News

PDP has recently commenced work on an ADB-financed TA aimed at strengthening governance and improving the efficiency and quality of service delivery in the public sector. Key tasks under the TA include:

• preparation of a plan to establish a Government Public Service Training Centre and developing its curriculum
• helping to increase the knowledge and improve the skills of Public Service Division (PSD) staff in modern human resource management and organisation development
• preparing a strategic reform plan for building a performance-orientated public service.

PDP’s team, in association with the Maldives Business and Financial Services Consulting Group, will provide assistance and advice to the PSD across a 12-month period.

Its not all work for the PDP staff in Laos—there is time for socialising with counterparts and supporting the PDP sponsored Fiscal Policy Division (FPD) soccer team too. The soccer team includes our Fiscal Policy Specialist Saysanith, and keen soccer spectator Les Henning (although if you ask him he'll never admit he's anything but a rugby man).

Unfortunately they didn't have much luck in their recent game, going down 0-3 to the State Asset Management FC.  At least FPD FC looked flash in their new Aussie green and gold strip.

A team of PDP experts has been employed to Moldova to provide technical assistance under the World Bank financed Trade and Transport Facilitation in South East Europe project, extending both PDP’s regional and technical experience in these areas.

PDP is providing assistance to develop various aspects of control of transit operations, with a focus on the introduction, organisation and implementation of selectivity based control and management. It also includes encouraging efficient utilisation of automation for management of the transit control and financial guarantees, following the recent implementation of ASYCUDA World in the MCS.

PDP has commenced work on the preparation of an accounting manual to be applied by the financial services of all Kosovo Consolidated Budget (KCB) spending entities. The manual will comprise a set of comprehensive written procedures for bookkeeping, accounting and financial reporting, aimed at improving the quality of financial information produced by line ministries. One of the main objectives of developing the accounting manual is to institutionalize and harmonise accounting practices across the Provisional Institutions of Self-Government’s (PISG) and United Nations Mission in Kosovo (UNMIK) administration in accordance with Cash Basis International Public Sector Accounting Standards.

PDP extended a warm welcome to a number of Kazakh officials who recently visited Australia as part of a study tour on public sector management reforms. PDP led the delegation and facilitated meetings with various government offices to discuss Australia’s public management practices and to evaluate how best to apply the lessons to the Kazakh context.

The study tour was organized in response to the Kazakhstan Government’s recent impetus on broad ranging reforms intended to integrate performance management and results-based budgeting into the public sector.

ADB has engaged the services of PDP to undertake a pilot TA aimed at strengthening civil society participation in development in the Pacific. The TA aims to legitimise and mainstream civil society participation in development processes and strengthen relations between Civil Society Organisations (CSOs), Pacific developing member country (PDMC) governments, the private sector and external funding agencies by direct engagement of civil society in the development cycle of ADB assistance.

PDP is responsible for two major tasks under the TA:

1. enhancing the competence of Pacific CSO staff with respect to the region’s broad development policy agendas, thus making the CSOs better able to understand and advocate development concerns on behalf of marginalised peoples
2. training of CSO staff in participatory process planning, and actual engagement of CSO staff with other members of civil society in the participatory formulation of ADB country strategies and programs, and project design, implementation and monitoring and evaluation.

PDP has been contracted to provide the services of a Health Sector Planning and Budgeting Adviser as a key member of the Solomon Island SWAp support team. The support team is currently preparing a SWAP-type joint (AusAID-World Bank) operation with the goal of supporting the Ministry of Health (MOH) in achieving its priority outcomes. The operation will provide approximately 50% of total sector financing for 2007-2012, focusing on selected priority sector outcomes and reforms to achieve these outcomes.

In contribution to one of the key reforms identified by the MOH, PDP’s specialist is focusing on improving planning and budgeting in the health sector, in particular, facilitating the linkages between MOH operational plans, the annual sectoral expenditure plan and the MOH budget.

PDP has recently commenced work under the World Bank-financed Economic Capacity Building Technical Assistance Project (ECTAC) aimed at modernising the Mongolian public administration and civil service. PDP is providing long-term assistance to the Civil Service Council to streamline and strengthen institutional arrangement and capacity for civil service management, financing, coordination and accountability. Key tasks include:

• strengthening civil service management capacity and professionalism by implementing a civil service reform strategy and conducting agency level efficiency reviews
• rationalizing the civil service wage bill, incentives and employment by formulating wage compensation and severance policy reform
• strengthening accountability for performance by devising accountability systems and income-asset declarations and reviewing/preparing regulations and operational manuals.

Commencing late-September, PDP is to undertake a study of the unit costs of education in schools and vocational centres in PNG, as part of the AusAID funded Education Capacity Building Program.

