2016-02 CVMENA MAG #5

8/19/2019 2016-02 CVMENA MAG #5

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Governance Global PracticeMiddle East & North Africa

Issue 5February 2016

www.cvmena.org

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CV MENA

In-a-Nutshell

Connecting Voices (CV) Middle East and North Africa (MENA) is aregional initiative and partnership that promotes governance andimproved financial management practices in the public and privatesectors. The ultimate aim is to support the demands of citizensthroughout the Arab World for jobs, better governance, a voice inpublic affairs, and social and economic inclusion as reflected in theWorld Bank’s MENA Regional strategy. CV MENA plans to seize on thewindows of opportunity available in the region. It will support capacitybuilding in the area of governance, facilitate the development of aprofessional community, as well as the sharing and transfer ofknowledge both within countries and within the region as a whole. CVMENA will help foster greater transparency and accountability, therebyengendering enhanced public trust. In addition, building public andprivate sector governance and financial management capacity will alsohelp attract and provide comfort to much-needed foreign direct

investment in the region.

CVMENA won the World Bank’s 2013 MENA Vice President Team Award

The Exchange is a major annual forum that provides a channel for dialogue,enabling countries to share experiences and promote societal-governmentalconsensus building. It fosters intra-regional cooperation and stimulatesinterest in improving public sctor governance, public financial management,and corporate governance and financial reporting in MENA. The Exchangefacilitates knowledge-sharing from transitional democracies and showcases

successful experiences from fragile and conflict states. The Exchange startswhere public sector and public financial management diagnostics leave off,that is, in supporting the creation of an enabling environment for reforms tomove from concept to reality. It helps catalyze innovative activities to developregional public goods and enables the World Bank to fulfill its mission as a“Solutions Bank.”

A Boot Camp is a practical and innovative concept. It involves gathering agroup of decision-makers and experts to address a particular issue throughfocused and intensive discussion that takes into account both technical andnon-technical factors. After thoroughly examining the issue, the groupdevelops possible solutions and a work program to help implement them. Theexperience is documented in a Solutions Paper—a brief note describing how

a specific challenge or problem is addressed in a collaborative and pragmaticfashion. The Boot Camps, together with the Solutions Lab and discussions inMaarefah (“knowledge” in Arabic), feed into the design of the Exchange andCV MENA’s workprogram.

In partnership with the Wold Bank’s Global Development and LearningNetwork (GDLN), CV MENA connects participants across the MENA region(once each quarter) in finding solutions on topics related to public sector,

financial management, and corporate governqance and financial reporting.The Solutions Lab realizes that an answer is not necessarily the solution: atime-tested “best practice” may not be optimal in a particular situationbecause it may not be politically or socially feasible at the time. The Labs helpour clients fashion an attainable solution—an alternative answer to theproblem—by bringing in other perspectives and different, yet relevant,experiences from other countries. The Labs also feed into the design of TheExchange.

Maarefah responds to the need to implement, sustain, and build on theresults of The Exchange, as well as to extend these benefits to those unable topersonally attend Boot Camps and Solutions Labs. Maarefah (“knowledge” in

Arabic) is a Community of Practice (CoP) that serves as a forum for ongoingdialogue and continuous peer-to-peer and expert knowledge exchange. TheCoP—established by the Financial Management Unit of the World Bank’sMiddle East and North Africa Region in 2011 as a response to popular demandfor change, accountability, transparency, and inclusiveness—is designed toserve as a robust base for extending the dialogue and refocusing it on theneeds of CV MENA.

[email protected]

Publisher: Governance Global Practcie, MENA, The World BankManaging Editor: Hisham WalyArt Director: Denis LargeronContributing Photographers: Denis LargeronImages: World Bank Images, Shutterstock

Note: The posts in the Connecting Voices magazine should not be reported as representing the views of The World Bank.The views expressed are those of the authors and do not necessarily represent those of the The World Bank or its policy.

