Role of the International Monetary Fund (IMF) in Bhutan.

Presented by Amra Srdanovic on 27^th October, 2016

  Resident PFM Adviser (Bhutan).

The speaker started her presentation with the introduction of International Monetary Fund (IMF), which is an organization comprising of 189 member countries created in 1945 working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment, sustainable economic growth and reduce poverty around the world. She mentioned that IMF ensures the stability of the International Monetary System in three ways; Surveillance, Lending and Capacity Development. Bhutan had joined IMF on 28^th September, 1981 becoming the 147^th member nation.

IMF in Bhutan provides both short and long term Technical Assistance (TA) to the Royal Government (Article IV consultation), Royal Monetary Authority (RMA), Ministry of Finance and New South-Asia Regional Technical Training Centre – SARTTAC (New Delhi). The IMF resident adviser to Bhutan, Ms. Amra Srdanovic at the request of the Bhutanese government, provides technical assistance to the Department of Public Accounts (DPA) in the Ministry of Finance on high level objectives which includes;

1.  Improving the effectiveness of expenditure control and the efficiency with which it is achieved.

2.      Improving the quality and timeliness of the financial reporting.

3.      Improving the cash flow forecasting and cash management.

4.      Supporting the execution of budget reforms in so far as they affect DPA’s operations and

5.      Supporting further development/enhancement of the Public Expenditure Management System (PEMS).

She informed the student that, currently the government of Bhutan has PEMS in the process for all government agencies and Government Accounting System Reform (GASR) with DPA to lead the implementation of the e-payment system reform. The resident adviser focuses on Public Financial Management (PFM) policies in the country which helps promote efficient and effective use of the public funds with appropriate level of control. PFM cycle includes four broad activities; Resource mobilization, Resource allocation, Resource utilization and Audit and Reporting. It was shown that Bhutan has always placed greater importance to Good Governance on principles of accountability, transparency and efficiency. This principle has helped the country to allocate the resources properly by having strong planning and budgeting system which translates the five year plan into sectorial strategies, programs and annual budgets within a rolling three year fiscal framework. Further, the efficiency in use of resources for service delivery is assisted by competitive procurement yielding greater value for money.

This has helped our country to gain more attention from IMF and Donors in the recent years with regard to PFM besides Asian Development Bank (ADB) being one active partner to Bhutan in the areas of macro-fiscal analysis and fiscal risk management. She also informed that the Fiscal Affairs Department (FAD) of the IMF have expanded its PFM TA to the Bhutan with primary focus on macro-fiscal analysis, budget preparation, cash management and payment systems.

The presentation ended with question and answer session.