Status Report on Follow-Up to the Reviews of the Enhanced
Structural Adjustment Facility
I. Introduction
1. On July 8, 1998, the Executive Board concluded a series of
discussions on the internal staff review and external evaluation of the Enhanced Structural
Adjustment Facility (ESAF), and agreed on a number of proposals for strengthening the design
and implementation of future ESAF-supported programs. This paper recalls the main conclusions
from the reviews—summarized in italics in each section—and reports on progress over the past
year in implementing them.1
Table of Contents
II. Update on Economic Developments Under
ESAF-Supported Programs
ESAF-supported programs should aim to accelerate growth by boosting national savings,
achieving and maintaining single-digit inflation, accelerating structural reforms, and shifting the
composition of fiscal expenditure in favor of health, education, and other priority
sectors.
2. It is too early to assess the effects of new programs put in place
over the past 12 months. However, looking more broadly at recent performance under
ESAF-supported programs, further evidence has accumulated indicating that the economies
concerned are moving in a positive direction. Whereas the internal ESAF review was based
largely on data through 1995, macroeconomic outcomes are now available through 1998. The
more recent information shows:
- A pick-up in real per capita GDP growth
in ESAF program countries, from an
average of -2.3 percent a year (or approximately zero, excluding transition countries) in 1991-95
to 2 ½ percent in 1996-98 (Table 1). The sharp turnaround is
the result not only of a recovery among transition economies, but also of a substantial
improvement in other ESAF countries’ growth rates, including in most African countries. While
it no doubt reflects in part a rebound in the terms of trade from the 1992-93 trough (Figure 1), the findings of the empirical analysis of economic growth in the
internal ESAF review suggest that the progressive strengthening in macroeconomic and
structural policies throughout the 1990s is likely to have been the dominant influence. For the
last four years, ESAF users have also experienced markedly higher per capita GDP growth than
other developing countries (Figure 1).2
This is consistent with the need highlighted in the internal ESAF review for faster output growth
rates, so as to begin closing the gap in living standards between ESAF users and higher income
developing countries, though it should be emphasized that still higher growth will be required to
make effective inroads into poverty in ESAF countries.
- Higher growth rates have been supported by rising national saving rates, which
improved from an average 8.4 percent of GDP in 1991-95 to 9.9 percent during the
past three years. The driving factor has been further progress in fiscal consolidation (Table 1). Saving rates in ESAF countries remain, on average, well below
those in other developing countries—as should be expected, given relative income levels—but the
gap is narrowing.
- Growth is also likely to have benefited from further progress in lowering inflation,
which has fallen to a median of 7.9 percent in the last three years. Most significantly,
perhaps, the number of non–transition ESAF countries with double–digit inflation rates has
fallen to 10 in 1998 (Figure 1), down by more than half relative to the
early 1990s.
- Social spending has been on a rising trend
for many years in ESAF countries, a
fact confirmed by data updated since the ESAF review: health and education spending has
increased by an average 4½ percent a year in real per capita terms during ESAF–supported
programs (Figure 2).3 In the eleven
non-transition countries starting ESAF arrangements since end–1997, the programs have targeted
increases in health and education spending sufficient to increase their share of GDP by nearly
½ percent on average in the first year alone, and many have embodied measures aimed at
improving the efficiency of social spending. Based on the World Bank’s 1999 World
Development Indicators, social "output" indicators are also continuing
to improve steadily, albeit gradually: life expectancy and literacy are rising on average, and infant
mortality is falling, though in some African countries the HIV/AIDS epidemic has halted or even
reversed progress with respect to life expectancy and some other social indicators.
|
Table 1. Economic and Social Indicators in
ESAF and Other Developing Countries
(In percent per year, unless otherwise
indicated) |
|
|
51 ESAF Program
Countries
|
|
96 Non-ESAF Developing
Countries1
|
|
1991-95 |
1996-98 |
|
1991-95 |
1996-98 |
|
|
Real per capita GDP growth 2 |
-2.3 |
2.5 |
|
-0.2 |
1.3 |
|
Excluding transition economies
2 |
-0.4 |
2.5 |
|
|
|
|
African ESAF countries
2 |
-1.4 |
2.3 |
|
|
|
|
Original 36 countries
2 |
-0.4 |
2.6 |
|
|
|
| |
|
Inflation 3 |
|
|
|
|
|
|
Mean |
221.3 |
15.5 |
|
208.1 |
38.7 |
|
Median |
17.5 |
7.9 |
|
13.1 |
7.6 |
| |
|
Gross national saving 2 (in percent of GDP)
|
8.4 |
9.9 |
|
19.2 |
19.1 |
| |
|
Budget balance 2, 4 (in percent of
GDP) |
-6.8 |
-3.9 |
|
-3.9 |
-3.9 |
| |
|
Export volume growth |
10.9 |
9.0 |
|
7.4 |
6.6 |
| |
|
Debt-service ratio (actual) (in percent
of
Exports of goods and nonfactor services) |
30.0 |
21.3 |
|
20.8 |
18.2 |
| |
|
External debt 2 (face value, in percent of
GNP) |
129.2 |
119.5 |
|
54.7 |
54.2 |
| |
|
Gross reserves (in months of imports) |
3.2 |
3.8 |
|
3.6 |
4.1 |
| |
|
Population growth 5 |
2.3 |
2.4 |
|
1.6 |
1.5 |
| |
|
Life expectancy (years at birth) 6 |
54.5 |
55.1 |
|
65.8 |
67.1 |
| |
|
Infant mortality (per thousand live births) 6 |
87.3 |
80.1 |
|
42.7 |
36.3 |
| |
|
Illiteracy (in percent of population age 15 or above)
7 |
44.3 |
42.5 |
|
18.6 |
17.6 |
|
|
Sources: Bredenkamp and Schadler (1999); International Monetary Fund,
World Economic Outlook and International Financial Statistics; and World Bank,
World Debt Tables, Social Indicators of Development, and 1999 World Development
Indicators. |
|
1 Developing countries as defined in World Economic
Outlook, excluding countries classified as "high income" by the World
Bank. |
|
2 Excludes Equatorial Guinea, as its per capita GDP growth
after 1996 has been dominated by new oil production. |
|
3 Annual averages. |
|
4 Overall balance, including grants as
revenue. |
|
5 Latest data available is for 1997. |
|
6 Averages are based on comprehensive data for 1992 and
1997. |
|
7 Averages are based on comprehensive data for 1995 and
1997. |
Figure 1. Growth, Inflation and the Terms of Trade
in ESAF Countries, 1990-98
|
|
|
Figure 2. Health and Education Spending Increase
in ESAF and
IMF-Supported Programs
(Annual average percentage change in real per capita spending since year preceding
program)
Source: "Review of Social Issues and Policies in IMF-Supported Programs,"
forthcoming. |
Table of Contents
III. Enhancing Ownership and Assessing
Program Implementation Capacity
Missions should assist the authorities in explaining to society-at-large the content and
rationale for their program; staff should be ready to engage in more frequent contacts with
representatives from civil society and to participate, for instance, in national conferences on
policy issues.
