Around the world, the International Monetary Fund (IMF) has received a great deal of negative press because of the conditionalities it imposes when it lends nations money.
But its role as lenders of last resort is just one of the three main functions it performs. The others are surveillance and technical assistance.
In a sense, if you are a diabetic, lending would be akin to life-saving surgery to remove your decaying foot, while surveillance would be the annual executive check-up with your endocrinologist assessing your blood sugar and cholesterol and the impact of your medication.
But technical assistance would be the diet, exercise and stress relief advice that your general practitioner dispenses to you: The tools to help you better manage your chronic disease.
Countries generally need loans (surgery) from the IMF, if they have ignored the advice of their specialist doctors during their annual check-up (surveillance) and if they have failed to make the necessary lifestyle adjustments (technical assistance).
Last month, T&T underwent its annual surveillance check-up when the IMF conducted its Article IV assessment of the country’s health. Tests revealed that the patient was not in crisis but had suffered a major shock to its system with the sharp fall in energy prices.
That shock means the country can no longer depend on the revenues from its energy sector: T&T needs to increase its non-energy revenue while ensuring its expenditure is more efficient.
This is where the technical assistance provided by the IMF, and the World Bank, comes in. Those institutions have spent more than 60 years providing technical assistance to countries in all states of health around the world.
They are experts in prescribing the type of exercise, the amount of food and when to eat it.
On April 15, the Ministry of Finance put out a statement that Finance Minister Colm Imbert was heading to Washington DC to attend the spring meetings of the IMF and the World Bank.
While there, he held discussions with the technical staffs to discuss technical assistance to:
• Review of the taxation system with a view to enhancing revenue and non-energy growth;
• Review of the foreign exchange regime operations in the current economic environment;
• Review the operation and management of the Heritage and Stabilisation Fund; and,
• Review of expenditure related to social programmes with a view to enhancing efficiency, effectiveness and rationalisation of the various programmes.
If T&T can make its revenue collection systems more efficient and its social safety net expenditure more targeted, it will avoid the more drastic adjustment that comes after an IMF/World Bank loan.