The major disclosure issue at the International Monetary Fund remains access to its key reports about member countries, the so-called Article IV reports.
Although more of these reports are now released–about 83 percent of them–there are still more than 30 countries that legally veto their disclosure. This core of resistance includes some larger countries, including Brazil, Egypt, Saudi Arabia, Malaysia, Thailand, Uzbekistan and Venezuela.
Some of these same countries object to mandatory disclosure of the reports, a reform that has been discussed in recent years when the Fund reviewed its transparency policy, first developed in 1994 and now reviewed on a three-year cycle. The next IMF review of its disclosure policy is slated for June 2008.
When that time rolls around, transparency advocates are once again likely to push for mandatory release of Article IV reports. These important documents summarize the IMF’s annual reviews of members’ economies and play a critical role in IMF interaction with governments and in the IMF decisionmaking process. In the meantime, the improving level of voluntary release is tracked in a new IMF report, "Key Trends in Implementation of the Fund’s Transparency Policy," the first and latest one dated January 31, 2006.
Despite internal resistance to further Article IV disclosure, summaries of the IMF Board discussion in 2005 indicate broad agreement that greater disclosure of Article IV has been useful and has not impeded internal discussions.
There are signs that the IMF staff has encouraged more openness about the IMF process. One emerging trend appears to be more frequent release of "Mission Concluding Statements" after IMF teams visit countries as part of the Article IV evaluation process (36 so far in 2006). Other signs of improving transparency include the issuance of press releases and, on occasion, press conferences. Such expanded efforts at transparency, however, must be approved by the affected government.
Article IV Reports Altered for Release
An emerging issue is the degree to which the reports shown to the public differ from the reports made to governments and to the IMF Board. In 2005, without seeking public comment, the IMF considered a specific transparency issue–what deletions should be allowed in the publicly released versions of IMF Article IV and related country reports.
The extent of such deletions, barely known outside the Fund before this discussion, was detailed during deliberations that led to the adoption of a few steps that may reduce the number of deletions.
An internal report found that more than one-third of the published reports "incorporate substantive changes" as a result of corrections and deletions requested by the subjects of the reports. Most of the editing is done because of concerns that particular information is "highly market-sensitive," the report found. Frequently, this means removing parts of the IMF’s assessments and policy recommendations from the published version of the report.
About 60 percent of the time the deletions "did entail some diminution of candor," although in only 5 percent of the cases was "a key message significantly altered," according to IMF research.
The Board debate over "candor" was extensive and resulted in a few policy changes designed to define exactly what information can be deleted. The Board approved a revised definition of "highly market-sensitive" information and added a new category to prevent release of premature information that would undermine governments’ ability to implement policies.
These changes and a few others are also aimed at mitigating another trend the IMF report discovered: a growing lag time in the release of reports. The average delay has increased from about a month after board action to almost a month and a half.
Overall, however, the IMF staff judged its disclosure policy to be "broadly satisfactory." A two-year-old policy change intended to encourage the release of more documents has shown positive results and the board agreed not to modify it. Since adopting its "voluntary but presumed" release policy in 2003, the Fund has seen the numbers of country reports disclosed increase from 67 percent to 77 percent, although the disclosure rate remains about 60 percent for developing countries.
In one small step to encourage more publication, the detailed IMF staff review of the disclosure policy for the first time named the countries whose governments continue to veto the release of the two major IMF country reports: the Article IV and Use of Funds reports. However, this same list is not included in the first annual report on transparency policy compliance, probably a deep-seated institutional reluctance to "name and shame."
The IMF transparency policy is not easy to find on its Web site. A "Transparency at the IMF" page is located here.
By Toby McIntosh
Filed under: IFTI Watch