3. Fund missions have in recent years been steadily broadening
their contacts and dialogue with groups outside of government. Using results from a survey
of Fund mission teams working on ESAF countries, Table 2
illustrates those contacts that have taken place between the Fund and civil society representatives
since the start of 1998. An increase in the frequency of Fund contacts, compared to earlier years,
was reported in more than 85 percent of countries covered and this was widely viewed by Fund
staff as having improved the quality of public debate on program-related issues. As the table also
illustrates, a broad spectrum of civil society has been consulted by Fund missions during this
period. Contacts with business representatives were most prevalent—having taken place in almost
90 percent of countries—followed by meetings with labor representatives and NGOs, which were
recorded in about half of the countries covered. In addition to staff missions, Fund resident
representatives play a significant role in the dialogue with local civic groups.
4. An increase in the authorities’ own efforts to foster wider
program ownership has also been reported, through this same survey, in more than 95 percent of
countries. For example, mission teams consider that governments are now generally more
actively engaged in dialogue with civil society than in the past, and the dissemination of
program-related information through the media and conferences has also improved. Fund staff is
increasingly involved in helping governments in these areas. Finally, there has been a marked
increase in the frequency with which countries publish their program documents—an important
means of fostering wider program ownership (see paragraph 6).
Fund missions should encourage the authorities to include relevant ministries in the
discussion of structural or sectoral policies, and to discuss with all affected ministries the impact
of measures taken in other areas.
5. Fund mission teams report participation of a broader range of
line ministries in program negotiations. Table 3 illustrates the
wide array of line ministry meetings that have taken place over the past 18 months and the range
of topics covered. While Fund staff have consulted frequently with line ministries in the past, an
increase in such contacts was reported over the past year and a half in more than three-quarters of
countries reviewed; in most cases relevant line ministries are now consulted during every
mission. Of the line ministries, meetings with the agriculture ministry were most
prevalent—having been reported in two-thirds of countries. Meetings with the health and
education ministries, and
privatization agencies—with whom consultations have also been common—were recorded in about
half of the countries reviewed.
Table 2. Fund
Contacts with Civil Society in ESAF Countries
(January 1998 to July 1999)
1
|
Country
|
Organized
Meetings--Counterpart groups
|
| Albania |
Business, Investors, Religious |
| Armenia |
Business, NGOs |
| Azerbaijan |
Academics, Business, Donors, Investors, Officials,
Politicians |
| Benin |
Business, Labor, Media, NGOs |
| Bolivia |
Academics, Business, Exporters, Farmers |
| Burkina Faso |
Business, Media |
| Cameroon |
BEAC, Business, Councils, Donors, NGOs |
| C.A.R. |
Business, Councils, Labor, Media |
| Chad |
Business, Donors, Labor |
| Cote d'Ivoire |
Academics, Business, Judiciary, Labor, NGOs, Officials, Politicians,
Women's Groups |
| Ethiopia |
Business, Councils, Donors |
| The Gambia |
Business, Labor, Media |
| Georgia |
Business, NGOs |
| Ghana |
Business, Donors, Labor, NGOs, Politicians,
Religious |
| Guinea |
Academics, Business, Donors, Investors, Labor, NGOs,
Religious |
| Guinea-Bissau |
Business, Farmers, Women's Groups |
| Guyana |
Business, Media, NGOs |
| Honduras |
Business, Councils, NGOs |
| Kyrgyz Republic |
Academics, Business, Labor, NGOs, Politicians |
| Macedonia |
Business, Councils, Investors, Officials, Politicians |
| Malawi |
Business, Labor, Media, NGOs, Religious |
| Mali |
Business, Donors, Labor, Media |
| Mauritania |
Business, Employers |
| Mongolia |
Academics, Business, Labor, NGOs, Officials,
Politicians |
| Mozambique |
Business, Donors, Labor, Media, NGOs, Politicians |
| Nicaragua |
Business, Donors, Labor, Media, NGOs, Politicians,
Religious |
| Niger |
Business, Donors, Labor, NGOs |
| Pakistan |
Business, Donors, Farmers, NGOs, Labor |
| Rwanda |
Academics, Business, Media, NGOs, Politicians |
| Senegal |
Business, Councils, Labor |
| Tajikistan |
Councils, Labor, Officials |
| Tanzania |
Business, Donors, Media, NGOs, Politicians |
| Uganda |
Business, Donors, Labor, Media, NGOs, Politicians |
| Yemen |
Academics, Business, Labor, Politicians |
| Zambia |
Business, Labor, NGOs, Religious |
|
Source: Internal Fund staff survey, August 1999.
1Covers countries for which an ESAF arrangement was agreed or review completed
in the period January 1, 1998 to June 30, 1999.
