Objective of Assistance Program

In accord with the IMF’s first Article of Agreement, the objective of the IMF’s technical assistance¹ program is to contribute to the development of the productive resources of member countries by enhancing the effectiveness of economic policy and financial management. The IMF’s technical assistance program works to achieve this objective in two ways. First, much of the IMF’s technical assistance seeks to support the efforts of members to strengthen their capacity—in both human and institutional resources—to formulate and implement sustainable, growth-oriented, and poverty-reducing macroeconomic, financial, and structural policies. Second, the IMF assists countries in the design of appropriate macroeconomic and structural policy reforms, taking account of the lessons learned by other countries in addressing similar economic policy concerns. In both ways, IMF technical assistance provides a cooperative framework for the sharing of knowledge and international experience, in a lasting manner, with member countries.

Scope and Nature

The IMF seeks to provide technical assistance as efficiently and effectively as possible in its core substantive areas of competency, namely:

• macroeconomic policy formulation and management;

• monetary policy; central banking; the financial system; and foreign exchange markets and policy;

• fiscal policy, public finances, and fiscal management;

• external debt monitoring; and

• macroeconomic, external, fiscal, and financial statistics.

The specific topics covered, and the relative emphasis given, are very much influenced by the issues that emerge in the course of the IMF’s surveillance and program activities, such as the recent focus on the links between high-quality growth and poverty reduction.

The Annex to this statement describes the technical assistance provided by the functional departments of the IMF. The IMF’s regional (or area) departments, which are responsible for country-level management of surveillance and program operations, collaborate closely with the functional departments in the planning, implementation, monitoring, and follow-up of technical assistance.

Mode of delivery. Technical assistance is provided in a variety of forms. These include staff missions from headquarters; the placement of experts for periods ranging from a few months to a few years (depending on the nature of the tasks to be done and the capacity and interest of the countries concerned); the preparation of technical and diagnostic reports; the delivery of training courses, seminars, and workshops; and the on-line provision of advice and support from headquarters. Technical assistance and training are also delivered from regionally based centers.

Recruitment of experts. The IMF provides the services of qualified experts, either directly from its staff or from external sources. These are often drawn from the staff, or former staff, of member country ministries, institutions, and agencies. The IMF seeks to expand and review its roster of experts, in order to ensure an adequate supply of well-qualified specialists that are conversant with technical developments in their particular fields of expertise. The principal approach to identifying candidates is through the IMF’s contacts with central banks, financial supervision agencies, ministries of finance, tax and customs departments, and statistical offices. Advertising is also occasionally used for highly specific scarce skills. The importance of appropriate language, communication, and pedagogic skills is recognized in the recruitment of staff and experts. All IMF experts are professionally supervised and administratively backstopped by technically qualified IMF headquarters staff. The IMF’s resident representatives also liaise closely with experts during their assignments. During staff visits, area departments may follow up on the implementation of technical assistance related policy advice and the work of experts.

Collaboration with other technical assistance providers. The IMF is committed to cooperate and collaborate with other providers of technical assistance. The global decline in Official Development Assistance levels underscores the need to ensure that duplication and overlap in coverage are avoided and that technical assistance is delivered by the most appropriate source within a carefully coordinated framework. The limited character of the technical assistance provided by the IMF offers a fruitful basis for such collaboration, with the IMF’s provision of experts usefully complemented by technical assistance-related services and equipment offered by other technical assistance agencies.

Determining Technical Assistance Priorities

The sources of demand for IMF technical assistance. The IMF’s technical assistance services are one of the benefits and rights of membership, and its provision, in almost all cases, is not related to IMF conditionality.² Much of the demand by countries for the IMF’s technical assistance services arises from the perception of recipient governments that such assistance can play an important role in helping them to strengthen their implementation of policies. As indicated above, the IMF’s surveillance and program activities may also generate requests for technical assistance. Specifically, it is often in discussions with country authorities during Article IV consultations, or when designing and monitoring IMFsupported programs, that the needs for capacity building and policy strengthening are mutually recognized and the concomitant requirements for technical assistance clearly identified. Recently, the IMF has given added emphasis to the importance of a better integration of technical assistance with its surveillance and program activities. In this regard, it stresses the importance of encouraging countries to identify their technical assistance needs and priorities well in advance, rather than waiting for problems to emerge. Working in partnership, the IMF and governments are thus moving further from a “reactive” to a more “proactive” stance in the planning, prioritization, and delivery of technical assistance.

Linking technical assistance with surveillance. This objective is currently being pursued, on an experimental basis, in two respects. First, Technical Assistance Consultations (TCs) have been added to the agenda of a selected number of Article IV missions. A TC provides an opportunity for discussions on the effectiveness of past IMF technical assistance and on the scope and direction of future possible assistance from the IMF. Secondly, for countries facing critical capacity constraints in their efforts to implement programs of economic and financial reforms, the IMF initiated a pilot project involving the preparation of medium-term Technical Cooperation Action Plans (TCAPs). TCAPs are intended to comprise a comprehensive assessment of a country’s or subregion’s macroeconomic and financial management weaknesses in the core areas of the IMF’s work and an elaboration of a technical assistance program for addressing these. Such exercises are carried out by IMF staff and the country authorities with the active participation and support of other interested donors. The preparation of a TCAP is seen as the beginning of a dynamic process that would involve a commitment by the authorities, the IMF, and other donors to provide resources to implement the TCAP and jointly to monitor and adjust its implementation over an agreed time period.

