Managing Director's Global Policy Agenda to the International Monetary and Financial Committee
Confront Global Challenges Together

Against a backdrop of declining oil prices, sharp variations in exchange rates, and market volatility, global growth remains uneven. The prospect of a new mediocre lingers as medium-term forecasts have been marked down since the last GPA. Promoting balanced, sustained growth requires an integrated policy package that bolsters today’s actual and tomorrow’s potential output, diminishes risks, and confronts emerging global challenges. Watch the Video The Executive Summary is also available in: Arabic , Chinese, French, Japanese, Russian, and Spanish.


Against a backdrop of declining oil prices, sharp variations in exchange rates, and market volatility, global growth remains uneven. The prospect of a new mediocre lingers as medium-term forecasts have been marked down since the last GPA. Promoting balanced, sustained growth requires an integrated policy package that bolsters today’s actual and tomorrow’s potential output, diminishes risks, and confronts emerging global challenges. Watch the Video The Executive Summary is also available in: Arabic , Chinese, French, Japanese, Russian, and Spanish.

When We Last Met

The main priority: prevent a “new mediocre”

The brittle global recovery faced elevated downside risks.

At the time of the Annual Meetings, global recovery remained uneven and brittle amid continued weakness in investment and activity. Major advanced economies faced persistently low inflation, high unemployment, and stagnation risks. Lower potential growth affected emerging market economies, with some facing lackluster domestic demand. On the bright side, growth in low-income developing countries remained strong. Geopolitical tensions and the reversal of risk spreads and volatility compression in financial markets elevated downside risks.

Lifting the outlook for growth and jobs required decisive policies.

Policymakers were encouraged to implement bold measures to prevent growth from settling into a “new mediocre,” with unacceptably low job creation and inclusion. While accommodative policies remained essential, addressing structural deficiencies needed to become a much higher priority.

The Fund identified actions to buttress the recovery and make it more durable. (Table 1)

Table 1.

Policy Priorities of the Fall 2014 GPA

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Source: Fall 2014 Global Policy Agenda.

The IMF committed policy work on implementing growth-friendly fiscal frameworks for investment, strengthening the sovereign debt restructuring framework through a market-based approach, assessing the impact of monetary policy normalization and asynchronous exit, and enhanced guidance on macro-prudential tools.

What Has Been Done

Demand support rose. Structural reforms lagged.

Further policy accommodation was implemented but structural reforms continue to lag (see also Annex Table 1).

Annex Table 1.
Annex Table 1.

Implementation of Policy Priorities by the Membership

Citation: Policy Papers 2015, 020; 10.5089/9781498344685.007.A001

In advanced economies, a deteriorating outlook for inflation and growth prompted additional and welcome monetary easing in the euro area and Japan, while progress towards monetary normalization continued in the United States. The euro area moved towards a common fiscal backstop by adopting the ESM Direct Recapitalization tool, but more remains to be done to break sovereign-bank links and reduce debt overhangs. Japan and the United States are still lacking medium-term fiscal consolidation plans. Structural reforms have been slow to advance, particularly in labor and product markets and infrastructure investments.

In emerging market economies, monetary policy stances remained broadly adequate, and have been recently eased. New regulations were introduced to address risks stemming from a sharp rise in foreign currency funding and non-bank financial activities in some countries (China, India, and Indonesia). While many countries are pursuing fiscal reforms such as revenue mobilization and expenditure rationalization, structural-reform progress remains uneven.

Several low-income developing countries enhanced financial supervision (Nigeria, Bangladesh) and made progress in reducing education gaps. Efforts to upgrade infrastructure, improve tax administration, strengthen monetary and fiscal policy frameworks, foster financial access, and improve the business environment remained slow and uneven.

Assessment of Policy Implementation by the Membership

Members are assessed on their progress implementing policy priorities identified in the Fall 2013 Global Policy Agenda (GPA). The groups are aggregated using PPP-GDP weights.

The IMF supported members through lending, capacity building, analysis, and policy reviews (Box 1 and Annex Table 2).

Key IMF Activities since the Fall Meetings

IMF established the CCR trust and continued to provide financial assistance to members in need.

