Managing Director Rodrigo de Rato outlined an intensive agenda for the IMF over the next few months as the organization gears up for the joint Annual Meetings of the World Bank–IMF Governors in September in Singapore. The work program of the Fund’s Executive Board, released June 22, aims for substantial progress in this period in three key areas of the organization’s new medium-term strategy: strengthening surveillance, including proceeding with the first multilateral consultation; the development of concrete proposals on quotas and voice for agreement at the Annual Meetings; and, to meet the needs of emerging market economies, the development of a new crisis prevention instrument and proposals on how to support members’ reserve pooling arrangements. The agenda also sets out the IMF’s projected activities for the remainder of 2006.
The work program offers a road map and calendar of activities for the current state of implementation of the Fund’s medium-term strategy, which is designed to bolster the Fund’s role in supporting growth and stability in a rapidly expanding and increasingly integrated international financial system.
In three priority areas, the work program outlines clear actions:
Surveillance. Work is under way on the first multilateral consultation, which focuses on policies to narrow global imbalances. Participants are China, the Euro Area, Japan, Saudi Arabia, and the United States.
Also moving forward is work on updating a 1977 IMF Executive Board decision that forms part of the foundation for the Fund’s surveillance work. Before the Annual Meetings, the Board will begin discussing the broad role of surveillance in pursuing international stability and monitoring members’ observance of their commitments to the Fund, and ways in which the basis for exchange rate surveillance might be strengthened. The review of the decision will be completed after the Singapore meetings.
Staff work is proceeding as well on improving analysis and assessments of exchange rate policies and on developing an analytical framework for addressing financial sector issues in country surveillance.
Governance. De Rato said that, reflecting preliminary discussions, work will begin on the development of concrete proposals on quotas and voice, and “at least one substantive Board discussion” on this topic will take place in advance of the Singapore meetings.
Emerging markets and crisis prevention. In the lead-up to the Annual Meetings, the Executive Board will hold a preliminary discussion on the elements of a crisis prevention financing instrument. A discussion on how to support reserve pooling arrangements will give particular attention to helping those members that already have such arrangements in place.
In keeping with its medium-term strategy, the IMF will work to improve the focus of its policy advice to low-income countries; better align its assistance for capacity building with members’ needs and evolving Fund priorities, particularly where surveillance has identified vulnerabilities; and streamline its own work to increase the organization’s efficiency and flexibility.
Low-income countries. To help low-income members achieve the Millennium Development Goals, the IMF is sharpening the focus of its policy advice, giving particular emphasis to the effective absorption of increased aid flows and debt relief, the provision of financial assistance, and institutional capacity. Before the Singapore meetings, the Board is expected to address debt issues and follow up on the debt sustainability framework for low-income countries.
Capacity building. The Fund’s medium-term strategy places priority on better aligning its capacity-building efforts with the needs of member countries and evolving Fund priorities, especially addressing the macroeconomic and financial sector vulnerabilities identified in Fund surveillance. In June, the IMF will circulate information on how reports on country observance of international standards and codes will be better integrated with Fund surveillance and technical assistance and on efforts to improve the clarity and timeliness of the reports.
Streamlining. A broad program of steps to improve the Fund’s efficiency and flexibility is moving forward. A proposal to streamline policy and other reviews is scheduled to be considered by the Board in July.
For more information, see IMF Press Release No. 06/138, which is available at www.imf.org