STRATEGIES FOR FINANCING DEVELOPMENT

Debt Strategy

Research, Analysis and Advocacy

• 20-23 September and 13-16 April. OIF Low-Income Ministers Advocate Debt Relief Reforms. DFI continued its support for this ministerial forum, which met at the BWI Spring Meetings on 15 April and at the Annual Meetings on 22 September. Ministers advocated faster relief under HIPC and MDRI, reforms to the LIC-DSF, legislative action against vulture funds, Highly successful press conferences after each meeting resulted in extensive press coverage and discussion of Ministers’ conclusions with G20 Ministers and officials, including detailed responses from the European Commission and UK Treasury. The press communiqués can be found here and here.
• April-September - LIC Debt Sustainability Analysis Reports. DSAs results are available on the IMF site. The results for Benin, Cameroon, Kyrgyz Republic, Lao, Liberia, Mauritania, Moldova, Mozambique, Papua New Guinea, Rwanda, Senegal, Tajikistan and Tanzania are similar to those of the previous DSA. Ghana and Togo have improved and Cote d'Ivoire and Republic of Congo have worsened their status. The results for Zimbabwe show that the country is in debt distress.
• 5 September - BMZ Seminar on "Managing Sovereign Debt Crises beyond HIPC". DFI helped to mobilize Development Countries Participants for the Workshop "Managing Sovereign Debt Crises beyond HIPC" hosted by the Federal Ministry of Development Co-operation (BMZ) in Berlin in June. For the organizers final report click here.
• 8-9 June – DMF Stakeholders Forum 2011. DRI's HIPC CBP partners participated in the annual DMF stakeholders forum organised jointly by the World Bank and Seco in Bern. Key issues discussed included lessons from 20 years of debt relief and recent debt restructuring, prudent lending and sustainable borrowing, subnational debt, domestic debt market development, and future challenges in debt management. For more details and the presentations made see here.

