During this seminar, the Government Debt & Risk Management Program leaders and participating countries came together to take stock of the achievements, share experiences on reform implementation and learn from reform initiatives in program countries.
On October 18, 2016, World Bank Treasury marked the fifth anniversary of the Government Debt and Risk Management (GDRM) program with a day of reflection on the impact, delivery and future of the program. Initially funded by the Swiss State Secretariat for Economic Affairs (SECO), the program provides tailored, programmatic technical assistance solutions to develop debt management capacity in middle‐income countries (MICs), to increase their resilience to financial shocks. Alfonso Garcia Mora, Director, Finance & Markets Global Practice, World Bank Group, and Rosmarie Schlup, incoming head of the Macroeconomic Support Division, SECO started the program with opening remarks. Taking stock of program’s expansion, Cigdem Aslan, Lead Financial Officer, World Bank Treasury, explained how the program has grown in size from three to ten countries, as well as in depth to more than three projects per country. She discussed the implementation of strategic reform and lessons learned; the specific technical methods employed; and collaboration between the various stakeholders in the program. GDRM Day continued with round table discussions during which presenters shared country specific cases. These sessions led to frank discussions on the most demanded services: design and implementation of debt management strategies and contingent liability management. Specific sessions included the following:
(i) “Designing government debt management strategies”, moderated by Antonio Velandia, Lead Financial Officer, World Bank Treasury; with presentations by Carlos Blanco, General Director of Public Debt and Treasury, Ministry of Economy and Finance, Peru; Anthony Julies, Deputy Director‐General, Asset and Liability Management, National Treasury of South Africa; and discussant, Emre Balibek, Senior Debt Specialist, Macroeconomics and Fiscal Management, World Bank Group.
(ii) “Assessing and managing risksfrom contingent liabilities” moderated by Sebastien Boitreaud, Lead Financial Officer, World Bank Treasury; with presentations by Samuel Arkhurst, Director, Debt Management Division, Ministry of Finance, Ghana; and discussant Frederick Haddad, Manager, Market and Counterparty Risk, World Bank Group.
(iii) “Implementing a government debt management strategy” moderated by Rodrigo Cabral, Senior Financial Officer, World Bank Treasury; with presentations by Branko Drčelić, Acting Director, Public Debt Administration, Ministry of Finance, Serbia; Vo Huu Hien, Deputy Director General, Ministry of Finance, Vietnam; and discussant Alessandro Scipioni, Consultant, World Bank Group.
Lars Jessen, Lead Debt Specialist, Macroeconomics and Fiscal Management Global Practice, World Bank Group, led the discussion of “GDRM: What have we learned and where do we go from here?”. Reflecting on the delivery methods of the program, participants underlined the importance of practitioner‐to‐ practitioner approach, the expertise, both from within the World Bank Group but also from consultants, a resident advisor’s role in implementation, and in‐person delivery supplemented by WebEx technology.
GDRM Day concluded with Coskun Cangoz, GDRM program manager at the World Bank Treasury, moderating a discussion on the reforms that the debt managers are currently confronting. Discussion topics included the need for upper management (minister of finance) level commitment by country, cash management and subnational lending.
OCTOBER 18, 2016
8:00 a.m. REGISTRATION AND BREAKFAST
9:00 a.m. OPENING REMARKS Speakers: Alfonso Garcia Mora, Director, Finance & Markets Global Practice, World Bank Group Rosmarie Schlup, Institute for Capacity Development, IMF; Incoming Head of the Macroeconomic Support Division, SECO
9:30 a.m. PRESENTATION Taking stock of the Government Debt and Risk Management (GDRM) program The Government Debt and Risk Management (GDRM) Program, initially funded by the Swiss State Secretariat for Economic Affairs (SECO), was established in 2011 to provide support to ten middle-income countries on public debt and risk management. The development objectives of the program are to improve macroeconomic and fiscal management and reduce vulnerability to financial shocks through: (i) strengthened public debt and risk management capacity and institutions; and (ii) deeper domestic debt markets. Significant progress has been achieved in many countries on various components and this is now a time to reflect on: (i) how countries have implemented strategic reforms and what we have learned about reform implementation; (ii) the specific technical methods employed; and (iii) the collaboration between the various stakeholders in the program. Presenter: Cigdem Aslan, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury
