April 11, 2000

Background
Agenda
Outcome

Background

The Board of Governors of the IMF —the top of its chain of command, consisting of one governor (generally, the finance minister or head of the central bank) from each of the 182 member countries —gets advice from two high-level advisory committees. These committees of IMF and World Bank governors convene in the spring as well as at the Annual Meetings in the autumn. Each committee has 24 members who represent either individual countries or groups of countries, and together represent the entire membership of the two institutions. The International Monetary and Financial Committee (the IMFC, formerly known as the Interim Committee) advises the IMF Board of Governors on the functioning of the international monetary system. The joint IMF/World Bank Development Committee advises the Boards of Governors of the IMF and the World Bank on the special needs of poorer countries.

Spring meetings of the advisory committees have been held every year for the past 25 years. This year's meetings are attracting heightened public interest and planned demonstrations on globalization issues, but the IMF is continuously engaged in dialogue with civil society. The IMFC meeting is one of the most important ways in which the IMF is held accountable and responsible to the governments of its member countries.

This year, the IMFC will meet on Sunday, April 16. The three main topics on the provisional agenda, outlined in a press briefing by the IMF's Acting Managing Director on April 4, are:

• the world economic situation and outlook

  The outlook is upbeat, with global output projected to rise by over 4 percent this year.

• the evolving role of the IMF in the reform of the international monetary system

  This agenda item includes a review of IMF financing facilities; new proposed safeguards on the use of IMF resources; standards and codes to guide sound economic and financial behavior; and ways to involve the private sector in preventing and resolving financial crises.

• progress on debt relief and poverty reduction

  The IMF and the World Bank, in partnership with the international community, are making an enhanced commitment to the easing of debt burdens and the eradication of poverty.

As usual, the meetings will begin with a discussion of the latest World Economic Outlook (WEO), the IMF staff's twice-annual assessment of global economic development and prospects, which will be released on the IMF external website (www.imf.org) on April 12. This discussion represents part of the IMF's regular surveillance--that is, assessment or check-up—of economic policies and prospects in member countries and the world economy as a whole. It provides the opportunity for members to review each other's economic situations and policies, including their impact on the rest of the world.

The second main topic on the agenda will be the reform of the IMF. The international community has learned many lessons from the financial crises of recent years, and with the support and encouragement of its members, the IMF has been taking important steps to increase the effectiveness of its work in light of those lessons. The IMFC is expected to consider the review of Fund facilities undertaken recently by the Executive Board and the summing up of the Board's discussion, both of which have been posted on our external website. Since the start of the year, the IMF has eliminated four facilities, and is now reviewing how the terms of its lending fit in with the institution's mandate and member's needs. At its last meeting, the IMFC called for a review and report on procedures and controls to safeguard the use of Fund resources (Public Information Notice 00/28), and this will be another agenda topic under IMF reform. Incidents of misreporting of information to the Fund by members using IMF resources are a serious issue, even though they occur rarely, and the Executive Board is recommending a two-stage safeguards assessment for central banks of borrowing countries to supplement the measures already in place. The Committee will also look at progress in the IMF's role in the establishment, implementation, and monitoring of standards and codes of good practices in fiscal, monetary, and financial sector policies that are essential to a well-functioning economy, and at ways of involving the private sector in the prevention and resolution of financial crises. Other issues on the agenda that relate to reform of the international monetary and financial architecture include data issues, transparency initiatives, and exchange rate regimes.

The third major agenda item encompasses the Initiative for the Heavily Indebted Poor Countries (HIPC) and Poverty Reduction and Growth Strategies that focus on the poorer member countries. At the last Annual Meetings, in September 1999, a major enhancement of the joint World Bank-IMF initiative to provide special assistance for heavily indebted poor countries that pursue adjustment and reform programs was endorsed, in order to provide deeper, broader, and quicker debt relief. The IMF's concessional lending facility for low-income countries was strengthened to make poverty reduction a central objective, creating the new Poverty Reduction and Growth Facility (PRGF). While the Development Committee will be the main forum for addressing the needs of poorer members, the IMFC will also assess progress in debt relief and poverty reduction.

The Communiqué: Outcome and Outlook

As usual, the communiqué of the IMFC will be quickly posted on our external website, so that the public has easy access to the conclusions, views, and recommendations. The communiqué will present the outcome of its discussions on the agenda items outlined above, lay out the work agenda for the Fund in the coming months, and provide an outlook on the issues that the Board of Governors should take up when it convenes at the next Annual Meetings in Prague in September 2000.