DMF NEWS 84158 Issue 15 DMF News Issue 15, Jan. 2014 NEWS IN THIS ISSUE Best wishes from the Director Dear Colleagues, World Bank-OECD-Italy Let me take this opportunity to wish you a happy and successful Cooperation on Debt Platform 2014. The Debt Management Facility (DMF) had another fruitful year The World Bank, OECD and Italian Treasury in 2013. Along with our Implementing Partners, we were able to will collaborate on a platform for dialogue assist some 33 countries individually in various aspects of public debt among debt managers in advanced and management, through 11 DeMPA assessments, 15 MTDS missions and 7 Reform Plan emerging market countries. consultations. We also trained more than 250 participants in debt management topics at 9 Page 2 “hub” sessions held across regions. The World Bank hosted 7 Debt Management Practitioners (DMPPs) in Washington DC. They participated fully in the DMF work program (see note in this New Guidelines for DSA Newsletter). And as you may recall, a well-received DMF Stakeholder’s Forum was held in Analysis Berlin in May, organized together with the German Federal Ministry for Economic Cooperation The World Bank and IMF have released a new and Development. guidance note for staff and country To start the New Year with some more good news, we have made significant progress in authorities performing Debt Sustainability establishing the foundations for DMF II, which we hope to launch at the Fifth Annual Analysis. Stakeholders’ Forum scheduled for April 3-4, 2014 in Brussels, Belgium. Page 2 We thank you for your continued support and look forward to your potential participation in the variety of DMF programs. Practitioners’ Corner Best wishes, Hear from two government officials –from Vietnam and Kosovo – and a mentor who Jeff Lewis participated in the Debt Management Director, PREM, Economic Policy, Debt and Trade Department Practitioners’ Program (DMPP). The World Bank Page 2 Mark your calendars! The next Debt Management Facility Stakeholders’ Forum, “Debt 1 UCTAD Debt Conference th Management in Developing Countries: New Frontiers and Ongoing The World Bank participated in UNCTAD’s 9 Challenges,” is scheduled for April 3-4, 2014 in Brussels. Among topics Debt Management Conference in Geneva. to be explored are: the debt management impacts of the U.S. Federal Reserve “tapering”; new avenues for financing infrastructure; an Page 3 overall risk management framework for debt management, and 2 challenges associated with international bond issuance. Click here for more information and Recent DMF activities registration. DMF meetings, missions and training. Page 3 1 http://bit.ly/1i6Hykh 2 http://bit.ly/19A4OEd DMF NEWS | Issue 15 2 World Bank-OECD-Italian New Guidelines available for Alban Fetahu, Ministry of Finance, Kosovo: “The Treasury Collaborate to Bank-Fund Debt Sustainability DMPP is a unique Support Knowledge Sharing on Analysis (DSA). opportunity which has Public Debt Management Following review by the respective Boards of significantly broadened the World Bank and the IMF, an updated my professional horizon. 3 guidance note for application of the Debt Apart from working with Sustainability Framework (DSF) to the highly experienced debt production of DSAs has just been released managers and On December 4, 2013, the World Bank, the into the public domain. Revisions to the DSF economists, I have also participated in a OECD and the Italian Treasury announced an introduced in 2012 are covered, including MTDS mission to Liberia and attended a agreement to collaborate on the Public Debt updated debt thresholds and benchmarks, as variety of training sessions related to debt Management Network (PDM Network), a well as a ‘probability approach’ for special management and economic development. virtual knowledge sharing platform country cases and a new method for While part of the DMPP, I have become dedicated to promoting sound practices in assessing overall debt distress. This guidance familiar with the MTDS Analytical Toolkit government debt management. Established note targets both staff and country which is a World Bank product used by in 2004 by the OECD and the Italian authorities, regardless of their level of countries to conduct the analytical part of Treasury, in cooperation with the OECD expertise with the Framework. It is a the debt strategy. Upon return to Kosovo, I Working Party on Debt Management, the comprehensive guide to using the DSF. intend to further inform the debt management process by applying the skills PDM Network provides resources and a Practitioners’ Corner and experiences I have gained while I was space for dialogue among debt managers Two government officials from debt part of the DMPP. Finally, I would like to from advanced and emerging market management offices have been in the World express my great appreciation to the countries. Bank’s Washington office for three months, Economic Policy and Debt Department and participating in the Debt Management the Treasury of the World Bank for always PDM Network partners include Practitioners’ Program (DMPP). The finding space to engage me in a variety of governments, multilateral organizations, program, which is funded through the DMF, tasks.” public and private research centers and allows debt practitioners to get exposure to a financial institutions. In line with the World wide range of debt management practices Lars Jessen, Lead Financial