Topic #1: Linking and integrating national policy and strategy with the Budget

Replies to This Discussion

Permalink Reply by Arunaselam Rasappan on July 1, 2009 at 7:48am

Hello Sithole,

Thanks for taking the trouble to share your thoughts though you just came back - never too late to respond and we are happy to hear your thoughts. Your feedback is useful and very practical as well. I agree that if we do not address the corruption problem, we can never really get policies translated into actions fully on the ground. In my last trip to India, I paid a visit to a moderate sized village and interviewed some farmers there...they were complaining about their difficulties with agriculture as there was poor irrigation. They also did not have running water in their homes. When I asked them if there were no development projects for them, they replied there was but that only a fraction of the budgeted money actually gets to the contractors and there was a lot of "seepage" along the way from the Treasury to the ground level. Without going into details of the ensuing discussions with them about this problem, they were in full agreement that money was NOT the issue...there was enough money from the government but the real problem were the "rent-seekers" along the pipeline. In Indonesia, I was in a focus group discussion with key stakeholders and they also narrated a similar experience (and frustrations).

In Malaysia, this phenomenon also exists just like it exists in other countries and even in more advanced countries. But the difference is that here, for every $10 allocated for an initiative for the grassroots, $7-8 dollars reaches the ground level compared to the $2-4 out of $10 that reaches the ground in some countries. When contractors are faced with delivering the outputs but with a much watered down budget (due to the siphoning), they cut corners or collude with key players to do all kinds ot tricks with the outputs they are supposed to deliver. By the way, I heard in one country that an entire dam "disappeared" during a surprise inspection after it was certified completed and payment made!

Given the above, it is my conviction that we have to adopt a mutli-prong approach to tackle this problem. Fact is that we cannot change the poltical scenario in a country overnight as it is deeply entrenched. Many politicians are a product of the system in which they live and work in. To get them out of that system, it will take integrated and systemic change process on an incremental basis from multiple angles, using the supply and demand strategy. Also, we must realise that we need to provide politicians an exit strategy and not try to merely apply the push factor to make the quantum change overnight...that makes people with vested interest defensive. I talked to one politician friend of mine here and he confidently told me that if the system is clear and everyone has to follow the rules, then he would of course follow the course.

Having said the above, I believe that in Zimbabwe, the winds of change have taken root and there is increasing awareness and concern about MfDR. Granted that the results are not that encouraging but lets give it some time. To be honest with you, I've never ever seen a bureaucracy that is so bent on adopting and implementing the MfDR and IRBM system such as in Zimbabwe and that includes even Malaysia. Right now, I'm senior advisor to the Malaysian government which has approved the country's 10th Five Year Plan to be IRBM compliant and if I were to compare this bureaucracy with the Zimbabwe bureaucracy, I would certainly like to take off my hat to the latter in terms of seriousness and sincerity. In fact, it is the only country that I know of (and I've worked in most regions around the world), that has allocated 2/3rd of the budget for the country's RBM/MfDR initiatives while 1/3rd came from UNDP....that speaks volumes in my books about being serious about RBM and by extension the MfDR initiatives.

But as I said, it is tough to make changes to a deeply entrenched traditional system and we need to work on it slowly but steadily - but not take too long for I've always maintained that a develoing country does not have the luxury of time to take 10 years to bring about changes. In that sense, I'd like to share the current Malaysian leadership's rally call of "People First, Performance Now" - this is the way to go! I am confident that there is still much hope for countries in Africa - for I already see a major shift in thinking, intentions, and seriousness of governments in the region to be more results focused and to adopt the MfDR and IRBM.

Please keep up your own good work and it will surely see fruits in the near future.

Best regards

Aru Rasappan



Sithole Humbe said:

Hie Dr Aru

I can see that im late since the doors of this discussion were closed
yesterday. I have been away on my vacation leave where internet
connectivity was impossible.

In my country the real problem in attempting to link and intergrate
national policy and strategy with the Budget lies with Attitude problem
at our Ministry of Finance offices. The Budget Officers at MoF are not
in support with Program Based Budgeting or Performance Based Budgeting.
Instead they demand Activity Based Budgets submissions from line
Ministries year in year out ,without critically emphasizing Programmes
linked to "agreed " National Development Policies as enshrined in the
Fiscal Policy statements.

When important top level meetings are called by the Reforms Department
to strategize the ideal implementation of National policies , MoF
representatives would be too junior to articulate the way the wind
would be blowing. This problem can be witnessed by you during your last
trip to Zimbabwe in October 2008( IDP ).

Again, in my country resources are plentiful if managed well. But
mismanagement of resources at both levels has seen intended results not
being attained. Mismanagement plus corruption at the highest enchelons
of management has set a bad precedence which leading us to the present
predicament. Corruption has been accepted as a norm certain quotas
although efforts to bring to sanity the environment are underway.

The reason which gave rise to corruption is lack of systematic
supervision, monitoring and evaluation of Programmes heavily funded
from domestic and external sources. The implemention of programmes are
contracted to "Indeginious" contractors in the name of Black Economic
Empowerment who lacks Capacity to deliver results at "agreed "
timelines. What the Contractors would be doing is milking the donor
funds and fiscus with no physical progress made. What would be paid is
IPCs Certificates. If an independent audit was tobe carried it could be
open truth that these so called contrators are owned by serving
Ministers and Governors.

Gender based budgeting is only lamented from the Women Organisations
but practical linking of micro and macro Goals are foung missing in an
attempt to reduce extreme poverty by assisting less privileged people.

National Security is of higher priority over anything in my country.
There is no ideal revelation as to how much the Ministry/ Sector is
provided with as Funding for fear of Enemies. So the pryramid of MfDR (
i.e. Accountability, Capacity,Transparency and Authority) are not
applied .From my experience, it is sleep-talk idealising linking
national policy to budget.