|
|
Table 3: Fund
Contacts with Line Ministries in ESAF Countries
January 1998 - July 1999
1 |
|
|
Country |
Government Unit 2 |
Topic |
|
|
Albania |
Agriculture |
Land market |
|
Privatization |
Privatization |
|
Trade |
Trade Reform |
|
Armenia |
Agriculture |
Agricultural issues |
|
Energy |
Energy Sector financial rehabilitation |
|
Industry |
Financial monitoring of public enterprises |
|
Privatization |
Privatization |
|
Regional |
Local government budgets, irrigation and drinking water, district
heating |
|
Welfare |
Pensions, targeted transfers |
|
Azerbaijan |
Energy |
Oil export policy and performance; tax and payment
arrears |
|
Parliament |
Loan guarantees; projects under negotiation |
|
Privatization |
Privatization |
|
Tax |
Tax reforms; tax code |
|
Trade |
Trade policy |
|
Welfare |
Pension reforms and social insurance contributions |
|
Benin |
Agriculture |
Cotton sector reform and production estimates and
forecasts |
|
Civil Service |
Objectives and progress on civil service reform |
|
Commerce |
Private sector development |
|
Culture |
Objectives and progress on telecommunications reform |
|
Education |
Objectives and execution of education budget |
|
Health |
Objectives and execution of health budget |
|
Industry |
Objectives and progress on public enterprise sector
reform |
|
Mining |
Private sector development and industrial production |
|
Planning |
Objectives and execution of investment budget |
|
Regional |
Objectives and progress on cotton sector reform |
|
Transport |
Reforms in the transportation sector |
|
Bolivia |
Agriculture |
Structural reforms and budget allocations |
|
Education |
Structural reforms and budget allocations |
|
Employment |
Structural reforms and budget allocations |
|
Health |
Structural reforms and budget allocations |
|
President |
Structural reforms and budget allocations |
|
Burkina Faso |
Civil Service |
Civil service reform |
|
Commerce |
Privatization |
|
Education |
Education reform |
|
Energy |
Mining code |
|
Health |
Health sector reform |
|
Mining |
Mining code |
|
Regional |
Agricultural reform |
|
Transport |
Transport sector reform |
|
Cameroon |
Education |
Education sector reform |
|
Forestry |
Forestry and environmental issues |
|
Health |
Strategy and action plan in the health sector |
|
Industry |
Oil industry developments; contribution of oil revenue to the
budget |
|
C.A.R. |
Agriculture |
Sectoral structural reform program |
|
Commerce |
Sectoral structural reform program |
|
Education |
Sectoral structural reform program |
|
Energy |
Sectoral structural reform program |
|
Environment |
Sectoral structural reform program |
|
Forestry |
Sectoral structural reform program |
|
Health |
Sectoral structural reform program |
|
Mining |
Sectoral structural reform program |
|
Transport |
Sectoral structural reform program |
|
Water |
Sectoral structural reform program |
|
Chad |
Civil Service |
Road maintenance and financing |
|
Education |
Sectoral reforms and financial needs |
|
Employment |
Sectoral reforms and financial needs |
|
Health |
Sectoral reforms and financial needs |
|
Industry |
Petroleum pricing; cotton producer prices |
|
Transport |
Road maintenance and financing |
|
Cote d'Ivoire |
Agriculture |
Liberalization of the coffee and cocoa sectors, sectoral
developments |
|
Civil Service |
Wage bill, reform of the public service policy |
|
Development |
Structural reforms, infrastructure investment, statistical
issues |
|
Education |
Education sector issues |
|
Employment |
Wage bill, reform of the employment policy |
|
Health |
Health sector issues |
|
Justice |
Judicial reform/governance |
|
Mining |
Liberalization of oil sector, privatization |
|
Planning |
Privatization, infrastructure, social sectors |
|
Privatization |
Privatization |
|
Regional |
Rural development, housing, social sector issues |
|
Trade |
Trade liberalization, in particular coffee and cocoa
exports |
|
Welfare |
Public sector liabilities |
|
Ethiopia |
Agriculture |
Agricultural output, rural land lease system |
|
Civil Service |
Current operations, foreign participation |
|
Employment |
Civil service reform |
|
Energy |
Current operations, foreign participation |
|
Industry |
Current operations, foreign participation |
|
Privatization |
Privatization program |
|
Statistics |
National income accounts, CPI |
|
Telecom |
Current operations, foreign participation |
|
Trade |
Trade licensing |
|
The Gambia |
Agriculture |
Groundnut sector reforms |
|
Education |
Education expenditure |
|
Health |
Health expenditure |
|
Industry |
Performance/Privatization |
|
Justice |
Legal reforms |
|
Georgia |
Agriculture |
Land reform program |
|
Environment |
Environmental reform |
|
Forestry |
Environmental reform |
|
Justice |
Judicial reform, legislative issues |
|
Privatization |
Privatization program |
|
Statistics |
Real, balance of payments and fiscal data issues |
|
Trade |
Export duties, trade liberalization |
|
Ghana |
Civil Service |
Public service reform |
|
Cocoa |
Cocoa sector reform policies |
|
Education |
Policy Framework Paper |
|
Employment |
Employment policies |
|
Energy |
Tariff policies and privatization for public utilities. Petroleum pricing
policies, energy policy, and privatization of energy sector. |
|
Environment |
Policy Framework Paper |
|
Industry |
State enterprise reform, public service reform, and
privatization |
|
Statistics |
Statistical reporting and national accounts |
|
Transport |
Road sector policies and expenditure arrears |
|
Welfare |
Social security policy and public service policies |
|
Guinea |
Defense |
Budgetary issues |
|
Energy |
Privatization |
|
Health |
Expenditure efficiency |
|
Justice |
Reform of the judicial system (equal justice; diligence); fight against
corruption |
|
Mining |
Mining tax regime and privatization; governance |
|
PM |
General program issues |
|
Planning |
General program issues |
|
President |
General program issues |
|
Supply |
Privatization |
|
Welfare |
Social expenditures |
|
Guinea-Bissau |
Civil Service |
Civil service reform |
|
Commerce |
Privatization |
|
Education |
Education reform |
|
Health |
Health reform |
|
Regional |
Agriculture reform |
|
Transport |
Infrastructure sector reforms |
|
Guyana |
Health |
Health sector policy reform, institution strengthening |
|
Honduras |
Agriculture |
Land reform issues |
|
Banking |
Modernization of the banking system |
|
Mining |
Impact of new concessions regulations |
|
Privatization |
Privatization process |
|
Kyrgyz Republic |
Agriculture |
Land reform, other agricultural reforms |
|
Industry |
Trade policies |
|
President |
Broad spectrum of economic reforms |
|
Privatization |
Privatization |
|
Trade |
Trade policies |
|
Welfare |
Pension reform, unemployment issues |
|
Macedonia |
Agriculture |
Agriculture developments, purchase of tobacco crop |
|
Culture |
Expenditure reform |
|
Employment |
Pension and labor sector reform |
|
Foreign |
Trade and international agreements |
|
Justice |
Bankruptcy reform and public sector reform |
|
Privatization |
Capital markets and privatization process |
|
Telecom |