The overall aim of the study is to ascertain the total unit cost of educating a student, at different levels of the education system and in different parts of PNG. Within this, the study further aims to ascertain the non-teaching costs incurred by schools, at different levels of the education system and in different parts of PNG. The PDP team will also embark on capacity strengthening of staff in the Department of Education (DoE), focusing on the acquisition of skills and techniques which they can use to develop and update unit costing.

The assessment of the unit costs of education are to be used by the DoE both for immediate policy purposes, and as one of the components of the Medium-Term Expenditure Framework (MTEF) for Education. The DoE has a particular interest in determining the component of the unit cost which is the responsibility of individual schools, because this information is needed by the National Education Board (NEB) to assist it to set school fee limits.

This month PDP hosted two further workshops under the AADCP Strengthening ASEAN Standards and Conformity Assessment Systems Project:

• Third CLMV National Development Models Regional Workshop, 5 September in Myanmar: This workshop focused on a review of the National Development Models (NDMs) and progress made by each ASEAN country towards agreed milestones.

• Second Good Regulatory Practice (GRP) Workshop for Electrical and Electronics Sector, 6-7 September in Myanmar: This workshop covered the general principles and benefits of risk-based GRP, GRP and risk management techniques, ASEAN and national electrical and electronics safety regulations, and conformity issues.

Several workshops and training sessions were held this month as part of the PDP-managed AADCP Strengthening ASEAN Standards and Conformity Assessment Systems Project. 

• ISO/IEC Training Course, 7-11 August in Malaysia: PDP delivered a 5-day training course covering the requirements of ISO/IEC standards, accreditation and certification processes.

• Good Regulatory Practice (GRP) Workshop for Prepared Foodstuffs Sector, 29-30 August in Brunei: PDP led this workshop covering the general principles and benefits of risk-based GRP, GRP and risk management techniques, ASEAN and national prepared foodstuffs regulations and common food control requirements, and conformity issues.

PDP has recently been appointed by AusAID to provide an independent completion report for Phase 2 of the Kiribati Strengthening Management and Information Systems (SMIS) Project. Two PDP experts, together with a representative of the Government of Kiribati (GoK), are currently carrying out an independent assessment of the relevance, efficiency, effectiveness, impact and sustainability of SMIS II, based on an assessment of the Activity Completion Report and consultations with stakeholders in Kiribati.

In particular, the team is charged with providing an evaluation on the appropriateness of the Project’s implementation mechanisms and modalities, the effectiveness of linkages with other TA, the impact of donor coordination on the project’s effectiveness, and the value and appropriateness of AusAID’s M&E mechanisms. The report will detail lessons learnt for the future, together with advice on how SMIS reforms can be sustained.

The World Bank has engaged PDP to provide the services of a Public Finance Specialist to undertake a financial management assessment of the Regional Pacific Islands Sustainable Energy Project executive agencies and fund manager. This project will be executed through executive agencies in Fiji, Papua New Guinea and the Solomon Islands and the services of an Australian-based fund manager. PDP is also responsible for providing recommendations on common financial report formats, so as to facilitate the aggregation of data by the World Bank, and disbursement arrangements for each agency, taking into account Government procedures and the needs of the project.

AusAID has recently appointed an Accounting and Systems Support Adviser to provide further assistance to the Vanuatu Ministry of Finance and Economic Management (MFEM). This assignment provides follow-on support to PDP’s long term Institutional Strengthening Project.

PDP’s adviser is providing assistance to the Department of Finance (DoF) to complete the 2005 financial statement, as well as accounting assistance for the accounts, payroll, payments and revenue sections. Help is also being provided to the payroll section and FMIS section to implement the Government Remuneration Tribunal.

PDP’s adviser is assisting the DOF to finalise and support the projects module of SmartStream, which is currently being implemented for financial management of the Millennium Challenge Account projects. Further, he will assist with upgrading the SmartStream FMIS to the latest version and implement a new budgeting and reporting package in time for detailed budget entry by line agencies for next year. Additional support will be provided to the FMIS section to manage the SmartStream FMIS system and further develop reporting tools.

PDP staff have been requested to make a presentation on MTEF development at the National Socioeconomic Development Plan (NSEDP) working group meeting, to be held in Vientiane on 11 July 2006.

The working group meeting will comprise of staff from the Committee for Planning and Investment (CPI), Ministry of Finance (MOF), Department of International Cooperation (DIC) and National Assembly (NA), as well as planners of key sectors. The group meeting will provide follow-up to the Regional Forum on National Plans as Poverty Reduction Strategies, specifically addressing the linking of sector strategies, plans and budget and the status of the sector costing exercise. As a key component, our staff will make a presentation on the progress of developing the national MTEF and how this will influence the work of sector planning and budgeting in the future.

