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MENA Experience with Public Sector Reform: A Survey of the Landscape. Robert P. Beschel Jr. Lead Public Sector Specialist (MNSED) Riyadh, Saudi Arabia November 2009. Focus on Three Areas. Public Financial Management Civil Service Reform Anticorruption.
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MENA Experience with Public Sector Reform:A Survey of the Landscape Robert P. Beschel Jr. Lead Public Sector Specialist (MNSED) Riyadh, Saudi Arabia November 2009
Focus on Three Areas • Public Financial Management • Civil Service Reform • Anticorruption
PFM Objectives are Relatively Straightforward • Macroeconomic stability and fiscal sustainability • Appropriate allocation between competing priorities • Efficient and effective spending • Effective control environment ensures fiscal probity
Common PFM Challenges in MENA • Budget Formulation • Ensuring credibility of the budget/ making hard ceilings stick • Scope and comprehensiveness of the budget • Link between recurrent and investment budgeting • Multiyear framework • Strengthening budget classification • Introducing performance orientation • Greater budget transparency and parliamentary scrutiny • Budget Implementation • Reducing ex-ante controls, while improving commitment controls • Improved virement • Better treasury operations and cash management • AFMIS systems • Strengthening internal audit • Strengthening external audit, including more independent and transparent reporting relationships
Bank Recently Analyzed Sample of 10 MENA Countries • Algeria • Egypt • Iraq • Jordan • Lebanon • Morocco • Syria • Tunisia • West Bank & Gaza • Yemen • Comprise 71 percent of MENA’s population and nearly half of its GDP • Different regions and levels of Development • Represent a range of administrative traditions
Civil Service Reform • Legislation • Pay and Employment • Machinery of Government (structure and business processes) • Human Resource Management • Policy Coordination
Common Problems in MENA • Governments are large • Pay is misaligned, w/ too many allowances • Wrong sets of skills • Too many agencies with vague and overlapping mandates • Interagency coordination is poor • Weak accountability • Meritocracy vs. wasta
Government Employees % of Population 7 6 5 4 3 2 1 0 Egypt Iran Morocco Syria Turkey India Indonesia Pakistan Mexico Country Comparison
Ongoing Bank CSR Efforts • Lending • Morocco • Yemen • WBG • TA and ESW • Regional Pay & Employment Exercise • Morocco • Egypt • Libya • WBG • Kuwait For a variety of reasons, this agenda has tended to struggle historically
Country Case Study No. 1:Morocco • Size of the wage bill an issue • Not overstaffed, but civil servants are overpaid (competitive salary increases among cadres) • Successful VRS in 2004 • Developing a computerized HR database • Optimal agency staffing levels? • Geographic distribution a problem
Country Case Study No. 2:Egypt • Massive overstaffing, but… • Split between policy (MSAD) and administration (CAOA) • Low salaries, with lots of allowances & distortions • Some success with reforming certain agencies (tax, customs, GAFI) • New legislation focuses on disicpline & contract employment
Country Case Study No. 3:Yemen • Broad, comprehensive reform agenda • Computerized biometric database reducing ghost workers, double dippers & staff serving after retirement • Reeingineering line departments • Fund to reduce overstaffing • Migrate agencies to new salary structure? • Other reforms in recruitment & performance evaluation
General Observations: CSR Necessary but Challenging • What has Worked • Agency specific reforms • Hiring freezes • Payroll reform • Creating service culture • Incrementalism& strategic opportunism • What has Not • Comprehensive strategies • Centrally driven efforts to reform line departments • Functional reviews • HRM reforms that directly confront wasta • Heavy ministerial & staff turnover • It Depends • Rightsizing • Voluntary retirement schemes • Computerized HR & payroll systems • Civil service censuses • Contract employment • Training and capacity building
Recent Developments in Combating Corruption in MENA • Creating Anticorruption Agencies • Jordan • Iraq • Yemen • Morocco
Transparency & Public Awareness The chart to the left shows the MENA region in relation to the rest of the world.
Transparency & Public Awareness • Freedom of Information legislation passed in Jordan and under consideration in Egypt & Yemen • E-government and web based dissemination growing in a number of countries • Civil society playing a role in several countries (Morocco, Lebanon, Palestine)
For the Quality of Administration, MENA’s ‘Governance Gap’ is Small
But for Public Accountability, the ‘Governance Gap’ is Wider
Global Governance Trends… • Many of the global trends in governance in the 1990s & beyond were felt only distantly in MENA • In comparison with other regions, MENA fares well in terms of political stability and e-governance and fair in terms of facilitating private sector development, service delivery and anticorruption, with wide variation between countries • The region fares worse than global comparators on issues of decentralization and on public voice, accountability and participation • Overall size of the public sector is an issue
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