This event will examine one of the central development finance challenges of the coming decade: how low-income countries (LICs) can simultaneously maintain macro and debt sustainability and invest in growth, at a time of larger and more frequent shocks, sharply reduced aid, higher borrowing costs, and heavy debt service burdens. Adding to the challenge, IMF net flows to LICs are projected to turn negative by the end of decade, as the exceptional COVID-era lending wave starts to come due. This raises questions about how to ensure the Fund's concessional lending frameworks and program design are adequately calibrated for this fundamentally changed environment.
The panel will bring together senior policymakers, development finance officials, and independent experts to discuss what this changed environment means for the IMF role in LICs in the context of the broader development finance architecture — including what a more adequate and effective response might look like in terms of finance volumes, policy prescriptions, and program design. The discussion will be framed by new CGD analysis on IMF net financing flows to LICs.
- How can low-income countries simultaneously maintain macroeconomic and debt sustainability and invest in growth in an environment of constrained financing, heavy debt service burdens and larger and more frequent shocks? What strategies are working and where are the gaps?
- How can low-income countries maintain politically acceptable reform momentum in the face of difficult adjustment-vs-financing dynamics?
- What are the implications of IMF net financing flows to low-income countries turning negative by the end of the decade as COVID-era lending comes due?
- How should the IMF's concessional lending frameworks and risk tolerance be calibrated for this changed financing environment?
- How should IMF program design and policy prescriptions evolve to better balance stabilization, debt sustainability, and growth?
- What would a more adequate and effective IMF response look like in terms of financing volumes, policy prescriptions, and program design?
- What should the international community—shareholders, multilaterals, and bilateral partners—prioritize to ensure the development finance architecture for low-income countries is fit for purpose over the next five to ten years? And what role should the IMF play within this broader architecture?
Presenter
Catherine Pattillo, Senior Fellow, CGD
Panelists
Kalpana Kochhar, Interim President, Global Policy & Advocacy, Gates Foundation
Hanan Morsy, Deputy Executive Secretary and Chief Economist, UN Economic Commission for Africa
Additional speakers to be announced
Moderator
Nancy Lee, Director Sustainable Development Finance and Senior Fellow, CGD
