Should debt managers be concerned with utilisation?

The Revised Guidelines for Public Debt Management published by the IMF/WB in 2014, define PDM as follows:

… the process of establishing and executing a strategy for managing the government’s debt in order to raise the required amount of funding at the lowest possible cost over the medium to long run, consistent with a prudent degree of risk. It should also meet any other public debt management goals the government may set, such as developing and maintaining an efficient market for government securities”.

 

One comes across this definition, in one form or another, in practically all debt management strategies published by countries. Achieving that fine balance between cost and risk remains, and rightly so, the major preoccupation of all debt managers, as is the development of the government securities market which is a longer term goal.

 

Looking at the above definition more closely, one notes that the focus is mainly on resource mobilization (“raising the required amount of funding”) and the management of the debt portfolio per se, which includes any deliberate actions taken to achieve the lowest cost at an agreed level of risk. Such actions can occur at any time during the loan cycle  e.g. from the time a loan is negotiated until the final repayment. Some measures can be taken at both the portfolio or sub-portfolio level. For example, the more advanced countries can engage in “active debt management” to fine tune the cost and risk trade off through the use of derivative products or by simply refinancing expensive loans.

 

In trying to define the scope of PDM, we are often reminded what falls outside its remit. For example, the difference between fiscal and debt management policies is often alluded to. Put simply, fiscal policy determines the level of borrowing (which is subject to medium and long-term debt sustainability conditions) while debt management per se focusses on funding the borrowing requirement, subject to the cost and risk tradeoff discussed above. Indeed, separate methodologies and tools exist for the two purposes –  Debt Sustainability Analysis (DSA) which is considered as a fiscal exercise and the Medium Term Debt Strategy (MTDS), which is the framework and tool commonly used to inform the design of debt management strategies.

 

What about the utilisation of borrowed funds?

It is interesting to note that the above definition of PDM is silent about the subsequent utilization of borrowed funds.

 

In practice though, borrowing does not occur in a vacuum. While a certain amount of borrowing is contracted for liquidity purposes – usually raised on the domestic market through short-term instruments such as Treasury Bills – or to finance the budget deficit, a considerable proportion is borrowed to achieve the socio-economic objectives of the country. This relates to the implementation of projects in various economic sectors (health, education, energy, roads and transport etc.). Developing and emerging countries have traditionally relied on external borrowing (from multilateral, biliateral) to do so, although this is changing given the increased popularity of Eurobond issuance and Public Private Partnerships.

 

Debt managers do get involved in monitoring disbursements on loans. For instance, disbursement data is required to update debt recording and management systems so that these are able to work out loan balances and forecast debt service accurately. In some countries, the Debt Office may also be responsible for submitting claims for reimbursements. In practice, disbursement monitoring can be quite a challenge due to the need to comply to creditor-specific practices as well as disbursement methods (via special accounts; based on reimbursements; direct to suppliers etc.). There can also be considerable delays in obtaining disbursement data although the development of online systems – such as the World Bank’s Client Connection – has greatly improved matters in this area.

 

The utilization of borrowed funds affects the cost and risk of borrowing in several ways:

 

First, slow utilisation directly affects the cost of borrowing through the payment of commitment fees[2]. The longer the disbursement period (or the slower disbusrsements are), the higher the cost of the loan. We have seen extreme cases whereby loans contracted were not disbursed for several years. This can happen for various reasons including the inability of the borrower to fulfill conditions preceeding effectiveness.

 

Secondly, slow utilisation is inevitably linked to delays in project implementation which, in turn, increases the risk of cost overrun and the need for loan enhancement; and

 

Thirdly, certain creditors will not consider new requests for funding unless a minimum utilisation rate has been achieved on their current outstanding portfolio. This can restrict the availability of additional funding from existing creditors and may result in countries having to fund new loans from more expensive (commercial) sources.

 

To what extent then should debt managers be concerned with the monitoring in loan utilization? We are certainly not advocating that debt managers should follow up on utilization project by project. This is the role of the implementing agency and of project managers. But we definetely see a role for debt management offices in analyzing utilisation at the macro level – e.g. by economic sectors –  pointing out bottlenecks and cases of low utilization rates. We believe that the debt management office is well placed to undertake such analysis.

