Partnerships for Capacity Development to Address Debt Vulnerabilities
IMF Capacity Development
Building stronger institutions and skills for better macroeconomic policy making.
Debt vulnerabilities have risen in low-income countries and emerging market economies amidst ongoing, multipronged shocks. An increasing number of countries—forty countries, or 55 percent of LICs—are at high risk of, or already in, debt distress—more than double the share in 2015. Similarly, emerging market economies are more at risk of a crisis today than just a few years ago (in the right-hand chart below, the fraction of countries in the high-risk dark pink zone has increased).
Against this difficult background, the IMF held its fourth semiannual Capacity Development Partnership Dialogue on October, 20, 2022. The theme this time was “Debt Sustainability, Transparency, and Management amidst Rising Vulnerabilities—The Role of IMF Capacity Development.” The event was chaired by IMF First Deputy Managing Director Gita Gopinath, who was joined by the Director of the IMF Strategy, Policy, and Review Department, Ceyla Pazarbasioglu, and the Deputy Director of the IMF Institute for Capacity Development, Roger Nord. The Dialogue involved some of the leading funding partners of the IMF for capacity development, including Japan, the European Union, Switzerland, Germany, China, the Netherlands, the United Kingdom, Norway, France, Korea, Canada, Sweden, Australia, and the United States.
The dialogue focused on the role of capacity development in addressing debt vulnerabilities and how to increase support to countries to forestall and mitigate debt vulnerabilities in the short term, while preventing systemic and country-specific problems in the long run—including by leveraging global partnerships.
In her opening remarks, the IMF's Gita Gopinath stated that "debt distress, or the risk of debt distress, is a growing concern for much of the IMF membership. We all know how devastating debt crises can be, and therefore we make it a priority for capacity development to help countries ensure debt sustainability. It is key for safeguarding macroeconomic and financial stability in the short term and ensuring sustainable growth and development in the long run".
The IMF's Ceyla Pazarbasioglu highlighted the strong coordination with the World Bank on debt issues, which partners welcomed. The joint strategy emphasizes capacity development to help debtor countries manage and prevent debt vulnerabilities; reach out to creditors; raise the quality and transparency of debt data; and better coordinate among creditors. Capacity development also helps countries manage public debt and fiscal risks, upgrade their analytical capacity to assess debt vulnerabilities, and better understand the international financial architecture, including IMF policies.
The IMF and the World – which jointly manage the Debt Management Facility – have launched a series of courses on debt, including on:
The IMF also developed online courses on:
- Projecting Public Debt - The Public Debt Dynamics Tool
- Public Debt, Investment, and Growth: The DIG and DIGNAR Models
- Public Debt Dynamics under Uncertainty
- Public Sector Debt Statistics
Coordination with development partners will continue in the months ahead to help meet the increasing demand for capacity development on debt sustainability, transparency, and management. The IMF thanks its partners for their strategic, financial, and technical support in this area.
Find out more on our partners' perspectives on this dialogue below as well as on IMF partnerships for capacity development here. You can also view the photo album of the dialogue here.
Key quotes from the IMF's capacity development partners on the dialogue:
