How to Prepare MDG based Plan or Strategy

1. How to Prepare MDG based Plan or Strategy Yuba Raj Khatiwada United Nations Development Programme MDGI, Regional Centre in Colombo Serving Asia and the Pacific

2. Developing MDG based Development Strategy MDG Needs Assessment Approach to Planning Methodology and Tools Writing MDG NA based Plan Macro Framework for MDG based Plan Developing Financing Strategy Linking MDG based Planning with MTEF Key Policy Issues Contents

3. Developing MDG based Development Strategy (1) : the Process • High-level political commitment • Nationally-owned • Integrated into on-going processes • Inclusive with participation from key actors • Transparent • Regularly reviewed

4. Developing MDG based Development Strategy (2): Key Steps Step 1: Launching the process with institutional set up Step 2: Adapt the MDG targets, Review Existing Plans, Establish Baselines Step 3: Undertaking MDG Needs Assessment and Costing through 2015 Step 4: Developing Macroeconomic Framework, Policies, and Financing Strategy Step 5: Preparing MDG NA based Development Strategy and drafting 3-5 year Plan to Operationalize it.

5. Developing MDG based Development Strategy (3): Institutional Set-up • A high level MDG based planning committee (headed by Finance/ Planning Minister) constituted to lead the process and oversee NA and planning exercise. • MDG NA & Costing led by governments; Task forces constituted by thematic areas - comprise of members from different concerning Ministries, public sector agencies and non government organizations. • Consultative process built in the formation of task force and NA work.

6. Identify and assess.. Who andwhereare the poor, deprived, and excluded from development process?Identify the population in need; Disaggregate the analysis. Whatneeds to be done?Focus on public investments (capital & operating costs); Undertake Needs Assessment from now until 2015; Cover goods, services, human resource, infrastructure; Unlock capacity constraints through prioritization of interventions. How much? Local unit costs of G&S x population in need; Human resources required to meet each benchmark; Infrastructure needs. MDG Needs Assessment Approach to Planning (1)

7. Include interventions that target the poor directly (e.g. school feeding programs, improved non-cash crops, subsidies for girls’ attending school) Ensure pro-poor coverage rates(e.g. universal coverage of essential health services, particular focus on underserved regions) Adapt financing strategy to the poor(e.g. end of school fees and health user fees, subsidized infrastructure services where necessary) Identify policies and supporting institutional reforms Link strategy with budgets / MTEFs MDG Needs Assessment Approach to Planning (2)

8. Key Elements of MDG-based Planning 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 MDG Needs Assessment Approach to Planning (3)

9. MDG Needs Assessment Approach to Planning (4) NA-based planning is typically a bottom-up approach.. • Physical targets based on goals are at the root • Financial targets are derived through costing • Priorities are clearly defined-MDG vs. others and within MDGs themselves. • Overall macro constraints are derived with necessary actions and required resource inflow

10. Methodology 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. • MP Excel based tools applied to do NA and costing; UNESCO Model for Education, Resource Need (now UNDP RCC) model adopted for costing HIV/AIDS

11. Methodology and Tools (2) • Two pronged approach followed for incorporating Gender, Environment, ICT, and CD under MDG NA: (i) mainstreaming interventions in sectoral NA and costing and (ii) additional NA for the cross cutting, policy and institutions related areas. • The Excel based tools customized to capture country specific additional intervention needs. • Policies and institutions related interventions identified and costed as additional interventions ( if they have financial implications for implementation).

12. 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. Methodology and Tools (3)

13. Writing MDG NA based Plan • MDG NA is an input to the planning process, not a plan in itself; requires complementary analysis of policy formulation, institutional structures, and M&E to evolve a full fledged plan document. • Following a local and national consultative process for ensuring national ownership of the plan is essential. • Macro framework and financing strategies are to be anchored with the MDG NA to make the Plan as a common document for pledging resources and aid by the donors.

14. Macro Framework for MDG based Plan (1) • Macro framework essential to link the investments estimated through MDG NA & costing to macro economic fundamentals. • Macro framework necessary to estimate the implied economic growth rate and its distribution to be achieved by investing in MDG related areas and then to estimate income poverty outcomes. • Macro framework also essential to develop comprehensive MDG financing strategy as it enables the projection of domestic resource mobilization for meeting MDG investment requirements.