 

Of course, one could take the analysis of utilisation further in two ways:

 

  • By focussing beyond the disbursement period (which is defined as the time from which a loan is signed right through to final disbursement). For example, one could consider the time from which a decision is taken to resort to borrowing to fund a particular project till the time the project actually becomes operational. After all, deciding to resort to borrowing to finance a project  – when perhaps other options are available – will ultimately impact on the debt burden and its costs

 

  • By adopting a Results Based Management approach which would include systematic evaluations of projects funded by borrowed resources, including  a value for money audit. After all, countries ought to  evaluate and draw lessons about how effectively borrowed resources have been used and if the objectives initially set out were met. Such an analysis could be performed by the Supreme Audit Institution (SAI) of the country or a special unit tasked with this function. Creditors also undertake their own evaluations and it would be interesting to compare notes.

 

Conclusion

 

The extent to which debt management offices should be concerned with utilisation is likely to be a controversial issue. Many observers will argue that utilisation is not the concern of debt managers and that the latter should exclusively focus on managing the cost and risk trade off of the debt protfolio. However, as we have argued above, utilisation does impact directly and indirectly on both costs and risks of borrowing. Trying to achieving the optimum cost-risk trade off but not questioning if borrowed funds are being used effectively would be a contradiction.

 

Debt Management Offices are well placed to review utilisation but this analysis should be kept at the macro-level. It may also require additional resources to ensure that this additional task is not performed at the detriment of the core functions of debt management.

 

Beyond this issue, Governments would gain from looking at the utilization of borrowed funds more closely and ensure that amximum benefits are derived from borrowed funds.

 

[1] The document can be downloaded from our Library page.

[2] Commitment fees are charged on the undisbursed amount of a loan. The slower the utilisation of the loan, the larger will be the amount of commitment fees paid.

Seminar for Parliamentarians on Public Debt and Macroeconomic Management

PDM Practice participated in a Seminar for Parliamentarians on Public Debt Management and Macroeconomic Management organised by the Macro Economic and Financial Management Institute (MEFMI) from 7th – 9th November 2016 in Windhoek, Namibia .

The principal objective of the Seminar was “to enhance Parliamentarian’s capacity to scrutinize policies and strategies with a view to providing more effective oversight”. It was attended by 27 Members of Parliament as well as officials from six of the MEFMI member countries namely Kenya, Malawi, Mozambique, Swaziland, Uganda and Zimbabwe.

PDM Practice gave presentations on a number of topics including Public Financial Management (PFM); traditional and emerging sources of development finance and Parliamentary Oversight in public finance.

Selecting a cloud service provider for backing up public debt databases

Following our presentation on “ICT for Effective Debt Management” at the Asian Regional Public Debt Management Forum (organised by the Asian Development Bank in Istanbul last year in May), a number of debt managers have contacted us wanting to know how they should approach and select a service provider to back up their public debt databases in the cloud.

 

In this blog, José Maurel (PDM Practice) and Sanjay Lollbeharree (Debt Management System Expert) discuss what to look out for and provide some general guidance on the matter. In doing so, they make two keys assumptions:

  • That the DMO staff would already be familiar with cloud computing as well as the various service and deployment models that exist. If not, the very first step would be for them to familiarize themselves with the subject matter; and
  • Their intention is to use cloud computing technology for data backups only (as opposed to running applications in the cloud) which would entail an additional set of considerations.

 

Defining the organisational needs and environment

The very first step is to have a clear understanding of organisational needs as well as the operating environment in which the debt office evolves. Organisational needs will comprise a number of considerations: how much data needs to be backed up? At what interval? What level of security is required? – while the operating environment would be a mix of technical and non-technical issues such as what is the quality of internet connectivity? How critical is it for the organisation to be able to retrieve back up within a given period?

 

Most Debt Management Offices (DMOs) are under the purview of Ministries of Finance which, in turn, are part of the public sector. It will be therefore crucial to review any laws, regulations or guidelines pertaining to the use of cloud computing in government. In the absence of such documents, special clearance may be required before proceeding further.

 

If there are other public institutions already using cloud facilities for data backups, the DMO would want to talk to these organisations to find out more about their experience. If the MOF is itself using cloud technologies for backing up data for other applications (e.g. IFMIS), then the possibility of a collaborative effort should be considered. As we discuss later, an important consideration when dealing with a cloud service provider is the balance of power that exists between the client and the provider. All other things being equal, bigger clients are more likely to secure better deals.

