PDP undertook an evaluation of the Australia/IMF scholarship program which had the primary objective of increasing the institutional capacity of key economic institutions in developing countries to achieve sound economic management and lead to good governance of any country. The consultant assessed and reported on the institutional capacity building needs, especially human resource development needs, of the relevant economic institutions in the target countries and the role of the program in meeting those needs. Consideration was given to other programs of technical and advisory assistance to the relevant institutions, especially by the IMF and/or by core Australian public sector agencies, and the place of the scholarships program in the overall assistance provided. PDP also evaluated the degree to which scholars acquired the skills, expertise and knowledge relevant to the needs of the institutions and functions to which they are to return, together with the degree to which their new skills are utilised following their return.

PDP undertook a review of opportunities for the countries of the Greater Mekong Subregion (Cambodia, China, Laos, Myanmar, Thailand and Viet Nam) to cooperate in foreign direct investment. The review covered:

• general investment facilitation, including exchange of personnel, sharing of data and dissemination of investment information to the international investment community
• investment promotion, including developing sub-regional strategy and common investment promotion materials and organising joint promotion missions
• defining the regulatory framework for investment, including harmonisation of application procedures and the identification of legal, bureaucratic and regulatory barriers to complementary and trans-border investment.

A paper was prepared for the Investment Working Group on mutually beneficial and cost effective cooperation opportunities, together with a list of priorities to shape further activities of the Group.

PDP provided expertise for a presentation on policy development principles and processes in the social welfare area in Australia and the application of the principles to social welfare policy development in China.

PDP provided consulting services to assess the needs and capability gaps of both central and sub-national agencies involved in fiscal reform. It involved extensive consultations with the Ministry of Finance (MoF) and the State Authority of Taxation (SAT) on key areas of fiscal reform, focusing on public expenditure management (PEM), the development of a Single Treasury Account System (STA), and tax policy and administration. Assistance was provided in developing strategies identifying the financial, human, institutional resources needed to successfully carry out fiscal reforms and indicated future areas for action, drawing upon international experience as well as the experience with implementation of pilot reforms in some agencies and provinces in China. Recommendations were made on future cooperation and technical assistance with a view to developing partnerships with donor agencies assisting the fiscal reform process.

PDP contributed to the macroeconomic policy and regulatory reform component of a major BOT study in Hunan Province. The macroeconomic study and regional energy sector analysis involved an examination of provincial budget, financing capacity and impact of divestment on the entity, a study of regulatory reforms and changes to institutional arrangement, and assessment of implications for budget and revenue policy.

PDP formulated the overall Regional Development Strategy (RDS) for the Tumen River area, with specific responsibility for environmental, trade, industry, investment and natural resource sectors. The RDS incorporated an Environment Management Plan which provided a number of measures to ensure that the resources of the area (including mineral, agricultural and marine resources as well as its human resources) were able to provide benefits over the longer term.

PDP was engaged to evaluate the progress of the first phase of the TRADP, a multi-national regional program designed to accelerate trade, investment and socio-economic development in a region located in the heart of North East Asia. PDP was subsequently commissioned to implement it’s recommendations including re-focussing of the program through a strategic planning process and preparation of an overall Regional Development Strategy together with sectoral strategies for transport, industry, telecommunications and tourism. PDP was also engaged to carry out phase two, establishing the TRADP Secretariat in Beijing and continuing support for sectoral and regional planning.

PDP provided the services of a Trade Facilitation Expert to assist the Greater Mekong Subregion (GMS) countries in formulating an action plan on trade and investment facilitation that would strengthen the competitiveness of the Mekong Subregion, complement trade liberalisation initiatives and promote the GMS as an integrated production base. The long term goal of the technical assistance was to strengthen economic and trade cooperation and promote integration within the GMS and with countries outside the region through facilitating the free movement of goods and people.

In preparing the action plan, the consultant provided technically sound advice through undertaking analytical research and literature reviews (on customs rules/regulations, inspection and quarantine measures, mobility of business, trade logistics, investment promotion and capacity building), country consultations and convening of the special trade facilitation group meeting.

PDP provided a comprehensive program of workshops, seminars and case studies to economic managers on all aspects of financial and economic management and reform, with an emphasis on the role of IFIs in external assistance programming and policy analysis. The program covered public expenditure management issues including external assistance relations and management, public investment planning and public expenditure programming, and focussed on social versus economic infrastructure allocations and budget reform.

PDP prepared a paper on external aid use and allocation for the 1996 Mongolian Aid Group (MAG) conference in Tokyo. The paper detailed historical expenditure of external resources, medium term PIP requirements and projected mid term sectoral assistance requirements, and focussed on social sector resource mobilisation and allocation arrangements consistent with the policy framework.

Against a background of macroeconomic stabilisation and structural reforms highlighting the consolidation tasks that remained, PDP assessed Mongolia’s opportunities for turning comparative advantages identified into competitive advantages. A development vision was proposed that consolidated the economic and institutional reforms and included a medium term strategy.

