Financial year 2004 saw continued budgetary constraint and reform; management and senior staff changes; and departmental reorganization to reflect evolving circumstances.

Financial year 2004 saw continued budgetary constraint and reform; management and senior staff changes; and departmental reorganization to reflect evolving circumstances.

The IMF’s administrative budget for FY2004, which authorized total expenditures of $837.5 million, was underspent by $31.4 million, as the Fund continued to modernize its internal budgetary procedures, prioritized the allocation of resources, and retained a cap on the number of staff positions. Total capital spending was within the approved budget of $39.6 million. In October 2003, the Fund created a new internal committee to advise management on resource allocations for the FY2005 budget.

Management changes during the financial year included the resignation of Managing Director Horst Köhler in March 2004, following his acceptance of his nomination for the position of President of Germany. He was succeeded by Rodrigo de Rato in June 2004. Deputy Managing Director Eduardo Aninat left the Fund in June 2003 and Deputy Managing Director Shigemitsu Sugisaki retired in January 2004. They were succeeded by Agustín Carstens and Takatoshi Kato, respectively.

There were also a number of departmental changes. The European II Department, formed in 1992 to assist the Baltic countries, Russia, and other countries of the former Soviet Union with their transition to a market economy, was dissolved as the central and east European countries prepared to join the European Union. The countries formerly within the purview of this department were transferred to the European Department and the Middle East and Central Asia Department (formerly the Middle Eastern Department). In addition, the African Department was reorganized toward the end of the financial year to strengthen its capacity to support the low-income countries that fall under its responsibility.

Administrative and Capital Budgets

The IMF’s Administrative Budget, which covers the period from May 1 through April 30, provides funds for personnel costs, travel, and other recurrent expenses. It is approved by the IMF Executive Board on both a gross and a net basis. The gross budget includes expenditures that are funded from “reimbursements”—mainly external donor contributions for capacity building (technical assistance and training of member country officials) and a small amount of revenue from publications. The net budget is funded from the net income of IMF operations. The Executive Board sets limits on gross and net expenditures and a ceiling on full-time (both open-ended and limited-term) staff positions. The Executive Board also sets a three-year ceiling on expenditures for capital projects—building facilities, including regulatory-mandated and security-related upgrades, and information technology projects—starting in the forthcoming fiscal year.

Budget Reforms

Following an external review in 2001, the IMF is in the process of modernizing its internal budgetary procedures and practices with a view to adopting, to the extent practical and appropriate for the institution, an output-focused budget system along the lines of those that have evolved in the public sector of many industrial countries.

Consistent with this objective, the IMF has shifted to dollar budgeting, while retaining a limit on the number of staff positions; created a top-down dollar limit on the size of the Administrative Budget; reintroduced a medium-term expenditure framework; required the preparation of departmental business plans for the delivery of services, both to member countries and to other departments; developed a revised output and activity structure, to classify Fund departments’ services; revised the internal accounts structure to facilitate budget management at the departmental level; provided to the Executive Board information on the full costs of new policy initiatives and financing proposals as appropriate; and revamped the capital budget procedures to bring them into line with standard practices.

In FY2004, along with the consolidation of the above reforms, additional changes focused on better prioritizing the allocation of resources, improving the costing of activities, and developing performance indicators. In October 2003, the internal Committee on Budget Priorities (CBP) was created to advise management on resource allocations for the FY2005 budget. In considering the broad allocation of resources to outputs, the CBP took into account the likely costs of new or expanded policies; anticipated pressures from program or other intensive country work; projected demands for other primary outputs, including work on technical assistance, research, standards and codes, and external training; existing pressures on IMF staff or other resources; and the scope for reducing or streamlining existing activities. Essential groundwork has also been done to improve cost allocation by developing better measures and apportionment of overheads. A task force on performance indicators recommended that the Fund develop a system of standards, emphasizing that, to be successful, the system should be developed with adequate time, ownership, and resources to support it.

