Global Conference: ‘ Budget formulation and enactment, enhancing Parliament’s role through independent Budget Analysis’ Montreal, Canada: June 17-19, 2013

Participants of Bangladesh Parliament Secretariat Shah Mahmood Siddique Senior Assistant Secretary (P&A) & Member Budget Analysis and Monitoring Unit (BAMU)

Objectives The main objective of the seminar was to share knowledge among the participants in the ex-ante phase of the budget process and independent budget analysis. The program mainly focused on the role of parliament in the budget process and key issues that make for effective scrutiny of the executive draft budget, as well as provide an opportunity for parliamentary committees working on the ex-ante phase of the budget process to share knowledge on different and innovate models for establishing parliamentary budget offices as a source of independent budget analysis and research.

Background Since the independence in 1971 Bangladesh followed both the Presidential form of Government and Parliamentary form of Government. From 1991 the country established Parliamentary form of Democracy. In Bangladesh, the Parliament is unicameral type. Regarding Budget, Ministry of Finance enjoys all authority in preparing Budget related documents and Ministry of Planning prepares Annual Development Program (ADP). According to rule 117 (3) of the Rules of Procedure, no motions be moved in the parliament to increase a grant or allocation of the budget rather it can cut some expenditure. Duration for discussion on the draft budget is very limited in Bangladesh Parliament. Timetable for the discussion related to Supplementary budget is also limited. Members of Parliament get roughly three weeks after placing the proposed budget in the Parliament.

Background (Cont.) There is no forum to examine the merits and demerits of budget as it is not to be referred to the standing committee. Budgetary issues may be discussed only in Estimates Committee and Public Undertaking Committee. Most of these are ex post exercises. If it is discussed in the committees, the Committees can at least examine the Budget, detect anomalies, if any, in the budget and put forward their observations. As there is no analytical research capacity of Bangladesh Parliament Secretariat, MPs did not get any analytical and technical information about Budget related matter from Bangladesh Parliament Secretariat. On this perspective a Budget Analysis and Monitoring Unit (BAMU) has been introduced in the Bangladesh Parliament Secretariat with a project financing by USAID.

Present Setup and Limitations As BAMU is newly introduced in Bangladesh Parliament Secretariat, permanent set up is yet to be established. Unlike other Budget Offices from participated countries, BAMU is not established under any act of parliament. At present this unit comprises of ten members and two analysts. Like us, the members of this unit are working in addition to their regular duty in the Parliament Secretariat without any incentive. Both analysts engaged in BAMU are from Ministry of Finance.

Functions BAMU can play vital role to provide need based analytical information for the MPs, so that they can properly address the Budget related matter to the plenary session and as well in the Committees. Members of the unit are participating in various types of courses related to Budget matter. They analyze the Public Expenditure Tracking (PET) with the data collected by themselves from the constituencies and finally make report for the MPs or the beneficiaries.

Functions (cont.) Members of the unit also engage with some research work with the help of renowned technical expert in this field. Some periodical booklet regarding allocation pattern of the Annual Development Program (ADP) is prepared with the help of our two analysts and make available for the MPs. From the last year ‘Budget Information Help Desk’ has been set up within the parliament building to assist the MPs for the Budget Session of the Parliament. Besides these, BAMU unit responds very quickly to any query placed by the MPs regardless of their need.

Comparative Study In Bangladesh, Ministry of Finance enjoys all authority in preparing budget related documents and Ministry of Planning prepares Annual Development Program (ADP). According to rule 111(3) of the Rules of Procedure of Parliament, the Budget shall not be referred to any Committee. Duration for discussion on the draft budget is very limited that is Members of Parliament get roughly three weeks after placing the proposed budget in the Parliament. There is no forum to examine the merits and demerits of budget as it is not to be referred to the standing committee. Article 87 to 92 of the Constitution reveals that the Budget can be discussed thoroughly in the parliament and there is no limitation to discuss the Budget in the House as well as in the Standing Committees. Finance, Public Accounts, Estimates and Public Undertaking Committees have the power to play vital role in formulating the proposed Budget, restrict to a certain limit for the Supplementary Budget and to make accountable the Executive to spend public money. At present they play a negligible role to make the Executive accountable to the Parliament.

