Japan has provided grant contributions to support the IMF’s technical assistance to member countries since 1990. In 1997, the scope of the administered account was widened to allow for financing of other IMF activities in Asia and the Pacific, carried out through the IMF Regional Office for Asia and the Pacific in Tokyo.

Activities Funded: Technical Assistance, 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 scope of the administered account was widened to allow for financing of other IMF activities in Asia and the Pacific, carried out through the IMF 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 also include support of various regional policy forums, such as Asia-Pacific Economic Cooperation, the Association of Southeast Asian Nations, and the Pacific Islands Forum. The office also undertakes TA activities benefiting countries in the region, including conferences on macroeconomic policy and on financial sector reform. 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. It also seeks to increase the representation of Japanese and other Asian nationals on the staff of the IMF by encouraging qualified applicants to apply for employment and by supporting IMF recruitment efforts through interviews and informational seminars.

In addition, Japan provides grant contributions for two scholarship programs. In 1996, the Japan-IMF Scholarship Program for Advanced Studies, 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, established in 1993, supports 12- and 24-month courses of graduate study in Japan in macroeconomics or related fields for students from Asia, Central Asia, and the Pacific, and is administered by the Regional Office in Tokyo.

Level of Funding

Since 1990, Japan has made annual contributions totaling more than $305 million, of which some $277 million has been for TA projects and the activities of the Regional Office for Asia and the Pacific and more than $27 million for the Asia Scholarship Program. In addition, starting in 1996, Japan has contributed $17.5 million to the Advanced Scholarship Program. Contribution figures for technical assistance and the two scholarship programs, for FY1990–FY2008, are provided in Table 1. Figure 2 shows the annual contributions for technical assistance under the JSA since its inception.

Table 1.

Contributions by Japan, FY1990-FY2008

(Millions of U.S. dollars)

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Note: Totals may not add due to rounding.

Includes activities of the Regional Office for Asia and the Pacific.

Figure 2.
Figure 2.

Annual Contributions by Japan for Technical Assistance, FY1990–FY2008

(Millions of U.S. dollars)

Japan-IMF Consultations

Consultations between the IMF and the Japanese authorities usually take place twice a year: at a formal meeting in March/April followed by a less formal meeting around the time of the IMF-World Bank Annual Meetings in September/October. They cover the following issues: (1) the effectiveness of the assistance provided with JSA funding, (2) the expected regional and subject area use of JSA resources in the current 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 are foreseen as likely to arise. The consultations also provide a venue to discuss developments regarding the IMF’s TA program as a whole. IMF staff may also visit Tokyo for more detailed discussions with the Japanese authorities on the JSA and related matters, such as the use of Japanese experts in IMF technical assistance.

Technical Assistance Funded by the JSA

Within certain parameters, the use of JSA resources is flexible. JSA funds can be used to cover the cost of short- and long-term TA experts and other costs associated with conducting seminars and workshops, such as room rental fees. JSA funds are not conditional on the use of Japanese nationals, but Japanese nationals are considered for expert assignments whenever possible. Although the Japanese authorities place high priority on funding TA activities in Central Asia and in Asia and the Pacific, JSA-financed TA activities can take place in all areas of the world. Consistent with the IMF’s TA policy, the Japanese authorities also place high priority on assistance for countries that have demonstrated strong efforts and good track records in the implementation of economic reform policies.

The main focus of the JSA TA program has been to support low- and lower-middle-income countries as they build the institutions and capacity needed to implement growth-enhancing policies. In terms of subject areas, the use of JSA resources reflects the priorities of IMF technical assistance. Overall, TA in the monetary and financial area has received the largest share of JSA resources, but the past five to six years have seen an increase in the fiscal area and in support for AML/CTF work. Examples of JSA-supported activities, selected from the three main TA areas as well as legal-area TA, are provided in Boxes 36.

Project submission and approval

Activities to be funded from the JSA, as well as all other IMF TA 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. The indicative list contains projects that reflect the shared reform objectives of beneficiary countries and the IMF. Thereafter, individual projects are submitted for approval on a monthly basis through the Office of Japan’s Executive Director at the IMF.