In FY2005, the Fund will continue reform efforts already under way in three areas: a new time-reporting system (TRS), a new cost-allocation system to complement the TRS, and a pilot program of performance indicators for certain IMF activities. These reforms will be supported by a determined effort to improve computerized management information systems, under the guidance of the interdepartmental Information Technology Policy Committee. A large part of this work is being outsourced.

As part of its budget reforms, the IMF has also begun undertaking departmental reviews incorporating a zero-based approach. The reviews, led by the Office of Internal Audit and Inspection (OIA) with the participation of the Office of Budget and Planning (OBP), aim to identify activities that are of lower priority in meeting the goals of the Fund and that may offer scope for resource reallocation to higher priority areas. In addition, like earlier OIA exercises, the reviews assess the effectiveness of departmental management in achieving the department’s mission and goals. The goal is to undertake two such departmental reviews each year.

Budgets and Actual Expenditure in FY2004

The IMF’s Administrative Budget for the financial year that ended April 30, 2004 (FY2004) authorized total expenditure of $837.5 million (or $785.5 million net of reimbursements). The FY2004 Capital Budget made provision for expenditure of $39.6 million on projects commencing in FY2004, including $13.2 million for building facilities projects and $26.4 million for information technology projects.

The Administrative Budget outturn for FY2004 amounted to $806.1 million on a gross basis, $31.4 million (3.7 percent) less than estimated in the original budget. This under-spending was composed of $9.6 million in personnel expenses, $9.1 million in travel, and $12.7 million for other activities, including $5.0 million of unused contingencies. Reimbursements were larger than budgeted because of a more active pursuit of rebates and discounts in negotiating airfares and increasing external donors’ contributions for technical assistance and training activity. On a net basis, the FY2004 Administrative Budget was under by 4.8 percent.

The budget underrun reflected a combination of lower-than-planned outputs, efficiency gains, and lower-than-projected input costs.

Total measured outputs were below planned levels in bilateral and regional surveillance, use of Fund resources, and capacity building, while for the other two primary outputs—(1) policy development, research, and operation of the international monetary system, and (2) standard setting—output levels were closer to departments’ aggregate business plans. This underdelivery of outputs was driven largely by higher-than-anticipated staff vacancies, in part the result of major organizational changes.

Significant efficiency gains were achieved on travel. The volume of travel fell relative to FY2003, in part because missions, particularly those for Article IV consultations and Financial Sector Assessment Program exercises, and those of functional departments, were shorter and mission teams were smaller.

On the input side, in addition to an overall higher vacancy rate for staff positions, lower-than-budgeted personnel costs were mainly the result of lower expenditure on outside experts and changes to the U.S. tax code. The lower-than-planned expenditure on experts reflects a greater shift toward a more strategic (upstream) focus in technical assistance delivery, with a related move away from long-term resident experts to short-term assignments. The reduction in income tax rates under the U.S. Jobs and Growth Tax Relief Reconciliation Act of 2003, enacted after the Fund’s FY2004 budget was approved, resulted in close to $4 million less expenditure on tax allowances than projected in the budget.

Total capital spending in FY2004 was within the approved budget. The Headquarters 2 building project remains within the $149.3 million budget approved by the Executive Board in April 2002 and on track with the revised project schedule (see Box 8.1). Information on the actual expenditures of the Administrative Budgets for FY2002 through FY2004 and budgeted expenditures for FY2004 and FY2005 is provided in Table 8.1.

Table 8.1

Administrative Budgets, Financial Years 2002-051

(In millions of U.S. dollars)

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Note: Figures may not add due to rounding.

Administrative budgets as approved by the Board for the financial years ending April 30, 2004, and April 30, 2005, compared with actual expenses for the financial years ended April 30, 2002, April 30, 2003, and April 30, 2004.

Includes $5 million in contingency reserves-$l million for travel, $1 million for other expenditures, and $3 million for central staff allocation.

Includes $3 million in contingency reserves-$l million for travel, $1 million for other expenditures, and $1 million for central staff allocation.