 

Choosing a cloud service provider

It is extremely important to choose the cloud provider with utmost care. Due diligence about the company should be carried out e.g. where is it incorporated? How long has the company been operating?  Is the company financially stable? How reputable is the company? Has there been or are there any pending law suits against the provider? What are the business continuity contingency arrangements in case the primary site or storage fails? Whether the service provider already has public sector or government institutions as clients? It will also be important to determine if the company actually hosts the data or if it is a re-seller which uses a cloud hosting company. Finally, one should try to talk to existing customers. Some providers are happy to provide a list of clients who can be contacted.

 

Legal issues

A number of legal issues will need to be looked at and professional advice sought. The DMO should ensure that its plan to use a cloud hosting company actually conforms to domestic law as well as public procurement rules and regulations. Also, many countries have implemented data protection laws and the DMO should ensure that any decision taken is in conformity with such legislation.

 

Another important legal issue is about the jurisdiction where the data will be physically held. This should be clearly stated in the contract with the cloud hosting company. It would also be helpful to understand what the legislature of that jurisdiction says about the protection, privacy and sovereignty of the data. Moreover, if the cloud hosting company is foreign, it will be important to determine in which jurisdiction disputes will be resolved.

 

There will also be a number of legal issues relating to liability in terms of a number of events such as termination, exit clause, migration, data breaches etc. Each of these areas needs to be looked at in detail.

 

Service level agreement (SLA)

Much time will be spent on the SLA. The SLA is “a contract between a service provider (either internal or external) and the end user (the DMO in this case) that defines the level of service expected from the service provider”. There is sometimes a temptation to use SLA templates and to just “fill in the blanks”. Even if a template is used, the final document must be scrutinised and carefully vetted before an agreement is reached.

 

The SLA will touch on a number of key issues including:

  • A description of the service to be provided
  • Responsiveness and reliability e.g. uptime requirement
  • The number of copies and generations of data to be kept
  • How the service level will be monitored and reported
  • The frequency of data verification tests and verification reports
  • Procedures to report any issue arising
  • What are the consequences of not meeting the agreed service level
  • What are the limits of liability specified
  • Escape clauses, constraints etc.

 

A general consideration is that the DMO should ensure that requirements are specific and precisely defined and that the service level is quantifiable and measurable.

 

Technical Issues

An equally important aspect will be the technical considerations for, in many ways, this will determine the performance, reliability and security of the backup system being implemented. Cloud technology is a fast changing environment and it is worth using the services of an expert to ensure the interests of the DMO are safeguarded.

 

According to Dr Sanjay Lollbeharree, Debt Management System Expert, there is a long list of technical issues to be considered including:

  • What is the underlying technology of the service provider’s backup solution and are these any issues to do with compatibility (if any) with the client’s platform for the solution to operate?
  • What data mirroring options exist to protect the service provider’s storage solution in case of failure? What are the contingency plans in place in the event of a disaster?
  • What is the level of encryption offered by the service providers and what is the minimum requirement (if any) imposed by government? Consideration should also be given to whether the data is encrypted in transit or only upon reaching the cloud. In the event of data security breach, what are the avenues available to clients to seek redress?
  • What is the password management policy of the service provider? What are the options in case a password is forgotten? For certain high levels of security and privacy, in case a password is forgotten, it may be impossible for even the service provider’s employees to be able to restore the data.
  • How to access the backups in case a restore is required and how easy it is to restore the files? For how long earlier versions of backup are kept in case one needs to restore earlier generations of backup.
  • It is very likely that service providers might be operating in a different time zone from clients? One should therefore also make sure that the provider offers 24-hour support in case problems are faced which need urgent resolution.
  • How up to date is the cloud service provider’s certification and regulatory/legal compliance in jurisdictions where the government is running a certification program?
  • What is bandwidth requirement for the backup which may be high in case the data is voluminous? Does the service provider’s solution support incremental backup to add changes only rather than undertake complete fresh backup which will very likely consume high bandwidth?
  • What is the minimum length of a contract and what are the options and liabilities if a contract is to be terminated earlier?
  • Whether the solution supports data duplication which reduces storage size and therefore cost and possible bandwidth requirements.
  • What is the frequency of the backup (e.g. daily, weekly) and what is the limit of the storage capacity? Depending on subscription plans, some service providers offer unlimited capacity which could be attractive in case of large backups with various generations to be kept over long periods.

