The Ministry of Finance has announced that a one off tax free payment of $50,000 will be made to all active public sector workers earning less than $500,000 monthly.This payment will be effected in December. Some 30,700 public sector workers including nurses, teachers, members of the Disciplined Services and semi-autonomous agencies will benefit.
The Ministry of Finance (MOF) notes with growing concern speculations in the media about the MOU signed between Fedders Lloyd and itself for the review of works for the Specialty Hospital Project.
MOF wishes to make clear that its actions are consistent with the Procurement Act Chapter 42:05:
“If the supplier or contractor whose tender has been accepted fails to sign a written contract, if required to do so, or fails to provide any required security for the performance of the contract, the appropriate board shall refer the matter to the Evaluation Committee to determine which of the remaining tenders is the second lowest evaluated tender based on the evaluation criteria outlined in the bid documents subject to its right, in accordance with section 40(1), to reject all remaining tenders.”
In the Public bidding done for the Specialty Hospital under the PPP/C government, four tenders were received. Two were deemed to be rejected, leaving the remaining two – Surrendra Engineering and Fedders Lloyd Ltd. – in contention.
In spite of the protestations of Fedders Lloyd, the PPP/C government selected Surrendra Engineering, leaving Fedders Lloyd as the second and only other bidder for the project.
Surrendra’s services were eventually terminated by the previous government. Therefore, in accordance with Section 42(5) of the Procurement Act, the government can proceed to the second bidder.
The MOF also takes this opportunity to clarify a few points.
- The MOF did not award a contract to Fedders Lloyd; the Ministry merely entered into a MOU with the second and, indeed, the only other qualified bidder.
- The advantages of proceeding in this manner, rather than going out for a new tender are many, including the fact that Fedders Lloyd expressed in the MOU its intention to hold its prices expressed in its original bid made some four years ago. In addition to being time consuming, a new tender will result, obviously, in price escalation due to inflation.
- Fedders Lloyd intends to examine works already done by the previous contractor and to integrate those works within its proposed current design options, so as to lessen the burden of loss of funds already spent.
- Fedders Lloyd intends to complete the designs and finalize the list of equipment (which was not completed by the previous contractor) to the satisfaction of the Ministry of Public Health.
- Fedders Lloyd intends to hold the overall cost of the project within the available balance of the Line of Credit from Exim Bank of India.
It is the intention of the MOF that should the conditions in the MOU be satisfied by Fedders Lloyd, then the Tender Board will be invited to make an award of contract to Fedders Lloyd.
Procedurally, therefore, there is no impropriety in the method used by government in entering the MOU with Fedders Lloyd with the intention of leading to an award should the conditions stipulated in the MOU be met by Fedders Lloyd.
The decision to utilize the instrument of the MOU safeguards the procurement process and seeks to optimize the use of Public Funds, in this case a loan, in the most beneficial way.
MOU signed between Government of Guyana and Fedders Lloyd to build and equip Specialty Hospital.
Minister of Finance, Honourable Winston Jordan today signed a Memorandum of Understanding (MOU) with Fedders Lloyd that will see works restarting on the construction of the Specialty Hospital.
Fedders Lloyd in entering this MOU with the Government of Guyana (GOG) will review the works already started; conclude a design of the Hospital that is acceptable to the GOG; and commit to fully equip the facility on completion of its construction. Fedders Lloyd also undertakes to commence work on the facility immediately following the signing of the MOU.
Work on the Specialty Hospital was halted after allegations of impropriety and fraud were leveled against the contractor who won the bid for its construction in 2012.
The then government terminated the contract and proceeded to Court to seek remedies. The Court ruled in favour of Government and the construction of the facility came to a standstill. The future of the Line of Credit (LOC) was threatened.
Following the APNU+AFC government’s accession to office, it reviewed the project and concluded that since there was no existing contract that could be enforced, it was impractical to continue to keep the LOC in its existing form, especially since it was attracting commitment fees.
Government therefore requested EXIM Bank of India to cancel the LOC for the Specialty Hospital and to reallocate the balance of funds to a project to modernize three Primary Healthcare Facilities.
However, the Government of India (GOI) in its response, while indicating its no objection and support for the modernization of Primary Healthcare Facilities suggested that GOG should consider salvaging the Specialty Hospital, as it will complement primary healthcare facilities in Guyana.
GOG having examined the merits of the proposal began searching for a willing partner to complete the Specialty Hospital using the remainder of the LOC.
In the interest of time, Government approached Fedders Lloyd – one of the original bidders –to explore the possibility of them completing the project. Fedders Lloyd expressed continued interest and was prepared to complete and fully equip the facility.
At a simple signing today, Minister Jordan said, “The signing of the MOU represents a tangible expression of Fedders Lloyd interest and commitment to move the project forward.”
He added that, “The MOU is also testament to Government’s commitment to advancing health care delivery in Guyana.”
He also restated the Government of India’s approval of an additional LOC for the upgrade and modernizing of Suddie and Bartica hospitals and the West Demerara Regional Hospital.
Signing on behalf of Fedders Lloyd was Mr. Ajay Jha.
He thanked the GOG for the opportunity to work on the project, but more especially, to work for Guyana.
He further remarked that, “The Specialty hospital will be a model not only for Guyana but the rest of the Caribbean.”
The Specialty Hospital is intended to cater for high risk surgeries and other health care demands.
The Hon. Minister of Finance Winston Jordan today began consultations for Budget 2016.
He and a high level team from the Ministry of Finance, led by Finance Secretary Dr. Hector Butts, met with Chairman of the Private Sector Commission (PSC) Major General (Rtd) Norman Mc. Lean and other representatives of the PSC earlier this morning.
Among the issues raised was the Private Sector’s concern about the present state of the economy.
In response, Minister Jordan reported that information coming out of the Bureau of Statistics shows that the outlook of the economy remains positive for the rest of the year while acknowledging that the first half of the year was affected by a downturn that began in 2014.
He further noted that at a recent IMF/World Bank Annual Meeting he attended, it was revealed that world economic growth had slowed, and so the challenge of a slowdown in growth was not peculiar to Guyana.
The Hon. Minister said that the latest Bank of Guyana statistics indicate that Private Sector Credit and Production have seen positive growth for the period January to October and projected that this growth will continue into the final quarter of 2015. Likewise, other positive economic indicators showed Real Estate Mortgage loans rising by 12 percent, and Construction and Engineering by 9 percent.
On the production side, Rice grew by 15 percent between January to July; and Sugar by 4 percent for the period January to October, while positive growth was recorded for diamonds, eggs, poultry meat and electricity, among other sectors.
These, he said, should boost investors’ confidence in the economy as well as catalyze the Private Sector to renew their resolve to increase their investments in production as well as value added services.
The PSC welcomed the news that Private Sector Credit had increased by 6 percent between January and September.
Minister Jordan told the PSC that the government was pursuing new markets for rice to which there have been very encouraging responses and also reminded them that for the first time in the recent past sugar production had exceeded the target.
The PSC for its part discussed challenges with the VAT Refunds system employed by the GRA, to which the Minister pointed to the functioning Tax Reform Commission as well as the impending audit of the entity that will ensure that the challenges raised will be addressed satisfactorily.
The Minister also said that his Ministry was collaborating closely with the Hon. Minister of Business, Dominic Gaskin, to improve the ease of doing business in Guyana, which in turn would effect an improvement in Guyana’s ranking in the Doing Business indicators.
The PSC welcomed the improvements being made at Go-Invest to make it a truly ‘one stop agency’ but cautioned that the bureaucratic malaise of the past should not be continued.
The body also noted that the recent expansion of airlift capacity for cargo out of Guyana should be seen as an opportunity to boost diversification of the Agriculture sector into fresh fruits and vegetables which are in high demand in the North American and Caribbean markets. They urged Government to invest in laboratories and other devices that would ensure certification and accreditation.
The PSC also discussed other issues for consideration in the 2016 budget, including corporate, personal and property taxes – written submissions on these had been sent to the Tax Reform Commission; interior roads and airstrips; export marketing support; liberalization of the telecommunications sector and the National Competitiveness Strategy.
In response to the issue of airstrips, Minister Jordan informed the PSC that funding has already been approved for the upgrade of two airstrips and discussions are ongoing with international funding agencies for the upgrade of several others.
He added that there was common ground between his Ministry and the issues raised by the PSC.
Minister Jordan and the PSC agreed to meet quarterly in the interest of closer collaboration.
March 17, 2017
A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country.
Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.
The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.