Budgets for FY2005

On April 28, 2004, the Executive Board approved a gross Administrative Budget of $905.1 million ($849.6 million net of estimated reimbursements) for FY2005.1 This amount includes a contribution to the Staff Retirement Plan equivalent to 14 percent of gross staff remuneration ($74 million). It reflects a decision to normalize the annual budgetary contribution to the Staff Retirement Plan at this 14 percent rate, with drawings from or additions to reserves to be made depending on the actuarial assessment of the required contribution rate. Excluding this contribution to the Staff Retirement Plan, the FY2005 budget represents an increase of 2.4 percent in gross terms (2.1 percent in net terms) over the FY2004 approved budget.

In line with the overarching objective of maintaining the present size of the institution, the FY2005 administrative budget is designed to fund the IMF’s principal strategic goals (as reflected in the April 19, 2004, Report of the Acting Managing Director to the International Monetary and Financial Committee on the IMF’s Policy Agenda). These are strengthening the framework for surveillance and crisis prevention; devising more effective crisis resolution strategies; assisting low-income countries to achieve the high and sustainable growth needed to reduce poverty and make decisive progress toward the Millennium Development Goals; and enhancing member countries’ institutional capacity.

To help the Fund achieve these goals, the FY2005 budget includes the following:

  • Twelve additional staff positions in the African Department to strengthen the IMF’s work in the region; a new unit will assist in integrating poverty and social impact analysis into the IMF’s work on low-income countries.

  • Establishment of a Middle East Technical Assistance Center to augment the Fund’s capacity-building work in that region.

  • Enhanced work on regional surveillance and, in line with the IMF’s Independent Evaluation Office recommendations, regular ex post assessments of countries that benefit from the prolonged use of Fund resources.

The Fund will be able to implement these initiatives by redeploying positions and dollar resources freed up by efficiency gains in support activities, streamlining its work in Europe and Asia, and reducing or eliminating lower-priority activities. The FY2005 Administrative Budget also provides for an expanded anti-money-laundering and combating the financing of terrorism (AML/CFT) program. The Fund will meet the costs of this program by redeploying staff and resources and relying on external finance (for related technical assistance). Three staff positions will be added for the program, raising the total number of positions to 2,802.

In line with the above plans and priorities for FY2005, area departments, as a group, plan to increase the share of their resources devoted to surveillance by 0.5 percentage point, from 46 percent in FY2004; functional and support departments plan to devote a greater share of their resources to the support of the use of Fund resources in low-income countries. Overall, departments also plan a small increase of resources devoted to research on crisis prevention and the international financial architecture, and to capacity building, particularly for the regional technical assistance centers. The estimated share of each activity in the total output funded from the net Administrative Budget is shown in Figure 8.1.

Figure 8.1
Figure 8.1

Projected Share of Resources by Output Category, FY2005

(As a percent of net Administrative Budget)

In terms of input costs, the FY2005 Administrative Budget takes account of lower projected price increases for FY2005 and incorporates a squeeze on volumes. Contingency provisions for FY2005 have also been reduced from $5 million in the FY2004 budget to $3 million. Relative to the FY2004 budget, the FY2005 budget provides for an increase of 3.9 percent in personnel expenses, whereas the provision for nonstaff salaries (for consultants and contractual employees) is broadly constant in nominal terms. Taken together, the provision for all nonpersonnel (travel plus other) expenditures in FY2005 will fall slightly, in nominal terms, relative to the FY2004 budget.

The three-year Capital Plan for FY2005-FY2007, which covers all new capital projects scheduled to start in each of the next three years and underpins the FY2005 capital budget, is costed at $123 million, compared with $115 million for the FY2004-FY2006 plan approved in FY2003. The increase is accounted for by the cost of heightened security. With the completion of the new Headquarters 2 building, no additional major building works are planned over the medium term. Investment in information technology will decrease, following the recent spike in capital spending associated with the replacement of the Fund’s main administrative and financial information systems over the past two fiscal years.

