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The safeguards policy was introduced in 2000 to reduce the risks of misuse of Fund resources and misreporting of program monetary data to the Fund. It supports the Fund’s approach to prudent lending and complements other safeguards such as program design, conditionality, and access limits, to name a few. Some 242 assessments of 92 central banks have been completed since 2000. Assessments are followed by a period of monitoring for as long as Fund credit is outstanding.
The safeguards policy, introduced in 2000, is designed to reduce the risks of misuse of Fund resources and misreporting of program monetary data to the Fund. It supports the Fund’s approach to prudent lending and complements other safeguards, including program design, conditionality, and access limits. Safeguards assessments are required for almost all member countries seeking Fund financing, and are followed by a period of monitoring for as long as Fund credit is outstanding
This report by the external expert panel (“the panel”) examines the effectiveness and appropriateness of the safeguards assessments policy in the five years since its last review in 2010. In addition to expressing an opinion on the effectiveness and appropriateness of the safeguards assessment policy, the panel also makes recommendations to the Executive Board for its consideration to improve and optimize the benefits to be garnered from the safeguards assessment policy. The panel’s opinion is based on (i) consultations with key stakeholders, including central bank authorities, IMF Executive Directors’ offices, Fund and World Bank staff; (ii) examination of safeguards assessment and other Fund-specific documents; and (iii) study of international reference materials.
This paper reviews experience with the safeguards assessment policy since the last review in 2010. The policy is subject to periodic reviews by the Executive Board. The policy’s main objective is to mitigate risks of misuse of Fund resources and misreporting of monetary data under Fund arrangements. Consistent with past reviews, an external panel of experts provided an independent perspective on the implementation of the policy.
Burundi is a fragile state with a history of political tensions and weak institutions. Before the Covid-19 pandemic, Burundi was recovering from an economic recession triggered by the 2015 political crisis stemming from the late President Nkurunziza’s decision to run for a third term. Real GDP growth was positive, at 1.8 percent in 2019, but difficult policy challenges persisted.
KEY ISSUES Context. Macroeconomic performance has generally exceeded expectations. Real GDP grew 7.3 percent for 2013, up from 6.3 percent in 2012. Inflation declined to below 5 percent, and the external current account balance has improved. Private credit growth has been slow, however, a number of financial sector indicators have deteriorated. Outlook and Risks. Growth is expected to remain robust at 7 percent and inflation to remain in the mid-single digits. The external current account should improve marginally, allowing for further accumulation of foreign exchange reserves. Near-term risks appear moderate, although there may be some bumps in the road from market turbulence and climatic events. Medium-term risks relate to the potential for tighter external liquidity, the challenge of further fiscal and debt consolidation while maintaining high levels of investment in infrastructure and human capital, maintaining a balanced monetary policy, and staying competitive in a shifting economic landscape. Key Policy Recommendations. • Fiscal consolidation and debt reduction need to continue, but the burden of adjustment needs to shift decisively to revenue generation. Debt targets could potentially be recast to achieve deeper reduction over a longer period. • Monetary policy needs to maintain a balance between supporting growth and containing inflation. A continued forward-looking approach is needed given long lags in monetary transmission. • Financial sector consolidation could lead to economies of scale, greater resilience, and more effective supervision, but corporate governance needs to continue to improve, and careful supervision in the post-consolidation period will be key. • Maintaining competitiveness and achieving a more sustainable external position will require a mix of continued innovation, sustained investment in infrastructure and human capital, a predictable business environment, and ideally a heavier emphasis on direct investment and equity portfolio flows than debt.
Burundi’s economy has shown resilience to the COVID-19 and Ukraine war shocks. Prior to the pandemic, the economy was recovering from the political and security crisis that followed late President Nkurunziza’s decision to run for a third term in 2015, with growth close to 2 percent in 2019. Difficult macroeconomic policy challenges persisted, nevertheless. The pandemic has taken a toll on the post-conflict fragile country, but COVID-19 contagion remained fairly contained and growth was positive. The war in Ukraine is compounding the adverse effects of the pandemic, with deteriorating terms of trade and the resulting domestic inflation threatening already-challenging living standards. Sanctions from the U.S. and E.U.—legacy of the 2015 crisis—have now been lifted. The U.N. Security Council ended mandatory reporting in Burundi and the country has reengaged with the international community. The 2022 Article IV consultation seals the full reengagement with the IMF—the last one was concluded in 2014.
This staff report on the Republic of Yemen’s 2013 Article IV Consultation highlights economic development and policies. The macroeconomic situation stabilized in 2012, but the recovery remains fragile. After contracting by more than 12 percent in 2011, real GDP is estimated to have grown by 2.4 percent in 2012, reflecting an easing of supply bottlenecks, and utilization of part of idle capacity. On the other hand, oil production declined further, due to continued sabotage of the pipelines. Average inflation declined to 9.9 percent from 19.5 percent in 2011, reflecting the appreciation of the rial to its pre-crisis level, the moderation of international food prices, and the easing of supply shortages.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
A moderate economic recovery is taking hold in St. Lucia. Favorable international conditions have contributed to improved demand for tourism, St. Lucia’s main economic sector, and the external current account deficit has narrowed significantly. The authorities have made some progress in addressing a weak fiscal position. However, the financial sector continues to be impaired by nonperforming loans, public debt keeps rising, and unemployment remains very high, while external sector competitiveness continues to be weakened by an overvalued exchange rate, economies of scale disadvantages, and structural bottlenecks.