Workshop Medium-term Expenditure Planning for National Sustainable Development Government Spending to Achieve Sustainable Development Policy Goals David Smith and Sanjesh Naidu 2-6 November 2015 Nadi, Fiji

Importance of Government Expenditure? Deliver services and access to services Support the implementation of national development priorities Recognising in the budget process the purpose of a national plan “…set national goals and effective strategies to guide policy decisions over the medium term…”, a Government Budget Book

Typical Budgetary Processes: Used or Not? National Plan, Vision, Strategy Sector Plans Corporate/Ministry plans Budgetary and donor allocations (recurrent budget, development/capital budget, aid resources) Development outcomes Economic and fiscal assessment Annual policy priorities established Budget preparation Budget approved (recurrent budget, development budget, aid resources) Monitoring of budget implementation And have a budgetary process that links to the Plan – on paper at least.

Use of National Plans in Budgeting Most Pacific Island Countries have national plans and budgetary processes aimed at achieving national development goals. How effective are they? Level of integration of plans and budgets? Extent to which development issues/ priorities are captured in budgets? Does the budget signal government commitment to a national priority area (even if partial funding allocated)? Are monitoring of plans and budgets connected? Should they be? Service delivery focused indicators?

What Country Presentations Suggest…? Tailored approach needed – sector comparative strengths, demographics, risks, country specific vulnerabilities to shape opportunity costs and trade-offs of budgetary allocations Robust consultation, analysis of proposals, national agreement on priorities, appropriate institutional arrangements - important Leadership and political will needed to help with development focused budgets Better costing needed to commit to development priorities Stronger monitoring of allocations and connecting with planned priorities

Practical Challenges in Allocating Expenditure? Plan priorities not linked as they are ‘out of sync’ and beyond the time frame of government term in office Political economy/ capture (horse trading) – ad hoc pressures and technical contestability of policy choices Spreading limited resources too thin vs few targeted expenditure to support full implementation? Development partner funding flows unpredictable Limited analysis to learn from past mistakes, and understand future policy commitments

Challenges – can be addressed? Short answer – YES! Need to ‘stay the course’! Connecting medium term plan with medium term exp plans helps. You have the solutions – country presentations indicate good processes tied to your context/ need Previous slide on key messages from country presentations captured some of these measures.

Case of Agriculture SPC presentation Reviewing potential of sector and national priorities Budget allocations Performance - has past funding support worked? - lessons and ways to target forward estimates – a what tool can be used?

Thank you for your attention! VINAKA!