PDP is currently working on developing and implementing a coherent medium term expenditure framework as part of the long-term Public Expenditure Planning for National Growth and Poverty Eradication Strategy Project.

PDP is providing technical assistance to support the Government of the Philippines’ efforts to strengthen the country’s anti-money laundering (AML) regime. This second phase of the ADB project on Strengthening the AML Regime is intended to deter money laundering and predicate crimes through support for strengthening the institutional framework for AML.

PDP is providing the services of a regulatory expert with responsibility for identifying key areas where changes to the AML legal and regulatory framework would be beneficial as well as politically feasible within the Philippine setting. Particular attention is being paid to identifying opportunities to strengthen institutional or individual incentives for AML implementation or allowing for alternative means to address otherwise thorny implementation issues requiring systematic long-term solutions.

The consultant is also providing support to the Anti-Money Laundering Council (AMLC) and other relevant stakeholders to develop legislation/regulation to address issues that hinder effective implementation of the AML regime.

PDP has commenced services, providing support to the Philippines Bureau of Internal Revenue (BIR) in progressing and deepening its reform agenda. This World Bank-funded project aims to increase revenues by increasing the efficiency and effectiveness of the Bureau and preparing it for further reform.

PDP is undertaking a comprehensive review of the existing plans for each of the Banks seven reform components (management, human resources, tax compliance, tax enforcement and control, services to taxpayers, change management and communication, and project management). Support is being provided to staff of the project administration unit to establish systems to plan, monitor and report on project components and financial and administrative coordination. Furthermore, PDP is developing a project management structure for the implementation of the reform components, including details of activities, risks and sequencing for the reforms.

A planning workshop at director and staff level will be held to promote and deepen the engagement between reform planning and BIR managers.

PDP recently completed a policy research paper on trade in accountancy services for the Government of Indonesia. The work was contracted by the Australia-Indonesia Technical Assistance Management Facility (TAMF) to support the development of the Government of Indonesia’s trade in services strategy. In turn, this is to be integrated into the Government's overall trade strategy.

The PDP team, comprising 2 international trade in services experts, working alongside researchers from the University of Indonesia, presented and discussed its findings at a workshop in Jakarta on 3 June 2006. The discussion involved the MoF, MoT, industry stakeholders and academics. It focused on regulatory measures affecting Indonesia’s accountancy sector, restrictions in key services export markets, export opportunities and import needs.

The final report was produced and submitted to TAMF in late June 2006. It makes a number of key recommendations to improve the international competitiveness of the accountancy sector in Indonesia, particularly in relation to trade-related policy, international strategy and domestic industry initiatives.

PDP has successfully completed inputs on the ADB-funded Indonesia Sustaining Decentralization and Local Governance Reforms Project. PDP provided the services of a Fiscal Decentralization Advisor over a period of 12 months to coordinate ADB assistance in fiscal and administrative decentralisation reforms.

PDP’s expert functioned as an integral part of the ADB team working on Local Government Finance and Governance Reform Sector Development Program (LGFGR-SDP) related reform measures. Specifically, he held responsibility for coordinating inputs of ADB experts, including the development and implementation of a management plan to ensure that ADB assistance in this area was fully integrated and consistent.

Key tasks of the Fiscal Decentralization Advisor included:

• monitoring legal and regulatory development and changes in near or medium term operational priorities of the concerned ministries
• finalising a background paper guiding the National Action Plan for Decentralisation (NAPD)
• activities and deliverables relating to the drafting and finalisation of the NAPD
• developing a background technical paper on functional assignments, focusing on the definition and allocation of responsibilities between different levels of government, and drafting key provisions that could be included in subsequent implementing regulations on the assignment of functions
• coordinating the preparation of an analytical paper on the provincial and sub-provincial fiscal capacities and needs
• coordinating the development of PEM modules (covering planning, budgeting expenditure and financial management aspects) for capacity building support to provincial and district administrations
• assisting with the design and implementation of a high level seminar on fiscal decentralisation, aimed at sharing experiences from other economies on policy and institutional arrangements adopted for decentralisation.

PDP’s team has once again mobilised for Input 3 of Phase III of the Solomon Islands Departmental Corporate Planning Assistance Project. This input is designed to focus on assisting departments to finalise or roll over departmental corporate plans for the period 2007-2009.

As the latest stage in the implementation of the SIG corporate planning process, the PDP team is working with all government departments in relation to their corporate plans. The team is also working with staff in building the capacity of the Department of the Prime Minister and Cabinet to manage the corporate planning process across all departments.