10:00 a.m. ROUNDTABLE DISCUSSION 1 1 Designing government debt management strategies A medium-term debt management strategy is a plan that a government intends to implement over a 3-5 year period in order to achieve the desired composition of its debt portfolio while capturing the government’s preferences with regard to the costrisk trade-off. As such, it operationalizes the government’s debt management objectives. The strategy will have a strong focus on managing the debt portfolio’s risks—specifically, potential variations in the cost of debt servicing and its impact on the budget. Under the GDRM program, debt management offices in Colombia, Indonesia, Serbia, South Africa, Peru and Tunisia have been able to or, are in the process of, designing a debt management strategy, obtaining approval of the Minister of Finance, publishing the strategy and beginning its implementation. Moderator: Antonio Velandia, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury Presenters: Carlos Blanco, General Director of Public Debt and Treasury, Ministry of Economy and Finance, Peru Anthony Julies, Deputy Director-General, Asset and Liability Management, National Treasury of South Africa Discussant: Emre Balibek, Senior Debt Specialist, Macroeconomics and Fiscal Management, World Bank Group
10:45 a.m. GROUP PHOTO
11:00 a.m. COFFEE BREAK
11:30 a.m. ROUNDTABLE DISCUSSION 2 Assessing and managing risks from contingent liabilities Contingent liabilities (CLs) expose governments to fiscal risks. These risks may stem from various sources such as government guarantees, legal proceedings against the state, public private partnerships, the financial sector etc. Prudent risk management, including risk analysis and measurement, can help identify and mitigate these risks. Under the GDRM program, debt management offices in Colombia, Ghana, Indonesia, Peru and South Africa have developed new and/or improved existing approaches to assess and manage CLs. Programs in Egypt, Tunisia and Vietnam are also aiming to improve CL risk management. Moderator: Sebastien Boitreaud, Lead Financial Officer, Financial Advisory and Banking, World Bank Treasury Presenters: Samuel Arkhurst, Director, Debt Management Division, Ministry of Finance, Ghana Discussant: Frederick Haddad, Manager, Market and Counterparty Risk, World Bank Group
12:30 p.m. LUNCH
2:00 p.m. ROUNDTABLE DISCUSSION 3 Implementing a government debt management strategy The operationalization of a debt management strategy and a well-functioning debt market that creates demand for government debt are essential for the successful implementation of the debt management strategy. The design of cost-effective funding programs can help operationalize a medium-term strategy. Debt managers may use liability management operations such as swap transactions, exchange offers and buyback programs to alter the existing portfolio structure. Strategically, debt managers and governments more broadly may undertake reform initiatives to develop domestic debt capital markets. Under the GDRM program Colombia, Peru, Serbia, South Africa and Vietnam have undertaken reforms to improve the functioning of capital markets, conduct liability management operations and implement desired debt management strategies. Moderator: Rodrigo Cabral, Senior Financial Officer, Financial Advisory and Banking, World Bank Treasury Presenters: Branko Drčelić, Acting Director, Public Debt Administration, Ministry of Finance, Serbia Vo Huu Hien, Deputy Director General, Ministry of Finance, Vietnam Discussant: Alessandro Scipioni, Consultant, World Bank Group
3:00 p.m. ROUNDTABLE DISCUSSION 4 What worked well in the delivery of the GDRM program? What can we do better? The delivery of the GDRM program is based on long-term partnerships between the World Bank and program countries that support the implementation of reforms in targeted areas of public debt and risk management. Delivery of the program has been conducted via various channels including missions, training events, peer-to-peer group dialogue, webinars and off-site support. In some countries, the program has been completed while in others, program implementation has only recently started. This session draws lessons on the “how” of the GDRM program. Questions we will address include: (i) has adequate and useful expertise been delivered?; (ii) how do we assess the mix of on-site and off-site support provided?; (iii) how can reform implementation be strengthened?; (iv) how can we move from outputs to outcomes?; (v) did the peer-to-peer events add value?; (vi) has enough been done to ensure sharing of experiences and knowledge on common themes relevant across countries?; and (vii) have webinars under the GDRM umbrella and for broader audience added value? Moderator: Lars Jessen, Lead Debt Specialist, Macroeconomics and Fiscal Management Global Practice, World Bank Group
4:00 p.m. COFFEE BREAK
4:30 p.m. CLOSING SESSION – ROUNDTABLE DISCUSSION What reforms are debt managers tackling now? Government debt managers face multiple challenges. Not only do they need to react to immediate challenges in the macro-economic and market environment but they are also required to develop debt management offices strategically to adapt to increasingly complex debt management operations and changes in mandates. This session aims to discuss these challenges and explore similarities across GDRM countries. Each participant will be given the opportunity to reflect on reform initiatives in their countries. Moderator: Coskun Cangoz, Manager, Government Debt and Risk Management, World Bank Treasury
5:00 p.m. END OF PROGRAM