15. Macro Framework for MDG based Plan (2) Purpose of MDG-consistent macroeconomic framework: • Estimate key economic variables (GDP growth, exchange rate, national saving, private sector investment, current account balance, etc.) • Project government revenues to map out MDG financing strategy • Support policy formulation • Monetary and fiscal stabilization • Pro-poor tax systems • Promotion of private sector investment • Check MDG needs assessment (Goal 1)

16. Developing Financing Strategy (1) • MDG Financing strategy should be developed by the Ministry of Planning/ Finance with inputs from the TTFs, particularly in household financing. • Macro framework along with the estimates of GDP and household income will provide input for domestic resource mobilization for financing MDGs • Fiscal space for domestic borrowing, higher revenue collection or rationalizing non MDG investments need to be explored. • The remaining financing gap has to be covered by ODA. Dialogue with major donors is needed to ensure higher aid commitment.

17. Developing Financing Strategy (2) Sequence of Preparing an MDG Financing Strategy-- • Estimate financing needs • Prepare MDG-consistent macro framework • Project government resource mobilization • Estimate household contributions • Identify MDG financing gap (debt relief & development assistance) • Identify strategy for maintaining macro stability

18. Developing Financing Strategy (3)Elements of an MDG financing strategy MDG Financing Needs Government MDG expenditures Domestic resource mobilization Household contributions MDG Financing Gap (closed through ODA including debt relief) Debt service payments

19. Building MDG-consistent MTEF to link MDG interventions to specific allocations in the national budget: include capital & recurrent costs, link cost with output and outcome, & protect key investments. Prioritizing investments and proper estimation of investment based on Needs Assessment. Setting up mechanism for periodic review of development outcomes-building system for M&E. Establishing public accountability mechanism-transparent fund, monitorable outputs, public audit. Linking MDG based Planning with MTEF

20. Key Challenges and Issues • Integrating MDG NA into long term plans and strategies • Building capacity in the government to undertake intensive MDG NA and costing and to institutionalize it. • Incorporating Gender, Environment, ICT and Capacity Development interventions in all the relevant sectoral MDGs NA and Costing works. • Integrating existing sector strategy, plan and credible programs into the MDG NA based plan or strategy. • Ensuring MDG NA based planning, programming and budgeting as a dynamic process and making use of the work for annual programming and budgeting. • Developing synergy among all development partners to help the country to prepare MDG based long term plan or strategy with a bottom up approach.

21. Proposed Action Plan for Preparing MDG based Long Term Development Strategy (1) First Month: Institutional Arrangements • Establish Political Level Steering Committee (led by of Planning / Finance Minister (functions: issue action plan for the NA and costing work, establish MDG thematic/goal wise task forces for NA and costing, provide oversight for the works of the task forces, oversee the consolidation of task forces’ reports, lead the national consultation process, & finalize the work) • Establish a core group at the MOF/ Planning to consolidate the works of the TTFs as critical input to the development strategy • Establish Thematic Task Forces (TTFs) to correspond with the goals set under MDGs /Investment Clusters identified in the Needs Assessment Methodology • Define roles of the government, UNCT and other development partners in supporting the MDG NA and costing for preparing the strategy.

22. Proposed Action Plan for Preparing MDG based Long Term Development Strategy (2) Second Month: Training on MDG NA and Costing • Training on NA methodology for TTFs - each TTF to be trained (one day each) in the relevant NA module • Follow up support to the TTFs to their hands on the tools and guidelines to the TTFs on customizing excel sheets. :NA preparatory work • TTFs review vision documents, sectoral strategies, Master Plans, sectoral programmes, and action plans • TTFs review the NA and costing exercise of other similar countries which have done NA and costing for the work in which no sector specific tools are available. • Familiarize with the whole planning tools and process & identification of the resources for input in NA work.

23. Proposed Action Plan for Preparing MDG based Long Term Development Strategy (3) Third-Fifth Months: MDG NA and Costing Exercise • TTFs identify all cluster specific interventions necessary for achievement of the MDGs by 2015 • TTFs carry out consultations with other government agencies, donors and non-governmental organizations while determining interventions & setting coverage target. • TTFs undertake costing of sectoral interventions with the collection of baseline information, setting of coverage targets, unit cost estimation, target population in need and estimation of sectoral investment requirements • Preparation of draft reports of individual TTFs identifying specific interventions and associated sectoral investment needs.

24. Proposed Action Plan for Preparing MDG based Long Term Development Strategy (4) Sixth-Seventh Month: Consolidation of the draft TTF reports • Consolidation of sectoral investment needs for the long term development strategy/plan. This would include key strategic directions and provisional costing of sinterventions. • National workshop on the draft sectoral Needs Assessment and Costing report • Development of macro framework, financing strategy and macro as well as sectoral policies Eighth-Ninth Month • First draft of long term development strategy ready for consultations with national stakeholders and donors. • National workshop on the draft of long term development strategy involving national stakeholders and donors. • Finalization of preliminary report on Needs Assessment and of Sectoral Investment Needs for the long term development plan.