Input 4 will commence in July, providing more intensive follow-up to the Department of Home Affairs, Department of Provincial Government and Constituency Development, and Department of Culture and Tourism. This assistance will focus on the management systems used by these departments in implementing the corporate planing process, together with the linkages between corporate planning and budgeting.

The PDP team has recently held a series of workshops (6-7 June) in Vientiane, as part of the Expenditure Planning for National Growth and Poverty Eradication Strategy Project. The workshops presented a preliminary medium term fiscal framework (MTFF), methodology for preparing the medium term expenditure framework (MTEF) and the need for budget reform in a number of areas (legislation, fiscal decentralisation arrangements and the budget preparation manual).

The workshops were attended by staff from the Ministry of Finance (MOF), mainly Financial Policy Department (FPD) and Budget Department, Committee for Planning and Investment (CPI), Ministry of Education (MOE), Ministry of Health (MOH), Ministry of Agriculture (MOA), and two regional MOF training schools (Luang Prabang and Champassax).

Additional workshops and training sessions are scheduled over the coming months, to cement understanding of the material presented. These sessions will further cover MTFF and macro-fiscal topics, MTEF and general budgeting principles.

PDP has commenced work to support the Philippines Department of Budget Management’s (DBM) budget consolidation and preparation processes. The assistance is being provided under the World Bank project on Budget Preparation in the MTEF Environment, as part of its efforts to inject a more strategic approach to budget decision-making, through the re-introduction of the medium-term expenditure framework.

The objective of the project is to reform the budget preparation process, as new policies, programs and projects would predominantly come from the priority sectors (education, infrastructure and agriculture), and ensure consistency with the organisational performance indicators framework (OPIF). The proposals assessment process also needs to be enhanced, both in format and content, to enable the Development Budget Coordination Committee (DBCC), Cabinet and the President to make allocative choices between individual proposals as well as between the priority sectors, within the strategic setting of the budget call.

In addition, consistent with the strategic thrust agreed with the government and other donors, a public expenditure and institutional review will also be undertaken to document advances in public expenditure management, particularly as it relates to the 2007 budget preparation, highlighting areas for short and medium term improvements. Support will also be provided to enable the Department of Budget Management (DBM) to deliver on the above objectives to document achievements and challenges including to identify areas for additional capacity and administrative improvements.

PDP recently facilitated a second workshop on Good Regulatory Practice for the Pharmaceutical Sector, as part of the ongoing Strengthening ASEAN Standards and Conformity Assessment Systems Project.

The workshop, held in Manila 30-31 May 2006, complemented and built on the objective of the first Pharmaceutical Sector Workshop, to provide a means to enhance the capacity of ASEAN regulators to use standards and conformity assessment procedures in the pharmaceutical sector. In-depth information was provided on principles of good regulatory practice (GRP) and risk management in the context the WTO Agreement on Technical Barriers to Trade. Further, the workshop facilitated the development of recommendations related to the implementation of the ongoing coordination of regulations in the pharmaceutical sector, especially in respect of borderline products between food and pharmaceuticals and cosmetics and pharmaceuticals.

The workshop proved an excellent forum in fostering regional information sharing and harmonisation, as well as improving cooperation and coordination between regulators in the pharmaceutical sector.

PDP successfully concluded inputs on its first project in Bulgaria earlier this year. The World Bank-funded project formed part of the Revenue Administration Reform Program (RARP), bringing together Bulgaria’s revenue collection into one new National Revenue Agency (NRA). Robin Adair acted as sole consultant on PDP’s component of the overall RARP Project, which included improving the organisational structure and management system design for the newly established NRA.

Something we didn’t know when taking up the assignment was that three previous consulting assignments had failed to produce a structure that was acceptable to the NRA management and the Government. We were therefore delighted when late in 2005 our project produced a structure that was accepted both by the NRA Executive Director and Management Board, which is chaired by the Minister of Finance.

“In my view,” says Robin, “the success of the project was due to the interactive process used to design the new structure. The three previous attempts had failed because of internal dissent within the NRA about the appropriate structural design. I managed to overcome this by facilitating a series of interactive workshops with a group of top managers. We worked through the design process afresh, using a top down approach and many case studies. The output of the workshops was an organisation structure that management itself had designed, and this was approved by the NRA Executive Director and finally by the Management Board.”

Appreciation of Robin’s interactive approach is exemplified by positive feedback received from the NRA.

Sally Brownette, PDP’s public finance and management specialist, is currently leading a two week web-based discussion forum on behalf of the ADB. The discussion is based around her paper ‘Completing the Circle Toward an Integrated Performance Management Framework’ which investigates the advantages of addressing uncertain revenue inflows and high mandated expenditures with an integrated performance management cycle—in other words by linking planning with budgeting.

