A Study for Oxfam, by Matthew Martin, Alison Johnson and Gideon Rabinowitz - Development Finance International
In 2005 the International Monetary Fund (IMF) introduced the Policy Support Instrument (PSI). The PSI is an instrument for low-income countries that do not need or want to borrow from the IMF under its Poverty Reduction Growth Facility (PRGF).
Oxfam commissioned research with Development Finance International to test the experiences with the PSI. The research report “What is the point of the PSI? The views of African policymakers” present the frank views of African policy makers and practitioners on their experiences and expectations in their engagement with the IMF.
The world has seen a dramatic turn around since the first bank fell in the United States. The global community is now facing the worst economic recession since the Second World War. While banks and countries deemed to be of systemic importance for the world economy are being bailed out, aid commitments to Africa face real risk of default. And as recent economic growth in Africa seems set to be reversed, African Governments’ progress on guaranteeing basic rights to education, health, employment and livelihoods and the fight against poverty are now threatened.
The IMF’s role has also seen a dramatic turn around from an organization that was considered to be increasingly irrelevant to an organization that has been given a lead crisis response role. This makes this research even more relevant now. The lessons that can be drawn from the research are not solely limited to the Policy Support Instrument. It gives valuable insights on how policy makers from low-income countries interact with the Fund and how perception and political processes are intimately interlinked with decisions by countries, donors and the Fund.