This report was prepared by the World Bank Treasury – Government Debt and Risk Management Program (GDRM) team, drawing on inputs from World Bank country teams, Swiss State Secretariat for Economic Affairs (SECO) country teams, and government counterparts from the countries participating in the GDRM Program. As the first phase of GDRM comes to an end, this report celebrates its achievements. From Colombia, South Africa, and Vietnam to Ghana, Indonesia, and Serbia, sophisticated skills and tools have been developed to manage their debts in a more strategic, less volatile, less risky, less costly, and more transparent way.

The Government Debt and Risk Management (GDRM) Program provides customized technical advisory services to middle-income countries in a programmatic approach. The Program assists countries in developing sustainable debt and risk management frameworks to reduce vulnerability to financial shocks.

Institutional Strengthening

• Governance: Focuses on the legal framework, institutional arrangements, accountability and transparency mechanisms that shape and direct the operations of government debt and risk managers: design of government structures with clear roles and responsibilities, with appropriate checks and balances and clear reporting lines.
• Policy coordination: Focuses on establishing efficient coordination mechanisms between debt management and monetary policy, fiscal and budget planning processes and cash management.
• Strengthening debt and cash management relations: Aims to improve the implementation of the debt management strategy, and supporting domestic market development.
• Capacity and management of internal operations: Includes analysis of organizational structures, development of strategies for recruiting and training staff, and evaluation of information technology systems for debt management transactions, with the aim of reducing operational risks and increasing debt management office efficiency.

Technical Capacity Development

• Debt management strategy development: Covers formulation of debt management strategies based on sound analysis of costs and risks, considering a country’s macroeconomic framework and level of debt market development, determining the composition of public debt portfolio.
• Debt management strategy implementation: Covers the development of an annual borrowing plan, access to the capital markets, hedging and the functioning of the primary and secondary markets.
• Management of contingent liabilities: Focuses on developing models to identify, measure and manage risks arising from sovereign loan guarantees, guarantees issued to public private partnership schemes, legal claims against the government, catastrophic and other risks.
• Asset and liability management: Management of the balance sheet risks (fiscal risks) from an asset and liability management perspective where market-based mitigation is possible