IMF Issues Modified Transparency Policy

22 July 2013

The International Monetary Fund July 22 announced modest alterations to its transparency policy.

The revised policy continues to give member governments the ability to block the release of  IMF assessments of their economies, but increases the pressure for disclosure.

Currently, when countries seek to borrow exceptional amounts, the IMF Managing Director can condition a favorable recommendation on the release of the explanatory Staff Report. The new policy will permit the appliction of this leverage to all lending requests.

Under the IMF’s 2009 “voluntary but presumed” disclosure policy, a persistent minority of countries (under 10 percent) have exercised their veto. In addition, “confidential” information can be deleted from reports that are disclosed; and such deletions have increased during the recent years of economic difficulties.

The rules governing what confidential material can be deleted at a country’s request will remain in place, but subject to “clearer staff guidance” and some related communication steps.

The discovery that the modification rate for reports on “advanced market” countries was much higher than those pertaining to other economies was evaluated, but the report found “little evidence of bias.” More monitoring of this was prescribed.

The new policy will speed up the release of the country reports that are disclosed, setting a deadline of 14 days after board consideration. If the deadline is missed, “factual statements” will be placed on the IMF website, but not announced, and delays of more than 90 days will be handled with “lower profile publication.”

New Document Category Created

A whole new category of documents has been created because of the increased use of “multilateral surveillance” to evaluate such things as the risks of “systemic spillovers” of country economic policies.

The new policy defines three types of “multi-country documents” with various levels of protection from disclosure. In some instances, governments would have the right to approve publication and request deletions. In so-called “cluster documents” where “country references are fully integrated into the analysis,” all primary countries covered in the document would be allowed to request deletions relating to their country and each country’s consent to publication will be required.

The directors rejected a staff proposal to identify explicitly that a country had objected to publication of references to it in a multi-country document. Close readers may be able to figure it out because the names of all countries involved in relevant analytical exercises, even if not all of their country pages, are published.

Archives Time Frame to Stay at Five Years

The time period for public access to the Fund’s archives will remain at five years, notwithstanding apparent majority support to reduce the time period to three years. There is a hint this could be reconsidered soon.

The press release reported:  “A significant minority of Directors favored retaining the existing lags in order to strike a balance between informing the public about the Board’s views and maintaining the candor of Board discussions. The proposal to reduce the lag to three years was not adopted at this time, pending further discussion to build a broader consensus among Directors. A separate discussion on this issue will be taken in the near future.

The directors rejected a staff proposal to identify explicitly that a country had objected to publication of references to it in a multi-country document. Close readers may be able to figure it out because the names of all countries involved in relevant analytical exercises, even if not all of their country pages, are published.

In addition to a press release, the IMF issued a series of documents about the changes and the decision-making process. These include a staff report that the IMF board considered June 5 and a shorter supplementary paper that discusses board members’ concerns with the proposed amendments, tells what the final decisions were on those points, and includes the final version of the revised policy. Also available is a background paper containing more detailed data.

The press release and the supplemental staff report summarize some disagreements among board members.  Quite a variety of views were expressed on how to handle the multi-country documents.

Unchanged, and apparently not much considered, is the IMF policy of not releasing draft policy papers in advance of board consideration, as recommended by civil society organizations. The staff report suggested trying to publish them faster afterwards.

The transparency policy, effective July 24, is expected to be reviewed no later than 2018.

Also see article by Reuters, and another by Bloomberg.

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ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
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