Sectoral reforms, privatization |
|
Trade |
Foreign trade regime and customs |
|
Malawi |
Agriculture |
Relevant sections of the PFP |
|
Education |
Relevant sections of the PFP |
|
Health |
Relevant sections of the PFP |
|
Privatization |
Relevant sections of the PFP |
|
Transport |
Relevant sections of the PFP |
|
Mali |
Agriculture |
Sector's reforms, particularly in the cotton sub-sector |
|
Civil Service |
Administrative reforms |
|
Education |
Sector's reform program |
|
Employment |
Administrative reforms |
|
Energy |
Restructuring of EDM and institutional reforms |
|
Family |
Sector's reform program |
|
Health |
Sector's reform program |
|
Industry |
Reforms of the regulatory framework |
|
Justice |
Reforms of the judicial system |
|
Telecom |
Sector's reform program |
|
Water |
Cotton sub-sector reforms |
|
Mauritania |
Agriculture |
Agriculture reform program, fisheries strategy |
|
Energy |
Petroleum price reform |
|
Welfare |
Food security, health and poverty reduction strategy |
|
Mongolia |
Parliament |
Budget, structural reforms |
|
Privatization |
Privatization and banking sector reform |
|
Mozambique |
Agriculture |
Agricultural policies |
|
Civil Service |
Public sector reform |
|
Commerce |
Industrial and trade policies |
|
Education |
Education sector policies |
|
Employment |
Sector's reform program |
|
Health |
Health sector policies |
|
Industry |
Industrial policies |
|
Justice |
Reforms of the judicial system and commercial
arbitration |
|
Tourism |
Tourism policies |
|
Welfare |
Poverty issues |
|
Nicaragua |
Agriculture |
Rural development, land titling, cadastres |
|
Education |
Education reform, indicators of progress, quantitative
targets |
|
Environment |
Environmental protection policies and capacity of
enforcement |
|
Health |
Health reform, indicators of progress, quantitative
targets |
|
Justice |
Measures to strengthen the Judiciary |
|
Niger |
Agriculture |
Sector's reform program |
|
Civil Service |
Sector's reform program |
|
Education |
Sector's reform program |
|
Health |
Sector's reform program |
|
Justice |
Sector's reform program |
|
Mining |
Sector's reform program |
|
Pakistan |
Agriculture |
Production targets and plans to achieve targets |
|
Commerce |
Trade liberalization |
|
Energy |
Petroleum development surcharge |
|
Privatization |
Status of privatization program |
|
Rwanda |
Agriculture |
Agriculture production |
|
Civil Service |
Civil service reform, payroll issues |
|
Education |
Budget implementation; social indicators monitoring; social
reforms |
|
Health |
Budget implementation; social indicators monitoring; social
reforms |
|
Welfare |
Social policies; assistance to victims of genocide; social security
system |
|
Senegal |
Agriculture |
Fisheries policy and reform; agricultural policy and agricultural
data |
|
Energy |
Power generation and petroleum sector reforms |
|
Planning |
Civil service reform |
|
Tajikistan |
Agriculture |
Land reform |
|
Energy |
Cost recovery |
|
Health |
Health reform |
|
Welfare |
Social safety net |
|
Tanzania |
Agriculture |
Agricultural sector developments and policies |
|
Civil Service |
Civil service reform policies |
|
Energy |
Energy policies |
|
Industry |
Petroleum sector reform |
|
Mining |
Reform petroleum sector and mining sector policy |
|
Privatization |
Privatization |
|
Statistics |
Improvements in statistics |
|
Tax |
Development - tax revenues; tax reform |
|
Uganda |
Civil Service |
Civil service reform, payroll issues, pension |
|
Capital |
Securities market, central depositary system |
|
Coffee |
Coffee production and exports |
|
Education |
Universal primary education |
|
Justice |
Anti-corruption efforts |
|
Privatization |
Privatization program |
|
Yemen |
Civil Service |
Civil service reform |
|
Customs |
Customs reform |
|
Energy |
Energy sector reform |
|
Industry |
Investment regime reform |
|
Planning |
General economy |
|
Privatization |
Privatization |
|
Statistics |
Production of statistics |
|
Supply |
Subsidy and trade reform |
|
Tax |
Tax reform |
|
Tourism |
Tourism developments |
|
Transport |
Transportation reform |
|
Welfare |
Social safety net reform; pension reform |
|
Zambia |
Agriculture |
Agricultural policies |
|
Commerce |
Trade reform |
|
Justice |
Tax exception and arrears |
|
Cabinet Office |
Civil service reform |
|
Privatization |
Privatization |
|
Welfare |
Pension system |
|
|
Source: Internal Fund staff survey, August 1999. |
|
1 Covers countries for which an ESAF arrangement was
agreed or review completed in the period January 1, 1998 to June 30, 1999. |
|
2 Either the relevant ministry or other government body in
the areas indicated. |
Publication of Policy Framework Papers and letters of intent should become
"standard procedure."
6. Table 4
summarizes the recent publication record of countries with ESAF arrangements. The publication
of PFPs (which has long been encouraged) became more frequent during 1998, and by end-July
1999, more than 85 percent of countries had published their latest PFP. The proportion of
countries publishing their LOIs and/or MEFPs also rose markedly in 1999, supported by the
Spring 1999 decision by the Executive Board establishing a presumption that such papers would
be made public. By end-July 1999, 60 percent of countries with ESAF-supported
programs had decided to make their most recent LOI/MEFP public.
Staff reports for requests for new three-year ESAF arrangements should include sections
that describe and assess the environment for program implementation.
7. The intent behind this proposal was to provide a clearer picture of
the extent to which governments had prepared the ground—both politically and technically—for
implementation of their program. Staff reports for five new ESAF arrangements have since
included a section of the kind envisaged, the countries concerned being Ghana, Honduras,
Mauritania, Mozambique, and Zambia.4 , 5
8. Four of these reports noted efforts the authorities had made to
foster consensus around the program, for instance by maintaining a close policy dialogue with the
private sector and with donors (Mozambique) and with stakeholders in key productive sectors
(Ghana). Following the devastation brought about by Hurricane Mitch, the government of
Honduras established a forum (with representatives from civil society) to help set the agenda for
the government’s reconstruction plans. Regarding possible risks to program implementation,
spending pressures from both within and outside the government and the need for vigilance
ahead of approaching elections were noted in the report for Mozambique, while in the case of
Ghana, the staff warned that the divestiture program could be derailed if the government did not
show sufficient resolve in striking a reasonable balance between the need to have a strategic
shareholder to lead the new privatized company and the interests of small local investors. The
Mauritania report noted possible opposition from vested interests to reforms (on market
deregulation and the removal of tax exemptions) that reduced the scope for rent-seeking
activities.
