Technical Assistance Reports
2024
June 10, 2024
Georgia: Technical Assistance Report-Report on Government Finance Statistics for State-Owned Enterprises Mission (April 26-May 24, 2021)
Description: This technical assistance (TA) mission on Government Finance Statistics (GFS) was conducted in Georgia during April 26 – May 24, 2021. The main purpose of the mission was to assist the authorities in extending GFS coverage to include non-market State-Owned Enterprises (SOEs) and aligning fiscal reporting requirements to the IMF and the European Union. The mission also reviewed the progress made by the authorities in implementing previous TA recommendations.
June 7, 2024
Republic of the Marshall Islands: Technical Assistance Report-Consumer Price Index Mission (January 15-26, 2024)
Description: A technical assistance (TA) mission was undertaken with the Economic Policy, Planning and Statistics Office (EPPSO) of the Republic of the Marshall Islands (RMI) between January 15–26, 2024. The mission assisted the EPPSO to update their consumer price index (CPI). The tasks completed included resampling the basket of goods and services and estimating new expenditure weights. The new weights are based on the results of the 2019/2020 household income and expenditure survey (HIES). An action plan for updating the CPI was developed and agreed with the authorities.
May 31, 2024
Bangladesh: Technical Assistance Report-Ministry of Finance Macroeconomic Framework Technical Assistance: Scoping Mission Report
Description: This technical assistance (TA) report presents the outcomes of the scoping mission of a new TA project aimed at building capacity in macroeconomic forecasting and policy analysis in the Finance Division (FD) of the Bangladesh Ministry of Finance (MoF). The FD has sought Macroeconomic Framework Technical Assistance from ICD and SARTTAC to support them in enhancing their Medium-term Macroeconomic Framework. A scoping mission was held in Dhaka in January 2023 to diagnose the FD’s current forecasting and policy analysis systems and to agree on a multi-year action plan. The project action plan is centered around the customization of the Macroframework Foundations Tool (MFT), which will support the FD in overcoming limitations in their current approach.
May 28, 2024
Suriname: Technical Assistance Report-Assessing the Launch and Administration of VAT in Suriname
Description: At the request of the Directorate of Taxes and Customs, a technical assistance mission evaluated how the authorities launched the Value Added Tax (VAT), administered the tax in the first 12-months of operation, and provided advice on improving the efficiency of the administration of VAT. Suriname implemented a VAT on January 1, 2023, replacing the Sales Tax. VAT revenue collected for the first 12 months was approximately 3 percent of Gross Domestic Product (GDP) and was 95.4 percent of the collection target. The weaker than expected VAT performance can be attributed to how the VAT implementation was managed. The authorities were not sufficiently prepared to effectively implement and administer the VAT. Several risks have been identified, and if not urgently addressed, there may be weaker VAT revenue collection, continued weak filing and payment compliance, which pose a challenge to the authorities’ fiscal program.
May 24, 2024
Guinea: Technical Assistance Report-Climate Change and Gender Budgeting
Description: [This report is only available in French] This technical report discusses ways to introduce climate and gender budgeting (CGB) in Guinea’s budget cycle. To this end, it develops an integrated approach to incorporate into the budget cycle both climate and gender (CG) aspects, as part of priorities-based budgeting, which could serve in similar contexts. Moreover, there was no program-based budget, as tagging climate and gender expenditures at the level of a program is more comprehensive and commonly suggested. The report supports that the introduction of CGB would facilitate and inform program budgeting initiatives. In Guinea, integrating climate aspects in the budget cycle face several challenges, including a proliferation of institutions involved. On gender, despite the adoption of key legislation and a national strategy on gender equality, there were limited sectoral diagnostics and sex-disaggregated statistics to cover gender transversality. The implementation of CG related national strategies is not completely translated into measures, actions, and associated costs. In addition to proposing a method for CGB tagging, this report proposes six high-priority recommendations that could significantly help integrate CG in the budget cycle in the short to medium term. The report also includes a couple of tools, which would help to successfully introduce and present CG aspects in the budget cycle. Guinea; Climate change; gender inequality; Budget cycle; budget planning and preparation; program-based budgeting; public investment spending; fiscal reporting; expending tagging; public financial management.
May 17, 2024
Costa Rica: Technical Assistance Report-Universal Basic Pension: Objectives and Constraints
Description: At the request of the Ministry of Finance, a mission from the International Monetary Fund visited San Jose. The purpose of the mission was to assess the proposal to a universal basic pension and to estimate its fiscal and welfare impact on the budget, on pension schemes, and on old age income poverty. Costa Rica is entering a demographic transition which will see the old age dependency ratios significantly worsen in the coming 20 years. The long-term financial sustainability of the general social security pension scheme (IVM) is a concern, despite various reforms introduced over the past three decades and the scheme’s reserves are expected to be exhausted by the mid-2030s. The government’s proposal intends to address financial sustainability, the adequacy of coverage and of benefit levels, as well as distributional equity through the introduction of a universal basic pension. The IMF team’s assessment is that the proposal is unlikely to fully meet its stated objectives. The proposal will worsen social security pension scheme’s financial sustainability and create additional financing needs. This will translate into an accelerated exhaustion of IVM reserves and, after the reserves are depleted, require significant adjustments to IVM parameters or higher government transfers. Old age income security may be more effectively addressed, with less pronounced fiscal side-effects, through improving coverage and compliance in IVM and expanding the reach of the social pension scheme. The primary instruments of achieving these goals are: (a) amending the rules undermining compliance with registration and wage reporting regulations in the contributory schemes, (b) improving coordination between tax and contribution collection agencies, (c) amending the regulations governing eligibility for noncontributory social pensions and (d) ensuring the noncontributory social pension is adequately financed.
