CHAPTER 7 Technical Assistance and Training

International Monetary Fund
Published Date:
September 2001
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In addition to its policy advice and financing, the IMF provides technical assistance and training to its member countries in its areas of expertise—including central banking, fiscal policy management, exchange rate systems, economic and financial statistics, and related legal fields. Much of the IMF’s technical assistance supports members’ efforts to strengthen their capacity—both human and institutional resources—to formulate and implement sound policies. Technical assistance also helps countries design appropriate macroeconomic and structural reforms, taking into account lessons learned by other countries in addressing similar economic policy concerns.

A description of the objectives, scope, priorities, and operational methods of this aspect of the IMF’s work is provided in the Policy Statement on IMF Technical Assistance (2001).

During FY2001, the IMF’s technical assistance program attracted heightened attention from management and the Executive Board. At the fall 2000 Annual Meetings in Prague, the International Monetary and Financial Committee (IMFC) endorsed the Managing Director’s view that technical assistance should play a central role in supporting the work of the IMF in crisis prevention and management, in capacity building for low-income and transition countries, and in restoring macroeconomic stability in countries in the wake of crises. The IMF then launched a reexamination of the way in which it manages and sets priorities for technical assistance. The result was a policy paper for the Board that suggested realigning technical assistance more closely and transparently to these policy priorities.

This reexamination of the IMF’s approach to planning and managing its technical assistance took place at a time when many surveillance-related initiatives were being launched, all of which began to generate additional demands for technical assistance. The Financial Systems Assessment Program (FSAP) and the preparation of Reports on the Observance of Standards and Codes (ROSCs) carried out during 2000–01 identified a wide range of weaknesses in members’ adherence to internationally recognized norms and practices that, to be rectified, would require significantly higher levels of technical assistance than in the past. Similarly, work on improving the management of offshore financial centers, macroprudential indicators, and policies to improve the access of developing and emerging market economies to capital and commercial markets further increased the demands on IMF technical assistance resources.

Aligning Technical Assistance with Policy Priorities

At its January 2001 meeting, the Executive Board recognized that technical assistance would become increasingly crucial as a means of furthering the IMF’s efforts in all the above areas. At the same time, the Board acknowledged that the IMF’s own capacity—both its staff and financial resources—was insufficient to provide all the technical assistance needed. Directors thus welcomed the staff’s new proposals for managing and setting priorities for technical assistance beginning in FY2002 (see Box 7.1), which should introduce more transparency and accountability into how technical assistance resources are planned, allocated, and reviewed. Directors also welcomed the staffs first Annual Report on Technical Assistance, which reviewed the IMF’s technical assistance operations in FY2000 and provided background for considering the new proposals for priorities—and which confirmed the membership’s appreciation of the value of IMF technical assistance.

Given the expectation that technical assistance would play a progressively more central and proactive role in the IMF’s work, the Board felt that a potentially significant gap might emerge between the supply of and demand for it. The demand for assistance arising from program activities was expected to continue to grow—particularly in low-income countries where capacity was weakest—with additional demands from the initiatives on standards and codes, the Financial Sector Assessment Program, tracking of debt relief provided to heavily indebted poor countries (HIPCs), and safeguarding IMF resources. Dealing with this potential imbalance would remain a key challenge, requiring carefully considered action on several fronts. First, setting priorities for technical assistance activities would be crucial. But even with greater prioritization and more efficient technical assistance operations, many Directors felt that a sizable gap might still remain that would require mobilizing additional technical assistance resources from both internal and outside sources—which in turn would require the cooperation of member countries and the international community as a whole. Any potential additional resource implications for the IMF arising from excess demand for technical assistance would have to be taken up in the context of the next round of deliberations on the IMF’s budget. While agreeing that it would be undesirable to earmark resources specifically for technical assistance, some Directors called for more precise information in the budget on plans for allocating technical assistance resources across departments.

Box 7.1Criteria for Prioritizing Technical Assistance Requests

Since the demand for IMF technical assistance normally exceeds the resources available, the IMF takes a number of considerations into account in prioritizing country requests. These considerations were revised in January 2001, and the new guidelines, in the form of “filters,” are as follows:

Filter 1: Core specialization of the IMF. The assistance provided must fall within the substantive areas of technical assistance recognized as being within the IMF’s core areas of specialization listed in Table 7.1 on the next page. The IMF provides technical assistance that supports policy reform and builds institutional capacity.

