Statement by the Managing Director on the Work Program of the Executive Board Executive Board Meeting: December 10, 2020

Statement by the Managing Director

on the Work Program of the Executive Board

Executive Board Meeting

December 10, 2020

As the COVID-19 crisis continues to unfold, uncertainty remains exceptionally high. The Fund has provided extraordinary financial support as well as timely analysis and policy advice during the first phase of the crisis, but additional efforts are needed to help members secure a durable exit, minimize long-term scarring, and build a more sustainable and resilient economy. Against this backdrop, and in line with the strategic directions laid out in the Fall 2020 Global Policy Agenda and the International Monetary and Financial Committee (IMFC) Communiqué, this Work Program puts forward a prioritized Board agenda for December 2020 to June 2021, focused on activities of most critical importance to our members1.

I. Key Priorities of the Fall 2020 Work Program

1. Restore confidence to foster jobs and economic growth

With the crisis creating unprecedented challenges to macroeconomic management, the Fund will continue to provide pertinent policy advice. The Spring World Economic Outlook (WEO) will discuss policy priorities to limit persistent scarring and set the stage for a resilient, inclusive, and green recovery. The Spring Global Financial Stability Report (GFSR) will analyze financial market developments, challenges in the corporate sector, financial stability risks in commercial real estate, and drivers of the credit and leverage cycle. In light of the impact of COVID-19 on people and societies, the Spring Fiscal Monitor (FM) will look into various aspects of inequality including inequality of access to basic services, and discuss tax and spending polices for fairer economies, and the role of public perceptions in determining support for redistribution. The World Economic and Market Developments Update will continue to provide interim information. Staff is also further enhancing the Policy Trackerand the Database of Country Fiscal Measures in Response to the COVID- 19 Pandemicto facilitate peer learning and sharing good practice, while continuing to disseminate technical advice through the Special Series onCOVID-19,Capacity Development (CD) and surveillance. As usual, the Fund will provide rigorous, evenhanded, and multilaterally-consistent assessments of external positions for the full membership, including through the External Sector Report (ESR). On macro risk work, the Board will continue to be engaged on the Early Warning Exercise.

1 In light of the uncertainties ahead arising from the pandemic and its consequences, the Work Program will be adjusted from time to time to introduce relevant topics of a strategic, thematic, and/or cross-cutting nature that are closely-related to the crisis and its resolution.

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Regional briefings will provide more granular views on crisis developments and tailored policy recommendations, while Briefings on Country Matters will present in-depth analyses of common challenges for specific groups of countries.

With the crisis exacerbating debt burdens across many countries, the Fund has an ambitious work agenda to reduce debt vulnerabilities, strengthen transparency, and improve the architecture for sovereign debt resolution. Following a discussion on the Update to the Joint WB-IMFMultipronged Approach for Addressing Debt Vulnerabilities, the Board has discussed the Review of Debt Sustainability Framework for Market Access Countries (MAC DSA) to assess the current framework and consider reforms to modernize it. Building on the previous briefing on Staff's Work Program on Sovereign Debt Restructuring (in August), the Board will be engaged on Fund Support for Debt- and Debt-Service-ReductionOperations and discuss Issues in Restructuring of Sovereign Domestic Debt. The Board will also be engaged on the Review of the IMF's Lending into Arrears Policies: Preliminary Considerations. The Board will be briefed on the Implementation and Extension of the G-20Debt Service Suspension Initiative (DSSI) ahead of the Spring Meetings, and in the interim receive a briefing on The Common Framework and Extension of the G-20DSSI.

As the Board gradually resumes considering focused Article IV consultations, work on enhancing the Fund's surveillance framework will restart. Building on previous engagements, including a recent update to reflect on the impact of the crisis, and forthcoming discussions on Data Provision to the Fund for Surveillance Purposes-AnUpdate and Systemic Risk and Macroprudential Policy Advice in Article IV Consultations, the Board is expected to conclude the Comprehensive Surveillance Review (CSR) in the Spring. The Board will also discuss the Financial Sector Assessment Program (FSAP) Review (jointly with the World Bank), following a recently completed informal meeting to engage Directors on progress since the mid-point review.