Bank’s missions of reducing extreme poverty Officer/Sovereign Debt, and economic policy issues. We asked them and promoting shared prosperity, the Bank World Bank Treasury and a and one of their mentors to provide us with engages in a range of activities to help DMPP mentor: their views of the program: governments reduce financial vulnerabilities “The DMPP provides an and foster macroeconomic stability and Hien Nguyen, Ministry of opportunity for country growth. Promoting sound practices in debt Finance, Vietnam: officials and World Bank management is a critical component of this “During the 3 month staff to exchange effort, as prudent debt management can program at the World experiences and ideas in help countries reduce risk exposures, protect Bank I have had a chance the field of debt public resources, and ensure the to participate in training in management – potentially with substantial sustainability of development programs. macroeconomic issues as benefits to both parties. I have had the well as debt management chance to work closely with Alban Fetahu Given the shared objectives of facilitating activities, including from the day he arrived in Washington in knowledge exchange and dialogue among country-economist “Boot-camp”, DSA and November 2013. The following observations debt managers around the world, the World MTDS courses. I have also had the are based on our working together over three Bank, the OECD and the Italian Treasury will opportunity to learn from experiences in months: collaborate to support the PDM Network’s debt management through joining the  Alban participated in the MTDS mission to ongoing activities and expand the Network’s Tanzania follow-up MTDS mission. All Liberia. Even without prior experience reach among developing country partners. knowledge that I have gleaned during the working with the MTDS Toolkit he was The collaboration offers an opportunity to time in Washington DC will be helpful for my able to provide substantial input- and it leverage the knowledge and expertise of the work in the Ministry of Finance of Vietnam. I was clear that there is a great deal of three organizations and build on the hope that more debt management experts interest in developing countries hearing Network’s extensive information resources. from developing countries can have a chance about experiences from colleagues in The PDM Network provides news, to participate in this program to improve similar situations; knowledge and capacity building resources, their debt management capacity. I have  To maximize their time, potential and knowledge sharing opportunities. Access really enjoyed the time at the World Bank participants in DMPP should think carefully the PDM Network at and thank you all for a productive program.” about issues they would like to focus on www.publicdebtnet.org. during their stay at the World Bank. Specifically, areas that are directly relevant to their daily work, and where they can provide added value when they return home. Based on analysis of country experiences, Alban wrote a paper on how developing countries can improve their 3 http://bit.ly/KnJ1U5 debt recording through improved data DMF NEWS | Issue 15 3 capture from project implementing units (a discussed common practices of recording the degree of development of the domestic paper that will be used by DMF missions in external and domestic government debt debt market, and understanding the investor the future); within- and outside-of a secure debt base for government bonds. A wrap up  And an obvious point: motivation and recording system; patterns of collection of meeting for Management featured a interest in learning and contributing are other public debt records, such as the debt of presentation by Debt Management Unit staff key to a successful stay as a debt SOEs; recording domestic government debt covering alternative strategies that had been management practitioner.” by Central Banks; and the availability, quality produced using the MTDS methodology and and frequency of debt reports in the public analytical tool. domain. The presenters at the meeting were: Request for Topics Ms. Diffie B. Mensah, Economic Officer, >> Liberia. At the request of the Finance We are looking for debt management topics Ministry of Finance, Ghana; Mr. Sajjad Ministry, a World Bank team in collaboration for the Debt Managers Network (DMN) Ahmad Shaikh, Joint Secretary (Debt), Debt with WAIFEM visited Monrovia over Webinars for the coming year--and Policy Coordination Office, Ministry of November 11-15, 2013 to provide MTDS welcome your ideas. We look forward to Finance, Pakistan; and Mr. Emanuel follow-up assistance, building upon the hearing from you! (Please email your Ssemambo, Head of Middle Office, Loans baseline mission of July 2013. Under the suggestions to eriordan@worldbank.org). and Grants Division, Central Bank, Uganda. existing IMF program in Liberia, the More than 20 participants from Asia, Europe Government has committed to publish a and Africa, and representatives from CEMLA, debt management strategy before the end of World Bank participated in MEFMI, UNCTAD, WAIFEM and the World 2013. The objectives of the mission were tied UNCTAD’s 9th Debt Bank attended the meeting. to this requirement—examine analytic work Management Conference, undertaken using the MTDS toolkit for the strategy report, review drafts prepared by November 11- 13 2013, DMF Missions