Government Debt and Risk Management Program Announces Impact on 654 Million People in 11 Middle-Income Economies

WASHINGTON The World Bank Treasury published a new report, Managing Public Debt in Middle-Income Countries, on the impact of the of the Government Debt and Risk Management (GDRM) Program from 2011 to 2017, commencing completion of Phase I of the program implementation. The GDRM Program, funded by Switzerland’s State Secretariat for Economic Affairs (SECO), supports countries in developing sustainable debt and risk management frameworks to reduce vulnerability to financial shocks.

The GDRM Program provided technical assistance in public debt management to 11 middle-income economies during its first phase of implementation, with a combined gross domestic product of US$2.54 trillion, and total public debt stock of US$1.18, impacting over 654 million people.

The Report highlights more than thirty tangible results benefitting the governments on key areas of public debt management:

Increased capacity in the debt management offices

Improved ability to design, publish and implement debt management strategies

Deeper domestic debt markets and enhanced international market activities

Better contingent liability risk management

For the World Bank Treasury, partnering with GDRM has been central to our mission of connecting capital markets to economic development. We are super-high-frequency issuers�on average, we issue bonds in the international market two and a half times a day, in more than 20 currencies, for an annual volume of around US$50 billion. We specialize in managing cash reserves in a high-liquidity, capital-preserving way�about US$150 billion of them. The GDRM team draws on this expertise, turning the program into a network of actual practitioners said Marcelo Giugale, Director Financial Advisory and Banking of the World Bank Treasury.

World Bank Treasury Public Debt Management Advisory, the executer of the GDRM Program, has been providing practitioner-to-practitioner, programmatic support for over 20 years, focusing on development and implementation of customized reforms to assist countries in strengthening their capacity to manage debt.

Client Perspectives

The GDRM Program provided a successful review of the benchmarks and helped us update the debt management strategy. The World Bank expertise is incredibly valuable, however we also benefited from the relationships the Bank has through member countries and the debt offices around the world, said Anthony Julies, the Deputy Director-General of the Asset and Liability Management in National Treasury of South Africa.

The flexibility offered by GDRM, combined with its approach, form of delivery, and commitment from all involved parts, was fundamental to ensuring the program’s efficiency�in particular, as compared to other initiatives, said Coskun CangAlz the Head of Debt and Risk Management of the World Bank Treasury.

We had a lot of challenges in our division. One Ghana transiting from low income to lower-middle income. The requirements have become big. Unfortunately, we didn’t have the capacity. And then there was also a very high turn-over of staff in the division. And that created a big challenge especially in the risk management function of the division. So, we have put a medium term plan for the division to be able to improve on its performance. And we saw the Program from GDRM as key to achieve that said Samuel Arkhurst, the Director of the Debt Management Division from the Ministry of Finance of Ghana.

After successfully increasing capacity in the debt management offices of the GDRM countries across the board. SECO and the World Bank Treasury have renewed the GDRM Program partnership for a second phase (2018�21).

Source: The World Bank