|
Table 4. Publication of
ESAF Program Documents
|
|
|
|
Policy Framework Paper (PFP)
|
Letter of Intent (LOI) and/or Memorandum of
Economic and Financial Policies (MEFP)
|
|
Published
|
Not published
|
Published
|
Not published
|
| |
|
ESAF arrangements in place on April 30, 1998 |
Armenia, Azerbaijan, Chad, Cote d'Ivoire, Georgia, Ghana, Guinea,
Kenya, Madagascar, Senegal, Uganda, Yemen (n=12) |
Benin, Bolivia, Burkina Faso, Cameroon, Rep. of Congo, Ethiopia,
Guinea-Bissau, Haiti, FYR Macedonia, Malawi, Mali, Mauritania, Mongolia, Mozambique,
Nicaragua, Niger, Pakistan, Sierra Leone, Tanzania, Togo, Zambia
(n=21) |
Armenia, Bolivia, Guinea, Nicaragua (n=4) |
Azerbaijan, Benin, Burkina Faso, Cameroon, Chad, Rep. Of Congo, Cote
d'Ivoire, Ethiopia, Georgia, Ghana, Guinea-Bissau, Haiti, Kenya, FYR Macedonia, Madagascar,
Malawi, Mali, Mauritania, Mongolia, Mozambique, Niger, Pakistan, Senegal, Sierra Leone,
Tanzania, Togo, Uganda, Yemen, Zambia (n=29) |
| |
|
|
|
|
|
ESAF arrangements in place on December 31, 1998 |
Armenia, Azerbaijan, Benin, Bolivia, Burkina Faso, Cameroon, Central
African Republic, Chad, Cote d'Ivoire, Ethiopia, Gambia, Georgia, Ghana, Guinea, Kenya,
Kyrgyz Republic, FYR Macedonia, Madagascar, Malawi, Mali, Mozambique, Niger, Pakistan,
Rwanda, Senegal, Tajikistan, Uganda (n=27) |
Albania, Rep. Of Congo, Guyana, Haiti, Mongolia, Nicaragua,
Tanzania, Yemen (n=8) |
Albania, Armenia, Benin, Bolivia, Georgia, Ghana, Guinea, Nicaragua,
Rwanda, Uganda (n=10) |
Azerbaijan, Burkina Faso, Cameroon, Central African Republic, Chad,
Republic of Congo, Cote d'Ivoire, Ethiopia, Gambia, Guyana, Haiti, Kenya, Kyrgyz Republic,
FYR Macedonia, Madagascar, Malawi, Mali, Mongolia, Mozambique, Niger, Pakistan, Senegal,
Tajikistan, Tanzania, Yemen (n=25) |
| |
|
|
|
|
|
ESAF arrangements in place on July 31,
1999
1 |
Albania, Armenia, Azerbaijan, Benin, Bolivia, Burkina Faso, Cameroon,
Central African Republic, Cote d'Ivoire, Ethiopia, Gambia, Georgia, Ghana, Guinea, Kyrgyz
Republic, FYR Macedonia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger,
Pakistan, Rwanda, Senegal, Tajikistan, Tanzania, Uganda, Yemen, Zambia
(n=30) |
Guyana, Haiti, Honduras, Mongolia, Nicaragua
(n=5) |
Albania, Armenia, Benin, Bolivia, Burkina Faso, Central African
Republic, Georgia, Ghana, Guinea, Honduras, Kyrgyz Republic, Madagascar, Mali,
Mozambique, Nicaragua, Rwanda, Senegal, Tajikistan, Tanzania, Uganda, Zambia
(n=21) |
Azerbaijan, Cameroon, Cote d'Ivoire, Ethiopia, Gambia,
Guyana,
Haiti2, FYR Macedonia, Malawi, Mauritania, Mongolia, Niger,
Pakistan, Yemen (n=14) |
|
Sources: IMF external website.
1 Countries classified according to whether they have published most recently
discussed program papers.
2 Published LOI for emergency assistance request, November 19, 1998.
|
9. Assessments of the technical capacity to implement the
program were included in all five reports. The judgments were that technical capacity was
generally adequate in relation to the planned policies, but all the reports noted areas where further
capacity-building should be sought, with relevant technical assistance. In Ghana and Honduras,
the main focus of technical assistance was on public sector reform, banking supervision, and
privatization. In the Zambian program, public sector reform also figured prominently, with
additional technical assistance being directed at strengthening expenditure control and improving
the quality of the statistical base. Reflecting the government’s limited implementation capacity,
the Mozambique program included a broad range of technical assistance aimed at strengthening
fiscal control; other areas included legal and financial sector reform and statistics. The report on
Mauritania set out a wide-ranging technical assistance agenda, and noted the authorities’
commitment to provide the counterpart resources necessary to carry it out.
Table of Contents
IV. Strengthening Bank-Fund
Collaboration
Bank and Fund staffs should intensify their collaboration, working with the authorities in
areas such as the design of structural reform measures, assessing the social impact of policies,
and examining the scope for higher externally-financed public expenditures in programs. Staffs
should experiment with new forms of collaboration in a few pilot cases.
10. The IDA/ESAF pilot program was initiated in the fall of 1998 in
six countries: Cameroon, Ethiopia, Nicaragua, Tajikistan, Vietnam, and Zimbabwe.6 This is one of a broader range of efforts under way to further enhance
Bank-Fund collaboration more generally, including in ESAF countries.
11. The precise work program in each of the pilot
countries was determined in consultation with the national authorities. The areas identified for
special attention—consistent with the broad recommendations from the ESAF reviews—included
privatization and civil service reform (Cameroon), social expenditure, poverty reduction, and an
assessment of the social impact of reforms (Cameroon, Tajikistan, and Vietnam), public
enterprise reform, private sector development, and public expenditure management (Tajikistan),
and financial sector reform (Tajikistan and Ethiopia). In Nicaragua, the agenda was heavily
influenced by the impact of Hurricane Mitch, and the Bank and Fund teams worked closely on
issues related to damage and reconstruction efforts, including the absorption of a major influx of
aid. But coordination was also strengthened in the areas of financial sector reform (together with
the Inter-American Development Bank), social security reform, and privatization. The urgent
need to address problems of macroeconomic instability in Zimbabwe delayed discussions on a
possible ESAF arrangement; nevertheless, the country teams have begun to work with the
authorities on structural measures aimed at more effective poverty alleviation in the
medium-term and the integration of social safety net mechanisms in the current stand-by
arrangement to mitigate the impact of rising food prices on the poor.
12. Although the pilot countries were selected partly on the basis of
the availability of social data, gaps in this area have in some cases delayed detailed ex ante and
ex post analyses of the social impact of adjustment measures (notably in Ethiopia and
Tajikistan); forthcoming household surveys and poverty assessments prepared by the Bank are
expected to provide a better basis for such analyses. In Cameroon, however, work is underway,
based on recently started annual household surveys, to assess the social impact of the
government’s ambitious privatization effort, which involves some 35,000 employees. This will
help better inform how the design of the ESAF-supported program can be adapted, including
through new safety net measures, to mitigate any adverse social consequences of the
privatization.