Reforming Public Financial Management in Uzbekistan

Sustained technical assistance has helped Uzbekistan make significant improvements in its public financial management.

Public financial management systems in Uzbekistan were weak at the beginning of its transition from a centrally planned economy. In 2002, an IMF Fiscal Affairs Department (FAD) mission to Uzbekistan concluded that its budget was not based on a consistent and realistic macroeconomic framework and was fragmented in many ways: there were numerous extrabudgetary funds, and the investment budget was prepared separately from the current budget; the classification system was not in compliance with international standards; budget documentation was not transparent and was not available to the public; a modern treasury organization did not exist; and fiscal reporting was perfunctory.

The Uzbekistan authorities committed themselves to a broad reform program in 2003, focused initially on budget execution and the establishment of a treasury. An FAD resident treasury advisor, financed by the JSA, assisted during the initial preparation phase in 2003–05, followed by peripatetic peripatetic expert visits until 2006. Beginning in November 2006, a JSA-funded FAD regional advisor was installed in Uzbekistan. The main areas of his work program included (1) assisting the Ministry of Finance in developing and implementing a comprehensive strategy for budget and treasury reform; (2) assisting with the progressive establishment of the treasury, including assistance on functionality issues with respect to the procurement and implementation of a Government Financial Management Information System (GFMIS); (3) assisting with the establishment of a treasury single account (TSA); and (4) assisting the Ministry of Finance on changes to existing budget/treasury-related laws and on new instructions.

This assistance provided by the JSA-funded advisor, in conjunction with supervision and inspection visits from FAD, has made a significant contribution to a sustained reform process in Uzbekistan. Progress in the treasury area has been significant and the authorities continue to be committed to an ambitious public financial management reform program. In particular, the Law on Treasury Execution of the State Budget came into force in January 2006 and a full set of treasury regulations has also been prepared. The Treasury was established on a pilot basis in 2005 and has been rolled out progressively since then throughout Uzbekistan. Closure of existing bank accounts toward a TSA is well advanced, with the next stage being the extension of Treasury coverage to extrabudgetary funds. A unified chart of accounts for the general government sector has been prepared. The procurement of the GFMIS has also begun.

More remains to be done and continued JSA-financed technical assistance will be important.

Despite progress in the treasury area, the authorities face several challenges to achieve their public financial management reform objectives. The fiscal framework still remains fragmented and the reforms of budget preparation and the appropriation system have somewhat lagged behind the reforms in the treasury area. The existing weak capacity could also adversely affect the timeframe and/or output envisaged under the authorities’ reform action plan, unless appropriate capacity building measures are undertaken. Reform of budget preparation is under way, with the introduction of a medium-term budget framework in its preliminary stage. As preparation for this and the new information system, a new budget classification has been approved, for introduction in the next budget cycle. The authorities also intend to introduce a comprehensive parliamentary appropriation system, which will rationalize and strengthen budgetary control.

During 2008, the JSA-funded advisory work will focus on further strengthening treasury functions; reforming the budget preparation process, including revamping the budget classification and budget system law as well as designing a new appropriation system; and reforming the accounting and fiscal reporting system, including a strategy for consolidated fiscal reporting. The advisor will also continue to assist with monitoring the implementation of the authorities’ public financial management reform action plan. Continued JSA financing will make a valuable contribution to the authorities’ ongoing reform efforts.

Requests for technical assistance are received from governments. These are carefully considered by the concerned functional and area departments of the IMF and prioritized through a thorough internal process (IMF Regional Strategy Notes).9 Project proposals are subsequently 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 submitted 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, to identify lessons to further improve the effectiveness of IMF TA, and are 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 seek to 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 view 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.

Support for Post-Conflict Financial Sector Reforms in Liberia

Liberia’s financial institutions and infrastructure were largely destroyed during 15 years of intermittent civil wars that ended with the signing of a Comprehensive Peace Agreement in August 2003. In between the wars and after the wars ended, the JSA played an important role in funding IMF technical assistance (TA) programs to restore the functioning of the monetary and financial system destroyed in these wars.

