Monitoring Private Sector External Debt

Transcription

1 Monitoring Private Sector External Debt Marlborough House, London September 17-18, 2009 Sponsored by Commonwealth Fund For Technical Co-Operation In collaboration with speakers from Bank of International Settlements Macroeconomic and Financial Management Institute of Eastern and Southern Africa International Monetary Fund The World Bank United Nations Conference on Trade and Development

2 Background Since the early part of this decade, there has been a resurgence in private capital flows to developing countries which ebbed significantly with the outbreak of global financial crises in Bulk of such capital flows were sourced by the corporate and banking sector in the developing countries. Although the emerging market countries continued to attract most of these capital flows, for the first time, many of the low-income developing countries also experienced significant external borrowings from their private sector. This rising volume of exposure to private sector external debt has prompted most of the emerging market economies to seek ways of developing sustainable capacity to comprehensively monitor and record the inflows and outflows of such debt to avoid ripple effects from external payment problems which could result in financial instability as was evidenced during the Asian crisis in 1997 as well as the most recent crisis of Most developing countries on the other hand do not have any comprehensive institutional framework for actively monitoring private capital flows. Against this background, the seminar will discuss the policy and regulatory framework for managing corporate external debt; institutional arrangements for effective monitoring and analysis of private capital flows and short-term debt; and data requirements. From the crosscountry experience of developing countries, the seminar will further deliberate on:- (a) the generic templates and methodology for capturing data on Private Sector External Debt (PSED), and (b) using computerised systems for monitoring PSED. The seminar will allow participants to exchange ideas on best practices to monitor and analize foreign private capital flows from an international, regional and country perspective. Methodology The seminar will take place during the course of two working days through a series of presentations and discussions conducted by representatives of the Bretton Woods Institutions (BWI), Bank for International Settlements (BIS), United Nations Conference on Trade and Development (UNCTAD), Macroeconomic and Financial Management Institute (MEFMI), and central banks from emerging and developing economies, among others. The event is oriented to high-level officials with vast experience in the external sector from central banks.

3 Venue Malborough House, London Discussion topics will include the following:- a) Contemporary issues in PSED and short-term external debt; b) Monitoring and managing PSED and short-term external debt in emerging market and developing economies; c) The need for reliable and comprehensive data capture and linkages with balance of payments statistics, international investment position; d) Challenges in the data collection process for PSED and short-term external debt; e) Data sources, availability and collection under different policy environments and institutional arrangements; and f) Relevant Management Information Systems for capturing data on PSED. The workshop will be followed by a two-day meeting of a PSED Technical Working Group (TWG), which will crystallize topics discussed during the seminar and identify ways to assist countries to comply with guidelines and international standards regarding information on foreign Private Capital flows. The TWG will come up with the following outputs:- a) Generic survey forms for capturing PSED and shortterm data b) Analytical aspects of PSED and short-term debt c) PSED and short-term debt reporting requirements (including report templates) d) Technical report summarising the workshop discussion to guide the features to be developed in Debt Recording and Management Systems (CS-DRMS) Programme Outline Topics highlighted in the preliminary program of the event include:- Day 1 Institutional arrangement, policy issues, regulatory framework and management of PSED (short, medium and long term) Linkages between PSED, Balance of Payments and IIP statistics Minimum data requirements for analysis and reporting on PSED Data collection and compilation for PSED (short, long term) World Bank Debtor Recording System and PSED data Day 2 Challenges in capturing and monitoring PSED (short, long term) Country experiences Data collection and compilation for PSED (short, long term) Management Information Systems for capturing data on PSED Computerized Systems for Monitoring PSED

