MKUKUTA REVIEW AND EMERGING ISSUES FOR MKUKUTA II

MKUKUTA REVIEWAND EMERGING ISSUES FOR MKUKUTA II ANNUAL NATIONAL POLICY DIALOGUE 19-25 Nov. 2009: Day 2: Friday 20th Nov. 2009 Ms. A. Mwasha/Prof. A.V.Y. Mbelle

STRUCTURE OF PRESENTATION FIVE SECTIONS I: INTRODUCTION II: EMERGING ISSUES FROM REVIEW III: HIGHLIGHTS/ISSUES FOR MKUKUTA II IV: CHALLENGES V: CONCLUDING REMARKS

I: INTRODUCTION POVERTY IS THE MAIN DEVELOPMENT CHALLENGE IN TANZANIA. THE FIGHT AGAINST POVERTY IS GROUNDED IN THE FOLLOWING: • NATIONAL REALITIES – SINCE INDEPENDENCE • HUMAN RIGHTS PERSPECTIVE – POVERTY IS DEHUMANIZING • REGIONAL AND INTERNATIONAL COMMITMENTS HENCE POLICIES AND STRATEGIES PUT IN PLACE KEY DOCUMENTS: ARUSHA DECLARATION (1967) NATIONAL POVERTY ERADICATION STRATEGY (1998); VISION 2025 (1999); PRSP 2000-2004; MKUKTA (2005).

I: INTRODUCTION EXPECTATIONS ON MKUKUTA OVER POVERTY REDUCTION STRATEGY PAPER: SUBSTANTIAL POVERTY REDUCTION, GIVEN: • MOVE FROM PRIORITY SECTOR APPROACH TO OUTCOME-BASED APPROACH TO POVERTY REDUCTION • IMPROVED COORDINATION • IMPROVED SYNERGIES AND CROSS-SECTOR COLLABORATION • POVERTY FOCUS INCLUDING BEING MDGs-BASED • IMPROVED MACROECONOMIC PERFORMANCE MANIFESTING IN RELATIVELY HIGH GDP GROWTH

INTRODUCTION … AREAS OF CONSENSUS • GROWTH ACHIEVED DURING MKUKUTA IMPLEMENTATION COULD HAVE DELIVERED MORE IN TERMS OF POVERTY REDUCTION (CONTRAST 1991/2 – 2001 AND 2001-2007 HBSs). WHERE DID ALL THE GROWTH GO? • HIGHER GROWTH COULD HAVE BEEN ACHIEVED • CONSIDERABLE A CHIEVEMENTS HAVE BEEN RECORDED IN NON-INCOME POVERTY (HUMAN DEVELOPMENT GAINS) AND SYSTEMS FOR RESOURCE ALLOCATION E.G. SBAS • REFORM PROCESS HAS BEEN INCOMPLETE CAUTION: MKUKUTA SHOULD NOT TAKE ALL CREDIT NOR ALL BLAME

I: CONT’D CONSIDERABLE “INVESTMENTS” IN MKUKUTA • DEVELOPMENT OF STRATEGIC BUDGET ALLOCATION SYSTEM (SBAS MACRO AND MICRO) • REVIEW OF STRATEGIC PLANS (MDAs, LGAs) • MONITORING SYSTEM • PRODUCTION OF MAIRs AND PHDRs • DESIGN OF MEDIUM TERM STRATEGIC PLANNING AND BUDGETING MANUAL

II: EMERGING ISSUES FROM REVIEW • MOST OF THE ISSUES RAISED DURING CONSULTATTIONS TOWARDS MKUKUTA LARGELY STILL VALID • KEY ISSUES THAT NEED TO BE ADDRESSED FOR MORE EFFECTIVE IMPLEMENTATION AND ATTAINMENT OF RESULTS HAVE BEEN IDENTIFIED (INADEQUATE PRIORITIZATION AND COORDINATION; INCOMPLETE REFORM PROCESS; INSTITUTIONAL CONCERNS, ETC)

II CONT’D FINANCING OF MKUKUTA: • MKUKUTA FINANCING TAKES LARGER SHARE (EG. 70.7% DURING 2008/09 COMPARED TO 29.3% NON-MKUKUTA ACTIVITIES) • SPENDING BY ECONOMIC CATEGORY FAVOURS DEVELOPMENT SPENDING (70%) • CLUSTER II TAKES LARGER SHARE OF MKUKUTA FINANCING (EG. 45.5% DURING 2008/09; COMPARED TO CLUSTER I, 34.1%; CLUSTER III, 16.1% AND X-CUTTING ISSUES, 4.4%) • DEVELOPMENT FINANCING OF MKUKUTA DOMINATED BY FOREIGN SOURCES (57% COMPARED TO LOCAL, 43)

