Working Group Meeting (4 th Meeting) May 20, 2008 Rabat, Morocco

1. Good Governance for Development (GfD) in Arab Countries InitiativeThematic Group III on Governance of Public Finance Working Group Meeting (4th Meeting) May 20, 2008 Rabat, Morocco ARAB REPUBLIC OF EGYPT MINISTRY OF FINANCE

2. Egypt leading thematic Group IIIGovernance of Public Finance Ever since Egypt has embarked on its economic reform program in 90s, it has explicitly accepted the challenge to restructure its institutions and its managerial system by undertaking serious actions towards increasing transparency and accountability through adopting the concept of Good Governance. In this respect, Egypt has contributed in the Good Governance for Development (GfD) Initiative and headed the third theme concerned with “Governance of Public Finance”.

3. 3 Working Group Meetings were Conducted: • 1st WGIII meeting …. Cairo, October 1-3, 2005 • 2nd WGIII meeting …. Cairo, May 7-8, 2006 • 3rd WGIII meeting …. Istanbul, May 30, 2007

4. Government of Egypt Proposal • On the first regional meeting of member countries, the WG III supported in principle the proposal made by the Government of Egypt for the creation of a "Regional Public Finance Training Institute", that will be based in Cairo and linked to other Institutes in the region. • At that time, the Egyptian Ministry of Finance offered to devote the premises and facilities of its Tax Training Center for such purpose, which is a well equipped center, till there is a more developed idea for the capacity needs of the Regional Center.

5. Rationale behind the idea of Developing A Regional Public Finance Training Institute • In recent years MENA countries have undertaken significant modernization initiatives in aspect of public Finance such as revenue collection, budget reform, tax and tariff administration, and management of other financial systems. • These reforms have changed the operational needs of the Institutions in charge of Financial management. • Today, public finance agencies strive for excellence and best practices in finance, require new skill sets to enable the new more complex operational needs. • Regional Training Center would promote networking of officials in financial management, that would facilitate policy dialogue and enhance transfer of techniques, experiences, and knowledge, closing the gap between the different stages of financial modernization in the MENA countries.

6. The Regional Training Center would provide shared training Resources to MENA countries and Financial Modernization effortsADVANTAGES • The Center would allow for economies of scale in skills development offering, which would be infeasible for small countries • Serving Ministries of Finance in the Arab worlds (MOFs) and their affiliate organizations develop well trained, highly qualified, specialized technical cadre, capable to carry and implement the ongoing and planned major changes and reforms in financial governance or public finance, utilizing common learning materials • The center will cater to special MENA Expertise, focusing on skills shortages and problems that are specific to the MENA region, ensuring that the public finance management procedures applied in the participating countries are fully compatible with best international practice; • Given its institutional nature, this Regional Training Center will continue to serve Arab MOFs after the GfD initiative is concluded.

7. Even though, the benefits of the new Regional Training Center are evident, there are still a number of Important factors to be considered: • What will be the underlying governance of the Center? In order to maintain a regional perspective, the Center would need a decisioning body representing key regional stakeholders and their interests. The governance body will be responsible for ensuring Center’s financial sustainability and maximizing performance. The current suggested management structure is: Board of Trustees or Governors (Supervisory Board) which includes the ministers of finance of the member countries. Advisory Committee with representation from the donor countries, organizations and technical experts. Executive or Managing Board, for executive issues, headed by the Director of the Center.

8. Important factors to be considered: (Cont’d) • What is the optimal modus operandi for the Center? The core operations of the Center should Not be limited to training delivery only, rather focus on the larger training value chain which includes needs definition, training design, delivery effectiveness measures and staff development Support. Well – defined performance indicators will measure the success of Center’s operations. International Experiences: In designing the Center programs, curriculums, tuition, certification, materials,…etc, the Center will seek the technical support of other international and regional organizations (OECD, WB, IMF, AMF,…etc). As well as getting into collaboration with some international institutions such as "Center of Excellence in Finance" (CEF) based in Ljubljana, Slovenia , The "Chartered Institute of Public Finance & Accountancy" (CIPFA) based in the UK, and Singapore Regional Training Institute to make use of the readily available successful programs and curriculums developed by these institutions.

9. Important factors to be considered: (Cont’d) • What is the right program and content? The training courses should be based on primary training demand, anticipated changes in financial administration and international best practices. According to International Experiences, the most effective training programs are those tailored to the needs of the trainees (i.e. local and/or regional). 3 kinds of programs suggested : - The “Responsive Programs”… offers short (2-5 days) seminars on specific topics; - The “Certification Programs” … Internationally certified program - “Train the Trainers” programs.

10. Egypt Steps to Develop the Regional Training Center • Assess Training Needs: As a step to figure the willing of the Arab countries to support the Regional Training Center and use of its facilities, the Egyptian ministry of finance designed a survey and delivered it to the MOFs of the MENA member countries to state the kind of programs needed, expected number of trainees, in addition to other issues. Survey Results: Countries Responded: Palestine, Libya, Saudi Arabia, Yemen, Oman, Iraq, Qatar. Suggested Programs were to cover specialized areas related to budget formulation and execution, debt management, Performance Based Budgeting, Broadening Tax Base, direct and indirect taxation, and other issues.

11. Egypt Steps to Develop the Regional Training Center (Cont’d) • Co-coordinating with International Consultant office: In defining a vision, strategy and design for the proposed regional training Institute, The Egyptian Ministry of Finance seeked the assistance of One of the International Expert Offices ( Booz Allen Hamilton )

12. Co-coordinating with International Consultant office: (Cont’d) Booz Allen Proposed Project Approach and Time Frame Phase II: Strategy Phase III: Operating Model Phase IV: Standup Phase I: Definition 4 weeks 2 weeks 4 weeks 2 weeks 1 Assess MOF Training Needs 6 Create Governance Model 2 4 5 8 9 Identify Participants Define Financial Requirements Define Training Center Strategy Define Private Sector Participation Develop Standup Plan 7 Define Modus Operandi 3 Project Demand Total Estimated Timeframe: 12 weeks Deliverable 1 Deliverable 2 Deliverable 3 Deliverable 4 Requirements Report TC Strategy TC Operating Model Standup Plan

13. Egypt Steps to Develop the Regional Training Center (Cont’d) • Investing in a specially designed premises for the Regional Training Center: • Location The newly designed premises for the center is located in a very central area on a main Autostrade, that connects Cairo Main roads. • Area The total built up area of the building is 21,000 m2.The building consists of basement, ground and four typical floors. Each floor has a total area of 3500 m2. The building can be divided into different sizes lecture and training halls in addition to the 300 seats auditorium.

21. Egypt Steps to Develop the Regional Training Center (Cont’d) • Seeking Donors Technical and Financial Assistance: We are currently aiming at going beyond the "approval – in – principle" stage and to secure concrete support for launching the Regional Training Center from both Donors and MENA member countries. It is hoped that funding assistance can be offered by donor countries & organizations as soon as possible, so that we would be able to launch the regional center over the next year And it’s worth mentioning that, under the umbrella of this initiative, the Government of Netherlands expressed their interest to allocate funds for the Training Center and we are now in the process of finalizing the contract and receiving the allocated fund (almost 1.5 Million Euro for the Local training).

22. Thank You