13. The country teams have begun to change their work
practices to strengthen collaboration through a variety of ways: more joint missions (e.g.,
Vietnam and Tajikistan), the inclusion of Bank (Fund) counterparts in the Fund (Bank) country
team internal communication networks (e.g., Cameroon and Tajikistan), and more intensive
efforts to develop unified and integrated policy approaches, especially in the context of parallel
Fund and Bank missions. New approaches in Vietnam include joint written communications on
policies to the authorities, joint aide-memoires by Bank-Fund technical assistance missions, and
joint letters from mission heads highlighting issues where further progress is needed: these
initiatives have been well-received by the country authorities. In Tajikistan, the updated PFP now
incorporates important elements of the Bank's Comprehensive Development Framework, and
reforms and associated conditionalities in the SAC and ESAF-supported programs are being
sequenced to ensure that they are mutually reinforcing.
14. The Bank and Fund country teams in the pilot project are
expected to report periodically to their respective Executive Boards on progress made. At the
Fund, this has been in the form of annexes to staff reports. In addition, the Managing Director of
the IMF and the President of the World Bank have held two joint meetings with the teams to
discuss their experience with the pilot program and underline the importance of their efforts;
further meetings are envisaged.
15. The time elapsed since setting up the pilots has been short, and it
is too early to make concrete evaluations at this stage. However, it is clear that all the country
teams have made some progress in refocusing and intensifying their collaborative efforts, and
changing their work practices in ways that contribute to a more integrated joint approach. It is
also apparent that the greater coordination needed has not been a free good: it has absorbed
additional staff time and resources. The experience in the pilot cases is expected to be reviewed
in early 2000, with a view to drawing lessons for enhancing Bank-Fund collaboration in
ESAF/IDA operations as well as more generally.
Table of Contents
V. Social Expenditures and Social Safety
Nets
Programs should be designed to protect—and in most cases increase—productive spending
on health, education, and basic infrastructure. Social safety nets should feature more prominently
in ESAF-supported programs.
16. Since the early 1990s, ESAF-supported programs have
progressively strengthened the integration of social spending needs into program
design. A review of PFPs and memoranda of economic and financial policies (MEFPs) for 44
countries that had ESAF-supported programs during 1994-98 indicates that about 80 percent of
the programs sought increases in public spending on education and health care.7 Over the same period, the use in MEFPs of quantitative targets for social
spending increased by 40 percent. In transition countries, where levels of social spending were
already high at the outset of reform, programs have emphasized improvements in the quality and
efficiency of spending rather than expanding social budgets further. Many PFPs now also include
"output" indicators, to try to capture the extent to which social spending has
translated into improved delivery of social services. This is an area where ongoing work, notably
in the Bank, could lead to further improvements in program design.
17. During 1994-98, three-quarters of ESAF countries included
commitments in their MEFPs to allocate budgetary resources for social safety nets,
aimed at countering possible adverse short-term effects of some reform measures on the poor and
vulnerable. The use of structural benchmarks and performance criteria related to social protection
objectives increased over this period, while measures to strengthen the design and coverage of
social safety nets were also commonly specified.8
18. These trends are consistent with the message from the ESAF
reviews. Nevertheless, there is an increasing recognition that much more can and should be done
in both Bank- and Fund-supported programs to ensure a better integration of economic policies
and social objectives. A series of papers by Bank and Fund staff—including a joint paper in the
context of the enhanced HIPC Initiative—examine ways in which such a strengthening could be
achieved in ESAF and IDA countries.9 The proposals contained
in these papers would lead to a more direct focus on poverty reduction as an ultimate objective,
and would integrate the design of future ESAF-supported programs with countries’
comprehensive poverty reduction strategies.
Table of Contents
VI. Scope for Increased Absorption of External
Assistance
In countries that have achieved stable macroeconomic conditions and are well-advanced
in structural reforms, the potential to absorb and spend productively larger amounts of foreign
assistance should be examined, and where appropriate reflected in the design of programs.
19. This approach has been applied during the past year in a number
of "post-stabilization" countries (e.g., Bolivia, Burkina Faso, Mali, Mauritania,
Mozambique, Rwanda, Senegal, Tanzania, and Uganda), where modified fiscal targets have been
agreed with the authorities to allow more room for development and social expenditure, or to
accelerate structural reform (Table 5). An easing of fiscal targets was
also agreed with the authorities in Nicaragua and Honduras in the wake of Hurricane Mitch, to
accommodate the emergency relief and reconstruction needs of these countries. In another recent
case (Azerbaijan), the staff agreed to adjust the fiscal targets in the event of
higher-than-programmed project loans associated with infrastructure investments. Finally, there
are now a number of programs in place (Mozambique, Guinea, and Senegal) where the choice of
a fiscal target excluding foreign-financed capital expenditures implicitly accommodates
additional spending when higher-than-programmed external finance is available.10
20. This increased flexibility in the fiscal stance has in all cases been
closely linked to the availability or prospect of higher external budget financing, except in
Senegal, where the additional capital expenditure programmed for the medium-term is to be
financed by exceptional privatization revenues. In several cases (e.g., Honduras, Nicaragua,
Mauritania, Rwanda, Senegal, Tanzania, and Uganda), Board country papers have addressed
explicitly the link between the proposed relaxation of fiscal targets and the objective to
accommodate additional capital or social expenditure in light of higher-than-programmed
external budgetary support. In Rwanda and Uganda, the fiscal program specifies adjusters that
make room automatically for additional social or development spending, and hence higher
deficits, to the extent that more external budgetary support becomes available.
|
Table 5. Adjustments
to Fiscal Targets in ESAF-Support Programs to Accommodate Priority
Expenditures
|
|
Country
|
Program
Adjustment
|
Basis for Adjustment
|
|
Azerbaijan |
Possible upward revision of fiscal deficit in the budget for
2000. |
In case of higher-than-programmed project loans associated with
infrastructure investments. |
|
Bolivia |
Adoption of a less ambitious target for the fiscal deficit and higher target
for public investment in 1999. |
To safeguard key social programs/infrastructure projects in view of
expected high amounts of external grants/concessional loans. |
|
Honduras |
The program contemplates a marked widening of the combined public
sector deficit in 1999 (from 1.4 percent of GDP in 1998 to 8.7 percent in
1999). |
Motivated by the large size of the emergency relief and reconstruction
needs (total NFPS capital expenditure is programmed to increase from 7½ percent of GDP
in 1998 to almost 12 percent in 1999). Larger fiscal deficit to be financed almost entirely by
concessional loans and debt relief. |
|
Mali |
The medium-term expenditure targets (for 2000-2001) were revised
upwards at the briefing stage. |
To allow more room for productive/social expenditures, given the
expected availability of project assistance and assistance under the HIPC
Initiative. |
|
Mauritania |
The medium-term program envisages a gradual reduction in the overall
budget surplus, from 2.2 percent of GDP in 1999 to 0.4 percent in 2002. |
Surplus target reduced to allow for more expenditure on basic
infrastructure and social outlays. Reduction expected to be consistent with monetary stability and
low inflation given the significant amounts of external financial assistance expected over the
medium term. |
|
Mozambique |
Primary deficit programmed to rise temporarily in 1999 to allow
implementation of structural reforms. In addition, since domestic primary deficit excludes
foreign-financed capital expenditure, these can be fully accommodated within the
program. |
To increase the scope for greater aid absorption, in view of the expected
unusually large amounts of foreign assistance in 1999 and the progress made on macroeconomic
front during the last few years. |
|
Nicaragua |
Significant increase in fiscal deficit targets for 1999-2001 compared to
pre-hurricane scenario. Estimates for total amount of reconstruction outlays recently increased by
US$30 million, totaling about 8 percent of GDP in both 1999 and 2000. |
To accommodate increased reconstruction and social expenditures in the
wake of Hurricane Mitch, financed with external grants and concessional
borrowing. |
|
Rwanda |
The fiscal program includes a contingency mechanism for additional
social spending above the program targets and for a higher primary deficit, up to a limit.
