Chapter

Chapter 9. Technical Assistance and Training

Author(s):
International Monetary Fund
Published Date:
September 1999
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Technical assistance has often been described as forming the third leg of the IMF stool—the other two being its surveillance work and its financial assistance. Member countries and the IMF have become increasingly convinced that the timely provision of effective technical assistance is a key ingredient in supporting governments’ efforts to sustain policy and institutional reform.

In 1998/99, technical assistance activity represented about 15 percent of the IMF’s total administrative expenditures. Demand for such assistance remained strong in 1998/99, continuing to focus on the monetary and fiscal aspects of macroeconomic management, but also on statistics, financial law, social security reform, IMF financial organization and operations, and information technology (Figure 4). A number of departments in the IMF—including Fiscal Affairs, Monetary and Exchange Affairs, Statistics, the IMF Institute (see Box 13), Legal, Policy Development and Review, and the Bureau of Computing Services—supply assistance and training. A Technical Assistance Committee—composed of senior staff from each of the IMF’s functional, area, and support departments—advises IMF management on priorities and policies and coordinates assistance activities among IMF departments. Assistance is delivered by IMF staff, as well as by experts and by short-and long-term advisors.

Figure 4Composition of Technical Assistance, 1998/99

(As a percentage of total resources in effective person-years)1

1 An effective person-year of technical assistance Is 260 days. For the IMF Institute, figure excludes training provided or coordinated by the Institute at headquarters.

At headquarters and abroad, training courses and seminars on a variety of topics are given by the IMF Institute and other technical assistance departments. In 1998/99, the Institute’s program at headquarters included basic, intermediate, and advanced courses on financial programming and policies, shorter courses on such specialized topics as exchange rate policies and monetary and inflation targeting, and a high-level seminar on trade reform and regional integration in Africa. The IMF Institute’s overseas training program continued to focus on issues related to the formulation and implementation of economic adjustment programs. In addition, other functional departments—including Fiscal Affairs, Monetary and Exchange Affairs, Policy Development and Review, and Statistics—conducted seminars and courses in their areas of expertise, both in collaboration with the IMF Institute and independently.

The increased attention given to promoting better governance and to creating and maintaining conditions for sustainable and equitable growth in member countries has highlighted the need for more attention to strengthening governments’ human resource and institutional capacities for effective economic management. The IMF’s technical assistance and training seek to engender transparency and strengthen economic management capacity so that, over the long run, members will have less need for IMF financing as well as an enhanced ability to engage in a productive dialogue with the IMF during surveillance operations. This is the preventive aspect of IMF technical assistance and training. Given the limited availability of resources, however, much of the IMF’s technical assistance has necessarily been directed at immediate problem solving or helping governments implement economic and financial reforms within the context of IMF-supported programs.

Box 13IMF Institute and Regional Institutions

The era of globalization has posed its own challenges for the IMF’s technical assistance and training programs. Not only has member countries’ demand for IMF’s technical assistance and training risen substantially, but their needs have become more varied and complex. To remain relevant and responsive to those needs, the IMF’s training activities have also had to change—shifting from the more basic to higher-level training and from general to more focused courses. In this context of change and innovation, the IMF Institute has forged a new strategy that seeks to deliver a quality program responsive to an expanding clientele. The Institute’s program has four components.

(1) It has sought to strengthen its traditional training program in macroeconomic management at headquarters. Standard courses on financial analysis and programming and specialized courses in macroeconomic statistics, public finance, and monetary and exchange operations represent the core of the IMF’s training for member country officials. Recently, the program has been targeted to address the specific needs of officials at different levels, with the introduction of a three-tier system aimed at junior, mid-level, and senior officials. It has also trimmed the schedule of longer Institute courses in Washington, using the time and resources gained to introduce one-to two-week intensive advanced courses on current issues for high-level officials.

(2) In 1996, the Institute expanded its program of in-house training to ensure that IMF economists remain at the forefront of their profession and keep pace with rapid developments in the global economy. These courses have featured prominent academics, well-known outside policy experts, and others working at the cutting edge of research on current economic issues.

(3) Faced with expanded demand and limited capacities, the Institute has turned increasingly to collaborative arrangements with partners to provide overseas training to strengthen the institutional capacity of member countries in economic management. Major strides have been made in developing a network of partner institutions. The Joint Vienna Institute (JVI) was established with other international organizations in 1992 (and its mandate was recently extended) to provide high-quality, practical training to officials of former centrally planned economies. The original curriculum has been revised to meet the changing needs of the region in 1999 and beyond. In 1999, the Joint Africa Institute (JAI) was established in Côte d’lvoire, in equal partnership with the African Development Bank and the World Bank, to build the institutional capacity of national governments in order to help them better manage their economies and further train their economic and financial managers. At the same time, the IMF Institute continues to participate in the training activities of the Central Bank of West African States (COFEB), the Bank of Central African States (BEAC), the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) in Zimbabwe, and the West African Institute for Financial and Economic Management (WAIFEM) in Nigeria. The IMF-Singapore Regional Training Institute (STI) was established in 1998 to help member countries in Asia and the Pacific develop stronger and sounder economies in the face of globalization. The STI’s programs will be complemented by training in the South East Asian Central Banks Research and Training Center (SEACEN), with which the IMF Institute has been collaborating since the 1970s. The joint Regional Training Program (RTP) was established in 1999 in Abu Dhabi in partnership with the Arab Monetary Fund. The aim is to meet the critical training needs of the region by allowing both organizations to mobilize their human and financial resources for training and to take full advantage of their respective expertise. The IMF Institute continues to provide lecturing assistance for courses organized by the Center for Latin America Monetary Studies (CEMLA); has been cooperating with the Islamic Development Bank on regional training courses since 1994; and has conducted joint training courses with the Asian Development Bank since 1995.