  • The CCR Trust, established in response to the Ebola Crisis, provides grants for debt relief for the poorest and most vulnerable countries hit by natural or public health disasters. The IMF provided $100 million in grants to Guinea, Liberia, and Sierra Leone to relieve Ebola-related debt burdens. The IMF also augmented Guinea’s and Sierra Leone’s programs under the Extended Credit Facility by a combined $134 million.

  • New disbursements under the Rapid Credit Facility were approved for Guinea-Bissau, Liberia, and the Central African Republic for a total of $57 million. New arrangements were also approved for Honduras, Kenya, Serbia, and Ukraine involving a resource commitment of $19 billion. Successor arrangements for Mexico and Poland under the Flexible Credit Line were approved totaling $87 billion.

A number of major policy reviews were completed.

  • Follow-up work to the 2014 Triennial Surveillance Review (TSR) is underway. The MD’s action plan covers all core operational areas of surveillance including risks and spillovers, macro-financial and macro-critical structural issues.

  • Reforms to the Fund’s debt limit policy were adopted. The new policies, effective end-June 2015, provide countries with more flexibility to finance productive investments while containing risks to medium-term sustainability.

  • Following the Independent Evaluation Office’s recommendation, a review of the Fund’s work on trade issues was completed. The assessment covered macro-critical trade issues underlying a work agenda for the Fund for the next five years.

  • Staff published guidance notes to strengthen the Fund’s advice on macro-prudential policy in surveillance. The notes factor the work of international standard setters and evolving country experiences with macro-prudential policy, including tailored approaches for low-income countries.

Analytical and policy work focused on challenges facing the membership.

  • Work on macro-critical structural issues covered topics such as productivity-enhancing reforms in advanced economies, female labor force participation, drivers of income inequality, economic diversification in the Gulf Cooperation Countries, and youth unemployment in European advanced economies. Analysis of monetary and financial sector policies focused on fostering private securitization, tackling SME problem loans in Europe, the role of exchange rate interventions, implications of Islamic finance, and financial deepening and inclusion in emerging market and developing countries. Policy and analytic work on fiscal issues included revenue mobilization and tax compliance, and public investment efficiency in the Middle East and North Africa and Caucasus and Central Asia oil exporting countries.

Intensive capacity building continued via technical assistance (TA) and training.

  • Capacity building focused on low-income developing countries, including those at the epicenter of the Ebola outbreak. The regional technical assistance office in Thailand also was pivotal in rapidly responding to demand for TA and training in Myanmar and Lao PDR. Other highlights include the creation of the Somalia Trust Fund for Capacity Development, and the official launch of the IMF-Middle East Center for Economics and Finance in Kuwait, the IMF’s first regional training institute in the Middle East. Two new massive open online courses on debt sustainability analysis and energy subsidy reform further extended the reach of IMF training.

Annex Table 2.
Annex Table 2.

Implementation of IMF Deliverables

(November 2014–April 2015)

Citation: Policy Papers 2015, 020; 10.5089/9781498344685.007.A001

The Fund took decisive steps to support international efforts to combat Ebola through the rapid provision of additional financing and the newly created Catastrophe Containment and Relief (CCR) trust. New arrangements were also approved for a number of countries (Serbia, Ukraine). The Fund further strengthened its lending framework with the conclusion of the new debt limits policy. Work on more efficient approaches to resolving sovereign debt distress is expected to be completed this year. Reviews on the role of trade in the work of the Fund and revenue mobilization were completed. Implementing the recommendations of the Triennial Surveillance Review (TSR) and the recent guidance notes on Article IV surveillance and macro-prudential policies will help strengthen surveillance to meet our membership’s needs.

Interim steps on quota and governance reforms were identified.

Disappointingly, ratification of the 2010 quota and governance reforms remained pending, with implications for Fund resources and representation. Fund staff presented interim steps to the Executive Board in early January and produced a follow-up paper in March. The Board of Governors called on the Executive Board to expeditiously complete this work to enable the Board of Governors to reach agreement on such steps by end-June, 2015.

Where We Stand Today

Global growth remains uneven and prospects of a new mediocre persist.