 

Dr Lollbeharree further adds that “some service providers may also offer hybrid backup option whereby backups are cached on-premises to avoid long restore times in case a restore is required. Another option to minimize restore times is the possibility of getting backups on disk instead of lengthy download through the internet. Certain providers can ship such storage devices containing the backup. This can be important in case short recovery time is required and network connectivity is slow or unreliable”.

 

Conclusion

From the points raised above, it is clear that choosing a cloud service provider – even if it is only for storing data backups – needs to be approached carefully and within the overall disaster recovery and business continuity strategy and plans of the DMO. More and more companies are offering hosting services in the cloud and there is a growing trend for institutions, private or public, to benefit from such services. There is therefore a widening choice available to institutions at increasingly competitive prices.

 

A balance will still need to be struck between the DMO’s requirements and cost. Obviously a standard package will be cheaper than a customised solution. As indicated earlier, the DMO’s negotiating power is likely to increase if it teams up with other departments or Ministries – which may or may not be possible.

 

DMOs should choose a cloud service provider with care for a potentially long partnership and above all, seek independent professional advice – both technical and legal – whenever required.

2016 Asian Regional Public Debt Management Forum

The sixth edition of the Asian Regional Public Debt Management Forum took place from 10 to 12 May 2016 in Istanbul, Turkey. The Forum is an annual event organised by the Asian Development Bank (ADB). On this occasion the co-host was the Turkish Treasury.

The Forum was attended by some 130 participants, including delegates from 34 countries. It was opened by Mr. Thierry De Longuemar, ADB’s Vice President (Finance and Risk Management) and Mr. Mehmet Simsek, Deputy Prime Minister of the Republic of Turkey.

The Forum discussed a range of topics directly relevant to public debt managers including:

  • Global and Regional Economic Outlook
  • Current challenges Faced by DMOs
  • Debt Management Office and Central Bank Coordination
  • Credit rating process
  • Establishing a sub-national debt management office
  • Domestic debt markets
  • Fiscal risks of contingent liabilities and advantages and risks of Public Private Partnerships
  • Managing risks of commodity price fluctuations
  • Trends in ICT and Business Continuity Plans
  • The Legal Framework for public debt management
  • Measuring and managing disaster-related contingent liabilities

José Maurel from PDM Practice gave a presentation on “ICT for Effective Debt Management”.

Cloud Technology for effective Public Debt Management: are we there yet?

Recent advancements in Information and Communication Technologies (ICT) are not only having a profound impact on our daily lives but also revolutionizing the way businesses and governments operate. Of the various developments that have occurred in recent years, cloud technology holds the biggest promise. In this blog we discuss how cloud technology could impact PDM in the future.

A bit of history…

The application of IT in debt management started in the 1980’s in the aftermath of the Mexican debt crisis. Realizing that any analysis of the debt situation (mainly for Paris Club purposes) was seriously hampered by the lack of accurate and timely data, countries began to develop debt so-called Computer-Based Debt Management Systems (CBDMS) with the assistance of multilateral and bilateral donors and the involvement of local IT staff. This led to the first generation of IT applications in PDM. These systems were all custom designed and developed on the mainframes and minicomputers of the time.

By the mid 1980’s many of these systems were ported to microcomputers, following the launch of the IBM PC in 1981. At the same time, both UNCTAD and the Commonwealth Secretariat embarked on the initial design of their debt recording and management systems in 1983 and 1985 respectively. Several private companies (including some of the larger accounting firms and banks) also developed debt recording systems that were sold and installed in some countries. However, it is fair to state that these systems had very limited success.

The advent of PCs brought about both advantages and disadvantages. Computing power was now literally in the hands of the users who could improve their productivity through the use of spreadsheets, word processors, email etc. However, many countries failed to distinguish between personal applications fit for PCs and “mission critical applications” that require a more rigorous computing infrastructure, environment and management. Debt databases ran on a PC under the debt manager’s desk; backups were taken once in a while, sometimes over and over on the same media and left in the desk’s drawer or taken to the debt manager’s home for safe keeping. Not a satisfactory situation!

The development of local area networks rationalized IT arrangements and moved the debt databases back to the IT department. This ensured- at least in theory – that regular backups were taken and that IT staff was available to maintain and support the debt recording and management systems which, by now, had grown in complexity.

Thirty years later…

Where do we stand to-day? Over the years the IT needs of debt managers have grown considerably. In most developing and emerging economies, the debt recording and management system is at the heart of the IT infrastructure for PDM.  In this area, UNCTAD and Commonwealth Secretariat remain the main players, sharing the market almost equally. This duopoly situation has led to “friendly competition” between the two providers and has prompted them to innovate.

