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IMF POLICY PAPER
2021 COMPREHENSIVE SURVEILLANCE REVIEW—BACKGROUND PAPER ON SCENARIO PLANNING
May 2021
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2021 Comprehensive Surveillance Review—Background Paper on Scenario Planning
March 19, 2021
EXECUTIVE SUMMARY
Scenarios are narratives manufactured to illustrate how an unpredictable future might play out. Three scenarios set in 2030 illustrate plausible futures that are relevant for economic surveillance. There is no baseline scenario or assessment of relative likelihoods. There is no preferred scenario because the set was constructed to illustrate potential economic policy challenges and tradeoffs. For example, the scenarios allow for the possibility that the role of governments is further diminished; a re-evaluation of the relative importance of growth and non-economic goals; or that an information revolution will be both a boon and a bane.
In the Corponationals scenario, corporations with extensive global footprints have used technology to assume the provision of services previously performed by governments but with unequal benefits and volatile capital flows. In Planet Protectionism, poorly designed unilateral protectionist actions have amplified a negative aggregate supply shock as countries grapple with the complementarities and tradeoffs between environmental and debt sustainability. In Big Data Building Blocs, the decade’s productivity gains from a big-data, 5G-fueled information wave were beginning to taper when a hybrid cyber-physical attack cemented a downshift in the global economy.
To varying degrees, the scenarios illustrate how trends relevant to the surveillance landscape can take on new characteristics and how key uncertainties might play out and how a combination of policies and shocks can compound or alleviate the effects of the initial trends.
The scenario planning exercises help to draw out the surveillance priorities and stress-test the robustness of those priorities to uncertainties in the decade ahead. To inform the two priorities on confronting risks and uncertainties and mitigating spillovers, the scenarios illustrate how different shocks and alternative policy approaches carry their own risks and can have both positive and negative spillovers. The scenarios also illustrate some of the complex economic and non-economic factors that feed into the priority on economic sustainability and demonstrate how resource constraints and changing economic structures underpin the need for a unified policy approach.
* Disclaimer: There is no baseline or preferred scenario in terms of outcomes or policies. The scenarios and references to regions are only illustrative and do not necessarily represent the views/projections of the IMF, its Executive Board, or management and staff.
Approved By
Ceyla Pazarbasioglu
Prepared by Alberto Behar and Sandile Hlatshwayo (SPR), who facilitated scenario construction and application in a series of workshops by Ashvin Ahuja (SPR); Serkan Arslanalp (STA); Javier Arze del Granado (SPR); Aqib Aslam (FAD); Kimberly Beaton (MCM); Fabian Bornhorst (SPR); Balasz Csonto (SPR); Chiara Fratto (SPR); Matthew W. Gaertner (MCD); Geoff Gottlieb (APD); Erik Lundback (SPR); Svitlana Maslova (EUR); Rui Mano (SPR); Giovanni Melina (RES); Borislava Mircheva (SPR); Murad Omoev (SPR); Sergio Rodriguez (SPR); Preya Sharma (AFR); Niamh Sheridan (SPR); Elizabeth Van Heuvelen (SPR); and Karim M. Youssef (WHD)—under the guidance of Rupa Duttagupta and Sanjaya Panth (both SPR). Contributors and participants also included the Interdepartmental Surveillance Contacts (ISC), Axel Schimmelpfennig (AFR), and Kristina Kostial (SPR). We used the scenarios in a series of “pre-mortem” workshops with CSR authors, the ISC, members of the Managing Director’s External Advisory Groups, and offices of the Executive Directors.
Contents
INTRODUCTION
DETAILED SCENARIOS
A. 2030 Global Surveillance Report: Corponationals
B. 2030 Global Surveillance Report Planet Protectionism
C. 2030 Global Surveillance Report: Big Data Building Blocks
CONCLUSION
BOXES
1. The (Lost) Fight Against an Expanding Eco-System
2. The Evolution of Green Protectionism
3. Linkages Between Environmental and Debt Sustainability
4. The Central Bank Response to Stagflation: A Case of Can’t or Won’t?
5. The EION Attack
6. Country Snapshots of the Information Revolution
7. Different Fintech Development Models
8. Recent and Potential Early Warning Signals
FIGURES
1. From Scenarios to Strategy
2. Scenario Summaries
3. Comparison of Key Landscape Outcomes
TABLES
1. Policy Room for Maneuver Available to the Traditional Authorities
2. Scenario Comparison: Surveillance Landscape
3. Scenario Comparison: Surveillance Priorities