Yuba Raj Khatiwada United Nations Development Programme MDGI, Regional Centre in Colombo Serving Asia and the Pacific

1. MDG NA and Costing Methodology Yuba Raj Khatiwada United Nations Development Programme MDGI, Regional Centre in Colombo Serving Asia and the Pacific

2. Objectives and Elements of MDG NA Guiding Principles of MDG NA and Costing Steps for MDG NA Addressing Important Capacity Constraints Methods and Tools Experience so far and lessons for further UN MDG NA Support Contents

3. Objectives and Elements of MDG NA: Objectives • Answer the question: “What will it take to achieve the MDGs?” • Translate long-term goals into operational targets. • Develop a strategy for increasing “absorptive capacity”. • Strengthen coherence between planning and budget processes. • Provide a monitoring & accountability framework. • Support the national policy dialogue & negotiations with development partners.

4. Objectives and Elements of MDG NA: Key Elements • Ambition- national targets are at least as ambitious as MDG targets for 2015 • Scope- the range of sectors identified is broad enough to achieve all the MDGs • Rigor -for each sector, the strategy is based on a detailed, bottom-up needs assessment • Timeline -the medium term plan/strategy is nested in a long term MDG framework • Financing -sources of financing are determined in line with ensuring access to MDG G &S.

5. Guiding Principles of MDG NA and Costing • Identify all interventions that require full or partial public financing • Include both capital and operating costs for all sectors • Undertake total, not incremental costing (financial cost, not economic costs) • Strive for maximum dis-aggregation • Address “Absorptive capacity” constraints through investments in HR, infrastructure & management systems. • Make periodic revision of targets/interventions based on new information and implementation of programs

6. Steps for MDG Needs assessment 1. Identify interventions 2. Specify targets for each intervention 3. Estimate resource needs 4. Check results: Synergies and trade-offs

7. 1. Identify Interventions Interventions are defined as “investments in goods, services and infrastructure” as distinct from policies and institutions: • Infrastructure (classrooms, roads, hospitals, toilets, water and electric connections) • Human resources (teachers, doctors, nurses, training staff, administrative support staff) • Goods (books, medicines, improved stoves, computers) • Demand side interventions to reduce barriers (scholarships for girls, microfinance, abolition of school and health care fees, cash incentives to families)

8. 2. Specify Targets for Each Intervention Coverage targets need to be specified for interventions. For example, by 2015 to reach: • Net primary school enrollment to 100% • Immunization service to 100 % of the children • Access to safe drinking water to 100% of the population • Rural electrification coverage to 80 % of the households • Access to decent shelter to 10 % of the poor HH • Micro credit coverage to 50% of the poor women

9. 3. Estimate Resource Needs Estimate All Required Inputs Infrastructure and equipments needed Direct and indirect financial costs Human Resources Needed Total Needs Direct Financial Cost Operating Cost Estimate Total Cost Human Resource Cost Capital Cost Infr.& Equip. Cost

10. 4. Check Results:Synergies and trade-offs • Identify synergies & iteratively refine estimates • Make comparisons of the costs with those of similar countries • Reiterate coverage targets and mode of intervention if costs are extremely high • Recheck the data entry and calculations to conform the costs

11. Addressing Important Capacity Constraints Need to map out long-term investment strategies in • Human resources (pre-service training; in-service training; review of salaries and benefits • Infrastructure (capital costs, operating costs) • Public management systems (civil service reform, equipment, IT services)

12. NA Method and Tools (1) • Bottom up approach of identifying interventions, costing them, and linking to national development strategy done in a sequential manner. • Targets are specifically set, unit costs are worked out and total cost for achieving the target estimated. • All types of inputs or resources like financial, human and infrastructure related ones are identified and costed. • The MP tools applied to do the NA and costing. UNESCO Model for Education, Resource Need (now UNDP) model adopted for costing HIV/AIDS.

13. NA Methods and Tools (2) Available tools • Education (UNESCO, World Bank) • Health (WHO, UNFPA, UNICEF/World Bank, UN Millennium Project) • Gender (UN Millennium Project) • Water and sanitation (UN MP, World Bank) • Energy (UNDP) • Roads (World Bank, UN Millennium Project) • Agriculture (UN Millennium Project) • Environment (UNDP, BDP) • HIV/AIDS (UNDP RCC in partnership with UNAIDS & BDP).

14. NA Methods and Tools (3) Addressing cross cutting Issues Two pronged approach on incorporating Gender, Environment, ICT, and CD under MDG NA: • mainstreaming gender, ICT, capacity development (CD), and environment interventions in sectoral NA and costing and • Costing separately additional NA for the cross cutting, policy and institutions related areas under gender, ICT, CD and environment. Governance related issues to be built in the NA process whether or not they are additional country specific goals.

15. NA Methods and Tools (4): Policies Affecting Costing • Policies affect resource estimation in 2 ways: • Direct impacts (e.g., legislative research, analysis, administration and enforcement of policies, conditional cash transfers, service delivery policies, salary reforms, etc.) • Indirect impacts (e.g., conditional cash transfers, user fees, etc.) • Policies can fall into both categories and are critical in ensuring the utilization of effective services to meet the Millennium Development Goals and other national priorities.

16. NA Methods and Tools (5): AddressingPolicy Issues • Key policy lapses and gaps to be identified in the bottom up approach of identifying interventions, costing them, and linking to national development strategy. • Existing policies, plans, strategies, and programs to be reviewed and credible ones incorporated into MDG NA. • Policies having implication for higher or lower public sector engagement -- like creating space for private sector in socio economic services -- to be factored in the NA process.

17. Experience so far & lessons for further UN MDG NA Support (1) Countries engaged in MDG based planning- • Many African and some Asian countries already successfully completed MDG NA and costing work. • Mongolia preparing long term (15 year) development strategy based on MDG NA. • Bhutan preparing medium term plan (2008-12) based on MDG NA. • Nepal developing its Interim Plan (2007-10) focusing on MDGs. • Afghanistan looking for MDG-nizing and costing Afghanistan National Development Strategy (ANDS). • PNG initiating MDG based development strategy

18. Experience so far & lessons for further UN MDG NA Support (2) Experience so far • Interventions not sufficiently discussed and refined, running the risk of being wish lists. • Sequencing of interventions often ignored; NA task force works often lack proper prioritization and sequencing of interventions. • Financing strategy not considered as a part of NA & costing exercise; thus costs arrived at might be unrealistically high for some task forces. • No pre determined criteria for priority setting in case of resource constraint in the short term. • Achieving all MDGs without trade offs in the macro economic front not always possible.

19. Experience so far.. NA taken more as a technical exercise than a process of evolving strategies & policies while identifying interventions & setting targets. Perceived as having high transaction cost - being an intensive and time taking work. Impression like an initiative for new programs and projects which would garner more financial resources. Mistaken as a parallel exercise for planning and budgeting to what is being done or is already existing. Experience so far & lessons for further UN MDG NA Support (3)

20. Experience so far & lessons for further UN MDG NA Support (4) Lessons • Institutionalizing MDG NA work within Ministries for updating NA & using it as live document for annual programming & budgeting. • Customizing tools to address the sectoral needs assessment & costing demands & mainstreaming cross cutting issues. • Encouraging governments to make the MDG NA a highly participatory process. • Developing synergy in the engagement of UN and other agencies in the NA, Costing and Planning process.