Performance Budgeting in Malaysia

admin version
Linking Budgeting and Planning
by Koshy Thomas
To see the power point prepared for this presentation please visit the conference page at www.cop-mfdr-africa-org or see conference CD-ROM given to all conference participants.

Plenary Discussion
During the discussion, the focus was put on whether there was flexibility within the Malaysian budgeting process since government undertook such a rigorous planning process. The five year developed plan allows for flexibility especially in the operational budget where there is an allowance of 5% for changes that may emerge with the implementation of the budget. There is also room for changes within the development budget, however limited to an extent that all changes have to be approved by the Central Planning Unit. It was also observed that although the implementation of RBM has challenges, it enables better planning and achievement of development goals.

Malaysia
The Malaysian experience has been a process that started from 1957. It has witnessed four major phases outlined below; Phase One: 1957 1969 was characterised by line item budgeting and development agendas with the public sector. Phase Two: 1969 1989 show PPBS, development agenda, a focus on development results, program activity structure and implementation weaknesses. The development results were good but there were challenges. Phase Three: during the period 1990-2005, Malaysia recognized the need to strengthen MFDR, and refocused on budget as drivers, use of integrated approach and performance plans and refocused on Monitoring and Evaluation. MfDR was institutionalised and the implementation mechanism was strengthened.

Phase Four: Current initiatives include:

• Knowledge Economy Master Plan,
• Learning organizational approach,
• Internalised self evaluation,
• Strengthening and linking organizational performance (HRPERF),
• Strengthening policy framework through monitoring and evaluation,
• Management Information Systems (MIS) enabling MfDR.

Planning for Development Results in Malaysia is reflected in several policy documents: Vision Plan (Vision 2020), Outline Perspective Plan (OPP), the Five Year Plan for goal setting as well as the Annual/ Budget Year Plan.

Malaysias national mission has five thrusts namely:

• To move the economy up the value chain,
• To raise the capacity for knowledge and innovation and nurture first class mentality,
• To address persistent socio-economic inequalities constructively and productively,
• To improve the standard and sustainability of quality of life, and
• To strengthen the institutions and implementation capacity.

Malaysia undertakes a participatory development planning process that takes place at three main levels, National by the National Government Ministries and Institutions under the leadership of the National Planning Council, Federal level by the Federal Government and at the Local Levels. The programmes planning process allows horizontal linkages involving the participation of different institutions at different levels. Focus is put on results based budgeting, personnel performance, administrative efficiency, monitoring of results and internalised self-evaluation.

A number of strategies have been adopted during implementation. Some of these include getting the necessary policy support, intensive capacity building, change management, phased roll-out, continuous review and strengthening, strategic alliance and e-enabling.

Future Plans

• Strengthening Monitoring and evaluation at all levels,
• E- enabling/ strengthening policy formulation,
• Strengthening decentralisation of MfDR.