Visit http://cop-mfdr.adb.org to view and discuss her paper.

The ADB has extended PDP’s contract for a further 2.5 month to provide continued support to the FMS Private Sector Development Program (PSDP). PDP has been responsible for the day-to-day implementation of the PSDP since early 2003.

The goal of the PSDP is to promote economic growth by expanding the private sector in the FSM, thereby raising domestic employment and incomes and reducing dependence on external assistance. To attain this goal, assistance is being provided to help the FSM establish an open and competitive economy that is conducive to private sector development by: (i) developing a sound economic and legal environment for investment; and (ii) improving access to and competitiveness of land, labour and capital resources to increase business prospects and performance. The PSDP has a national and state focus, in particular, on states and groups where income inequality is more pronounced. The program is tailor-made to meet individual states’ needs.

The PSDP includes a policy framework and actions, and an investment project aimed at improving performance of the public services to promote private sector development. The investment project aims to: (i) establish a secured transaction system; (ii) provide institutional capacity building for land administration and management, in particular, land titling, financial support to small and medium-sized enterprises, and business development support; and (iii) strengthen the capacity for coordinating and monitoring the PSDP.

PDP holds specific responsibility for the design disbursement, procurement and recruitment procedures and guidelines under the PSDP, and for preparing guidelines and supporting the Department of Economic Affairs (DEA) in recruiting consultants under the loan proceeds. Key tasks have included:

• the design and activation of national and state implementation and performance monitoring and evaluation system, including the training of DEA and state counterpart staff
• in coordination with DEA staff, facilitating the establishment and start-up of national and state level steering committees, specifically the Business Development Councils or their equivalent in four states
• assisting DEA and national and state steering committees in making widely known the improvements and changes under the program
• supporting the Secretary of Economic Affairs in providing overall direction to consulting services delivered through the investment component
• providing training to DEA counterpart staff and the state counterpart from each agency assigned to manage program and project implementation.

PDP has recently completed services for the development of an anti-money laundering regime in Indonesia. This ADB-funded technical assistance, which ran from October 2005 to end of April 2006, was focused on strengthening Indonesia’s anti-money laundering (AML) regime and combating money laundering effectively in order to strengthen the financial system and its governance.

PDP provided assistance to the Directorate General of Financial Institutions (DGFI), Capital Market Supervisory Agency (BAPEPAM), Attorney General’s Office and the Ministry of Justice and Human Rights (MOJHR) across a number of areas including:

• supporting proper implementation of AML laws and regulations
• strengthening non-bank supervision and audit procedures
• building capacity to prosecute and adjudicate money-laundering cases
• increasing understanding of AML compliance among non-bank financial institutions (NBFIs)
• supporting sustainable in-country AML computer-based training (CBT).

It is anticipated that proper controls for money laundering will reduce vulnerability to other types of crime such as trafficking in drugs and people, and corruption.

April saw PDP leading an AusAID-funded team carrying out a mid-term review of the Mongolia-Australia Capacity Building and Small Activity Facility (CaBSAF). The objectives of the review were to examine and comment on progress of Facility activities and identify major achievements, challenges and likelihood of sustainability of impact.

The review team assessed whether the Facility purpose, components and objectives remain relevant in the current development context of Mongolia. Consequently, the team made recommendations including on suitability of the current managing contractor (MC) to continue management of the Facility, and on an extension period of up to two years with specific recommendations for further improvement of the Facility’s design and its delivery with the available resources.

In addition to leading the review team, PDP’s Public Sector Reform/Human Resource Development specialist also imparted expert advice on public service reform and human resource development in Mongolia and internationally. He also held primary responsibility for assessing the scholarship program, particularly its integration into broader human resource development strategies and priorities.

PDP has recently completed services to the ASEAN-Australia Development Cooperation Program (AADCP)–Regional Economic Policy Support Facility (REPSF), undertaking an assessment of the Ten Years of the ASEAN Framework Agreement on Services (AFAS). This research project assessed the extent to which regional liberalisation of services trade has progressed in the last decade and considered difficulties encountered in services liberalisation on the domestic and multilateral fronts. It also examined how ASEAN should evaluate its performance at the regional level.

Our team worked closely with the ASEAN Secretariat to assess the achievements of AFAS to date, addressing the liberalisation under AFAS compared to the GATS, the realities of ‘free trade in services’ in ASEAN, barriers to trade in the region, and the extent to which the lifting of restrictions on member states has progressed under each of the four AFAS packages. The study’s key findings focussed on coverage, depth, restrictiveness, regulatory convergence, extent of mutual recognition agreements (MRAs), regulatory harmonisation, transparency and predictability, and overall performance.