May 17, 2024
Cabo Verde: Technical Assistance Report-Climate Policy Diagnostic
Description: Cabo Verde faces development challenges from multiple structural factors, including insularity, territorial discontinuity, fragility of ecosystems, and scarcity of natural resources, namely water and arable land. Climate change implications are amplifying these challenges. As an island extension of the arid Sahel zone, Cabo Verde faces severe water shortage, which the country addresses more and more through energy intensive desalination, using electricity produced largely by thermal power plants, which depend entirely on imported fossil fuels. The resulting high energy prices directly impact the cost of water production. In conjunction with climate change induced aridity, the energy-water-climate nexus presents the core development challenge for the country.
May 17, 2024
Guinea: Technical Assistance Report-Public-Private Partnership (PPP) Institutional and Fiscal Risks Management
Description: [This report is only available in French] This technical report discusses the main bottlenecks that have hampered the effectiveness of Guinea’s PPP governance framework and the management of PPP-related fiscal risks. The legal and institutional framework for PPP in Guinea appears to be strong, but its implementation is not yet effective. The institutions involved in PPP management are gradually stepping-up their staff and capacity. The PPP unit (UPPP) has developed several standard documents (forms an templates) by to assist contracting authorities in complying with legal and regulatory procedures for PPP projects. The report elaborates on the factors that prevent line ministries from completing feasibility studies, which is essential to ensure project efficiency and value for money. While the Guinean authorities appear to have fallen into the fiscal illusion of free infrastructure through PPPs, the report underlines the need to consider the fiscal costs and contingent liabilities generated by PPPs, as part of the fiscal risk management framework and the budget cycle more generally. It highlights the massive recourse to unsolicited proposals for PPPs which are often poorly aligned with government priorities and suggested, in line with good practices, to limit the use of such proposals and favor government-led calls tenders. On these grounds, this report makes nine high-priority recommendations that could improve PPP management and the associated fiscal risk in Guinea.
May 17, 2024
Bangladesh: Technical Assistance Report-Report on Climate Risk Analysis
Description: A Technical Assistance (TA) mission was conducted in Dhaka, Bangladesh, from March 5 to 9, 2023, to assist authorities in setting up a framework to assess physical climate risk in the financial system. The TA mission focused on (i) proposing a risk assessment framework tailored to available data, with a focus on the impact of floods on the banking sector, (ii) taking stock of financial and climate data availability and identifying data gaps, (iii) setting up collaboration and data sharing mechanisms, taking into account legal obligations and confidentiality constraints, between multiple agencies. The mission identified the main climate and financial data sources and existing data gaps, proposing a preferred micro approach for climate risk assessment based on high-granularity data and two alternative options relying on more aggregate data. The micro approach is a borrower-level assessment based on geo-located bank exposure data; the alternatives rely on lower granularity or country-level exposures, possibly resulting in estimates that might be of lower precision and output of lower quality. The choice of framework should aim to strike the right balance between timeliness and quality of the analysis.
May 10, 2024
Georgia: Technical Assistance Report-Report on Stress Testing the Central Bank Balance Sheet and Developing Hedging Markets
Description: This CD engagement covered two distinct areas to help the National Bank of Georgia (NBG) deliver on its price stability mandate, it: 1) provided a forward-looking analysis of the NBG’s balance sheet to assess its policy solvency and to help institutionalize such a process, and 2) outlined a strategy to develop hedging instruments in interest rate and foreign exchange (FX) markets to support monetary policy transmission. With virtually no interest-bearing liabilities, the NBG balance sheet is robust. Under the adverse shock, it improves on account of FX revaluation gains. Higher inflation also helps, since the need for a higher policy rate generates larger domestic interest income. Institutionalizing this analysis allows for early warning of the need to reduce dividend payments (or for re-capitalization) thereby supporting operational independence. Georgia has made good progress on many of the enabling conditions for developing hedging markets, but several structural factors provide challenges. A supportive regulatory environment is in place, market infrastructure is robust, and there is a range of instruments available to serve as the underlying instrument for derivatives. However, there is a lack of heterogeneity of financial risk profile and appetite amongst participants. Recommendations include setting up a standardized FX forward trading platform, pushing for upgrades of banks’ treasury management systems, supporting the targeted education and training efforts of the Georgian Financial Markets Treasuries Association, revising the current FX forward index to be more informative by publishing outright transacted rates; and publishing Overnight Indexed Swap benchmarks.