Providing a resilient global economic and

financial environment is an overarching priority.

TOWARDS AN ENABLING GLOBAL

ENVIRONMENT FOR SUSTAINABLE
DEVELOPMENT
 Sustainable Development

"Sustainable development is
development that meets the needs of
the present without compromising
the ability of future generations to
meet their own needs."
Key Areas:
A. Policy actions are needed to boost
sluggish global growth over the
medium-term, thereby providing a
strong foundation for financing flows.
- Supportive policies promotes cooperative
solutions
- Structural reforms are needed to improve the
medium-term economic outlook in many countries
Key Areas:
- Working to support global economic and
financial stability is core business for the IMF.

“to provide the machinery for consultation

and collaboration on international monetary
problems”
- IMF Articles of Agreement, Article 1
Key Areas:
B. International Tax Cooperation
The current international tax agenda is focused on 2
initiatives;
1. Base Erosion and Profit Shifting (BEPS)
- targeting profit shifting by multinational firms
2. Automatic Exchange of Information
- making a global standard to tackle tax evasion through
sharing of tax information across countries
Key Areas:
B. International Tax Cooperation

Developing countries will need tailored

technical and analytical support to
strengthen the international aspects of
their tax systems.
Key Areas:
C. International Trade as an Engine for
Development
Trade has increased dramatically during the last three
decades, particularly for developing countries but the pace of
expansion of international trade has slowed significantly in
recent years.
Key Areas:
C. International Trade as an Engine for
Development
With appropriate supporting policies, infrastructure
and an educated work force, trade can also help to
realize productive employment, decent work, women’s
empowerment and food security, as well as a reduction in
inequality, among other objectives.
Key Areas:
D. Official Development Assistance

Definition: A government aid designed to promote the

economic development and welfare of developing countries.
The OECD maintains a list of developing countries and
territories; only aid to these countries counts as ODA. The
list is periodically updated and currently contains over 150
countries or territories with per capita incomes below USD
12,276 in 2010. A long-standing United Nations target is that
developed countries should devote 0.7% of their gross
national income to ODA.
Key Areas:
D. Official Development Assistance
ODA, and other forms of official assistance, continue to play a
significant role in bolstering domestic development efforts in
many countries.
- Raising aid levels, including for climate finance
purposes, should be a priority in the advanced economies and
other higher income economies, notwithstanding significant
domestic budgetary challenges.
Key Areas:
E. Remittances
Definition: Certain transactions that are initiated by
individuals living or working outside their country of
birth or origin and related to their migration.
Remittances includes;
• Compensation of employees,
• Workers’ remittances, and
• Migrants’ transfers
Key Areas:
E. Remittances
- Global remittance flows now far exceed ODA flows,
playing a key role in supporting income levels in many
recipient countries
- The costs associated with executing remittance payments
are typically high relative to the size of the amounts being
remitted.
- Further policy action is needed to reduce the cost of
remittance transfers.
 IMF INITIATIVES IN SUPPORT OF
SUSTAINABLE DEVELOPMENT

Initiatives of IMF reflecting

priorities of Financing for
Development where the IMF has the
capacity to contribute.
 1. Strengthening domestic revenue mobilization and
management

Tax Policy and Administration

- The IMF already allocates one-fifth of its support
for national capacity-building efforts to providing
assistance in the areas of tax policy and
administration
- The IMF will deepen its work on international tax
issues of relevance for developing countries
- The IMF will continue its support for developing
countries in their efforts to increase the efficiency of
public spending.
 2. Infrastructure Policy Support
Many developing countries are, or will be, scaling up
investment spending to address severe growth-
constraining infrastructure gaps.

This policy support package for infrastructure provision

would include some or all of:
– Public Investment Management Assessment (PIMA)
– Debt-Investment-Growth (DIG)
– Debt Sustainability Assessments (DSA)
– PPP Fiscal Risk Assessment Model (P-FRAM)
– Medium-term Debt Management Strategy (MTDS
 3. Enhancing Policy Space and
Resilience
Access to IMF financial resources
provides a financial safety net to help
countries manage adverse shocks,
acting as a potential supplement to
foreign reserves when there is a
significant balance of payments need.
4. Increased Engagement on Equity/Inclusion
and Environmental Issues
IMF has expanded its analytic work on
macro-relevant elements of inclusion,
including on jobs and growth, inequality,
access to finance, and the economic impact of
gender inequities.

Looking ahead, the IMF intends to:

– Expand the analytical work underway
5. Strengthening Support for Fragile/Conflict-
Affected States (FCS)
FCS face exceptional development challenges that
typically result, for extended periods, in sluggish growth
and poor performance in improving key social indicators.
– weak state institutions;
– a difficult security situation;
– impaired capital stock, including physical
infrastructure;
– enhanced scarcity of human skills; and
– highly uncertain outlook, reflecting both political
uncertainty and vulnerability to shocks.
 6. Strengthening Domestic Financial
Markets
A. The IMF will enhance its support for financial
market development in developing countries

B. The IMF will explore the scope for developing,

in collaboration with the World Bank, a
diagnostic product that would help to guide
targeted capacity building in financial market
development in LICs.
 7. Other Initiatives
The IMF will strengthen its statistical data
dissemination and knowledge sharing by better
leveraging its technology.
– dissemination of data and technical assistance can
by using web-based tools and Open Data Platforms
(for example, enhanced general data dissemination
standards (eGDDS)) &Massive Open Online
Courses (MOOCs);
– promotion of peer-to-peer learning in the IMF
Institute training curriculum.
 Illicit Financial Flows
IFFs means – “money illegally earned, transferred or used” —and made
use of the term “illicit” (rather than illegal) to include activities that,
while not illegal “go against established rules and norms”.
There are many other types of flows that fall within the definition of IFF
employed by the high-level pane;
– movement of funds derived from criminal activity or from the
abuse of authority for personal gain (corruption and
embezzlement)
– movement of legally acquired funds abroad to circumvent capital
controls (whether it be to diversify portfolios, seek safe havens for
savings threatened by inflation or expropriation, or evade taxes)
 Two Key Principles of the
Monterrey Consensus
I. Achieving the internationally agreed development
goals … demands a new partnership between
developed and developing countries.

II. Each country has primary responsibility for its own

economic and social development, and the role of
national policies cannot be overemphasized.
 Guiding Principles for Producing a
Balanced Domestic Revenue Bas
I. Use a broad-based VAT with most items subject to a single rate and
a high threshold.
II. Use a corporate income tax levied at a competitive rate on a broad
base.
III. A progressive personal income tax
IV. Excise taxes on (only) a few key items
V. Real property taxes
VI. Move towards taxing carbon at levels designed to compensate for
negative externalities
VII. Analyze and take tailored actions to reduce tax “gaps”