Progress in implementing Group of Seven action plan

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Page 111

Following is the full text of the Group of Seven's report on progress to date in implementing the action plan to strengthen crisis prevention and resolution.

In April 2002, we adopted an integrated action plan to strengthen crisis prevention and resolution measures designed to promote conditions for sustained growth of private investment in emerging markets. The progress made on each element of the action plan is set out below.

Surveillance and crisis prevention. Better information is key to sound economic analysis and improved pricing of risk, with a view to promoting more stable capital flows. In this regard, the IMF has made progress in deepening its surveillance capacity, including through the development of more robust debt sustainability analyses and greater focus on national balance sheets. The IMF and its Independent Evaluation Office have identified areas for further progress to make surveillance more comprehensive, independent, and accountable, including a fresh perspective in program countries and improved analysis of vulnerabilities.We urge the IMF to intensify its work in these and other critical areas, including currency mismatches, reporting progress to the 2003 Annual Meetings. To complement these measures, we support the presumption of publication of Article IV reports, Public Information Notices of relevant Executive Board discussions, program documents, and Reports on the Observance of Standards and Codes, especially for countries with IMF programs, while taking into account its impact on deletion and correction policy.

Program documents for cases of exceptional access should always be published. Access limits. Consistent with the need for greater discipline in the provision of official finance in crisis situations, we support the IMF Board's decision that normal access should be limited to 100 percent of quota in any one year and a cumulative total of 300 percent of quota. Lending under any facility, or combination of facilities, above these limits will be considered exceptional. Over the past year, the IMF has set out criteria and procedures to inform decisions and judgments for cases where exceptional access is contemplated. These stronger procedures, including early Board involvement and a separate report evaluating the case for exceptional lending, will be applied to any exceptional lending, even where the member is not experiencing a capital account crisis.We welcome the recent establishment of a strong...