A staff team from the International Monetary Fund (IMF), led by Mr. Marcos Chamon, visited Georgetown during March 6–17 to hold discussions for the 2017 Article IV Consultation. Ms. Srobona Mitra, the FSAP mission chief, joined the concluding meeting. The team met with Finance Minister Winston Jordan, Natural Resources Minister Raphael Trotman, Public Infrastructure Minister David Patterson, Central Bank Governor Gobind Ganga, other senior officials, representatives from the private sector, the opposition party, labor unions, and other stakeholders.
Guyana’s economy continued to expand, although growth was uneven. In 2016, subdued agricultural commodity prices and adverse weather conditions led to a contraction of agriculture, with negative spillovers to manufacturing and services. Additionally, delays in public investment remained a drag on construction. Nevertheless, GDP was buoyed by very large increases in gold output, including from new mines, with total real GDP increasing by 3.3 percent despite a contraction in non-mining GDP. In 2017, the mission projects real economic growth of 3.5 percent driven by an increase in public investment, continued expansion in the extractive sector, and a recovery in rice production. Despite weather-related shocks to food prices and excess demand during Guyana’s Golden Jubilee, inflation remained subdued at 1.5 percent at end-2016, and is expected to be around 2.5 percent at end-2017.
Increased exports of gold and improved terms of trade helped Guyana achieve a current account surplus. In 2016, the current account balance improved to 3.5 percent of GDP from a 5.7 percent deficit in 2015, reducing the overall BOP deficit. Reserve coverage remained at about 3.5 months of imports. The anticipated start of oil production in 2020 will provide a significant boost to exports and official reserves in the medium-term.
The fiscal deficit widened relative to 2015, but was smaller than budgeted. The 2016 nonfinancial public sector deficit is estimated at 2.9 percent of GDP, lower than the budgeted 5.5 percent. Despite slower than expected growth, fiscal revenue increased due to improvements in tax administration and higher royalties from the mining sector. Expenditure increased less than projected mostly due to lower than budgeted public investment. In 2017, the deficit is projected to increase to about 7 percent of GDP, due in part to delayed capital spending from 2016 and the reclassification of subsidies to state owned enterprises as financing instead of revenue to the receiving enterprise.
The mission welcomed the authorities’ plans to establish a comprehensive legal framework for managing oil wealth. The authorities are preparing draft legislation for a fiscal regime for oil revenues, and a sovereign wealth fund. The IMF stands ready to provide technical advice in these areas. The mission commended the authorities for refraining from non-concessional external borrowing against future oil revenue and urged them to continue to maintain a prudent external debt stance. The mission encouraged the authorities to continue to strengthen public procurement and public investment management in line with international best practices. Improving the appraisal, selection and execution of projects could enhance the efficiency, timeliness and quality of public investment.
Fiscal consolidation would help slow debt accumulation before the onset of oil revenues. The debt-to-GDP ratio is projected to reach 61 percent of GDP by 2019. However, debt sustainability risks remain moderate. Authorities noted that the debt to GDP ratio will decline rapidly after the start of oil production, dropping to under 50 percent by 2020. The mission recommended fiscal adjustment to safeguard against downside risks. The adjustment could be achieved by curtailing the growth of current expenditure, supported by public enterprise reform. The mission welcomed the VAT reform which broadened the tax base while reducing the rate from 16 to 14 percent, and encouraged authorities to continue to strengthen tax administration. The mission also welcomed the authorities’ interest in issuing a long-term domestic bond to substitute for short-term domestic financing, and help develop capital markets. The mission stressed the importance of settling government balances at the Bank of Guyana (BoG). Going forward, authorities are encouraged to consolidate government accounts at the central bank and establish a Treasury Single Account in line with international best practices.
Sustaining growth hinges upon improvements to the business climate, private sector confidence, reinvigorating construction activity and productivity-enhancing reforms in key sectors, including agriculture. The mission welcomed the progress in liberalizing the communications sector, and the authorities’ plans to increase the contribution of low cost renewables to the energy matrix, improve transportation links, and modernize the payment system. Addressing these long-standing structural impediments will stimulate construction, help raise productivity in traditional sectors, facilitate diversification into higher added-value activities, and make growth more inclusive. The mission encouraged the authorities to press ahead with the overhaul of the sugar industry, while being mindful of the large social impact and providing a safety net to protect those affected by that process.