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Editor’s Note

Hisham WALYPractice Manager

Governance Global Practice / MENA

The World Bank

Untying the Knot“The water crisis is essentially a crisis of governance”

According to Greek and Roman mythology1, when Gordius, a poorpeasant, became king of Phrygia, he dedicated his ox cart to Zeus,tying it up to a pole with a highly intricate knot - - the Gordian knot.Although the knot was supposedly impossible to unravel, an oraclepredicted that it would be untied by the future king of Asia. Manyindividuals came to Gordium to try to undo the knot, but they allfailed. Then when Alexander the Great visited the city in 333 B .C. hetried unsuccessfully to search for the hidden ends of the Gordian knotbut failed so Alexander became impatient and in an unexpected andbold move, he took out his sword and cut through the knot. Alexanderthen went on to conquer Asia, thus fulfilling the oracle's prophecy.Alexander's solution to the problem led to the saying, "cutting theGordian knot," which means solving acomplex problem through bold action.

The problems facing the water andsanitation agenda are complex, urgent andmultidimensional thus requires a boldaction to unknot to develop sustainablesolutions. There is more than 700 millionpeople worldwide still lacking access toimproved sources of drinking water andanother 2.5 billion people do not use animproved sanitation facility, and of these 1billion people still practice opendefecation, which contribute to the spreadof diseases and suppresses economicgrowth. For decades experts told us that

this is due to a number of reasons rangingfrom ageing infrastructure to insufficientfunds for operations and maintenance. As a result to address thesechallenges facing the water sector governments focused ondeveloping large-scale, physical infrastructure, such as dams andreservoirs.

However, faced with increased water demands and competinginterests yet shrinking supply, inequitable access to water, high levelsof corruption, fragmented legal framework, unclear and overlappingresponsibilities, and centralized decision-making that marginalizeslower levels of government, community, civil society organizationsand the private sector. All of these challenges made it clear that

focusing only on infrastructure is not sufficient to address persistentwater management concerns, and discourse about water governancebegan to emerge in the early 1990s [Cooley, 2013]. Studies show adirect correlation between the countries most lacking in water

1 Myths Encyclopedia.com

services and those with poor governance (UNDP 2004). However,improving governance in water services is not just about governmentsystems and capabilities, it is about engaging civil society andestablishing a functioning social contract between government and itscitizens to bring effective basic services and it is ultimately about theprogressive achievement of agreed rights to water (ODI 2007)

Water governance encompasses several systems - political, social,economic, environmental and administrative - that control thedecision-making process in relation to developing and managingwater resources and the delivery of water services at different levelsof society (Rogers & Hall, 2003). In its first Water Development

Report, the United Nations stated that the“water crisis is essentially a crisis of

governance”. In other words, governancehas the potential of helping unknot theGordian knot facing the world in providinguniversal access, affordable to citizens andwhich are sustainable, efficient, equitableand transparent.

This issue of CV MENA focuses on theinstitutional underpinnings of water servicedelivery and the role governance plays inaddressing the challenges faced by thewater and sanitation sector. Though therole of governance in water is multifariousranging from how water shares of

transnational rivers and water bodies arenegotiated to utility reform to delivery of

water and sanitation services. In this issue, we discuss specifically therole of governance in the delivery of water and sanitation services. Inaddition we also highlight how the World Bank’s Governance and

Water Global Practices are working together in MENA to addressthese critical institutional issues through the World Bank’s financedoperations as well as through knowledge products.

On the cover of this issue we decided to have a quotation by JunaidAhmad, Senior Director of the Water Global Practice, where heeloquently and profoundly states the mission of the Water GlobalPractice “We don’t fix pipes, we fix the institutions that fix the pipes.”

I consider this an invitation for us in the Governance Global Practiceto engage hand-in-hand with our colleagues in water by taking bold,innovative and pragmatic actions to "cut the Gordian knot” which

would help us develop sustainable water solutions.

