Fourth Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations

Fourth Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations

Abstract

Fourth Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations

I. Overview

1. Periodic Monitoring Reports (PMRs) update the status on Management Implementation Plans (MIPs) in response to IEO recommendations endorsed by the Executive Board.1 The third PMR, which was discussed by the Board Evaluation Committee (EVC) in December 2009, concluded that all key performance benchmarks related to the MIPs covered in that report had either been met or were on track for timely completion, that no new remedial actions were proposed, and that there were no outstanding performance benchmarks to be reviewed in the next PMR.2 In their assessment to the Executive Board, the EVC did, however, ask for follow up in future PMRs on two specific issues—the Monitoring of Fund Arrangements (MONA) database and staff mobility. 3 Therefore, this fourth report updates work on these two outstanding issues and informs on other progress since the third one through end-2010, namely on the Implementation Plan in response to Board-endorsed recommendations arising from the IEO Evaluation of IMF Involvement in International Trade Policy Issues.4,5

II. Summary of Implementation Status

2. The implementation status of the main performance benchmarks are reported below. Section A describes progress on the key benchmarks for the implementation plan regarding the IMF’s involvement in international trade policy issues, while the EVC’s request for a progress update on the MONA database and staff mobility are covered in Section B.

A. The IMF’s Involvement in International Trade Policy Issues

3. The implementation of key performance benchmarks related to the IEO Evaluation of the IMF’s Involvement in International Trade Policy Issues were either met, or are on track for timely completion:6

  • Guidance on financial services and preferential trade agreements (PTAs) were developed by staff and issued to the Board for information.7

  • Reflecting the views of Directors that trade restricting measures should be avoided during Fund-supported programs, and that trade liberalization should be promoted where necessary, the new reference notes include guidance for staff on designing effective trade reforms and assessing progress in trade liberalization for occasions when attention to trade reform is appropriate. Staff observance of this guidance would be examined in the five-yearly reviews of trade policy (first one expected in 2014).

  • Coverage of cross-cutting trade policy issues were included in the Fund’s surveillance vehicles, for example in Chapter 4 of the September 2010 World Economic Outlook. More trade-related multilateral surveillance material was also prepared on a standalone basis, including two Staff Position Notes in April and September 2010.8

  • Since the discussion of the MIP, trade policy work continued to be carried out by staff economists able to work effectively on both trade policy and broader macroeconomic issues, which helped to integrate trade policy into the Fund’s broader work.

  • Action was taken on several fronts to ensure that staff has ready access to timely and relevant summary trade policy information regarding goods trade, PTAs, and financial services. One example is the Fund-wide availability of the Global Trade Atlas (containing up to date, detailed bilateral monthly trade statistics). There was also continued close cooperation between IMF staff and those of the World Bank, WTO, and others on information and data sharing.

  • Regular meetings continued between senior staff of the WTO and World Bank, as well as other relevant multilateral organization. Examples include that: (i) staff up to B4 level visited the WTO, met the WTO management team, and made a formal presentation to the WTO Committee on Trade in Financial Services, (ii) Fund staff presented to WTO staff and country delegations on the macroeconomic aspects of protectionism, (iii) staff gave outreach seminars on IMF LIC facilities reforms to WTO LIC delegations; (iv) WTO senior staff attended the GFSR discussion (a first), continued to attend WEO discussions, and met Fund staff from several departments; and the WTO’s expert on trade in financial services came to the Fund for a couple of multi-day visits.

B. Progress on Specific Issues Highlighted by the EVC from the Third PMR

4. In their discussion of the third PMR, the EVC asked for updates in subsequent PMRs on two specific issues, the MONA database and staff mobility.

  • The third PMR reported that the MONA database had been launched on the Fund’s external web site in January 2009, and was updated in October 2009 to include a more up-to-date economic classification of structural conditions. Directors suggested that more work could be done on the system to track goals and strategies and its links to conditions. Since then, work has begun on the 2011 Conditionality Review, which is utilizing the MONA database to assess how well program conditions have been linked to program goals. As a part of conducting that review, staff will assess whether any further changes to the MONA database are needed.

  • Striking a balance between mission team stability on the one hand and staff career development needs and department flexibility on the other remains a challenge. Going forward, departments have agreed on a reporting system for monitoring staff tenure so that the Board will have better information on whether an appropriate balance is being struck. The infrastructure for ongoing monitoring will be developed and maintained by HRD in close collaboration with TGS. Updates on progress will be provided to the Board annually through this report. To provide a baseline, the average time that mission chiefs and economists have been in their current positions in the five area departments and SPR was calculated (based on tenure at end-2010) and is shown in the table below. The figures in the table show the tenure of the current incumbents and not the average time a staff member spends in a country assignment, which would be longer. For example, if all economists served exactly 24 months on a mission team and start dates were distributed uniformly over time, the table would show an average tenure of 12 months even though the average duration of an assignment would be 24 months.

Table 1:

Average Staff Tenure on Country Assignment

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III. Conclusions

5. All key performance benchmarks related to the trade MIP have either been met or are on track for timely completion, and no new remedial actions are proposed. There are no outstanding performance benchmarks to be reviewed in the next PMR, although the next PMR will provide further updates as necessary on broader issues raised in the context of this report.

Proposed Decision

The Executive Board supports the conclusions in Paragraph 5 of the Fourth Periodic Monitoring Report on the Implementation of Board-Endorsed IEO Recommendations.

Table A.1. Status of Implementation Plan in Response to Board-Endorsed Recommendations on Trade

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1

Periodic Monitoring Reports (PMRs) were established by the Executive Board in January 2007 to ensure the systematic monitoring of IEO recommendations that the Board has endorsed. The first PMR was discussed by the Board in January 2008 (Periodic Monitoring Report on the Status of Board-Endorsed IEO Recommendations and Management Implementation Plans), and the second PMR was discussed by the Evaluation Committee (EVC) in November 2008 (Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations).

2

Third Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations.

3

The assessment by the EVC is reflected in Third Periodic Monitoring Report on the Status of Implementation Plans in Response to Board-Endorsed IEO Recommendations—Assessment by the Evaluation Committee to the Executive Board. For example, the next Triennial Surveillance Review, which is expected to be completed in September 2011, will review progress on integration of macroeconomic and financial surveillance, the 2007 Surveillance Decision, and Fund exchange rate assessments—issues specifically cited in the EVC assessment.

4

The Board discussed the IEO evaluation in June 2009, and agreed to the MIP in December 2009.

5

The Executive Board also discussed the IEO Evaluation of IMF Interactions with Member Countries in December 2009, and agreed to the Implementation Plan in Response to Board-Endorsed Recommendations Arising from the IEO Evaluation of IMF Interactions with Member Countries and supplement in December 2010. Given the short time since that MIP was agreed, this PMR does not report on the status of implementation.

6

Details are provided in Appendix Table A.1.

7

See Reference Note on Trade in Financial Services (September 2010), and Reference Note on Trade Policy, Preferential Trade Agreements, and WTO Consistency (October 2010).

8

See Trade and the Crisis: Protect or Recover (April 2010), and Reaching the MDGs: An Action Plan for Trade (September 2010).