OREANDA-NEWS. June 20, 2016. Developing economic policymaking capacity in its member countries is one of the IMF’s most critical jobs—and a key means of preventing crises, IMF Managing Director Christine Lagarde said in Vienna, Austria.

Speaking to course participants at the Joint Vienna Institute (JVI), the oldest of the IMF’s regional training centers established with partners, Lagarde said that the IMF’s efforts to build macroeconomic policymaking capacity in its members is less well known than other aspects of its work, such as lending and surveillance. Spanning a period of years, capacity development rarely makes headlines.

But cultivating a country’s capacity through training and technical assistance is crucial to bring about more favorable economic outcomes.

“Building the human capital to develop and implement sound policies for sustainable growth is one of the IMF’s most important functions,” Lagarde told about 60 participants in two ongoing JVI courses during her visit. “If we get it right, lending in crisis situations may be less often needed.”

Joint effort

The JVI—funded jointly by the Austrian Federal Ministry of Finance, the Oesterreichische Nationalbank (OeNB), and the IMF—was created 24 years ago to assist countries in the region, including the former Soviet Union, with their transition from planned to market economies. It offers an extensive array of courses of a hands-on, applied nature on macroeconomic policy formulation and management and related topics.

During her visit, Lagarde thanked the Austrian authorities and the JVI’s international partners for their generous financial and intellectual support as well as the JVI’s staff for their dedication and commitment. “Our cooperation has been immensely successful,” she said.

This success is borne out in the numbers. The JVI delivers about 70-80 courses each year, and since its founding, more than 20,000 public sector officials have participated, many of them visiting the JVI several times, resulting in an overall training volume of close to 40,000 course participants. They are mostly from central banks and ministries of finance from 30 target countries in the JVI region.

The JVI has fostered the development of strong networks across the region, with many alumni in senior government positions and close to twenty currently serving as Governor or Minister.

Innovation is key

Innovation in training is key, Lagarde emphasized. As the global economy evolves, so too do country officials’ training needs. With the issues facing economies becoming ever more complex, policymakers need to keep pace. As a result, the JVI updates and seeks feedback on its curriculum on a regular basis. And the IMF Institute for Capacity Development—which together with other IMF departments offers some 60 percent of the training at the JVI—is currently revamping its curriculum, focusing on streamlining and updating its portfolio.

The modalities of training are likewise evolving, Lagarde said. Courses have become more interactive, focusing more on workshops and applications. Online courses have also become an integral part of capacity development for both the JVI and the IMF, allowing the reach of training to extend far beyond what was possible with exclusively classroom delivery.

In recent years, the IMF has introduced massive open online courses—or MOOCs—to complement its traditional training.

While the content and delivery of training may be changing, Lagarde said, “Our core objective remains unchanged: to bring our knowledge and practical experience to the classroom—physical or virtual—so we can help improve policies and macroeconomic outcomes in our member countries.”

JVI’s international partners

The JVI was uniquely placed to respond to increased demand for training in the aftermath of the global financial crisis, thanks to the expertise of its primary members—the IMF and Austria—and its 5 contributing members—the European Bank for Reconstruction and Development, the European Investment Bank, the Organization for Economic Cooperation and Development, the World Bank, and the World Trade Organization. The European Commission is an observer.

In addition to the IMF, the Austrian authorities, and its other members, the JVI also works with several central banks (such as the Bank of England, Banque de France, and Deutsche Bundesbank) to deliver courses.

Drawing on the expertise of its partners, a few specialized courses are offered jointly by three or more partners; a course on structural reforms is offered jointly by all primary and contributing members. In addition to support from its sponsoring organizations, the JVI has received financial support from some bilateral donors, namely the National Bank of Belgium, the Czech National Bank, the Magyar Nemzeti Bank, and the Central Bank of Malta.