The Executive Board of the International Monetary Fund (IMF) has approved the revision of the Fund’s “Statement of Surveillance Priorities” (SSP). The SPP, which was adopted in October 2008 spells out the economic and operational priorities for IMF surveillance until 2011. The SSP is designed to help the IMF deliver on its mandate to promote international monetary and financial stability, and to lay a clear basis for monitoring and accountability.
The economic priorities of the SSP have been revised in response to the significant changes in the global environment over the last year. The initial priorities focused on resolving financial market distress, strengthening the global financial system, adjusting to sharp changes in global commodity prices, and promoting orderly reduction of global imbalances. These issues remain relevant, but it is clear that shifting towards the design of exit strategies and policy requirements for sustaining world growth will be key challenges looking ahead. The Board therefore approved the Fund’s economic priorities to be formulated as follows:
• Allow for an orderly unwinding of crisis-related policy interventions to ensure a sustained recovery. In particular, design exit strategies that:
- Support the economy and the financial system as needed.
- Safeguard the room for future policy maneuver.
• Strengthen the global financial system.
• Promote a rebalancing of sources of global demand, through both macroeconomic and structural policies, so as to achieve sustained world growth while keeping global imbalances in check.
The operational priorities, which were drawn from the main recommendations of the 2008 Triennial Review of Surveillance for improving the Fund’s surveillance activities, remain unchanged.
Surveillance is a core activity of the IMF, involving the monitoring of national, regional, and global economies to assess whether policies are consistent with countries’ own interest as well as the interest of the international community. The IMF fulfills this mandate through bilateral, regional, and multilateral surveillance. The main instrument of bilateral surveillance is the Article IV consultation process. The Executive Board reviews the implementation of the Fund’s bilateral surveillance every three years. The next such review is due in 2011.