A Spotlight on the IMF’s Technical Assistance

By Nemat Shafik

(Version in عربي)

Of the three main pillars of the IMF’s work, technical assistance has been a sort of middle child; it doesn’t get the attention of the oldest and youngest children, yet in many ways is the glue that holds the family together.

The other two pillars are well known: we lend money to countries in times of need and crisis, and conduct annual check-ups of their economies and financial systems, known as surveillance.

As countries around the world cope with the global economic crisis, the IMF’s technical assistance is a vital part of the work that we do to help countries prevent, prepare for and resolve crises.  Technical assistance also helps countries master the form and details to govern themselves in an effective and legitimate way.

And as we adjust our way of doing things based on lessons from the recent crisis, we have to adapt the way we work to countries’ needs and change how we measure success.

 A new strategy for technical assistance is under discussion at the IMF and there are five key areas we need to focus on: adapting to countries’ evolving needs, more cooperation with donors, new ways to deliver technical assistance, the importance of training, and a focus on results.

Here’s why:

Serving our members best—a key objective—will require constant adaptation to evolving needs. The last few years have shown vividly how quickly new challenges can emerge. The IMF’s rapid response to the global crisis is central to our work. We adjusted quickly and we will need to be prepared to continue to do so. New and complex areas of capacity building and training will require that our agenda be flexible, encompassing areas such as advice on crisis resolution, the linkages between countries economies’ and their financial systems, and sustainable debt strategies.

Deepening cooperation with donors will make our work on capacity building more effective:  Donor contributions to finance IMF capacity building have made it possible for us to be responsive to rising demand, whether for basic or more specialized advice.

In 2011, donors financed about 75 percent of technical assistance, up from about 60 percent in 2007. And the number of donor countries has almost doubled to over 40.

We must keep alert for new ways to enhance the delivery of technical assistance.  Our Regional Technical Assistance Centers bring our expertise closer to the end-users and to zero in on key issues, facilitated by donor support.

We will officially open the IMF’s latest regional technical assistance center in Mauritius on October 17.

We are already planning and working on securing support for another regional center to serve non-Francophone Western Africa. It will be the fifth center in sub-Saharan Africa and would boost coverage on the continent.

Technical assistance and training form a continuum and complement each other. Their common goal is to build capacity to support and realize good government policies.

Training, for instance, can help officials acquire the skills they need to implement advice. After the global financial crisis struck, many countries used fiscal policy to cushion its impact, including some low-income countries that had earlier benefitted from debt relief. As their debt levels have again begun to rise, many countries are now asking for help in drafting medium-term debt management strategies.

The IMF’s technical assistance means a country doesn’t have to start from scratch.  We leverage the experience and expertise of people from over 100 countries so countries in need of help can adopt the best practices that work for them.

Our resident representatives and regional center coordinators in countries try to stay in constant dialogue with international development partners, local and international civil society organizations and others so we can cooperate with other technical assistance providers.

We must stay focused on results. An area close to my heart is how we can best measure the impact of technical assistance.

We must ask questions like: what realistic contribution can we make to help a member country meet its strategic objectives, such as bringing in more revenue to create space for poverty-reducing expenditure?

Questions like these are difficult; to answer them effectively, we must be more rigorous about our objectives and measurement.  We have much to learn from some of our donor partners. They are calling for more results-based management, which can be useful not only to inform management decisions but also to identify and more clearly communicate our achievements.

At the same time, we must be realistic about what can be achieved and measured. Economic shocks, political events, and the ripple effects from events in the United States, Europe and elsewhere will continue to influence outcomes across countries.

20 Responses

  1. Why is the IMF pushing technical assistance (TA) so much at present? Answer: same reason the World Bank is pushing growth of trust fund administration. It is a way to empire build, maximise budgets, interesting work for IMF staff, push the IMF worldview, increase staff numbers etc. See Public Choice Theory for further information.

    One thing you can be sure of – emphasis will always be on pushing the next TA mission, not making people accountable for previous failed TA missions.