Drawing on their findings, the PDP team made a presentation to the 45th Meeting of the ASEAN Coordinating Committee on Services (CCS) in Yangon, Myanmar on 17 February 2006. This meeting was coordinated by the ASEAN Secretariat and attended by delegates from each of the ASEAN member countries (AMCs). Our team recommended the following strategic actions as the way forward: 

• AMC action plans and associated monitoring tools
• target all sectors for AFAS liberalisation that AMCs have not made commitments on under the GATS
• prioritise the finalisation of MRAs
• establish timelines for deeper integration
• implement firmer provisions on transparency and predictability.

The Bureau for Economic Integration has invited the team to make a further presentation of their findings to the Senior Economic Officials Meeting (SEOM) 3/37. This is tentatively scheduled for June 2006 in Yangon.

The PDP team also developed an assessment framework (AF) so that ASEAN could systematically evaluate progress under AFAS as the region moves to the free flow of services by 2015. This AF is a much-simplified version of the framework used in the current study. It requires fewer resources and will enable government officials in ASEAN member countries to make their own assessments of services trade liberalisation in the future.

April sees the kick-off of PDP’s support of fiscal and governance reforms in Assam, India. PDP has deployed a team of 11 specialists to provide long-term technical assistance to the Government of Assam as part of the ADB-funded Assam Governance and Public Resource Management Loan program. This 2-year program focuses on fiscal and governance reforms, with a view to improving state budgeting and enhancing poverty-focused and growth-oriented expenditure. It covers the reform of state finances to foster aggregate fiscal discipline and enhancing allocative efficiency, reform of fiscal governance to improve budget and expenditure management processes, and reorientation of the role of the state to stem unproductive government and public sector enterprise expenditure.

Our team is addressing shortcomings and building up technical capacity in five main areas: 

• broadening of the tax base and strengthening tax administration, as well as seeking to attain greater cost recovery on the basis of unit costing of providing services to the public
• reducing the heavy burden on the budget outlays on interest payments, civil service salaries and pensions obligations, as well as subsidies to public enterprises
• overhauling the present manually operated budgetary system by revising procedures for its formulation, execution and review, with a computerised performance management-oriented system in line with international standards and approaches
• revising the present method of budgetary allocations by means of economic analysis that is reoriented toward comprehensively addressing issues relating to poverty reduction or promoting growth
• providing institutional strengthening in the areas of public enterprise reform, strengthening of public-private partnerships, improving public administration (through civil service reforms) and enhancing decentralised service delivery.

AusAID has engaged the services of a PDP specialist to help the Government of Tuvalu (GOT) to implement the thrust of recent recommendations of the Tuvalu Trust Fund Advisory Committee (TTFAC) on budget management issues.

Our budget management adviser is helping to enable the GOT to enhance its budget preparation process, with a key focus on developing a practical capacity building program targeting the respective roles of each of the key budget preparation stakeholders: Cabinet Ministers and senior officials of the Ministry of Finance Economic Planning and Industry (MFEPI), and all line ministries.

Support will be provided across four main areas:

• setting realistic fiscal targets—and aggregate expenditure and revenue levels consistent with them—so as to provide more certainty that budgeted funds will be available and without adverse economic implications
• formulating expenditure and revenue policies that have the best change of achieving the desired strategic policy outcomes and priorities
• allocating resources consistently with these strategic policy outcomes, policies and priorities, and with their aggregate fiscal targets
• resolving operational efficiency and effectiveness issues, as a means to ensure that resource allocation decisions are well informed.

The AADCP’s Strengthening ASEAN Standards and Conformity Assessment Systems Project, under the management of PDP Australia, is entering into its second year, with an approved, re-scoped and busy forward program. The project aims to facilitate the free flow of intra-ASEAN trade by adopting a harmonised system of standards and conformity assessment of goods.

Eleven workshops are planned for 2006 to address key priorities including:

• assisting with Cambodia, Laos, Myanmar and Vietnam (CLMV) national development models
• train the trainer training in standards development and internationalisation
• good regulatory practice toolkits for key priority sectors
• training in new ISO/IEC guides.

The following workshops were presented in March 2006:

• Second CLMV National Development Models Regional Workshop (1-2 March in Vientiane, Laos)
• Train the Trainer: Standards Development and Internationalisation (6-10 March in Singapore)
• Good Regulatory Practice Toolkits – Cosmetics Sector (13-15 March in Jakarta, Indonesia).

