Jobs in PFM

Research Fellow/Manager - Budget Strengthening Initiative - Fixed Term Contract until March 2015

Deputy Director – Budget Strengthening Initiative - Fixed Term Contract until March 2015

Recent TAs from ADB

Kingdom of Cambodia: Capacity Development for National Economic Policy Analysis and Development Management, Phase III

Strengthening Governance and Accountability in Pacific Island Countries (Phase 2)

Tuvalu to get an MTEF

ADB to Help Tuvalu Strengthen Public Financial Management and Good Governance

“The Improved Public Financial Management Program will assist Tuvalu with fiscal stability, improve public enterprise performance, and boost business and public confidence in the government’s financial management and governance systems,” said ADB Country Specialist Emma Ferguson.

ADB is providing a grant of $3.24 million sourced from the concessional Asian Development Fund (ADF).

Related;

Tuvalu: Capacity Development for Public Financial Management

The Government of Tuvalu (the Government) has adopted a set of five performance benchmark indicators (PBIs) developed jointly by it, the Asian Development Bank, the Australian Agency for International Development, and New Zealand International Aid and Development. The PBIs track the achievement of the stated social outcomes with a focus on improved financial management and fiscal consolidation. The PBIs are as follows:
(i) Benchmark 1.1. The Government’s recurrent expenditure each year should not exceed the total of its recurrent revenue plus a sustainable Tuvalu Trust Fund (TTF) distribution (consolidated investment fund drawdown).
(ii) Benchmark 1.2. The target minimum value of funds retained in the consolidated investment fund should not be less than 16% of the maintained value of the TTF at the beginning of the TTF year, to ensure that sustainable distribution is available to help finance annual budgets.
(iii) Benchmark 1.3. The Government’s total debt liability, both domestic and external, should not at any time exceed 60% of the gross domestic product, as specified in Te Kakeega II.
(iv) Benchmark 2.1. In 2008, the Government will increase its budgeted non-salary expenditure on basic education by at least 5%.
(v) Benchmark 2.2. In 2008, the Government will increase its budgeted non-salary expenditure on primary and preventative health services by at least 5%.

See also there Development Coordination Matrix (page 59)

New Blog from OECD

OECD Blog: spotlight on a fact or figure

Assorted reports

World of Work Report 2008

World Tariff Profiles

using knowledge to improve the development effectiveness

National Development Strategies Policy Notes

Anti corruption In Africa

2009 Education For All Global Monitoring Report focuses on inequalities

Review of Maritime Transport 2008

Kyrgyz - Investment Climate

Kyrgyz Republic: Preparing the Investment Climate Improvement Program

Limitations of Growth Diagnostics

Rethinking the Growth Diagnostics Approach: Questions from the Practitioners

Reports Watch

World Investment Report 2008- special focus on the role of transnational corporations in infrastructure development.

Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World

Right to health - MDGs in Latin America and the Caribbean

World Malaria Report 2008

ILO rising food prices report

Housing for All

Economic Development in Africa 2008

Trade and Development Report 2008

Millennium Development Report 2008

Reforming energy subsidies: opportunities to contribute to the climate change agenda

Economic Survey of Latin America 2007-2008

Recently from ADB

Political and Economic Update (Nepal)

Longer-term growth and development prospects hinge on the establishment of lasting peace and political stability as well as preserving macroeconomic stability and continuity of key economic reforms. Although the new Government has yet to announce a detailed policy and development agenda, the Common Minimum Program agreed between the coalition partners suggests that they will not deviate significantly from the strategic thrusts of the current Three- Year Interim Plan. The Plan seeks to reduce poverty and widening inequality through reconstruction, rehabilitation, and reintegration, pro-poor and broad-based economic growth, good governance and effective service delivery, social and infrastructure development, and an inclusive development process. However, the new Government is likely to come under pressure to deal with sensitive issues such as integration of former combatants and high oil and food prices in ways that could jeopardize fiscal sustainability and macroeconomic stability. There is also a risk that private investment could decline if the new Government fails to improve the enabling environment through concrete policy measures.

Dealing with the Proliferation of Bilateral Trade Agreements: Consolidation, Multilateralization, Harmonization, or Dilution? (No. 123) (Regional)

Inflation in Developing Asia: Demand-Pull or Cost-Push? (No. 121) (Regional)

What Constrains Indian Manufacturing? (No. 119) (India)

Governance Reform Program (First Phase) (Mongolia)

Program Agreement for Assam Governance and Public Resource Management Sector Development Program

Proposed Loan and Technical Assistance Grant: Assam Governance and Public Resource Management Sector Development Program (Subprogram II) (India)

Preparing the Strengthening Higher Education Project (Financed by the Japan Special Fund) (Lao People's Democratic Republic)

Eligibility of State-owned Road Enterprises for Participation in ADB-financed Projects (Uzbekistan, Republic of)

Another heavy report

Millennium Development Report 2008

I will wait for a review from Bill Easterly.

