At the request of the Colombian authorities, World Bank public debt management experts carried out an evaluation of these institutional arrangements. The evaluation concluded that while the current arrangement gave the Treasury greater confidence in its ability to meet the government’s cash management objectives, it hampered further development of the domestic debt and money markets. The Ministry of Finance lacked an overall strategy for domestic debt market development, including issuance of both short- and long-term debt, because each directorate had different priorities.

The World Bank advised Colombia to consolidate debt management and treasury functions, to reduce coordination and information requirements, eliminate duplication of functions, and strengthen accountability. More importantly, consolidation facilitated the development of a strategy for managing the aggregate domestic debt portfolio, which addressed debt management objectives and contributed to the development of a more liquid domestic debt market. In late 2003 Colombia consolidated debt and cash management responsibilities into a single unit, the Directorate of Public Credit and National Treasury.

Other advances include Colombia’s implementation of a money market development program with the technical assistance of World Bank global capital markets experts. The program focused on improving T-Bill auction practices and developing regulatory and operational frameworks for repurchase/sell-buybacks (including an automated platform for securities lending). The World Bank also provided technical assistance to the authorities and the private sector to create a money market reference rate —the Indicador Bancario de Referencia— that is currently published daily (overnight and 30 day rate) by the central bank.

The World Bank in cooperation with the Australian Aid Agency provided training and capacity building for reform implementation. These efforts led to the development and publication in 2005 of a medium-term debt management strategy outlining the preferred direction for debt management, including less exposure to foreign currencies, more fixed interest rate debt and support of market development. An established debt management unit responsible for issuing and managing domestic marketable debt provided the foundation for the creation in 2006 of a DMO organized along functional lines, i.e. with a front-, middle- and back-office.

Strengthened by these foundational reforms, Indonesia has made marked progress in debt market development as part of its debt management strategy. Successes include the extension of domestic debt maturities, issuance of global bonds, an active buy-back program, and the introduction of retail and Shariah compliant securities.

Says Dr. Rahmad Waluyanto, Director General of Public Debt Management, "The substantial institutional and organizational reforms, including a strong focus on staff capacity building, that we have been carrying out puts us in a position today where we have access to a wide variety of domestic and external funding sources, including Sukuk and retail markets. This allows us to implement our medium term debt management strategy in a cost effective manner".

Based on the findings of the World Bank needs assessment, the government agreed to undertake reforms that would prepare DMD to gradually assume overall responsibility for central government debt management, including development and monitoring of a comprehensive debt management strategy. In 2004, the World Bank recommended a sequenced capacity building plan, which it led, in collaboration with the Commonwealth Secretariat, and the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI):

Year 1 (July 2005 - June 2006): Construction of a comprehensive and accurate debt database using the latest edition of CS-DRMS, development of procedures for recording and checking all necessary debt data, and establishment of a back-office unit within DMD skilled in recording and monitoring debt data.

Year 2 and 3 (July 2006 - June 2008): Establishment of a middle-office unit of DMD capable of cost-risk analyses, and the drafting and passing legislation to support development of a comprehensive debt management strategy, reporting and evaluation.

Year 4 (July 2008 - June 2009): Formation of a full-fledged DMD with skilled staff and effective business processes and preparation and official adoption of a comprehensive debt management strategy based on cost-risk analyses.

Good leadership from the Kenyan Ministry of Finance, continued implementation of staff capacity building programs to scale up skills and attract and retain staff in the DMD, and close collaboration of the capacity building providers led to successful reform implementation. By July 2009, only the passing of the drafted legislation remained incomplete.

*Commonwealth Secretariat Debt Recording and Management System

World Bank public debt management experts conducted a needs assessment and worked with the Debt Management Division (DMD) of the Ministry of Finance (MoF) to design a reform plan that focused on: (i) clarifying the legal mandate for the MoF to manage government debt; (ii) strengthening staff capacity to undertake risk analysis and the subsequent formulation of a borrowing strategy; and (iii) establishing an organizational structure and debt recording capacity to support strategy development and implementation. Securities market experts from the World Bank also advised the government on the development of debt markets as a source of public borrowing.

The World Bank’s Institutional Development Fund funded DMD’s implementation of the reform plan. Armenia has progressed significantly in consolidating local currency bond issuances, implementing a more rational issuance policy to reduce funding costs, and in strengthening DMD's capacity to undertake cost and risk analysis for the design of debt management strategies.