A major component was the completion of a background paper on the development strategy. The paper:

• described progress in macroeconomic stabilisation and structural reforms
• commented on the status of major sectors in the economy and cross cutting issues such as environment, poverty, social welfare and regional development
• presented a clearly defined development vision for Mongolia
• outlined the preferred economic and social development paths over the medium to longer term required to achieve the vision.

Macroeconomic, institutional and sectoral strategies and related investment options were presented and financing strategies and options included.

PDP was retained at the request of the Minister of Finance and Economics to prepare papers for the Mongolian Aid Group covering government development strategy, macroeconomic reform priorities, sector strategies and priority expenditure programs to the Year 2000. A medium term PIP and a financing plan were prepared and submitted to Cabinet for approval as the capital budget program. Priorities for the medium term and a new aid management policy were also identified for inclusion in the papers.

PDP provided technical assistance to support balanced and equitable regional development, with the aim of strengthening the capacity of the government for policy analysis and development management, and helping to establish systematic and structured development planning functions. Assistance included an assessment of the economic rationale and financial viability of the Regional Development Corporation (RDC), an assessment of the economic basis for the inter-relationships between existing policies, plans and strategies, and an examination of the strengths, weaknesses and opportunities for market competitiveness of national and regional economies (prioritising investment areas with a consideration of economic perspectives and the impact of poverty reduction). On this basis, an integrated medium term regional development plan was prepared, incorporating implementation strategies and operational guidelines. Overseas training was provided to senior government decision makers, policy makers and technical analysts to support capacity building. Recommendations were made for establishing an independent policy development unit to function as a policy development think tank and to help policy makers implement informed policy decisions based on sound analyses.

PDP has been contracted by the World Bank to support the Mongolian Civil Service Council in the development of proposals for a new civil service grade structure, to conduct a sample survey of pay in the civil service, to identify benchmark jobs; and to undertake a pay comparator study with selected private sector organizations.

PDP provided long-term assistance to the Government of Mongolia to streamline and strengthen institutional arrangements and capacity for civil service management, financing, coordination and accountability. The assistance focused on three core tasks:

• strengthening civil service management capacity and professionalism by implementing the civil service reform strategy and conducting agency level efficiency reviews
• rationalising the civil service wage bill, incentives and employment by formulating a 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.

PDP provided technical assistance to:

• assess how the ADB could best assist in building the institutional, administrative and financial management capabilities of local government in the context of decentralisation and other donors’ activities
• identify priorities and approaches for further ADB assistance.

A review was conducted of the structure, functions and staffing levels of the Governors’ Offices at two sample aimags, together with a preliminary needs analysis for improving institutional, administrative and financial management capabilities. Review and assessment was undertaken of the existing:

• budget processes and level and structure of the resulting budgets of the local governments
• screening and selection mechanism for investments at the local government level
• laws, regulations, policies and strategies in decentralisation and local self governance and the relationships between the local and central governments.

A review was conducted of the project profiles proposed by the Government of Mongolia for donor assistance for the Decentralisation Support Sub-Program of the Management Development Program, to refine the scope of Bank assistance. Inputs were provided to the preparation of a Memorandum of Understanding, including defining the objectives, scope and costing, implementation arrangements, timing and terms of reference. A report was also prepared outlining the organisation, structure and function of local governments in Mongolia and their relationships with central government.

PDP provided assistance to the Government in the development and implementation of methodologies on asset valuation. PDP’s consultant focused on several critical areas to improve the existing asset valuation framework for the Government, including: 

• reviewing the current asset valuation framework and providing recommendations on formulation of national law and regulations in compliance with the International Standard and experience 
• providing assistance in implementation of national regulations and methodologies on asset valuation 
• providing trainings and workshops to improve capacity and practical experience of the asset valuators.

PDP provided technical assistance in support of the government’s priorities to improve health services at the sub-district level in selected provinces. Assistance was provided in:

• upgrading bag level health services
• rationalisation and improvement of district health infrastructure to support referral and supervision
• design and implementation of systems for community participation in health care financing, essential drugs, sub-district and district level logistics, supervision and management and health information
• training in health services and health institution management.

Specific tasks included a review of the government’s fiscal situation in the health sector, an assessment of existing private health sector activities, and the identification of legal reforms, mechanisms and incentives to support the development of the private health sector in Mongolia.

PDP provided the services of an International Tax Specialist to develop consistency in the application of national rules on Government taxes (customs, excise, VAT, income tax) on projects funded by International Financial Institution (IFI) grants and credits in Mongolia. Responsibilities included:

• detailed review of existing tax legislation and guidelines and international treaties concerned to the tax issue of the projects financed under external grants and credits
• analysis of the application of taxes to ongoing projects funded by different IFI and donor countries
• comparing relevant practices in other countries
• providing recommendations on the application and use of existing tax rules and international treaties, and recommendations on amendments to the relevant legislation and rules, if necessary
• conducting workshop/seminars to central government agencies.