New Headquarters Building

Construction is progressing well on a second IMF building adjacent to the existing headquarters. The new building will enable the IMF to accommodate its entire staff within a single headquarters complex and reduce overall costs by eliminating the need to lease commercial office space. Construction of the new building began in October 2002. Occupancy is currently scheduled to be completed in mid- 2005, which is earlier than the original schedule of January 2006. The Fund expects to lease out retail space on the first floor of the building.

Against this background, the FY2005 Capital Budget amounts to $31.8 million, consistent with the three-year ceiling on expenditures for capital projects. This year’s capital budget includes the heightened-security projects mentioned above, further integration of economic databases, and the core network infrastructure for the new building.

The Medium-Term Expenditure Framework

Since FY2002, the IMF has prepared an annual, medium-term expenditure framework that reflects the cost, with the number of staff positions unchanged, of policies covering the current and each of the following two financial years. The framework allows for the same price increases for personnel, travel, and other expenditures as are assumed in the FY2005 budget. This year’s expenditure framework takes into account the location and the cost of the Annual Meetings (Washington, D.C., in FY2005 and FY2006 and Singapore in FY2007) and the opening of the Headquarters 2 building (including the move-in costs, the savings in lease and other rented-property costs, and the operating costs of the new building). Based on the above assumptions and adjustments, the Fund’s net administrative expenditures are expected to increase by 3.6 percent in FY2006 and 3.8 percent in FY2007.

Human Resources

The Managing Director appoints a staff whose sole responsibility is to the IMF, whose efficiency and technical competence are expected to be, as set forth in the Articles of Agreement, of the “highest standards,” and, subject to “the paramount importance” of securing such standards, whose diversity by nationality should reflect its membership, with “due regard to the importance of recruiting personnel on as wide a geographical basis as possible.”

The goals of the IMF require that all who work for the institution observe the highest standards of ethical conduct, consistent with the values of integrity, impartiality, and discretion, as set out in the IMF Code of Conduct and its Rules and Regulations. In accordance with these high standards, the IMF relies on a financial certification and disclosure process for staff and other internal controls to prevent actual or perceived conflicts of interest.

To provide the continuity and institutional memory from which the membership benefits, the IMF has an employment policy designed to recruit and retain a corps of international civil servants interested in spending a career, or a significant part of a career, at the IMF. At the same time, the IMF recognizes the value of shorter-term employment and recruitment of mid-career professionals, given the changing labor market and the benefit of fresh perspectives. In the case of a number of skills and jobs—relating mainly to certain services and highly specialized economic and financial skills—business considerations have called for shorter-term appointments or for outsourcing.

As of December 31, 2003, the IMF employed 1,954 professional and managerial staff (about two-thirds of whom were economists) and 739 staff at the assistant level. In addition to its staff, the IMF had 317 contractual employees on its payroll, including technical assistance experts, consultants, and other short-term employees not subject to the staff ceiling. Of the IMF’s 184 member countries, 141 were represented on the staff. (See Table 8.2 for the evolution of the nationality distribution of IMF professional staff since 1980.)

Table 8.2

Distribution of Professional and Managerial Staff by Nationality1

(In percent)

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Includes staff in Grades A9-B5.

Regions are defined broadly on the basis of the country distribution of the IMF’s area departments. The European region includes Russia and countries of the former Soviet Union. The Middle East region includes countries in North Africa.

Changes in Management and Senior Staff

Managing Director Horst Köhler resigned from the Fund on March 4, 2004, following his acceptance of his nomination for the position of President of Germany. In its April Communique, the IMFC paid tribute to Mr. Köhler for his leadership of the IMF during the past four years and his work to promote close international cooperation so that all can share in the benefits of globalization. On May 4, 2004, the Executive Board selected Rodrigo de Rato to serve as Managing Director for a five-year term, which began on June 7, 2004. A national of Spain, Mr. de Rato was Minister of Economy and Vice President for Economic Affairs during 2000-04, prior to which he served as Spain’s Minister of Economy and Finance.