Capacity Building Events

• 15-29 September - MTDS mission to Mongolia. DFI joined a World Bank mission to Mongolia requested by the Ministry of Finance, which focused on providing technical assistance in debt management strategy formulation. The mission shared the Bank-Fund framework for Medium-Term Debt Management Strategy (MTDS) development, and jointly with a government team, applied it to Mongolia. In the process, the team provided training on basic cost-risk analysis, data preparation, and preparation of a debt management strategy document.
• 13-16 September - Final HIPC CBP Mission to Ethiopia. The final mission of the HIPC Debt Strategy and Analysis Capacity-Building Programme (see http://www.hipc-cbp.org/) was conducted by DFI and a Zambian expert, fittingly to Ethiopia which made major strides in improving its debt strategy capacity under the CBP. The mission agreed with the Government on a debt strategy and analysis capacity-building programme for potential donor funding.
• 25 July - 5 August - Southern Sudan Debt Policy and Capacity Building Mission. DFI was funded by the Joint Donor Capacity Building Trust Fund for Southern Sudan to help the Government of the newly-independent Republic of Southern Sudan to examine policy options for post-independence development financing – especially borrowing on concessional terms – and the institutional and capacity-building measures required to establish a debt management unit well coordinated with wider economic policymaking. To read more on Southern Sudan’s debt, click here.
• 11-22 July - Tajikistan Debt Management Reform Plan Mission. A joint Development Finance International and World Bank mission visited Dushanbe to conduct a Reform Plan mission in July. The mission met the various officials involved in debt management and with their input prepared a reform plan that contains short and medium-term recommendations, capacity building needs and their costings. The draft report was finalized and has been sent for peer review.
• 11-15 July - MTDS mission to Cape Verde. DFI participated in a joint mission with the IMF to Cape Verde. The mission worked with the debt unit at the Ministry of Finance in order to finalize the Medium Term Debt Strategy (MTDS), which the Government wants to have ready by the fourth quarter of this year. The mission included presentations on how to finalize the different underlying assumption of the model and guidance on how to advance in the work.
• 5-8 July - Institutional Mission to Honduras. At the request of the Ministry of Finance in Honduras, a joint CEMLA/DFI mission visited the capital as one of the final events of the HIPC CBP. The purpose of the mission was to train government officials from the Ministry of Finance and the Central Bank on financing issues which included: the LIC-DSF Methodology, new issues on resource mobilization strategy and sub-national debt management. The last day of the mission focused on capacity building issues.
• June-August - Institutional Missions in the Franc Zone. In the context of the BCEAO/BEAC/BCC Capacity Building Programme under the HIPC CBP, five institutional missions were held in Senegal (30 May – 3 June), in Togo (6-10 June), in Burkina Faso (13-17 June), in Central African Republic (27 July – 1 August) and in Comoros (15-19 August). These missions focus on helping countries to introduce debt management procedures manuals adapting international best practices to national needs. Two other similar missions will be held soon in Chad and Congo.
• 7 April - 30 June - Technical Assistance to Guinea. DFI is currently providing technical assistance in debt management to Guinea. A six-month expert attachment is focusing on building capacity and training in debt management mechanisms, on the design of debt management and monitoring tools, as well as providing advisory services to the Department for Debt and Aid Management.
• 6-8 June - LIC - DSF Mission to Kyrgyz Republic. DFI was contracted by the Government of the Kyrgyz Republic in order to train government officials in the latest LIC-DSF methodology. The training was organized by the Ministry of Finance and was opened to staff from various departments at the Ministry as well as the Central Bank. Training included lectures about the methodology and the DSF template. The last two days allowed for participants to practice with some country specific exercises.
• 1-10 June - Afghanistan DeMPA Mission. A joint Development Finance International and World Bank mission visited Kabul to conduct a Debt Management Performance Assessment (DeMPA) during June. The mission met with officials from the various agencies responsible for debt management and reviewed the way the various functions are performed to see whether they are in line with international standards. As required by the methodology, each dimension of the indicators was scored between A and D. A draft report was prepared during the mission and is being peer reviewed.
• 16-26 May - DeMPA Mission to São Tomé and Príncipe. DFI participated in a joint mission with the World Bank to Sao Tome and Principe. The mission met with officials from the Central Bank, Ministry of Foreign Affairs and the Ministry of Finance as well as commercial banks operating in the country. The main objective of the mission was to evaluate the existing debt management capacity in the country within the framework of the Debt Management Performance Assessment (DeMPA). At the end of the stay, the mission presented the national authorities with a preliminary assessment.
• 26-29 April - MEFMI - Malawi Debt Sustainability Analysis Workshop. A successful DSA workshop with 22 participants was conducted by MEFMI as part of the HIPC CBP, to support the Malawi government by training staff in the use of the DSF tools. At the end of the workshop a draft DSA report was submitted to senior officials for comments. The exercise revealed that Malawi remains sustainable even in the presence of serious shocks and decline of GDP growth. The results of this DSA will feed into the 2011/12 budget framework and the review of the MTDS planned for the end of 2011.
• 14-24 April - DFI mission to Tajikistan. DFI participated in a joint mission to Tajikistan. Other partners that took part in the mission included the World Bank and UNCTAD. The mission met with officials from the Central Bank and the Ministry of Finance as well as commercial banks operating in the country. The main objective of the mission was to evaluate the existing debt management capacity in the country within the framework of the Debt Management Performance Assessment (DeMPA). At the end of the stay, the mission presented the national authorities with a preliminary assessment.
• 13-16 April - Support to Meetings on Sudanese Debt Relief. DFI, funded by Seco, supported the Government of Sudan in preparing for Technical Working Group and Round Table meetings at the BWI Spring Meetings, which discussed the potential cancellation of Sudanese debt as part of the secession of Southern Sudan and subject to continuing progress on peace in Darfur. Northern and Southern Sudanese officials announced their agreement that the existing debt of Sudan will remain with the North, subject to strong commitment by the international community to cancel most of the debt at the earliest possible dates. They also announced strong progress on debt reconciliation and an Interim Poverty Reduction Strategy, as well as the design of an outreach strategy to creditors.