4 Resource Persons Mr Neil Patterson - Facilitator and Consultant Neil Patterson spent most of his working career as a macroeconomic statistician before retiring several years ago from his position as an Assistant Director of the IMF Statistics Department. He worked at the IMF and the Australian Bureau of Statistics as a manager, a compiler, and as a researcher in external sector statistics, including balance of payments, international investment position, and external debt. He also worked in these agencies, and at the United Nations, in other statistical fields including national accounts, public finance, and price statistics. He helped develop the new balance of payments and international investment position manual and the external debt guide. Dr Karsten von Kleist (Bank for International Settlements) Karsten von Kleist is deputy head of international financial statistics at the Monetary and Economic Department of the Bank for International Settlements (BIS), a position he has held since He joined the BIS in 1986 and has held various positions, including senior economist in the BIS representative office in Mexico ( ). His current research interests include growth in international bank lending related to financial crises and research on global risk transfers involving financial derivatives. He established the Joint External Debt Hub, a popular data-collection project with colleagues in the IMF, World Bank and the OECD. He holds a PhD in economics from Freiburg University and a M Phil in economics from Oxford University. Mr Eduardo Valdivia-Velarde (International Monetary Fund) Eduardo Valdivia-Velarde is a Ph.D. Candidate (ABD) in Economics at the University of Maryland, USA. He is the Deputy Division Chief, Balance of Payments Division, Statistics Department, IMF. Secretary of the Inter-Agency Task Force on Finance Statistics (TFFS) since Coordinator and lecturer in several courses on balance of payments, IIP, and external debt statistics. Guest lecturer in seminars on balance of payments and external debt organized by the other international organizations, including the Andean Community,, UNCTAD, and WAIFEM. Led a ROSC data module mission to Oman and conducted balance of payments and external debt statistics technical assistance missions to Lithuania, Tanzania, Vietnam, and several Latin American countries. Other professional experience in international financial issues include: Advisor to the Minister of Finance of Peru on external debt issues ( ); Advisor to the Governments of Ecuador ( ) and Bolivia ( ) on external debt issues; and Deputy Manager of the External Sector at the Central Reserve Bank of Peru ( ). Professor of International Trade and International Economics at the Universidad del Pacifico ( , 2001) and the Universidad de Piura (1982), Peru. Mr Charles Assey (MEFMI) Charles Assey, a Tanzanian national, is currently employed by MEFMI as a Programme Officer in the Macroeconomic Programme. He is responsible for capacity building in monitoring and analyzing private capital in the MEFMI region. He joined MEFMI in May 2005 on secondment from the Bank of Tanzania, where he worked since 1989 as part of the Balance of Payments Department of the Economic Policy Directorate. Charles has worked mostly on managing enterprise surveys, designing and developing monitoring systems and interpreting results through analytical reports. Since joining MEFMI he has been proactively involved in working with member countries in developing the framework for strengthening the capture and analysis of data on foreign private capital including private sector external debt. He has managed foreign private capital (FPC) enterprise surveys in Tanzania, Uganda, Malawi, Zambia and led demand assessment missions in Botswana and Rwanda. He holds a Masters degree in International and Monetary Economics from the University of Dar es Salaam. Mr Ibrahim Levent (World Bank) Ibrahim Levent is a Senior Information Officer at the World Bank, with the Development Data Group and the team leader for the Financial Data Team. He is responsible for managing the World Bank Debtor Reporting System (DRS), which gathers loan by loan data on external debt from all member countries. He also manages the joint World Bank/IMF Quarterly External Debt Statistics (QEDS) database. Mr Balliram Baball: The United Nations Conference on Trade and Development (UNCTAD) Balliram Baball is presently the Training Coordinator/ Senior Debt Management Expert at the DMFAS Programme, UNCTAD, having over twelve years of cumulative experience with this organisation.. His experience in debt management spans over 20 years, starting with implementation of the Debt Analysis and Financial Analysis System (DMFAS) in Trinidad and Tobago and supporting the Government in restructuring its debt in the late 1980s and early 1990s. Since then, he has been working internationally for UNCTAD and other international and regional organisations in the areas of debt recording, debt statistics, debt analysis, debt strategy formulation, private sector external debt and other areas of debt management, in Asia and South-East Asia, Africa and the Caribbean.

