A logo of the International Monetary Fund is seen at the headquarters building in Washington, DC on July 5, 2015. (MANDEL NGAN / AFP)
WASHINGTON – The International Monetary Fund (IMF) on Thursday unveiled plans to revamp the way it conducts economic assessments to better account for risks related to climate change, inequality and demographics, as well as evolving digital technologies.
The new approach was agreed by the IMF's executive board after the global lender's first comprehensive review of its surveillance work since 2014. It will provide strategic direction for its economic analysis in coming years.
Civil society groups lauded the changes, which acknowledge for the first time that climate-change related policies affect overall economic performance, but said the IMF should have enacted further-reaching changes regarding climate and poverty.
It aims to make our surveillance – our economic analysis and assessment – more timely, more topical, more targeted, better-informed. In short – modernized.
Gerry Rice, IMF's spokesman
"It aims to make our surveillance – our economic analysis and assessment – more timely, more topical, more targeted, better-informed. In short – modernized," IMF spokesman Gerry Rice said at a regular briefing.
The changes are aimed at enhancing the quality and traction of surveillance to better help IMF members navigate coming challenges and achieve resilient growth, and macroeconomic stability, the IMF said in a 49-page paper on the changes.
It said the COVID-19 pandemic was still depressing economic activity in many parts of the world and had exacerbated inequality and sent public debt levels sharply higher, which in turn could pose risks to economic stability in some regions.
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In addition to macrofinancial factors, the IMF cited in the paper significant uncertainties and risks linked to digital technologies, including cryptocurrencies; climate change; inequality; demographics; and a more multipolar landscape.
To better assess countries' economic prospects, the IMF's analysis should prioritize looking at risks and uncertainties; preempting and mitigating cross-border spillovers; taking a longer view aimed at fostering economic sustainability; and adopting a more unified approach to promote strong and sustainable growth, according to the paper.
Oxfam and other civil society groups welcomed the Fund's plans, but said the changes did not go far enough to address the "disastrous effects of rising inequality," climate change and persistent gender imbalances.
They also criticized the IMF for not consulting more fully with non-governmental organizations in its review.
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Recourse, a group focused on development finance, voiced similar concerns and said the IMF should have compelled the 20 biggest emitters of carbon dioxide to account for the consequences of those emissions on global sustainability.
Sargon Nissan, IMF project manager at Recourse, said the Fund's Comprehensive Surveillance Review revealed the obstacles imposed by the IMF's governance since the world's biggest economies are also the Fund's biggest shareholders.