Mukuta Vs Non-Mkukuta Allocation

Spending by Economic Category

Cluster wise Allocation

Mkukuta Development Funding

III: HIGHLIGHTS/ISSUES FOR MKUKUTA II DESIGN/VALUE ADDITION OVER MKUKUTA I • SHARP, FOCUSSED, PRIORITIZED STRATEGY/INTERVENTIONS • GREATER EMPHASIS ON GROWTH (INCLUSIVE) • TARGETING GREATER DEVELOPMENT IMPACT • FLEXIBILITY IN ADJUSTING STRATEGIES • INCORPORATING ISSUES THAT WERE NOT PROMINENT IN MKUKUTA (I): HUMAN RESOURCE DEVELOPMENT PLAN; PUBLIC PRIVATE PARTNERSHIPS; EXTENDED EMPHASIS ON CROSS-CUTTING ISSUES -INTEGRATED MANAGEMENT OF ENVIRONMENTAL RESOURCES (INCLUDING CLIMATE CHANGE); ENABLING INVESTMENT CLIMATE FOR DOMESTIC ENTERPRISE; POPULATION ISSUES; SPATIAL/GEOGRAPHICAL/LOCATION ISSUES; RAPID URBANIZATION AND IMPLICATIONS

III CONT’D 6. ROBUST ACTORS COORDINATION IN ACHIEVING RESULTS 7. LONG TERM GROWTH AND DEVELOPMENT PLAN 2010-2025 (MISSED INTERVENTION IN MKUKUTA) – JUSTIFICATION (EXPERIENCE OF SUCCESSFUL COUNTRIES; INVESTMENTS NEED A LONGER HORIZON TO DELIVER “MULTIPLIER EFFECT”; DOMESTIC RESOURCE MOBILIZATION; INSTITUTIONAL ISSUES; SUSTAINING REDUCTION IN EXTERNAL DEPENDENCE;

III CONT’D DESIGN – WHAT WILL NOT CHANGE :BROAD FRAMEWORK: RESULTS FOCUSSED, CLUSTER-BASED. KEY STRATEGIC INVESTMENTS AND POLICY DIRECTION : HIGH AND SUSTAINED GROWTH CLUSTER I: GROWTH AND REDUCTION OF INCOME POVERTY • GROWTH –FOCUSSED INTERVENTIONS WITH EXPLICIT AND ELABORATE LONG TERM GROWTH PLAN • ANCHORED ON COMPARATIVE AND COMPETITIVE ADVANTAGES • DRIVEN BY GROWTH DRIVERS: AGRICULTURE, INFRASTRUCTURE, TOURISM, MINING • INCLUSIVE GROWTH • INTERVENTIONS FROM CLUSTERS II AND III EMBEDED (E.G. SKILLS, WATER FOR PRODUCTION, PRODUCTIVE INTERVENTIONS IN SOCIAL PROTECTION, ECONOMI GOVERNANCE

III CONT’D CLUSTER II: IMPROVEMENT OF QUALITY OF LIFE AND SOCIAL WELL BEING • ADDRESSING QUALITY ISSUES IN SERVICE DELIVERY (EDUCATION, HEALTH, WATER, SANITATION) • COORDINATED INTERVENTIONS

III CONT’D CLUSTER III: GOVERNANCE AND ACCOUNTABILITY • ISSUES OF GOVERNANCE IN SUPPORT OF GROWTH

IV: CHALLENGES • AREAS AND EXTENT OF REFORMS TO COMPLETE REFORM PROCESS • IMPROVING THE BUSINESS ENVIRONMENT • ADAPTATION TO DEVELOPMENT MANAGEMENT (ATITUDES, WORK CULTURE, ETC) • CONTRACTUAL ARRANGEMENTS FOR STUDIES THAT HAVE BEEN APPROVED INORDER TO INFORM REVIEW/DRAFTING OF MKUKUTA II • DEVELOPMENT OF MKUKUTA II AND LONG TERM GROWTH AND DEVELOPMENT PLAN CONCURRENTLY • POLITICAL CONSENSUS AND STEWARDSHIP

V: CONCLUDING REMARKS MKUKUTA II IS ABOUT CHOICES: • SUBSTANTIAL POVERTY REDUCTION VERSUS INCREASED GROWTH IN THE SHORT TERM • WHAT SHOULD SPUR GROWTH IN THE SHORT TO MEDIUM TERM AND IN THE LONG RUN • FACING THE FINANCIAL RISK: SIGNIFICANT SCALE-UP OF ODA (INCLUDING GLENEAGLES SCENARIO) VERSUS DOMESTIC RESOURCE MOBILIZATION AS ENVISAGED ALSO IN VISION 2025 • RESOURCE ALLOCATION IN MKUKUTA – ADDITIONAL REQUIREMENTS FOR CLUSTER I WITHOUT DEPRIVING CLUSTERS II AND III

END NOTE THANK YOU FOR YOUR KIND ATTENTION AHSANTENI SANA

MKUKUTA REVIEW AND EMERGING ISSUES FOR MKUKUTA II