Thematic Funds for Capacity Development (CD)

February 27, 2019

The IMF maintains a limited number of thematic funds that cover critical areas in IMF capacity development, and are complemented by the IMF’s extensive network of regional CD centers. External partners help finance these funds.

Improving revenue mobilization, fiscal and natural resource management


Revenue Mobilization (RMTF)
: The RMTF was launched in 2011 to support low-income and lower middle-income countries as they design and administer effective tax systems. This helps generate sustainable revenue to pay for essential infrastructure and the social spending needed to meet growth and development objectives. The fund’s second phase began in 2016. The current partners are European Union, Belgium, Japan, Australia, Switzerland, Norway, the Netherlands, Sweden, Denmark, Luxembourg, Germany, and Korea.

Tax Administration Diagnostic Assessment Tool (TADAT): TADAT was launched in 2014 to provide an objective and standardized performance assessment of a country’s tax administration system. By helping identify administrative strengths and weaknesses and facilitating shared views among all stakeholders, the tool helps develop a reform agenda which can manage, monitor, and evaluate progress. The fund’s second phase will begin in May 2019. Current partners are the United Kingdom, the European Union, the Netherlands, Norway, Switzerland, Japan, and Germany.

Managing Natural Resource Wealth (MNRW): Many resource-rich countries fail to realize the full development potential of their natural resource wealth. The MNRW was launched in 2011 to support resource-rich countries in their efforts to mobilize and manage their natural resource wealth effectively. The MNRW also helps build capacity to design and implement macroeconomic and macroprudential policies in countries that are highly dependent on large and volatile resource revenues and ensure that they are managed in a socially responsible way. The fund’s second phase began in 2016 with the European Union, Switzerland, Norway, the Netherlands Australia, and the United Kingdom as partners.

  

Promoting financial sector stability and access, and addressing debt issues

 

Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT): Money laundering and the financing of terrorist activities can undermine the soundness and stability of financial institutions and systems, discourage foreign investment, and distort international capital flows. Established in 2009, this fund supports countries as they strengthen the integrity and stability of their financial sectors, which facilitates their integration into the global financial system; improves fiscal governance; and boosts revenue mobilization. Currently the AML/CFT thematic fund is in Phase II. With continued strong demand, the IMF intends to launch Phase III of the thematic fund covering the period from May 2020 through April 2025. [Current partners are Switzerland, the Netherlands, Luxembourg, the United Kingdom, Qatar, Norway, Japan, France, and Saudi Arabia.]

Financial Sector Stability Fund (FSSF): The FSSF was launched in November 2017 to support low- and lower-middle-income countries as they assess and address risks and vulnerabilities in the financial sector, and help promote financial development and inclusion. The FSSF supports Financial Sector Stability Reviews (FSSRs), a standardized diagnostic assessment; related technical advice based on the diagnostic results and capacity development to enhance financial sector statistics. Current partners include Sweden, Switzerland, Italy, China, the United Kingdom, Luxembourg, Saudi Arabia and the European Investment Bank.

Debt Management Facility II (DMF II): Launched in 2014, DMF II is a joint IMF-World Bank fund that builds on the success of the DMF I, which was set up in 2008. With support from the DMF, more than 75 countries have assessed and strengthened their debt management capacities, actively planned for future debt operations and ensured that their debt levels are sustainable. Partners include Switzerland, the Netherlands, Austria, Russia, the European Union, Germany, Norway, and the African Development Bank. DMF III will be launched in April 2019 which will help countries to adapt to emerging debt management challenges. Given increasing concerns about debt transparency, DMF III will expand in scale and launch new activities in support of debt transparency, e.g., on debt recording, reporting and monitoring.

Financial Sector Reform Strengthening Initiative (FIRST): The FIRST is a joint IMF-World Bank fund that promotes financial sector development in low- and middle-income countries. Established in 2002, FIRST supports a broad range of financial sector reforms, including banking, insurance, capital markets, pensions, and crisis preparedness. Partners include Switzerland, Germany, the Netherlands, the United Kingdom, and Luxembourg.

Strengthening economic decision making through better statistics


Data for Decisions (D4D)
: Improving the availability, quality, coverage, timeliness, and dissemination of macroeconomic statistics enables better policy making. Launched in June 2018,  D4D has supported low and lower-middle income countries in these efforts, particularly by working with them to develop the necessary infrastructure to compile and report on many Sustainable Development Goals (SDG) indicators, and also by delivering the Financial Access Survey (FAS). The FAS is used as the source for one indicator measuring progress for Sustained and Inclusive Growth and includes gender-disaggregated data. D4D is now supported by Japan, Luxembourg, Germany, Netherlands, Switzerland, the European Union, Korea and China.

 

Supporting fragile states

 

Fragile State Funds: Building sound economic institutions and developing skills are key priorities for fragile states. South Sudan and Somalia each have a dedicated fund to strengthen their operating and technical capacity to make economic and financial institutions more effective, transparent, and accountable. The South Sudan Country Fund was established in 2012, and its current phase is financed by Norway. The Somalia Country Fund started operations in 2015, and is currently supported by the Arab Fund for Economic and Social Development, Canada, the United Kingdom, the European Union, the United States, and Italy. In parallel, the IMF is increasing utilizing its regional centers to provide flexible and targeted capacity development support to fragile states members.

 

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