Nepal : Country Paper On Managing For Development Results

1. Nepal : Country Paper On Managing For Development Results Hari Prasad Sharma Joint Secretary, MoPPW hari.pd.sharma@gmail.com

2. Presentation Outlines • Nepal : Transitional Socio-Political Context • Steps taken to Institutionalize MfDR in Nepal • Status of MfDR Operationalization and Internalization • Barriers and Challenges • Future Course of Action

3. Nepal - Transitional Socio-Political Context

4. Background Land locked, Mountainous country East west and south border-India North border-China Area 147181 sq.km Altitude 100 m to 8848 m Average temperature 25 0 c, varies from 0 to 42 0 c Total land covered by forest 29% Population - 27 million 80% population live in the rural areas Cultivated lands (21%), Most of the Nepalese are farmers (66 %) GNP per capita -470 US$

5. Background …. Population below the poverty line (31%) Life expectancy - 63 years Infant mortality rate 48 per thousand Literacy rate 63% 60 languages are spoken, Nepali is official language, 80% of the total people follow Hinduism Telephone density 18% Population with excess to drinking water 78 % Inflation Rate 13% annual

6. Some issues Fragile political situation Impunity/weak law and order situation Low economic growth Reduced poverty but increased inequality Improved social indicators but slow progress in governance infrastructure Weak regulatory mechanisms High dependency over bureaucracy to implement policy reform and development programme

7. Country in Transition Diverse Ethnicity and Geographical region Economic disparity, marginalization and exclusionary practices – 10 year armed conflict Comprehensive peace accord and raised expectation of people Political transformation and Election of Constitution Assembly – fragile political condition Governance challenges - role of bureaucrats and technocrats & other stakeholders Ray of Hope - Revenue growth is enthusiastic, remittance is increasing and voice of reconciliation is raising

8. Steps taken to Institutionalize MfDR in Nepal

9. What MfDR Helped ? Developing mission-driven organizations Enactment of M/E law and Strengthening M&E systems Improving quality at entry and supervision of projects and program Focuses on capacity building of local bodies in planning, implementation and monitoring Structural development and capacity building for fiscal federalism Developing performance-based contract systems Strengthening change management Strengthening and institutionalizing business plans Increasing knowledge of MfDR concepts and principles down to local level

10. MfDR Practices in Nepal PRSP and MTEF practiced since 2002 Medium Term Budget Review in place Poverty Monitoring and Analysis System (PMAS) District PMAS with focus on MDGs Extensive use of Log-fame in 10th and TYIP Project prioritization based on predetermined criteria with guaranteed funding for first priority projects Sector-wide Approach (Swap) initiated in education and extending to other sectors Immediate Action Plan (IAP) introduced and monitored Establishment of performance-incentive fund etc.

11. MfDR Practices in Nepal In 2005, the Government requested ADB to support the capacity development of government institutions to operationalize MfDR between 2006 and 2008, two technical assistance (TA) projects were implemented TA 4765-NEP : Three pilot agencies of the central government MPPW, MLD, MOES, and four district development committees Dang, Dhanusha, Jhapa, and Jumla operationalization of MfDR is piloted. TA 6306-REG: completed MfDR readiness assessment of two ministries MPPW and MOES, one department (Drinking Water Supply and Sewerage) and one district development committee Dhanusha

12. MfDr Practices in Nepal .. Performance based incentive system has been put in place and result monitoring indicators of the national budget (fy 2009/10) has been published in the annex of budget speech.

13. ADB and MfDR in Nepal ADB introduced MfDR approach in Country Strategy and Program in Nepal on a pilot basis in 2004, Supported operationalizing MfDR in 2007 in the Ministry of Education and cascade it in Dhanusha district, ADB supported TA in operationalizing MfDR in Ministries of Local Development, Education and Physical Planning and Works in 2008 and extended district coverage by adding 3 more districts – Jhapa, Dang and Jumla. The Present TA (2009/10) focus on internalizing MfDR in the MoE, MoPPW and MLD Extending its work in MOF and NPC Operationalizing it in the Ministry of Energy and the Ministry of Agriculture and Cooperatives ( new initiatives ) Now TA also supports preparing Result Based Budgeting (RBB) in two Government entities – Department of Transport Management and Traffic Police (Nepal Police).

14. Mandatory provision of Logframe/Result matrix in Large Projects District Development Committees started prepare Periodic Development Plan Using Result Based Matrices Trimesterly progress review in all projects and Monthly progress review in National interest Projects Performance Based Budget Released System is adopted (atleast 80 % progress to be achieved in all projects) Performance Grant System in school Education is adopted. Achievement from MfDR

15. Right to Information Act - Public Disclosure of Key Information Use of ICT, Web based portal and broad band Networking in most GoN Organizations Public Sector Reforms – civil service reform, change of public procurement act Actions on the centralized planning Performance Grant release system in DDC Establishment of Performance based incentive system (MoF, MoPPW, MoE, MoHP) Achievement from MfDR

16. GIS Map of Strategic Road Alignment

17. Barriers and Challenges

18. Capacity Gaps/Barriers Forces operating to prevent the implementation of MfDR at the organizational level: Lack of resources : financial, human and knowledge Poor Monitoring and Evaluation system at the organizational level Poor linkages between sectoral results chain and organizational results chain (broad and nonspecific organizational mandates) Overemphasis on process compliances Accountability focused on procedures but not on delivery of results