the Debt Management Unit, and advise on Geneva. Medium Term Debt Management Strategy the approval-and publication processes for The DMFAS Conference gathered some 307 (MTDS) the DMS report. participants from 87 countries, underscoring Six MTDS missions were undertaken. the high level of interest in the topics >> Burkina Faso. A World Bank team, in >> Tanzania. At the request of the presented and discussed. Jeffrey Lewis, collaboration with UNCTAD, visited Government, a joint IMF-World Bank Director of the World Bank’s Economic Ouagadougou between September 23 and mission, in collaboration with MEFMI, visited Policy, Debt, and Trade Department, spoke October 2, 2013, at the request of the Dar-es-Salam over November 12-21, 2013, to on the issues of external shocks, financial Government, to conduct a MTDS follow-up provide follow-up support for the MTDS. The stability and debt. Among other topics mission. A baseline MTDS mission had legal framework in Tanzania requires that a covered during the conference were: debt visited Burkina Faso in September 2012. The National Debt Strategy document exists to crisis prevention and debt strategies objective of the visit was to apply the MTDS help guide policymakers in their borrowing (including contingent liabilities and debt toolkit to help build capacity within the decisions. The mission assisted the portfolio), and transparency in debt Direction de la Dette Publique (DDP), while authorities in drafting inputs to this management. Presentations may be found using the results of the analytic work to document, with a parallel objective of here. 4 strengthen the authorities’ existing draft building capacity to quantify costs and risks debt management strategy report. of alternative strategies using the MTDS DMF Meetings framework and toolkit. Implementing Partners (IP) Meeting, >> Sao Tome and Principe. The World Bank, October 12th, 2013, Washington, D.C. in collaboration with CEMLA, visited the At this meeting, which took place during the Island of Sao Tome over September 30 to World Bank/IMF Annual Meetings, the October 10, 2013, at the request of the Implementing Partners discussed the Government, to provide technical assistance ongoing work program for FY14. The IPs to the Ministry of Planning and Finance on a were also briefed on the activities, country baseline MTDS exercise. The team worked coverage, governance and financing with counterparts to analyse the central arrangements proposed for the DMF II. The government’s debt portfolio to identify Figure 1 Hien Nguyen, a participant in the Debt DMF II with the World Bank and IMF is inherent costs and risks. Following Management Practitioners Program (DMPP) and a planned to be launched in early 2014. workshops on the MTDS framework and the member of the World Bank mission, works with a analytical tool, participants prepared a wrap- government official in Tanzania. Debt Manager’s Network (DMN) Virtual up meeting at which, among other issues, a Meeting on Government Debt Recording, new debt law and a legally-required debt >> Pakistan. A joint IMF-World Bank mission November 27th, 2013. This virtual discussion management strategy were discussed. visited Islamabad at the request of the gave DMN participants the opportunity to Government from December 9 to 18, 2013, to share experiences in the current practices of >> Cape Verde. At the request of the provide baseline technical assistance in government debt recording. Participants Government, a joint IMF-World Bank designing a MTDS. The mission shared the mission, in collaboration with DRI, visited MTDS framework and techniques with a Praia over October 23–31, 2013 to conduct a working group of counterparts and applied MTDS baseline program. In addition to use of the toolkit directly to debt data for Pakistan. the MTDS toolkit to support training in the The main recommendations to the design of debt management strategies, authorities included strategic guidelines for 4 debt management prepared with the http://bit.ly/1cBE0yb objectives of the mission included assessing DMF NEWS | Issue 15 4 working team, initiatives for domestic >> Honduras. The World Bank, with CEMLA trial was a success, with 10 out of 11 teams market development and potential reforms and UNCTAD, fielded a DeMPA mission to able to use their data for the MTDS to institutional arrangements. As next steps, Tegucigalpa over December 3 to 13, 2013, at Analytical Tool and cost-risk exercises with a debt management strategy is hoped to be the request of the Ministry of Finance. The the same. finalized, approved and disseminated by mission’s objective was to work closely with spring 2014. main counterparts at the MoF, the Central >> Austria. A joint World Bank-IMF- Bank and other agencies, to assess the Commonwealth Secretariat (Comsec) Debt Management Reform Plans framework for debt management in training on MTDS formulation was held over One Debt Management Reform Plan mission Honduras. The picture of debt management December 9 -13, 2013, at the Joint Vienna was undertaken. is somewhat mixed: stronger areas are found Institute (JVI) in Vienna. The training in the legal framework, preparation of a DSA, provided participants with an understanding >> Ethiopia. At the request of the authorities, and certain aspects of borrowings. of the MTDS framework through a mix of the World Bank, in collaboration with Opportunities for improvement lie in the presentations on conceptual issues and MEFMI, undertook a reform plan mission to areas of operational risk, debt recording and hands-on exercises. 