Public Information Notice No. 10/43

Public Information Notice: IMF Executive Board Discusses Implementation of the Joint Management Action Plan on Bank-Fund Collaboration

March 30, 2010

On March 24, 2010 the Executive Board of the International Monetary Fund (IMF) discussed a report prepared by the staffs of the IMF and the World Bank on “Implementation of the Joint Management Action Plan on Bank-Fund Collaboration.”

Background

The report assesses implementation of the Joint Management Action Plan on Bank-Fund Collaboration (JMAP), discusses the state of Bank-Fund collaboration more generally, and suggests ways to improve it. The report finds that Bank-Fund collaboration has improved in recent years. Nevertheless, further progress appears possible. The report describes a number of actions to be taken by both institutions to move collaboration forward.

The JMAP is the Bank and Fund managements’ response to those aspects of the Report of the External Review Committee on Bank-Fund Collaboration that are deemed to be within their purview. Presented to the Boards of the Bank and the Fund in 2007, the plan identifies three broad priority areas for improvement in Bank-Fund collaboration:

• Improving collaboration on country work, including through new procedures for country team coordination;

• Enhancing communication between staff of the two institutions working on common thematic issues;

• Improving incentives and support for collaboration on policies, review, and other issues.

Going forward, the managements intend to focus efforts to enhance collaboration on a limited number of areas including encouraging more structured interactions between country teams, enhancing information sharing, and fostering greater staff mobility between the two institutions.

The report also discusses new and emerging issues in collaboration that have been brought to the fore by the recent global economic turmoil, including the division of labor in the provision of financing to member countries. It concludes that the Bank and the Fund have complementary financing roles, and must collaborate closely in providing financial assistance and policy advice to individual countries. Where the financial support or policy advice of one institution has a bearing on the operations of the other, as is often the case, collaboration is particularly important, with each institution guiding the other in its core areas of expertise.

Executive Board Assessment

Executive Directors welcomed the opportunity to discuss the first report on Implementation of the Joint Management Action Plan on Bank-Fund Collaboration. They noted that the recent global economic turmoil has highlighted the importance of close collaboration between the Bank and the Fund. Against this background, Directors considered the review of JMAP implementation to be timely. They also welcomed the discussion of the state of Bank-Fund collaboration more generally and suggestions to improve it.

Directors welcomed the report’s finding that Bank-Fund collaboration has improved in several respects over the past two years. Contacts among staff, including at the country level, have intensified; the flow of information has improved; early drafts of policy documents have been shared for comment more frequently; and cross attendance by staff at relevant Board meetings has increased. Directors noted that both the JMAP and other factors have contributed to stronger collaboration. In particular, the succession of global crises—beginning with the food and fuel price surges in 2007–08—has led the staffs to work together more closely than before, to deliver support to member countries quickly and effectively.

Looking ahead, Directors agreed that there is scope to continue strengthening collaboration in several respects. They broadly endorsed the managements’ pragmatic emphasis on promoting those measures that have the greatest potential to enhance collaboration in meeting the needs of member countries. In the period ahead, the focus will accordingly be on encouraging more structured and regular interactions between country teams, while guarding against turning such consultations into bureaucratic exercises; taking collaboration into account more systematically in performance assessments; fostering greater staff mobility between the two institutions; and enhancing information sharing and communication. As underlined by the crisis, collaboration in financial sector work, including on the implementation of the Financial Sector Assessment Program (FSAP) recommendations recently endorsed by both Boards, merits continued high priority. Directors considered that a clear and sustained commitment by both managements to improved collaboration will remain crucial, and will serve to enhance effectiveness of the JMAP. While mindful of resource implications, Directors observed that a strengthened JMAP could help establish best practices of effective collaboration. Today’s discussion also brought to the fore several other issues for follow-up, including the role that Resident Representatives can play in ensuring proper coordination; increasing cross-participation in missions; exploring practical ways of engagement between the two Boards; and fostering effective collaboration with regional development banks.

With regard to the provision of financing to member countries, Directors broadly agreed that the Bank and the Fund have complementary roles, and must collaborate closely to ensure coherent assistance, policy advice, and public messages, with each institution guiding the other in its core areas of expertise. Close collaboration, based on a clear sense of complementarities, was felt to be particularly relevant in the area of budget support, including in a crisis context, as well as in the area of longer-term financial engagement with low-income countries. Directors saw a need for a more in-depth discussion on these more strategic issues. They also highlighted the crucial importance of taking account of the review of the Fund’s mandate in providing the context for effective collaboration with the World Bank going forward.

Directors looked forward to a follow-up report on Bank-Fund collaboration in two years’ time.