ISLAMABAD: The International Monetary Fund (IMF)-supported economic programs and related policy advice have helped low-income countries navigate the global financial crisis, an internal review found.
The IMF latest report, covering more than 70 low-income countries eligible to receive concession IMF resources, also presented new evidence that IMF support had played a positive role over the longer term in raising growth, reducing poverty, and strengthening poorer countries’ resilience to shocks.
The report, which was discussed by the IMF Executive Board on September 6, also presented proposals to address a sharp prospective drop in the IMF’s concession lending capacity after 2014, and ensure that resources were used efficiently by tailoring them better to countries’ needs. IMF staff will prepare two further reports, with recommendations on how to implement these proposals, based on Directors’ feedback.
The 2009 reforms aimed to close gaps and to create a streamlined architecture of facilities that is better tailored to the needs of low-income countries.Subsequently, demand for support from the IMF for countries’ programs had been high, and shifted to a more diverse range of facilities. The use of facilities had been greatest among the poorer low-income countries and those eligible for the heavily indebted poor countries debt relief program and had increased strongly for small and fragile economies. Many members utilized the increased operational flexibility under the 2009 reforms, but recent experience had highlighted a few areas where streamlining and greater flexibility could enhance the IMF’s ability to respond effectively to members’ needs. – PT