|
Primary balance to be adjusted by the amount of social expenditure,
provided the additional spending is fully financed by donors on highly concessional terms; the
adjustment is subject to consultation with Fund and IBRD staffs and donors. |
|
Senegal |
Adoption of less ambitious targets for the basic budget in 1999-2000. For
1999, the supplementary budget reduced the basic surplus target to 1.7 percent of GDP instead of
2.6 percent in original budget. |
To accommodate additional capital expenditure financed by exceptional
resources from privatization operations. |
|
Tanzania |
The overall budget balance is projected to move from an estimated
surplus of 0.3 percent of GDP in 1998/99 to a deficit of 0.8 percent in 1999/2000 and a
deficit of 1.3 percent in 2000/2001 (compared to a surplus of 0.4 percent and zero balance,
respectively, in the brief). |
The deficits are more than offset by higher-than-expected net foreign
financing; reflect increasing donor emphasis on the use of program grants to support social sector
expenditures; an increase of 80 percent in health and education spending is envisaged in
1999/2000 budget. |
|
Uganda |
The target for fiscal deficit in 1999/2000 was increased by 0.9 percent of
GDP, in line with government’s commitment to increase expenditures on social and priority
areas—up to a limit— if donor financing proved more favorable than expected. |
To make room for higher development/social spending given
higher-than-expected net external budget financing and positive assessment of domestic
economic situation.
|
|
|
Source: Staff reports and briefing papers. |
21. In proposing increased fiscal flexibility, staff reports have
commonly stressed the need to ensure additional spending is effectively targeted—often indicating
that the World Bank will make an assessment in this respect. Other factors that have been taken
into account include the implications of higher borrowing for debt sustainability (the programs
invariably require that additional financing be on concessional terms), and the risks associated
with building in higher expenditure allocations in the face of uncertain funding prospects.
Table of Contents
VII. Closer Program Monitoring
In order to promote more consistent policy implementation, the framework for program
monitoring should be enhanced, and in selected cases more intensive monitoring should be
considered.
22. The ESAF Trust Instrument was amended on November 20,
1998, to allow greater flexibility in the setting of test dates in ESAF arrangements, and hence
closer program monitoring. As well as simplifying the structure of arrangements—new three-year
ESAF arrangements no longer include three separate annual arrangements—the modifications
provide for either regular six-monthly performance criteria and reviews (annual arrangements
previously had only one test date and review, mid-year) or for quarterly test dates and
disbursements. The Executive Board indicated that quarterly performance criteria should be used
only in exceptional cases, where the country’s record on policy implementation was weak, or
where the program was considered particularly vulnerable to shocks and policy
slippages.11
23. Although visits by Fund staff and discussions on program
developments commonly take place on a quarterly or even more frequent basis, quarterly
performance criteria and disbursements have so far been used in only two ESAF arrangements,
for Zambia and Tajikistan (both in 1999). In both cases, the poor track record in implementing
previous Fund-supported programs was a factor. In addition, Tajikistan’s vulnerability to
external shocks (related to contagion from the Russian crisis and lower cotton prices) was
considered sufficiently severe to warrant quarterly program reviews by the Board. It is too early
to assess whether these provisions have contributed to better policy implementation in the two
countries.
Table of Contents
VIII. Conclusion
24. This report constitutes, of necessity, a very preliminary
assessment of progress to date in following through on the lessons from the ESAF evaluations.
Nevertheless, it is clear that ESAF operations have begun to evolve in the directions sought by
the Executive Board at the conclusion of the reviews:
- The dialogue between Fund staff and member countries appears to be steadily becoming
more open and broad-based, involving a wider range of contacts both within and outside
government, helped in no small measure by the increasing readiness of governments to make
their program documents publicly available.
- Issues of implementation capacity and ownership-building are receiving more attention in
staff reports on requests for ESAF arrangements, though the advances in this area are fairly
modest.
- The pilot projects to enhance Bank-Fund collaboration have, for various reasons, gotten off
to a slower start than had been hoped, but are all now underway and beginning to report tangible
improvements in both program design and work practices.
- The focus on social spending and safety net issues is continuing to strengthen in
ESAF-supported programs, with an increasing proportion of programs adopting specific
benchmarks in both these areas of social policy.
- In circumstances where macroeconomic conditions are reasonably stable and structural
reforms well advanced, there are now numerous instances (affecting 14 ESAF countries in
all) where programs have been designed with flexibility in the fiscal targets to accommodate
additional aid for productive expenditures.
- Changes to the ESAF Instrument now allow for closer formal program monitoring,
including on a quarterly basis where this is considered likely to improve program
implementation, and two ESAF-supported programs with quarterly monitoring are now in
effect.
25. It would be premature to attempt an assessment of how the
macroeconomic and structural policy content of programs has changed in light of the ESAF
reviews. The sought-after changes in these areas did not, however, call into question the basic
strategy for adjustment and reform that ESAF had been supporting, which the evidence
corroborated. It is therefore encouraging that new data accumulated since the internal review was
carried out supports that study’s contention that the marked strengthening of ESAF countries’
policies in the early 1990s was beginning to show through in their economic growth rates: per
capita GDP growth in these countries has since accelerated further, and has surpassed that of
other developing countries in each of the last four years. Saving rates have risen, inflation rates
have come down, and fiscal positions have been further consolidated, notwithstanding substantial
real per capita increases in social expenditures.
