1 MKUKUTA REVIEW AND EMERGING ISSUES FOR MKUKUTA II ANNUAL NATIONAL POLICY DIALOGUE Nov. 2009: Day 2: Friday 20 th Nov Ms. A. Mwasha/Prof. A.V.Y. Mbelle

STRUCTURE OF PRESENTATION FIVE SECTIONS I: INTRODUCTION II: EMERGING ISSUES FROM REVIEW III: HIGHLIGHTS/ISSUES FOR MKUKUTA II IV: CHALLENGES V: CONCLUDING REMARKS 2

I: INTRODUCTION POVERTY IS THE MAIN DEVELOPMENT CHALLENGE IN TANZANIA. THE FIGHT AGAINST POVERTY IS GROUNDED IN THE FOLLOWING:  NATIONAL REALITIES – SINCE INDEPENDENCE  HUMAN RIGHTS PERSPECTIVE – POVERTY IS DEHUMANIZING  REGIONAL AND INTERNATIONAL COMMITMENTS HENCE POLICIES AND STRATEGIES PUT IN PLACE KEY DOCUMENTS: ARUSHA DECLARATION (1967) NATIONAL POVERTY ERADICATION STRATEGY (1998); VISION 2025 (1999); PRSP ; MKUKTA (2005). 3

I: INTRODUCTION EXPECTATIONS ON MKUKUTA OVER POVERTY REDUCTION STRATEGY PAPER: SUBSTANTIAL POVERTY REDUCTION, GIVEN: MOVE FROM PRIORITY SECTOR APPROACH TO OUTCOME-BASED APPROACH TO POVERTY REDUCTION IMPROVED COORDINATION IMPROVED SYNERGIES AND CROSS-SECTOR COLLABORATION POVERTY FOCUS INCLUDING BEING MDGs-BASED IMPROVED MACROECONOMIC PERFORMANCE MANIFESTING IN RELATIVELY HIGH GDP GROWTH 4

INTRODUCTION … AREAS OF CONSENSUS 1. GROWTH ACHIEVED DURING MKUKUTA IMPLEMENTATION COULD HAVE DELIVERED MORE IN TERMS OF POVERTY REDUCTION (CONTRAST 1991/2 – 2001 AND HBSs). WHERE DID ALL THE GROWTH GO? 2. HIGHER GROWTH COULD HAVE BEEN ACHIEVED 3. CONSIDERABLE A CHIEVEMENTS HAVE BEEN RECORDED IN NON-INCOME POVERTY (HUMAN DEVELOPMENT GAINS) AND SYSTEMS FOR RESOURCE ALLOCATION E.G. SBAS 4. REFORM PROCESS HAS BEEN INCOMPLETE CAUTION: MKUKUTA SHOULD NOT TAKE ALL CREDIT NOR ALL BLAME 5

I: CONT’D CONSIDERABLE “INVESTMENTS” IN MKUKUTA  DEVELOPMENT OF STRATEGIC BUDGET ALLOCATION SYSTEM (SBAS MACRO AND MICRO)  REVIEW OF STRATEGIC PLANS (MDAs, LGAs)  MONITORING SYSTEM  PRODUCTION OF MAIRs AND PHDRs  DESIGN OF MEDIUM TERM STRATEGIC PLANNING AND BUDGETING MANUAL 6

II: EMERGING ISSUES FROM REVIEW MOST OF THE ISSUES RAISED DURING CONSULTATTIONS TOWARDS MKUKUTA LARGELY STILL VALID KEY ISSUES THAT NEED TO BE ADDRESSED FOR MORE EFFECTIVE IMPLEMENTATION AND ATTAINMENT OF RESULTS HAVE BEEN IDENTIFIED (INADEQUATE PRIORITIZATION AND COORDINATION; INCOMPLETE REFORM PROCESS; INSTITUTIONAL CONCERNS, ETC) 7

II CONT’D FINANCING OF MKUKUTA:  MKUKUTA FINANCING TAKES LARGER SHARE (EG. 70.7% DURING 2008/09 COMPARED TO 29.3% NON- MKUKUTA ACTIVITIES)  SPENDING BY ECONOMIC CATEGORY FAVOURS DEVELOPMENT SPENDING (70%)  CLUSTER II TAKES LARGER SHARE OF MKUKUTA FINANCING (EG. 45.5% DURING 2008/09; COMPARED TO CLUSTER I, 34.1%; CLUSTER III, 16.1% AND X- CUTTING ISSUES, 4.4%)  DEVELOPMENT FINANCING OF MKUKUTA DOMINATED BY FOREIGN SOURCES (57% COMPARED TO LOCAL, 43) 8