Global economic activity diverged and market volatility rose.

The recovery in the United States, United Kingdom, and India gained momentum, while growth elsewhere met or fell short of expectations, including in some large emerging market economies (Brazil, Russia). Low-income developing countries continued to steadily expand, albeit with growing vulnerabilities. A sharp decline in oil prices and large exchange rate movements create new challenges and opportunities. Growth and, hence, policy advice are increasingly country-specific.

With more marked growth divergence and asynchronous monetary policy settings across major economies, the dollar appreciated, while the euro and yen weakened. Market volatility increased from historical lows, prompting rising risk spreads and currency depreciations in some emerging markets. Long-term government bond yields in major advanced countries fell reflecting accommodative monetary policies, safe haven effects, lower inflation expectations, and a more subdued medium-term growth outlook.

Only a moderate recovery is foreseen.

Global growth is expected to remain essentially unchanged in 2015, as lower oil prices and a rebound in advanced countries offset a slowdown in emerging markets. Overall, the medium-term global outlook remains weaker than envisioned at the time of the last GPA.

A sustained recovery in the United States is projected. This is supported by lower energy prices, a reduced fiscal drag, and strengthened balance sheets. In the euro area and Japan, a gradual strengthening is envisaged. This is sustained by recent welcome monetary stimulus, weaker currencies, and lower oil prices.

The growth outlook in emerging market economies and low-income developing countries is uneven. Unwinding of past excess investment and continued demand rebalancing should further slow growth in China. Geopolitical tensions, regional spillovers, and lower commodity prices will dampen activity in some countries (Venezuela, Russia, Nigeria, some countries in the Middle East and North Africa). India’s growth is projected to benefit from recent and announced policy reforms and an expected pick-up in investment. Many low-income developing countries are expected to grow steadily despite headwinds from lower commodity prices and the Ebola epidemic.

Prospects of a “new mediocre” linger.

Serial markdowns in medium-term growth estimates since the global financial crisis highlight the need to lastingly lift productivity and growth. Slowing productivity and longstanding structural impediments in many advanced economies may spur a self-reinforcing cycle of declining medium-term growth, weakening confidence, and sluggish investment, while demographic headwinds loom. The productivity slowdown in some advanced economies (e.g., United States) even prior to the crisis could extend to other countries through technological spillovers. Without decisive actions to boost potential output in emerging market economies, the ability to sustain growth and foster convergence to higher income levels could be jeopardized.

Downside risks persist

Lower oil prices present a two-sided risk.

On the upside, the decline in oil prices could provide more of a boost to global growth than anticipated. This will depend on the future path and pass through of oil prices, exchange rate movements, and whether the windfall is used to rebuild policy buffers and support growth. On the downside, oil prices could rebound faster than expected.

Disruptive exchange rate and other asset price shifts could trigger financial turbulence.

A lasting dollar appreciation against the backdrop of asynchronous monetary policy stances in major economies could lead to an unbalanced global recovery. Dollar strength along with sagging commodity prices creates the risk of balance sheet and funding strains for dollar debtors. It could also potentially offset trade benefits from real depreciation in some countries.

Emerging market economies are more exposed to a sharp dollar appreciation and associated capital flow reversals, given exposure to external funding, including the recent rise in dollar borrowing by firms. Financial turmoil could compound fiscal, external, and balance sheet vulnerabilities in commodity exporters.

Surprises in monetary normalization in the United States could also trigger financial market turbulence amid relatively low term and risk premia in bond markets. Declining market liquidity resulting from changing market structures and regulation could amplify the impact of volatility and trigger broader systemic stress. Financial stress in the euro area could reemerge triggered by policy uncertainty associated with Greece.

Protracted low inflation in some advanced economies remains a concern.

Protracted low inflation or outright deflation could set off a downdraft in medium-term inflation expectations and push up real interest rates in some advanced economies. This could hamper the recovery, exacerbating debt overhang problems, particularly in the euro area, with spillovers to a number of smaller European countries.

Geopolitical tensions could generate regional and global spillovers.