Deputy Managing Director Shigemitsu Sugisaki retired from the Fund on January 31, 2004, having served as Deputy Managing Director since February 1997, prior to which he had been Special Advisor to the Managing Director since August 1994. Takatoshi Kato took up his position as Deputy Managing Director on February 4, 2004, following a distinguished career in the Japanese government, international organizations, and academia, which included appointments as Japan’s Vice Minister of Finance for International Affairs and more recently as Advisor to the President of Bank of Tokyo-Mitsubishi and Visiting Professor at Waseda University.

Agustin Carstens assumed office as Deputy Managing Director on August 1, 2003, succeeding Eduardo Aninat. Prior to taking up his current position he was Mexico’s Deputy Secretary of Finance, and from 1999-2000, after a career at the Banco de Mexico, he served as an Executive Director at the IMF.

Raghuram G. Rajan took up his post as Economic Counsellor and Director of the Research Department in October 2003. Before his appointment, he taught at the Graduate School of Business at the University of Chicago, where he is the Joseph L. Gidwitz Professor of Finance.

Recruitment and Retention

In 2003, 175 people joined the IMF staff, compared with 216 in 2002. The new recruits included 74 economists, 51 professionals in other specialized career streams, and 50 assistants. Thirty-two of the recruits were mid-career economists, and 35 entered the two-year Economist Program, which is designed to familiarize entry-level economists with the work of the IMF. Participants in the program are placed in two different departments, for 12 months each. Those who perform well are offered regular staff appointments.

During 2003, 167 staff members, 112 of whom were in professional and managerial grades, separated from the organization. The separation rate for these staff was 6.0 percent.

Salary Structure

To recruit and retain the highly qualified staff it needs, the IMF has developed a compensation and benefits system designed to be internationally competitive, to reward performance, and to take account of the special needs of a multinational and largely expatriate staff. The IMF’s staff salary structure is reviewed annually by the Executive Board and, if warranted, adjusted on the basis of a comparison with salaries paid by selected private financial and industrial firms in the United States, France, and Germany, and in representative public sector agencies, mainly in the United States. After analyses of updated comparator salaries, the salary structure was increased by 4.0 percent for FY2004, and the Board approved an increase of 3.6 percent for FY2005 (Table 8.3).

Table 8.3

IMF Staff Salary Structure

(In U.S. dollars, effective May 1, 2004)

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Note: Because IMF staff other than U.S. citizens are usually not required to pay income taxes on their IMF compensation, the salaries are set on a net-of-tax basis, which is generally equivalent to the after-tax take-home pay of the employees of the public and private sector firms from which IMF salaries are derived.

Management Remuneration

Reflecting the responsibilities of each management position and the relationship between the management and staff salary structures, the salary structure for management as of July 1, 2003 is as follows:

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Management remuneration is subject to periodic structural reviews by the Executive Board and annual revisions. It is autonomous and not formally linked to remuneration in other international organizations.

Executive Board Remuneration

Upon the recommendation of the Board of Governors’ Committee on the Remuneration of Executive Directors, the Governors approved increases of 3.5 percent in the remuneration of Executive Directors and their Alternates effective July 1, 2003. The remuneration of Executive Directors is $188,980.3 The remuneration of Alternate Executive Directors is $163,470.4


During 2003, the Executive Board continued to emphasize the importance of staff diversity in improving the IMF’s effectiveness as an international institution. Notable progress was achieved in the recruitment and promotion of several underrepresented staff groups, but more still has to be done to reach a balanced regional representation in all grade groups. At the managerial level, the shares of women and of staff from developing countries rose slightly, to 15.4 percent and 31.1 percent, respectively. In both categories there is still room for improvement.

The IMF places strong emphasis on people management skills and diversity sensitivity in assessing the performance of supervisors and in recruitment and promotion decisions, which are of particular importance in an institution with a diverse workforce. Since 1995, the Senior Advisor on Diversity, who reports to the Managing Director, has advised and assisted management, the Human Resources Department (HRD), and other departments on ways to strengthen and monitor nationality and gender diversity (Tables 8.2, 8.4, and 8.5) and on diversity management. In line with the IMF’s diversity strategy, HRD continues to focus on integrating diversity into its human resource management policies, procedures, and practices.