Filter 2: Main program areas. Technical assistance must be clearly directed toward supporting one of five main program areas. These are:

  • preventing or containing crises and their contagion effects in countries without IMF-supported programs; principally, systemically important nonindustrial countries and emerging market economies;
  • implementing sustainable debt relief and poverty reduction programs for low-income countries; encompassing the full range of technical assistance in support of both poverty reduction initiatives and policies to restore macroeconomic stability;
  • fostering and maintaining macroeconomic and financial sector stability in countries not currently using IMF resources, largely middle-income and transition economies;
  • promoting regional capacity-building initiatives, including training and, in some cases, regional integration efforts; and
  • rehabilitating basic economic and financial institutions in countries in postconflict situations.

Filter 3: Key policy initiatives. Assistance should be focused on supporting the IMF’s key policy priorities and initiatives. While these will vary over time, they are currently as follows:

  • Standards and codes: follow-up assistance to help countries bring their fiscal, financial, and statistical practices (including legal instruments) in compliance with the standards and codes that are under the auspices of the IMF. This would include technical assistance to help countries undertake assessments of their compliance with such standards;
  • Financial Sector Assessment Program (FSAP): follow-up assistance to help countries address weaknesses identified under the FSAP;
  • Heavily Indebted Poor Country (HIPC) programs: technical assistance for strengthened public expenditure management systems to track the use of debt relief for poverty reduction outlays, as well as basic economic and financial statistics improvement, under the Heavily Indebted Poor Countries (HIPC) Initiative;
  • Safeguarding IMF resources: assistance in support of strengthened public expenditure management or central bank accounting and reserve management practices (and associated legal instruments) as well as addressing data misreporting issues;
  • Offshore financial centers: assessments and introduction of best practices; and
  • Policy reforms/institutional capacity building in support of achieving macroeconomic viability: for example, revenue mobilization efforts, strengthening sound monetary policy, developing macroprudential and other statistical indicators.

Filter 4: Impact and commitment. A country’s past track record, and its degree of ownership and commitment, should receive a large weight in appraising a request for technical assistance. These factors could be offset by other considerations only in a limited set of cases, such as dealing with systemically important countries or crisis situations. At times, a change in government may result in stronger ownership and better prospects for successful assistance, even where a poor track record exists.

Filter 5: Regional diversity. The principle of uniformity of treatment of members requires that some diversity in technical assistance resource allocation be maintained, and that small countries’ needs, where technical assistance can often have high impact and where other sources of assistance may be unavailable, are not ignored.

Filter 6: Availability of external financing. Although the availability of external financing should normally not be a decisive factor, cooperation with other donors providing funding for IMF technical assistance and/or to support other elements of assistance that the IMF cannot easily provide (for example, equipment, in-country training, systems development, local expertise) should be positively taken into account when appraising requests for technical assistance.

Filter 7: Nature of the request. Requests for a policy or diagnostic mission, or short-term expert, are less costly than requests for a resident expert. Some of these requests can be met without significantly impinging on the IMF’s overall technical assistance program resources, irrespective of their priority, unless they are likely to have implications for longer-term follow-up assistance.

Filter 8: Regional approach. Given the high cost of providing assistance to small member countries, and in the light of common problems even among some of the larger countries, the IMF will actively seek opportunities for using regionally based approaches to providing technical assistance. In some situations, regional technical assistance centers may be an efficient solution—for example, the Pacific Financial Technical Assistance Center—and will be pursued.

Filter 9: Presence of other technical assistance providers. In deciding whether to provide assistance, the IMF will consider whether other providers are actively engaged in similar efforts. Duplication should be avoided, and where requests are made in such situations, all efforts at coordination will be made.

The above guidelines are reflected in the full Policy Statement on IMF Technical Assistance, posted on the IMF website.

