- International Monetary Fund
- Published Date:
- July 2005
JSA Annual Report Fiscal Year 2004
In 1990, Japan agreed to provide financial support for the IMF’s technical assistance to its member countries to strengthen their capacity to formulate, implement, and maintain macroeconomic and structural adjustment programs. Since then, Japan has been, and continues to be, the largest contributor to the IMF’s technical assistance (TA) activities.1 Japan’s contributions are provided through the “Japan Administered Account for Selected Fund Activities” (JSA).2 In addition, Japan also finances two scholarship programs, one under the JSA and the other under a separate account, the “Subaccount for Japan Advanced Scholarship Program.”
This report opens with a brief description of the IMF and its activities, focusing in particular on its technical assistance activities. The report describes in detail the JSA—its objectives, size, scope and use, as well as assessments of its activities, with a focus on fiscal year 20043—and the scholarship programs that it finances.
The IMF: Purpose and Activities
The IMF, an international organization of currently 184 member countries, was established in 1946 to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to provide temporary financial assistance to countries with balance of payments difficulties; and to foster economic growth and high levels of employment.4 To achieve these objectives, the IMF carries out three types of operational activities: surveillance, financial assistance, and technical assistance.
Surveillance is the process by which the IMF maintains a policy dialogue with each of its members and appraises country and global macroeconomic conditions. Generally once a year, it appraises members’ exchange rate policies within the overall framework of their economic policies in what is known as an Article IV consultation. The IMF also carries out multilateral surveillance, the results of which are summarized in the World Economic Outlook, prepared and published twice a year, and in the Global Financial Stability Report, which is also published twice a year.
Financial assistance includes credits and loans extended by the IMF to member countries with balance of payments problems so that they can restore conditions for sustainable economic growth. The financial assistance provided by the IMF enables countries to rebuild their international reserves, stabilize their currencies, and continue paying for imports without having to impose trade restrictions or capital controls. The IMF makes its financial resources available to its members through a variety of financial facilities—for example, Stand-By Arrangements and the Extended Fund Facility. It also provides concessional assistance under its Poverty Reduction and Growth Facility (PRGF) and debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.
Technical assistance consists of expertise and training provided by the IMF to help member countries strengthen their human and institutional capacity, and design and implement effective macroeconomic and structural policies. Technical assistance is offered in several broad areas, namely fiscal policy and management, monetary policy and financial systems, and macroeconomic and financial statistics. See Box 1 on page 6 for a list of the core areas of IMF technical assistance.
IMF Technical Assistance: Demand and Supply
The IMF began to provide technical assistance to its member countries in the early 1960s in response to requests from newly independent nations in Africa and Asia. By the mid-1980s, resources devoted to technical assistance had nearly doubled. As a result of the expansion of the IMF’s membership and the adoption of market-oriented economies by a large number of countries worldwide, IMF technical assistance activities grew even more rapidly in the early 1990s. The demand increased further in the late 1990s as significant technical assistance resources had to be directed to countries hit by financial crisis. In addition, in recent years, the IMF has had to provide prompt policy advice and operational assistance to countries emerging from conflict situations. In FY2004, the IMF devoted over 360 person years to technical assistance activities, plus some $10 million for training and scholarships.5 The delivery of IMF technical assistance over FY2000-FY2004 is shown in Figure 1.
Figure 1.IMF Technical Assistance Delivery, FY2000-FY2004
During the past five to six years, the IMF’s technical assistance program has had to respond to a number of new initiatives that have changed the overall demand on its resources. As part of these initiatives, resources have been devoted to help countries build capacities for their anti-money-laundering efforts and for combating the financing of terrorism (AML/CFT); to adopt and adhere to international standards and codes for financial, fiscal, and statistical management; to help low-income countries formulate and implement poverty reduction strategies; and to help HIPCs design and manage debt reduction programs and strengthen public expenditure management for an effective tracking of poverty reducing expenditures.
In light of these demands and competing needs, the IMF has taken steps to prioritize technical assistance to reflect both the IMF’s “core” specialties—fiscal affairs, monetary and financial systems, and macroeconomic statistics—and main program areas—crisis prevention, debt relief and poverty reduction, fostering macroeconomic stability, post-crisis management, and regional capacity building.
The IMF finances its technical assistance for its member countries mainly from its own budgetary resources; it also receives external financing from bilateral and multilateral partners. The IMF currently spends about 25 percent of its annual administrative expenditures on technical assistance work. Of this, approximately 55 percent is spent on technical assistance delivered in the field by IMF missions or by experts, and the rest is spent on technical assistance-related work at IMF headquarters in Washington. In FY2004, external financing from bilateral and multilateral donor partners accounted for almost 30 percent of total technical assistance and over 50 percent of technical assistance delivered in the field. Although the number of bilateral and multilateral partners has increased significantly in recent years, Japan continues to be the largest source of external financing. In FY2004, JSA financing accounted for 17 percent of total IMF technical assistance, 32 percent of the assistance delivered in the field, and 58 percent of the total external financing. The JSA’s share of financing of the IMF’s field-delivered technical assistance over FY2000-FY2004 is shown in Figure 2.
