The IMF’s Resilience and Sustainability Trust: How Conditionality Can Help Countries Build Resilience

John Hicklin
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John Hicklin: Center for Global Development

No 324, Policy Papers from Center for Global Development

Abstract: The IMF’s Resilience and Sustainability Trust (RST) has been operational for over a year, with the first seventeen countries receiving commitments of financial support. But if lending from the RST is to achieve its objectives, the IMF should make it fitter for purpose by taking a radically different approach in applying conditions to the loans. This paper first gives the background and summarizes the argument; sets out the unique challenges involved in designing best practice conditionality to deal with climate change – the focus of the RST so far; and makes three specific suggestions to address shortcomings in the emerging conditionality to make the most of the IMF’s new initiative to help member countries build resilience and sustainability. The IMF has adapted its approach based on initial experience. A forthcoming Executive Board review will allow for further course correction and much-needed greater traction for the RST.

Pages: 32 pages
Date: 2024-03-18
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Persistent link: https://EconPapers.repec.org/RePEc:cgd:ppaper:324

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