However, if we consider the wider aspects of PDM, there are a number of other software applications that are used including:

  • Auctioning systems for government securities (which are often used in conjunction with online bidding systems);
  • Central Depository Systems (CDS);
  • Securities Settlement Systems, which connect to Real Time Gross Settlement Systems (RTGS);
  • Electronic platforms for the trading of government securities;
  • Links to sub-systems such as disbursement monitoring systems; and
  • Links to Integrated Financial Management Systems (IFMIS);

Many of these systems are custom-designed although there commercial products for certain functions e.g  auctioning and IFMIS. Given that there is at present no “ERP-equivalent*” for PDM, debt offices must ensure that software applications are well integrated and work smoothly together. Also, many of these systems will not be owned and operated by the debt management office. This makes coordination among institutions concerned very important.

Impact of cloud computing

One technology that has the potential to revolutionize public debt management is Cloud Computing.

Cloud technology is the result of the convergence between Information Technology (IT) and Communications Technology (CT). The concept is fairly simple: cloud technology is a system of storing and accessing data in/from central servers via the internet. Clouds can be public, private or hybrid. There are two main pre-requisites for exploiting cloud technology:

• The software applications must be developed to run in the cloud; and
• Users must have good internet access.

We make use of cloud applications everyday when using Social Media applications, Google, Amazon, Microsoft 360 or OneDrive.

One obvious use of cloud technology in PDM is the implementation of off-site backups. While this is very useful and will contribute to improved business continuity (and DeMPA scores!) cloud technology could have a much wider impact on PDM. The National Institute of Standards and Technology (NIST) states that “cloud computing is more than a new technology: it is a new way of delivering IT services”.

Three features of cloud computing are of particular importance:

• The use of cloud-based hardware (or virtual servers) – referred to as Infrastructure as a Service (IaaS);
• The hosting of software applications and/or data in the cloud – Software as a Service (SaaS)
• Software developed in the cloud – or Platform as a Service (PaaS).

IaaS is particularly appealing to countries that are finding it difficult to procure, install and maintain IT installations as well as retain competent staff to manage these. Cloud services are routinely advertised in computer magazines at very competitive prices.

The provision of cloud-based software for PDM would be a breakthrough. No longer would debt management offices have to worry about applying the latest releases to their applications. This would be undertaken by the software developer. The applications and debt data would be accessible from anywhere via an internet connection.

One of the advantages of cloud computing is that it provides a large degree of standardization in terms of software application and database structure thus facilitating consolidation. The development of cloud-based debt recording and management systems would therefore be of interest to group of countries e.g. in a currency union or in a sub-national debt situation. In the latter case, it is possible to imagine a setup whereby states would maintain their debt databases in the cloud which the central government would then be able to access and produce aggregated data.

Cloud computing does not come without risks and security is a major concern. The issue is not about loss of data but rather unauthorized access. There are ways to mitigate these risks including carefully selecting the cloud provider; carrying out due diligence to ensure one is aware of the facilities offered by the provider and the standards that are in place; using more than one provider etc. DMOs should seek independent advice when in doubt.

Conclusion

The application of the latest ICT technologies, such as cloud computing, in the area of public debt management is still work in progress. A lot will depend how software providers respond to the challenge. Moreover, countries also have an important role to play. Procuring new technology has initial cost implications as well as risks. At the end of the day, DMOs must be able to demonstrate that any investment improves delivery and productivity. To be able to do so, and to maximize the benefits that new technologies offer, DMOs must plan ahead and develop a strategy. It is also very important to select technology, products and providers with great care!

We believe that both software providers and countries will rise to the challenge. So, while we may not be there yet, we are definitely getting closer!

Note: * ERP or Enterprise Resource Planning is a suite of integrated applications that an organization can use to collect, store, manage and interpret data from its business activities (purchasing, manufacturing, marketing, inventory, shipping etc.)

UNCTAD’s 10th Debt Management Conference

UNCTAD’s 10th Debt Management Conference took place in Geneva from 23-25 November 2015.