Geopolitical risks, stemming from ongoing events in Russia/Ukraine, the Middle East, and West Africa, could generate regional and global spillovers through disruptions in trade and financial transactions. Disruptions in energy and other commodity markets remain a concern; an escalation in tensions could take a toll on confidence and aggravate the risk of financial turbulence.

Policy Priorities

Adopt comprehensive and well-integrated policies.

Multiple challenges require a new policy impulse.

Decisive policies are needed to boost today’s demand, tomorrow’s growth potential, and to build resilience against existing and emerging challenges. Actions are needed to increase the effectiveness of monetary and fiscal accommodation, ensure durable financial stability, pave the way for higher medium-term growth, and instill a new multilateralism to secure a sustainable future.

Fiscal Policy

Provide growth support and bolster fiscal frameworks.

Policies should support growth today and tomorrow.

A durable rebound in activity and employment needs to be supported by growth-friendly fiscal policies and frameworks, while placing debt on a sustainable path. Where available, fiscal space should be used to boost demand. Stronger fiscal frameworks would support long-term growth and help manage fiscal risks.

Infrastructure investment is a priority for many countries.

Productive and efficiently executed infrastructure investment can provide a needed boost to output in the short- and long-term. Strengthening fiscal institutions to improve the planning and delivery of public investments remains a priority. In emerging market economies and low-income developing countries, removing infrastructure bottlenecks, especially in power sectors (India, South Africa), is key. In advanced countries, such investment would address gaps in existing infrastructure (United States, Germany).

Lower oil prices provide a prime opportunity for fiscal reforms.

In advanced economies, energy tax reform can reduce externalities (e.g., health, traffic congestion, and global warming) and provide space for growth-enhancing tax reforms. In emerging market and developing economies (India Venezuela), further reform of energy subsidies would provide room for essential social and infrastructure spending.

Advanced economies should calibrate fiscal adjustment and establish credible fiscal frameworks.

Attuning fiscal consolidation to economic conditions and prospects will be crucial (Japan and euro area). For the euro area, fiscal space could be used to complement monetary easing, including by boosting public investment.

Additional policies include establishing credible medium-term fiscal consolidation plans (Japan and the United States); increasing tax revenues and improving compliance; and simplifying the euro area’s complicated fiscal governance frameworks.

Emerging market and developing economies need to rebuild buffers and strengthen fiscal management.

Fiscal buffers have diminished in many countries even as risks associated with commodity prices volatility and exchange rate depreciations have increased. Financial buffers in commodity exporters should be used to smooth the impact of lower oil prices on spending. In countries with less policy space, domestic revenue mobilization efforts and expenditure prioritization will be needed. Establishing strong multi-year budget frameworks and a more transparent natural resource management would help reduce fiscal risks.

What the IMF will do

The Fund will continue to provide advice on how to make fiscal policy supportive of both short- and long-term growth, calibrate fiscal packages and advice to reduce public debt overhangs, and manage fiscal risks. Technical assistance and training will focus on strengthening fiscal institutions and ensuring public debt sustainability. Ongoing analytic and country work will target: energy tax and subsidy reforms (e.g., in Turkey, Lebanon, Haiti); interactions between fiscal policy and long-term growth; improving public investment management; and the fiscal consequences of aging populations. The Fund will also provide operational guidance on implementing the revised debt limits policy.

Monetary Policy

Improve policy effectiveness and strengthen frameworks.

Monetary support needs to be made more effective.

Improving the traction of monetary policy while containing excessive financial risk-taking is a priority. Excessive reliance on exchange rate depreciations to spur domestic activity could increase global currency tensions and should be avoided.

Advanced economies should strengthen policy efficacy and communication.

The expansions of asset purchase programs in Japan and the euro area are welcomed, but their efficacy should be enhanced. In the euro area, addressing private debt overhangs and impaired corporate and bank balance sheets is vital for improving policy transmission and credit market conditions. In Japan, steadfast implementation of fiscal and structural reforms is essential.

In the United States, clear and careful communication is essential to minimize negative surprises and disruptive market adjustments.

Emerging market policies will depend on available space.

