Speech

Remarks by Carla Grasso
Deputy Managing Director, International Monetary Fund
August 20, 2015
Washington, D.C.

As prepared for delivery

Ladies and gentlemen, distinguished guests – good afternoon!

It is a great pleasure to be here with you to sign this first Memorandum of Understanding between the International Monetary Fund and the United States Agency for International Development on capacity development.

Supporting the SDG framework

This Memorandum of Understanding comes at a very important time. It comes on the heels of the international conference on Financing for Development in Addis Ababa and ahead of the follow-up conference on the Sustainable Development Goals in New York and on climate change later this year.

The Addis Ababa conference has culminated in a multilateral consensus on a broad range of commitments by bilateral donors and multilateral institutions to promote financing for development. There was a particular focus on domestic revenue mobilization, infrastructure development, equity and inclusion, and on fragile and conflict-affected states.

The IMF has a deep commitment to support these efforts, with the help of our partners. I am very pleased that we are joining forces with the USAID to tackle global economic challenges in the context of the post-2015 development agenda.

This Memorandum is an important contribution to the international effort to put in place a framework that will support sustainable development over the next 15 years. It will allow us to further expand our reach in a core service that is highly valued by the entire IMF membership—capacity development.

Capacity development at the Fund

Capacity development is one of the three core mandates of the IMF. And it might surprise you to learn that capacity development and technical assistance is now the largest service we provide to our members, absorbing over a quarter of our budget.

Why is capacity development so important? It is important because it helps member countries build strong institutions and boost skills to design and implement sound macroeconomic and financial policies.

Strong frameworks for fiscal policy, monetary policy, and financial sector oversight are essential for economic wellbeing. Without good economic institutions, and without capable people behind them, policies will be ineffective. This is why capacity development is critical in supporting our surveillance and financial assistance activities—the other two core mandates of the IMF.

Today, more than 90 percent of our membership has benefited from our capacity building services—from Mauritius to Myanmar to Mexico. Officials from virtually all members have also benefited from our training activities. The biggest recipients of our services are low and lower middle-income countries—accounting for two-thirds of our technical assistance and half of our training.

We have also strived to be closer to the needs our members and to respond more flexibly. We now have nine regional technical assistance centers and seven regional training centers in Africa, Asia, Latin America and the Middle East. Our footprint is near universal.

Yet, we went even further. Through new initiatives such as Massive Online Open Courses (MOOCs), we are now able to engage the general public, especially the youth. With 10,000 active participants and 5,400 graduates to date, MOOCs are a valuable platform for sharing knowledge with a diverse audience from around the world—right where they are, and at their own pace.

The IMF and USAID – a new partnership

This takes me back to the significance of today’s event. It is with the generous support from partner organizations that the IMF was able to significantly expand capacity building services to member countries. So today we are very pleased that the USAID has decided to join hands with us in supporting our capacity development efforts.

The Memorandum of Understanding will help us to strengthen our cooperation with USAID and deepen our partnership through greater engagement of USAID staff. This will include IMF’s capacity development activities both at headquarters and in the field through a variety of capacity development vehicles – such as the global network of Regional Technical Assistance Centers, which has a strong presence in Africa.

We will continue the strategic dialogue on our joint priorities, at all levels, so that we can complement and leverage each organization’s comparative advantage to the benefit of our member countries and development partners.

Let me conclude by again expressing our appreciation for the opportunity to enhance and strengthen collaboration between USAID and the IMF. We look forward to a new partnership.