Update on Budget Literacy and Transparency Working Group Progress PEMPAL Budget Community of Practice (BCOP) Budget Literacy and Transparency Working Group (WG) Anna Belenchuk, Ministry of Finance of the Russian Federation March 16, 2018

WG Background Goal: to learn from international experience related to improving budget literacy, openness and access to citizens, as well as public participation in the budget process Objectives: Review best international practices in the area of budget literacy, transparency and public participation Exchange experience with budget experts from the WG member countries in order to develop standardized approaches to implementing similar projects Create new BCOP knowledge products based on accumulated outcomes, such as guidelines for the implementation of similar projects in PEMPAL countries. Partnerships: World Bank: Budget Literacy; International Budget Partnership (IBP): Open Budget Index success drivers; OECD/ Global Initiative for Fiscal Transparency (GIFT): contribution to the draft Toolkit for Budget Literacy; OECD SBO meetings: Report on the WG activity and on the knowledge product dealing with citizens budget development. WG Members (15 countries): Albania, Russia, Armenia, Kosovo, Kyrgyz Republic, Croatia, Turkey, Belarus, Bosnia and Herzegovina, Romania, Tajikistan, Ukraine, Uzbekistan, Kazakhstan, and Moldova.

Summary of WG Activity Activities 5 face-to-face meetings and 3 videoconferences (from May 2015 to date) 1 study tour to Croatia (December 1-4, 2015) PEMPAL Pre-meeting survey to identify progress in budget literacy and transparency reforms (May 2015, prior to the meeting in Poland) Knowledge Products Overcoming Barriers in Citizen’s Budget Preparation in PEMPAL Member States (2016-2017) Public Participation in the Fiscal Policy and Budget Process. How to Create and/or Strengthen the Mechanisms in PEMPAL Countries? (2017-2018) – in progress Cooperation with OECD Participation in discussions on the development of the Budget Transparency Toolkit for OECD and G20 countries (East and Central Europe Senior Budget Officials meetings, 2016 and 2017)

Topics and Issues for Discussion (1) Budget Transparency and Access, Including Citizens Budgets How to make the government budget easier–to-understand for citizens by means of adopting a ‘citizens budget’, developing information portals, projects for students and basic learning programs for schools (Poland, May 20, 2015) Addressing 10 challenges related to the development of the citizens budget, encountered by the WG member states (September 22, 2016, videoconference) Exchange of experience on drivers of success facilitating improved budget transparency, using two country case-studies: Romania (75/100) and Russia (74/100) (both countries have leading positions in the region according to Open Budget Index 2015), as well as Kyrgyz Republic (from 20/100 to 54/100) – a country that has achieved the largest increase in its rating (Belarus, February 23, 2016 г.) Some Conclusions Study Tour and Meeting in Zagreb, Croatia, December 1-4, 2015. 10 countries participated. Legislative establishment of transparency standards is a pre-requisite for improving transparency; setting good transparency standards across all the levels of government. A key for successful reforms and improvements in budget transparency and citizens’ engagement in the budget process is close interaction among ministries and government agencies and effective use of modern IT (e-government).

Topics and Issues for Discussion (2) Budget Literacy Review of international practices related to budget literacy based on the World Bank’s survey of over 30 countries (Videoconference on September 14, 2015) Review of outcomes of the World Bank’s and the MoF of Russia’s Project ‘Budget Literacy for High-Grade Students’ (Russia, June 22, 2017) Some Conclusions Budget literacy is a link which may help citizens understand, use and stimulate demand for budget data, the transparency and openness of which are ensured by the government. Budget literacy cultivates responsible attitude in citizens participation in the budget process as well as helps to better understand their role and the role of civil society in the budget process. 

Topics and Issues for Discussion Public Participation in the Budget Process Review of the new Principles of Public Participation in Fiscal Policy developed by GIFT, and changes to the IBP public participation assessment methodology (Kyrgyz Republic, April 13, 2017) Exchange of countries’ practices in the area of public participation in the budget process: Brazil and Kyrgyz Republic (Kyrgyz Republic, April 13, 2017) Formulating the concept of a knowledge product that would be instrumental in further reforms in the area of public participation (videoconference of October 27, 2017) Some Conclusions A key for successful reforms and improvements in budget transparency and citizens’ involvement in the budget process is close interaction among ministries and government agencies and effective use of modern IT (e-government).