5 It is considered by many as more than computer software; but as a model of best practice in debt management The Debt Management Programme of the Background The Debt Management Section (DMS) which implements the s capacity building programme in debt management in its member countries is an arm of the Special Advisory Services Division (SASD) of the Secretariat. In accordance with the mandate from the Commonwealth Heads of Government and the principles of the Millennium Development Goals to ensure sustainable debt of member countries, the central feature of the Secretariat s debt management programme is to build capacity as well as to provide advisory support on debt strategies and institutional aspects including the provision of the world renowned CS-DRMS. The programme has benefited a large number of low and middle income developing countries. As part of the advisory services, the secretariat provides training to the debt management personnel and economists in Research Departments, Economic Policy Units, Debt Managements offices, etc. in the use of the software for debt recording, management and analysis. DMS also provides advisory services in debt management to member countries in developing prudent debt strategies, restructuring debt portfolios, reviewing institutional arrangements for debt management and strengthening the domestic debt market. In addition, DMS carries out in-depth studies on sovereign debt management and makes recommendations on broad areas of reforms and corrective actions for strengthening debt management policies, institutional arrangements, legal framework and capacity building in debt management. Treasuries, Accountant General s Offices and Central Banks in some 59 countries, including 15 outside the Commonwealth.. Of prime importance is the ability of the software to meet the international reporting requirements of multilateral organisations such as the World Bank, International Monetary Fund and the Bank of International Settlements - at the click of a mouse. Debt data can also be downloaded to specialised analytical applications, such as the Debt Sustainability Framework and Medium-term Debt Strategy (MTDS) toolkits. The Secretariat is also looking at the possibility of linking CS-DRMS to Integrated Financial Management Systems, which is used by various governments. Using technology Over the next few years the Secretariat will be improving delivery and support of the debt management programme by using the web technology more proactively. Users can already download patches and service packs from www. csdrms.org, which acts as an e-forum. The CD-DRMS support team can also connect to user sites through the internet for the purpose of technical intervention. Future possibilities include on-line conferences and broadcasts. The feasibility of web-enabling CS-DRMS is already being discussed. DMS will launch an elearning program in debt management and CS-DRMS early Our Debt Recording System - CS-DRMS DMS has developed and continuously maintains the - Debt Recording and Management System (CS-DRMS - visit us at www. csdrms.org) which allows the user countries to record their portfolio of sovereign debt (external and domestic). Since its first launching in 1985, CS-DRMS has grown in both Commonwealth and non-commonwealth member countries to achieve leadership status in the area of debt information management solutions. Available in English and French, the system is used by Ministries of Finance,

6 CS-DRMS is one of the jewels in the Commonwealth s crown a world leading and transforming product. Kamalesh Sharma, Commonwealth Secretary-General The success of CS-DRMS is due not only to the strength of the software and support for users, but also to its delivery as an integral part of the Secretariat s programme of advice and training. It is considered by many as more than computer software; but as a model of best practice in debt management. assist in bridging them while working with debt office staff at the work place or through workshops. We support work on networking debt management institutions to enable online sharing of information on debt and interfacing the CS-DRMS with IFMIS. CS-DRMS is one of the jewels in the Commonwealth s crown a world leading and transforming product. Kamalesh Sharma, Commonwealth Secretary-General The Central Bank, for more than 20 years now, has hosted CS-DRMS, providing a supporting role to the Ministry of Finance in managing Government s debt. This software has allowed us to maintain a database inclusive of gross external and domestic debt, giving us the capacity to effectively and efficiently track and forecast outstanding debt at any given time. Karen Carbis, Central Bank of Belize The system is certainly a technological innovation that will help a country manage its debt in an efficient and effective manner. Cyril Teboua, Treasury, Solomon Islands Debt Management Services of the The Debt Management Section (DMS) offers the following services Needs Assessment Missions: We undertake needs assessment missions to CS-DRMS countries to identify areas of weaknesses in debt management and recommend measures to address them e.g. review of primary and secondary legislation, institutional set up and responsibilities, coverage of debt data, including recording of government guarantees, grants and on-lending. We identify institutional and technical capacity gaps in the existing arrangements for debt management and Support on Institutional Arrangements: We undertake reviews of institutional set up for debt management. We make recommendations and support the re-organisation of debt offices to comply with sound practices for example establishment of Front, Middle and Back offices, adoption of appropriate legal frameworks, institutional arrangements and governance procedures, organisation of debt management operations and development of procedures manuals to mitigate against key person risk. Debt data computerisation: We develop and maintain:- (a) our proprietary Debt Recording and Management System (CS-DRMS) for the recording, reporting and analysis of public debt, and (b) the Securities Auction System (CS-SAS) for the management of auctioning of government securities. We provide assistance on the installation of CS-DRMS and CSSAS We offer hotline support for the software via and telephone. We remotely and securely connect to user systems via Internet for technical support. We ensure that our software remains current to evolving debt management practices by constantly updating the application.