PDP assisted the Government of Mongolia to prepare and implement the Poverty Reduction Support Credit (PRSC) program. Help was provided to the authorities to undertake the necessary analytical work, update implementation action plan of the mid-term civil service reform strategy recently approved by the Parliament, and prepare policy and institutional reform recommendations in the area of administrative and civil service reform.

Provision of eight person (four international and four local) team to assist in implementing the local government component of public sector management and reforms, including design, testing of financing mechanisms, establishment of new budget and financial management systems and the FMIS, legal and regulatory framework and establishment of accrual accounting systems at center and provincial level.

Work occurred in relation to the composition of expenditure and the assignment of key social sector expenditures between different levels of government. There was also a focus on the delivery of health and education service in decentralized locations.

PDP provided policy and strategy assistance to support reform of intergovernmental relations, encompassing financial, structural and organisational, and legal and regulatory adjustments. The assignment involved extensive policy dialogue and the preparation of a framework and action program for intergovernmental relations reform including resource allocation and service delivery arrangements in the social sector at national and provincial levels. PDP was also involved in the preparation of the Phase II program for Bank financing.

PDP facilitated the introduction of public administration and intergovernmental finance reforms focusing on intergovernmental financial relations, a shift to output budgeting, the user-provider model and accrual accounting systems for public sector management. Tasks included design and testing of financing mechanisms, establishing new budget and financial management systems and FMIS, defining the legal and regulatory framework, and establishing accrual accounting systems at centre and provincial level.

This project entailed a mid-term review (MTR) of the Mongolia-Australia Capacity Building and Small Activity Facility (CaBSAF) to assess its progress and management. The MTR team reviewed and commented on progress of the Facility activities and advancement towards the achievement of the stated objectives and outputs, and made recommendations for improvement. As a key member of the MTR team, PDP provided the services of a Public Sector Reform/Human Resource Development specialist. He imparted expert advice on public service reform and human resource development in Mongolia and internationally as appropriate. The consultant also had primary responsibility for assessing the scholarship program, particularly its integration into broader human resource development strategies and priorities.

PDP provided assistance to the Ministry of Finance and Economy, with a particular focus on the Economic Cooperation Management and Coordination Division, in the preparation of studies, analysis and documents for the 2002 Consultative Group Meeting. Work included a macroeconomic analysis covering the period June 2001 to June 2002 with a focus on sources and uses of foreign assistance and coordination of foreign assistance, pro-poor growth strategies and external financing requirements.

PDP provided the services of a PEM/Aid Management Specialist to assist the World Bank Resident Office prepare all Consultative Group Meeting papers, including a policy/strategy framework and aid utilisation requirements.

PDP staff undertook an assessment of the state of overall public financial management in Mongolia, contributing to the financial management section of the governance assessment of Mongolia. A program to support the implementation of measures to strengthen public sector financial management was formulated, focusing on institutional measures, interim legal and regulatory measures and capacity assessment. Specifically, the consultant evaluated Mongolia’s:

• revenue administration
• public expenditure management
• social sector program financing including social assistance overhang
• public sector accounting, internal control and auditing
• ongoing public sector financial reforms
• current state of fiscal relations and the capacity and resource implications of ongoing reform measures for centre-local fiscal relations.

PDP assisted the Government of Mongolia and the Ministry of Finance and Economic Planning (MFEP) to establish an outcomes-based public expenditure management (PEM) system to provide the necessary framework for planned public administration reforms. PDP helped the MFEP design and implement a reformed PEM system that improved institutional arrangements, accountability and transparency relating to aggregate fiscal discipline and the allocative and operational efficiency of budgets.

Responsibilities of the PDP team included:

• training domestic consultants and key MFEP officials in applying objective criteria for selecting and prioritising public investment projects
• training and assisting pilot agencies in preparing forward estimates
• developing and helping implement the top-down components of an MTEF, including a system for setting medium term strategic priorities and sectoral budgetary ceilings for ministries that build on the PIP process.

PDP provided advisory technical assistance to the National Development Board of Mongolia to design and implement a development planning model. Expertise was applied to analysing current planning processes and systems and assisting with the design of a planning system linking macro and sector policy and investment programming. Key achievements of the project were the adoption of PIP processes incorporating a medium term framework, integration of PIP into capital budget, adoption of a systematic cycle of priority setting of PIP processes and establishment of an effective monitoring system for PIP projects.

PDP assisted the Government of Mongolia to implement a performance-based budgetary and public administration system strategy. The project pilot-tested output-based budgeting, medium term planning, accrual accounting, financial reporting practices and performance-oriented administrative reforms of five pilot central government agencies in two pilot provinces. The PDP team supported the Ministry of Finance and Economic Planning, the pilot agencies and pilot provinces in: preparing accrual accounting for selected entities in the two pilot aimags; preparing a study on the relationships of governance reforms and decentralisation; preparing functional reviews of the decentralised structure of the six pilot agencies (with bottom up feedback from the two provinces); and implementing the management change proposed in the functional reviews. PDP also made recommendations for broadening the decentralisation reforms to other ministries.