Table 8.4

Distribution of Staff by Gender

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Includes only staff on duty; differs from the number of approved positions.

Staff in Grades A1-A8.

Staff in Grades A9-A15.

Staff in Grades B1-B5.

Table 8.5

Distribution of Staff by Developing and Industrial Countries

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Includes only staff on duty; differs from the number of approved positions.

Staff in Grades A1-A8.

Staff in Grades A9-A15.

Staff in Grades B1-B5.

An Enhanced Diversity Action Plan was introduced in 2003. The plan includes quantitative and qualitative benchmarks for the most underrepresented staff groups—women and staff from developing countries, and nationals of African, Middle Eastern, and emerging market countries. A Fundwide mentoring program was established for mid-career newcomers, and selection procedures and the special appointee program were revised to improve the Fund’s response to diversity needs. Family-friendly work arrangements and benefits were reinforced. The IMF also strengthened its policy on discrimination and consolidated previous policies and statements related to discrimination in one document.

Achieving satisfactory diversity of staff in an institution that emphasizes career employment is a continuing challenge that requires concerted effort. Progress is monitored and problems are reported in a transparent manner in various formats—including the Diversity Annual Report—on the IMF website. The Fund’s Senior Advisor on Diversity works closely with HRD and other departments to identify needs and opportunities for promoting diversity in each department’s annual human resources plan, which provides a business-relevant and systematic framework for the IMF’s diversity efforts. Typically, departmental and Fund-wide diversity actions include initiatives in recruitment and career planning, orientation and mentoring for newcomers, and measures to improve performance assessment and management selection and development. The Fund is making special efforts to increase the transparency of human resource policies, procedures, and statistics.


The Board of Governors, the highest decision-making body of the IMF, consists of one governor and one alternate governor from each of the IMF’s 184 member countries (Figure 8.2). All Governors meet once each year at the IMF-World Bank Annual Meetings; 24 of the Governors sit on the International Monetary and Financial Committee (IMFC) and meet twice each year. The day-to-day work of the IMF is conducted at its Washington, D.C., headquarters by its 24- member Executive Board; this work is guided by the IMFC and supported by the IMF’s professional staff. The Managing Director is Chair of the Executive Board and head of IMF staff; he is assisted by three Deputy Managing Directors. (For more about IMF governance, see Section 6.)

Figure 8.2
Figure 8.2

IMF Organization Chart

(As of April 30, 2004)

1The European I Department, European II Department, and Middle Eastern Department were reconfigured on November 1, 2003, to form the European Department and the Middle East and Central Asia Department.2Attached to the Office of the Managing Director.

The IMF staff is organized mainly into departments with regional (or area), functional, information and liaison, and support responsibilities. These departments are headed by directors who report to the Managing Director.

Area Departments

In November 2003, given the progress of the transition process and the prospect of European Union accession for a number of transition economies, the European II Department was dissolved, reducing the number of area departments from six to five. The transition countries were moved into two other, enlarged departments—the European Department and the Middle East and Central Asia Department (formerly, the Middle Eastern Department).

The five current area departments—African, Asia and Pacific, European, Middle East and Central Asia, and Western Hemisphere—advise management and the Executive Board on economic developments and policies in countries in their regions. Their staffs are also responsible for putting together financial arrangements to support members’ economic reform programs and for reviewing performance under these IMF-supported programs. Together with relevant functional departments, they provide member countries with policy advice and technical assistance and maintain contact with regional organizations and multilateral institutions in their geographic areas. Supplemented by staff in functional departments, area departments carry out much of the IMF’s country surveillance work through direct contacts with member countries. In addition, 90 area department staff are assigned to members as IMF resident representatives (see Box 8.2).