Comparative Study (Cont.) Intensive budget discussion takes place in the advanced democracies like USA, UK, Canada, India, etc. from which Bangladesh can adopt many important lessons. In India, Standing Committees are indeed powerful and play crucial role in budgetary discussion. After placement of Budget in the Indian Parliament, the budget is discussed and analyzed intensively by the Committees while Parliament goes into recess. In USA, Appropriation Committees reconcile the trade-offs in the Budget. Budget is known as a process of negotiation between Executive and Ministry in the USA. At present there are 235 staff working in different level at Congressional Budget Office (CBO) of USA. Compare to powerful Congressional Budget Offices in USA, Mexico, South Korea or Parliamentary Scrutiny Unit of UK House of Commons, Scottish Parliament Financial Scrutiny Unit or Parliamentary Budget Offices in Canada, Australia etc. There are some African Parliamentary Budget Offices like Uganda, Kenya, South Africa are going to play vital role in the Budget process and to make accountable the Executive to spend public money.

Findings Budget information is frequently not made available by the executive's budget office, but even when it is, it may be so complex that the legislature has difficulty in understanding it. An independent unit must have the expertise to be able to make complex budget information understandable to the legislature, as well as to the media, academia, and the public. As a unit that is part of the legislature, an independent budget unit can provide much more rapid responses to budget inquiries from the legislature than an executive budget unit.

Findings (Cont.) The additional values of an independent legislative budget unit mean that it is much more than just an instrument to assist the legislature in the budget process, or one to help check the executive's budget power, but also serves the society at large and actually can help improve the whole budget process. The value of an independent unit can change over time. At first, the information produced by the unit may be more valuable to the legislature as whole as a means to balance the executive's budget power. But as the unit ages and as the executive adjusts to the presence of the independent unit, the information it produces may be of more value for minority parties in the legislature vis-à-vis the majority party. As a new introduction to the Bangladesh Parliament Secretariat BAMU can be advanced following the best model of PBO with a permanent structure. In that case it should be guided by an act of parliament.

Recommendations Parliamentary Budget Office that is Budget Analysis and Monitoring Unit (BAMU) in Bangladesh Parliament Secretariat needs to achieve following things if the unit play vital role in Budget making process: BAMU should be established by an act of parliament so that its legal position can be ensured. The unit should be incorporated within the organogram of the Parliament Secretariat so that a permanent set up can be established.

Recommendations (Cont.) Members or staff of this unit should be appointed full time basis so that they can discharge their duties effectively round the year. Terms and conditions of the staff can be determined by its own regulations. Training courses/workshops/internships/fellowships etc should be frequently arranged within the country and abroad for their capacity building. Finally active support is essential from the top authority and MPs so that this type of much needed office can do their work freely, smoothly and independently.

Conclusions If legislatures are to play a substantive role in the Budget formulation process, they have to be well served by an independent source of Budget information. Examples are in the United States and in a number of other countries established as a non-partisan, independent, objective analytic unit can provide Budget information without polarizing the relations between the executive and the legislature. However, a requirement for the successful establishment of such a unit is the existence of, or the desire for, some kind of balance in the political environment—a balance between political factions and/or a balance between the executive and the legislature. Once created, such a unit must operate in a credible and impartial manner if its value is to be sustained.

Conclusions (Cont.) As a permanent official of Bangladesh Parliament Secretariat and an active member of Budget Analysis and Monitoring Unit (BAMU), We believe that this seminar was very effective for me as well as for the organization. I shall be able to discharge my duties more effectively having learnt different system of Independent Fiscal Institutions Thanks