26. In the coming months, the experience gathered in implementing
the ESAF evaluation conclusions—particularly in the context of the Bank-Fund collaboration
pilots—will be useful input to the new proposals that are being developed for a reform of the
ESAF, founded on comprehensive poverty reduction strategies. These proposals will, if adopted,
give additional impetus to many of the initiatives of the past year, especially in strengthening the
social content of programs and enhancing national ownership by opening up the process through
which those programs are formulated.
|
Appendix 1. ESAF
Program Countries and Non–ESAF Developing Countries
|
|
51 ESAF Program Countries
|
|
96 Non-ESAF Developing Countries
|
|
ALBANIA |
|
AFGHANISTAN |
MAURITIUS |
|
ARMENIA |
|
ALGERIA |
MEXICO |
|
AZERBAIJAN |
|
ANGOLA |
MICRONESIA, FED.STS. |
|
BANGLADESH |
|
ANTIGUA AND BARBUDA |
MOLDOVA |
|
BENIN |
|
ARGENTINA |
MOROCCO |
|
BOLIVIA |
|
BAHRAIN, KINGDOM OF |
MYANMAR |
|
BURKINA FASO |
|
BARBADOS |
NAMIBIA |
|
BURUNDI |
|
BELARUS |
NIGERIA |
|
CAMBODIA |
|
BELIZE |
OMAN |
|
CAMEROON |
|
BHUTAN |
PANAMA |
|
CENTRAL AFRICAN REP. |
BOTSWANA |
PAPUA NEW GUINEA |
|
CHAD |
|
BRAZIL |
PARAGUAY |
|
CONGO, REPUBLIC OF |
|
BULGARIA |
PERU |
|
COTE D IVOIRE |
|
CAPE VERDE |
PHILIPPINES |
|
EQUATORIAL GUINEA |
|
CHILE |
POLAND |
|
ETHIOPIA |
|
CHINA,P.R.: MAINLAND |
ROMANIA |
|
GAMBIA, THE |
|
COLOMBIA |
RUSSIA |
|
GEORGIA |
|
COMOROS |
SAMOA |
|
GHANA |
|
CONGO, DEM. REP. OF |
SAO TOME & PRINCIPE |
|
GUINEA |
|
COSTA RICA |
SAUDI ARABIA |
|
GUINEA-BISSAU |
|
CROATIA |
SEYCHELLES |
|
GUYANA |
|
CZECH REPUBLIC |
SLOVAK REPUBLIC |
|
HAITI |
|
DJIBOUTI |
SLOVENIA |
|
HONDURAS |
|
DOMINICA |
SOLOMON ISLANDS |
|
KENYA |
|
DOMINICAN REPUBLIC |
SOMALIA |
|
KYRGYZ REPUBLIC |
|
ECUADOR |
SOUTH AFRICA |
|
LAO PEOPLE'S DEM.REP |
|
EGYPT |
ST. KITTS AND NEVIS |
|
LESOTHO |
|
EL SALVADOR |
ST. LUCIA |
|
MACEDONIA, FYR |
|
ERITREA |
ST. VINCENT & GRENS. |
|
MADAGASCAR |
|
ESTONIA |
SUDAN |
|
MALAWI |
|
FIJI |
SURINAME |
|
MALI |
|
GABON |
SWAZILAND |
|
MAURITANIA |
|
GRENADA |
SYRIAN ARAB REPUBLIC |
|
MONGOLIA |
|
GUATEMALA |
THAILAND |
|
MOZAMBIQUE |
|
HUNGARY |
TONGA |
|
NEPAL |
|
INDIA |
TRINIDAD AND TOBAGO |
|
NICARAGUA |
|
INDONESIA |
TUNISIA |
|
NIGER |
|
IRAN, I.R. OF |
TURKEY |
|
PAKISTAN |
|
JAMAICA |
TURKMENISTAN |
|
RWANDA |
|
JORDAN |
UKRAINE |
|
SENEGAL |
|
KAZAKHSTAN |
URUGUAY |
|
SIERRA LEONE |
|
KIRIBATI |
UZBEKISTAN |
|
SRI LANKA |
|
LATVIA |
VANUATU |
|
TAJIKISTAN |
|
LEBANON |
VENEZUELA |
|
TANZANIA |
|
LIBERIA |
YUGOSLAVIA, SFR |
|
TOGO |
|
LIBYA |
|
|
UGANDA |
|
LITHUANIA |
|
|
VIETNAM |
|
MALAYSIA |
|
|
YEMEN, REPUBLIC OF |
|
MALDIVES |
|
|
ZAMBIA |
|
MALTA |
|
|
ZIMBABWE |
|
MARSHALL ISLANDS |
|
1The list of policy conclusions is drawn from the Summing
Up by the Chairman—Distilling the Lessons from the ESAF Reviews. See also the staff
paper, Distilling the Lessons from the ESAF Reviews, for a fuller description of the
proposals and references to the reports on the internal review and external evaluation. Both
documents are available on the IMF's website (www.imf.org).
2See Appendix I for a list of ESAF program countries and
non-ESAF developing countries.
3See Review of Social Issues and Policies in IMF-Supported
Programs (forthcoming).
4In the case of the three other new ESAF arrangements approved
since July 8, 1998—for Bolivia, Guyana, and the Central African Republic—the missions had taken
place (and, in two cases, the reports were already issued) before the new policy took effect.
5The staff report for Ghana combined the section on the
environment for program implementation with that on access, capacity to repay, and risks to the
program. The report for Mauritania had a section on "program monitoring, performance criteria,
and implementation capacity."
6The selection was based on a number of considerations,
including: the geographical distribution of ESAF arrangements; the stage of the reform process
and whether a new thrust of reform to accelerate progress could be envisaged; the receptiveness
of the authorities to intensified dialogue; and the adequacy of information, such as household
surveys, for assessing the social impact of program design.
7See Box 3 in Review of Social Issues and Policies in
IMF-Supported Programs (forthcoming).
8Box 1, ibid. The use of formal benchmarks or performance
criteria on social safety net measures is still comparatively rare, however, rising from one case
(within the sample) in 1994 to five cases in 1998.
9Review of Social Issues and Policies in IMF-Supported
Programs (forthcoming); HIPC Initiative—Strengthening the Link between Debt Relief
and Poverty Reduction (forthcoming); and Building Poverty Reduction Strategies in
Developing Countries (World Bank, forthcoming).
10In Mozambique, the domestic primary balance is the only
quantitative fiscal target, so additional foreign-financed capital expenditures can be fully
accommodated in the program. This is also the case in Guinea and Senegal: the fiscal targets in
these countries include a ceiling on net bank credit to the government, and do not (unlike most
programs) require that government bank borrowing be adjusted downward in the event that
external budgetary assistance is greater than programmed.
11Summing Up by the Chairman—Distilling the Lessons from
the ESAF Reviews.
|
