Report on the Incidence of Longer-Term Program Engagement

The decision on IMF membership in the Financial Stability Board (as set forth above) was adopted by the IMF’s Executive Board.

Abstract

The decision on IMF membership in the Financial Stability Board (as set forth above) was adopted by the IMF’s Executive Board.

1. Longer-term program engagement (LTPE) occurs when a member has spent at least seven of the past 10 years under Fund-supported financial arrangements.2 In response to the Executive Board’s request for periodic updates on the incidence of LTPEs, this is the eleventh such report and provides information through end-May 2010.3

2. An Ex Post Assessment (EPA) is required for members considered as having LTPE that wish to request successor arrangements, provided at least five years have passed since the last EPA for the member.4 As of end-May, 2010, the Executive Board had discussed EPAs for 49 members. This is the same as the number reported in the last update to the Executive Board, since the EPA requirement was temporarily suspended at the time of the last incidence report, until August 27, 2010.5 In line with the Board decision regarding program requests during the suspension period, brief updates were prepared for Benin (Country Report No. 09/252), Malawi (Country Report No.10/87), Mauritania (Country Report No.10/168), and Sierra Leone (Country Report No.10/176) to provide the Board with brief summaries before EPA updates (an EPA report for Mauritania) are prepared later this year.6

3. Twenty-one members, of which 18 are PRGT eligible (with two members currently having GRA arrangements), met the LTPE definition as of end-May 2010. Since the time of the last report, Chad and Mozambique have ceased to meet the LTPE definition, while Sao Tome & Principe, Sierra Leone, and Sri Lanka have been added to the list.

4. Several EPAs could be expected over the next year, depending on whether new financial arrangements will be requested. As discussed in ¶2, EPA updates are expected in 2010 for Executive Board discussions for Benin, Malawi, and Sierra Leone; an EPA report for Mauritania is also expected. Should a successor arrangement be requested for the Kyrgyz Republic, an update on program engagement since the last EPA report would be required. Further, if successor financial arrangements are to be requested, EPA updates are expected for the following members with arrangements expiring in the first half of 2011: Gambia, Georgia, Mali, Niger, and Zambia. In addition, a comprehensive EPA report would be needed for Sri Lanka if a successor arrangement is requested (as this is the first time Sri Lanka has met the LTPE definition). Finally, three members without a current Fund financial arrangement—Albania, Cameroon, and Madagascar—would need an EPA update over the next year if they request an arrangement.

Table 1.

Ex Post Assessments Considered by the Executive Board and Member's LTPE Status

(As of June 15, 2010)

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Source: IMF staff.

Excluding the Policy Support Instrument. Arrangement as of end-April 2010.

And 6th Review under PRGF.

And ex post evaluation of exceptional access.

Table 2.

Members with Longer-Term Program Engagement

(As of June 15, 2010)

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Members that have had at least seven years of non-precautionary Fund financial arrangements in the last ten years.

Excluding the Policy Support Instrument. Current arrangement as of June 15, 2010.

The member currently has a GRA arrangement.

The member currently has a PSI.

ESF arrangement scheduled to expire on June 18. The member currently has a PSI.

1

Prepared by Apinait Amranand and Bikas Joshi.

2

Fund financial arrangements that qualify for the definition of LTPE are those drawing on upper credit tranche GRA or PRGF-ESF/PRGT resources, or any blend of the two. An outright purchase under the ESF, RAC, RCF, or ENDA/EPCA does not count towards LTPE. Further, time spent under the Policy Support Instrument (PSI) and the precautionary use of the Flexible Credit Line (FCL) or the precautionary use of the GRA or PRGF- ESF/PRGT resources that remain undrawn throughout the arrangement does not count toward LTPE. For a complete definition of LTPE, see “Public Information Notice of Ex Post Assessments and Issues Related to the Policy on Longer-Term Program Engagement,” (PIN/06/96, 08/10/06); report entitled “Review of Ex Post Assessments and Issues Relating to the Policy on Longer-Term Engagement”; and “Ex Post Assessment of Members with Longer-Term Program Engagement—Revised Guidance Note”.

3

This report provides an update since the last report to the Executive Board from June 2009.

4

The Executive Board approved, on August 28, 2009, modifications to the procedures for EPAs (in light of the Board discussion of Omnibus Paper on Easing Work Pressures). The changed procedures are discussed in detail in the Revised Guidance Note for Ex Post Assessment of Members with Longer-Term Program Engagement.

5

The initial request was made in the 2009 Report on the Incidence of Longer-Term Program Engagement and Request for Temporary Suspension of the Ex Post Assessment Requirement, with further Board decision taken in the context of the Omnibus Paper on Easing Work Pressures.

6

See the revised guidance note for Ex Post Assessments of Members with Longer-Term Program Engagement for distinction between a streamlined “EPA update” and a more comprehensive “EPA report.”

Report on the Incidence of Longer-Term Program Engagement
Author: International Monetary Fund