Public Information Notice No. 05/114

Public Information Notice: IMF Executive Board Discusses Conclusions of the Task Force on IMF Technical Assistance

August 12, 2005

On July 27, 2005, the Executive Board of the International Monetary Fund (IMF) discussed the conclusions of the Task Force on IMF Technical Assistance, which was created by the Managing Director to follow-up on the recommendations of the Independent Evaluation Office's (IEO) Evaluation of the Fund's Technical Assistance.¹

Background

In January 2005, the IEO issued its evaluation report on the Fund's technical assistance. In a statement to the Executive Board, the Managing Director agreed with the thrust of its recommendations, which were aimed at strengthening the effectiveness of the technical assistance (TA) program and noted that the Fund had already begun taking steps to address the issues highlighted in the report. The Managing Director observed that there were wider issues than those indicated by the IEO which required careful consideration, such as (i) the strategic role to be played by the IMF's TA, in particular in low-income countries; (ii) the link between TA and surveillance and use of Fund resources; and (iii) the appropriate role for Fund TA relative to that of other providers. The IEO report's recommendations also needed to be considered in the wider context of the ongoing strategic review of the Fund, as well as the review of the Fund's regional TA centers. Taking into account the above considerations, a staff Task Force was created and was tasked with making concrete proposals to implement the IEO's recommendations, estimating their budgetary costs, and assessing their implications for work practices and TA delivery.

Executive Board Assessment

Executive Directors welcomed the opportunity to discuss the conclusions of the Task Force on IMF Technical Assistance, which the Managing Director had convened to follow up on the recommendations of the Independent Evaluation Office's (IEO) evaluation of the Fund's technical assistance (TA). They noted that the Task Force's proposals address the IEO's main recommendations, which were to (i) introduce a more medium-term perspective for setting technical assistance strategy and priorities; (ii) strengthen the tracking and evaluation of technical assistance implementation and results; and (iii) enhance country ownership of technical assistance activities. Directors broadly endorsed the Task Force's proposals, which they viewed as key steps toward further enhancing the effectiveness of the Fund's technical assistance. However, a few Directors saw the need for further, more in-depth discussions on the strategic issues related to the Fund's TA, including clarification of the scope and purposes of TA, prioritization of the types of TA provided by the Fund, particularly that from limited internal resources, and greater focus on upstream TA activities.

Directors supported the IEO's call for a central role for area departments in developing a country-focused, medium-term, holistic TA strategic framework. They broadly welcomed the Task Force's proposal to achieve this objective through the production of Technical Assistance Country Strategy Notes (TACSNs) for intensive Fund technical assistance users and countries in which TA is particularly important from a strategic point of view. Key features of these Notes should be the involvement and ownership of the authorities, and sufficient flexibility to respond to shifts in priorities. Coordination with, and support from donors will also be important. Most Directors concurred that, in view of the resource implications of this proposal, it should be implemented first on a pilot basis, but agreed that to have a meaningful input into TA prioritization decisions, it will be important for the Notes to have a wide country coverage eventually.

Many Directors agreed with the Task Force's proposal that the Fund's resident representatives act as TA facilitators. A number of Directors cautioned, however, that resident representatives had seen their role expand in recent years, and that increasing this role further to include TA activities could involve difficult tradeoffs with their other responsibilities. In this context, some Directors expressed the view that the Resident Representative's role should center on supporting the Fund's strategic relationship with countries, and possibly, in helping assess technical assistance outcomes. A few Directors encouraged staff to explore with interested donors, where relevant, the possibility of using project funding to hire a technical assistance coordinator to work with the resident representative.

Directors agreed that the Fund should develop more systematic approaches to tracking progress on technical assistance, to identify reasons behind major shortfalls, and to shift emphasis to monitoring results. In this respect, Directors endorsed the Task Force's proposal to utilize the Technical Assistance Information Management System (TAIMS) as a vehicle for this purpose. However, a few Directors questioned whether TAIMS in its current format can adequately monitor TA outputs. Looking ahead, Directors also emphasized the importance of using TAIMS to generate information on the cost associated with individual TA activities that could be used to inform medium-term budget decisions.

Directors saw particular merit in greater involvement by country authorities in the design and follow up of technical assistance activities, based on the needs and priorities set out, where possible, in PRSPs. They noted that area and functional departments already maintain extensive contacts with the authorities on TA, but emphasized that there was merit in making these consultations systematic and in setting mutually agreed milestones to monitor progress in implementation, especially for medium- and long-term TA activities. In this connection, most Directors agreed that countries' track records in implementing TA recommendations should guide future TA allocations by the Fund. However, a few Directors cautioned that such a criterion amounted to a form of conditionality, and suggested that TA allocations be determined on a case-by-case basis.

Directors agreed that the Fund staff and experts should identify options and discuss the feasibility of alternatives with the authorities prior to drafting technical assistance recommendations, as this greatly enhances the prospects of their effective implementation. Directors supported the Task Force's proposals to invite staff and experts to be attentive to the political and institutional environment for the design and implementation of technical assistance projects, to discuss constraints and identify risks, and to reflect them in the design of the technical assistance activity.

Directors emphasized that, in view of the magnitude of the resources—both internal and external—spent by the Fund on providing technical assistance, it is critical to have in place systematic procedures for evaluating the effectiveness and efficiency of this expenditure. They therefore supported the Task Force's proposal to strengthen and expand the Technical Assistance Evaluation Program, and also called on staff, including in area departments, to develop and implement more systematic procedures for feeding back into the TA program the lessons learned from self-assessments and evaluations. The value of independent assessments of TA by third parties selected in consultation with the recipient country was emphasized by some Directors.

Directors concurred with the Task Force's proposal that the prioritization filters should be discontinued. They broadly agreed that the Task Force's proposals encompassed the key ingredients for an effective prioritization of TA resources on an ongoing basis.

Directors agreed that in a constrained budget environment, implementing the Task Force's proposals would involve trade-offs. They noted that the staff's estimate of the cost of the Task Force's proposals was necessarily highly tentative at this stage, and many Directors felt that the estimates may not have taken into account the fact that some of the proposals build on practices that have already been adopted. A number of Directors observed that costs might also be reduced by making greater use of RTACs and limiting the role of Resident Representatives. Some Directors noted that they would be prepared to support lower levels of TA as a trade-off for higher costs, however, a number of others felt that, in view of its importance in supporting institution building, particularly in low-income countries, reductions in TA activity should be avoided. Directors stressed the importance of clearly defining the TA to be provided to specific countries and identifying associated costs. There was support from some Directors for exploring the scope for introducing charges for TA, taking account of recipients' financial capacity, as these could contribute to promoting greater ownership, commitment, and TA effectiveness. However, other Directors expressed concerns about this proposal.

Directors observed that implementation of the Task Force's proposals would require the full cooperation of staff and management support. They further noted that it would be important that the Task Force's proposals feed into mechanisms that result in an efficient allocation of TA resources across countries, sectors, and policy initiatives. A number of Directors urged staff to give priority to developing and implementing mechanisms to identify emerging trends in TA demand across departments and sectors, and in cost-effectiveness so that this information could be factored into medium-term budget decisions.

Directors encouraged staff to move forward expeditiously with implementation of the Task Force's proposals. They stressed the importance of monitoring the timely implementation of the proposals, and asked that staff report to the Board periodically on that implementation.