Unanticipated sources of demand. Despite the intention to improve projections of technical assistance requirements through the TCs and TCAPs, some of the demand for technical assistance from the IMF will still arise in response to unexpected changes in the policy environment of a country—a change in government, an unanticipated crisis, or an external shock. There is thus expected to remain a continuing element of unpredictability in the demand for technical assistance services, and an important characteristic of the IMF’s technical assistance program will remain its capacity to respond quickly to such situations.

Prioritizing technical assistance requests. Technical assistance is provided only when requested by a country’s authorities. ³ Since the demand for such assistance normally exceeds the resources available from the IMF, a number of considerations are taken into account in prioritizing country requests. In order of their relative importance, these are the extent to which:

• a country’s authorities are strongly supportive of obtaining the technical assistance and committed to ensuring its implementation. Such commitment is critical for the technical assistance to be effective and have a measurable impact. A strong prior track record in effectively using the IMF’s technical assistance services is one key indicator of country commitment;

• the technical assistance addresses those weaknesses in a country’s institutional capacity for macroeconomic policy implementation that have been identified in the course of the IMF’s surveillance and other work;

• technical assistance contributes to strengthening a country’s capacity to design and implement an IMF-supported program, especially in the preparation of a Poverty Reduction Strategy Paper and in the implementation of a Poverty Reduction and Growth Facility program;

• technical assistance supports a country’s efforts in complying with internationally agreed standards and codes of statistical, fiscal, and financial transparency;

• other donors cannot provide the requested assistance;

• technical assistance would be the only benefit of IMF membership accruing to a country; and

• technical assistance can be provided in collaboration with other technical assistance providers, since this allows the IMF to use its cooperation with other donors to leverage its limited resources.

While emphasizing the need to apply the above criteria systematically when appraising individual requests for technical assistance, the IMF recognizes that at times two additional factors may influence a decision to provide technical assistance:

• the systemic or regional importance of the requesting country; and/or

• the emergence of the need for technical assistance as a result of a postcrisis situation.

With respect to the former, even when it is clear that a technical assistance project may not be fully effective, the IMF may provide critically necessary technical assistance in order to maximize the prospects for successful macroeconomic policy implementation. With respect to the latter, when countries are faced with the task of rebuilding their basic macroeconomic management institutions, the international community has come to expect that the IMF will be able to respond to these needs, even when the risk of failure is considered high.

Role of Recipient Governments in Realizing Effective Technical Assistance

Strengthening recipient country ownership. The IMF’s technical assistance program is based on the fundamental principle that to be effective and to have a high impact, it is important to ensure that a partner country is fully committed to owning the work associated with the assistance and implementing the recommendations flowing from the technical assistance. This underscores the importance of having IMF technical assistance activities planned and implemented with the full involvement of the recipient authorities at each of the various stages of the process, from identification of need through discussion and agreement on terms of reference and project objectives, to implementation, monitoring, and evaluation. Particularly when it is intended to field a long-term expert—whether on a full-time or peripatetic basis—close consultation with the authorities is critical in order to ensure that the conditions are right for making good use of an expert’s time. Such consultation should result in reaching agreement on the type of expert required; the needed qualifications and experience; and, ultimately, on the individual chosen to provide the technical assistance. A mutual review of the results of past and current technical assistance efforts, including a country’s track record in the implementation of technical assistance recommendations, and a consideration of future needs, are important aspects of the process of enhancing ownership by recipient country authorities.

Charging policy of the IMF for its technical assistance. In line with the practice of other bilateral and multilateral agencies, the IMF’s technical assistance is generally provided free of charge. The exception relates to the assignment of long-term experts (defined as experts residing in a country for six months or more), for which countries may be asked to make a specified financial (or equivalent in-kind) contribution to the IMF. Whether a contribution is required, and the amount charged, depends on the country’s ability to pay, although no member is denied access to technical assistance because it is unable to pay. The IMF’s management determines the charges within a basic policy framework on country contributions established by the IMF’s Executive Board. As a cooperative undertaking between the IMF and the requesting country, the IMF recognizes that successful technical assistance requires careful preparation and commitment of resources by the recipient authorities. Important in this regard are the assignment of counterpart staff and adequate complementary resources (for example, office space and equipment, administrative support staff, communications facilities, material supplies, and utilities), all of which amount to a considerable real cost for the recipient government, over and above whatever charges may be levied by the IMF.