Table 7.1Core Areas of IMF Technical Assistance Activity, Classified by IMF Department
High Priority1Secondary Priority1

(resources permitting)
Monetary and Exchange Affairs
  • Design of structural reforms for the effective conduct of monetary and exchange policy formulation and implementation, including improving monetary and exchange operations, foreign reserves management, systemic liquidity arrangements, and related issues in public debt management
  • Promoting sound and efficient banking and financial systems as necessary for financial and economic stability, including through strengthening bank supervision policies and regulation, bank restructuring/resolution, cross-border supervision issues, and payments system issues
  • Contributing to capacity building within central banks and financial supervisory agencies for effective ongoing implementation of monetary, exchange, and financial sector policies, including legal framework and institutional improvements, and priority aspects of central bank accounting and auditing systems
  • Banking system-related issues in corporate restructuring and bankruptcy
  • Capital market development and oversight
  • Nonbank financial sector supervision; coordination and consolidation of supervisory bodies
  • Development of credit bureaus
  • Workshops/seminars on central banking and financial sector supervision issues
Fiscal Affairs
  • Creation and enhancement of institutional capacity in macro-fiscal policy management
  • Design of structural policy reforms, and related institutional reforms, for sustainable revenue mobilization, including interjurisdictional issues of macroeconomic significance (e.g., fiscal federalism, tariff reform)
  • Budget preparation and public expenditure management, including reform of treasury and government accounting and reporting systems
  • Short-term expenditure rationalization, incorporation of social safety nets in IMF program design, and analyses of macro-fiscal sustainability of social security systems
  • Advice on how to use information technology in tax/customs administration and public expenditure management
  • Design of central government transfer systems to lower levels of government
  • Design of social safety nets and social security systems, but only when relevant to macroeconomic adjustment and in the absence of timely World Bank involvement
  • Conduct of courses, seminars, and workshops on various fiscal issues
  • Tax aspects of financial abuse
  • Monetary and financial statistics
  • Balance of payments and international trade statistics, including international investment positions
  • Reserves and foreign currency liquidity/external debt statistics
  • Government finance statistics
  • National accounts and price statistics
  • Statistical organization
  • Employment statistics (refer to International Labor Organization)
  • Social and demographic data (refer to World Bank)
  • Development and implementation of census and household or industry surveys
  • Computerization; database and information technology development
  • Training courses/seminars for individual countries
  • Development of source statistics
IMF InstituteTraining events focusing on:
  • Macroeconomic management and financial programming
  • Financial sector issues
  • Fiscal issues
  • External sector issues
Training events focusing on:
  • Poverty reduction strategies
  • Structural reform
  • Governance
  • Economic issues for nongovernmental organization representatives

Classification does not represent a value judgment by the IMF of the intrinsic importance of these areas. Its purpose is to distinguish between areas in which the IMF considers it has the primary responsibility, mandate, and competence to act, and areas in which other agencies may be better placed and have the resources.

Classification does not represent a value judgment by the IMF of the intrinsic importance of these areas. Its purpose is to distinguish between areas in which the IMF considers it has the primary responsibility, mandate, and competence to act, and areas in which other agencies may be better placed and have the resources.

Effective prioritization will remain crucial if the IMF is to discharge its technical assistance responsibilities in the coming years. Directors thus welcomed the progress already achieved in elaborating principles on prioritization through the use of “filters” outlined in the Policy Statement on IMF Technical Assistance (approved by the Board in March 2000), but agreed that more should be done. Directors therefore endorsed the proposal that management set priorities in accordance with a revised set of filters (see Box 7.1). Prioritizing technical assistance in accordance with the IMF’s core areas of specialization, its main program areas, and its key policy initiatives should enable departments to align more systematically resource commitments with institutional priorities. A number of Directors cautioned, however, that the introduction of the new criteria should not unduly dilute previously agreed-upon filters. Directors stressed the importance of countries’ past track records and commitment to making good use of technical assistance resources, while recognizing that these criteria should be assessed taking into account country-specific circumstances.

The Board endorsed the view that the new approach to setting priorities should not compromise the principle that all members are eligible to request technical assistance, and that all requests should be seriously considered. The new system, while rules-based, should be applied flexibly, in particular to enable the IMF to respond to emerging and unforeseen needs. The Board welcomed the provision of technical assistance to support key policy initiatives and concerns, while reiterating that technical assistance to support the effective implementation of IMF-supported programs remained important, as did technical assistance for countries without IMF-supported programs.

Given the growing demand for technical assistance, Directors reiterated the importance of better coordination among providers; they thus agreed to intensify coordination and collaboration with other providers, especially the World Bank. As a step in this direction, the role and tasks of the Technical Assistance Secretariat (in the Office of the Managing Director) were strengthened so that it now reports directly to the Deputy Managing Director responsible for technical assistance and has been renamed the Office of Technical Assistance Management.

Directors expressed appreciation to member countries that had helped finance IMF technical assistance by opening Technical Assistance Subaccounts with the IMF; they especially recognized the exemplary generosity of Japan, which financed a third of total IMF technical assistance field delivery. The Board welcomed the announcement that the Japanese government expected to increase its financial support sharply in FY2002, and urged other countries to follow suit—particularly to cover the capacity-building needs of the low-income countries eligible for the Poverty Reduction and Growth Facility and for the HIPC Initiative, and for improving adherence to standards and codes.

The Board reiterated the overriding importance of full ownership by recipients as a way to ensure their commitment to achieving agreed-upon technical assistance objectives. They therefore welcomed the information in the Annual Report on Technical Assistance on the progress being made in strengthening operational procedures—especially those aimed at ensuring greater involvement of the recipient country authorities in the design, monitoring, and implementation of technical assistance.

Effective technical assistance delivery systems and strong systems for monitoring, follow-up, and evaluation of activities were also important, and the Board urged further efforts in these directions.

Directors considered the potential benefits of disseminating technical assistance reports more widely. They agreed to develop a policy to promote dissemination of information on the IMF’s technical assistance operations, which would be shared with other technical assistance providers on a reciprocal basis, with countries cofinancing technical assistance, and with the Board.

Strengthening Technical Assistance

New guidelines on the planning and monitoring of technical assistance were issued during FY2001 to ensure that management’s priorities for allocating and delivering technical assistance are adhered to rigorously and systematically. Directors had earlier requested staff to assess the approaches to monitoring and evaluation followed by other bilateral and multilateral organizations and take into account the assessment in the development of a strengthened program for the IMF. Following completion of that assessment, the departments that provide technical assistance developed proposals and initiated procedural changes. Evaluation procedures have been differentiated according to the way in which technical assistance is delivered—advisory mission, expert assignment, or training.

While the approaches of departments are similar, there are some differences among them in the formats used. These differences reflect the specific characteristics of the technical assistance and the manner in which technical assistance is integrated with other aspects of departmental operations. Departments have instituted databases documenting technical assistance capacity and policy work. In addition, departments have introduced a number of changes to enhance the monitoring of technical assistance. For example, the terms of reference and briefs for mission and experts now specify aims, outputs, and activities, as well as verifiable indicators of performance, in more detail and explicitly address risks that might prevent objectives from being achieved. Where appropriate, final reports include a work plan for the authorities to act upon following the conclusion of a technical assistance intervention. Such an approach allows enhanced feedback to departments, which in turn improves the advice provided to countries.

Guidelines also cover the measures that departments need to take to improve their cooperation and coordination with other providers of technical assistance providers, and to promote greater ownership and involvement of the recipient authorities in all aspects of technical assistance planning, implementation, and oversight. The guidelines underscore the role of area department mission chiefs and IMF Resident Representatives (see Box 8.1) in more proactively identifying economic and financial management weaknesses at the country level and in discussing these with national authorities and with other technical assistance providers.

As part of the reform of its technical assistance operations, the IMF is improving the dissemination of information on technical assistance activities more widely and openly. Besides publishing and periodically updating its Policy Statement on IMF Technical Assistance, the IMF, as noted earlier, has begun producing comprehensive Annual Reports on Technical Assistance activities.

Technical Assistance Delivery in FY2001

The IMF provided about the same level of technical assistance to its members in FY2001 as in the previous year; such assistance accounted for about 343 person-years of advisory, capacity building, and support services by IMF staff in headquarters and the field, and externally recruited experts and consultants working in the field (see Table 7.2 and Figure 7.1). About three-quarters of IMF technical assistance goes to low and lower-middle-income countries (see Figure 7.2).