In 1999, the Central Bank of Liberia (CBL) emerged almost defunct and illiquid at the end of seven years of civil war; the payment system had reverted chiefly to cash; and the banking sector was largely insolvent. To address these weaknesses, the authorities, in the context of an IMF staff-monitored program, requested technical assistance from the Monetary and Capital Markets Department’s (MCM) predecessor departments. In this regard, between 1999 and 2000, several advisors funded with JSA grants worked with the authorities to rehabilitate the CBL and improve its operational capacity in research functions and accounting and auditing as well as banking supervision. They also provided advice on currency issuance.

The resurgence of intense hostilities during 2003 worsened a still-dire situation and erased some of the gains made through the technical assistance program. Already fragile commercial banks suffered from rising nonperforming loans, the CBL had negative capital with little scope to conduct monetary policy, foreign exchange operations that had been conducted on a discretionary and noncompetitive basis failed to smooth out substantial fluctuations in the exchange rate, and governance problems had emerged. However, despite the largely devastated physical infrastructure, some institutional capacity remained in a few key areas. In particular, the CBL did not need basic assistance, often required in most post-conflict countries, such as cash management, establishing a new currency, reintroducing central bank systems hurt by conflict, and restaffing.

After the hostilities ended in 2003, the government again sought technical assistance from MCM to restore the functioning of the monetary and financial system. For this purpose, between May 2004 and December 2005, several MCM-led TA expert visits provided advice in the areas of monetary operations, payment systems, foreign exchange operations, bank restructuring and supervision, and central bank administration. In 2006, long-term advisors, funded from JSA grants, were contracted to serve as chief administrator at the CBL and to provide advice on bank restructuring. The chief administrator served under the guidance of the Executive Governor, with binding co-signature authority for operational and financial matters. His mandate was broad and included strengthening the conduct of sound monetary policy, central bank operations, supervision and regulation of the banking sector, and ensuring independence of the CBL.

Although progress has been slow and not always smooth, the technical assistance has yielded important benefits. In particular, the CBL’s financial position has improved and its independence substantially strengthened. The expert on bank restructuring has delivered a manual on supervisory intervention, collaborated on general resolution and intervention strategies, and collaborated on specific plans for each insolvent bank. The basic framework for effective banking supervision is now in place and on-the-job training continues.

Significant challenges, however, remain and more is needed to strengthen internal controls of the CBL and the regulation and supervision of the Liberian banking institutions. There is also need to further strengthen appropriate and independent conduct of sound monetary policy, and to improve the functioning of financial markets and the contribution of the nonbanking sector to financial intermediation.

Harmonization of Monetary and Financial Statistics in Central America and the Dominican Republic

Prior to launching the Regional Project on Harmonization of Monetary and Financial Statistics (Project), the IMF Statistics Department provided extensive technical assistance to Central American countries, which led to a good understanding of the challenges facing the region in the area of monetary and financial statistics (MFS). The three main challenges were to (1) improve financial reporting systems to enhance macroeconomic analysis; (2) expand statistical coverage by incorporating depository corporations (for example, credit cooperatives and money market mutual funds), nondepository financial corporations (for example, pension funds and insurance corporations), and offshore banks; and (3) harmonize the definition of financial instruments, economic sectors, and valuation criteria to be consistent with other macroeconomic statistics (balance of payments, government finance, and national accounts) and among countries in the Central American region. The IMF Statistics Department was of the view that the available data were not conducive to the calculation of high-quality monetary, credit, and debt aggregates.

Against this background, the Project was launched in September 2006 to be implemented during a two-year period, and is financed by the JSA. The overall objective of the Project is to harmonize the MFS of the Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama) and the Dominican Republic to facilitate comparison across countries and analysis at the regional level. Furthermore, the Project fosters implementation of international statistical standards, in particular, the IMF’s Monetary and Financial Statistics Manual (MFSM 2000). The governors of the central banks of Central American and the Dominican Republic—represented on the Central American Monetary Council (CAMC)—approved the terms of reference for the Project at the fifth regional conference on Central America, Panama, and the Dominican Republic (held June 29–30, 2006).