Monitoring and Evaluation

Development of a cost-effective and well-integrated system of monitoring and evaluation. Monitoring and evaluation are essential for ensuring accountability and transparency in technical assistance activities; for assessing their relevance, efficiency, effectiveness, and impact; and for drawing lessons on how to strengthen ongoing and future technical assistance operations. The size of the IMF’s technical assistance program, though still modest by international standards, has reached a level requiring the adoption of a systematic approach to technical assistance monitoring and evaluation. Staff are in the process of preparing proposals in this area, drawing on the experience and current practices of other agencies. Monitoring needs to involve both IMF staff and country authorities in order to ensure that all ongoing technical assistance efforts are meeting agreed targets and objectives and producing the required outputs. Monitoring also inevitably involves making evaluative judgments during a project’s lifetime, which are then used to improve ongoing implementation efforts. In contrast, more analytical evaluation exercises generally take a longer-term perspective, are often carried out independently of the directly involved staff (sometimes by external evaluators), and focus mainly on completed operations or on completed operations of an ongoing program.

A common approach to monitoring and evaluation will be developed to enable judgments across countries and selected subject areas, so that lessons can be drawn and used to strengthen future operations. All monitoring and evaluation activities will require input from the recipient authorities, at the project and policy level, to ensure their views on the reasons for success and failure of technical assistance are fully taken into account. In-depth, thematic evaluation studies on selected topics are expected to complement routine and comprehensive monitoring activities by individual technical assistance departments. Such studies serve as a cross-check on the consistency and quality of the advice rendered, and allow for an assessment of the policy and capacity-building impact of the technical assistance provided and of its sustainability. Independent evaluations will also be undertaken, taking account of budgetary implications.

External Dissemination

The IMF recognizes the importance of disseminating information on its technical assistance activities of general interest both to the membership and the public at large. One vehicle for this will be an Annual Report on Technical Assistance to the Executive Board, which will summarize technical assistance activities and related technical assistance policy developments over the previous year, as well as the outcome of monitoring and evaluation efforts. The report will also highlight any policy issues on which Board guidance may be needed.

In the interests of transparency and a well-informed public, the IMF believes that information on the lessons learned from the IMF’s technical assistance program, as well as on the assistance provided to individual countries, should be disseminated as widely as possible. Thus, information on the general substance of the IMF’s technical policy advice in the different functional areas is disseminated both through IMF research and other publications (e.g., handbooks, occasional papers, and pamphlets), and increasingly on the IMF’s external website. ⁴ While the IMF recognizes the public interest would also be served by the provision of information on the country specific advice tendered by the IMF, it is also important to recognize that members may seek the IMF’s technical advice on a confidential basis. It is thus appropriate that a member country should have the right to decide on whether to allow publication of this advice. For this reason, individual technical assistance reports will continue to be circulated on a restricted basis within the IMF, the World Bank, and other cooperating donor agencies, with wider distribution contingent upon the permission of the country concerned.

Internal Management of Technical Assistance

Although the management of the IMF’s technical assistance program is largely devolved to individual departments, IMF wide policies and procedures governing the financing, planning, implementation, monitoring, evaluation, and reporting of technical assistance are coordinated and developed by a senior-level Technical Assistance Committee (TAC). Reporting directly to the Deputy Managing Director responsible for technical assistance matters, the TAC also acts as a forum for reaching agreement on recommendations to management on the allocation of technical assistance resources across the different geographic regions and functional areas. In addition, it serves as the coordinator for pilot technical assistance initiatives undertaken by the IMF (such as the recent experiment with TCs and TCAPs) and for the implementation of the reforms that emanated from the Executive Board’s June 1999 review of the IMF’s technical assistance activities. The TAC and its subcommittees are supported by a small unit, the Technical Assistance Secretariat (TAS), attached to the Office of Budget and Planning in the Office of the Managing Director, which also assists in negotiating and administering technical assistance agreements with other agencies and donors. The TAS compiles aggregate data on planned and actual technical assistance delivery for internal and external reporting purposes.

Role of External Financing

In recent years, the IMF has sought to expand its range of contacts and collaboration with other technical assistance providers. For example, the IMF has cooperated with other donor agencies on a number of large-scale integrated multiyear technical assistance projects of administrative and institutional reform. Equally, the IMF’s technical assistance program has benefited from generous cofinancing from a few multilateral and bilateral agencies, which have supplemented the IMF’s own budgetary resources for these activities. As the IMF’s mandate broadens, the pressure of demand on its technical assistance resources is likely to increase further—for work on implementing the new international codes and standards; for work on strengthening the banking sector and financial systems; for helping HIPC countries undertake debt sustainability analyses and manage their debt reduction programs; and for public expenditure management and statistical technical assistance in connection with the design and implementation of Poverty Reduction Strategy Papers and IMFsupported policy programs under the new Poverty Reduction and Growth Facility. The IMF will seek every opportunity to cooperate with other agencies in these areas. The TCAPs in particular will require the close involvement of other donor agencies,⁵ since effecting and financing their implementation will greatly exceed the technical assistance resources and instruments available to the IMF.

The IMF encourages member countries who have not yet done so to consider providing such complementary financial support in order to enhance the resources available for technical assistance, preferably in a manner that is as unrestricted as possible. Meanwhile, the IMF’s efforts to deepen technical assistance collaboration with its multilateral and bilateral development partners will continue.