Latin American Treasurers Discuss Cash Management

Posted by Mario Pessoa[1]

During February 16-17, 2017 the Latin American Treasury Forum (FOTEGAL) together with the International Monetary Fund (IMF), the Inter-American Development Bank (IDB), the World Bank, and the Swiss Economic Cooperation (SECO) organized a high level workshop in Washington to discuss active cash investment and electronic payment systems.

The FAD Deputy Director, Chris Towe, emphasized in his opening remarks that investing excessive cash can potentially generate positive financial returns to the treasuries, but the challenge is to minimize risks and avoid a negative impact on the payment of government obligations. On the use of electronic payment systems, he pointed out that developments have been impressive. The challenge is how to incorporate these facilities in treasury’s operations and provide better services to the public.

SARTTAC is Launched and Completes its Maiden Training Course

Posted by Udaya Pant[1]

The South Asia Regional Training and Technical Assistance Centre (SARTTAC) was inaugurated on February 13^th, 2017 by the Secretary of Economic Affairs of the Government of India, Shaktikanta Das, at its first class facilities in New Delhi. Representatives of all six SARTTAC member countries (Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka) attended as did six development partners, four of whom are contributing to SARTTAC (Australia, DFID, the EU, and Korea). A delegation of senior IMF staff was led by Deputy Managing Director Carla Grasso, and included the Directors of the Asia and Pacific Department and the Institute for Capacity Development, as well as representatives of the Fiscal Affairs Department (FAD).

Both member countries and development partners commended the IMF for setting up SARTTAC within eleven months of the signing of the agreement between Minister of Finance Jaitley and the IMF’s Managing Director, Christine Lagarde. The collective efforts of several IMF departments and SARTTAC staff were recognised as were those of counterparts within India’s Finance Ministry.  Expectations over SARTTAC are very high from all stakeholders, notably with regard to its unique design in combining technical assistance and training under one roof. Member countries in particular stressed the demand-driven design of SARTTAC programmes and the need for flexible and swift responsiveness. In sum, SARTTAC was envisioned to become a center of excellence, blending capacity building, knowledge sharing and policy advice.

Big Data Analytics for Better Revenue Administration

Posted by Duncan Cleary[1]

The IMF’s senior management recognizes the potential value of Big Data and Analytics[2] for its work. In late 2015, the IMF hosted a symposium on Big Data, and following this event the Managing Director, Christine Lagarde, sponsored the Big Data Innovation Challenge, where she urged staff to ‘step out of your comfort zone and propose bold new ideas’. The challenge saw 109 entries from across 16 departments. There were ten finalists chosen by a panel of internal and external experts. Of these finalists, six were awarded seed money. A proposal from the IMF’s Fiscal Affairs Department (FAD) was placed fifth, with the title ‘Applying Analytics for Better Tax and Customs Administration’. This proposal laid out in broad terms how applying analytics can assist tax and customs administrations in improving their performance across a range of business areas, but with a focus on risk management.

FAD, through its Revenue Administration Divisions, provides technical assistance to many countries on a regular basis. The objective is for these countries to achieve systems of tax and customs administration that are sustainable, fair, and efficient. How can making better use of available data assist in achieving this goal, and what role can FAD play? The proposal from the Big Data Innovation Challenge seeks to develop a methodology that combines both in-country field work and headquarters-based analysis of micro-level tax and customs data. Tax and customs administrations are often holders of large quantities of micro level data, their ‘Big Data’, at the taxpayer/ trader level, and at the transactional level.

Tilting the Balance towards Quality Infrastructure in Developing Countries

Posted by Taz Chaponda[1]

At a recent international conference[2] on “Quality infrastructure and the Multilateral Development Banks”, the Director General of the Japanese Ministry of Economy Trade and Industry (METI) issued a stark reminder of the potential costs of “poor” infrastructure. He cited the Kobe highway disaster, when in 1995 a major highway in Japan collapsed following an earthquake.  The Director-General explained that the highway was built in a rush and the poor construction works resulted in its collapse several decades later.  He went on to discuss the expansion of power generation in the country’s early years of development through high-polluting plants that were subsequently phased out due to the negative impact on local populations.

Such examples remind us that even the richest nations went through a period of development where low quality infrastructure was pervasive, with very negative social and environmental consequences. Such issues are still common in many developing countries. This motivated the conference to explore what exactly is meant by “quality infrastructure”.  Do countries really need this type or level of infrastructure, and if so, how should it be procured and paid for?