The IMF Statistics Department is responsible for managing the Project in coordination with the Executive Secretariat of the CAMC. Technical assistance to each country is delivered by an expert, with a total of about 20 visits planned to carry out the work. At the end of the first year of the project, all the countries in the region had harmonized systems in place for compiling MFS based on the standardized report forms (SRFs) for monetary data. Furthermore, the main users (policymakers at central banks) and compilers of MFS from participating countries worked together to define a set of Harmonized Monetary and Financial Statistics (HMFS) for the region, to be used for analysis and dissemination purposes. The HMFS comprise 38 analytical tables covering the most important topics in monetary analysis.

Defining the MFS compilation systems based on SRFs for monetary statistics paved the way for significant improvements in quality, although it also highlighted data source limitations in some countries. The full set of HMFS analytical tables constitutes a very useful tool for national analyses and comparisons between countries in the region. Furthermore, the HMFS contain areas not covered by the SRFs, such as detailed analysis of monetary aggregates, liquidity, and credit, and harmonized interest rates statistics.

The work plan for the second year of the Project, which ended in August 2008, can be summarized as follows: (1) continued improvement in the quality of the source data (primarily sectorization and coverage), (2) compilation of the HMFS, and (3) improvement in the intersectoral consistency of the MFS. Regarding the sectorization problem, Honduras, Nicaragua, Panama, and the Dominican Republic are sufficiently sectorized for MFS compilation purposes. El Salvador is improving its sectorization of securities issued by the central bank. Costa Rica and Guatemala are resolving significant data source constraints for compiling MFS in accordance with the MFSM 2000.

All the countries of the region compile SRFs for monetary statistics with adequate coverage to derive a Depository Corporations Survey (DCS), with the exception of Costa Rica and the Dominican Republic. DCS coverage is improving in El Salvador, Nicaragua, and the Dominican Republic with the incorporation of savings and loan cooperatives, although their importance relative to the remaining depository corporations (mainly banks) is low. Conversely, in the case of Costa Rica and the Dominican Republic, the lack of coverage in the DCS is more significant and therefore the incorporation of offshore banks and money market investment funds (Costa Rica only) in the DCS is a priority task.

The statistics harmonization followed by this project is a unique experience, comparable only to the efforts to achieve statistical harmonization in the European Union. Central America is the first region in the world to harmonize its MFS—in line with the experience of the European Central Bank, which the IMF Statistics Department regards as an example to follow in other regions—and sectoral statistics (especially fiscal statistics), as a means of supporting regional integration initiatives.

In the communiqué issued in June 2008 at the conclusion of their annual regional conference, the authorities of Central America, Panama, and the Dominican Republic expressed their appreciation for Japan’s support for this project as well as other TA projects in the region.1

1 The communiqué of the Seventh Annual Regional Conference on Central America, Panama, and the Dominican Republic, issued on June 27, 2008, can be found at the IMF website (www.imf.org) under Press Release No. 08/152.

Commitments and disbursements

Between FY1993 and FY2008, cumulative commitments for technical assistance under the JSA totaled more than $247 million for 1,748 projects, of which some $235 million has been disbursed.10 During FY2008, $13.3 million was committed for 85 projects. 11 Table 2 and Figure 3 show commitments and disbursements, as well as the number of approved TA projects, between FY1993 and FY2008.12 A brief description of each of the projects approved in FY2008 is provided in Annex 1.

Table 2.

JSA Annual Technical Assistance Commitments and Disbursements, FY1993–FY2008

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Figure 3.
Figure 3.

JSA Annual Technical Assistance Commitments and Disbursements, FY1993–FY2008

Support for Tax Legislation Reform in Asia and the Pacific

With the help of JSA financing, the IMF Legal Department (LEG) was able to engage in a number of important legal drafting technical assistance (TA) projects over the past year. One of these was a multicountry undertaking to assist countries in the Asia and Pacific region with tax law drafting. It involved work in Bangladesh, the Federated States of Micronesia, Mongolia, Nepal, Papua New Guinea, and Tonga. As can be seen from the description below, the scope of the work involved was substantial, and only a portion of it was financed by this particular project. Although resources under this project were exhausted in FY2008, in most cases related work financed by a subsequently approved JSA project (or by other resources) is expected to continue.

