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International Monetary Fund. Fiscal Affairs Dept.

Abstract

Public sector balance sheets provide the most comprehensive picture of public wealth. They bring together all the accumulated assets and liabilities that the government controls, including public corporations, natural resources, and pension liabilities. They thus account for the entirety of what the state owns and owes, offering a broader fiscal picture beyond debt and deficits. Most governments do not provide such transparency, thereby avoiding the additional scrutiny it brings. Better balance sheet management enables countries to increase revenues, reduce risks, and improve fiscal policymaking. There is some empirical evidence that financial markets are increasingly paying attention to the entire government balance sheet and that strong balance sheets enhance economic resilience. This issue of the Fiscal Monitor presents a new database that shows comprehensive estimates of public sector assets and liabilities for a broad sample of 31 countries, covering 61 percent of the global economy, and provides tools to analyze and manage public wealth. Estimates of public wealth reveal the full scale of public assets and liabilities. Assets are worth US$101 trillion or 219 percent of GDP in the sample. This includes 120 percent of GDP in public corporation assets. Also included are natural resources that average 110 percent of GDP among the large natural-resource-producing countries. Recognizing these assets does not negate the vulnerabilities associated with the standard measure of general government public debt, comprising 94 percent of GDP for these countries. This is only half of total public sector liabilities of 198 percent of GDP, which also includes 46 percent of GDP in already accrued pension liabilities. Once governments understand the size and nature of public assets, they can start managing them more effectively. Potential gains from better asset management are considerable. Revenue gains from nonfinancial public corporations and government financial assets alone could be as high as 3 percent of GDP a year, equivalent to annual corporate tax collections across advanced economies. In addition, considerable gains could be realized from government nonfinancial assets. Public assets are a significant resource, and how governments use and report on them matters, not just for financial reasons, but also in terms of improving service delivery and preventing the misuse of resources that often results from a lack of transparency.