The 'Train the Trainer: Standards Development and Internationalisation Workshop' aimed to strengthen the capacity of standards bodies in the ASEAN region to participate effectively in international standards development, and to train other ASEAN member nationals. The ASEAN Consultative Committee on Standards and Quality (ACCSQ) has recognised that the path forward to developing a harmonised system of standards in the region will best be achieved by the adoption of international standards, rather than attempting to develop unique standards in the region. Hence the training component of the workshop offered delegates the skills and frameworks to apply in the workplace, including when training staff members. It also identified some of the training problems that may be encountered and suggested strategies to overcome these.

PDP is providing continued support to the SouthAsia Enterprise Development Facility (SEDF) to improve the capacity of local non-banking financial institutions (NBFIs) in Bangladesh to develop capacity and procedures to manage credit risk.

The SouthAsia Enterprise Development Facility (SEDF) is a multi-donor funded program, managed by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to assist in the development of the small and medium enterprise (SME) sector in Bangladesh, Bhutan, Nepal and North East India. With a view to increasing access to finance to SMEs, SEDF signed a Memorandum of Understanding (MOU) with a number of financial institutions, called Partner Financial Institutions (PFIs). As part of its program in Bangladesh, SEDF aims to develop a robust financial sector. SEDF is therefore organising training on Credit Risk Management for Non-Banking Financial Institutions (NBFIs) in Bangladesh.

PDP is conducting further training sessions, including Training of Trainer (TOT) sessions on credit risk management and training sessions on credit risk management for a NBFI Partner Financial Institution of SEDF. Our staff are also developing a TOT manual on credit risk management and a training manual on financial statement analysis for the Partner Financial Institution.

PDP is currently contracted through the Philippines-Australia Partnership for Economic Governance Reforms (PEGR) Facility to provide technical services under the Establishing a Performance-based/Outcome Orientated Culture in Fiscal Management Project (RA-002). As a key component of this project, our team recently assisted with the conduct of a series of training workshops (held in February 2006) for the roll-out of the 2007 Organisational Performance Indicator Framework (OPIF) Budget.

The workshops consisted of a two-day exercise for the orientation of the Sector Assistance Teams (SATs) and Technical Advisory Teams (TATs) composed of officers and staff from the Department of Budget and Management (DBM) and the National Economics and Development Authority (NEDA) and their respective local experts. The SATs conducted three other similar orientation workshops for seven departments and their line agencies namely Department of Education, Department of Finance, NEDA, Department of Transportation and Communication, Department of Trade and Industry, Department of National Defence and Department of Science and Technology. The workshops provided a conceptual and operational overview of OPIF prior to the actual documentation work for the 2007 Budget.

The team benefited from the assistance of two additional PDP experts, Paulette Quang and Sally Brownette, who joined our team leader, Stuart Jamieson, and other international experts to assist DBM and NEDA in establishing a performance-oriented culture in fiscal management. The RA-002 Phase I will run until June 2006.

PDP staff have joined an AusAID, NZAID and Government of Kiribati joint programming mission targeted at improving public sector performance in Kiribati. The purpose of this mission is to provide advice to the Governments of Kiribati, Australia and NZ on a strategic approach to implementation of a joint program of Australian and New Zealand assistance.

As an integral part of the mission, PDP’s specialists are reviewing the current focus of Australian and NZ assistance to Kiribati for public sector reform (as well as that of other donors) and making recommendations regarding the strategic focus areas Australian and NZ support should target. The team is also examining the mechanisms currently used to provide Australian and NZ assistance and providing recommendations on future delivery mechanisms.

The PDP-managed Vanuatu Ministry of Finance and Economic Management (MFEM) Institutional Strengthening Project (ISP) finished in February 2006, after seven years. Our thanks go to the PDP team and our Ni-Vanuatu counterparts who contributed to the success of the project and in building Vanuatu’s MFEM into one of the leading ministries of its kind in the Pacific; a true ‘jewel in AusAID’s crown’.

Platform for growth
Since 1999, our project has contributed significantly to overall economic growth and governance—with a design and work focusing on instituting sound building blocks to support governance. Our project was designed to build structures for good decision-making via improved MFEM functions and capabilities in key systems and procedures, good quality information and management.

Our team and counterparts made significant gains across budget management, information systems, accounting processes, corporate management and policies, and financial management including in the line ministries. We have:

• strengthened key financial systems and procedures
• addressed key financial risk and managed financial issues with GoV
• reinforced the role of financial management in public service delivery.

These processes now represent a strong platform for further—including policy-oriented—financial management improvement.

Lessons learned
The IMF country team visited Port Vila in late 2005 and repeated their belief that Vanuatu has one of the strongest financial management systems amongst LDC level countries. The recent AusAID Project Independent Completion Review (ICR) team found that the project demonstrated sound and clear improvement in systems, processes and procedures, particularly in the transparency of the budget process across central and line agencies. Feedback from local counterparts, the GoV and key donors also suggests that core to this success has been our targeted, yet flexible, program of assistance working in close partnership with the GoV.