Mukuta Vs Non-Mkukuta Allocation 9

Spending by Economic Category 10

Cluster wise Allocation 11

Mkukuta Development Funding 12

III: HIGHLIGHTS/ISSUES FOR MKUKUTA II DESIGN/VALUE ADDITION OVER MKUKUTA I 1. SHARP, FOCUSSED, PRIORITIZED STRATEGY/INTERVENTIONS 2. GREATER EMPHASIS ON GROWTH (INCLUSIVE) 3. TARGETING GREATER DEVELOPMENT IMPACT 4. FLEXIBILITY IN ADJUSTING STRATEGIES 5. INCORPORATING ISSUES THAT WERE NOT PROMINENT IN MKUKUTA (I): HUMAN RESOURCE DEVELOPMENT PLAN; PUBLIC PRIVATE PARTNERSHIPS; EXTENDED EMPHASIS ON CROSS-CUTTING ISSUES -INTEGRATED MANAGEMENT OF ENVIRONMENTAL RESOURCES (INCLUDING CLIMATE CHANGE); ENABLING INVESTMENT CLIMATE FOR DOMESTIC ENTERPRISE; POPULATION ISSUES; SPATIAL/GEOGRAPHICAL/LOCATION ISSUES; RAPID URBANIZATION AND IMPLICATIONS 13

III CONT’D 6. ROBUST ACTORS COORDINATION IN ACHIEVING RESULTS 7. LONG TERM GROWTH AND DEVELOPMENT PLAN (MISSED INTERVENTION IN MKUKUTA) – JUSTIFICATION (EXPERIENCE OF SUCCESSFUL COUNTRIES; INVESTMENTS NEED A LONGER HORIZON TO DELIVER “MULTIPLIER EFFECT”; DOMESTIC RESOURCE MOBILIZATION; INSTITUTIONAL ISSUES; SUSTAINING REDUCTION IN EXTERNAL DEPENDENCE; 14

III CONT’D DESIGN – WHAT WILL NOT CHANGE :BROAD FRAMEWORK: RESULTS FOCUSSED, CLUSTER-BASED. KEY STRATEGIC INVESTMENTS AND POLICY DIRECTION : HIGH AND SUSTAINED GROWTH CLUSTER I: GROWTH AND REDUCTION OF INCOME POVERTY  GROWTH –FOCUSSED INTERVENTIONS WITH EXPLICIT AND ELABORATE LONG TERM GROWTH PLAN  ANCHORED ON COMPARATIVE AND COMPETITIVE ADVANTAGES  DRIVEN BY GROWTH DRIVERS: AGRICULTURE, INFRASTRUCTURE, TOURISM, MINING  INCLUSIVE GROWTH  INTERVENTIONS FROM CLUSTERS II AND III EMBEDED (E.G. SKILLS, WATER FOR PRODUCTION, PRODUCTIVE INTERVENTIONS IN SOCIAL PROTECTION, ECONOMI GOVERNANCE 15

III CONT’D CLUSTER II: IMPROVEMENT OF QUALITY OF LIFE AND SOCIAL WELL BEING  ADDRESSING QUALITY ISSUES IN SERVICE DELIVERY (EDUCATION, HEALTH, WATER, SANITATION)  COORDINATED INTERVENTIONS 16

III CONT’D CLUSTER III: GOVERNANCE AND ACCOUNTABILITY  ISSUES OF GOVERNANCE IN SUPPORT OF GROWTH 17

IV: CHALLENGES AREAS AND EXTENT OF REFORMS TO COMPLETE REFORM PROCESS IMPROVING THE BUSINESS ENVIRONMENT ADAPTATION TO DEVELOPMENT MANAGEMENT (ATITUDES, WORK CULTURE, ETC) CONTRACTUAL ARRANGEMENTS FOR STUDIES THAT HAVE BEEN APPROVED INORDER TO INFORM REVIEW/DRAFTING OF MKUKUTA II DEVELOPMENT OF MKUKUTA II AND LONG TERM GROWTH AND DEVELOPMENT PLAN CONCURRENTLY POLITICAL CONSENSUS AND STEWARDSHIP 18

V: CONCLUDING REMARKS MKUKUTA II IS ABOUT CHOICES:  SUBSTANTIAL POVERTY REDUCTION VERSUS INCREASED GROWTH IN THE SHORT TERM  WHAT SHOULD SPUR GROWTH IN THE SHORT TO MEDIUM TERM AND IN THE LONG RUN  FACING THE FINANCIAL RISK: SIGNIFICANT SCALE- UP OF ODA (INCLUDING GLENEAGLES SCENARIO) VERSUS DOMESTIC RESOURCE MOBILIZATION AS ENVISAGED ALSO IN VISION 2025  RESOURCE ALLOCATION IN MKUKUTA – ADDITIONAL REQUIREMENTS FOR CLUSTER I WITHOUT DEPRIVING CLUSTERS II AND III 19

END NOTE THANK YOU FOR YOUR KIND ATTENTION AHSANTENI SANA 20