Description

Fiscal transparency is a critical element of fiscal management and accountability. It ensures that governments have an accurate picture of their fiscal position and prospects, the long-term costs and benefits of any policy changes, and the potential risks that may blow them off track. It also provides legislatures, markets, and citizens with the information they need to hold governments accountable. The new Fiscal Transparency Code and Evaluation described in the Update on the Fiscal Transparency Initiative—an IMF staff policy paper issued in August 2014—are part of the IMF’s efforts to strengthen fiscal surveillance, support policymaking, and improve fiscal accountability.

The new Code covers four key elements of fiscal transparency: Pillar I – Fiscal Reporting; Pillar II – Fiscal Forecasting and Budgeting; Pillar III – Fiscal Risk Analysis and Management; and Pillar IV – Resource Revenue Management. The seminar focused on the first three Pillars as resource revenue management is not a major issue in South East Europe (SEE).

Under Fiscal Reporting, the seminar explored the compilation of fiscal statistics and accounts and the Code’s approach to evaluating fiscal reporting practices and whether they offer relevant, comprehensive, timely, and reliable information on the government’s financial position and performance. Under Fiscal Forecasting and Budgeting, the seminar discussed how to measure the strengths and weaknesses of macroeconomic and fiscal forecasts, how to evaluate the credibility and consistency of budgetary projections and their evolution over time, and how well they reflect the government’s policy objectives. Under Fiscal Risk Analysis and Management, the seminar reviewed the range of fiscal risks that governments are exposed to, and how well they are identified, analyzed and monitored.

The seminar included case studies of the two Fiscal Transparency Evaluations recently completed in the SEE region, notably Albania and Turkey.

How participants benefited

The seminar’s primary objective was to better understand the IMF’s new Fiscal Transparency Code, and how the Evaluation can help identify priority areas of improvement in fiscal reporting, fiscal and budgetary forecasting, and fiscal risk management.

After attending this seminar, participants are able to:

• Understand how to evaluate strengths and weaknesses of a government’s fiscal reporting, fiscal and budgetary forecasting, and fiscal risk management practices
• Describe the IMF’s fiscal transparency code and evaluation process, and the benefits that it can bring to a government
• Identify priority areas of improvement that would enhance a government’s fiscal transparency and fiscal risk management
• Contribute to raising awareness and consensus around the need for greater focus on fiscal transparency and fiscal risk issues

Target audience

The Seminar was designed primarily for senior level public officials working at ministries of finance and other government institutions, such as research institutes, who actively deal with macroeconomic and fiscal forecasting, medium-term and annual budgeting and policy formulation, accounting and reporting, and fiscal risk management.

Contributions from participants

The Seminar encouraged a participatory approach by asking countries to share their countries’ practices in key areas in fiscal reporting, fiscal and budgetary forecasting, and fiscal risk management. Participants were also encouraged to be active in discussions throughout the seminar.

Faculty

ISABEL RIAL, Senior Economist, M1 Division, FAD, IMF

Isabel Rial is a senior economist of the Public Financial Management Division in the Fiscal Affairs Department of the International Monetary Fund. During the last 10 years in the Fund she has worked on a range of cross-country fiscal policy issues, particularly focusing on public-private partnerships, fiscal risks management, and fiscal rules. She has more than 10 years of experience in the public sector prior joining the Fund as chief of Fiscal Policy Analysis Division in the Central Bank of Uruguay. Ms. Rial holds a Master’s degree in Applied Macroeconomics from the Pontifical Catholic University of Chile (Chile).

DUNCAN LAST, PFM Advisor for South East Europe, FAD, IMF

Duncan Last is the IMF PFM Advisor for South East Europe, having previously been based in IMF headquarters for the last 8 years. Prior to that he had been working in the field for 20 years covering various topics in public financial management, including: PFM advisor in the IMF’s AFRITAC East Regional Technical Assistance Center; budget and treasury advisor in Slovenia also covering various countries in the region, during which time he helped establish the Center of Excellence in Finance; budget and IFMIS advisor in Mali and Papua New Guinea, debt management advisor in Papua New Guinea, and debt management software designer at the Commonwealth Secretariat in UK.

MARCO CANGIANO, Former Assistant Director, FAD, IMF

Between 2008 and 2015, Mr. Cangiano has been an Assistant Director at the Fiscal Affairs Department (FAD) of the IMF, which he joined in 1991. During this period he was head of the PFM Division responsible for Asia, the Western Hemisphere, and non-Anglophone Africa, and prior to that head of the PFM Division responsible for Europe, Anglophone Africa, Central Asia and the Middle East. Between 2004 and 2008, he was Acting Deputy Director and head of the Budget Strategy Division of the Office of Budget and Planning, reporting directly to IMF Managing Director. In 2013 he took on one-year sabbatical leave from the IMF as visiting scholar at the New York University Wagner Graduate School of Public Service, the Australian Government’s Treasury, and Chile’s Budget Office. Mr. Cangiano has coordinated training activities and lectured on a range of fiscal matters in Washington and abroad, including at the OECD Senior Budget Officers’ meetings, the Harvard Kennedy School of Government, and the London-based Overseas Development Institute, and has been a member of the steering committee and chair of the multi-donor Public Expenditure and Financial Accountability (PEFA) program. His research interests include how to strengthen fiscal institutions and design public financial management reforms, and has published on pension reform, fiscal transparency, and tax policy, and co-edited Public Financial Management and Its Emerging Architecture published by the IMF in April 2013. Mr. Cangiano is currently on leave from the IMF.

Partners

This FAD/CEF activity is financed with the support of the European Union under the program Strengthening Economic Governance and Public Financial Management, which supports fiscal reforms in six countries of South Eastern Europe – Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia. Complementary financial support is provided by the Dutch Ministry of Finance, and the CEF.