  2. Can the IMF lend with the condition that it’s funds be used for infrastructure investments or specific projects that countries may need to promote commerce or bring about reduced expenditures (such as highways, tunnels, ports, etc.)? Has it ever done this, or would that be treading on the turf of the World Bank?
    The European Investment Bank (eib.org) seems a very capable entity with power to contol how well funds are used, and has their own experts to help conduct and monitor such efforts. The ASEAN community has a development bank which might be similarly capable. Two or more nations might be helped with one loan! Unfortunately, the USA does not have such a bank. It has scattered trust funds that tend to get frittered away in congressional machinations, and stimulus funds from the Treasury or Federal Reserve get diverted to banks or cronie organizations that seldom result in more “bang for the buck!”
    M. E. Baker

    • Dear Mr Baker,

      Thanks for your comment. I agree with you, it would not be the job of the United States, but a European trust fund (and respectively an Asian one concerning Asia). Would it work, as the comment suggested? ( the crisis is everywhere, and each organization should look at its own backyard)

      If it is the case, the principle of one source of finance for one use is not good because there is a higher risk. I think, it is exactly what happened with the European crisis and the Euro currency. The strategy was to get a technical assistance from the IMF, which usually does not help European countries. The case of Greece is rare and it coincided with difficulties in the building of Europe (politically, sociologically,….) As you may know, Europe is just an economic integration.

      Also, I think IMF funding is short-term funding (while World Bank is longer term — addressing development infrastructure, such as bridges.) Do not forget, borrowers are paying a small fee that goes to US stakeholders. Also, as a trade congressman of the Senate said, everytime and each time US people promote a technology on $100 invested for promotion, it is returned 3 times more).
      So, I think it is good for the USA and for the IMF to lend money to whatever country (as long as they can return the debt….Europe is far from being bankrupt, but I think I understood your concern about keeping US money for the United States (or the Americas –is that the Monroe doctrine?)

      I look forward to hearing from you — Merry Cristmass too.

      Yoru sincerely,

      Georges RADJOU, CEO, MBA, DUPEBH
      Energy & Engineering, Sustainable Development

      • Most interesting! Thanks so much for the clarification regarding the place infrastructure loans may have in IMF dealings versus those of the World Bank. Recently, I was looking at the web site for the European Investment Bank and was impressed by the description, there, of its monitoring functions and staff of expertise. Investments under their scrutiny would seem less likely to be wasteful and take fewer monitoring resources, thus mitigating the workload for World Bank or IMF staffing on infrastructure loans they might offer. I’m curious to pursue the topic further out of envy in that the USA doesn’t seem to have so direct a route to get funds for large interstate developments (such as high speed trains to relieve road traffic) applied to good effect. We’re certainly getting nowhere fast, especially in comparison with Europe – – falling farther and farther behind when builders desperately need more employment. Instead, investment money here seems to get swallowed up by big Wall Street banks and hugh funds that prefer to keep the lucre trapped thrashing around in their computers, “pumping and dumping” from day to day in faster and faster “plays” and “bets.” Yuk!
        I wish to note that I’m chagrined that some in our Congress are noisily objecting to seeing IMF funds “being used to bail out the EU!” In my opiniion, in view of our lackluster history in administering the World Bank and the dreadful damage our derivatives peddlers have done to pension and savings funds worldwide, I am gobsmacked by their monumental hubris – – mortified to no end! Please know that I wish all success to everyone striving to straighten out global finances in the coming weeks and new year!
        Sincerely, M. E. Baker in SW Ohio, USA

      • Dear Ms Baker,

        I completely agree with what you said. Definitely, Europe and the United States are both allies, but Europe and the USA are not the same.

        Within Europe itself, there are differences too — and not only above the Atlantic Ocean between Europe and the USA. To make it clearer, take for example, the nuclear industry. One could understand if the decision to ban these ageing technologies in Germany are not followed — in the same way in France, they are not followed at all.

        I believe what a former director of CNRS (top country administration for research) said: France and Germany are opposed in their network designs for electrical supply. These networks are decentralized in Germany, while they are centralized in France. This can make all the difference when transforming the landscape of both energy supply sources due to network and in light of the Fukushima disaster (which also in my viewpoint is a case of aging technologies).

        So, to return to our finacial interests, both the USA and France are capitalist countries, but with a different face i.e questions of details and systems may matter more than Descartes analyses in finding these differences.

        I look forward to hearing from you

        Yours sincerely,

        Georges RADJOU
        BIRD ECOSOC AFFILIATE

      • Lt. Colonel Baker,

        Are you America bashing? You do realize certain disloyal statements by military personnel (even retired, receiving a pension) may not constitute an offense under 18 U.S.C. §§ 2385, 2387, and 2388, but may, under the circumstances, be punishable under this article.