This year’s Conference attracted over 360 high-level participants from 91 countries, as well as from international, regional and inter-governmental organizations. The comments received from the participants were unanimously positive with regard to the array of topics, the quality of speakers and moderators and the organization of the Conference.  In his Keynote Address during the opening session, Mr. Michael D. Higgins, President of Ireland, spoke on the theme “Issues of Debt Management in the New Context of the Sustainable Development Goals and the Universal Challenge of Climate Change”. A short video on the Keynote Address is available from UN TV here.

PDM Practice was represented by Jose Maurel who moderated the discussion panel on Debt Management Capacity Building Needs.

The conference material is available from the UNCTAD website at:

http://unctad.org/en/Pages/MeetingDetails.aspx?meetingid=702

World Bank Survey

The World Bank has published a Working Paper entitled “How strategically is Public Debt Management managed around the globe: a survey of Public Debt Management Strategies”.

The legal requirement  for and existence of a debt management strategy – as well as its approval, publication and dissemination – is regarded as a crucial indicator of the level of PDM and is indeed one of the DeMPA indicators.

117 countries responded to the survey. The results indicate that 60% of respondents have a formal debt management strategy in place and 40% (or 47 countries out of 117) did not.

Of those countries that have a debt management strategy in place:

  • 44% have a legal requirement to do so;
  • 97% have the document approved (mainly by the Minister of Finance);
  • 77% of countries make the document public;
  • 76% use some type of target or benchmark; and
  • 71% use a qualitative framework or model.

Broken down by country group, 58% of low income countries responded they have a formal debt management strategy in place.

The Working Paper can be accessed at:

http://treasury.worldbank.org/bdm/pdf/DebtManagementSurveyCabral.pdf

Round the world in 80 minutes

PDM Practice has just uploaded links to the web sites of over 225 national agencies dealing with public debt management from around the world. This resource should be of tremendous value to debt managers as well as researchers and consultants. This blog explains how to make optimum use of this facility.

Access

The links can be accessed by choosing Resources > Debt management agencies around the world on this web site. Clicking a site opens a new window (tab) in your browser, so that by closing this window, you are back to the list.

Coverage

For practical purposes, the links are divided by geographical regions:

  • Africa – 64 entries
  • Asia (including the Middle East) – 53 entries
  • Europe – 51 entries
  • North America (including Central America and the Caribbean) – 30 entries
  • Oceania – 19 entries
  • South America – 13 entries

The agencies comprise debt management offices (legally established); ministries of finance and central banks. Some countries have more than one entries as debt management responsibilities are shared among two or more institutions. In cases where the web site has a distinct section on public debt management, the link will refer to this section as opposed to the Home page.

Practical Use

One of the main advantage of the facility is the ability to access all the links in one place and to be able to move from country to country with a few mouse clicks.

Visiting the national web sites will allow access to a wealth of information about country data; studies and in some cases even books published by countries. Unlike those of institutions, practically all these publications are free to download.

Besides accessing country specific data, the facility also allows a fair amount of comparative analysis – between two countries; within a region etc. For instance, many countries post their public debt management laws which provides a good comparison of the respective legal frameworks. The same goes for institutional arrangements.

Another example: at PDM practice we have been looking at the various Debt Bulletins published by a group of countries in terms of coverage, frequency, information provided etc. and the resource has proved invaluable for this task.

Many sites have an “Opportunities” section – where tenders are advertised. This will no doubt be of  interest to PDM consultants. Web sites will also provide contact details should you want to get in touch with the officials of a particular country.

Web masters will also find the facility useful and allow them to compare their own web sites with peer sites. Overall we have been very impressed by the quality of the web sites that we perused.

Accessing sites in other languages

Some of the sites may be in a foreign language. However many sites offer an English version which can be accessed by an icon (usually the United Kingdom flag) or the word “English” on the upper right (or sometimes left) of the Home Page. If this is not available, users can also use their browsers’ translation facility. We use Google Chrome as browser and the translation facility, though not perfect, is accurate enough. Document downloaded will tend to be in the original language and will need to be translated by other means. If you need help setting up the translation facility in your browser, please drop us a line.

Given the coverage, some web sites will inevitably be slow and may take some time to load, so please be patient. If a single site won’t load, you can check to see if other users are having the same problem by using the simple but very useful web tool isup.me. Just enter the URL of any web site in the box provided and click on “or just me?” to find out if the web site is really down or if it is only you. Some sites may also be “down” for a period of time so please try and visit them later. However, if you encounter what is clearly a broken link please drop us an email through the Contact page and we re-check the link for you.