Figure 2.JSA Share of Financing of Technical Assistance Delivered in the Field, FY2000-FY2004
The Japan Administered Account for Selected Fund Activities (JSA)
Activities Funded: Technical Assistance, the Regional Office for Asia and the Pacific, and Scholarship Programs
Japan has provided grant contributions to support the IMF’s technical assistance to member countries since 1990. In 1997, the administered account was amended to widen the scope of activities for which contributions could be made to finance other IMF activities carried out through its Regional Office for Asia and the Pacific in Tokyo.
The responsibilities of the Regional Office in Tokyo include collaborative efforts between the IMF and Japan that strengthen economic prospects in the Asia-Pacific region and include support of various regional policy forums such as the Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN), and the Pacific Islands Forum. The office also undertakes some technical assistance activities benefiting countries in the region, including conferences on macroeconomic policy and on financial sector reform.6 The Regional Office helps to improve understanding of the international financial system in Japan and the region through public relations events as well as by releasing Japanese-language publications. The Office also seeks to increase the representation of Japanese and other Asian nationals on the IMF staff by encouraging qualified applicants to apply for employment at the IMF and by supporting its recruitment efforts through interviews and informational seminars.
In addition, Japan also provides grant contributions for two scholarship programs. In 1996, the Japan-IMF Scholarship Program for Advanced Studies, which is administered by the IMF Institute, was established. It supports nationals of Asian member countries of the IMF who undertake doctoral studies in economics in North America in order to pursue a career in international financial institutions, such as the IMF, or in their home administration.
The Japan-IMF Scholarship Program for Asia, which was established in 1993, supports 12- and 24-month graduate studies in macroeconomics or related fields in Japan for students from Asia, Central Asia, and the Pacific. This program is administered by the Regional Office in Tokyo.
Level of Funding
Since 1990, Japan has made annual contributions totaling some $224 million, of which $209 million has been for technical assistance projects and the activities of the Regional Office for Asia and the Pacific and $15 million for the Asia Scholarship Program. In addition, starting in 1996, Japan has also contributed over $11 million for the Advanced Scholarship Program. Annual contribution figures for technical assistance and the two scholarship programs, for the period FY1990-FY2004, are provided in Table 1. Figure 3 shows the annual contributions for technical assistance under the JSA since its inception.
|Asia Scholarship Program||4.7||1.2||1.2||0.6||1.4||2.3||2.7||2.7||15.7|
includes activities of the Regional Office for Asia and the Pacific.
includes activities of the Regional Office for Asia and the Pacific.
Figure 3.Annual Contributions by Japan for Technical Assistance, FY1990-FY2004
Consultations between the IMF and the Japanese authorities usually take place twice a year: at a formal meeting in March followed by a less formal meeting around the time of the IMF-World Bank Annual Meetings in September. They cover the following issues: (1) effectiveness of the assistance provided with JSA funding; (2) the expected regional and subject area use of JSA resources in the fiscal year and the targets for the following fiscal year; (3) the likely costs of project inputs; (4) the likely magnitude of Japan’s further contribution to the JSA; (5) the organization of joint field visits by the Japanese authorities and the IMF; and (6) any special projects or issues that may arise. The consultations are also used to discuss developments regarding the IMF’s technical assistance program as a whole.
Technical Assistance Funded by JSA
JSA resources can be used to cover the costs of short- and long-term technical assistance experts and those providing seminars and workshops.
JSA funds may not be used to finance IMF staff costs (including salaries, per diem, or travel expenses). JSA funds are “untied” and can be used to hire experts of any nationality, but Japanese nationals are considered for expert assignments whenever possible.
Box 1.Core Areas of IMF Technical Assistance
Fiscal Policy and Management
Tax and customs administration Expenditure policy
Budgeting and public expenditure management
Monetary Policy and Financial Systems
Central banking and currency arrangements
Monetary and exchange policy operations, and public debt management
Financial market development, focusing particularly on money, government debt, and foreign exchange markets
Exchange systems and currency convertibility
Bank supervision and regulation
Bank restructuring and banking safety nets
Macroeconomic and Financial Statistics
Multisector statistical issues
Balance of payments and external debt statistics
Government finance statistics
Monetary and financial statistics
National accounts and price statistics
Data dissemination standards
While technical assistance activities financed by the JSA can be in all areas of the world, the Japanese authorities place high priority on funding technical assistance activities in Asia and the Pacific, Central Asia, Central and Eastern Europe, and countries of the former Soviet Union. Consistent with the IMF’s technical assistance policy, the Japanese authorities also place high priority on assistance for countries that have demonstrated strong efforts and good track records in implementing economic reform policies. An example of training activities supported by the JSA is described in Box 2; four JSA-supported projects, selected from different technical assistance subject areas, are described in Boxes 3–6.
