« April 2013 | Main | June 2013 »

May 2013

May 30, 2013

Who Never Talks about Money and Religion...?

Posted by Yasemin Hurcan and Gregory Horman

Sukuk[1] is an Arabic word that is used to define borrowing instruments issued in line with Islamic norms, the sharia. Sukuk are not limited to private sector borrowers. Increasingly, these instruments are being issued by governments to finance the public sector. Although there is already a sizeable body of literature on the capital market aspects of sovereign sukuk issuance, the public financial management (PFM) dimension of sukuk has not been widely discussed. The implications for areas such as budgeting, reporting, and accounting are not insignificant.

Malaysia is recognized as one of the pioneers of sovereign sukuk issuance, and these instruments make up a significant share of the total public sector debt. Qatar and Bahrain are also notable issuers of sukuk, and in recent years Pakistan has added sukuk to its borrowing mix. In October 2012, Turkey, too, joined the group of countries issuing sovereign sukuk. Although sovereign sukuk issuances have so far been made only by countries where sharia is the governing law, or the population is predominantly Muslim, other countries have investigated sukuk as an opportunity to broaden their sources of financing. In 2008, for example, the UK Debt Management Office consulted with the market to find out the possibility of issuing sukuk as an additional borrowing instrument. These developments suggest that the use of sukuk instruments for sovereign borrowing is likely to increase in the coming years.  

Continue reading "Who Never Talks about Money and Religion...?" »

May 28, 2013

PFM Law Reforms: Balancing Legislative and Executive Powers

Posted by Kubai Khasiani and Florence Kuteesa

A growing number of Parliaments in Commonwealth African countries are casting off their Westminster inheritance and demanding a greater role of parliaments in budget decision-making. The last decade has seen restive backbenchers in some of  these countries bring forward Private Member’s Bills which look to enhancing the legislature’s powers over the public purse at the expense of the executive. This approach has sometimes been fiercely contested or not fully supported, and the product of this struggle between the branches of government leaves many unresolved issues and, in some cases, an outcome that is fiscally challenging to the country.

For almost half a century after achieving their independence, former British colonies in Africa implemented a budget preparation system that enshrined a weak legislature and a strong executive in the decision-making process. Ian Lienert examined the British influence on budget systems in Tanzania, as an example, and noted that the  parliament was engaged only very late in the budget preparation process, had limited powers to alter the government budget after it was presented, and was often not consulted about changes made by the government during the budget execution phase. As a result, parliaments seldom had a significant impact on the size or distribution of government revenue or expenditure.

Continue reading "PFM Law Reforms: Balancing Legislative and Executive Powers" »

May 22, 2013

Can an “Independent” Public Body be Truly Independent?

Posted by Richard Allen

Independent central banks in many countries are under threat from governments that want to bring them under a tighter rein. Independent fiscal councils have been abolished by governments that see their independence as an unacceptable threat. Independent auditors are having their autonomy and remits curtailed by governments that are concerned about opening themselves up to scrutiny. Does this signal that governments, while paying lip service to the ideas of transparency and accountability, only accept these ideas on their own terms, and suitably diluted for public consumption? What are the failures of the executive branch—inadequate public accountability, for example—that independent public entities are deemed to fill? How well have the entities concerned filled these perceived gaps?

These are legitimate and complex questions but are the subject of several research studies, including an ongoing study of fiscal councils by FAD. In this article we focus on a narrower question: what do we mean when we say that a public sector entity is “independent” and how can we measure its degree of independence? It seems fair to say that, for entities operating in the public sector such as central banks, audit institutions, accounting standards boards, and fiscal councils, there can be no absolute standard or guarantee of independence. “Independence” is a relative term, and one that depends for its legitimacy on the quality of political institutions and public perceptions, as well as legal and financial considerations. It is possible nevertheless to set out the conditions that make it more likely that an institution such as a fiscal council or an accounting standards board is able to operate independently of the government.

Continue reading "Can an “Independent” Public Body be Truly Independent?" »

May 15, 2013

FMIS Choice: the Dangers of In-House Development in Low-Capacity Countries

Posted by Lewis Murara and Christopher Iles[i]

A major decision faced by many countries is what sort of Financial Management Information System (FMIS) they should develop to support their PFM reform efforts. The decision is more difficult in low-capacity countries where implementing an FMIS can have a disproportionate impact on management, operations, and operating costs.

There are three general FMIS options that governments can consider:

  • Bespoke, i.e. own developed software solutions
  • Customized “enterprise resource planning” (ERP) systems
  • Non-customized COTS systems

In making the decision, recent studies[1] have demonstrated that there is no single best solution. Over a decade or so, the tendency in many Latin American countries has been for in-house development of their FMIS, while Africa has preferred commercial off-the-shelf solutions (COTS) and developed countries have tended to favor customized ERPs.

Continue reading "FMIS Choice: the Dangers of In-House Development in Low-Capacity Countries" »

May 13, 2013

Twenty-one Countries Meet in Albania to Discuss Program Budgeting Reforms

Posted by Gelardina Prodani, Ministry of Finance, Albania and Konstantin Krityan, Ministry of Finance Armenia

Albania
As Chair and Deputy Chair of the Public Expenditure Management Peer Assisted Learning (PEMPAL)[1] Budget Community of Practice (BCOP), we would like to inform you about an exciting meeting that was held recently in Tirana, Albania on program budgeting.

