PERFORMANCE BASED BUDGETING AND MID-TERM BUDGET FRAMEWORK

Trading Markets, CA
Asia Pulse Data Source via COMTEX
Friday, September 14, 2007; Posted: 11:46 PM

A four-day workshop "Performance based budgeting and mid-term budget
framework" took place at Panorama-Grand hotel in Samarkand on 10-13
September.

It was organized by the World Bank Institute and UNDP Projects
"Public Finance Reform in Uzbekistan" and "Support to Uzbekistan’s
Welfare Improvement Strategy".

Fiscal and social policies currently implemented in Uzbekistan
should bring about sustainable development, improved efficiency and
effectiveness of public expenditures, growth in real income of public
employees and pensioners. Their implementation should improve social
protection and quality of health care and education services.

Citizens of the Republic being both the taxpayers and public services
consumers must be confident that the money they give to the Government
is used transparently and efficiently and has a positive impact both
for the society as a whole and for each citizen in particular.

Clearly established targets and performance criteria for budget
formulation and execution as well as transition to the mid-term
budgeting are the gist of new approaches in public finance
management. This means that expenditures of the Uzbekistan’s state
budget should be planned for three years using concrete and measured
results. Many transition countries, including some CIS countries, have
already introduced the system of mid-term budgeting and performance
based budget.

Bakhrom Ashrafkhanov, Head of Treasury of Ministry of Finance of
Uzbekistan, said in his opening speech "…public finance reform is
a powerful resource of Uzbekistan in achieving competitiveness in the
world market, ensuring sustainability and efficiency of the national
economy. Eventually, the way Uzbekistan will look in the next decade
depends on the success of the current state fiscal policy and reforms."

Leading international experts who possess both theoretical and
practical experience led the workshop.

Presentations were made by leading specialists from the World Bank
Institute, government officials and researchers from Albania, Armenia,
Georgia, Russia, Slovakia, and Kazakhstan.

International consultants presented to participants international
experience in transition from cost-based annual state budget
planning to mid-term budgeting based on ultimate performance of
state-financed organizations. In particular, they presented methods
of cost estimation and prioritization of state national programs
and gave a situation analysis using the budget systems of Russia and
Kazakhstan as examples. Health care and education sectors were used
for more detailed review.

During the workshop, representatives from the Uzbekistan’s Ministry of
People’s Education and Center for Economic Research made presentations
on the development and improvement of monitoring and evaluation
instruments for state education programs.

Open discussions that followed presentations showed that there
existed some debatable issues in the understanding of transition to
new budgeting methods.

The session on Albania’s experience in transition from annual
to long-term budgeting was of special interest to the seminar
participants.

The workshop was attended by senior officials from key Uzbek ministries
and agencies involved in the state budget preparation.

As noted by the participants, the workshop contributed to improving
the qualification and practical skills of fiscal policy experts,
particularly in performance based budget preparation. The knowledge
gained from presentations, experience sharing and exchange of views
will ensure that many problems and mistakes will be avoided in the
process of mid-term budget development and introduction in Uzbekistan.