19. Capacity Gaps …. Frequent transfer of leadership – effect the MfDR Process Low capacity of local bodies in planning, implementation and monitoring Weak capacity for MfDR Traditional focus on output - Lack of focus on results Rewards not linked to performance Weak performance evaluation systems Resistance to change Political interference for operations Weak leadership in many government organizations Inadequate resources for M & E

20. Problems related to adopt MfDR approaches in the Ministries Integration and Institutionalization of Piloted activities is Challenge Input focus, process oriented organizational culture Lack of change oriented attitude Lack of staff development activities related to MfDR-training etc. Lack of staff incentives Lack of supportive environment/tendencies Cascading result based approaches to the lower level is also challenge

21. Status of MfDR Operationalization and Internalization

22. MfDR ImplementingGoN Organizations: • National Planning Commission • Minstry of Finance • Ministry of Local Development • Ministry ofEducation • Ministry ofPhysical Planning and Works • Ministry ofAgriculture and Cooperative (new) • Ministry ofEnergy (new) • Department of Road • Departmant of Water Supply and Sewerage

23. Role of NPC and MoF in Application of MfDR in other line agencies Poverty assessment Alignment with plan and project cycle and use of the country system Harmonization among the stake holder of development partner Development of selective and focused programmes Providing leadership role to implementation MfDR approaches in other agencies

24. Three years interim plan TYIP (2007-2009) This is current plan with the objectives of poverty unemployment and economic disparity reduction and achieving sustainable peace. It spell out clear cut frame work for all stakeholder and development partners. All development partners are very much supportive to efforts and assisting accordingly it prioritized reconstruction, rehabilitation and reconciliation

25. TYIP and Sectoral Business Plan NPC is coordinating sectoral business plan preparation for different development sectors. Business plans coordinate TYIP and MTEF. It includes result based targets and indicators for effective monitoring. It harmonizes external assistance potentials for sector - wide approaches (SWAps).

26. MfDR Readiness Assessment Process

27. Assessment Process Senior management retreat to discuss organizational purpose, desired results, and performance gaps The Focal Point & Working Group gets oriented to Readiness Assessment Tool Individual meetings of the working groups with the TA Team Document review Interviews Focus groups Working groups prepare an Readiness Assessment Report with the support of TA Team.

28. Sources Gap - Category A : The Operating Environment Freedom to manage Management accountability Development and use of MIS Incentive and disincentive system Flow of information between departments External pressure for results Mission driven culture Politicisation in work and decision making Frequent changes in staff Good relationships between staff

29. Sources Gap assessmentin 8 Categories • Category A : The Operating Environment (10) sub heading • Category B: Clarity of Results, Mandate and Purpose (9) • Category C: Adequacy of Resources (6) • Category D: Organisation Management and Structure (10) • Category E: Organisation Culture and Values (6) • Category F: Vision and Leadership (5) • Category G: Attitude Towards Change (5) • Category H: Monitoring and Evaluation System (10)

30. Marking Process for the Source gap Assessment

31. Readiness Assessment of MoPPW

32. Readiness Assessment of DOR

33. Readiness Assessment of DWSS

34. Result Matrix (used in PRPS and TYIDP)Overarching National Objective: Sectoral Objective

35. Result Matrix as a Tool It helps in: Defining the sectoral objectives (impact level) Formulating strategies and working policies for achieving the sectoral objectives and outcomes; and identifying the sectoral programs Defining outcomes which are to result from the outputs produced from the program implementation Identifying programs in conformity with the strategies, outcomes and objectives (impact level) Identifying objectively verifiable indicators for both the impact and outcomes levels Identifying the sources of data/ information to monitor the progress against the indicators Identifying the risks which are outside the control of management

36. Future Course of Action

37. Works to Follow Next Prepare status report of MfDR in the selected ministries and plan for next move, Conduct MfDR Readiness analysis and identify areas to focus in the coming days, Prepare Business plan for the ministry/sector including Results Chain linking impact -outcome – output - activities – inputs, Enhance Capacity to operationalize/internalize MfDR in the line agencies and sectors, Prepare Result Based Budgeting (RBB) for Dep. Transport Mang. and V.Traffic Police (Nepal Police).

38. Further Actions onGoN Organizations • NPC: Streamlining the MfDR principles in its project entry and supervision systems. • MoF : Piloting Result Based Budgetingin DOTM and VTPO, • MoLD: Updating the works done by previous TA and operationalizing this project in the municipality management division • MoE: Updating the works done by previous TA and operationalizing this project in the 10+2 Level (HSEB). • MoPPW: Updating the works done by previous TA in DOR and DWSS and moving forward with the process of internalization in these two entities. • MoAC: Develop macro level planning strategy at the ministry level and introduce this program in Department of Agriculture (DoA). • MoEn: Develop macro level planning strategy at the ministry level and introduce this program in DoED.

39. What next in DWSS ? In DWSS or Water Supply and Sanitation Sector ; Support for further MIS development and improvement Provide performance based incentives to the staffs (Indicator Prepared) Introduce performance based budgetary system Introduce SWAP in WSS sector Provide trainings and MIS skills to staffs working in the sector Creates Water Supply and Sanitation Resource Center in the sector

40. What next in DOR? In Road Sector; Introduce and institutionalize electronic bidding system for all Road Projects Prepare road maintenance master plan and align budgetary support for maintenance Prepare bridge maintenance plan and introduce periodic maintenance system Update periodically road map in GIS and put in the web browser Support for further MIS development and improvement Provide performance based incentives to the staffs and Organization (Indicators developing now) Introduce performance based budgetary system

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