Abstract

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 and to meet the needs of countries emerging from conflict situations.

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 and to meet the needs of countries emerging from conflict situations.

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 particularly 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 six 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 capacity for their anti–money laundering and combating the financing of terrorism (AML/CFT) efforts; adopting and adhering to international standards and codes for financial, fiscal, and statistical management; helping low-income countries formulate and implement poverty reduction strategies; and helping HIPCs design and manage debt reduction programs and strengthen public expenditure management for effective tracking of poverty-reducing expenditures. In light of these demands and competing needs, the IMF has taken steps to prioritize technical assistance within the IMF’s core specialties.

The IMF’s technical assistance is delivered mainly by its Fiscal Affairs Department (FAD), Monetary and Capital Markets Department (MCM),5 and Statistics Department (STA). Overall institutional TA policy and coordination are handled by the Office of Technical Assistance Management (OTM) in consultation with other IMF departments. OTM is also responsible for mobilizing and managing external finance for this area of the IMF’s work.

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 primarily 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 FY2008. Since 1993, the IMF has provided an increasing part of its technical assistance through regional TA centers. Currently, there are six regional TA centers; the latest, the Central Africa Regional Technical Assistance Center in Libreville, Gabon, was inaugurated in January 2007.7 Experience with this regional approach to TA delivery has been very positive and the IMF plans to establish four additional regional TA centers in the near future—two more in Africa, one in Central America, and one in Central Asia.

JSA-Financed Training

The JSA provided about $2.1 million in support of the IMF Institute’s training program in FY2008. 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 39 training courses, of which 25 were delivered by Institute staff and consultants and 14 by other IMF departments. In total, 804 participants benefited from this JSA funding, receiving a total of 1,452 participant weeks of training. Eighty-five percent of this training went to Asian participants, with the balance to officials from Africa and from the Islamic Republic of Afghanistan.

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

  • Seven 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 18 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 policy, macroeconomic implications of fiscal policy, macroeconomic management and financial sector issues, macroeconomic forecasting, macroeconomic and debt issues, financial markets analysis, balance of payments issues, monetary and exchange rate policy, and managing capital flows.

Courses delivered by other IMF departments included

  • Five delivered by the Statistics Department, focusing on balance of payments statistics, monetary and financial system statistics, and external debt statistics.

  • Three delivered by the Monetary and Capital Markets Department on banking supervision using off-site examination, payment systems, and a foreign exchange reserve management framework for strategic asset allocation.

  • One delivered by the Fiscal Affairs Department on financial taxes.

  • Five delivered by the Legal Department on financial transactions for lawyers, legal aspects of international financial institutions, anti–money laundering and combating the financing of terrorism workshops for financial sector officials and for financial sector supervisors, and legal aspects of banking regulation and insolvency framework for Central Asian judges.

The IMF finances technical assistance for its member countries, devoting some 25 percent of its annual operating budget to TA work and training. Although most technical assistance is financed through internal resources, external financing from bilateral and multilateral partners has been increasing over the past few years and constitutes an important pillar. In FY2008, external financing from bilateral and multilateral donor partners accounted for about 60 percent of technical assistance delivered in the field.8 Although the number of bilateral and multilateral partners has increased significantly in recent years, Japan continues to be the largest single source of external financing. In FY2008, JSA financing accounted for 37 percent of total external financing and more than 20 percent of IMF technical assistance delivered in the field. The JSA’s share of financing of the IMF’s field-delivered technical assistance over FY2000–FY2008 is shown in Figure 1.

Figure 1.
Figure 1.

JSA Share of Financing of Technical Assistance Delivered in the Field, FY2000-FY2008

(Percent)

5

Formerly the Monetary and Financial Systems Department (MFD) until its merger with the International Capital Markets Department (ICM) in August 2006.

6

The IMF currently cosponsors seven regional training institutes/programs with other donors and host governments: the Joint Vienna Institute in Austria; the IMF-Singapore Regional Training Institute in Singapore; the IMF-Arab Monetary Fund Regional Training Program in Abu Dhabi, United Arab Emirates; the Joint Africa Institute in Tunis, Tunisia; the Joint China-IMF Training Program in Dalian, China; the Joint Regional Training Center for Latin America in Brasilia, Brazil; and the Joint India-IMF Training Program in Pune, India.

7

The six IMF regional technical assistance centers comprise three Africa Regional Technical Assistance Centers (Central AFRITAC, based in Libreville, Gabon; East AFRITAC, based in Dar es Salaam, Tanzania; and West AFRITAC, based in Bamako, Mali); the Caribbean Regional Technical Assistance Center (CARTAC), based in Bridgetown, Barbados; the Middle East Technical Assistance Center (METAC), based in Beirut, Lebanon; and the Pacific Financial Technical Assistance Center (PFTAC), based in Suva, Fiji.

8

This excludes IMF headquarters-based activities related to technical assistance, such as desk-based TA, policy and research, evaluation, management, and administration.

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    JSA Share of Financing of Technical Assistance Delivered in the Field, FY2000-FY2008

    (Percent)