From February 25th to 28th 2013, the Ministry of Finance of Albania hosted 81 participants from 21 PEMPAL member countries from across Europe and Central Asia (ECA). As suggested by our BCOP members from last year’s plenary meeting,[2] the agenda focused on technical aspects of program budgeting and performance measurement. The three main sessions of the meeting covered international approaches and country cases in (i) design of programs and performance measures, (ii) budget documentation, and (iii) performance monitoring and evaluation.

Continue reading "Twenty-one Countries Meet in Albania to Discuss Program Budgeting Reforms" »

Представители двадцати одной страны встретились в Албании, чтобы обсудить переход на программное бюджетирование

Авторы: Джеральдина Продани, Министерство финансов, Албания, и Константин Критян, Министерство финансов, Армения

Albania
В качестве председателя и заместителя председателя Практикующего сообщества по бюджету (В СоР) Сети по взаимному обучению и обмену опытом в управлении государственными финансами (PEMPAL)[1] мы хотели бы проинформировать вас о встрече, которая недавно состоялась в Тиране, (Албания), по теме программного бюджетирования.

С 25 по 28 февраля 2013 года Министерство финансов Албании приняло в общей сложности 81 участника из 21 страны-члена PEMPAL из Европы и Центральной Азии (ЕЦА).  Как и было предложено членами нашего Практикующего сообщества по бюджету (BCOP) на пленарном заседании в прошлом году,[2] повестка дня фокусировалась на технических аспектах бюджетного финансирования программ и на оценке эффективности работы.  Три основных сессии заседания были посвящены международным подходам и практическим примерам стран в следующих областях: (i) дизайн программ и критерии эффективности работы, (ii) бюджетная документация, и (iii) мониторинг и оценка эффективности программ.

Continue reading "Представители двадцати одной страны встретились в Албании, чтобы обсудить переход на программное бюджетирование" »

May 10, 2013

Latest Issue of International Journal of Governmental Financial Management Published

Posted by Andy Wynne

ICGFM1
The latest issue of the International Journal of Governmental Financial Management was recently published and is now available for free download

We begin this issue of our Journal with an examination of key public financial management (PFM) reform measures undertaken in India in the recent past and suggestions to enhance the effectiveness of the PFM systems involved involved. In recent years the role of sound PFM systems in achieving the objectives of fiscal discipline, strategic planning and improved service delivery has been receiving increased public attention in India. PFM reforms undertaken intermittently over the years have, however, not delivered the anticipated results in these areas. Studies and recommendations of government appointed committees and expert bodies have identified gaps that need attention to strengthen the institutional framework and to improve the efficiency of government spending.

Continue reading "Latest Issue of International Journal of Governmental Financial Management Published" »

May 09, 2013

What To Do When Disaster Strikes: Business Continuity Plans in Latin America

Posted by Almudena Fernandez[1]

The governments’ treasury system is a core part of the public financial infrastructure and that of the broader economy. If government cash payments went off line, due to say a fire in the Ministry of Finance, it would cause a disruptive ripple effect across broad swathes of the economy. For example, think about the impact of the loss of public sector wages, non-payment of seniors’ pensions, or cash shortages for key government suppliers.

Therefore, it is important that governments have contingency plans in place should the worst happen, so as to keep the cash flowing and the government operating.

Most Latin American treasuries have done an impressive job of improving their institutions over recent years. For example, the majority of the countries of the region have unified the structure of government bank accounts enabling consolidation and a better utilization of government cash resources through a Treasury Single Account. Now, they are turning their focus to strengthening their Business Continuity Plans (BCP).

Continue reading "What To Do When Disaster Strikes: Business Continuity Plans in Latin America" »

May 08, 2013

Upcoming Event: International Workshop on Government Performance Management, July 1-12, 2013, New Delhi

Posted by Bill Dorotinsky, The World Bank

Indialogo
The Institute of Public Enterprise (IPE), Hyderabad, and the Performance Management Division (PMD), Cabinet Secretariat, Government of India, are collaborating to organize the ‘International Workshop on Government Performance Management’ from July 1-12, 2013. The enclosed brochure gives the details of this workshop.

This workshop is a unique training program that will cover a wide range of issues that concern the design and implementation of effective performance management in government. As part of its administrative reforms, India has implemented one of the most far reaching systems called the ‘Performance Monitoring and Evaluation System (PMES)’ for government departments.

This training program will compare and contrast this experience with similar experiences in developed and developing countries. It will discuss the entire eco-system that is required for designing and implementing an effective performance management system in Government. We believe that a training program of this caliber and quality has never been organized on this subject anywhere in the world.  As you can see from the enclosed brochure, we have carefully chosen the topics and invited some of the leading theoreticians and practitioners to share their experience with workshop participants.

Continue reading "Upcoming Event: International Workshop on Government Performance Management, July 1-12, 2013, New Delhi" »

Back to top of page
©2007 IMF. All Rights Reserved. About Us | Terms of Use