Conclusion

We hope that you will find the facility useful. We will be updating some of the gaps as the information comes in. Also check the Comments column where we will be flagging issues of interest to debt managers on particular web sites. Together with the other set of links “International and regional organisations involved in public debt management“, you will have access to a vast amount of web resources in debt management.

Welcome to the PDM Practice web site

Welcome to the Public Debt Management Practice (PDM Practice) web site – the site for debt management professionals!

Although the importance of debt management has been recognized for centuries – the first “independent” debt management office was created in Sweden in 1789 and the creation of the Bank of England (which also has its origins in the management of debt) was setup even earlier in 1694 – it is surprising that PDM is still not recognized as a discipline and a profession in its own right. As of now, there is no professional body of public debt managers (as we have for say accountants) and one cannot study for an accredited degree in public debt management.

Perhaps the reason lies in the multi-disciplinary nature of public debt management, which encompasses elements from economics, finance, law, IT etc. However, it is a situation that we think needs to change. It is often mentioned that public debt is one of the biggest financial portfolio of a country. Public debt managers will be aware of the complexity of this portfolio in terms of the different types of debt instruments that it is comprised of, its currency composition, interest rate structure etc. and the associated risks that this entails. The socio-economic consequences of poor debt management hardly need to be reiterated.

In addition to our core objective of developing governments’ capacity for managing public debt by offering high quality and affordable consultancy services as well as training, PDM Practice would like to contribute towards the recognition of debt management as a discipline and a profession. A tall order you might think but one which we think is not impossible to achieve if debt managers themselves start realizing the importance of their work and other organisations involved in public debt management the idea.

PDM Practice’s own contribution will take three forms:

First, we will advocate for better recognition of debt management professionals. We chose to call ourselves “a Practice” for the word means “actively pursue or be engaged in a particular profession or occupation”. But more importantly though, we intend to start a discussion on the issue in various forums of interest to public debt managers.

Secondly, we have for some time been looking for a partner academic institution to offer an Executive Master in Public Debt Management. This project is on-going and we have met and discussed with a number of universities as to what form and shape such a course could take. You can find out more on the project’s dedicated web site at: http://josemaurel.wix.com/empdm.

Thirdly, in time, we will be offering a set of resources through this web site which we hope, will be useful to debt managers. More on this later.

We hope you will enjoy this new web site on public debt management. Please email us your views and suggestions.

World Bank’s e-Institute to offer on-line DeMPA course

The World Bank’s e-Institute is to offer the Debt Management Performance Assessment (DeMPA) course online. The course will run from 20 October to 7 November 2014.  This e-learning course is to assist participants address debt management capacity challenges by equipping them with knowledge on comprehensive debt management functions through the application of the DeMPA tool.

The DeMPA tool provides a set of indicators for comprehensively assessing debt management performance in developing countries. The debt management performance indicators (DPIs) span core areas of public debt management, covering:

  • Governance and strategy development
  • Coordination with macroeconomic policies
  • Borrowing and related financing activities
  • Cash flow forecasting and cash balance management
  • Operational risk management
  • Debt records and reporting

Based on the Public Expenditure and Financial Accountability (PEFA) methodology for public financial management and sound practices in government debt management, the indicators represent an internationally recognized and comprehensive methodology for assessing debt management performance in relation to country peers and monitoring progress over time. The indicators are useful to guide the design of reform programs, monitor debt management performance over time, and enhance donor harmonization.

According to the e-Institute web site, the objectives of the course is for the participants to:

  • Understand the scope, coverage and rationale behind the 15 DeMPA DPIs;
  • Be familiar with the DeMPA scoring methodology; Understand inter-linkages between the indicators;
  • Discuss and deliberate on methodology for assessment of DPIs;
  • Be able to use the DeMPA methodology to evaluate and track progress on debt management performance using evidence-based data in their countries.

The course is targeted to debt managers and Central Bank officials dealing with debt management in client countries, technical assistance providers in client countries, as well as World Bank country economists.

The e-Institute was launched as a virtual learning classroom to provide convenient, easy, and reliable access to cutting edge knowledge and communities of practice. More than forty-five e-Learning courses address complex real-world problems in priority areas such as governance, health, cities, climate change, and public private partnerships. Learners also have access to free monthly podcasts and webinars, video success stories, multimedia toolkits, and other resources.

The deadline to register for the October course is 6 October 2014.  However a second course is planned for March 2015. To register please visit the course home page.