IMF Technical Assistance : Transferring Knowledge and Best Practice

International Monetary Fund

• Publisher: INTERNATIONAL MONETARY FUND
• Year: 2003
• eBook ISBN: 9781589060999

NONE

Technical Assistance in Action

Technical assistance can improve lives in a variety of ways. In the next few pages we take a look at examples of how the IMF has helped governments build institutional capacity in Africa; meet internationally recognized standards for collecting and publishing financial data; combat money laundering and the financing of terrorism; and strengthen taxation systems and financial sectors. We also discuss how the IMF helps countries after an emergency or conflict; and the role of the IMF Institute in training government officials.

Capacity Building in Africa

The IMF launched its Africa Capacity-Building Initiative in 2002. It is part of the IMF’s response to the urgent call by African leaders—including under the New Partnership for Africa’s Development—to strengthen economic governance and the capacity of governments to carry out sound economic policies that contribute to reducing poverty.

“The center offers an opportunity for the member countries to work together, to share the substantial amount of technical resources within the region, and to exercise positive peer pressure on one another.” Tanzanian President Benjamin William Mkapa at the opening of the East AFRITAC in Dar es Salaam

As part of the Initiative, the IMF decided to establish several African Regional Technical Assistance Centers—known as AFRITACs—in sub-Saharan Africa. The AFRITAC idea is modeled on the existing Caribbean and Pacific centers, which have shown that a decentralized, regional approach to identifying and meeting technical assistance needs makes it easier for country authorities to have a voice in setting priorities. And that, in turn, both enhances country ownership and commitment and encourages an efficient use of technical assistance resources. Placing such resources directly in the region has the added advantages of increasing IMF staff’s familiarity with the needs of the countries and allowing a more flexible and rapid response to capacity-building requirements. The AFRITAC initiative builds on efforts already under way in Africa, notably the Partnership for Capacity Building in Africa and its implementing agency, the African Capacity Building Foundation (ACBF), in which the IMF participates.

The IMF opened its first AFRITAC—the East AFRITAC—in Dar es Salaam in late 2002. The member countries of the East AFRITAC are Eritrea, Ethiopia, Kenya, Rwanda, Tanzania, and Uganda. The East AFRITAC is staffed by a center coordinator and five resident experts. Their work is supplemented by short-term specialists. The Tanzanian government provides office space and logistical support for the Center.

Priorities for the Center in Dar es Salaam include:

• Central banks: Effective monetary policy management requires a sound and respected institution that is credibly dedicated to maintaining price and financial stability. The Center can help in this area, including development of more effective monetary policy instruments; more efficient markets in interbank money, foreign exchange, and treasury bills; and stronger banking system regulation and supervision to enable national authorities to manage financial risks more effectively.
• Fiscal policy: To help the countries of the region strengthen economic growth, reduce poverty, and increase their integration into the global economy, the Center gives priority to improving the capacity of governments to raise revenue and use public resources more efficiently and fairly. Its assistance is expected to help countries strengthen budget management, so that they can direct more resources to poverty reduction within a sustainable macroeconomic framework; ensure accountable public expenditure management; and improve revenue administration, while strengthening the tax base.
• Decentralization: It is critical for poverty reduction that sub-national levels of government develop the capacity to use public resources effectively—including for education, health, and other social services.
• Statistics: Timely and accurate economic, financial, and socio-demographic statistics are essential if countries are to formulate effective policies, monitor their implementation, and assess their impact. All of East AFRITAC’s members either are participating in the IMF’s General Data Dissemination System or have expressed a strong interest in doing so.

Developing the Initiative, IMF Management decided, with the cooperation of the Malian government, to set up the West AFRITAC temporarily in Bamako in May 2003. This center operates on the same model as the East AFRITAC and serves 10 countries in West Africa.

To enhance the technical assistance provided by the AFRITACs, the ACBF, in partnership with the IMF, will develop training programs responsive to the particular needs of the African countries concerned.

Meeting Internationally Recognized Standards

An important part of the IMF’s technical assistance work is helping countries meet internationally recognized standards in a variety of areas relating to economic policymaking. The international community has attached increasing importance to the dissemination and implementation of standards and codes, particularly as a means of strengthening crisis prevention. The idea is that providing benchmarks of good practice, encouraging their implementation, and measuring progress against them will improve the quality of policymaking and investment decisions. The IMF and the World Bank have played leading roles in these efforts. They act as standard setters in their respective areas of expertise, assess member countries’ observance of standards and codes, and help them make reforms where needed.

The work on standards and codes falls into three broad groups, covering the government, the financial, and the corporate sectors. Within those groups, the IMF and the World Bank have recognized 12 areas and associated standards as useful for their operational work. They comprise data; monetary and financial policy transparency; fiscal transparency; banking supervision; securities; insurance; payment systems; corporate governance; accounting; auditing; insolvency and creditor rights; and anti-money laundering and combating the financing of terrorism. Beyond their areas of responsibility, the IMF and the World Bank also cooperate with other standard-setting bodies in each of the 12 areas.

Statistics. The IMF’s technical assistance to promote international best practices in statistics focuses on capacity building and improving data quality. It is offered in the areas of balance of payments, government finance, monetary and financial, and national accounts and price statistics. In all these areas, technical assistance is designed to improve the coverage, collection, compilation, accuracy, reliability, timeliness, and dissemination of official statistics. In addition to providing assessments of all these dimensions of statistical quality, technical assistance missions also often deliver on-the-job training, assist in designing reporting forms and spreadsheets to aid correct classification, and lay out short- and medium-term action plans for the improvement of statistical procedures.

Advisors may make frequent visits to countries to help them improve statistical quality. An alternative is the placement of long-term statistical advisors in countries most needing assistance. The latter approach has proven particularly effective in Africa, and in the transition countries, where there was an urgent need to build a statistical infrastructure that would buttress the move to market-oriented economic systems. In recent years, statistical adviso...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Preface
• Abbreviations
• Foreword
• What Is IMF Technical Assistance?
• Technical Assistance in Action
• Footnotes