More countries are providing data needed for effective IMF oversight

• Pages: 375-376

Page 375

There is work still to be done, but an increasing number of countries are providing the IMF with data of the quality it needs to provide effective oversight of members' economic policies. According to the recently released staff report, Data Provision to the IMF for Surveillance Purposes, and a summary of the Executive Board discussion of it, poor data remain a problem in one-third of the IMF's member countries. But the number has been declining and there has been progress on many fronts, notably with data on international reserves.

Good data are a valuable commodity. Policymakers need them to make informed decisions; markets rely on them to fulfill their allocative role efficiently and to reward good, and penalize bad, policies; and the IMF requires them to provide effective oversight (surveillance) of members' economic policies. Crises have, in turn, underscored how severely data inadequacies can affect a country's economic well-being. The Executive Board noted that timely and adequate economic and financial data, especially on international reserves, external debt, and capital flows, are essential for assessing countries' external vulnerabilities and are key to the IMF's ability to strengthen its surveillance. But data enhancements can be costly in terms of resources, and the Board recommended balancing minimum data requirements and country capacity to fulfill these needs.

Progress on the reserves front

Rapidly diminishing international reserves have figured prominently in most external crises, but data have often been unavailable to alert other countries, markets, or sometimes even domestic policymakers of impending problems. Because data inadequacies have often hidden the need for remedial action until it is too late, improving international reserves data has been a focal point of IMF data reviews.Over the past two years, there has been noteworthy progress. Currently, nearly half of the countries covered in the report provide international reserves data to the IMF with lags of one week or less- up from the 38 percent recorded in the previous survey.

The IMF's Executive Directors lauded this progress as well as the use of benchmarks to promote and monitor the provision to the IMF of timely data for international reserves and for external debt. These benchmarks, which are the same as the prescriptions for the Special Data Dissemination Standard (SDDS), have...