I welcome the report of the Independent Evaluation Office (IEO) on the IMF and Fragile States. The report recognizes that the Fund has made important contributions in restoring macroeconomic stability, building core institutions, and catalyzing donor support across a diverse range of countries in fragile and conflict situations. The IEO’s analysis and findings provide a thorough stock-taking and resonate with staff. Accordingly, I broadly support the IEO’s recommendations to make the Fund’s engagement with countries in fragile and conflict situations more impactful.
As noted in the IEO report, helping countries in fragile and conflict situations has been deemed an international priority, meriting close engagement by the Fund in its bilateral surveillance, program design and lending, and capacity development (CD). The growing attention given to the dangerous implications of persistent fragility for regional and global stability, underline the key role of the Fund in international efforts to help countries in fragile and conflict situations. The Fund is in a unique position in this effort, particularly in its proven ability to respond quickly and effectively to assist such countries.
I am pleased that the IEO report finds important contributions that the IMF has made in countries in fragile and conflict situations, including helping to restore macroeconomic stability, build core macroeconomic policy institutions, and catalyze donor support. It is also welcome that the IEO shows that the IMF is broadly acknowledged to have high impact, particularly in years soon after countries emerged from periods of violence and isolation. The findings of the IEO report confirm many identified in the June 2015 policy paper on “IMF Engagement with Countries in Post-Conflict and Fragile Situations—Stocktaking.” The paper concluded that the Fund’s engagement with countries in fragile and conflict situations is often impactful and well appreciated by country authorities, and that this vulnerable group of the membership particularly benefits from the Fund’s expertise in capacity building, financial support, and policy advice.
At the same time, I agree that there remains room to do better, while considering that engagement with countries in fragile and conflict situations is inherently challenging, given their generally limited capacity, weak governance, and often unstable political and security environment. In particular, the IEO report concludes that more could be achieved by making bolder efforts, including to: build on ongoing initiatives to develop forward-looking, holistic country strategies; provide more sustained financial support; strengthen the impact of CD; and incentivize staff work in countries in fragile and conflict situations. In making these recommendations, the IEO report recognizes that some efforts would require an increased allocation of the Fund’s financial and human resources.
In broadly supporting the findings of the IEO, I wish to highlight relevant actions that are in train or are in the work program agreed by the Executive Board. Specifically, staff are piloting a multi-year CD framework for selected countries in fragile and conflict situations that better integrates CD with surveillance and improves coordination with other assistance providers. The ongoing 2018 PRGT facilities review will provide an opportunity to assess the finding that there is a gap in the toolkit between emergency and medium-term support. The new HR strategy, currently under development, aims to strengthen incentives for staff to work on countries in fragile and conflict situations by ensuring that career development is linked to experience in working with a broad range of the membership, including in countries in fragile and conflict situations. In this context, I acknowledge and recognize the finding that the lack of field presence of staff in high-risk locations could be a limitation on effective engagement. But I believe we need to weigh this finding against the paramount objective of ensuring staff safety as set out in our 2015 security policy for missions to high-risk locations.