Project submission and approval
Activities to be funded from the JSA, as well as all other IMF technical assistance activities, are planned in advance each year. At the beginning of each fiscal year, the IMF provides Japan with an indicative list of projects that it intends to submit for consideration in the course of the year. Thereafter, individual projects are submitted for approval on a monthly basis through the Office of Japan’s Executive Director at the IMF.
Box 2.Courses on Financial Programming and Policies
Courses on Financial Programming and Policies (FPP) have long been a central feature of the training delivered by the IMF Institute. They also continue to be among the courses in the heaviest demand from country officials, as revealed by a recent survey of national authorities carried out for the Institute by an independent consulting firm. In recent years, JSA funding has directly supported three or four deliveries a year of the Institute’s two-week FPP course, including two in Africa and one in China. In addition, JSA support for two long-term experts at the IMF-Singapore Regional Training Institute and toward the cost of Asian participants at the Joint Vienna Institute helps finance the delivery of FPP, as well as other courses through these regional programs.
FPP courses exemplify one of the key tenets of the Institute’s training program—an emphasis on the real world application of theory. In these courses, the participants’ time is equally divided between attending lectures and participating in workshops in which they apply the principles discussed in the lectures to an actual country case study.
The lectures typically cover three sets of topics: (1) the analysis and forecasting of the accounts for the key macroeconomic sectors—the real economy, the external sector, the fiscal sector, and the monetary sector; (2) the key principles of economic policy making in each of these sectors; and (3) additional policy issues of topical interest in a global context or of particular interest in the region in which the course is being delivered.
In the workshops, participants work together in small groups analyzing economic conditions and policies in the case study country and gaining experience in how to design a consistent economic program. They initially construct a baseline scenario, projecting the likely development of key macroeconomic variables on the basis of existing economic policies. After assessing the baseline scenario, they propose an alternative set of policies (the program scenario) that is designed to produce a better economic outcome, addressing in particular the key macroeconomic imbalances, and they project the macroeconomic outcome that is expected to result from implementing these policies.
During the period 1996-2004, 32 FPP courses have been financed by JSA with 989 participants, 491 of whom came from Africa, 447 from Asia and Pacific, and 51 from Eastern Europe and Central Asia.
Box 3.Timor-Leste: Development of a Banking and Payment System
Following Timor-Leste’s violent break from Indonesia in 1999 and subsequent independence in 2002, a major component of the reconstruction efforts was reestablishing the banking and payment system essential for economic recovery. At the request of the United Nations Transitional Authority for East Timor (UNAET), the IMF took on the task of establishing a Central Payments Office (CPO), later the Banking and Payments Authority (BPA), which would be in charge of critical banking and payments function.
As is often the case in post-conflict situations, reliance on foreign expertise was initially very high, and managerial positions at the CPO/BPA had to be filled by international experts appointed by the IMF, including the key positions of General Manager, Deputy Manager for Supervision, Deputy Manager for Payments, and Chief Accountant. The hiring of these experts was made possible by grants from the JSA (cost-shared by the United Nations), which also supported other related expert assistance and training in central bank functions.
While technical assistance will be needed for several more years for continued institution building and strengthening of local capacity, significant progress has been made toward establishing a fully functioning central bank and financial system. Local staff have been recruited and trained, and expatriate experts have gradually been replaced by their local counterparts. By the end of 2004, all of the aforementioned managerial positions at the BPA were filled by Timorese nationals. The Timorese nationals are assisted by international advisors, a few of whom have been resident while the rest have provided support through peripatetic visits.
Through technical assistance provided by the IMF, which the JSA has helped to finance, the following have so far been achieved:
Currency reform. During 2000-2002, the planning and subsequent implementation of the complete dollarization of the economy.
Payment system reform. In 2000, running of an emergency cash-based payment system and then, as commercial banks reappeared, making the payment system increasingly non-cash based. From 2003, preparations for a comprehensive law on payments transactions and settlement systems (yet to be enacted).
Central bank institution building. The establishment, with enabling legislation, of the Central Payments Office in January 2000 and its transformation into the Banking and Payment Authority in November 2001. Accounting, financial reporting, and internal audit functions set up in line with international best practices for central banks.
Foreign exchange reserve management. From 2001, setting up of and continued development of a foreign exchange reserve management function.
Financial system and insurance supervision. Starting in 2000, banking supervision functions set up, including regulations and procedures for on-site examination and off-site monitoring, and subsequently in 2003 functions expanded to include insurance supervision.
Legal/institutional framework for commercial banking and insurance. During 1999-2000, preparations of regulation for bank licensing, which was enacted in February 2000. The draft insurance law will be submitted to parliament in early 2005.
AML/CFT. Starting in 2003, development of needed legislation and regulation to strengthen requirements for AML/CFT compliance.