The monetary policy stance should remain accommodative given low inflationary pressures and weakness in economic activity. However, pass-through from the VAT reform to inflation should be closely monitored. Guyana remains vulnerable to external shocks due to its dependence on imported oil and the concentration of exports on a few commodities. The mission noted the recent increase in exchange rate flexibility, which should facilitate adjustment to external developments, and safeguard reserves. The inter-bank foreign exchange market appears segmented and illiquid, and could be further developed, including by enhancing the transparency of market activity. The mission recommends that any official foreign exchange purchases and sales use a market mechanism similar to the one used for auctioning treasury bills.
This year’s consultation included an in-depth assessment of Guyana’s financial sector under the IMF and the World Bank’s Financial Sector Assessment Program (FSAP).
Key findings include:
- The financial oversight framework continues to be strengthened. The authorities have introduced a more structured approach to supervision, expanded the supervisory and regulatory perimeter, and drafted a Crisis Management Plan. The FSAP recommended making supervisory oversight, from routine supervision to intervention and resolution, internally consistent. The authorities are already taking steps in this direction.
- Weak activity in a few key sectors led to a notable increase in Nonperforming Loans (NPLs), and a decline in private credit growth. While banks’ reported capital adequacy ratios and profitability are high, slow collateral recovery, unrecorded related-party exposures and loan misclassifications account for inadequate provisioning. The more timely and effective enforcements recently initiated by the BoG must be continued to address these supervisory gaps.
- The BoG’s supervisory guidelines should be revised to eliminate reduced provisioning requirements for “well-secured” portions of NPLs. The BoG should also encourage banks to cease use of overdraft lending for commercial purposes; revise the definition of related parties to reflect international standards; and increase the minimum capital requirements from 8 to 12 percent of risk-weighted assets to enhance loss absorbency.
- Banks’ strong interlinkages with the domestic and regional sovereigns; complex ownership structures; and substantial related-party lending can amplify potential shocks. Stress tests found the banking system resilient to severe shocks, but there are vulnerabilities in some institutions. Credit and deposit concentrations are high, and underpin the need for requiring banks to have contingency funding plans. Systemic risk assessment should track the ownership linkages of banks, private sector balance sheet strength, and house price growth.
- Operationalizing the crisis management framework will require proper sequencing and substantial amendments of the Financial Institutions Act (FIA). An effective resolution regime and a formal framework for emergency liquidity assistance are prerequisites for a Deposit Insurance Scheme. The FIA should give BoG powers and tools to carry out orderly resolution of banks and prevent Courts from reversing BoG’s actions.
- Losses of correspondent banking relationships (CBRs) continue to be a major concern for trade finance and remittances. While Guyana has commendably exited the Financial Action Task Force monitoring and concluded a National Risk Assessment, it should continue to strengthen its Anti-Money Laundering and Combating the Financing of Terrorism framework in line with international standards. Stronger supervisory and regulatory regimes, in line with the FSAP recommendations, and regional CBR accounts to help international banks exploit economies of scale could help ameliorate the problem.
- The FSAP also provided advice on strengthening insurance and pensions supervision, improving access to finance, and upgrading payments and settlement infrastructures to improve financial development.
The IMF Executive Board is expected to discuss Guyana’s Article IV consultation in late April 2017. The mission is grateful to the authorities and other Guyanese stakeholders for their availability, collaboration, and hospitality.
Statement by: Alexandre Tombini, Governor, Central Bank of Brazil. On behalf of the Constituency comprising Brazil, Cabo Verde, Dominican Republic, Ecuador, Guyana, Haiti, Nicaragua, Panama, Suriname, Timor Leste and Trinidad and Tobago
International Monetary and Financial Committee
Global Economic Outlook
- Uncertainties about the global economy have increased since our last meeting in Lima in October 2015. Global growth projections were revised down and risks are tilted to the downside. Global growth in 2015, at 3.1 percent, was the lowest since the financial crisis of 2008-2009.
- Such more restrained pace of global growth reflects a combination of both cyclical and structural processes that are still unfolding. The main factors behind this subdued performance include: i) slowdown of the Chinese economy related to its rebalancing toward a growth model with greater emphasis on domestic consumption; ii) tightening of financial conditions in the United States and its international spillovers; iii) drop of commodity prices, which triggered a substantial decline in investment in commodity sectors worldwide; and iv) insufficient deleveraging and other financial fragilities, as well as deflation risks, limiting growth in the Euro
area and Japan.