Mr. Paulo A Medas, Ms. Veronique Salins, and Mr. Jeff Danforth
Resource-rich countries have to manage highly volatile commodity revenues. In periods of revenue booms there is a tendency for large spending scale-ups. When facing large and persistent reductions in commodity prices, some of these countries will need to adjust their budgets to the new reality. In many cases, overall surpluses turn into large fiscal deficits and borrowing costs tend to rise with the fall in commodity prices. This note discusses how to undertake large fiscal adjustments, which often tend to be protracted and with long-lasting impacts on growth. Consequently, the note also highlights how to better prepare for future booms and busts in commodity prices.
Mr. Enrique A Gelbard, Corinne Deléchat, Ms. Ejona Fuli, Mr. Mumtaz Hussain, Mr. Ulrich Jacoby, Mrs. Dafina Glaser, Mr. Marco Pani, Mr. Gustavo Ramirez, and Rui Xu
Ce document analyse la persistance de la fragilité dans certains pays d'Afrique subsaharienne et la coexistence de multiples dimensions de la faiblesse de l'État. L'étude passe également en revue les caractéristiques de la fragilité, et ses liens avec les conflits et l'action internationale en faveur des états fragiles, avant de dresser un état des lieux de la situation et des domaines dans lesquels la résilience a progressé. Elle s'intéresse également au rôle des politiques et institutions budgétaires, et analyse les phases d'accélération et de ralentissement de la croissance. Une analyse du cas de sept pays précise certain des principaux facteurs en jeu et illustre la diversité des voies suivies, en soulignant l'importance de l'échelonnement des réformes. Enfin, l'étude se termine par une synthèse des principaux résultats et conséquences pratiques.
Mr. Enrique A Gelbard, Corinne Deléchat, Ms. Ejona Fuli, Mr. Mumtaz Hussain, Mr. Ulrich Jacoby, Mrs. Dafina Glaser, Mr. Marco Pani, Mr. Gustavo Ramirez, and Rui Xu
This paper analyzes the persistence of fragility in some sub-Saharan African states and the multiple dimensions of state weakness that are simultaneously at play. This study also provides an overview of the analytics of fragility, conflict, and international engagement with fragile states before turning to an assessment of the current state of affairs and the areas in which there has been progress in building resilience. The paper also looks at the role of fiscal policies and institutions and analyzes growth accelerations and decelerations. Seven country case studies help identify more concretely some key factors at play, and the diversity of paths followed, with an emphasis on the sequencing of reforms. The paper concludes with a summary of the main findings and policy implications.
International Monetary Fund
Ample natural resource revenues create both opportunities and challenges for a sovereign to transform its natural resources into well-managed financial assets. Hence, inter-temporal smoothing of revenue and consumption/investment moves to the center stage of macroeconomic policies. The questions arising from natural resource wealth accumulation are becoming more pressing for many countries, given the need to achieve intergenerational equity in a context where commodity prices may not continue their upward trajectory of the past decade. Addressing these questions requires a flexible sovereign asset-liability management (SALM) framework that integrates various macroeconomic and financial trade-offs with the aim of containing financial risk to the sovereign balance sheet. The framework and policy advice aims to guide policymakers across different institutions in weighing those trade-offs.
International Monetary Fund. African Dept.
This paper discusses Burkina Faso’s Seventh Review Under the Extended Credit Facility (ECF) Arrangement and Request for a new Three-Year ECF Arrangement. Economic activity in Burkina Faso continued to grow at a brisk pace in 2013. Program performance remains strong. Revenue performance remains on target, but is no longer overshooting targets as in recent years, while spending execution is below target. Almost all program targets were met, including on net domestic financing and the fiscal balance. All structural benchmarks slated for completion in June and September were also met. The IMF staff supports completion of the seventh review of the current ECF arrangement and the authorities’ request for a new three-year ECF arrangement with access equivalent to 45 percent of quota.
International Monetary Fund
This paper presents the Joint Staff Advisory Note on Guinea-Bissau’s Second National Poverty Reduction Strategy Paper (PRSP II) covering 2011–15. The PRSP II, adopted by the government in July 2011, provides the framework for the implementation of a comprehensive strategy aimed at consolidating macroeconomic stabilization and strengthening recent improvements in economic governance. Its successful implementation would help the country enhance its economic growth conditions, strengthen the rule of law, and accelerate progress toward the achievement of the Millennium Development Goals.
Mr. James Daniel

Abstract

Este folleto (que actualiza las Directrices de 1995 para el ajuste fiscal) presenta el enfoque del FMI con respecto al ajuste fiscal, y se centra en la importancia de la solidez de las finanzas públicas para promover la estabilidad macroeconómica y el crecimiento. Está estructurado en torno a cinco preguntas prácticas: cuándo realizar un ajuste, cómo evaluar la situación fiscal, cuáles son los factores que determinan el éxito del ajuste, cómo realizar el ajuste y qué instituciones facilitan el ajuste. Aborda temas tales como las políticas tributarias, la sostenibilidad de la deuda, las leyes de responsabilidad fiscal y la transparencia.

Mr. James Daniel

Abstract

Cette brochure (qui actualise la brochure initiale de 1995, « Ajustement budgétaire : principes directeurs ») présente la démarche du FMI en matière d’ajustement budgétaire et le rôle qu’une position saine des finances publiques joue dans la recherche de la stabilité macroéconomique et de la croissance. Elle aborde des thèmes tels que la politique fiscale, la viabilité de la dette, la réglementation de la responsabilité budgétaire et la transparence. Elle est structurée autour de cinq questions : quand faut-il mettre en œuvre l’ajustement budgétaire ? Comment faut-il évaluer la position budgétaire ? Comment assurer la réussite de l’ajustement budgétaire ? Comment mettre en œuvre l’ajustement budgétaire? Comment les institutions peuvent-elles appuyer l’ajustement budgétaire ?

Mr. James Daniel

Abstract

The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.