7 Debt data recording and quality: We assist countries build debt databases for both external (including private sector non-guaranteed debt) and domestic debt in line with recommended sound practice. We review debt databases for accuracy, timeliness, coverage using the IMF Data Quality Assessment Framework (DQAF) and participate in joint missions with other organisations such as theworld Bank to review debt databases We participate in World Bank Debt Management Performance (DeMPA) assessment missions to CS-DRMS countries, which serves as one of the basis for our intervention in CS-DRMS countries to help them establish sound practices for debt management. We are part of the IMF led Task Force for Financial Statistics for setting standards and debt data compilation and dissemination. Capacity Building and Sensitisation Workshop: We conduct regular in-country and regional workshops independently or jointly with MEFMI and WAIFEM on debt recording and analysis using the CS-DRMS, securities auctioning using the Commonwealth Secretariat Securities Auctioning System (CS-SAS), debt data quality and management We conduct regular in-country training independently or jointly with the World Bank or IMF on Debt Sustainability Analysis, Medium Term Debt Management Strategies and debt data quality and management. We conduct Pan-Commonwealth training on administration of CS-DRMS and development of country specific reports using the report writing tool available within the software. Enhancement of the CS-DRMS and CS-SAS: We continually enhance CS-DRMS/CS-SAS to make them compliant with current developments in ICT, debt management and user requirements. Debt data dissemination: We assist countries comply with and report to the World Bank and IMF under various initiatives including the Debt Reporting System (DRS), Special Data Dissemination Standard Site (SDDS), General Data Dissemination System (GDDS) and Quarterly External Debt Statistics (QEDS). We assist countries disseminate debt data through the production of Statistical Bulletins and Annual Debt Management Reports. Debt analysis: We undertake debt analysis using various tools such as the CS-DRMS Management Tools, IMF and World Bank Tools on DSA and MTDS. We conduct regional workshops on general public debt management focusing on debt management concepts, investor base analysis, portfolio analysis, debt sustainability and risk analysis, securities pricing and valuation and portfolio valuation. DMS is an implementing partner in the World Bank s Debt Management Facility Debt Policy and Strategies: We assist countries develop debt management policies and strategies We help build in-country capacity to undertake Debt Sustainability Analysis (DSA) and for developing Medium Term Debt management Strategies (MTDS) independently and jointly with other international and regional providers such as the World Bank, IMF, MEFMI etc.

8 Other areas of Support: We facilitate sharing of knowledge on debt management by arranging attachment of staff to other countries and to our offices in London We organise bi-annual Pan-Commonwealth Debt Management Forum and Regional CS-DRMS User Group Forum to provide a platform for debt managers to interact with debt management experts, and practitioners thus facilitating sharing of experiences. When required, we place debt management/cs-drms experts in member countries to address specific debt management issues. We organise thematic seminars on topical and emerging issues in debt management. This is an indicative but not exhaustive list of our services. For more information please contact us at support@csdrms.org and visit our website at Mr Arindam Roy Head, Debt Management Section Special Advisory Services Division Marlborough House, Pall Mall London SW1Y 5HX United Kingdom Tel: +44 (0) Fax: +44 (0) a.roy@commonwealth.int Walton Gilpin Project Manager Adviser, Debt Management Section Special Advisory Services Division Marlborough House, Pall Mall London SW1Y 5HX United Kingdom Tel: +44 (0) Fax: +44 (0) w.gilpin@commonwealth.int Mac Banda Business Analyst Special Advisory Services Division Marlborough House, Pall Mall London SW1Y 5HX United Kingdom Tel: +44 (0) Fax: +44 (0) m.banda@commonwealth.int