Functional and Special Services Departments

The Finance Department (formerly the Treasurer’s Department) has a mission to mobilize, manage, and safeguard the IMF’s financial resources to ensure that they are deployed in a manner consistent with the Fund’s overall mandate. This entails major responsibilities for the institution’s financial policies and for the conduct, accounting, and control of all financial transactions. In addition, the department safeguards the IMF’s financial position by assessing the adequacy of the Fund’s capital base (quotas), net income targets, precautionary balances, and the rates of charge and remuneration. Other responsibilities include investing funds in support of assistance to low-income countries and conducting assessments of borrowing members’ central banks.

The Fiscal Affairs Department is responsible for activities involving public finance in member countries. It participates in area department missions on fiscal issues, reviews the fiscal content of IMF policy advice and IMF-supported adjustment programs, and provides technical assistance in public finance. It also conducts research and policy studies on fiscal issues, as well as on income distribution and poverty, social safety nets, public expenditure policy issues, and the environment.

The IMF Institute provides training for officials of member countries—particularly developing countries—in such areas as financial programming and policy, external sector policies, balance of payments methodology, national accounts and government finance statistics, and public finance. The Institute also conducts an active program of courses and seminars in economics, finance, and econometrics for IMF economists. (See Section 5.)

The International Capital Markets Department assists the Executive Board and management in overseeing the international monetary and financial system and enhances the IMF’s crisis prevention and crisis management activities. As part of surveillance, the department prepares a twice-yearly Global Financial Stability Report that assesses developments and systemic issues in international capital markets. Staff members also liaise with private capital market participants, national authorities responsible for financial system policies, and official forums dealing with the international financial system. In addition, the department plays a leading role in the IMF’s conceptual and policy work related to international capital market access and gives technical advice to members on how to gain access to international markets and how to benefit from this access, as well as on strategies for external debt management.

The Legal Department advises management, the Executive Board, and the staff on the applicable rules of law. It prepares most of the decisions and other legal instruments necessary for the IMF’s activities. The department serves as counsel to the IMF in litigation and arbitration cases, provides technical assistance on legislative reform, assesses the consistency of laws and regulations with selected international standards and codes, responds to inquiries from national authorities and international organizations on the laws of the IMF, and arrives at legal findings regarding IMF jurisdiction on exchange measures and restrictions.

The Monetary and Financial Systems Department is organized around four operational areas—financial system surveillance, banking supervision and crisis resolution, monetary and exchange rate infrastructure and operations, and technical assistance. It provides analytical, operational, and technical support to member countries and area departments, including development and dissemination of good policies and best practices. An important role is coordinating with collaborating central banks, supervisory agencies, and other international organizations. The change of name from Monetary and Exchange Affairs Department on May 1, 2003, reflects the expanded responsibilities of the reorganized department, which now includes the Financial Sector Assessment Program and anti-money-laundering and combating the financing of terrorism assessments.

The Policy Development and Review Department plays a central role in the design and implementation of IMF financial facilities, surveillance, and other policies. Through its review of country and policy work, it ensures the consistent application of IMF policies throughout the institution. In recent years, the department has spearheaded the IMF’s work in strengthening the international financial system, streamlining and focusing conditionality, and developing the Poverty Reduction and Growth Facility (PRGF) and the HIPC Initiative. PDR economists participate in country missions with area department staff and assist member countries that are making use of IMF resources to mobilize other financial resources.

The Research Department conducts policy analysis and research in areas relating to the IMF’s work. The department plays a prominent role in surveillance and in developing IMF policy concerning the international monetary system. It cooperates with other departments in formulating IMF policy advice to member countries. It coordinates the twice-yearly World Economic Outlook exercise and prepares analysis for the surveillance discussions of the Group of Seven, Group of Twenty, and such regional groupings as the Asia-Pacific Economic Cooperation (APEC) forum, and the Executive Board’s seminars on world economic and market developments. The department also maintains contacts with the academic community and with other research organizations.

The Statistics Department maintains databases of country, regional, and global economic and financial statistics and reviews country data in support of the IMF’s surveillance role. It is also responsible for developing statistical concepts in balance of payments, government finance, and monetary and financial statistics, as well as producing methodological manuals. The department provides technical assistance and training to help members develop statistical systems and produces the IMF’s statistical publications. In addition, it is responsible for developing and maintaining standards for the dissemination of data by member countries.