        The fact that you advertise your former position as a Staff Officer, is the hook here. This acts to garner support from all military personnel regarding your negative views of the U.S. and it’s current administration’s investment and monetary policy.

        This can easily be misunderstood as negative publicity for the USAF, the disambiguity being supported by your choice to continue to affiliate yourself with the USAF, through your self-styled mention of your military service. This lends argument to the fact that your personal views could be misunderstood as those of the USAF, through your very use of their name in your identifying title, while making statemnénts against the USG, no matter how trivial you may find them.

        This is of course not to be confused with Article 134 of the Uniform Code of Military Justice (UCMJ) also known as the General Article of the UCMJ that provides for penalties by court-martial various offences that prejudice good order and discipline or bring discredit upon the armed forces, such as for “disloyal” statements made “with the intent to promote disloyalty or disaffection toward the United States by any active duty member of the armed forces or to interfere with or impair the loyalty to the United States or good order and discipline of any member of the armed forces, which no longer applies, as you are retired.

        However, the aforementioned may be applied in this situation. Be sure to exercise caution when showing support, as well as voicing opinion where the USG is concerned.

  3. The world we live in is revolving and never static in nature; as such, the receivers of the loans from the World Bank and IMF must understand that they have a choice to receive under the conditions specified or not. As long as you are interested in receiving these loans because you have intentionally or unintentionally mismanaged your own natural resources and wish someone else to bail you out, you must dance to the tunes of the organizations that are willing to work with you. At the same time, hoping that whatever loan you receive will be used efficiently in both the infrastructural and human developments of your own society and not let the fund be distributed among a few legislative officials with fictional agendas.
    It makes no sense to call on either Ireland or Thailand relative to the treatments they received from IMF and World Bank. With all the highly educated people you have in these third world countries who specialize in outsmarting their governments, why don’t these governments create an incentive for these highly educated people to use their intelligence in contributing to the sustainable development of their countries?

    • Case in point, INDIA.

      There has been a run on elite U.S. Universities over the last 30 yrs especially. I know many who studied at Harvard, Princeton, MIT who interviewed with us. If we are to be told constantly how intelligent some persons are, why is that intelligence being wasted?

      I asked them all the same question: “Why don’t you go home and use your knowledge to save your country?” All of them answered the same, bottom line was money.

      None of them were hired. Reason, their lack of ethics.

      India is suffering from a complete lack of infrastructure and infrastructure investment, full stop, and if any project comes about that passes Phase1, it’s halted IMMEDIATELY at Phase 2, and the “evelope full of cash” scenario starts.

      The political corruption is endemic, and private family influence needs to be stopped. There is no sense of order, and there is none on the horizon. As long as the few powerful, (Mallya, Mittal, Premji, Tata) are allowed to continue to act with impunity, they (India) will continue to experience failed private equity investments, as has been the case over the last few years.

      Naturally, we have distanced ourselves, and will NEVER support any investment in India at any time in the future.

  4. I agree 360° with the comment. The middle child has been neglected and in many ways the middle one is the glue….. But, as it is technical assistance, it is less likely that the middle child needs assistance — the industry is the middle child, because it open to challenges, it why the business is robust, and there is no need for help. Instead, business should serve the communities and extremes of the family –the young and the old–who need most, on one end, industrial newcomers that are not mature industries and can grow up quickly, and at the other end, decaying industries, better speed up the funerals.

    Anyway, all is more complex than that –but not necessarily complicated. Most famous entrepreneurs who became wealthy in the Fortune 500 started nearly naked –no money nearly.

    Mac Do — garage mechanic
    Bill Gates — student room
    Richard Branson — buying trees and selling trees for Christmas with his pocket money
    Madonna — a small suitcase with few clothes and maybe $34 dollars, when she came to New York

    No, really you do not need to be rich or famous to grow a business and be wealthy or earn lots of cash — just the right business model and less regulations — and a can-do attitude, a willingness to win, and a vision and a strategy – and keep it.

    (But, today, as people are tossed by globalization, these mergers and acquisitions can need quick cash — a bank or IMF is a partner and not a foe….Even micro credit can help)

    In summary, perhaps the IMF should think about the middle category, which is less a priority.

    Old people are fortunate enough today, to look after themselves– they have high incomes – the business model should look for these opportunities.

    In summary, technical assistance is much easier knowing the organizational strengths and weaknesses, and opportunity and threats of the environment. So, as money is the nerve of war, it may help. But, I suggest to not to prioritize the money. The right project comes first and finance after (pay attention to the fact that being a successfull business person does not necessary mean you have a lot of cash in the bank account.)

