Perspectives 2020-2021 Public Sector

2 3 Citi Perspectives for the Public Sector Contents 3 Welcome Julie Monaco 4 How Smart Public Assets Management Can Drive the Post-COVID-19 Recovery Laura Gibson Craig, Hanan Amin-Salem, Dag Detter and Ian Ball 12 Investing Post-COVID-19: Challenges and Responses Michael Paulus, Robert Crossley, Anh Khuat, Winnie Zhang and Sophia Oh 18 Public Sector Digitization: Payments and Receivables Take Center Stage Gary Schneider and Anupam Sinha 22 COVID-19 Catalyzes Digital Donations and Disbursements Dustin Ling 28 Preparing for a Potential Emerging Markets Debt Crisis: A Response Toolkit Joaquin Jugo, Jorge Ordonez, Hanan Amin-Salem and Anna Corcuera 34 Using the Banking Sector to Bring Opportunity to All Harold Butler 38 Transforming Debt: Re-Focusing in the COVID-19 Era John Finnigan, Valentina Antill and Maryna Asipchuk 44 Leveraging the New Gold Rush: How to Extract Greater Value from Gold Akeel Akhtar, Giovanni Laureri, Narjess Aschi and Burak Ciceksever 54 Policymakers in Europe Take Action to Secure the Post-COVID Recovery Georgi Yordanov, Howard Miller and Guy Peters 58 Secure, Efficient and Flexible Payments Are Paramount During COVID-19 and Beyond Andy Taylor Welcome to Citi Perspectives for the Public Sector Julie Monaco Global Head for Public Sector, Corporate and Investment Banking, Citi T he impacts of the pandemic are felt far and wide in nearly every part of our lives. COVID-19 has presented a challenge of historic proportions, that continues to shape our outlook for a post-pandemic future. Even as the rollout of vaccination programs begins worldwide, government finances face unprecedented strain. Revenues have collapsed given the sharp economic downturn while health and social spending has soared. While this year has brought extraordinary challenges, it has also revealed remarkable ingenuity, flexibility and perseverance in the public sector. Public sector organizations’ shift to remote working was in most instances seamless and critical services continued to be offered to companies and citizens. Success in combating the consequences of COVID-19 has fostered a ‘can-do’ mentality that will hopefully deliver benefits for years to come. One of 2020’s hallmarks has been the rapid acceleration of digitization for individuals, companies and the public sector. Technologies such as big data and cloud computing have become crucial to governments around the world. As the public sector invests in digitization, payments and receivables should be a priority as they are a key point of interaction with citizens and organizations, and offer scope to improve efficiency and accountability. Digitization has also proved valuable for donations and disbursements during these times of crisis. As the world looks beyond COVID-19, smart public assets management has the potential to release hidden value in countries’ balance sheets to kick- start economic recovery. Public Sector Investment Funds, such as central banks, public pension funds and sovereign wealth funds, are rethinking their approach to safety, liquidity, risk and reward, in order to meet their obligations in the coming years. And new financial tools can enable central banks to extract greater value from their gold holdings. The world still faces great risks from the pandemic and its economic consequences, but we believe that creative thinking and a concerted effort to bring multilateral development banks and investors together could head off a potential emerging market debt crisis. Already, multilaterals are helping borrowers to better insulate themselves from global events and systemic shocks. In Europe, COVID-19 has spurred a renewed sense of solidarity that could finally overcome the region’s structural challenges. One cannot overstate how uniquely challenging 2020 was, and we at Citi are proud to serve as a partner and trusted advisor to our clients during these times of uncertainty. This 2020-21 edition of Citi Perspectives for the Public Sector leverages our public sector banking team’s expertise to highlight solutions to pressing problems and opportunities to build back better. We hope you enjoy it, and wish you a wonderful year ahead.