Policy challenges vary. In oil-importing countries, lower oil prices provide space to combat slowing growth where frameworks are credible. For oil exporters with limited policy space, exchange rate flexibility will be a critical buffer to the shock. Some will need to strengthen monetary frameworks to avert persistently higher inflation and adapt to a protracted deterioration in terms of trade.

More broadly, exchange rates should act as a shock absorber. Foreign exchange interventions can help counter disorderly market conditions, provided reserves are adequate. Strengthening fundamentals and monitoring corporate leverage buildup will be important to manage financial stability risks.

Low-income developing countries should allow for more exchange rate flexibility and strengthen frameworks.

Weak growth in the rest of the world, lower commodity prices, and greater exposure to volatility in international financial markets has increased vulnerabilities. Allowing for greater exchange rate flexibility, where possible, will help. Strengthening monetary policy frameworks and managing foreign currency exposure will also be essential.

What the IMF will do

The Fund will continue to assess the impact of asynchronous monetary policies on the membership in its bilateral and multilateral surveillance. This includes how to strengthen the effectiveness of macroeconomic policy transmission, manage disruptive exchange rate movements, mitigate financial stability risks and capital flow volatility, and respond to falling commodity prices and disinflationary pressures. The Fund stands ready to provide financial support to countries that face market and financial pressures. The Fund will also deepen analysis of the link between monetary policy and financial stability and provide advice and capacity building for monetary policy frameworks in low-income developing countries.

Financial Sector Policies

Safeguard financial stability and facilitate a durable exit from the crisis.

More comprehensive policies will boost financial resilience.

Policies should address private sector debt overhang, manage rising corporate leverage, and enhance resilience against global financial market turbulence.

Ensure continued market liquidity.

Trends in market structure and regulation have affected market liquidity, potentially amplifying asset price responses and increasing spillover risks. Policies should seek to reduce liquidity mismatches in the asset management sector and improve incentives for market-making services.

Advanced economies should address private debt overhang and curtail financial excesses.

The corporate sector in the euro area remains highly leveraged, posing obstacles to growth and financial stability. Resolution of non-performing loans, support for out-of-court settlements, and more robust insolvency frameworks should help monetary policy traction and boost investment.

Household debt in the United States has fallen sharply, helping to support consumption. But financial risk taking has increased, and underwriting standards have weakened. Macro-prudential policies should be strengthened to better monitor pockets of vulnerabilities.

Emerging market economies should cushion against headwinds and safeguard stability.

Some emerging market economies face retrenchment of overinvested industries and property price declines (China). In others, systemic risks arising from balance sheet exposures to foreign exchange rate risk, rapid credit growth and increased private sector leverage, and falling commodity export revenues (Argentina, Brazil, Nigeria) create financial stability risks.

Strengthening regulation, supervision, and macro-prudential frameworks, including for shadow banking, can help contain financial excesses, minimize foreign currency and commodity price risks, encourage safe credit creation, and safeguard financial stability. Preparations should be made to maintain liquidity in local currency bond markets.

Complete global financial regulatory reforms.

Full and prompt implementation of the global financial regulatory reform agenda is essential. This includes measures for ending too-big-to-fail, enhancing the regulatory framework for non-banks, and making derivatives markets safer.

What the IMF will do

The Fund will deepen macro-financial analysis and support members in addressing financial stability risks. The Fund will advise on addressing debt overhangs (euro area), macro-prudential policies, including systemic risks stemming from corporate sector exposures (emerging market economies, especially China); provide analysis on financial deepening and inclusion to support growth; address data gaps; and advise on Islamic finance. FSAPs are ongoing and planned for the United States, China, Germany, Russia and the United Kingdom. Technical assistance and training will target financial sector supervision and regulation, macroprudential policy frameworks, systemic risks, and stress testing.

Structural Reforms

Accelerate reforms to lift growth potential and ensure inclusiveness.

Structural reforms need a new push.

Decisively implemented structural reforms are urgently needed to revive business confidence, investment, jobs, and to lift potential output. This could be an essential complement to demand-boosting efforts.

Reform priorities are country-specific.