Poor Haiti waiting for aid

Meager Living of Haitians Is Wiped Out by Storms

Not Related;
IMF Mission Reaches Agreement in Principle on a US$750 million Stand-By Arrangement with Georgia;

The IMF Stand-By Arrangement is intended to support the economic policies of the Georgian authorities and to help mitigate the adverse economic and financial consequences of the recent conflict.

Joint Needs Assessment Begins in Georgia

Wanted- MTEF Experts

I'm preparing a list of MTEF experts in the IFIs -IMF, World Bank,IADB, OECD and ADB.

Please provide the names of those who think are the REAL EXPERTS on MTEF in the comments.

An MTFF for Suriname

The mission welcomed the authorities’ interest in establishing a medium-term fiscal framework (MTFF) and encouraged them to move as fast as feasible on this front.

• Staff proposed that fiscal discipline over the medium term be anchored on a debt target of no more than 20–25 percent of GDP when revenues are at trend. This would allow some room for debt to temporarily rise when commodity revenues were unusually low, without threatening sustainability. The authorities found this ceiling somewhat restrictive, and preferred a ceiling of some 30 percent.

• Staff indicated that an MTFF should also include a target for the non-mineral balance. The authorities explained that setting a formal target for this would require changing legislation, which could take time. They will consider the staff’s recommendation to appendix). Staff also indicated that it would be advisable to supplement the MTFF by a ceiling on expenditure growth, especially since the debt ceiling is non-binding and formal adoption of a target for the non-mineral balance may take time.

• A well-managed natural resource fund (NRF) could help safeguard surpluses and accumulate financial assets as future mining projects come on stream. Staff stressed that an NRF should be fully integrated into the budget, with no independent spending authority. The authorities agreed that, since new large mining projects are not expected to come on stream in the near term, priority should be given to establishing an MTFF. Staff also pointed to the need to settle external arrears before starting asset accumulation in an NRF, and supported plans to normalize relations with creditors.

The mission urged better assessment of fiscal risks. Available public debt statistics cover only debt contracted or guaranteed by the central government. In addition, some state-owned enterprises are legally allowed to borrow without government guarantee, and reporting on their operations is incomplete. The mission recommended improving monitoring mechanisms and reporting their operations in budget documents. The authorities noted that cases of public enterprises borrowing with no government guarantee had been very rare, and that for external loans, creditors consistently asked for a government guarantee even for financially sound enterprises. They explained that a ministry of finance unit was already charged with monitoring public enterprises, although they were not yet in a position to comprehensively report these entities’ operations in budget documents.

Source:Suriname: 2008 Article IV Consultation - Staff Report


Related;
Suriname - Key Indicators

Governance in Suriname- IADB

Some IADB Projects in Suriname
Program for the Modernization of the Surinamese Tax Administration
Public Financial Management Assessment

Support for the Public Sector Investment System

Design of Pension Reform

Strengthening of Public Sector Management-USD 6,250,000
Road Map for Public Sector Reform
Institutional Strengthening of Debt Management
Advisory Services to the Central Bank of Suriname

Assorted Technical Assistance- ADB

Nepal: Knowledge Transfer for Public Procurement

Bhutan- Strengthening the Debt Management Capacity of the Department of Aid and Debt Management-Undisbursed $6,672;

• A debt policy. The TA final report produced a “borrowing policy and strategy.” It includes a framework for government borrowing, recommended borrowing ceiling and parameters, an on-lend policy, and guidelines on the use of guarantees. Despite the delivered output, it took additional Government efforts to finalize the debt policy, which was drafted independently by the Government after the TA completion. Nonetheless, the exposure from the consultants’ preparation of the “borrowing policy and strategy” was helpful to the DADM staff in finalizing the debt policy. In 2008, the debt policy is in the process of being mainstreamed into the decision-making process. This TA output was therefore relevant but not sufficient, as well as less effective.

A loan procedures and regulations manual. A brief loan manual was prepared under the TA. The manual described government borrowing cycle and the responsible agency functions. MOF used such information to produce the Standards Operating Procedures (SOP). SOP is in use and effective. However, this TA component did not contribute to the more comprehensive “Aid and Debt Management Manual” because of government reorganization that separated aid and debt management functions. Therefore, the Government was unable to produce a combined manual. Under such a circumstance, this TA output was still relevant, effective, and sustainable.

• A complete and consolidated database on all loans and grants. Procurement and installation of the database were the largest TA component. In early 2006, the CS-DRMS for loan and grant recording was procured. Significant efforts were made by ADB to reduce the price for a non-Commonwealth member. As a result, the system procured was cost effective and suitable in the Bhutanese context. The system has been essential for the country’s debt policy management and formulation. This TA output was highly relevant, highly effective, and most likely sustainable.