Box 4.Nicaragua: Strengthening Tax Administration
The tax system in Nicaragua has been difficult to administer, has lacked transparency, and has relied on few taxes and taxpayers, resulting in low and declining tax revenues. In the context of a three-year IMF arrangement, and following some of the recommendations of FAD technical assistance missions in 2002 and 2003, the government has begun implementing tax reform. The reform has focused on expanding the tax base, increasing the tax system’s efficiency, and reducing the scope for fraud. A key element of the reform effort has been modernizing tax administration.
Historically, the General Tax Department of Nicaragua (Dirección General de Ingresos, or DGI) has been characterized as having an inadequate organizational structure, ineffective systems and procedures, and poor control of taxpayer compliance. This situation was partly attributable to external interference in tax administration, lack of professionalism and inadequate technical qualifications of DGI staff, insufficient financial resources, and low investment in information technology. Other weaknesses included the lack of proper differentiation between management and operational functions at the headquarters office, lack of a proper large taxpayers unit (LTU), an incomplete and inaccurate taxpayer register, absence of a return filing and payment system through the banks, poor monitoring of stop filers and delinquent taxpayers, and confusion between management and operational functions in the area of audit. These shortcomings have persisted despite several reform projects that were undertaken with the assistance of various international organizations and donors. The reform programs were unfortunately poorly coordinated and not designed as part of a comprehensive plan to improve tax administration.
In May 2004, with JSA financing, an IMF resident tax advisor was provided to assist DGI implement measures needed to address the above issues. Although much remains to be done, this assistance has contributed toward significant progress in modernizing tax administration and has let to a sizable improvement in tax compliance. Tax revenue collection increased from 16.2 percent of GDP in 2003 to 16.9 percent of GDP in 2004. The achievements have included:
A new organizational structure for DGI headquarters. Approved in August 2004 and now being put in place, it permits a proper differentiation between management and operational functions at headquarters and assigns clear responsibilities to each core functional department (collection, audit, and enforcement).
Improvement in control of large taxpayers’ compliance. The former large taxpayer office was transformed into a bona fide national large taxpayer unit administering all large taxpayers nationwide and applying standard, objective selection criteria, and an improved system was introduced to monitor stop filers and delinquent taxpayers. Work is also under way to extend the new procedures for administering large taxpayers to medium-size taxpayers in the rest of the tax administration offices. In addition, steps have been taken to strengthen the LTU’s audit capacity.
Preparation of an audit reform strategy. Following the approval of the DGI’s new headquarters’ structure, the audit department has designed a strategy to increase the effectiveness of audit, including cross-checking taxpayers with third-party information.
Preparation of a Master Plan for Computerization. A three-year master plan has been prepared to create a centralized database and computer modules to support enforcement and audit work, and to provide DGI staff with needed computer hardware. Further assistance, with JSA support, is planned to consolidate the achievements made in the above areas and to assist DGI in designing and implementing reforms in other key areas of tax administration, including an electronic filing and payment system, starting with the large and medium-size taxpayers, and introduction of a tax collection system through the banks; a comprehensive strategy to introduce a new taxpayer identification numbering system, based on a modern TIN structure; and a modern and effective human resources policy for tax officials.
Box 5.Bosnia and Herzegovina: Rebuilding the National Macroeconomic Statistics System
The Republic of Bosnia and Herzegovina was established under the Dayton Agreement, which led to the end of hostilities in December 1995. Bosnia and Herzegovina’s urgent need to collect, compile, and disseminate macroeconomic statistics that would support effective policy analysis became evident during the early months of 1996.
Bosnia and Herzegovina presented a particularly challenging environment for delivering technical assistance in macroeconomic statistics for several reasons. The conflict had severely affected data collection and processing systems. In its aftermath, accounting rules evolved differently in the different political jurisdictions, and several currencies circulated in various regions of the country. Complicating matters further was the duplication of statistical services that mirrored the devolution of the major political powers to the entities.
Following a comprehensive review of the key macroeconomic statistical systems in January 1998, an IMF resident statistical advisor was assigned to the Central Bank of Bosnia and Herzegovina (CBBH) in May 1999 to provide technical assistance for the development of all areas of macroeconomic statistics.
The JSA financed the resident advisor’s assignment, and provided assistance to the Bosnia and Herzegovina authorities up to June 2004. Technical assistance was offered in the methodology used for compiling national accounts, and financial, external, and government finance statistics. The advisor also made significant efforts toward seeking implementation of the new State Statistics Law.
With the active involvement of the advisor, a modern Statistics Law was drafted and enacted in 2002. However, implementation of the law has been very slow, particularly with respect to harmonizing the entities’ statistical laws and supporting organizational arrangements, including the establishment of the Statistical Council and the design and adoption of a countrywide statistical work plan that would require the cooperation and involvement of the entity statistical agencies.
