The 2009 reforms have broadly achieved their objective of closing gaps and creating a streamlined architecture of facilities that is better tailored to the diverse needs of LICs. Supported by the financing package to boost the PRGT’s lending capacity for 2009–14 and the accompanying doubling of access, the Fund was able to mount an effective response to LICs’ needs during the global financial crisis.

2018-19 Review of Facilities for Low-Income Countries---Reform Proposals: Review Of The Financing Of The Fund’s Concessional Assistance And Debt Relief To Low-Income Member Countries

Based on the Executive Board’s guidance during the first stage of the Review of Low Income Countries (LIC) Facilities, this paper suggests a number of refinements to the facilities and instruments that are consistent with the self-sustainability of the Poverty Reduction and Growth Trust (PRGT). The proposals seek to improve the tailoring and flexibility of Fund support. Taken together with those advanced in the parallel paper on PRGT eligibility, they are projected to keep the average annual demand for PRGT resources within a range consistent with the Board’s approved strategy to make the PRGT self-sustaining over the period 2013–35. The proposals are as follows.

The Fund is facing strong demand for financing from low-income countries (LICs). Commodity price shocks and loose fiscal policies have contributed to rising debt levels and financing needs in many countries. Several developing states, especially smaller ones, are also increasingly vulnerable to large natural disasters. At the same time, many LICs less dependent on commodity exports have enjoyed robust growth in recent years, with more contained vulnerabilities.

2018-19 Review of Facilities for Low-Income Countries---Reform Proposals: Review Of The Financing Of The Fund’s Concessional Assistance And Debt Relief To Low-Income Member Countries

The Fund’s concessional facilities are aimed at providing flexible and tailored support to low-income countries (LICs) in their efforts to achieve, maintain, or restore a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.

This Handbook provides guidance to staff on the IMF’s concessional financial facilities and non-financial instruments for low-income countries (LICs), defined here as all countries eligible to obtain concessional financing from the Fund. It updates the previous version of the Handbook that was published in December 2017 (IMF, 2017e) by incorporating modifications resulting from the 2018–19 Review of Facilities for Low-Income Countries and Review of the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries (IMF, 2019a, b), approved by the Board in May 2019; the reforms introduced in 2021 on the basis of the Board paper Fund Concessional Financial Support for Low-Income Countries—Responding to the Pandemic (IMF, 2021a), approved in July 2021; and a number of other recent Board papers. Designed as a comprehensive reference tool for program work on LICs, the Handbook also refers, in summary form, to a range of relevant policies that apply more generally to IMF members. As with all guidance notes, the relevant IMF Executive Board decisions including the terms of the various LIC Trust Instruments that have been adopted by the Board, remain the primary legal authority on the matters covered in the Handbook.