- The ongoing process of monetary policy normalization in the U.S.—initially flagged in May 2013—has encouraged important adjustments in the global economy but has also been a
source of surges of volatility in the international capital markets. Tighter financial conditions,
including due to an important appreciation of the U.S. dollar, impinged on many emerging
market and developing countries (EMDCs) by means of lower capital inflows, a few episodes of
capital outflows, and higher sovereign and corporate credit spreads.
- The U.S. dollar appreciation and the terms-of-trade shocks reduced the room for many
EMDC policymakers to react to the mediocre global growth outlook. Additionally, signs of
weaker-than-expected Chinese growth, volatility of the Chinese renminbi and persistent capital
outflows led to growing anxiety in the financial markets—despite plenty and strong buffers that
EMDC have accumulated in recent years. The Chinese authorities’ commitment to support
growth and decisive policy communication were paramount to anchor growth expectations and
contain exchange rate speculation.
- At the turn of the year, the context was of heightened divergence in the monetary stances
of the three major monetary areas. The Bank of Japan and the European Central Bank were
compelled to introduce new monetary stimulus, whereas the Federal Reserve “dot plot”
forecasted 100 basis-points hike in the fed funds rate in 2016, after an initial increase in
- Some accommodation has taken place in international financial markets in recent weeks,
contributing to lower risk aversion, rising asset prices, alleviating commodity-price distress and
allowing some depreciation of the U.S. dollar. This relief came not only from the reassessment of
the pace of normalization of U.S. monetary policy, but also from the Chinese authorities’
- However, this calmness may not be stable. Lack of synchronicity in major monetary
policies in the foreseeable future will probably widen again since the growth outlook for the U.S.
economy outpaces the ones for Europe and Japan, where crisis legacies remain relevant in both
public finances and banking systems. Economic stagnation can only magnify such weaknesses,
and further policy action is urgent. The perception per se that monetary policies in advanced
economies have had low effectiveness to foster economic growth—or may be close to running
out of ammunition—makes the policy response even more challenging, and may overly prolong
the ultra-low interest rate stance.
- In sum, the main risks embedded in the global economy pose substantial challenges for
policymakers from both advanced and developing countries. What we have seen so far highlight
an ever higher interconnectedness in the global economy and an increasing relevance of
emerging market economies. Building the basis of sustainable and inclusive global growth
requires a set of complex policy actions and reforms in all countries, but it is probably going to
take some time for those reforms to yield results. Meanwhile, it seems paramount to remain
committed to sustain growth in the short term, as well as to ensure macroeconomic and financial
stability. In this regard, finding the right balance between the long-term structural agenda and the
right incentives to support growth and reduce unemployment in the short run, while taming
financial markets’ anxiety, continues to be a major task for policymakers.
- In Brazil, the complexity of the global economy has not been the only factor explaining
the recent economic performance. At this exact moment, the private-sector behavior has been
mainly driven by developments related to domestic political events, which have outweighed
economic factors. Despite that, and like many other EMDCs including most countries in our
constituency at the IMF, the commodity-price distress has had a meaningful impact in domestic
investment, mainly in the energy and mining sectors.
- Nevertheless, macroeconomic adjustments in Brazil are following the expected course,
although at different speeds, and the country is already reaping some benefits. Indeed, the
external accounts have surprised positively thanks to a sizeable adjustment in the real effective
exchange rate and the fall in domestic demand. The current account deficit declined from US$
104 billion in 2014 to US$ 59 billion in 2015 and it is expected to further decline to only US$25
billion this year. Foreign direct investment, at US$ 77 billion in the past 12 months, remains
vigorous in spite of the recent downgrades of sovereign and private rating credits.
- It is worth noting that Brazil was able to cope with nearly 50 percent currency
depreciation in the last four years without any financial system disruption. A comfortable level
of buffers in the banking system (in terms of capital and provisions), adequate amount of
international reserves and wisely designed tools for provision of exchange rate hedge by the
Brazilian Central Bank led to this smooth transition.
- On the monetary side, inflation has started to recede, after peaking last January. Given
that significant price realignments from public tariffs are no longer expected and the major
impact from exchange rate depreciation is behind us, inflation dynamics is beginning to respond
more forcefully to the economic downturn. Indeed, inflation is expected to converge to the target
at a fast pace from now on. Faster-than-expected labor and credit markets responses have
contributed to accelerate the convergence of inflation and inflation expectations for 2016.
