The Managing Director's Global Policy Agenda
A More Inclusive and Resilient Global Economy April 2017

The global economy is gaining momentum, but further progress hinges on policies to support the recovery, lift productivity growth, and enhance resilience. Against the background of rapid technological progress, a cooperative multilateral framework for trade and financial integration has served countries well, producing large economic benefits. However, some groups have not been able to share in these benefits, a trend exposed by a too-slow post-crisis recovery, which limited the room for all segments of society to experience income gains. Working within the multilateral framework, countries should strive for strong and more balanced growth and to provide economic opportunities for all. To this end, they should anticipate the effects of technological progress and economic integration, equip their populations with tools to reap the benefits, and put in place domestic policies to share them more broadly. The Fund will assist members through carefully tailored policy advice, lending to smooth adjustment, and capacity development.

Abstract

The global economy is gaining momentum, but further progress hinges on policies to support the recovery, lift productivity growth, and enhance resilience. Against the background of rapid technological progress, a cooperative multilateral framework for trade and financial integration has served countries well, producing large economic benefits. However, some groups have not been able to share in these benefits, a trend exposed by a too-slow post-crisis recovery, which limited the room for all segments of society to experience income gains. Working within the multilateral framework, countries should strive for strong and more balanced growth and to provide economic opportunities for all. To this end, they should anticipate the effects of technological progress and economic integration, equip their populations with tools to reap the benefits, and put in place domestic policies to share them more broadly. The Fund will assist members through carefully tailored policy advice, lending to smooth adjustment, and capacity development.

The global economy is gaining momentum, but further progress hinges on policies to support the recovery, lift productivity growth, and enhance resilience. Against the background of rapid technological progress, a cooperative multilateral framework for trade and financial integration has served countries well, producing large economic benefits. However, some groups have not been able to share in these benefits, a trend exposed by a too-slow post-crisis recovery, which limited the room for all segments of society to experience income gains. Working within the multilateral framework, countries should strive for strong and more balanced growth and to provide economic opportunities for all. To this end, they should anticipate the effects of technological progress and economic integration, equip their populations with tools to reap the benefits, and put in place domestic policies to share them more broadly. The Fund will assist members through carefully tailored policy advice, lending to smooth adjustment, and capacity development.,

Current Conjuncture

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Policy Challenges and Priorities

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What the Fund Will Do

The challenges outlined above require the Fund to remain agile and integrate its policy advice across several areas to respond to the needs of its members. The Fund will help members design macroeconomic policies and reforms that raise growth, expand economic opportunities, enhance resilience, and facilitate a global rebalancing. The Fund will help countries smooth adjustment through lending and capacity development, including in partnerships with other stakeholders. The Fund will advocate for multilateral cooperation as the most effective vehicle to address global challenges.

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Annex I. Implementation of Policy Priorities by the Membership

Monetary policy continues to bear the burden of supporting demand though some countries are exploring options for making fiscal policy more growth-friendly. There has been good progress in the financial sector area. Structural reforms are advancing only gradually.

Annex II. Key IMF Activities since the Annual Meetings

IMF provided financial assistance to members in need:

  • New arrangements were approved for Jamaica (SBA); Egypt (EFF); Cote d’Ivoire and Moldova (EFF/ECF); Niger (ECF); and Poland (FCL). New disbursements under the Rapid Credit Facility Instrument were approved for Haiti.

A number of major policy reviews and analytical work are ongoing or have been completed:

Help policymakers identify policy space and enhance resilience:

  • Began mainstreaming the assessment of available fiscal space in surveillance;

  • Initiated work to strengthen analytical tools for stepped-up surveillance of macro-structural issues;

  • Analyzed the causes of the global productivity slowdown;

  • Discussed macroeconomic developments and prospects for low-income developing countries;

  • Issued a paper on macro-structural policies and income inequality in low-income developing countries;

  • Initiated the work on the use of third-party indicators in surveillance;

  • Continued to highlight domestic revenue mobilization and international tax issues in surveillance;

  • Initiated the review of the LIC debt sustainability framework;

  • Examined the economic and market case for state-contingent debt instruments;

  • Initiated analytical work on the experiences with negative interest rate policies;

  • Reviewed the experience with the Institutional View on the liberalization and management of capital flows;

  • Began exploring the role of macro prudential policies in increasing the resilience to capital flows;

  • Reviewed the experience with mainstreaming macro-financial surveillance;

  • Discussed financial stability issues in countries with Islamic finance systems;

  • Reviewed recent trends in correspondent banking relationships;

  • Reviewed the role of the Fund in boosting resilience to natural disasters and the climate change in small states;

  • Reviewed the experience with setting social objectives in PRGT-supported programs;

  • Initiated the 2018 review of the Fund’s capacity development strategy.

Make Multilateralism Work for All:

  • Issued a paper on making trade an engine of growth for all;

  • Reviewed financial safety net for developing countries, including access to Fund financial support;

  • Developed reform proposals for a new monitoring instrument and a new liquidity instrument;

  • Initiated a paper on modalities and reform options for debtor-creditor engagement in sovereign debt restructurings;

  • Secured the renewal of the NAB decision through 2022 and additional commitments for bilateral lending agreements;

  • Reviewed the Fund’s communications strategy.

Capacity development activities supported the global policy agenda:

  • Continued to grow activities, with nearly half of all technical assistance going to low-income developing countries and over half of training to emerging and middle-income market economies.

  • Continued to expand the reach of Fund training through online learning, now accounting for about 30 percent of all training participation. Continued to expand online offerings, including in languages other than English.

  • Enhanced synergies among Fund activities, including through the newly opened South Asia Regional Training and Technical Assistance Center and the redesign of training curriculum and course offerings.

  • Continued to develop capacity in financial sector related issues, with Africa as the main recipient.

  • Continued to develop a capacity development framework for fragile states to support institution-building; strengthen outcome monitoring and evaluation framework; and enhance coordination with other partners.

  • In collaboration with the OECD, UN, and World Bank, continued to support work on international taxation issues, including through the Platform for Collaboration on Tax.

  • Worked with partners on tackling the challenges toward reaching the 2030 Sustainable Development Goals, including by supporting revenue mobilization. To this end, renewed and expanded the Revenue Mobilization Trust Fund and the Managing Natural Resource Wealth Trust Fund. Continued to address data and financial sector issues in low-income countries, including by launching new funds on data gaps and financial stability; and continued to provide hands-on, field-based follow-up support through the Fund’s network of regional technical assistance centers.

Annex III. Implementation of IMF Deliverables

(October 2016–April 2017)

The Managing Director’s Global Policy Agenda: A More Inclusive and Resilient Global Economy April 2017
Author: International Monetary Fund