Tax law reform is a critical element in facilitating economic development and strengthening governance in the Asia and Pacific region. Governments in the region are interested in reforming their tax systems for various reasons. Some, like Mongolia and Nepal, are undergoing substantial economic and political transformation. Others need to modernize outdated and inefficient tax laws or provide a legal basis for introduction of new taxes such as the value-added tax (VAT). In all cases, tax legislation reform is a high priority for governments.

In most cases, the aim was to assist the authorities in the drafting of legislation that the authorities could then propose to their legislatures for enactment. In Bangladesh, the project financed work on drafting a new income tax law. This work is expected to take some time, in light of the complexity of existing laws and the need to adapt the new law to the policy and administration needs of the government. The project financed the initial work, which is expected to continue in the future. In Tonga, the assistance involved drafting new customs legislation, which was enacted in June 2007. This is the basic law for the collection of customs duty and other import duties, which is of key importance to an island country like Tonga. The new law both simplified the drafting of earlier legislation and adopted modern techniques, as appropriate for the administrative capacity of the customs authorities in Tonga.

In Papua New Guinea, the work under the project involved preparation of a new law on tax administration that would consolidate provisions from various laws, simplify drafting to make the law more understandable, and rationalize the rules to underpin modern tax administration processes. This draft is currently under consideration by the authorities.

The Federated States of Micronesia is considering a substantial reform of its taxation system, and to facilitate this effort, drafts have been produced of a VAT, net profit tax, revenue administration act, reforms to the salary and wages tax, and consequential amendments. This legislation is currently under discussion, and further work is being done by LEG to adjust the legislation, explain it, and make sure that it meets the needs of the authorities.

Mongolia amended its tax laws recently, and work under the project involved preparing guidance materials for the VAT, which are being used to implement the tax. Similarly, in Nepal, an income tax manual was produced to help the authorities in administering the income tax law. Amendments to the income tax law prepared in conjunction with the manual were enacted. The work in Nepal also involved preparation of a fiscal transparency law, which is under consideration.

This project has successfully contributed to the tax reform process. Further work in several of these countries is expected to continue in a follow-up project in the current fiscal year. By delivering TA to several countries that has contributed to strengthening their basic tax legislation, the project has achieved tangible and important results at a relatively low cost. The multicountry design of the project has allowed the flexible delivery of TA to meet the articulated needs of the authorities. LEG experts have visited the countries concerned to work intensively with local officials, thereby delivering TA in a manner that enhances capacity building. Given the lengthy timetables involved in preparation and enactment of tax legislation (often several years), the full results of work under the project in terms of enacted legislation cannot be assessed today, but the track record of similar work in the past suggests that it is likely that most of the legislation drafted will be enacted in due course. Importantly, this legislation was prepared in a collaborative way, which helps ensure ownership by the authorities and appropriateness to the legal system and the administrative capacity of the countries involved.

LEG will continue to follow up on the TA provided by this project as needed, to assist the authorities with interpreting and implementing the new laws. Such follow-up contact will help ensure the continued relevance of the TA and also will strengthen local capacity.

Geographical distribution of funds

To date, 123 member countries of the IMF as well as the 13 IMF regional TA centers and training institutions have been beneficiaries of JSA-funded technical assistance. Countries in the Asia and Pacific region received more than $85 million from the JSA for approved TA projects during FY1993–FY2007, which represents FY2008.37 percent of TA projects approved during this period. 13 Countries in Africa received the next largest share, totaling almost $55 million or 23 percent of total approvals during the same period. Of the remaining amount approved during this period, 17 percent were for countries in Central Asia and Eastern Europe (mainly the transitional countries of the former Soviet Union), 7 percent were for multiregional projects, 6 percent for projects in Western and Central Europe, 5 percent for projects in Latin America and the Caribbean, and 5 percent for projects in the Middle East. 14

The regional distribution of commitments in FY2008 was as follows: Asia and Pacific countries, $5.3 million (40 percent); Africa, $4.7 million (35 percent); the Middle East and Central Asia, $1.7 million (13 percent); Latin America and the Caribbean, $0.9 million (7 percent); Europe, $0.5 million (4 percent); and multiregional projects, $0.2 million (2 percent). 15 Table 3 shows the commitments by region in dollars for FY1993–FY2008, and Figure 4 shows the regional percentage distribution for FY2008.