However, due to the complexity of current balance of risks for inflation, there is no room for
- Fiscal consolidation, along with tax reforms and spending reviews, remains crucial.
External sector adjustment and inflation convergence are necessary, but not sufficient to restore
business and households’ confidence. Accordingly, the government has sent many proposals to
Congress aiming at improving the long-term fiscal outlook. In the meantime, other initiatives and
reforms have been drafted. These proposals include measures to mobilize additional revenues in
the short and medium-term, as well as structural measures to rationalize and limit public
- In conclusion, the political developments have had a meaningful impact on recent
economic performance, but we must not lose sight of the progress made so far in terms of
macroeconomic adjustment. The external accounts have adjusted, the competitiveness of the
tradable sector is improving consistently, and inflation started to converge to the target at a more
robust pace. In the meantime, fiscal consolidation remains the most pressing economic
challenge. Although the current political environment has not favored the approval of fiscal
reforms, as soon as there is more clarity on this front, the fiscal challenges will surely be dealt
with and the economic prospects will improve accordingly.
- Our constituency welcomes the entry into force of the Fourteenth General Review of
Quotas in January this year. This important review included a doubling of quotas and a major
shift in quota shares toward dynamic emerging market and developing countries, while
protecting the voting power of the poorest members of the Fund. Four emerging market
economies (Brazil, China, India, and Russia) are now among the 10 largest IMF members.
- The Fifteenth General Review, including a new quota formula, is to be completed by the
2017 Annual Meetings. We re-emphasize the commitment of the membership that any
realignment in quota shares is expected to result in increases in the quota shares of dynamic
economies in line with their relative positions in the world economy, and hence likely in the
quota share of emerging market and developing countries as a whole.
International Monetary System
- A large global financial safety net is fundamental to safeguard the stability of the
international monetary system. We fully support the ongoing efforts by the IMF to evaluate its
shortcomings, challenges and necessary improvements. In a world that is slowly sliding towards
multipolarity, the international monetary architecture has also become multilayered. We agree
that its evolution has been less articulated than desirable, but the current multilayered structure—
international reserves as first line of defense, bilateral and regional financing arrangements and
the Fund—reinforce its stability.
- We trust the Fund’s current lending capacity is at the minimum level required to provide
liquidity to the membership. Moreover, the Fund’s catalytic role to promote inclusiveness in the
global safety net is paramount, particularly for those non-systemic members with lesser access to
the multilayered system—such as the small states and low-income countries.
- We welcome the decision by the Fund’s Executive Board to include the renminbi in the
basket of currencies that form the Special Drawing Rights (SDR). We support initiatives to
broaden the use of the SDR and welcome the discussion on a possible SDR allocation later this
De-Risking and Correspondent Banking
- As the global community struggles to recover from the financial crisis, there has been a
welcome wave of financial regulatory reforms to prevent another crisis from happening on such
a large scale. An unintended consequence of these enhancements was the exacerbation of the derisking
phenomenon, where financial institutions terminate or restrict correspondent banking
relationships in many emerging market and low-income countries.
- While this issue is not new, the impact has rapidly spread to many countries over the last
few years. The adverse impact on trade, investment and remittances has serious implications on
the macroeconomic stability and development of these countries. De-risking can result in
reduced access to external finance, undermine efforts to promote financial inclusion and lead to
development of unregulated financial flows. Given its seriousness, our constituency continues to
advocate for an urgent resolution to the issue.
Policy Advice and Evenhandedness
- We welcome the focus of the IMF on issues that, although may not appear at first sight
directly linked to its mandate, are important to boost economic growth and ensure financial
stability, such as financial inclusion, climate change, and technological progress. Moreover, we
fully support further work on how income inequality may interact with productivity growth over
the medium term. In collaboration with other institutions, the Fund should use its economic
expertise to better understand these issues and their effect on the economy, and to adjust its
policy advice, where warranted.
- We welcome steps taken by the Fund to address evenhandedness concerns in
surveillance. The aptitude of the institution to maintain evenhandedness in its economic analysis
and policy recommendations is critical for its credibility, legitimacy and effectiveness. We look
forward to a broader perspective that also addresses evenhandedness concerns in regard to the
use of Fund resources.