(4) To expand its reach and make its training accessible to wider audiences worldwide, the Institute has expanded the use of video conferencing and CD-ROMs and has taken steps to introduce two distance-learning courses: one on financial programming and policies and another on introductory macroeconomics. It has also set up a website, thus increasing access to information regarding Institute course offerings through the Internet (see http://www.institute.imf.org).

Although much has been accomplished to adapt the Institute’s training program to the changing needs of its members amid globalization, more remains to be done. The Institute will continue to adapt current communication technologies for distance learning, rely more on regional training efforts, and strengthen internal training to ensure that IMF economists remain at the forefront of current thinking on analytical and policy issues.

The IMF quantifies the technical assistance it delivers in units of “person-years” of services provided, both by its staff as well as by the experts it recruits. Using this measurement, the annual volume of IMF technical assistance in the past few years has been about 300 person-years, compared with about 130 person-years in the late 1980s and early 1990s (see Table 6). The regional distribution of IMF technical assistance and training has shifted since the mid-1990s, when the countries of the two IMF European Departments (EUI and EUII) absorbed approximately 40 percent of technical assistance resources. This proportion fell to 23 percent in 1998/99, while the share of the Asian and Pacific countries rose to 20 percent, reflecting the increased demand for technical assistance in the context of the Asian financial crisis.

Table 6Technical Assistance Delivery

(Effective person-years)1

1995/961996/971997/981998/992
IMF technical assistance resources211.4172.7189.6201.7
Staff108.697.1103.998.9
Headquarters-based consultants23.520.120.821.2
Experts79.355.564.981.6
External technical assistance resources97.5104.296.2100.0
United Nations Development Program25.021.524.414.4
Japan65.067.355.670.9
Other7.515.416.215.0
Total technical assistance resources309.0277.0285.7301.7
Total resources by department
Monetary and Exchange Affairs
Department137.3114.6110.6120.8
Fiscal Affairs Department99.896.298.8101.7
Statistics Department39.236.639.038.9
IMF Institute14.011.012.115.4
Legal Department11.09.310.310.7
Other37.79.314.914.3
Total regional use by department280.1251.0258.7274.9
African Department62.454.565.872.2
Asia and Pacific Department4n.a.49.042.558.1
Central Asia Department27.5n.a.n.a.n.a.
Southeast Asia and Pacific Department25.0n.a.n.a.n.a.
European I Department24.422.523.822.4
European II Department73.557.652.647.1
Middle Eastern Department23.426.529.532.5
Western Hemisphere Department32.331.235.232.1
Interregional11.79.68.68.8
Nonregional use28.926.126.927.7
Total technical assistance use309.0277.0285.6301.7

An effective person-year of technical assistance is 260 days.

Estimated.

“Other” includes the Policy Development and Review Department, Bureau of Computing Services, and Technical Assistance Secretariat.

Effective January 1, 1997, the Central Asia and Southeast Asia and Pacific Departments were merged into a single Asia and Pacific Department.

An effective person-year of technical assistance is 260 days.

Estimated.

“Other” includes the Policy Development and Review Department, Bureau of Computing Services, and Technical Assistance Secretariat.

Effective January 1, 1997, the Central Asia and Southeast Asia and Pacific Departments were merged into a single Asia and Pacific Department.

A key feature of IMF technical assistance and training over the past few years has been its application in countries emerging from crises of different types. In such situations, the traditional “request and response” mode of operation has been considered inadequate to address the urgent need to rehabilitate these countries’ basic economic and financial management capacities. This has given rise to the practice of preparing large-scale, integrated, multiyear technical assistance programs cofinanced with other donors. Such technical assistance programs have now been implemented—or are being implemented—in such postcrises countries as Albania, Angola, Cambodia, Haiti, Lebanon, Malawi, Namibia, Rwanda, and Yemen; plans are under way for a similar approach in Nigeria. These programs are usually closely coordinated with, and cofinanced by, the United Nations Development Program (UNDP) and often involve a number of bilateral donors. The Pacific Financial Technical Assistance Center in Fiji (PFTAC), for instance, provides technical assistance to 15 countries in the Pacific area with financing from UNDP, the Asian Development Bank, Australia, New Zealand, and the Pacific Forum. Where appropriate, the IMF has developed a regional approach to the delivery of technical assistance and training services (see Box 13).

Japan was again, in 1998/99, the single largest source of external financing for IMF-provided technical assistance, and it responded with great flexibility in seeking to ensure that its funding was readily available to help address the demands for technical assistance arising from the Asian crisis. In addition, the Framework Administered Account for Technical Assistance Activities—established by the IMF in 1995—has attracted contributions from Australia, France, Japan (for a scholarship program), Switzerland, and Denmark. Some donors, such as Sweden and Norway, have supported UNDP projects for which the IMF is the executing agency. Others, such as the United Kingdom, the European Union, and the Inter-American Development Bank, have agreed to coordinate technical assistance cofinancing arrangements with the IMF. Several developing country members have used the proceeds from World Bank loans and credits to finance IMF-provided technical assistance. In 1998/99, about 30 percent of the IMF’s total technical assistance and training activities—including two-thirds of the experts it recruited to serve in member countries—were financed from external sources. It is hoped that this level of external financing can be maintained in a time of growing austerity among donors.

During 1998/99, the IMF’s Office of Internal Audit and Inspection undertook a review of the IMF’s technical assistance program, examining among other things its effectiveness, focus, and various modalities of delivery. The Board and management will be considering recommendations made in the review during 1999/2000.

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