February 21, 2018

Managing Fishing Revenues

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Posted by Richard Neves and Iris Claus[1]

In 2015 2.7 million tonnes of tuna (a catch valued at around USD 2.2 billion) were caught in the largest tuna fishery in the world (the Western Pacific fishery), accounting for around 57 per cent of the global catch. The 1.8 million tonnes of Skipjack tuna (the smallest and most abundant of the major commercial tuna) species represented around 67 per cent of the catch and were caught mostly by “purse seining”, namely the use of a large net to catch schools of fish.  

Skipjack tuna are not considered an endangered species. They end up mostly as canned tuna which is consumed globally. The Western and Central Pacific Fisheries Commission (WCPFC) scientific committee recently outlined that the stock of skipjack tuna in the Pacific is moderately exploited, fishing mortality levels are sustainable, and the spawning biomass can be maintained near the target reference point of fifty per cent (basically, the combined weight of all the fish stock that are able to reproduce).

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February 13, 2018

Who Watches over the European Banking Supervisor? No-one Really!

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Posted by Peter van Roozendaal and Jochen Wenz[1]

Banks and other financial institutions have a crucial role to play in society, and are of great importance for a country’s financial and economic health. The global financial crisis ten years ago showed that if big banks fail, countries are in trouble.

In response to the crisis, the EU Member States transferred the supervision of the largest banks from national supervisors to the European Central Bank (ECB). After the so-called Single Supervisory Mechanism (SSM) took effect in November 2014, the ECB became responsible for early detection of emerging threats to the financial system, so as to be ready to respond swiftly and decisively, if necessary.

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February 08, 2018

Building Bridges: The Open Budget Survey 2017 Results

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Posted by Jason Lakin[1]

Good public financial management practice is increasingly understood to require the free flow of information, robust oversight institutions (legislatures, auditors, etc.), and a role for the broader public to engage at each step of the budget process, from formulation through oversight and audit. These are the core practices and institutions that underpin representative democracy, and they are as critical for democratic policymaking as they are for managing the budget.  

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February 05, 2018

What We Can Learn from Tolstoy about FMIS

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Posted by Moritz Piatti-Fünfkirchen and Ali Hashim[1]

When Leo Tolstoy wrote Anna Karenina about 150 years ago, he inspired generations. His novel begins

“All happy families are alike; each unhappy family is unhappy in its own way.”

Now, what does this have to do with Financial Management Information Systems (FMIS)? What Tolstoy perhaps meant was that a deficiency in any one of a host of factors dooms an endeavor to failure. Consequently, to make an endeavor successful it is necessary to mitigate against deficiencies and risks in multiple areas.

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January 31, 2018

Armenia Tightens Control of its Extra-Budgetary Entities

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Posted by Atom Janjughazyan[1]

 

In December 2017, the National Assembly of the Republic of Armenia amended the Treasury System Law (TSL) and Law on Non-Commercial Organizations (NCOs) to extend the coverage of the treasury system to extra-budgetary entities (called non-commercial organizations in Armenia) under the supervision of the central government. This important decision concludes a debate that has lasted since before the law permitting the establishment of NCOs was approved in 2001. The fulcrum of this debate was the trade-off between efficiency associated with increased managerial flexibility, on the one hand, and issues of transparency, fiscal risks and macroeconomic stability, and efficiency due to improved central control, on the other hand.

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January 26, 2018

How “Premature Funds” Can Leave Countries Poorer

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Posted by Andrew Bauer and David Mihalyi1

Countries rich in oil and minerals commonly use sovereign wealth funds (SWFs) to store a share of their natural resource wealth. Examples include Chile, Kuwait, Norway, Texas (U.S.), Timor-Leste, and more than 50 other countries. These funds have been used to decrease budget volatility, save for future generations, or earmark financial earnings for education or infrastructure spending.

But over the last decade we have seen a new trend: governments creating funds when resource revenues are small, distant, or uncertain. This is yet another manifestation of the "presource curse" where the discovery of oil, gas, or minerals leads to rosy expectations and over-optimism from governments, citizens and international institutions, leading in some cases to an unsustainable spending boom and institutional upheaval.

International advisors—especially some economists at international institutions, investment bankers, and lawyers—have promoted the creation of what we call “premature funds.” Yet there are considerable costs and risks associated with their establishment, and uncertain benefits.

Risk 1. Saving while borrowing

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January 17, 2018

Is the Open Budget Survey Biased against Francophone Countries?

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Posted by Ian Lienert1

In the Open Budget Surveys (OBSs) published prior to 2015, the average overall score of francophone countries were quite a lot lower than those of comparable non-francophone countries. This led some French-speaking observers to remark that the OBS is biased against francophone countries.

Is there any validity in this claim? Are there specific features of francophone countries’ PFM system that are not captured in the OBS, or which lead to bias?

A new study considers these questions, by examining:

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January 12, 2018

Gender Budgeting in Central America

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Posted by Virginia Alonso Albarran[1]

The IMF’s Technical Assistance Center for Central American Countries and the Dominican Republic (CAPTAC-DR), and the IMF’s Fiscal Affairs Department (FAD) organized a seminar on Gender Budgeting in Costa Rica in December 2017.

More than 20 representatives from seven countries participated (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama). The seminar was conducted by FAD together with experts from UN Women, Mexico and Spain. The country participants were mainly technical staff of the budget directorates and, for Costa Rica, also from the Women’s Institute.

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Reorganization of the Budget Directorate in Senegal

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Posted by Bruno Imbert[1]

The budget department in Senegal underwent recently a major reorganization, having remained broadly unchanged for several decades. The old structure had outlived its useful life and is being replaced by one that is better able to meet the challenges of technological advances in budget preparation and execution, enhanced requirements for transparency, and the implementation of performance-based budgeting and other PFM reforms.

Since the early 1950s, responsibility for both the preparation and execution[2] of the annual budget has been assigned to the Ministry of Finance (MoF), but it took several decades to progressively shape a department of the ministry to take charge of the budget.

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La réorganisation de la Direction générale du budget (DGB) au Sénégal

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Publié par Bruno Imbert[1]

Après plusieurs années d’une relative stabilité la direction en charge du budget a récemment vécu des changements majeurs. L’ancienne organisation a été remplacée par une nouvelle plus à même de faire face aux enjeux liés aux avancées technologiques pour la préparation et l’exécution du budget, aux exigences croissantes en matière de transparence et à la mise en œuvre des réformes de finances publiques telle que la gestion axée sur les résultats.

Au Sénégal, la responsabilité pour la préparation et l’exécution du budget[2] annuel a, de longue date, été confiée au Ministère des Finances mais il faudra attendre plusieurs décennies pour que se dessine progressivement une véritablement direction en charge de ces problématiques.

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