The Role Of The IMF In Low-income Countries 2006 Annual Meetings – Singapore September 2006 Mark Plant International Monetary Fund

The Medium-term Strategy Put forth by Managing Director and approved by Executive Board Reiterates continued engagement by IMF in low-income countries Stresses the need for focus on areas of comparative advantage – macroeconomics and financial sector expertise Underscores new challenges of scaled-up aid and debt relief

Outline Of Presentation Three new macroeconomic challenges New tools Open questions

Three New Macroeconomic Challenges Widening gaps Scaled up aid / – absorb and spend No more debt? – the challenge of borrowing

New Tools – Principles Of Engagement Remain engaged in low-income countries Surveillance, technical assistance and lending Align with Poverty Reduction Strategies (PRS), in support of the Millennium Development Goals (MDGs) Focus on core areas of competence Recognize need for international cooperation

New Tools Poverty Reduction and Growth Facility Policy Support Instrument Exogenous Shocks Facility Debt Sustainability Framework Debt relief Heavily Indebted Poor Countries (HIPC) Initiative Multi-lateral Debt Relief Initiative (MDRI) New lenders

Open Questions How to achieve focus, flexibility and streamlining? What resources does the Fund need – financial and human? What role in PRS and donor coordination? What role in debt decisions? Rethink post-conflict/failed states strategy?

References The MD’s Medium-Term Strategy PRGF-supported Program Design http://www.imf.org/external/pp/longres.aspx?id=548 PRGF-supported Program Design http://www.imf.org/external/np/pp/eng/2005/080805r.htm Debt Sustainability Analysis To be published