The enhancement of the IMF’s structural adjustment facility is discussed. In its April 1987 meeting, the IMF’s Interim Committee highlighted the plight of low-income countries, and outlined a strategy for their recovery. It emphasized that it is crucial for these countries to implement reforms that to be fully effective, will need to be accompanied by the timely provision of additional financing on appropriate concessional terms to support these reforms. The Committee also called upon creditor governments to grant exceptional relief with respect to official credits in highly indebted low-income countries.

Abstract

The enhancement of the IMF’s structural adjustment facility is discussed. In its April 1987 meeting, the IMF’s Interim Committee highlighted the plight of low-income countries, and outlined a strategy for their recovery. It emphasized that it is crucial for these countries to implement reforms that to be fully effective, will need to be accompanied by the timely provision of additional financing on appropriate concessional terms to support these reforms. The Committee also called upon creditor governments to grant exceptional relief with respect to official credits in highly indebted low-income countries.

Late in May 1987, the World Bank began to implement its first institution-wide internal reorganization since 1972, the early period of Robert McNamara’s presidency. The current President of the Bank, Barber B. Conable, who launched the reorganization, said that the purpose of the exercise was to make the World Bank more responsive and efficient in the face of new developmental realities. According to Mr. Conable, the Bank’s organizational structure had not kept pace with the changing global environment.

As Mr. Conable has explained: “The opportunity to strengthen significantly the Bank’s organizational responsiveness in delivering development assistance to its borrowers is the guiding purpose behind the reorganization and one which the new structure must serve.”

The reorganization will clarify and strengthen the roles of the President and senior management in providing overall strategic and policy direction for the Bank. This will enable the President to provide effective leadership in five critical areas:

  • Defining the Bank’s short- and long-term strategic agenda.

  • Deciding major institutional issues, while delegating day-to-day decisions to line managers.

  • Ensuring that major issues receive adequate debate and analysis.

  • Defining the Bank’s management structure and making key appointments.

  • Representing the Bank publicly and building support for the institution among its shareholder governments.

Senior Vice Presidents

To strengthen the President’s ability to provide leadership in these five areas, the Bank’s functions have been rearranged into four broad groups, each headed by a Senior Vice President (see chart). The General Counsel and Secretary also report directly to the President.

Moeen A. Qureshi from Pakistan, has been appointed Senior Vice President for Operations, and Ernest Stern, a US national, Senior Vice President for Finance. Willi A. Wapen-hans, a German national who was regional Vice President for Europe, the Middle East, and North Africa, is now Senior Vice President for Administration. W. David Hopper, a Canadian who was regional Vice President for South Asia, is now Senior Vice President for Policy, Planning, and Research (PPR).

PPR is a new complex which combines the interrelated activities of research, policy formulation, strategic planning, and institutional budgeting that formerly were dispersed across the Bank. The reasons for this consolidation are to:

  • Strengthen the Bank’s capacity to provide intellectual leadership in the development field and translate the results of research and other analytical work into tangible benefits for the Bank’s borrowers.

  • Enhance the Bank’s capacity to manage strategic issues by linking the policy and research functions with strategic planning and budgeting activities.

Changes in operations

The number of regions within the Operations complex has been reduced from six to four, each headed by a Vice President. The new regions are Africa; Asia; Europe, the Middle East, and North Africa (EMENA); and Latin America and the Caribbean (LAC). Each region is organized into country departments that combine the operational management functions previously divided between programs and projects departments. In addition, each region has a technical department that is organized into five functional divisions: trade and finance, agriculture, industry and energy, infrastructure operations, and environment. There are some regional variations in divisional structure.

Country department directors have been delegated broad authority, in an effort to reduce management layers and promote efficiency. Each country department’s management structure is composed of a country operations division chief, division chiefs for each of the major sectors, and resident representatives.

In addition to the four regional Vice Presidents, there is a Vice President for cofinancing and a Vice President for financial intermediation services who integrate key financial assistance activities for borrowers.

Other functions

The changes in the Finance complex are relatively limited and relate to strengthening key financial functions and to clarifying accountability and control. Planning and budgeting has been relocated to PPR, and financial intermediation and debt management activities has been moved to the Operations complex.

To the extent possible, the Bank’s support functions have been decentralized to the departments that use them. Certain support activities are now within the Administration complex. These include Personnel; External Affairs; Information, Technology, and Facilities (ITF); and General Services. The Internal Auditor also reports directly to the Senior Vice President for Administration but retains access to the President.

Finance & Development, September 1987
Author: International Monetary Fund. External Relations Dept.