PDP field staff represented a boutique firm committed to the project and institutions’ end-outcomes. The senior-level advisers on this project gained trust and commitment for sound reform efforts by working differently to other advisers. We have worked closely with local counterparts to ensure effective skills transfer and mentoring, an ongoing focus on improved outcomes and a flexible, engaged approach to our work.

Way forward
The key lesson from this long-term project is to now ensure and assist reform efforts in Vanuatu to remain focused to moving to the next stage, and to shift these practical ‘front-end’ successes of our project to broader policy-level reform.

How do we maintain this critical momentum and build on the key achievements of this project?

This is an important turning point for financial management reform in Vanuatu. It is important not to be complacent. There is a need to re-focus and carefully target future reform directions under a new, GoV-embraced medium-term framework for reform, eg a Comprehensive Reform Program (CRP) II. This will work to build a robust platform to achieve long-term and sustained economic growth in Vanuatu, and harness progress made to date in a comprehensive and coordinated program designed in partnership with Ni-Vanuatu.

Further information
Further information on PDP's involvment in implementing Vanuatu's new financial management system can be found on the Islands Business website.

PDP has commenced the provision of long-term (ADB-funded) technical assistance to assist the Government of Azerbaijan to integrate the achievement of the Millennium Development Goals (MDG) into its development planning and implementation processes. The main outcome of this TA will be the enhanced planning and monitoring capacity of Ministry of Economic Development (MOED) to achieve those goals.

Our team is focusing on strengthening the strategy implementation and impact monitoring mechanisms put in place under the State Programme on Poverty Reduction and Economic Development (SPPRED) 2003-2005, and for enhancing the capacity of the SPPRED Secretariat to carry out participatory poverty impact monitoring of projects and policy measures identified in the strategy. Further, PDP is leading the MDG costing and budgeting exercise to support the development of feasible MDG targets, as well as supporting capacity building efforts and information dissemination.

PDP has commenced services under the ADB Lao PDR Public Expenditure Planning for National Growth and Poverty Eradication Strategy project.

On the Government’s request to the ADB, this technical assistance (TA) seeks to support the Lao PDR to improve its PEM. The proposed TA is in line with ADB’s Country Strategy and Program (CSP) for the Lao PDR, which highlights good governance through policy and institutional development as key to achieving sustainable economic growth.

The goal of the TA is to contribute to improved allocation efficiency of public resources according to the Government’s development and poverty reduction policy objectives, approaching international good practice standards in public financial management. The TA outcomes will be: (i) improved quality of fiscal planning; and (ii) improved capacity within the relevant MOF departments and government agencies involved in the fiscal planning process.

Our team is providing long-term technical assistance to improve the quality of fiscal planning and enhance capacity within the relevant MOF departments and government agencies involved in the fiscal planning process. This will involve an assessment of the present fiscal planning process and progress to date, identifying challenges and opportunities, and addressing these in the development of a coherent medium-term expenditure framework (MTEF). The PDP team is also providing training on fiscal planning, budgetary systems, international public financial/expenditure management standards, and computer models and database systems to the relevant MOF departments. Furthermore, PDP is leading the automation of fiscal planning and budgeting processes.

PDP is providing continued support as part of the AusAID Philippines Land Administration and Management Project II (LAMP 2) Inception Phase, prior to the full-scale launch of the 5-year project.

The goal of LAMP 2 is to reform the land administration system so that it contributes to the country’s socio-economic development goals. The purpose is to accelerate the process of land administration reform and apply the lessons of LAMP 1 in selected regions, provinces and municipalities to support the progressive expansion of tenure security and the adoption of approved property valuation standards and procedures through sustainable partnership agreements.

PDP’s land administration and management policy adviser joins the Land Equity International consortium in working with counterparts from the GOP agencies to produce a detailed work plan for the policy component of LAMP 2. Our expert will prepare a workshop and training inputs plan for the policy component and is also responsible for the provision of advice and recommendations on the Land Administration Authority (LAA) Bill and Transition Plan and the LAM policy development process.

PDP has commenced work to prepare a policy research paper on trade in accountancy services for the AusAID-funded Australia-Indonesia Technical Assistance Management Facility (TAMF). This engagement supports the development of the Government of Indonesia’s trade in services strategy as part of its overall trade strategy.

Under the contract, PDP will prepare a sectoral paper on trade in accountancy services, which will be used as a model for analysing trade in other services. Our team will analyse how Indonesia can maximise the gains from trade in accountancy services, addressing regulatory measures, restrictions in key services export markets, exports opportunities and import needs.