• Strengthened debt management capacity of public debt management staff. Continuous ADB TA support from 2003 to DADM delivered concrete results in strengthened debt management capacity. Six DADM staff members have been trained and are now proficient in using the CS-DRMS. All six are still with DMD, and the developed capacity is retained. Because of the complex nature of the software system, DMD staff requires continuous support to use the new database. This TA output was highly relevant, highly effective, efficient, and most likely sustainable.

• Timely feedback provided in the form of descriptive and analytical reports to other user departments of the Government and aid agencies. The information generated by CS-DRMS provides descriptive and analytical reports to line ministries. Such reports helped MOF formulate critical decisions in macroeconomic management and development planning. This TA output was highly relevant, effective, efficient, and sustainable.

Major Lessons
The TA completion was delayed because the TA design did not foresee the extended time required for software procurement and launch. The selection of a suitable system, especially fitting the Bhutanese context was time consuming. The Government conducted exhaustive reviews, including country site visits, and extensive negotiation of the price. Database conversation from original Excel sheets to the CS-DRMS also took longer time than originally planned. The extensive time on software procurement and launch therefore affected some remaining TA outputs. These issues need to be taken into consideration for the subsequent TA design and implementation.

Capacity Building for Fiscal Reforms in Sikkim- Undisbursed-$183,889;

Overall Assessment and Rating: The TA was successful in introducing VAT in the State, and designing a fiscal consolidation program in conjunction with capacity building trainings in several areas (see the previous section). The consulting firm was selected under the Quality and Cost Based Selection Process (QCBS) at a significantly lower cost than anticipated during TA processing. Thus, the objective of the TA was accomplished without utilizing the entire amount of the original TA budget. The proposed overall rating of the TA is successful

Major Lessons: Sustaining the capacity building effort in a small state like Sikkim is a difficult challenge. The follow-up actions are often not pursued after the period of assistance. In such a situation, designs of the capacity building initiatives become very crucial. The capacity building process needs to be completed within the TA period so that the desired sector outputs could be achieved without immediate follow-up actions. For example, the VAT manual and the VAT rules were designed under the TA, and adequate training was provided to the concerned staff. In other words, the desired output was not exposed to exogenous risks in terms of Government’s commitment for training.

Report Forum for Next Week

Next week we will be discussing the report Public Sector Reforms - What works and Why? and its background paper.

Here's a backgrounder on the report.

Related Multimedia;
IEG Public Sector Reform: What Works and Why? ;

Francis Fukuyama, renowned author and external advisory group member for the report, presented his concerns regarding the public service reform project. Fukuyama highlighted four issues, including the use of CPIA scores, quantitative analysis, report results, and the demand for good governance. Concerning the projects results, Fukuyama presented a theory on ineffective reforms, proposing that no amount of time will result in change because public sector dysfunctions are deeply rooted in political and social structures.

Finally, Robert Klitgaard, author and President of Clairmont Graduate University, explained that more public service reform data and theory were needed. Klitgaard said that in order to eliminate corruption, the gap between “what the state says and what it does must be closed”. He then explained that the Bank has its own challenges regarding its credibility and perceptions and recommended working more with professional organizations, the eradication of internal violations and the continuation of supply-side work. Moving forward, Klitgaard asked the audience whether it’s time for the World Bank to step-back or step-up even further concerning the fight against corruption.

MTEF Advice for Laos- IMF

IMF recommended last year;

Developing a fully-fledged medium-term fiscal framework (MTF) that explicitly takes into account the level and nature of resource revenues and use it to frame the annual budgets. The MTF should include a specific quantitative path of fiscal consolidation at the level of both the overall and non-resource balances, and make adequate provisions for contingencies. Until the BoL develops further its set of monetary management tools, the MTF should continue to envisage an annual reduction in the domestic financing requirements to help control demand pressures….

The uncertainty surrounding resource revenues in general, and the finite nature of mineral revenues in particular, also argue in favor of a prudent use of such resources. It also underscores the need for making spending decisions on the basis of a medium term fiscal framework to take account of intergenerational considerations.

In another report;

Developing an integrated medium-term fiscal framework. The authorities agree that expenditure decisions need to be made in a multiyear context. Such a framework should account not only for the volatile nature and uncertainties associated with resource revenues, but should align expenditures to the priorities of the National Socio-economic Development Plan (NSEDP). It is important that future budgets include this type of framework.

MTEF Advice for Laos- World Bank

From Public Expenditure Review, 2007;

In the longer term, an MTEF will be an important tool for planning and budgeting in Lao PDR. The country’s short-term budgeting horizon is a deficiency, and the progress that has been achieved so far is valuable, both as capacity building and as an end in itself. However, moving beyond the current very simple MTEF would be premature at this stage and might divert attention from more pressing and fundamental problems associated with the annual budget cycle.

