Chapter

IMF Technical Assistance: Demand and Supply

Author(s):
International Monetary Fund
Published Date:
August 2006
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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 TA activities grew even more rapidly in the early 1990s. The demand increased further in the late 1990s as significant TA resources had to be directed to countries hit by financial crisis. In addition, in recent years, the IMF has had to mount significant efforts to provide prompt policy advice and operational assistance to countries emerging from conflict situations. In fiscal year 2006 the IMF devoted 429 person years to TA activities—a 13 percent increase from FY2005 and almost 130 person years more than a decade ago.5 The delivery of IMF technical assistance over the period FY2000–FY2006 is shown in Figure 1.

Figure 1.IMF Technical Assistance Delivery, FY2000–FY2006

(Annual, in person years)

Box 1.Core Areas of IMF Technical Assistance

Fiscal Policy and Management

Tax policy

Tax and customs administration

Expenditure policy

Budgeting and public expenditure management

Fiscal management

Fiscal federalism

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

Monetary Policy and Financial Systems

Central banking and currency arrangements

Monetary and exchange policy operations, and public debt management

Financial market development, focusing in particular on money, government debt, and foreign exchange markets

Exchange systems and currency convertibility

Payment systems

Bank supervision and regulation

Bank restructuring and banking safety nets

During the past four to five years, the IMF’s TA 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 helping countries build capacities for their anti–money laundering and combating the financing of terrorism (AML/CFT) efforts; to adopting and adhering to international standards and codes for financial, fiscal, and statistical management; to helping low-income countries formulate and implement poverty reduction strategies; and to helping 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, such as crisis prevention, debt relief and poverty reduction, fostering macroeconomic stability, postcrisis management, and regional capacity building.

Technical assistance is delivered in a variety of ways. IMF staff may be sent to member countries to advise government officials on specific issues, or the IMF may provide specialists on a short- or long-term basis. Training is provided by the IMF Institute, in collaboration with other IMF departments, at headquarters, in recipient countries, and through regional training institutes.6 See Box 2 for a description of JSA-funded IMF training in FY2006. Since 1993, the IMF has provided a small but increasing part of its technical assistance through regional TA centers. There are currently five such regional TA centers and, if necessary funding is secured, a sixth center will be set up in Libreville, Gabon, in 2007 to assist the countries of Central Africa.7

Box 2.JSA-Financed Training

The JSA provided about $2 million in support of the IMF Institute’s training program in FY2006. This funding helped cover the costs of participants attending Institute training and of experts delivering the training. Through these channels, the JSA contributed to the implementation of 35 training courses, of which 23 were delivered by Institute staff and consultants and 12 by other IMF departments. In total, 870 participants benefited from this JSA funding, receiving a total of 1,520 participant weeks of training. Over 90 percent of this training went to Asian participants, with the balance to officials from Africa.

The training delivered by the Institute fell into two broad categories:

  • Fourteen courses were on financial programming and policies or similar topics. Such courses have long been a central feature of the Institute curriculum and were described in more detail in Box 2 of the JSA Annual Report for FY2004.

  • The remaining nine courses were more specialized macroeconomic courses developed in recent years to address the evolving training needs of member countries. These included courses on macroeconomic management and fiscal issues, macroeconomic management and financial sector issues, inflation targeting, and current issues in exchange rate policy.

The courses delivered by other IMF departments included:

  • Five delivered by the Statistics Department, focusing on external debt statistics, monetary and financial system statistics, and financial soundness indicators;

  • Three delivered by the Monetary and Financial Systems Department on monetary and foreign exchange operations and on anti–money laundering and combating the financing of terrorism;

  • Two delivered by the Fiscal Affairs Department on public financial management in transition countries and on revenue administration reform; and

  • Two delivered by the Legal Department on financial transactions for lawyers and legal aspects of international financial institutions.

The IMF finances its technical assistance for its member countries mainly from its own budgetary resources, but also receives external financing from bilateral and multilateral partners. The IMF currently spends about 25 percent of its annual administrative expenditures on TA work and training. Of the total expenditures for technical assistance, approximately 45 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, D.C. In FY2006, external financing from bilateral and multilateral donor partners accounted for 20 percent of total technical assistance and more than 45 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 FY2006, JSA financing accounted for more than 10 percent of total IMF technical assistace, 24 percent of the assistance delivered in the field, and more than half of the total external financing. The JSA’s share of financing of the IMF’s field-delivered technical assistance over FY2000–FY2006 is shown in Figure 2.

Figure 2.JSA Share of Financing of Technical Assistance Delivered in the Field, FY2000–FY2006

(percent)

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