Tempering the pace of decline in long-term growth in advanced economies will depend on policies that reverse the downswing in productivity growth and bolster competitiveness. The focus should be on reforming labor markets, improving access to finance for smaller firms, lowering barriers to entry in product markets and raising productivity in the services sectors (euro area, Japan), building skills, and incentivizing innovation (United States, euro area, China, India).

Priorities for unlocking productivity growth and sustaining growth potential in emerging market and low-income developing economies vary. Easing limits on investment and improving the business climate (Indonesia), implementing reforms to education, labor, and product markets to raise competitiveness and productivity (Brazil, China, India, South Africa), and deepening financial markets will be important. Stepped up efforts to improve governance and the business climate (low-income developing countries; Middle East and Central Asia, Russia) are needed to diversify economies.

Trade reforms can complement and reinforce other structural reforms.

Significant productivity and growth dividends can accrue from further trade integration. For advanced economies, a priority is to open services markets and make regulation more coherent. A number of emerging market economies would benefit from trade liberalization and anchoring their economies to global value chains. Low-income developing countries can benefit by addressing traditional trade barriers. Protectionist measures, including non-tariff barriers, should be avoided by all.

Boost labor supply and tackle inequality to ensure broad-based growth.

Removing tax disincentives (Japan, euro area), targeted training programs, and active labor market policies (euro area) will be essential to maximize labor input’s contribution to growth, address high rates of structural unemployment, and cope with the challenges of an aging population. Better access to education and health care, well-targeted social policies, and efforts to foster financial inclusion can help tackle widening income disparities.

What the IMF will do

The Fund will continue to identify and analyze macro-critical structural reforms to make growth sustainable, job-rich and inclusive, leveraging the expertise of other institutions. The Fund also will build on recent work that identifies priority reforms at different stages of development (see illustrative Figure). The analytical agenda will focus on productivity-enhancing reforms; examine complementarities between different reforms, including trade and financial inclusion; and assess their impact. Upcoming Article IV consultations will feature work on income inequality (Israel, Col mbia, Ethiopia), and female labor force participation (Germany, Hungary, Pakistan).

Structural Reforms with Highest Productivity Payoffs

Note: Comparisons across reforms within each country group.

New Multilateralism to Secure a Sustainable Future

Strengthen cooperation for a more stable International Monetary System.

Action is needed to keep up with ongoing global transitions.

Sustained growth and rapid trade integration of emerging market and developing countries have created a more interconnected and multipolar global economy. However, their integration into the global financial system is less advanced. These trends have significant implications for the architecture and efficacy of the International Monetary System (IMS).

Renew collective efforts to enhance the global safety net and strengthen International Monetary System resilience.

Since the 2008 financial crisis, important steps have been taken to strengthen the policy dialogue on global imbalances, manage capital flows, and broaden the global financial safety net. Yet, the global financial safety net remains underused during periods of turbulence, with uneven access and a multilayered structure (e.g., regional financing arrangements, bilateral swap lines, and Fund financing) that requires coordination to avoid fragmentation. Episodes of high capital flow and exchange rate volatility, and precautionary reserve accumulation also suggest the need for further collective efforts to strengthen the IMS.

Facilitate integration of dynamic emerging economies.

Facilitating financial deepening and integration of key emerging market economies would generate positive global spillovers and stability gains. This would help raise domestic demand, reduce global imbalances, facilitate greater reliance on exchange rates to achieve external adjustment, and increase the ability to cope with capital flow volatility.

Implement quota and governance reforms.

Quota and governance reforms remain an imperative to provide the resources, credibility, and legitimacy the Fund needs to play an effective role in overseeing the IMS. Full implementation of the 2010 quota and governance reforms, including its forward looking elements, remain the highest priority for the membership.

What the IMF will do

The IMF will take stock of challenges facing the IMS. This includes the need for close cooperation with regional facilities and institutions to enhance the efficacy of the global financial safety net and adequate support for the financial integration of dynamic emerging economies. A comprehensive review of the composition and valuation of the SDR basket will be conducted later this year. The IMF will also continue to foster balanced global growth by promoting coherent structural, financial, and demand policies.