Access to Documents According to OBS 2017: PEMPAL Countries Executive Budget Proposal Pre-Budget Statement Enacted Budget Citizens’ Budget In-year Reports Mid-Year Review Year-end Report Audit Report PEMPAL Member States Albania Azerbaijan Armenia Belarus B&H Bulgaria Croatia Czech Republic (IACOP) Georgia Hungary (IACOP) Kazakhstan Kosovo Kyrgyz Republic Macedonia Moldova Montenegro Romania Russia Serbia Tajikistan Turkey Ukraine Uzbekistan Public Access (No of countries) IBP does not include Armenia IBP does not include Belarus МБ IBP does not include Kosovo IBP does not include Montenegro IBP does not include Uzbekistan 8 18 18 11 17 6 17 17 Not produced Accessible to public Produced but inaccessible to public or published with delay Source: lnternational Budget Partnership , January 2018

Changes in Accessibility of Citizens Budgets (IBP): PEMPAL Member States Country Albania Azerbaijan Armenia Belarus B&H Bulgaria Croatia Czech Republic Georgia Hungary Kazakhstan Kosovo Kyrgyz Rep. Macedonia Moldova Montenegro Romania Russia Serbia Tajikistan Turkey Ukraine Uzbekistan 2015 2017 IBP does not include Armenia IBP does not include Belarus Not produced Accessible to public Produced but inaccessible to public or published with delay IBP does not include Kosovo IBP does not include Montenegro IBP does not include Uzbekistan Accessible to public (No. of PEMPAL countries) 8 11

Knowledge Product on the Development of Citizens Budgets: Finalized and Being Made Print-Ready Contains proposals (options) for addressing 10 challenges encountered by the WG member states, based on the member state recommendations and international experience 1. Identify entities/persons responsible for the preparation and distribution of the citizens budget 2. Lack of public resources 3. Lack of political will 4. Lack of motivation and incentives at the levels of central and municipal authorities 5. Identify suitable timeframes for the preparation of citizens budgets 6. Identify suitable formats for citizens budgets 7. Identify a suitable approach to public consultations 8. Citizens and some public officials lack budget-related skills and understanding 9. Low public interest to budget-related issues 10. Lack of access to reliable mass media and/or communication technologies Visit the Budget Community of Practice’s section of the PEMPAL website for the latest update of the knowledge product prepared by the WG. Please use it to promote the reforms in your countries.

The Knowledge Product Has Been Highly Appraised by International Experts Positive feedback to the document was received from experts of a number of international organizations: OECD, International Budget Partnership (IBP), Global Initiative for Fiscal Transparency (GIFT) and Public Finance Institute (Croatia). Some of the feedback is referred to in the Foreword to the Knowledge Product. On April 18, 2017, the results were presented at the webinar ‘Improving Openness through Citizens Budgets’ organized by CEF (Slovenia) as part of professional development program for civil servants of various countries. Case studies featuring examples of PEMPAL countries enjoyed the highest degree of interest in the course of the event. On July 7, 2017, the Working Group’s activity results including the Citizens Budget Knowledge Product were presented at the Symposium on Promoting Fiscal Transparency, held on Day 2 of the 13th Annual Meeting of Senior Budget Officials from Central, Eastern & South-Eastern European Countries (CESEE SBO) with participation of GIFT, PEFA, International Federation of Accountants and PEMPAL. Our objective as of now is to enhance our activity on the basis of what has already been achieved and use citizens budgets as a tool promoting more active public participation in the budget process.

Next Steps  GIFT and IBP’s Warning: establishing public participation and making it sustainable requires more time (as compared to publishing budget documentation). We need to work at two levels - that of the state and that of the civil society/population, i.e. implement mechanisms enabling public participation in the process, as well as initiatives designed to increase the demand for budget information (especially in countries with less developed and less active civil society). As a starting point, we may ask citizens what they would like to see in the citizens budgets and, more generally, how they would like to participate in the budget process. Today’s Agenda: World Bank expert Harika Masoud will deliver a presentation on the outcomes of PEMPAL countries survey of their public participation related experiences; IBP expert Sally Torbert will present the latest Public Participation Section results of the IBP Open Budget Survey in 115 countries; GIFT Network Director Juan Pablo Guerrero will present new practical examples of public participation in the budget process; experience of a PEMPAL country will be presented using the examples of Georgia (Inga Gurgenidze) and Croatia (Mladenka Karacic).

Forthcoming WG Activities Action Plan for 2018-2019 Timeframe Current Fiscal Year 1. Meeting to be held in parallel to the 14th Meeting of Senior Budget Officials from CESEE Countries (Zagreb, Croatia) May 24-25, 2018 Next Fiscal Year Study tour to a country to study good practices of public engagement (Portugal is considered as a candidate) Fall 2018 2. Drafting a new knowledge product on public participation in the budget process (videoconference) 3. Possible participation in the international conference on participatory budgeting, jointly organized by the Ministry of Finance of Russia and World Bank on Day 2 of the Moscow Finance Forum, is being considered 14 сентября 2018 г. 4. Opportunities of joint projects with IBP and GIFT are also being considered. To be discussed 5. Discussions may be organized within frameworks of other activities of PEMPAL Budget Community of Practice As necessary WG’s main areas of activity still remain focused on issues of budget literacy, citizens budget and public participation in the budget process.

Thank You for Your Attention! All Working Group’s materials in English, Russian and Bosnian-Serbo-Croatian are published on www.pempal.org website, while additional materials аre posted on the BCOP’s wiki-page.