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Robert P. Beschel Jr. Lead Public Sector Specialist (MNSED) Riyadh, Saudi Arabia November 2009 MENA Experience with Public Sector Reform: A Survey of the.

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Presentation on theme: "Robert P. Beschel Jr. Lead Public Sector Specialist (MNSED) Riyadh, Saudi Arabia November 2009 MENA Experience with Public Sector Reform: A Survey of the."— Presentation transcript:

1 Robert P. Beschel Jr. Lead Public Sector Specialist (MNSED) Riyadh, Saudi Arabia November 2009 MENA Experience with Public Sector Reform: A Survey of the Landscape

2 Focus on Three Areas Public Financial ManagementPublic Financial Management Civil Service ReformCivil Service Reform AnticorruptionAnticorruption

3 PFM Objectives are Relatively Straightforward Macroeconomic stability and fiscal sustainabilityMacroeconomic stability and fiscal sustainability Appropriate allocation between competing prioritiesAppropriate allocation between competing priorities Efficient and effective spendingEfficient and effective spending Effective control environment ensures fiscal probityEffective control environment ensures fiscal probity

4 Common PFM Challenges in MENA Budget Formulation Ensuring credibility of the budget/ making hard ceilings stickEnsuring credibility of the budget/ making hard ceilings stick Scope and comprehensiveness of the budgetScope and comprehensiveness of the budget Link between recurrent and investment budgetingLink between recurrent and investment budgeting Multiyear frameworkMultiyear framework Strengthening budget classificationStrengthening budget classification Introducing performance orientationIntroducing performance orientation Greater budget transparency and parliamentary scrutinyGreater budget transparency and parliamentary scrutiny Budget Implementation Reducing ex-ante controls, while improving commitment controlsReducing ex-ante controls, while improving commitment controls Improved virementImproved virement Better treasury operations and cash managementBetter treasury operations and cash management AFMIS systemsAFMIS systems Strengthening internal auditStrengthening internal audit Strengthening external audit, including more independent and transparent reporting relationshipsStrengthening external audit, including more independent and transparent reporting relationships

5 Bank Recently Analyzed Sample of 10 MENA Countries AlgeriaAlgeria EgyptEgypt IraqIraq JordanJordan LebanonLebanon MoroccoMorocco SyriaSyria TunisiaTunisia West Bank & GazaWest Bank & Gaza YemenYemen Comprise 71 percent of MENAs population and nearly half of its GDPComprise 71 percent of MENAs population and nearly half of its GDP Different regions and levels of DevelopmentDifferent regions and levels of Development Represent a range of administrative traditionsRepresent a range of administrative traditions

6 MENA & Global PEFA Averages

7 What Works and What Doesnt with PFM Reform Successful PFM Reforms Mixed Less Successful PFM Reforms Improving budget classification Improving budget classification Improving budget transparency Improving budget transparency Reforms in tax and customs Reforms in tax and customs Enhance macro-fiscal capacity Enhance macro-fiscal capacity Budget integration Budget integration Streamlining ex-ante control processes Streamlining ex-ante control processes Commitment control Commitment control Payroll management Payroll management Treasury operations Treasury operations Reform of accounting systems Reform of accounting systems Internal and external audit Internal and external audit Medium term expenditure framework Medium term expenditure framework Improving budget scope and coverage Improving budget scope and coverage Introducing performance into the budget Introducing performance into the budget Procurement reforms Procurement reforms Large information technology projects Large information technology projects

8 Civil Service Reform LegislationLegislation Pay and EmploymentPay and Employment Machinery of Government (structure and business processes)Machinery of Government (structure and business processes) Human Resource ManagementHuman Resource Management Policy CoordinationPolicy Coordination

9 Common Problems in MENA Governments are largeGovernments are large Pay is misaligned, w/ too many allowancesPay is misaligned, w/ too many allowances Wrong sets of skillsWrong sets of skills Too many agencies with vague and overlapping mandatesToo many agencies with vague and overlapping mandates Interagency coordination is poorInteragency coordination is poor Weak accountabilityWeak accountability Meritocracy vs. wastaMeritocracy vs. wasta

