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Abstract

The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx

The IMF’s Independent Evaluation Office (IEO) recently outlined its work program for FY 2006. In addition to a study on the IMF’s structural conditionality that is already under way, it committed to review the following three topics:

Advice on exchange rate policy. While the IMF’s Articles of Agreement clearly obligate member countries to “avoid manipulating exchange rates” and “follow exchange policies compatible” with an orderly and stable exchange rate system, clear and candid discussions of exchange rate issues remain a challenge. This partly reflects the market-sensitive nature of these issues as well as the lack of consensus about what constitutes a sustainable exchange rate under a given set of conditions. The IEO review will ask questions on both the IMF’s policy advice on the choice of an exchange rate regime in various circumstances and the methodology the organization uses to assess or identify competitiveness, sustainability, and manipulation. The evaluation will examine a representative sample of developing, emerging market, and industrial countries in recent years.

The IMF’s role in African countries. Calls for a sizable scaling up of aid to African countries have raised questions about just how that aid is accommodated in the IMF’s policy advice and program design. How does the IMF gauge the sustainability of aid-financed fiscal spending, its effects on exchange rates and competitiveness, and the behavior of private sector savings and investment? The IEO will base its evaluation on in-depth case studies of a small number of sub-Saharan African countries, with a focus on the IMF’s actual policy advice and program design inputs, the analytical basis for this advice, and the outcomes. More specifically, it will address the setting of the medium-term resource envelope, aid predictability, and related issues such as revenue erosion and “Dutch disease” (in which aid inflows make exports less competitive).

Bilateral surveillance. Surveillance is one of the IMF’s core responsibilities, and its effectiveness has been a top priority for the organization’s International Monetary and Financial Committee and Executive Board.

The IEO’s evaluation will ask three questions: What value added does surveillance provide for domestic policymakers, the international community, and markets? How are bilateral (country) and multilateral (global) surveillance—especially for systemically important countries—integrated, and is there scope for adjusting the modalities so as to improve impact? And to what extent have the IMF’s internal biennial reviews of surveillance translated into greater effectiveness?

The IEO study will draw on cross-country analysis and reviews of surveillance in various country groupings, including industrial, emerging market, and low-income developing. The precise scope of the country analysis, including the emphasis given to country groups, will be influenced by the findings of the earlier evaluation of multilateral surveillance.

Next steps

Following IEO practice, detailed issues papers or draft terms of reference will be prepared for each project. Before finalizing the scope of an evaluation, the IEO will seek comments from both IMF and external stakeholders, such as academics and civil society organizations. Final terms of reference will then be posted on the IEO website (http://www.imf.org/external/np/ieo) and interested stakeholders will be invited to submit inputs on any aspect of the subjects covered in the terms of reference.

For more information about the IEO, including the full text announcing its FY 2006 work program, please see the IEO website (http://www.imf.org/external/np/ieo).

Laura Wallace

Editor-in-Chief

Sheila Meehan

Managing Editor

Jacqueline Irving

Production Manager

Christine Ebrahim-zadeh

Conny Lotze

Senior Editor

Camilla Andersen

Assistant Editors

Maureen Burke

Lijun Li

Senior Editorial Assistants

Kelley McCollum

Editorial Assistant

Julio Prego

Graphic Artist

Graham Hacche

Senior Advisor

Prakash Loungani

Associate Editor

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