The treasurers of the region are very interested in sharing experiences and collaborating in the processes of reforms. To this end, a group called Foro de Tesorerias Gubernamentales de America Latina (FOTEGAL) was created in 2010. The members of this permanent forum are the State Treasurers of Latin America, and through FOTEGAL they organize technical discussions and share experiences.
With the support of the Government of Japan and the collaboration of the Ministry of Finance of Peru, the Fiscal Affairs Department (FAD) of the IMF organized a Seminar on BCP in mid-April with FOTEGAL members as guests. Forty people attended the seminar, representing twelve countries: Argentina, Bolivia, Colombia, Costa Rica, Guatemala, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, and Uruguay.
Ian Storkey, an FAD consultant with a wide experience in this field, explained how to develop and implement a BCP and the main challenges that it poses. In his presentation he provided examples of successful experiences worldwide. According to Storkey,[2] business continuity at the Treasury level means maintaining the uninterrupted availability of all key business resources required to support essential treasury operations. BCP encompasses the development, implementation, and maintenance of policies, frameworks, and programs to assist treasury managers to counteract a wide range of possible business disruptions. It also aims to make the Treasury’s business processes more resilient. In short, BCP assists in preventing, preparing for, responding to, managing, and recovering from the impacts of an incident or disruptive event.
To develop the BCP, a six-step process is recommended:
- Document business activities as well as critical processes and systems;
- Undertake business impact analysis to assess probability and impact;
- Formal develop the BCP, which must includes a Disaster Recovery Plan (DRP);
- Implement or update BCP/DRP;
- Provide training to imbed measures into the day-to-day operations of the treasury;
- Execute regular testing and updating.
Several countries have successfully implemented a BCP. Australia, France, UK, and Turkey are notable examples and their experiences were focus of discussion on the seminar. Representatives from the Treasury of Colombia, Mexico, and Peru presented their experiences and shared the main challenges with their colleagues from the region.
Colombia presented their progress on the development of a BCP, including the implementation of an operational risk matrix, evaluation of critical activities, and contingency measures adopted, which included the development of an alternative site for ensuring the continuity of the critical activities of the Treasury.
Mexico presented the development of their BCP since 2008. The process in the country culminated with the creation of a Business Continuity Committee, chaired by the head of the Treasury. Mexico also set up of an alternative treasury site that is located in an area where the risks of natural disasters is low. It is strategically placed next to the alternative venue of the Central Bank.
Peru presented a real case of a disaster that happened in 2000 when fire destroyed its main headquarters. The immediate steps taken to return the Treasury to normal operations, the management of the communications during the crisis, and the subsequent actions, were studied as part of a continuous learning process. The Ministry’s Risk Committee proved a key element to help the authorities resolve the disaster, as it includes both budget and treasury representatives.
The workshop on BCP in April was developed as a result of the demands from the FOTEGAL members and the result was very satisfactory. For more information about FOTEGAL, you can visit their website.
[1] Almudena Fernandez is a Technical Assistance Advisor in the Fiscal Affairs Department. She joined the IMF in November 2012.
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