The International Monetary Fund (IMF) will expand its work on social protection and governance as key levers for reducing inequality and strengthening social cohesion and resilience following the pandemic. According to Managing Director Kristalina Georgieva, the Fund will assess the impact of the crisis on income and gender equality and further operationalize the strategy for the Fund’s engagement on social spending.
In addition to governance safeguards in emergency financing, they will continue to support fiscal transparency and institution building to foster good governance and anti-corruption efforts. “We will also be resuming work on illicit financial flows and aggressive tax avoidance to help level the playing field within and across countries.”
They will also strengthen their support of members’ efforts to reduce debt vulnerabilities, increase debt transparency and debt management capacity, and improve the architecture for sovereign debt resolution. This she says is part of her Global Policy Agenda 2020 “CATALYZING A RESILIENT RECOVERY” as they will help countries develop credible medium-term fiscal frameworks to restore market confidence and foster stronger growth and sustainable fiscal balances.
On making economies more resilient, the Fund she said will prepare countries to more effectively and quickly overcome shocks, and will further develop the Integrated Policy Framework to advance the understanding of policy options, including monetary, exchange rate, macro prudential, and capital flow management measures. This work will also be an input into the review of the Fund’s Institutional View on the Liberalization and Management of Capital Flows, which will draw as well on the IEO’s evaluation of the Fund’s advice on capital flows.
We will also advance our work on options to strengthen monetary policy frameworks; unconventional monetary policy and the impact of low-for-long interest rates; and systemic risk analysis and macro prudential policies. Harnessing the full potential of digitalization can help expedite and secure a resilient recovery. The Fund will support governments’ digital transformation through advice and CD, and continue exploring the benefits, risks, and macro-financial implications of fintech on financial inclusion, monetary policy, and the international monetary system.
“We will also develop an analytical framework for central bank digital currencies, consider options to address deficiencies in global payment systems, and develop a global approach to data policy frameworks.” The Managing Director stressed that they will update their work on the multi-pronged approach to address debt vulnerabilities, in collaboration with the World Bank. In addition to completing the reviews of the debt limits policy and the debt sustainability analysis for market-access countries, “we are engaging with creditors to bolster our advice on sovereign and corporate debt restructuring and will undertake reforms of our policies, where needed, to promote timely and comprehensive debt resolution.”
The Fund will continue to promote international cooperation and open trade as an engine for restoring global growth. By supporting the modernization of the rules-based multilateral trading system, including better covering services and digital commerce and strengthening rules on subsidies and technology transfer. “We will provide rigorous, even handed, and multilaterally-consistent assessments of external positions for the full membership.”
By Zainab Iyamide Joaque