Table 3.

JSA Commitments for Technical Assistance by Region, FY1993–FY2008

(Millions of U.S. dollars)

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Starting in FY2008, data for countries in Central Asia are grouped with data for countries in the Middle East, and data for all European countries are grouped together under Europe; see footnote 15.

Figure 4.
Figure 4.

Distribution of JSA Technical Assistance Commitments by Region, FY2008

In FY2008, about 40 percent of JSA funds were allocated to help low- and lower-middle-income countries and transitional economies maintain macroeconomic and financial sector stability, 30 percent to rehabilitate basic economic and financial institutions in post-conflict countries, 20 percent for regional capacity building efforts (including support for regional TA centers), and 10 percent to assist low-income countries seeking to implement sustainable debt management and poverty reduction programs. Table 4 shows the 10 beneficiary countries or organizations receiving the largest share of JSA assistance during FY1993–FY2008 and in FY2008. Of the 10 largest beneficiaries in FY2008, 5 were post-conflict countries: Burundi, Cambodia, Liberia, Rwanda, and Timor-Leste.

Table 4.

The 10 Largest Recipients of JSA-Financed Technical Assistance, FY1993–FY2008

(By commitments, in descending order)

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PFTAC = Pacific Financial Technical Assistance Center.

Distribution of funds by subject area

The distribution of JSA funds among subject areas continues to broadly reflect the distribution in the overall use of IMF resources for technical assistance. The main trends over the past five years have been a reduction in the relative use of overall IMF resources for TA in the monetary and capital markets area, an increase in the fiscal policy and management area, and an increase in AML/CTF. This has also been the case in the use of JSA resources.

In FY2008, the major IMF functional departments delivered some 186 person-years of staff and expert time for TA work in recipient countries, which were distributed as follows: Fiscal Affairs, 37 percent; Monetary and Capital Markets, 35 percent; Statistics, 19 percent; and Legal, 5 percent.16 In FY2008, the distribution of JSA commitments was as follows: Monetary and Capital Markets, $4.7 million (35 percent); Fiscal Affairs, $3.5 million (27 percent); Statistics, $2.3 million (17 percent); and Legal, $1 million (8 percent). This represents a 3 percent decrease in the relative amount of JSA funds committed in the monetary and capital markets area and a 7 percent increase in the fiscal area since FY2003.

In FY2008, the proportional allocation of JSA funds by topic within each of the above core areas was broadly consistent with FY2007. In the monetary and capital markets area, 42 percent of JSA funds were committed to technical assistance for central banking operations, including central bank accounting and audit; 38 percent to banking supervision; and the remainder to other work, such as monetary policy and operations, balance of payments and foreign reserves management, and capital markets development and market risk supervision. In fiscal affairs, 60 percent of JSA funds were committed to strengthening public expenditure management, 30 percent to revenue administration, and 10 percent to tax policy. In the macroeconomic statistics area, about 30 percent of JSA funds were committed to real sector statistics and the remainder was spread across the broad range of statistics including government finance, monetary and finance, and balance of payments statistics, as well as assistance in adopting the IMF’s general data dissemination system. In the legal area, 60 percent was committed to technical assistance for AML/CFT, 30 percent to banking legislation, and 10 percent to tax legislation. Table 5 shows the distribution of commitments in dollars by subject area for FY1993–FY2008, and Figure 5 shows the percentage distribution by subject area for FY2008.

Table 5.

JSA Commitments for Technical Assistance by Subject Area, FY1993–FY2008

(Millions of U.S. dollars)

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Figure 5.
Figure 5.

