Despite the criticism of Fund structural conditionality levelled in the IEO’s January report (see Update 59), the management implementation plan of board-endorsed recommendations provides little confirmation that the IMF will solve the problem. In fact Juan Zalduendo of the IMF’s policy development and review department declared during the spring meetings that “IMF conditionality is here to stay”.
One element of the plan undermines recipient country ownership of conditionality. “Staff will propose the policy strategy necessary to achieve the programme goals at the pre-brief meeting. This strategy should include a preliminary indication, to the extent possible, of the structural conditionality”. Not mentioned is that the ‘pre-brief meeting’ occurs in Washington before Fund staff visit the country. The paper cautions that “such conditionality would need to reflect the outcome of discussions with country authorities” but it is not clear how that is possible before Fund staff have met the recipient country officials.
IMF conditionality is here to stay
The board was also vague on conditions set in areas that the Fund has no expertise in, such as civil service reform and trade liberalisation. It will be up to the drafters of the operational guidance note, the document that directs staff behaviour, to recommend how to deal with conditionality in the Fund’s non-core areas of work.