Foreign Private Capital

Research, Analysis and Advocacy

• 24 September - Workshop Creates FSB Watch Network. A workshop organised at the BWI Annual Meetings agreed on the creation of a network to monitor and analyse the Financial Stability Board (FSB Watch Network) to complement the FSB Watch website. Various participants including DFI agreed to mobilise key stakeholder groups (governments, UN agencies, trade unions, CSOs, expert researchers) to support the network, which will operate in coalition with networks already working on key issues (governance, transparency, commodity speculation, tax havens, bank regulation, debt workouts). The workshop was part of the joint AERC-Brookings-DFI-New Rules project on FSB funded by the Ford, C.S. Mott and Connect US Foundations.
• 23 September - High-Level Panel Demands Improvements in FSB Governance. An independent high-level panel composed of experts from developed and developing countries, and hosted at the Brookings Institution, launched a report demanding improvements in the governance of the Financial Stability Board. These included clarification of its legal status; greater transparency, accountability and disclosure; and stronger representation of developing countries. The panel was supported financially by the joint AERC-Brookings-DFI-New Rules project on FSB funded by the Ford and Connect US Foundations. At the meeting to launch the report, the FSB Secretary General welcomed the recommendations as a valuable input to the FSB's own report on governance which will be presented to the G20 Summit in November.
• 23 September - New website to examine FSB operations and governance. At the height of the international financial crisis and following the G-20 London Summit in 2009, the Financial Stability Board (FSB) was established to formulate and oversee the implementation of regulatory, supervisory and other financial sector policies. Despite its importance, there is extremely limited knowledge as to how it operates or is governed. DFI has worked with the Brookings Institution, New Rules for Global Finance, and the African Economic Research Consortium to establish the FSB Watch website that examines and promotes efforts towards an effective, inclusive, transparent and accountable global regulation of the financial system.
• 22 September and 15 April – Low-Income Ministers Demand Stronger Representation in G20 and FSB. OIF Low-Income Countries’ Finance Ministers, meeting in Washington at the BWI Spring and Annual Meetings, strongly demanded greater representation in the G20, the Financial Stability Board and the various subsidiary standard-setting bodies, committees and working groups linked to the FSB. To see their communiqués click here and here.
• 10 August - FDI to recover to pre-crisis levels in 2 years (UNCTAD). World Investment Report 2011 forecasts FDI flows to recover to pre-crisis levels within two years. The challenge is to make this impact on efforts to achieve the MDGs. In 2010 developing economies absorbed almost half of global FDI inflows, and generated record FDI outflows (much of them South-South). TNCs are engaging with developing and transition economies via a broadening array of production and investment models. DFI contributed to the production of this report.
• 15 April - Workshop on Financial Stability Board and Development. DFI helped to facilitate a packed CSO workshop on how the FSB impacts on global development, launching a New Rules for Global Finance-AERC-Brookings project on the FSB, at the BWI Spring Meetings. Participants agreed next steps in the construction of a global CSO network to monitor and lobby the FSB, which New Rules will support. See the video and presentations of the workshop.
• 29 March - Togo Releases IP and FPC Survey Results. Togo's first survey of Foreign Private Capital flows and Investor Perceptions closed in November 2010. Achieving a response rate of 64.7%, the country is now releasing its national analytical report containing all the detailed findings generated by the survey, covering the methodological approach used, analysis of investment climate and of foreign assets and liabilities, and policy recommendations.

Capacity Building Events

• August-December – Support to Comsec on Innovative Financing for Development. DFI has been asked to support the Commonwealth Secretariat Economic Affairs Department for 6 months by supplying a consultant to work on innovative financing issues, including tax revenue measures, GDP-linked and diaspora bonds, frontloading mechanisms such as the IFF, counter-cyclical loans, impact investing, private sector guarantees and insurance, SDRs and IMF gold sales.
• August - Wilson Phiri graduates MEFMI's FPC Fellowship Programme. We are pleased to announce Wilson Phiri's recent graduation under MEFMI's Programme, having successfully presented his findings to assessors on FDI and economic diversification in Zambia. Wilson has been mentored by DFI during this process, and his work draws on a wide range of sources including work Zambia and other countries have done under the FPC CBP. He will now advance to the accreditation stage, which would involve providing capacity building in the region, followed by preparation and presentation of a technical paper.
• 28-30 April - Botswana SMME Conference and Fair (Gaborone). DFI Programme Manager Nils Bhinda attended the Botswana SMME Conference and Fair, where he represented UNCTAD at the invitation of the Local Enterprise Authority. The Conference addressed the challenge of economic diversification in the context of declining natural resource revenues, and private sector led growth via SMMEs. Mr Bhinda presented on global FDI trends and prospects. The Fair showcased SMME products and services. The events were very well attended by national, regional and international experts.
• March - April - DFI Secondment to UNCTAD (Geneva). Following on from participation in the Expert Meetings in Q4 2010, DFI Programme Manager Nils Bhinda went on secondment to UNCTAD to work on FDI linkages to other financial flows. During this time he contributed towards related sections of the World Investment Report 2011, which has recently been published.