Due to a lack of political commitment to make institutional changes at the level of the entity statistical offices, the objective of building the capacity of the central statistical agency, required for the development of a sound national statistical system, was not achieved. The situation was complicated by delays in appointing staff to key positions. Moreover, the complex institutional management arrangements created difficulties for decision-making and for coordinating work programs with the entity statistical offices. As a result, although progress was made over time in developing databases that can be used for policy analysis, in particular, in the area of monetary statistics, significant deficiencies continue to undermine the quality of the real sector statistics.
In the case of monetary statistics, the CBBH, working with the statistical advisor, has made very important improvements, following the creation of a new Statistics Division with new management and strong leadership from the Governor. However, strengthening other macroeconomic statistics systems will require concerted efforts to fill gaps and improve quality.
In 2004, the IMF decided to suspend the resident advisor position in view of the lack of progress made by the Bosnia and Herzegovina authorities in supporting the organizational arrangements necessary for the Bosnia and Herzegovina to develop an effective national statistics system.
By late 2004, however, the Bosnia and Herzegovina authorities were able to assure the IMF that the Bosnia and Herzegovina Agency for Statistics (BHAS) was operational, and significant steps had been taken to satisfy the preconditions set for further collaboration on technical assistance. With this encouraging news, the IMF will be looking to support the Bosnia and Herzegovina authorities with further technical assistance to strengthen the BHAS’s role and capacity, including the assignment of a multisector statistics advisor proposed for funding by the JSA.
Box 6.The Joint China-IMF Training Program (CTP)
The Joint China-IMF Training Program (CTP) was established by the IMF and the People’s Bank of China (PBC) in May 2000 to provide policy-oriented training in economics and related operational fields for Chinese officials. The CTP has received financial support from the JSA since its inception.
The CTP’s annual training program is jointly determined by the PBC and the IMF Institute, and comprises seminars and courses ranging in length from two days to three weeks. The training events are typically concentrated in the subject areas that address economic issues of prime concern to Chinese officials. They are (1) financial programming and policies; (2) macroeconomic management issues, including monetary policy, public finance, and external sector issues; (3) financial sector issues, including bank supervision; and (4) statistics.
Since its inception, the CTP has held an average of six training events per year. The schedule for FY2004 comprised the following courses and seminars: Government Finance Statistics (STA); Financial Programming and Policies (INS); Workshop on Assessing Financial Systems (MFD); High Level Seminar on Financial Programming and Policies (INS); Monetary and Financial Statistics (STA); and High Level Seminar on China’s Monetary Policy Transmission Mechanism (INS). Two of the six events listed above—the high level seminars—were especially targeted for senior officials.
Training events at the CTP are typically designed to provide ample time for discussion and interaction by participants during lecture sessions, and hands-on practice in financial programming and other techniques during workshop sessions. Lectures and workshops are conducted in English, with consecutive Chinese interpretation. Considerable time is allocated for presentations by Chinese officials, to provide a Chinese perspective on issues treated more generally by Fund staff.
More than 1,000 participants have received CTP training to date. Participants have come from various government agencies—including the PBC, many ministries, the State Administration of Taxation, and different statistical offices—that are involved in the formulation and implementation of macroeconomic and financial policies and structural reform, as well as in the compilation and analysis of statistics. They have ranged from junior staff to senior officials, depending on the training event.
CTP training events have taken place in a number of cities, including Beijing, Chongqing, Dalian, Haikou, Hangzhou, Kunming, Shanghai, Suzhou, and Xian. In 2003, the IMF and PBC signed an agreement to establish the CTP in a new training center in Dalian. The CTP Dalian hosted its inaugural seminar, the “High Level Seminar on the Foreign Exchange System,” in May 2004.
Requests for technical assistance are received from governments. These are carefully considered by the concerned functional and area departments of the IMF. If requests fall within the core mandate of the IMF’s technical assistance program and otherwise meet the established prioritization criteria, project proposals are prepared. Following the screening process, the IMF’s Office of Technical Assistance Management reviews the project proposals for conformity with the JSA Guidelines. The proposals are then considered for approval by the Japanese authorities.
Project assessment and evaluation
Within four weeks of a project’s completion, the IMF is required to submit a project assessment to the Japanese authorities. Any request for an extension of a project also requires an assessment. This assessment is complemented by an evaluation of the technical assistance conducted by the recipient institutions through the completion of a questionnaire. The results of these evaluations are reviewed by the IMF and provided to the Japanese authorities.
In addition, JSA projects in two or three countries are visited and reviewed each year by a joint Japan-IMF mission. These visits provide the Japanese authorities with a firsthand view of how JSA funding is being used in the field. During the visits, participants assess how the authorities value the work of experts funded by the JSA. The visits are also used to review whether the authorities are making effective use of the assistance and whether the technical assistance is making a contribution to the reform process.