Elsewhere in the report;

Deficiencies in the budget nomenclature, which remains overly detailed, does not include a functional classification. The nomenclature also muddles administrative and economic classifications in a way that is not compatible with the IMF’s internationally recognized “Government Finance Statistics” (GFS) classifications.

The short-term horizon also is an issue. A Medium-term Expenditure Framework (MTEF) was included in the NGPES, but it was more of an aggregate fiscal framework than an expenditure framework and did not include expenditure breakdowns by ministry, province, centralAoca1 level, sector, or sub-sector.

Related;
CFAA 2002- Summary Report, Detailed Report

Public Expenditure Review 1997, Volume 1, Volume 2

MTEF Advice for Laos- Asian Development Bank

In early 2005, ADB provided technical assistance in developing a MTEF for the Lao PDR. According to an assessment of the TA;

The TA provided the Government with the general MTFF and MTEF models, together with detailed explanatory notes on the basic concepts and workings of the models. The Excel-based spreadsheet MTEF has also been converted into a database model (in Access software), which is a simpler, more standardized, and better tool for data management of large cumulative annual data. A strategy and manual for implementation of a government-wide MTEF was likewise submitted to the MOF.

The MTEF is an analytical tool that would assist the Government in budget preparation. The methodology used for developing MTEF has been the baseline/forward estimates approach. It means that as a first step, government expenditures are projected over the medium term (typically 3 years) on the basis of existing expenditure levels. The projection is adjusted for projected inflation and pay increases, projections of the numbers of beneficiaries of public services9 and commitments for future spending that have already been made by the Government.

As a second step, and at the start of a new budget preparation cycle, ministries and agencies can request the MOF for additional funding in order to reduce underfunding of existing policies or to fund new policies. Such requests have to be fully justified. If approved, the baseline/forward estimates are adjusted accordingly. The MTEF is a moving process: every year, the MTEF is rolled forward 1-year and reprioritized.

Indicative MTEFs for the education and health subsectors (that is, primary education and expansion of rural health infrastructure) were developed and presented to the Government. The basis of the MTEFs is the cost of implementing sector programs (at the subsector level) over the medium term according to existing government policies at existing service levels (i.e., the baseline). The MTEF and the procedures for updating and revising it are firmly anchored in the budget preparation process and the overall spending ceiling (derived from MTFF), which lays out the parameters for budget preparation….

TA 4627 also developed a budget preparation model that included a revised budget calendar, revised content of the budget circular, and new budget request templates.

More importantly, the TA provided useful advice on the revisions to the draft Budget Law, the draft Implementation Decree, the budget nomenclature system and chart of accounts, and budget preparation procedures...

The outputs generated by TA 4627 were effectively used to inform the Lao PDR’s fiscal planning and budget policies. Institutional measures were also recommended to ensure more effective capacity for managing the MTFF and MTEF. In particular, the TA continued capability development that includes appreciation and applied skills in basic macroeconomics (and basic economics in general) and in basic principles of public expenditure management. Similarly, the need for interagency coordination with respect to the macroeconomic framework was identified, and it was suggested that this could be developed through the establishment of a formal committee process.

Given the gains achieved by TA 4627, a follow-through TA amounting to $1.1 million funded under the Asian Development Bank’s TA Special Fund will be initiated in 2008 for a more extended implementation of the models developed under the TA across line

Further according to ADB;

Overall Assessment and Rating: The TA was highly successful in providing the methodological foundation for the MTFF and MTEF aimed at strengthening LAO PDR's budget management processes, (and the subsequent adoption of the MTEF). This was viewed as a positive response to the weaknesses in expenditure planning. The flexibility in TA implementation enabled having the budget basics in place to facilitate future implementation of an MTEF as a basic tool for fiscal planning. TA’s efforts culminated in encapsulating MTEF in the Implementing Decree of the Budget Law, the legal framework for the strategic management of the Budget. The TA also contributed to the drafting of the associated implementing decree and the study of policy options to reform the fiscal transfers system.

Major Lessons: One of the key lessons learned in the implementation approach and progress in Lao regarding the introduction of MTEF is to be flexible and respond to government’s requirements during implementation. The pace of implementation of a project needs to take into account the institutional environment. In Lao PDR, the institutional environment mitigates against a rapid pace of project implementation. Basic skills building should ideally precede implementation of projects such as this one, and an assessment of existing institutions and their capacity is a crucial first step. In the absence of an experienced national fiscal management specialist, a full-time international consultant should be on site. To conclude, the potential for implementing planning and budgeting reforms is there, but the implementation process is likely to remain slow and must take into account progress in reforms in other elements of public finance management, institutional constraints and the need for basic skills development.