Table 7.2Technical Assistance Delivery

(In person-years)1

IMF technical assistance resources189.6201.7199.7265.5
Headquarters-based consultants20.821.221.222.7
External technical assistance resources96.2100.089.377.7
United Nations Development Program24.414.48.98.4
Total technical assistance resources285.7301.7288.9343.2
Total resources by department
Monetary and Exchange Affairs
Fiscal Affairs Department98.8101.798.5111.9
Statistics Department39.038.940.648.2
IMF Institute12.115.424.154.4
Legal Department10.310.78.015.4
Total regional use by department258.7274.0261.8275.8
African Department65.872.172.068.2
Asia and Pacific Department42.557.648.157.0
European I Department23.822.427.030.2
European II Department52.647.147.540.8
Middle Eastern Department29.532.528.227.8
Western Hemisphere Department35.
Nonregional use26.927.727.167.5
Total technical assistance use285.6301.7288.9343.2

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

“Other” includes the Policy Development and Review Department, Bureau of Information Technology Services, and the Office of Technical Assistance Management.

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

“Other” includes the Policy Development and Review Department, Bureau of Information Technology Services, and the Office of Technical Assistance Management.

Figure 7.1Technical Assistance by Function, FY2001

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

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

Figure 7.2Technical Assistance by Region, FY2001

(As a percent of total resources, in effective person-years)

Apart from its own budgeted resources for technical assistance and training, the IMF administers financing provided by several bilateral and multilateral donors—including Australia, Canada, Denmark, France, Japan, the Netherlands, Switzerland, New Zealand, and the United Kingdom, as well as the Asian Development Bank, the United Nations, the United Nations Development Program (UNDP), the European Union, and the World Bank. It administers the financing either through the Framework Administered Account for Technical Assistance (set up by the IMF in 1995), or through cost sharing under UNDP projects carried out by the IMF or other arrangements with the IMF. In FY2001, outside sources of financing accounted for about 23 percent of the IMF’s total technical assistance and training activities, with Japan continuing to be the largest source of such external financing. Two new technical assistance subaccounts with the IMF were set up during FY2001—by the Netherlands in July 2000 and arrangements were well advanced for establishing another such subaccount with the United Kingdom’s Department for International Development. The Office of Technical Assistance Management coordinates management of this financing.

The IMF Institute continued to expand its training in different parts of the world in FY2001, building on earlier collaborative arrangements with partners. A new Joint China-IMF Training Program with the People’s Bank of China was established during the year, to deliver training to government officials in China. In addition, the IMF and the government of Brazil agreed to establish a regional training center in Brasilia, which was inaugurated in May 2001. The Institute also increased the number of distance learning courses on financial programming and policies being delivered. In each of these courses, 50 participants receive eight weeks of training in their home countries, and, if successful, attend a two-week residential workshop in Washington. Finally, several courses in financial sector issues, introduced last year, have become part of the regular curriculum at headquarters and overseas.

As indicated above, in FY2001, a number of IMF initiatives relating to strengthening the architecture of the international monetary system created demand for technical assistance. Work on standards and codes, including fiscal transparency assessments, led to requests for technical assistance to help carry out recommendations. The Financial Sector Assessment Program, under which financial vulnerabilities are reviewed and measures recommended to strengthen financial systems, identified needs that in turn prompted requests for help in such areas as secondary market development and risk assessment methods. Similarly, work on the Special Data Dissemination Standard (SDDS) and the General Data Dissemination System (GDDS) led to requests for technical assistance and training in macroeconomic statistics.

Technical assistance to support rehabilitation and recovery in countries emerging from conflict continued in a number of regions; in particular, the IMF provided assistance to East Timor in close cooperation with the United Nations and Japan, which are cofinancing most of the technical assistance. Technical assistance “diagnostic” missions visited Angola, Burundi, the Republic of the Congo, and Ethiopia; a technical assistance program to help rehabilitate Eritrea’s economic and financial management institutional capacity was started; and the IMF continued to cooperate with other donors in organizing fiscal, monetary, and statistical technical assistance to the Balkan region.

In response to the Executive Board’s concern that IMF technical assistance be more closely aligned to its surveillance and programs and, where appropriate, be planned and financed in cooperation with other technical assistance providers on a country and regional basis, the staff initiated broad-based, comprehensive technical cooperation action plans for Cambodia and the Caribbean region in 2001. Implementation of similar programs continued for Nigeria, Yemen, and the Pacific region. The preparation of a technical cooperation action plan for the West Bank/Gaza was well advanced before it had to be abandoned because of security considerations. On an experimental basis, reviews of past technical assistance received and future technical assistance requirements were undertaken in conjunction with about 20 country (Article IV) consultations during 2001. Preliminary results showed that the country authorities and the IMF team considered the reviews useful but suggested that they be done on a more selective basis in the future.

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