I.M.F. key to Pacific Islands’ development
The International Monetary Fund (I.M.F.) has helped Pacific Islands develop in a number of ways and will continue to do so in the future, says I.M.F. Small States Division Chief (Asia Pacific Department), Allison Stuart.
In Samoa, the I.M.F. has been instrumental in developing two key areas of Samoa’s economy – micro economic statistics and addressing the high cost of remittances, Ms. Stuart said.
“Help has been very useful in a number of different areas, one example that we could point to well is in supporting the Fiji authorities in improving their tax revenue collection and administration policy, and there the authorities have been successful in managing to raise revenues.
“We’ve also had successes in other countries in terms of helping them develop statistics or support central bank in terms of their thinking on micro economic policies as well.”
Ms. Stuart said their programme of assistance in the region is based on three key roles, and their assistance is tailored to the needs of the specific country.
“We do what we call surveillance, which is we look at any country that’s a member of the I.M.F., we do an economic health check up on those economies once a year, or once every two years in some cases, and we provide advice to those authorities in the country on how they might address those policies,” she explained.
“The second feature of I.M.F’s work, which is very important in the Pacific, is working with countries to develop capacity, or technical assistance and training.
“For the region, a colleague of mine runs the Pacific Financial Technical Assistance Centre (P.F.T.A.C.), which is based in Fiji, helping countries develop various aspects of their work, for example working with finance ministries to improve their public financial management, working with them to help mobilise revenues and also working with central banks on things like financial stability, also in improving the collection of data or statistics, which is important in micro economics.”
The P.F.T.A.C. was the first centre established by the I.M.F. 25 years ago in the region, and because of its success, there are 16 centres around the world doing similar things in different regions.
“We are celebrating the 25th anniversary of P.F.T.A.C. next month in Fiji, where we will have a two-day high-level dialogue to look at how countries can improve their growth opportunities and how the I.M.F. can help support that through capacity development.”
Ms. Stuart said I.M.F’s lending facilities are designed for both developed and developing countries, which have access to the World Bank’s International Development Association (I.D.A.) and there lending is done on concessional terms.
“We also have facilities that are available after a natural disaster and we recently raised the limits on that facility, so that countries that face natural disasters can get slightly a larger amount. We see our role as very much catalytic with every other development agencies that come in with bigger support. All our money is loans and on the concessional loans our interest rate is currently zero.
“There haven’t been large uses of I.M.F. loan by the Pacific countries probably because they receive aid from other countries; we haven’t seen any large take. Recently Vanuatu took advantage of the post-natural disaster facilities.”
Ms. Stuart highlighted their biggest impact in the region is through capacity building and surveillance, all though they would like to see countries make use of I.M.F. funding.
“As the I.M.F we are always learning, we are always striving to find what maybe better ways to help countries achieve their own goals and so that’s seen as for example, in the more recent past, do more peer to peer learning, where countries learn from one another.
“The other area we are going into is online learning, so we can reach more people through the internet, there are a number of online training courses. In terms of its success it depends on many things like the infrastructure, electricity availability and speed of internet, so it’s not necessarily a solution for the Pacific, so we have to think about how we tailor our thinking on helping countries.
“The other thing we also try do is to make sure we coordinate well with the World Bank, Asian Development Bank because they are also helping countries strengthen capacity, and so we want to make sure we don’t have too much overlap and that we complement each other’s work.”
Ms. Stuart said the I.M.F has focused more on countries that are quite fragile and face vulnerabilities, and so they are putting a lot of effort into supporting their basic development needs.