Analytical Notes

April 30, 2024

Towards an Inclusive, Equitable and Sustainable National Pension System in Iraq

Description: A pension system is at the heart of social protection. By ensuring income security for older persons and other vulnerable groups, it prevents poverty, reduces inequality, and facilitates consumption smoothing. A pension system also affects the working population’s labor market choices and has important fiscal implications. Iraq’s current pension system is highly fragmented, inequitable, and inefficient. First, it fails to provide adequate income protection to most of Iraqi’s old age population and other vulnerable groups, such as survivors and persons with disability. Second, the public sector pension is already putting substantial pressure on the budget and is potentially unsustainable given the projected acceleration of the total pension bill due to recent policy changes. Third, it sets an uneven playing field between the public and private sectors, contributing to the continued expansion of an already outsized civil service and holding back much-needed economic diversification and private sector growth. Thus, a comprehensive pension reform is urgently needed. Based on collaboration between the IMF, ILO and the World Bank this policy note aims to: 1) Provide an assessment of the existing public and private pension system across the four dimensions: fiscal sustainability; labor market implications; coverage; and adequacy of benefits. 2) Develop and propose options to adjust the pension system with a view to making it fiscally sustainable, more inclusive and adequate, and conducive to private sector development and labor market formalization. 3) Provide a basis to engage key stakeholders—including workers, employers organizations and the civil society—on strategies to achieve a more inclusive system, importantly by including workers in the informal economy, female workers, workers with disabilities, and other disadvantaged groups.

April 25, 2024

Enhancing Sustainable and Inclusive Growth in the Central African Economic and Monetary Community: Suggested Policies and Structural Reforms

Description: The Central African Economic and Monetary Community (CEMAC) has been hit hard by two shocks, just a few years apart. The first shock in 2015–16 was triggered by a sharp decline in oil prices—CEMAC’s main export proceeds and revenue source—just when many of these countries were ramping up public investment programs. CEMAC countries responded by putting together a coordinated effort relying on large fiscal adjustments under IMF- and World Bank Group-supported programs. External balances were on the path of recovery when, in the first quarter of 2020, the world experienced its largest economic shock since World War II with the spread of the COVID-19 pandemic and, again, a collapse in oil prices. A large demand and supply shock ensued, exacerbated by the social and economic cost of mitigation measures to contain the contagion. This second crisis hit the region before fiscal and external buffers had time to fully recover from the previous one and threatened to erase the hard-won gains made since the previous shock. CEMAC authorities had been trying to set in motion a process to address the root cause of the region’s vulnerability—a largely undiversified economic basis overly dependent on oil. The CEMAC Commission had put in place a large-scale strategy of CEMAC Economic and Financial Reform (PREF). This plan defines a set of reforms, organized around five pillars, to create the basis for more diversified, inclusive, private sector–led growth and enhanced governance of the public sector. Initial measures focused on engaging in closer financial relationships with the IMF and other development partners. As the first generation of IMF-supported programs are ending, and most CEMAC countries have benefited from the IMF’s sizable emergency financing to cope with the social and economic fallout of the COVID-19 crisis, the next step is to identify key reforms that will underpin second-generation programs to boost progress on the PREF and focus on addressing growth bottlenecks. This position note responds to this need. It highlights a set of priority reforms at the national and regional levels that can guide the second generation of IMF programs and support the objective of putting CEMAC on a more sustained and inclusive path.

February 28, 2023

The Big Push for Transformation through Climate and Development: Recommendations of the High-Level Advisory Group on Sustainable and Inclusive Recovery and Growth

Description: The High-Level Advisory Group (HLAG) on Sustainable and Inclusive Recovery and Growth came together to provide policy analysis and practical proposals for actions that could help countries secure a strong recovery from the pandemic and a successful green transition. This report pulls together key findings from the deliberations and provides actionable recommendations to support a pathway to green, resilient, and inclusive development (GRID). The HLAG started by assessing the scale and nature of investment and financing challenges. It was immediately clear that investment needs require rapid and sustained scaling up: conservative estimates presented to the HLAG by Bhattacharya et al. (2022) suggest that EMDEs other than China have aggregate investment and development spending needs on the order of at least $1.3 trillion per year by 2025 and $3.5 trillion per year by 2030.

January 18, 2023

Exploring Multilateral Platforms for Cross-Border Payments

Description: This report provides an assessment of whether and how multilateral platforms could bring meaningful improvements to the cross-border payments ecosystem. It was written by the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) in collaboration with the BIS Innovation Hub, the International Monetary Fund (IMF) and the World Bank.1 The report analyses the potential costs and benefits of these platforms and how they might alleviate some of the cross-border payment frictions. It also evaluates the risks, barriers and challenges to establishing multilateral platforms and explores two paths for their evolution. The analysis is based on a stocktake, conducted by the CPMI, of existing and potential multilateral platforms as well as bilateral discussions with existing platform operators.

April 22, 2022

Subsidies, Trade, and International Cooperation

Description: The international organizations (IOs) authoring this report can strengthen their individual and joint work to support governments in this endeavor. While the brunt of this work lies with finance ministries, trade ministries, and sectoral and specialized agencies of national governments, international organizations have key roles to play. The four authoring institutions are examining ways to help, individually and jointly, such as by collecting, organizing, and sharing data, coordinating analytical work agendas to develop methodologies to assess the cross-border effects of different forms of subsidies, and supporting inter-governmental dialogues. This will involve reaching out to and working with other international institutions as well.

December 22, 2021

How to Implement Strategic Foresight (and Why)

Description: This note explains the value of strategic foresight and provides implementation advice based on the IMF’s experience with scenario planning and policy gaming. Section II provides an overview of strategic foresight and some of its tools. Scenario planning and policy gaming have been the Fund’s main foresight techniques so far, though other tools have been complementary. Accordingly, section III focuses on the scenario planning by illustrating applications before detailing the methods we have been using, while section IV describes policy gaming including the matrix policy gaming approach with which we have experimented so far. Section V summarizes the key points. In so doing, the note extends an invitation to those in the economics and finance fields (e.g., researchers, policymakers) to incorporate strategic foresight in their analysis and decision making.

Notes: Online Annex

March 12, 2021

Guidance Note For Developing Government Local Currency Bond Markets

Description:

This guidance note was Prepared by International Monetary Fund (IMF) and World Bank Group staff under a project undertaken with the support of grants from the Financial Sector Reform and Strengthening Initiative, (FIRST).The aim of the project was to deliver a report that provides emerging market and developing economies with guidance and a roadmap in developing their local currency bond markets (LCBMs). This note will also inform technical assistance missions in advising authorities on the formulation of policies to deepen LCBMs.

March 12, 2021

Guidance Note For Developing Government Local Currency Bond Markets

Description: This guidance note was prepared by International Monetary Fund (IMF) and World Bank Group staff under a project undertaken with the support of grants from the Financial Sector Reform and Strengthening Initiative, (FIRST).The aim of the project was to deliver a report that provides emerging market and developing economies with guidance and a roadmap in developing their local currency bond markets (LCBMs). This note will also inform technical assistance missions in advising authorities on the formulation of policies to deepen LCBMs.