  5. Organisations such as the IMF and the United Nations do give assistance and if they did not exist there would be absolutely no way private corporations would give. There is just so much help they can give; the rest is up to the countries, the leaders and their people.

    Yes! It can always be better and give more and help more, but to what end? Throwing money won’t help everything as some governments would just use that money on themselves and not on the people!

    • Dear George,

      Of course, you are right, in time of uncertainties, there is a need of a robust management control system to fund the best appropriate strategy to deliver and from experience, we all know that communities, do not like the surveillance society- but, it is necessary…as monies wasted is never easy to regain -and regain control, when it is most needed. So, the job of the IMF is exactly that, but you said there is the appropriate human attitude –
      What is the best appropriate strategy?
      I think a banking system the size of the earth planet (IMF) needs to be decentralized, with mission units -so, money people could be autonomous, but accountable, AND ALSO A SYSTEM BEING TRANSPARENT FOR THE MONEY ALLOCATION EFFICIENCY;

  6. My comments are:-
    (i) If the IMF is so efficient then why so much upheaval in the global economy?
    (ii) It sounds good to deliver lectures from the ivory towers, but look what your technical assistance has done to the Euro zone economies.
    (III) Over 90 EU banks and financial institutions were given stress tests twice in two years. These tests were conducted in most unprofessional ways. Some of the banks in Europe, though declared to be viable, later on turned out to be bankrupt. And dozens of the European banks are being downgraded by the credit rating agencies. So, where was your technical assistance?
    (iv) Who audits the auditors in your case when you talk about surveillance of economies of other countries.?
    (V) Why is the International Monetary Fund is acting as the European Monetary Fund; looking to the billions of tranches of euros being delivered by this ‘world organization’?
    (VI) How do you propose to secure your doled out funds to the bailout scheme of things in Greece, Ireland, and Portugal? and
    (vii) Why should the G-20 countries help in enhancing your capacity to lend more to the shattering economies of Europe while the other third world countries are either deprived or disabled to seek assistance from you due to unbearable interest, rates, lending and strange repayment conditions?.
    Please answer these questions in the light of your well crafted lecture above. Thanks.

  7. There are good ideas in the strategy planning, mainly considering people as being the wealth of the black box.
    Also, the goal is clear. The transformational strategy is to help
    “….helps countries master the form and details to govern themselves in an effective and legitimate way….”
    So, hopefully, one should be able at the end of the project, program to compare project with the experimentations and how to reduce the program. Eventually, make some new designs, abandon, take new paths.
    The basic question is: is it worth investing? And if not, why should I invest my money, if it is not worth? And also, the evils are in the details (like task controls, flowcharting, peoples, systems and organizations)

  8. @Nemat Shafik “We must stay focused on results”

    Absolutely and that starts with being very transparent and explicit about what the objective and the purpose of any assistance and recommendation is.

    For instance you should not, as the bank regulators did, regulate without defining a purpose for our banks and just settling for their comfy private short term goal of avoiding bank defaults. That could just result in the banks being the last standing buildings in a world reduced to rubles.

    (Unfortunately, because the regulators failed to understand that only bank lending to those perceived as not-risky can grow into exposures that can threaten the system… they even failed in keeping the banks from crumbling.)

    If only those of Occupy Wall Street knew the truth of what has happened, they would not be there but in Basel, where they could perhaps be asking for capital requirements for banks based on job creation potential ratings.

    (Unfortunately there are many comfortable pseudo-truths about this crisis being pushed by various agendas, so that the real truth, and that would be so uncomfortable for the regulators, is not coming out.)

  9. SURVEILLANCE THE YOUNGEST CHILD
    ———————————————————

    Out of the three children. in my humble opinion the Surveillance be treated as the youngest as such will need more care and attention. Annual check-up is not enough rather frequency of check-ups be increased regardless of the size of the economy..

    Had the Surveillance been exercised with more penetration and more frequent visits, the present global financial crises mainly faced by the countries of the Eurozone if not completely avoided, could have been substantially mitigated (so called headwinds could be handled with much ease).

    It is a lot easier to lend at the global level but it is much more difficult to recover in view of the uncertainties involved due to circumstances prevailing in different countries with different political economic and social institutions.

    However establishment of Technical Assistance Centres in the less developed and low income countries will be a source of education and is a step in the right direction.

