1. MDGs and MTEF Sudharshan Canagarajah World Bank

2. Background MDGs are requiring additional efforts in improving planning, budgeting and policy reforms MDGs are requiring additional efforts in improving planning, budgeting and policy reforms MDGs come in the context of streamlining PRSPs in many countries MDGs come in the context of streamlining PRSPs in many countries MDGs encounter weak MTEFs/PFM in most countries MDGs encounter weak MTEFs/PFM in most countries All these require learning from past to meet the challenges for the future All these require learning from past to meet the challenges for the future

3. MDG Challenges: MDG targets provide prioritizing/planning framework for countries MDG targets provide prioritizing/planning framework for countries MDG related analysis is weak in many countries but much progress achieved through Millennium Project (2004/5) MDG related analysis is weak in many countries but much progress achieved through Millennium Project (2004/5) MDGs require additional resources and system reforms MDGs require additional resources and system reforms MDGs require capacity to plan, budget and implement programs at central (CG) and local govt (LG) MDGs require capacity to plan, budget and implement programs at central (CG) and local govt (LG)

4. MTEF: MTEF is an integral part of annual budget cycle: MTEF is an integral part of annual budget cycle: –Resource envelope consistent with macro stability and broad economic policy priorities –A bottom up estimate of current and medium term cost of existing national programs and priorities –An iterative process of decision making, matching costs and new policy ideas with available resources over a rolling 3-5 year period MTEF provides realism and systematic planning for achieving objectives over a period of time MTEF provides realism and systematic planning for achieving objectives over a period of time

5. MTEF Lessons: Valuable tool in improving fiscal stability and expenditure efficiency Valuable tool in improving fiscal stability and expenditure efficiency Capturing and planning all sources of funding and actors for any given objective Capturing and planning all sources of funding and actors for any given objective Greatest impact at the stage of priority setting and consistent resource allocation Greatest impact at the stage of priority setting and consistent resource allocation Reduces thinly spread spending with minimal effectiveness Reduces thinly spread spending with minimal effectiveness Improve quality of budget execution at CG/LG Improve quality of budget execution at CG/LG Ensures balance of development and recurrent exp allocation over time Ensures balance of development and recurrent exp allocation over time

6. PRSP lessons: PRSP is an integrated planning framework. PRSP is an integrated planning framework. PRSP is helping achieve selectivity and prioritization PRSP is helping achieve selectivity and prioritization PRSP ensures realism in expectation/time line of achieving core priorities/outcomes. PRSP ensures realism in expectation/time line of achieving core priorities/outcomes. PRSP and MTEF have improved effectiveness of resource use and achievement of core objectives. PRSP and MTEF have improved effectiveness of resource use and achievement of core objectives. PRSP includes all MDG priorities and much more. PRSP includes all MDG priorities and much more.

7. MDG Experience to date MDG costing needs to take into account time line, public sector capacity and absorption issues. MDG costing needs to take into account time line, public sector capacity and absorption issues. MDG costing is not about just finding out resource needs but also system reforms MDG costing is not about just finding out resource needs but also system reforms MDG needs assessment has to be carried out within the PRSP context, not duplicate MDG needs assessment has to be carried out within the PRSP context, not duplicate MDGs should be prioritized – all targets are not achievable at same speed MDGs should be prioritized – all targets are not achievable at same speed MTEF helpful in resolving most of these issues MTEF helpful in resolving most of these issues