Commitments and disbursements
Between FY1993 and FY2004, cumulative commitments for technical assistance under the JSA reached $177 million for a total of 1,302 projects, of which over $163 million had been disbursed. During FY2004, $18.2 million was committed for 114 projects.7Table 2 and Figure 4 show commitments and disbursements, as well as the number of approved technical assistance projects, between FY1993 and FY2004. A brief description of each of the projects approved in FY2004 is provided in Annex 1.
|Number of Projects Committed||Committed|
(in millions of U.S. dollars)
(in millions of U.S. dollars)
|Total||1,302||177.4||163.8|Figure 4.JSA Annual Technical Assistance Commitments and Disbursements, FY1993-FY2004
Geographical distribution of funds
To date, 123 different member countries of the IMF and 13 regional organizations and training institutions have been beneficiaries of JSA-funded technical assistance. Countries in the Asia and Pacific region, Eastern Europe, and Central Asian countries and the transitional countries of the former Soviet Union have together received almost $97 million from the JSA for approved technical assistance projects during FY1993-FY2004, which represents 54.8 percent of technical assistance projects approved during this period. Countries in Africa received the next largest share, totaling some $40 million or 22.4 percent of total approvals during the same period. Of the remaining amount approved during this period, 5.5 percent were for projects in Latin America and the Caribbean, 6.3 percent for projects in Western and Central Europe, 3.5 percent for projects in the Middle East, and 7.5 percent for multiregional projects.8
The regional distribution of commitments in FY2004 was as follows: Asia and Pacific countries, $6.9 million or 37.9 percent; Africa, $5.1 million or 28 percent; the Middle East, $1.6 million or 8.8 percent; multiregional projects, $1.6 million or 8.8 percent; Eastern Europe and Central Asian countries and countries of the former Soviet Union, $1.4 million or 7.7 percent; Western and Central Europe, $1 million or 5.5 percent; and Latin America and the Caribbean, $0.6 million or 3.3 percent. Table 3 shows the annual and total commitments by region in dollars. Figures 5 and 6 show the regional percentage distribution for FY1993-FY2004 and for FY2004, respectively.
In FY2004, 35 percent of JSA funds were committed to assist low-income countries implement reforms supportive of sustainable debt relief and poverty reduction programs, 25 percent to maintain macroeconomic and financial sector stability, 20 percent to rehabilitate basic economic and financial institutions in postconflict situations, and the remainder went to regional capacity-building initiatives (16 percent) and technical assistance focusing on crisis prevention (4 percent).
Table 4 shows the 10 beneficiary countries or organizations receiving the largest share of JSA assistance during FY1993-FY2004 and FY2004, respectively. In FY2004, of the 10 largest beneficiaries, five were postconflict countries: Afghanistan, Cambodia, Democratic Republic of the Congo, Sri Lanka, and Timor-Leste.
|Asia and Pacific||1.6||3.6||4.5||6.3||5.8||4.2||5.6||5.5||4.7||6.2||6.6||7.0||61.6||35|
|and Central Asia||2.1||3.8||5.1||4.3||3.1||3.4||3.3||3.0||2.7||1.4||1.5||1.4||35.3||20|
|Total||5.7||8.8||13.1||15.1||14.5||13.0||20.6||17.3||16.4||16.7||17.3||18.2||176.7||100|Figure 5.Distribution of JSA Technical Assistance Commitments by Region, FY1993-FY2004 Figure 6.Distribution of JSA Technical Assistance Commitments by Region, FY2004
|Indonesia||Congo, Democratic Republic of|
|PFTAC: Pacific Financial Technical||Cambodia|
|Assistance Center||Sri Lanka|
|Timor-Leste||PFTAC: Pacific Financial Technical|
|Rwanda||Afghanistan, Islamic Republic of|
Distribution of funds by subject areas
In FY2004, the IMF delivered 367 person years of staff and expert time for technical assistance work, a 3 percent increase over FY2003. The distribution of the technical assistance by the major IMF functional departments was as follows: Monetary and Financial Systems (formerly called Monetary and Exchange Affairs), 33 percent; Fiscal Affairs, 26 percent; Statistics, 16 percent; and Legal, 6 percent.
The distribution of the commitment of JSA funds among the subject areas has broadly reflected the foregoing distribution in the overall use of IMF resources for technical assistance. In FY2004, the distribution of JSA commitments was as follows: Monetary and Financial Systems, $6.9 million (38 percent); Fiscal Affairs, $4.3 million (24 percent); Statistics, $3.3 million (18 percent); and Legal, $1.2 million (7 percent). During FY2004, commitments of JSA funds in the fiscal area increased significantly (by over $1 million), while there was a slight reduction in commitments in the macroeconomic statistics area. Table 5 shows the annual distribution of commitments in dollar terms by subject areas. Figures 7 and 8 also show the percentage distribution by subject area for FY1993-FY2004 and for FY2004.