Public Sector Financing

Research, Analysis and Advocacy

• 29-30 September - Commonwealth/OIF Meeting on Innovative Financing. DFI helped to facilitate a technical meeting of Commonwealth and OIF country and secretariat officials, held at Wilton Park in the UK, to raise awareness and discuss the practicalities of various types of innovative financing instruments and mechanisms. DFI gave a presentation on public revenue-raising measures such as Financial Transaction Taxes and taxes on aviation and shipping fuels. The meeting followed the recent Commonwealth and OIF Finance Ministers' meetings which discussed these issues (see 22 September).
• 22 September and 15 April - OIF Ministers Urge Use of FTT for Development. In April OIF Finance Ministers became the first global group to endorse the introduction of a Financial Transaction Tax. In September they issued a strongly worded communiqué urging that a Financial Transaction Tax must be used to fund global development and the fight against climate change, and that as many G20 members and other countries as possible should adopt an FTT. To see the communiqués of the two meetings, click here and here. Elsewhere in the September Annual meetings, Argentina, Brazil, South Africa and the Gates Foundation also declared their support for an FTT, adding momentum to its forthcoming adoption.
• 12 September - Real Aid 3 Report - Aid dependency is going down. DFI co-wrote a report with Action Aid on REAL AID which argues that Developing countries are getting less dependent on aid and that real Aid is transforming lives. The report also argues that the key to reduce aid dependence is strong leadership by recipient country rather than by the donors. It also discusses what is and is not Real Aid, recommendations to Busan and beyond.
• 5 September - South South Commonweath Cooperation. As part of its ongoing collaboration with the Commonwealth Secretariat, DFI prepared a background paper on south-south cooperation amongst Commonwealth countries to support discussion by Senior Officials at the 2011 Commonwealth Finance Ministers Meeting in September. The study is available here.
• 9-13 May - LDC-IV Conference Papers and Events on Aid to LDCs. DFI assisted the UN Department of Economic and Social Affairs to prepare a background paper and side event at the conference. See more on this event here. DFI also helped Save the Children UK to write a background paper on aid to LDCs, called The LDCs: Biggest Challenges, Least Assistance ?
• 9-13 May - DFI commissioned by the UN DCF. DFI was recently commissioned by the UN DCF to prepare a background study analysing the quantity and quality of aid in LDCs and outlining possible elements for an LDC accountability framework that builds on existing review processes. The study was discussed at the Fourth United Nations Conference on Least Developed Countries (LDC-IV) held from 9 to 13 May 2011 in Istanbul, Turkey to review the Brussels Programme of Action (BPoA) and agree on a new Programme of Action (IPoA) for LDCs. The paper can be downloaded from here.
• 4-6 May - AfDB - World Economic Forum (Cape Town). DFI and the Global Economic Governance Programme at University College Oxford conducted a joint mission to the World Economic Forum in order to meet with African business people and pilot the private sector questionnaire for the African Development Bank Client Survey. The meeting yielded useful preliminary findings towards the survey, and helped to improve its methodology.
• April-September - AfDB Client Survey and Workshops. DFI and GEG launched the client survey of AfDB Performance by contacting and sensitizing all the 40 African governments participating at the IMF/World Bank Spring Meetings and the AfDB Annual Meetings on 7-10 June in Lisbon, and interviewing an initial sample of policymakers, as well as representatives of the regional economic community. A first workshop for government managers of AfDB financing officials was then held in Bamako jointly with the Government of Mali and the AfDB. The conclusions of the workshop are available here. A second workshop for government officials, CSO, parliamentarians, private sector representatives and trade unions was held in Johannesburg on June 29-July 1. Its conclusions are available here. More than 300 actual or potential clients of the AfDB have been surveyed and the results will soon be available.
• 18 April - Oxfam Aid Summit. DFI participated in a meeting of all 14 Oxfam International affiliates to formulate policies on aid issues, in Washington DC, making a presentation on international and developing country-level initiatives to increase accountability and transparency for aid results, and how Oxfam should participate in and contribute to them. These will result in updated Oxfam policies on aid issues in mid-year, as well as policy papers to lead into the Busan High-Level Forum on Aid Effectiveness in November.

Capacity Building Events

• 5-11 September - Targets Designed to Improve Partnership in Uganda. DFI conducted the final mission of the Uganda Partnership Policy project funded by DfID. The mission achieved its three aims: to draft targets for development partners to improve their aid to Uganda; to redraft a MoU to be signed by Uganda and its partners to implement the policy; and to make recommendations for capacity-building support to be provided to government, parliament and civil society in order to ensure the policy is successfully implemented. The policy is currently being approved by Cabinet and will begin to be implemented in 2012.
• July - September - Final Aid & Auditing Missions in Guinea. Two DFI experts have conducted their final two missions in Guinea in keeping with the national capacity building programme in aid management, and audit and control. After launching a training programme for Ministry of Finance executives and public investment experts, the consultants are now finalising a national manual of procedures for the management and control of public investment projects.
• 25-29 July - Mauritania Diversifying Development Financing Advisory and Capacity-Building Mission. As one of the last missions of the HIPC Debt Strategy and Analysis Capacity Building Programme, Development Finance International conducted a mission to Nouakchott to help the Government examine options for diversifying sources of development financing away from concessional OECD aid. The mission designed a plan for diversification and for reinforcing Mauritania's institutional structures to manage all development financing, which will be finalized with Government by the end of Q3.
• 26-29 April - Uganda Partnership Policy Monitoring Framework. DFI conducted a mission to support Government of Uganda in finalizing a monitoring framework for its Partnership Policy covering aid and beyond aid issues, as well as a memorandum of understanding for GoU and its development partners to sign. The mission conducted a successful workshop in which GoU and DPs discussed the draft framework and principles for the MoU, as well as extensive briefing of officials in the Ministry of Finance, which will be responsible for the detailed monitoring of the policy. The next steps will be full training sessions on the policy, followed by a baseline survey of DP and GoU performance, and agreement on future targets.

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