    • Dear Javed Mir,

      As a disaster manager, my comment would match HFA mid-term review (UNISDR Meeting of 2011, from 8th to 13th May 2011, Geneva, Hyogo Framwork for Action)- Disaster integration e.g. planning, prepradness, community survival,…. should be thought at the step of the Development project, programs,…But, it is evolutive over time, to keep tracking progress status.

      Now, as I understood the wok of IMF is a link between the youngest and the oldest kid- It is strategy, and the family model talks by itself, there is no need of more chat to understand.

      As long as my remember, my own family-Fathers and mothers were looking at the first child as there new born babe, and because it was a new experience of growing a child. So, the skills was not yet in place,

      The second, child relationship experience was usually better, by of lessons learned from the first child relationshi^p experience.

      Now, if considering further, the example of growing up children in a family, the more children my family had -and I suppose the example of my family is witnessing all families -nearly- the less, the last child was paid attention.

      The last child in the family received less attention than the first child- So, I am afraid, it is against to what you said, about priority and attention given to child orders in a family.
      Or Perhaps, I did not understand. Can you be clearer?

      Regards.

      GS

      • Dear Radjou

        I thank you very much for adding to my sense of family relationships.

        In my humble opinion, in lending, surveillance (the follow-up) comes the last and as such simile of the youngest child used by Madame Nemat Shafik and emphasized by me was due to the reason that till the final recovery of funds, the financial progress of the borrowers be regularly and more frequently scrutinized. Consequently the surveillance (our so called youngest child) should involve more attention and check-ups.

        However, in my society the youngest child gets more feed and parent’s attention in view of the fact the senior ones can take care of themselves but it does not mean that they should be ignored altogether.

        Accept my best regards and good wishes.

        Sincerely yours
        Javed Ahmed Mir
        Lahore

      • Dear Javed Mir,

        In this way, your explanation is quite clear- bank surveillance-

        Look forward to hearing from you

        Regards

  10. Technical assistance, but funding….

    0- I am happy, customers are king- now with the new corporate laws and the CSR, it is much difficult to know who are these customers, citizens, firms, authorities,…I think there are enough failure of technical assistance to put people at the heart of the change process and community improvement-Considering 2 technical assistance- one with experts -and one with people participating.
    Experts are good, but they were in isolation, and probably, it is not what CSO are looking for.

    1- Empowering populations or age group-perhaps increase the transparencies to find the real needs of organizations-needs can be seen as a doctoral need and engineering needs-….going beyond the first need-

    2- The need for lighting, created not only changes in the technology used. For example, from a candle to a bulb lamp, but also, designs of new houses, road infrastructures, transport systems,…, people behaviors and new civilizations. This is great because this can be a revolutionary development- going beyond, just the simple sustainability…..
    In summary, needs can be hidden.

    3- Helping people to help themselves is the favorite advocacy of ITDG and E. F. Dr Schumacher- and CSO,…- It is because of the focus on community empowerment and participation and reconnection with their own concerns of life.

    4- New strategies. My viewpoints it is not about being new but innovative, new thinkings….
    For example old-new strategies can work too-Sometime one cannot move forward and one needs to return to the past.
    Anyway, a strategy is about success, is virtual, fashionable, destabilizing and conformist…
    So my view point is that no strategy is better,…if the strategy helps to balance traditional societies and administrative ones and bring more sustainability. Strategy is plural-The tree should not hide the forest- and being in the middle of the forest, one would see a huge variability of strategies.

    5-Adaptation strategies is much successful than a simple mitigation-The scale is important and also, taking into account physical process of the environment- I think today, we are living in an aged societies were most of technologies are aged- look Fukushima disaster 2011, look waste water treatment in cities for the 21rst centuries,…
    If there is no adaptation strategies, societies are under permanent crisis.

    6- Assessment is part of the review and an assurance quality and way to improve-this is positive.

    7- I mean output management is about results, but my viewpoint, not all projects should be profit oriented-If it was the case, it would be the end of the game-and the social cohesion would crumble.
    In summary, if production costs-there may cases-there is no need to invest on new, but build with the existing. For example, in reorganizing the space and the existing assets.

    In summary, evolving needs is our daily bread, and one should not act when the context become an urgency- preventive maintenance is always better. As money matter more than technical assistance, it is best use these reviews and control at the root step of a process and then applying monitoring systems would cut on costs-and reduce controls along the process.

  11. […] – The IMF’s neglected middle child, Technical Assistance. […]

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