|Total||5.7||8.8||13.1||15.1||14.5||13.0||20.7||17.3||16.4||16.7||17.3||18.2||176.8||100|Figure 7.Distribution of JSA Technical Assistance Commitments by Subject Area, FY1993-FY2004 Figure 8.Distribution of JSA Technical Assistance Commitments by Subject Area, FY2004
In FY2004, the proportional allocation of JSA funds by topic within the above four areas was broadly consistent with FY2003 although there was a relative increase in technical assistance commitments for strengthening fiscal and macroeconomic management, central bank operations, balance of payments and external debt statistics, and legislation for anti-money laundering and combating the financing of terrorism (AML/CFT). In the monetary and financial systems area, 58 percent of JSA funds were committed to technical assistance for banking and financial sector supervision, 22 percent for central bank operations and strengthening payment and accounting systems, 11 percent for monetary policy and operations, and 9 percent on AML/CFT. In fiscal affairs, 38 percent of JSA funds were committed for strengthening fiscal and macroeconomic management, 36 percent for public expenditure management, and 26 percent for tax policy and revenue administration. In the macroeconomic statistics area, 49 percent of JSA funds were committed for multisector statistical technical assistance, including General Data Dissemination System-related assistance, 20 percent for work on real sector statistics, 19 percent for balance of payments statistics, 8 percent for monetary and financial statistics, and 4 percent for government finance statistics. In the legal area, 60 percent was committed to technical assistance for AML/CFT, and 40 percent for work on central bank and financial sector legislation.
Effectiveness of JSA-funded technical assistance
Since 1996, 11 joint Japan-IMF evaluation visits have taken place to gauge the effectiveness of JSA-funded technical assistance activities. These have covered 17 beneficiary countries in Africa, Asia and the Pacific, Central Asia, and Central and Eastern Europe, as well as the regional training institutes in Singapore and Vienna, and the Pacific Financial Technical Assistance Center. The joint evaluation teams have reported that technical assistance activities financed by the JSA were highly relevant and consistent with the core mandate of the IMF’s work, were well formulated and implemented, and were appreciated by recipient governments, who often underscored that the JSA-funded advisors were instrumental in establishing critically needed capacity. The teams also reported that the JSA-financed training and seminars were highly visible, tightly focused, and highly appreciated by participants. In FY2004, a joint Japan-IMF evaluation team visited Fiji and Indonesia. The Fiji visit focused on the Pacific Financial Technical Assistance Center (PFTAC) and the regional projects that support the AML/CFT efforts of the Pacific Island countries and improve their production and dissemination of macroeconomic statistics to meet international standards. In Indonesia, the team concentrated on JSA assistance for TA in banking supervision. A summary of the findings of these visits is provided in Annex 2.
As of 2000, beneficiary authorities have been requested to provide an assessment of completed JSA-funded projects. The questionnaires gauge the authorities’ views regarding the appropriateness and relevance of the assistance and the experts’ qualifications and experience. The questionnaires also cover the cooperation between the expert and counterparts, the usefulness of the advice in terms of the reform efforts, whether adequate attention was paid to skills transfer, and the quality of supervision by IMF Headquarters. To measure the beneficiaries’ overall satisfaction, the respondents are also asked to rate the overall progress of the assignment.
Since 2000, 105 evaluation questionnaires have been received from beneficiary authorities covering 89 projects. Overall, the beneficiary authorities continue to be very positive about the effectiveness of the JSA-funded technical assistance projects. As shown in Figure 9, 58 percent of the respondents were highly satisfied with the overall progress of the assignments funded, and another 40 percent were satisfied. Annex 3 provides detailed results of the ongoing evaluations.
Figure 9.Results of Evaluations of Technical Assistance Projects
Japan-IMF Scholarship Program for Asia
The Japan-IMF Scholarship Program for Asia is a program for graduate studies in macroeconomics or related fields at several leading universities in Japan. The objective of the program is to contribute to institutional capacity building of transition economies, by providing educational opportunities to promising junior officials in central banks or in ministries of finance, economy, or planning in East and Central Asia, and the Pacific region.9
The program, which is operated under the JSA, can award up to 55 scholarships a year but the actual number awarded annually depends on the number of qualified applications received. For the academic year 2003, 39 new scholarships were awarded, with a total of 51 scholars studying in Japan under the program.10 There are two forms of scholarships. Scholars accepted under the “partnership track” participate in specially designed master’s courses offered by one of four partnership universities,11 while the “open track” is available to candidates who have already been accepted to a graduate-level program, both at the master’s and PhD levels, in macroeconomics or a related field at any leading university in Japan. The program is administered by the IMF’s Regional Office for Asia and the Pacific in Tokyo.
Since the first students were accepted under the program in 1993, a total of 280 scholarships have been awarded, and by the end of the academic year 2003, 206 scholars had graduated from the partnership universities. Table 6 shows the distribution of scholars by their nationality and organizational affiliation. Most scholars have expressed a high degree of satisfaction with the program and subsequently with the career opportunities that have opened to them. A number have taken up mid- to senior-level positions in their respective government agencies, and have direct input in policy initiatives.
|Scholars by Country||Total||Percent||Scholars by Affiliation||Total||Percent|
|Vietnam||48||17||Ministry of finance||67||24|
|Myanmar||28||10||Economic affairs ministry||8||3|
|Kyrgyz Republic||25||9||Investment bank||8||3|
|Cambodia||22||8||Trade affairs ministry||7||3|
Japan-IMF Scholarship Program for Advanced Studies
Japan also provides financial support for a scholarship program for qualified Asian nationals who want to study economics at the doctoral level at one of the leading universities in North America to pursue a career in their home country governments or in international financial institutions such as the IMF. The program covers reasonable costs for two years of study, while scholars are expected to cover the remaining years of study.