Resident Representatives

At the end of April 2004, the IMF had 90 resident representative positions covering 84 member countries in Africa, Asia, Europe, the Middle East, and the Western Hemisphere. Planning is under way to open new offices in Jordan (in support of Iraq) and the Dominican Republic. These posts-usually filled by one IMF employee supported by local staff-help enhance IMF policy advice and are often set up in conjunction with a reform program. The representatives, who typically have good access to key national policymakers, can have a major impact on the quality of IMF country work. In particular, resident representatives contribute to the formulation of IMF policy advice, monitor performance-especially under IMF-supported programs-and coordinate technical assistance. They can also alert the IMF and the host country to potential policy slippages, provide onsite program support, and play an active role in IMF outreach in member countries. Since the advent of enhanced initiatives for low-income countries, resident representatives have helped members develop their poverty reduction strategies (see Section 4) by taking part in country-led discussions on the strategy and presenting IMF perspectives. They also support monitoring of program implementation and institution building, working with different branches of government, civil society organizations, donors, and other stakeholders.

Information and Liaison

The External Relations Department plays a key role in promoting public understanding of and support for the IMF and its policies. It aims to make the IMF’s policies understandable through many activities aimed at transparency, communication, and engagement with a wide range of stakeholders. It prepares, edits, and distributes most IMF publications and other material, promotes contacts with the press and other external groups, such as civil society organizations and parliamentarians, and manages the IMF’s website. (See also Appendix V.)

The IMF’s offices in Asia and Europe and at the United Nations maintain close contacts with other international and regional institutions. The UN Office also makes a substantive contribution to the Financing for Development process, while the offices in Asia and Europe contribute to bilateral and regional surveillance and are a major part of the IMF’s outreach effort. (See Appendix IV.)

Support Services

The Human Resources Department helps ensure that the IMF has the right mix of staff skills, experience, and diversity to meet the changing needs of the organization, and that human resources are managed, organized, and deployed in a manner that maximizes their effectiveness, moderates costs, and keeps the workload and stress at acceptable levels. The department develops policies and procedures that help the IMF achieve its work objectives, manages compensation and benefits, recruitment, and career planning programs, and supports organizational effectiveness by assisting departments with their human resources management goals.

The Secretary’s Department organizes and reports on the work of the IMF’s governing bodies and provides secretariat services to them, as well as to the Group of Twenty-Four. In particular, it assists management in preparing and coordinating the work program of the Executive Board and other official bodies, including scheduling and assisting in the conduct of Board meetings. The department, in cooperation with the World Bank, also manages the Annual Meetings.

The Technology and General Services Department manages and delivers a full range of services essential for the IMF’s operation. These include information services (information technology, library services, multimedia services, records and archives management, and telecommunications); facilities services (building projects and facilities management); general administrative services (travel management, conference and catering services, and procurement services); language services (translation, interpretation, and preparation of publications in languages other than English); and a broad range of security and business continuity services (covering headquarters security, field security, and information technology security).

The IMF also has offices responsible for internal auditing and review of work practices, budget matters, technical assistance, and investments under the staff retirement plan.

Independent Evaluation Office

The IMF’s Independent Evaluation Office (IEO) provides objective and independent evaluation on issues related to the Fund. The office operates independently of IMF management and at arm’s length from the IMF’s Executive Board. The IEO enhances the learning culture of the IMF, promotes understanding of the IMF’s work, and supports the Board in its governance and oversight. (For more information on the IEO see Section 3.)


The budget document can be accessed electronically at www.imf.org/external/np/obp/budget/040104.htm.


In addition, a supplemental allowance of $61,700 is paid to cover expenses.


In determining the salary adjustments for Executive Directors, the committee took into consideration the percentage change in the remuneration of the highest-level civil servant in the ministry of finance and central bank of selected member countries, and the change in the selected countries’ consumer price index.


These figures do not apply to the U.S. Executive Director and Alternate Executive Director, who are subject to U.S. congressional salary caps.

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