MDGs and MTEFMDGs and MTEF

Sudharshan CanagarajahSudharshan Canagarajah

World BankWorld Bank

BackgroundBackground

MDGs are requiring additional efforts in MDGs are requiring additional efforts in improving planning, budgeting and policy improving planning, budgeting and policy reformsreforms

MDGs come in the context of streamlining MDGs come in the context of streamlining PRSPs in many countriesPRSPs in many countries

MDGs encounter weak MTEFs/PFM in most MDGs encounter weak MTEFs/PFM in most countriescountries

All these require learning from past to All these require learning from past to meet the challenges for the futuremeet the challenges for the future

MDG Challenges:MDG Challenges:

MDG targets provide prioritizing/planning MDG targets provide prioritizing/planning framework for countriesframework for countries

MDG related analysis is weak in many MDG related analysis is weak in many countries but much progress achieved countries but much progress achieved through Millennium Project (2004/5)through Millennium Project (2004/5)

MDGs require additional resources and MDGs require additional resources and system reformssystem reforms

MDGs require capacity to plan, budget and MDGs require capacity to plan, budget and implement programs at central (CG) and implement programs at central (CG) and local govt (LG)local govt (LG)

MTEF:MTEF:

MTEF is an integral part of annual budget MTEF is an integral part of annual budget cycle:cycle:– Resource envelope consistent with macro stability Resource envelope consistent with macro stability

and broad economic policy prioritiesand broad economic policy priorities– A bottom up estimate of current and medium term A bottom up estimate of current and medium term

cost of existing national programs and prioritiescost of existing national programs and priorities– An iterative process of decision making, matching An iterative process of decision making, matching

costs and new policy ideas with available resources costs and new policy ideas with available resources over a rolling 3-5 year periodover a rolling 3-5 year period

MTEF provides realism and systematic MTEF provides realism and systematic planning for achieving objectives over a planning for achieving objectives over a period of timeperiod of time

MTEF Lessons:MTEF Lessons: Valuable tool in improving fiscal stability and Valuable tool in improving fiscal stability and

expenditure efficiencyexpenditure efficiency Capturing and planning all sources of funding and Capturing and planning all sources of funding and

actors for any given objectiveactors for any given objective Greatest impact at the stage of priority setting Greatest impact at the stage of priority setting

and consistent resource allocationand consistent resource allocation Reduces thinly spread spending with minimal Reduces thinly spread spending with minimal

effectivenesseffectiveness Improve quality of budget execution at CG/LGImprove quality of budget execution at CG/LG Ensures balance of development and recurrent Ensures balance of development and recurrent

exp allocation over timeexp allocation over time

PRSP lessons:PRSP lessons:

PRSP is an integrated planning framework.PRSP is an integrated planning framework. PRSP is helping achieve selectivity and PRSP is helping achieve selectivity and

prioritizationprioritization PRSP ensures realism in expectation/time PRSP ensures realism in expectation/time

line of achieving core priorities/outcomes. line of achieving core priorities/outcomes. PRSP and MTEF have improved PRSP and MTEF have improved

effectiveness of resource use and effectiveness of resource use and achievement of core objectives.achievement of core objectives.

PRSP includes all MDG priorities and much PRSP includes all MDG priorities and much more. more.

MDG Experience to dateMDG Experience to date

MDG costing needs to take into account MDG costing needs to take into account time line, public sector capacity and time line, public sector capacity and absorption issues.absorption issues.

MDG costing is not about just finding out MDG costing is not about just finding out resource needs but also system reformsresource needs but also system reforms

MDG needs assessment has to be carried MDG needs assessment has to be carried out within the PRSP context, not duplicateout within the PRSP context, not duplicate

MDGs should be prioritized – all targets are MDGs should be prioritized – all targets are not achievable at same speednot achievable at same speed

MTEF helpful in resolving most of these MTEF helpful in resolving most of these issuesissues