The Japan-IMF Scholarship Program for Advanced Studies, which is administered by the IMF Institute, began with a class of nine scholars seeking to obtain a PhD in economics in the 1996-97 academic year.12 In each succeeding year, 15 scholars from Asian countries who have independently gained admission to one of the leading North American universities in the field of economics have received this scholarship.
A total of 48 scholars have graduated with PhD degrees in economics, seven of whom have joined the IMF’s staff. Three scholars were recruited to the IMF’s Economist Program, which is the main entry point for economists seeking to join the organization after completion of their studies. In addition, one scholar has worked as a professional consultant to the IMF’s Independent Evaluation Office while completing her PhD program. Table 7 shows the distribution of scholars by country since the beginning of the scholarship program, while Table 8 lists the universities attended by the scholars and the number of scholars at each institution during the program.
|Number of Scholars||Total|
|Hong Kong SAR)||2||5||2||4||2||2||1||1||19||16.5|
|Number of Scholars|
|1. Brandeis University||1||1|
|2. Brown University||1||2||1||2||1||1||8|
|3. Boston University||1||2||3|
|4. Columbia University||2||3||1||1||1||8|
|5. Cornell University||1||2||1||4|
|6. Duke University||2||1||1||1||5|
|7. Georgetown University||1||4||5|
|8. Harvard University||1||1||2|
|9. Indiana University||1||1|
|10. Johns Hopkins University||1||1||1||3|
|11. Massachusetts Institute of Technology||1||1|
|12. New York University||1||2||2||1||6|
|13. Northwestern University||1||1|
|14. Ohio State University, Columbus||2||2|
|15. Stanford University||1||2||3||1||1||1||9|
|16. University of California, Berkeley||1||1|
|17. University of California, Los Angeles||1||3||1||1||1||7|
|18. University of California, San Diego||1||1||2|
|19. University of Chicago||1||1||1||2||1||2||8|
|20. University of Maryland, College Park||1||1||2|
|21. University of Michigan, Ann Arbor||2||1||2||1||1||7|
|22. University of Minnesota, Minneapolis||1||1||1||3|
|23. University of Pennsylvania||1||2||3||1||1||8|
|24. University of Rochester||1||1||1||1||4|
|25. University of Texas, Austin||1||1|
|26. University of Washington, Seattle||1||1|
|27. University of Wisconsin, Madison||1||1||1||4||7|
|28. Vanderbilt University||1||1||2|
|29. Yale University||1||1||2|
|30. University of British Columbia||1||1|
The number of applications received has grown significantly over the years, with well over 100 applications received in each of the last three years. The academic quality of the applicants has also improved from earlier years, both in terms of their academic record and graduate school examination scores. While participating in the scholarship program, scholars are required to maintain high grades and good academic standing. The high academic standards of the program are now widely recognized. Many distinguished universities in Asia and North America recommend that their graduate students apply to this program.
An annual orientation program for each incoming group of scholars is conducted at the IMF in Washington to expose scholars to the IMF and to provide them with an opportunity to meet other scholars embarking on their studies. At the end of the third year of study, scholars are expected to complete a summer internship at the IMF, during which they conduct research and other professional work under the guidance of an experienced IMF economist. Thus far, all eligible scholars have completed their internships.
Table 9 shows the employment of the scholars from the first six intakes, that is, academic years 1996-2001: of those who have completed their studies, about 20 percent have joined the IMF, 18 percent are pursuing an academic career, and 5 percent have gone into government service. During 2004, the IMF Institute, with the assistance of the Institute of International Education, conducted a tracer study to locate and obtain additional information on the professional career paths and profiles of past scholars. The study will be updated in 2005 and 2006.
|1996||1997 1||1998||1999||2000 2||2001|
|IMF Economist Program (EP)||0||0||0||4||2||1|
|IMF mid-career economist||0||5||0||0||0||0|
|IMF other employment||0||0||0||0||1||0|
|Other international organizations||0||0||0||0||0||0|
|Studies in progress||0||0||0||1||10||12|
Four graduates from the 1997 program started as EPs, and later became regular economists. One 1997 graduate started as a mid-career economist.
One graduate from the 2000 program received a contractual appointment in the IMF in 2004.
Four graduates from the 1997 program started as EPs, and later became regular economists. One 1997 graduate started as a mid-career economist.
One graduate from the 2000 program received a contractual appointment in the IMF in 2004.