The national Policy might seem to be linked to budget when the
blue-print is prepared to outsource donor funds/ grants to traditional
money-lenders. When the money is released through central bank, the
hawks might pounce on it to serve unstated necessities such as
political campaigns or villification of villagers.

What need to be done is to lead by example, stamping out corruption,
allow traditional contractors to undertake multi-purpose services,
agree on private public partnerships in infrastructure development and
depoliticize the civil service. The Budget Officers need capacity
development and training in Results Based Management(all modules) in
all countries such that METF system can be implemnted working closely
with officials from Economic Planing & Development where the 2
Ministries are separated.

Thanks Dr to accept my late submission.


Arunaselam Rasappan said:

Dear Colleagues,

There has been limited discussion on this topic though it is very important Before we close this topic, I'd like to get some feedback from you all
on the following aspect of this topic. We are facing this dilemma and
your experience with this in your country would be most helpful.

In a poor developing country which has limited resources, there is a huge
challenge of turning myriad national policies (most of them sound very
nice and politically correct) into actions and results on the ground.
Sometimes, it is not just due to the lack of limited resources but due
to several other factors. Some countries have been successful in
strategically utilizing their limited resources into real development
results at the grassroot levels.

What is the secret here? What happens to all that development/aid money that a country gets? Why is
the money not being used to produce the desired results in priority
areas? Is it due to corruption, lack of capacity, poor implementation,,
poor planning and other reasons? We would like to get some feedback on
this topic as it is extremely important to move ourself forward with
the MfDR.

Hope to get some quick responses on this.

Thanks

Aru Rasappan

• ▶ Reply

Permalink Reply by Zaam Ssali on July 7, 2009 at 9:05am

Dear Arun,

I hope it is not too late for me to chip in in reaction to your latest questions. The issue of linking the limited resources to national policy and strategy is critical but there are challenges and below are my thoughts on why results may not be realised ;

1. I have noted that in some cases that the Ministries of Finance and Planning are amalgamated into one. These are very huge ministries with far reaching mandates. What usually happens one arm loses out on realising its mandate.Usually it is the planning arm which looses out without clarity on its work. This translates to the fact that planning takes a back sit whiles resources are spent.

2. Closely linked to the above are the data gaps that exist in informing the national strategies. Evidence may not be employed and even the evaluation capacities of many countries are very poor.

2. There are tendencies for ruling parties in times of government change to abandon what may have been planned by an outgoing government. New plans are drawn without realising results of the plans of the outgoing government.

3. Closely linked to the above is the situation where party manifestos are not aligned to the national strategy. The truth is a politician thinks about the next election ( how to win more votes), therefore there is a danger of diverting resources to party manifestos leaving the national strategy on the wayside. More especially, where governments think that donors are proposing what gets included in the strategy depending on what they are willing to fund.

4. I think, like you have rightly noted there are many competing priorities with limited resources. When a national strategy is prepared, planners need to desist from prioritising all; there has to be agreement on what gets to be done first and what comes later.

5. Definitely issues of corruption and capacity also affect issues of implementation. I will give an example of instances where departments are poorly staffed definitely things dont get done.

regards,

Zaam

• ▶ Reply

Permalink Reply by Arunaselam Rasappan on July 7, 2009 at 9:49am

Hi Zaam - never too late though we have closed this topic for now.

I agree on the points you made as they reflect the reality of the complex situation on the ground. These situations pose serious challenges to any effort at MfDR and there is no easy and simple solution. However, I also believe that if we do not make a concerted effort to introduce MfDR through various means, we will never get to it.

On the issue of a Ministry combining the planning and finance functions, there are pros and cons. Personally, I favor the merging of the planning and finance Ministries but the merger is not the only solution. It is the system in place and being practiced that matters more. If there is a good system of integrated development planning in place supported by a focused results-based budgeting, and other support systems and tools, then the issue of the planning and finance Ministries being separate or together is less likely to pose serious problems.

In all of the above, I think we need look at and learn from the success stories of countries that have done this and succeeded to overcome the challenges we are talking about.

Regards. Aru Rasappan




Zaam Ssali said:

Dear Arun,

I hope it is not too late for me to chip in in reaction to your latest
questions. The issue of linking the limited resources to national
policy and strategy is critical but there are challenges and below are
my thoughts on why results may not be realised ;

1. I have noted that in some cases that the Ministries of Finance and
Planning are amalgamated into one. These are very huge ministries with
far reaching mandates. What usually happens one arm loses out on
realising its mandate.Usually it is the planning arm which looses out
without clarity on its work. This translates to the fact that planning
takes a back sit whiles resources are spent.

2. Closely linked to the above are the data gaps that exist in
informing the national strategies. Evidence may not be employed and
even the evaluation capacities of many countries are very poor.

2. There are tendencies for ruling parties in times of government
change to abandon what may have been planned by an outgoing government.
New plans are drawn without realising results of the plans of the
outgoing government.

3. Closely linked to the above is the situation where party manifestos
are not aligned to the national strategy. The truth is a politician
thinks about the next election ( how to win more votes), therefore
there is a danger of diverting resources to party manifestos leaving
the national strategy on the wayside. More especially, where
governments think that donors are proposing what gets included in the
strategy depending on what they are willing to fund.

4. I think, like you have rightly noted there are many competing
priorities with limited resources. When a national strategy is
prepared, planners need to desist from prioritising all; there has to
be agreement on what gets to be done first and what comes later.

5. Definitely issues of corruption and capacity also affect issues of
implementation. I will give an example of instances where departments
are poorly staffed definitely things dont get done.

regards,

Zaam

• ▶ Reply

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