While continuing to support full implementation of pending quota and governance reforms, the Fund is committed to working expeditiously with the membership to put interim steps in place by end-June 2015 to make meaningful progress in the key areas of the 2010 Reforms.

Delivering on commitments will require continued efforts to learn from the past, adapt to a changing global environment, and strengthen internal operations (Box 2). This will include reforms to the Fund’s lending framework with respect to sovereign debt that ensure member’s debt sustainability problems are effectively addressed. The Fund will continue to ensure that it responds to members’ diverse needs; promote coherent global structural, financial, and demand policies; and refine external sector assessments.

The Agenda to Strengthen Fund Operations


  • The Fund is seeking bilateral contributions to the new CCR Trust to assist its most vulnerable members facing catastrophic disasters, including public health disasters with the potential for international spillovers, such as the Ebola outbreak.

  • The Fund will seek approval of reforms to enhance the flexibility of its lending framework with regard to sovereign debt to ensure that members’ debt sustainability problems are effectively addressed, and that Fund lending policies do not become a source of costly bailouts and encourage moral hazard.

  • The Fund will conduct a review of crisis programs to draw lessons from Fund arrangements during the global financial crisis. A biennial review of concessional financing eligibility will be conducted.

Surveillance and capacity building

  • The MD’s action plan lays out steps to advance the priority areas agreed in the 2014 TSR. This includes advancing work on risks and spillovers and mainstreaming macro-financial surveillance. It also covers delivering more cohesive, better tailored, and expert policy advice, including by focusing more systematically on macro-critical structural reforms; greater emphasis on engagement and communication; and establishing a framework to ensure that concerns about evenhandedness are addressed transparently.

  • Capacity development will play an increasingly important role in the global policy agenda by helping members strengthen financial, monetary and fiscal policy frameworks and institutional structures, and tools for macro-prudential policy. Priorities include: fragile states, Arab Countries in Transition, vulnerable and program countries, low-income countries and small states, and the financial sector. The IMF will enhance prioritization, efficiency, and monitoring of Fund-wide capacity development activities through the implementation of result based management by end-2015. The Fund’s ongoing initiative on knowledge management will bring a global perspective to national challenges.

Budget process and human resource management

  • Management is proposing an unchanged budget envelope in real terms to deliver a complex agenda for the fourth year in a row. The budget process is being strengthened by combining cross-cutting streamlining measures with departments’ own efforts to reallocate resources. The objective is to promote a more risk-based approach to the Fund’s work and resource allocation, better exploit synergies, reduce overlaps, and make products and processes more cost effective.

  • Several human resource measures have been introduced to enable the Fund to respond to members’ evolving needs, including a new employment framework to be implemented in May, an updated training curriculum on core skills, more focused diversity benchmarks for the year 2020, and increased emphasis on inclusion to better leverage staff diversity. Managers are key to implementing these changes; a new leadership framework is in place that clarifies the roles, responsibilities, and expected behaviors of managers at all levels.

Build a durable framework for sustainable development.

A new focus on development milestones.

Three major UN conferences planned in 2015 will lay the foundations for a lasting global framework for sustainable development. The success of these efforts hinges on building platforms for mobilizing resources for development and achieving meaningful progress on climate change.

National measures should include strengthening domestic revenue mobilization for essential social spending, deepening domestic capital markets, and attracting foreign private investment. International efforts should focus on global trade reforms, official development assistance, and tax cooperation. A global agreement on carbon emissions, broad-based domestic charges on greenhouse gas emission, and energy subsidy reforms could generate significant economic and environmental benefits.

What the IMF will do

The Fund will participate actively in the forthcoming UN conferences, including producing a paper explaining the Fund’s position on topics under its mandate. This will cover the links between global and national policies, fostering productive investment, debt management and restructuring, financial sector policies, and macro-critical climate issues. The Fund will examine if its lending facilities adequately meet the needs of the poorest, fragile, and frontier low-income developing countries. Capacity building efforts will also play a central role in supporting development efforts.

Table 2.

Policy Priorities of the Spring 2015 GPA

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Managing Director's Global Policy Agenda to the International Monetary and Financial Committee: Confront Global Challenges Together
Author: International Monetary Fund