Update on the IMF 2021 Comprehensive Surveillance Review

In May 2021, the IMF published its 2021 Comprehensive Surveillance Review (2021 CSR), which takes stocks of the Fund’s policy advice in the past six years and sets the strategic direction of its surveillance work for the coming years.

With partners (including Bretton Woods Project, Oxfam and Recourse among others), we engaged in the process giving feedback regarding the ways in which the IMF has integrated macrocritical issues (inequality, gender and climate change) in its work, and developing a Proposed Framework for IMF Engagement in Country-level Surveillance on Macrostructural Issues; Inequality, Gender and Climate Change.

The document was discussed with IMF Executive Directors in April 2021, but overall the process of preparation of the 2021 CSR lacked a proper consultation with CSOs. 

The 2021 CSR identifies four priorities that will direct the Fund’s surveillance in the future (and discussed in this IMF blog):

  • Confronting risks and uncertainties
  • Pre-empting and mitigating adverse spillovers
  • Fostering economic sustainability
  • Unified policy advice

The background paper on ‘Economic Sustainability’ discusses how key trends including demographics, technological change, inequality and climate change are relevant for the Fund’s surveillance work. While this paper goes to some length in expanding the concept of macrocriticality, several concerns have been expressed by CSOs:

-as noted by Oxfam, the 2021 CSR fails to require staff to advise countries on policies to tackle inequality or systematically assess the impacts on inequality of its own recommendations;

-as noted by Action Aid, it fails to address the impact of its policy prescriptions on gender equality and women’s rights, and to consider how IMF policies enable governments to meet the UN sustainable development goals (SDGs), the Paris Climate Agreement;

-the 2021 CSR does not provide clear guidelines, dashboard of indicators or threshold to determine when inequality, climate change or gender are macrocritical, leaving this assessment to IMF staff’s judgment. This risks making the treatment of macrocritical issues an ad hoc exercise with no systemic impact.

An important innovation found in the 2021 CSR is the recognition that climate change is macrocritical (as discussed in this background paper), and that surveillance should be concerned with countries’ adaptation strategies, the physical and financial risk that transitioning to a low carbon economy can entail and policies to deliver a country’s Nationally Determined Contribution under the Paris climate accord.

However, as noted by Recourse, the 2021 CSR fails to compel the biggest 20 emitters to account systematically for consequences of emissions on global sustainability and to examine how Fund’s own policy advice locks countries into fossil-fuel dependency.

Following the publication of the CSR 2021, the IMF held a call with civil society to discuss the document (note of the call are here). A Staff Guidance Note is being written to accompany the CSR and the process will entail further CSOs consultation.

Key aspects that we expect to continue push for considerations in the Staff Guidance Note (and also raised in the CSOs Proposed Framework for IMF Engagement in Surveillance) are:

  • Need to improve coherence of policy advice adopting a more systematic and joined-up approach, especially in the treatment of macrocritical issues (inequality, gender, climate change);
  • Need to strengthen and better address how surveillance will include CSOs engagement;
  • The need to adopt do-no-harm principles, including systematising and further developing impact assessments,and mainstreaming paragraph 26 of the Gender and Inequality ‘How to guidance note’ into the new Staff Guidance Note;
  • The importance of promoting closer cooperation with other organisations, including beyond the World Bank.

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