10 General Civilian Government as % of Total Employment MENA

11 Government Employment as % of Total Population

12 Country Comparison Government Employees % of Population EgyptIranMoroccoSyriaTurkeyIndiaIndonesiaPakistanMexico

13 Central Civilian Government Wages as % of GDP

14 Wage Bill Country Comparison

15 Public-Private Wage Ratios

16 Ongoing Bank CSR Efforts Lending MoroccoMorocco YemenYemen WBGWBG TA and ESW Regional Pay & Employment ExerciseRegional Pay & Employment Exercise MoroccoMorocco EgyptEgypt LibyaLibya WBGWBG KuwaitKuwait For a variety of reasons, this agenda has tended to struggle historically

17 Country Case Study No. 1: Morocco Size of the wage bill an issueSize of the wage bill an issue Not overstaffed, but civil servants are overpaid (competitive salary increases among cadres)Not overstaffed, but civil servants are overpaid (competitive salary increases among cadres) Successful VRS in 2004Successful VRS in 2004 Developing a computerized HR databaseDeveloping a computerized HR database Optimal agency staffing levels?Optimal agency staffing levels? Geographic distribution a problemGeographic distribution a problem

18 Country Case Study No. 2: Egypt Massive overstaffing, but…Massive overstaffing, but… Split between policy (MSAD) and administration (CAOA)Split between policy (MSAD) and administration (CAOA) Low salaries, with lots of allowances & distortionsLow salaries, with lots of allowances & distortions Some success with reforming certain agencies (tax, customs, GAFI)Some success with reforming certain agencies (tax, customs, GAFI) New legislation focuses on disicpline & contract employmentNew legislation focuses on disicpline & contract employment

19 Country Case Study No. 3: Yemen Broad, comprehensive reform agendaBroad, comprehensive reform agenda Computerized biometric database reducing ghost workers, double dippers & staff serving after retirementComputerized biometric database reducing ghost workers, double dippers & staff serving after retirement Reeingineering line departmentsReeingineering line departments Fund to reduce overstaffingFund to reduce overstaffing Migrate agencies to new salary structure?Migrate agencies to new salary structure? Other reforms in recruitment & performance evaluationOther reforms in recruitment & performance evaluation

20 General Observations: CSR Necessary but Challenging What has Worked Agency specific reformsAgency specific reforms Hiring freezesHiring freezes Payroll reformPayroll reform Creating service cultureCreating service culture Incrementalism & strategic opportunismIncrementalism & strategic opportunism What has Not Comprehensive strategiesComprehensive strategies Centrally driven efforts to reform line departmentsCentrally driven efforts to reform line departments Functional reviewsFunctional reviews HRM reforms that directly confront wastaHRM reforms that directly confront wasta Heavy ministerial & staff turnoverHeavy ministerial & staff turnover It Depends Rightsizing Rightsizing Voluntary retirement schemes Voluntary retirement schemes Computerized HR & payroll systems Computerized HR & payroll systems Civil service censuses Civil service censuses Contract employment Contract employment Training and capacity building Training and capacity building

21 Corruption & Transparency…

22 MENA and Transparency Internationals CPI

23

24 KKM Indices

25

26 Recent Developments in Combating Corruption in MENA Creating Anticorruption Agencies JordanJordan IraqIraq YemenYemen MoroccoMorocco

27 Transparency & Public Awareness The chart to the left shows the MENA region in relation to the rest of the world.

28 Transparency & Public Awareness Freedom of Information legislation passed in Jordan and under consideration in Egypt & YemenFreedom of Information legislation passed in Jordan and under consideration in Egypt & Yemen E-government and web based dissemination growing in a number of countriesE-government and web based dissemination growing in a number of countries Civil society playing a role in several countries (Morocco, Lebanon, Palestine)Civil society playing a role in several countries (Morocco, Lebanon, Palestine)

29 For the Quality of Administration, MENAs Governance Gap is Small

30 But for Public Accountability, the Governance Gap is Wider

31 Global Governance Trends… Many of the global trends in governance in the 1990s & beyond were felt only distantly in MENAMany of the global trends in governance in the 1990s & beyond were felt only distantly in MENA In comparison with other regions, MENA fares well in terms of political stability and e-governance and fair in terms of facilitating private sector development, service delivery and anticorruption, with wide variation between countriesIn comparison with other regions, MENA fares well in terms of political stability and e-governance and fair in terms of facilitating private sector development, service delivery and anticorruption, with wide variation between countries The region fares worse than global comparators on issues of decentralization and on public voice, accountability and participationThe region fares worse than global comparators on issues of decentralization and on public voice, accountability and participation Overall size of the public sector is an issueOverall size of the public sector is an issue

32 Thank You شكراً متشکرم


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