28 participants from Addis Ababa, Ethiopia, from October 24-30, coordination with monetary policy. developing country ministries of finance and 2013. Building on earlier technical assistance, central banks comprised the audience for the the mission focused on key areas and >> Republika Srpska, Bosnia-Herzegovina. At training. suggested actions to build debt management the request of the RS-Ministry of Finance, capacity. Among these, improvement in the the World Bank, together with DRI and institutional framework, development of the UNCTAD, conducted a subnational DeMPA Forthcoming Activities (from domestic debt market, upgrading of the debt exercise for this Entity of Bosnia- January 2014 onward). data recording system, as well as updating of Herzegovina over December 4 to 13, 2013. Ethiopia’s debt management strategy (DMS) The team worked closely with the Debt Forthcoming DMF Training Events more frequently, while including the Management Department (DMD) and other  World Bank- APFDC DeMPA Training: requirement for a DMS in the legal units within the MoF, as well as with private January 6-10, 2014, Shanghai, China framework. sector actors, to assess the practice of debt  MEFMI MTDS Training (Portuguese): management in the RS. Among areas of February 2014, Mozambique Debt Management Performance Assessments strength were the well trained-and organized  World Bank-IMF MTDS Training: March 24- (DeMPA) staff of the DMD and a detailed legal 28, 2014, JVI, Vienna, Austria Four DeMPA missions were undertaken. framework; areas for improvement included  World Bank DeMPA Training: April 14-18, addressing of operational risks and debt 2014, JVI, Vienna, Austria >> Bangladesh. At the request of the reporting. authorities, the World Bank, in conjunction Forthcoming DMF Missions with DRI and UNCTAD, fielded a DeMPA  Nigeria (Cross River) SN DeMPA: January mission to Dhaka from September 29 to DMF Training 27 – February 7, 2014 October 7, 2013, a follow-up to an initial >> Ghana. A joint World Bank-WAIFEM  Bhutan DeMPA: January 30, 2014 DeMPA exercise held in 2008. The training session in the MTDS framework was  Madagascar Reform Plan: February 11-20, assessment revealed that over the period undertaken over October 21 to 29, 2013, in 2014 since 2008, much progress had been Accra, Ghana. The training was targeted to  Timor Leste Reform Plan: February 11-21, achieved by the debt management entities, provide attendees with an understanding of 2014 notably in the areas of governance (new debt the framework through a mix of law), coordination with macro policy (DSA),  Samoa Reform Plan: February, 2014 presentations on conceptual issues and  Pakistan (Sindh) Reform Plan: March 3-14, and in borrowings and related activities. hands-on exercises. Participants included Additional opportunities for improvement 2014 about 25 staff from WAIFEM member states remain in areas related to the domestic debt  Georgia Reform Plan: March 19-29, 2014 (the Gambia, Ghana, Liberia, Nigeria and market, operational risk management, and Sierra Leone) and Zimbabwe. This training technical capacity. session represented the first time that the workshop was delivered in part by video >> Armenia. At the request of the conference, and results for determining Government, the World Bank, in directions ahead will be reviewed carefully. collaboration with DRI, conducted a DeMPA mission to Erevan from October 29 to >> Senegal. A World Bank team, together November 8, 2013. The objective of the with DRI, visited Dakar between October 28 mission was to conduct an evaluation of the and November 1, 2013, to conduct a hub- current state of debt management practices training in developing an MTDS. The course in Armenia. Following discussions with was delivered in French. Twenty-five counterparts in the Government and private participants from 11 countries and 3 regional sector, the team presented its summary to institutions attended the training. The the authorities, which featured particular workshop provided the first opportunity in a strengths in coordination with macro policy, hub-session for participants to work on their borrowing and related activities; with areas own country data rather than on a generic for improvement including operational risk dataset. With additional lead time in management and select issues regarding preparing country databases for analysis, the organizational structure. DMF NEWS | Issue 15 5 Debt Management Facility (DMF) Newsletter Issue 15, January 2014. The DMF Newsletter is published quarterly and is provided to debt management practitioners from developing countries, DMF News donors, DMF implementing partners, civil society organizations, and private sector firms. The newsletter aims to share DMF work plans, lessons learned, and news and developments related to debt management. The World Bank 1818 H Street NW Washington, DC On the web www.worldbank.org/debt Email Abha Prasad: aprasad@worldbank.org Elliot Riordan: eriordan@worldbank.org Ivana Ticha: iticha@worldbank.org economicpolicyanddebt@worl dbank.org Telephone (202) 458-7266 Fax (202) 522-3740 The Donors The DMF’s donors are Austria, Belgium, Canada, Germany, The Netherlands, Norway, Switzerland, the African Development Bank and the European Union/European Commission.