Friday 24 November 2017

Ireland is first 'advanced economy' to seek IMF public spending advice - here are the others

Ireland joins ex-warzones in inviting IMF to perform public spend assessment

Former IMF deputy director AJ Chopra. Photo: Tom Burke
Former IMF deputy director AJ Chopra. Photo: Tom Burke
Cormac McQuinn

Cormac McQuinn

Ireland has joined ex-war-zones, former Soviet states and developing countries in seeking an International Monetary Fund (IMF) examination of public spending.

The IMF has confirmed that Ireland is the first "advanced economy" country where it has undertaken a Public Investment Management Assessment (PIMA) mission.

The financial institution's team is in Ireland meeting Government departments and agencies to prepare a report Finance Minister Paschal Donohoe expects will be "an important input and supporting document" as he draws up the new 10-year capital spending plan.

Other countries where PIMA studies have been done include war-torn Ukraine and places recovering from conflicts, such as Liberia. Former Soviet state Kyrgyzstan is on the list of 23 countries that have hosted missions, as are Mozambique, Honduras and Thailand.

An IMF spokesman said that the PIMA mission was requested by the Irish Government and it is the first time it has carried out such a study in an advanced economy. He added that PIMAs are done "based on demand" and if other advanced economies ask for similar studies "it will be done".

"The Government of Ireland thought it would be useful and timely to have a PIMA, given that they are preparing a long-term special planning strategy and a long-term capital plan," the spokesman said.

He added that PIMAs examine planning, allocation and implementation of investment "in a comprehensive manner".

The IMF spokesman said Ireland had a history of working with the IMF fiscal affairs department and was also the first country where a Fiscal Transparency Evaluation (FTE) was done. He said other advanced economies have had FTEs carried out since.

The IMF team is here until July 19 and includes experts in investment and planning from the UK, Australia and Denmark.

The PIMA exercise has no relation to the Troika bailout programme which saw the IMF effectively take control of Ireland's finances along with the European Commission and European Central Bank after the economic crash.

Ireland exited that programme in 2013.

Mr Donohoe has said the IMF offered to carry out the PIMA study at a meeting in Washington earlier this year during a discussion on capital planning in Ireland. The costs are being be borne by the IMF.

The Government has indicated it wants to ramp up investment in infrastructure spending. Projects like the Dublin Metro and M20 motorway between Cork and Limerick are likely to feature in plans to be announced later this year.

The IMF team is evaluating Ireland's public investment procedures and its assessment will benchmark Ireland's infrastructure against comparable developed countries.

Mr Donohoe's department has said the PIMA is a "valuable exercise" with "direct relevance" to the review of the current capital plan and the development of the Government's longer-term spending plan. A PIMA report on Botswana published this month praised the African country's "prudent fiscal policy" and noted its "moderate debt" of around 10pc of GDP. It found its public investment has outpaced peer countries.

Ireland's debt-to-GDP ratio is expected to stand at around 71pc by the end of 2017.

Who else has got IMF advice?

Mozambique

Kosovo

Cameroon

Serbia

Kyrgyzstan

Ghana

Thailand

Albania

Ukraine

Togo

Madagascar

Liberia

East Timor

Honduras

Mauritius

Maldives

Ivory Coast

Mongolia

Botswana

Zambia

Jordan

Burkina Faso

Malaysia

Irish Independent

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