The Fund will continue to support the G-20 to catalyze a coordinated global response. The Board will receive the G-20Analytical Note on Italy's Framework Working Group Priorities as well as G-20Surveillance Notes ahead of relevant G-20 Meetings. Other deliverables as agreed with the G-20 will also be shared with the Board.

2. Assist the most vulnerable members

The forthcoming report on Macroeconomic Developments and Prospects in Low-Income Developing Countries will be streamlined and focus on the external financing needs of developing countries and sustainable financing options to fulfil the request from the IMFC for the Fund to prepare a report on external financing needs of low-incomecountries. This work will incorporate findings from a Staff Discussion Note (SDN) on Post-Pandemic Assessment of Sustainable Development Goals (SDGs), which will present an analysis of prospects for progress toward the SDGs, accounting for the setback from the COVID-19crisis.

The Board paper Fund Engagement with Countries in Post-Conflict and Fragile Situations will examine the follow up to the2018 Management Implementation Plan (MIP)and outline a strategy for

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future Fund engagement. The briefing on Building Capacity in Monetary and Financial Policies in Fragile and Conflict-Affected States will describe approaches taken in designing and implementing central bank and financial system reforms, including on financial market development and debt management. More broadly on CD, following the recent briefing on the COVID-19CD Initiative and the Fund's External Financing of CD, the Board will have a discussion on the Implementation of CD Priorities ahead of the budget meeting.

The Review of the Temporary Increase in Fund Access Limits will assess the initial experience with the use of the higher access limits taking account of the global economic outlook, and propose modifications, if needed. And the Board will consider proposals to extend the Catastrophe

Containment and Relief Trust (CCRT)-Third Tranche of Debt Service Relief in the Context of the COVID-19 Pandemic, which will also update on the beneficiary countries' policy responses and the use of resources freed up by the relief. To ensure adequate resources for the Poverty Reduction and Growth Trust (PRGT) and debt relief under the CCRT and the Heavily Indebted Poor Countries (HIPC) Initiative, the Board will discuss the Review of Concessional Financing and Policies.

3. Support a transformational recovery for a more sustainable and resilient global economy

Building on work on the Integrated Policy Framework, the Board will have a discussion (to engage) on the Review of the Institutional View on Liberalization and Management of Capital Flows, which will also draw on the IEO's evaluation of the Fund's advice on capital flows, and the subsequent MIP on IEO Evaluation-TheIMF Advice on Capital Flows.

In an environment of lower-for-longer interest rates, Unconventional Monetary Policy (UMP) will assess the macroeconomic impact and financial stability risks of prominent UMP tools. Monetary Policy Framework Reviews will provide an overview of the framework reviews of major central banks, considering key factors motivating the reviews such as falling equilibrium real interest rates and a decline in inflation expectations.

To provide support for the members on revenue mobilization, a briefing on Tax Policy in the COVID/post-COVIDWorld will examine the role of taxation in different phases of the crisis and the recovery therefrom.

The Fund will help members harness the full potential of accelerating digitalization to expedite and secure a resilient recovery. A briefing on Developing an Analytical Framework for Central Bank Digital Currencies (CBDCs) will suggest a framework to weigh the costs and benefits of CBDCs, taking into account design features, countries' levels of development, and policy objectives. An SDN on Considerations for a Global Approach to Digital Data Frameworks will present a framework for understanding the macroeconomic, financial stability, and individual privacy implications of the use of customer data generated and exchanged in digital commercial and financial transactions, which have gained further importance since the pandemic. Another SDN on Rising Corporate Market Power: Emerging Policy Issues will provide new evidence of rising corporate market power and discuss policy implications.