. In this series of articles, an attempt is made to give some glimpses of development as it affects the lives of the private soldiers of development.
International Monetary Fund. External Relations Dept.
During July 23-27, the IMF Institute offered a course on economic growth as part of its in-house training program. Xavier Sala-i-Martin, Professor of Economics at Columbia University, came to the IMF for the seventh time to discuss growth from a theoretical and empirical perspective. As on previous occasions, there was a large demand for this very popular course. Sala-i-Martin spoke with the Alicia Jiménez of the IMF Institute about the main factors that need to be present in order to stimulate growth.
International Monetary Fund. Asia and Pacific Dept
KEY ISSUES Context: Nepal has been trapped in a low-investment, low-growth equilibrium. The authorities' aim is to graduate from least-developed country status within 7 years. Macroeconomic situation and outlook: The earthquakes in April and May have held back growth. Together with the recent unrest and disruptions to trade routes, they also pushed up inflation. Growth is expected to gradually rebound as economic activity recovers and reconstruction gains momentum. High remittance inflows are supporting a strong external position, as well as high broad money growth. The outlook is subject to considerable downside risk, involving continued political and economic instability and slower-than-expected growth of government capital spending. Medium-term prospects: While remittances are expected to continue to support the external position, the outlook for growth depends importantly on the authorities' reform efforts. Experience in other fragile states shows that natural disasters can have permanent effects on potential growth. This underscores the importance of a decisive boost to public capital spending and reforms to strengthen the business climate. Key policy recommendations: Fiscal policy needs to support post-earthquake reconstruction and medium-term growth through higher public investment. Stronger public financial management (PFM) will be key to the swift and efficient implementation of higher capital spending. Along with efforts to improve the business climate, this should support private investment needed to generate sustained higher economic growth and employment opportunities. The exchange rate peg to the Indian rupee provides a useful nominal anchor to the economy, and the real exchange rate is broadly in line with fundamentals. Money growth should be contained to a level consistent with supporting the peg. The monetary operations framework needs to be strengthened to put the central bank in a position to better control the growth of broad money in the face of strong inflows of remittances and aid. Financial sector reforms should continue to focus on bolstering regulation and supervision, and improving financial infrastructure, to reduce risk and increase access to finance.
This paper highlights that for the IMF, July 2004 marked the 60th anniversary of the conference in Bretton Woods, New Hampshire, when delegations from 44 allied countries drafted and agreed upon the IMF’s charter. The IMF’s role and work have evolved in response, but like any large organization, its ability to change has been limited by its own rules and mandate and has been held back by inertia. This year’s anniversary offers an opportunity to reflect on how gaps between the reality and the ideal might be closed in the coming years.
Articles in Finance and Development generally deal with the world’s economic problems as they appear to the generals in the operations room, or to senior officers in the field. In this series of articles, an attempt is made to give some glimpses of development as it affects the lives of the private soldiers of development.
The Russian economy has improved after the recession, but recovery is fragile. Executive Directors appreciated the pre-crisis policy of taxing and saving oil revenues in a stabilization fund, which had created significant space for fiscal expansion, monetary easing, and extraordinary liquidity support to the banking system while helping to prevent an abrupt ruble depreciation. Directors agreed that the main challenges will be to implement medium-term fiscal consolidation, mitigate pressures for real appreciation and inflation, restore the health of the banking system, and improve the investment climate through ambitious structural reforms.