Distribution of JSA Technical Assistance Commitments by Subject Area, FY2008

Effectiveness of JSA-funded technical assistance

Several measures are taken to gauge the effectiveness of JSA-funded TA activities. In addition to project assessments submitted by the IMF to the Japanese authorities upon completion of each JSA-financed project, since 2000 beneficiary authorities have also provided their own project assessments through the completion of a questionnaire. The questionnaires gauge the authorities’ views regarding the appropriateness and relevance of the assistance and the expert’s 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. Overall, the beneficiary authorities have been very positive about the effectiveness of the JSA-funded TA projects. These assessments provide feedback on the quality of TA delivery.

Since 1996, 14 joint Japan-IMF review missions have been carried out to assess the effectiveness of JSA-funded TA activities. These visits have covered 21 beneficiary countries in Africa, Asia and the Pacific, Central Asia, and Central and Eastern Europe; the regional training institutes in Singapore and Vienna; the Pacific Financial Technical Assistance Center; the East Africa Regional Technical Assistance Center; and the Middle East Technical Assistance Center. The joint review teams have reported that TA 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, which in several cases noted 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, well focused, and greatly appreciated by participants. A summary of the findings of the joint review mission for FY2008 is provided in Annex 2.

In addition to the aforementioned joint field visits and project-specific assessments, JSA-funded TA activities are also evaluated as part of larger sector-wide, region-wide, or special topic evaluations of IMF technical assistance. The results of these evaluations are reported to the IMF Executive Board and can be found on the IMF website. 17


Regional Strategy Notes (RSNs), introduced in FY2008 as part of the IMF’s efforts to enhance its TA prioritization process, are prepared by IMF area departments (in collaboration with IMF member countries and functional departments) and set out the IMF’s medium-term TA strategy for both countries and regions. RSNs provide a global strategic view of IMF TA, and serve as a planning tool for resource allocation, resource mobilization, and coordination with other TA providers and donors.


Because of the time required for the contracting and fielding of experts and payment of invoices, there is a time lag between commitments and disbursements. The duration of a JSA-funded TA project is normally 6 to 12 months.


This represents a 36 percent decrease in the amount approved and a 30 percent decrease in the number of projects funded compared with FY2007, resulting from the sharp reduction in Japan’s contribution to the JSA for FY2008 (see Table 1).


The IMF arranges for an annual audit of the JSA to be undertaken by its external auditors in connection with the annual audit of the IMF’s own accounts, and for a separate certificate of completion to be provided to the Japanese authorities. See Annex 3 for the audited financial statements of the JSA and the Japan Advanced Scholarship Program for FY2008.37


This reflects the priority given to the countries of this region under JSA financing guidelines, which for FY2008 set a target of 50 percent of allocations for countries in Asia, Central Asia, and the Pacific combined.


Multiregional projects are those with beneficiaries from more than one region. Annex 1 includes descriptions of such projects.


Starting with this FY2008 report, JSA commitments for countries in Central Asia (Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan) are included with countries in the Middle East to better align recorded data with the reconfiguration of the IMF’s former two European departments and Middle East department into a single European department and a Middle East and Central Asia department.


One way the IMF measures its technical assistance is by recording the time spent by IMF staff and experts on such activities. A person-year is equivalent to 260 working days.


In FY2003, as part of a larger effort to strengthen monitoring and evaluation of IMF technical assistance, a multi-year program of TA evaluations was introduced under which the results of three to four evaluations covering a mix of topics are presented each year to the IMF Executive Board. In FY2008, the Board received evaluation reports on the Caribbean Regional Technical Assistance Center, the Middle East Technical Assistance Center, technical assistance to Iraq, and general data dissemination system assistance for selected Anglophone African countries. Fourteen evaluations currently are planned or ongoing.

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    Annual Contributions by Japan for Technical Assistance, FY1990–FY2008

    (Millions of U.S. dollars)

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    JSA Annual Technical Assistance Commitments and Disbursements, FY1993–FY2008

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    Distribution of JSA Technical Assistance Commitments by Region, FY2008

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    Distribution of JSA Technical Assistance Commitments by Subject Area, FY2008