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Content

Public Financial

Management (PFM)

06 Tax Reform

A tool at the right timefor tax reform

07 Accounting Reform Cash versus Accrual Basis Accountingin National Accounting

11 Navigating through FragilityProcurement Solutions

for Iraqi Education

14 Internal AuditEnhancing Public Financial Management in

MENA through developing Internal AuditFunctions in the Public Sector

15 In Their Own Words

Corporate Governance

& Financial Reporting (CGFR)

17 Education

The Value of National Qualifications

19 The IFRS for SMEsRecent Developments

21 Doing Business ReportBusiness Reforms Pick Up in MENA

Public Sector

(PS)

22 Government SpendingAchieving More with Less

25 Corruption Around the world, in 5 charts

26 Public Investment Management Selecting and prioritizing

Cover

Governance

&

Water

29 Overview

The Role of Governance

in the Water Sector

30 Interview

Junaid Ahmad: Senior Director

Water Global Practice

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Story

35 Insight Steven Schonberger & Hisham Waly

Water & Governance

38 Institutions & Incentives

Strengthening Sector Performance

39 From Across the BankModernizing Uzbekistan’s Water

Sector with Citizen Engagement

41 Governance in ActionEgypt Sustainable Rural Sanitation

Services (SSRS) Program for Results

43 Operations43 Books Water

Maghreb

44 Interview With World Bank Country Director for the

Maghreb, Marie Francoise Marie-Nelly

46 Morocco Social Contract and Civil Liberties

47 Morocco Government more Accountable to Citizens

49 Morocco Overhauling a Fragmented System

50 Tunisie Le Budget Participatif

52 Libya A debate show keeps discussion alive

53 Libya Governance and Public Administration

Mashreq

56 Jordan Poverty and Legal Problems

58 Jordan Public Investment Management System

63 Jordan Ending Violence against Women

64 Lebanon Accounting Profession

67 Offering a Public Good:Support for Syrian Refugees

Gulf

68 Kuwait Embedding a tax culture

69 Bahrain Training Vocational Accountants

71 The World Government SummitShaping Future Governments

Events

78 The ExchangeFrom Vulnerability to Resilience

84 Audit ProcessAdvancing Public Participation

87 State BuildingStrong, effective and accountable state

90 Bootcamps

Cross-Cutting

94 Syria’s Displaced Women Why the G20 Needs to Pay Attention

95 Through a Camera Lens Capturing the Refugee Crisis

97 What is the Social Contract?Perspectives from the Arab World

100 Year in Review: 2015 in 12 charts

103 Books Tour

107 Comic Relief

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Public Financial

Management

Tax Reform 06

Accounting Reform 07

Fragility 11

Internal Audit 14

Tax Reform

A tool at the right time for tax reform

Jim BrumbyDirector, Governance Global Practice

In today’s world, international aid is fickle,financial flows unstable, and many donorcountries are facing domestic economiccrises themselves, driving them to applyresources inward. In this environment,developing countries need inner strength.

They need inner stability. And they deservethe right to chart their own futures. This iswithin their grasp, and last week the launchof an unassuming-but-powerful tool markedan important step forward in this quietindependence movement. It’s called theTADAT, or Tax Administration DiagnosticAssessment Tool. At first glance, this toolmay look inscrutable, technical, anddisconnected from development. Butlisten. Research shows that if developingcountries could simply increase their taxcollection by 2 percent to 4 percent of GDP,the amount they raised would eclipse theamount of foreign aid they are receiving. Thissmall relative increase would representthree times the amount of officialdevelopment assistance distributed in theworld. That’s a big deal. And we know thathaving more taxpayers registered and havingmore directly contribute to the tax systemmakes for a more effective state. And theidea is catching on, globally. At the UnitedNation’s Financing for Development

conference in Addis Ababa in July, the WorldBank Group and the International MonetaryFund committed to a joint initiative to help

client countries strengthen their tax systems.In addition: Thirty countries signed the AddisTax Declaration, calling for moreinternational support and coordination inthis area. In September, the UN included inits Sustainable Development Goals this

target: “Strengthen domestic resourcemobilization, including through internationalsupport to developing countries, to improvedomestic capacity for tax and other revenuecollection.” Last week, G20 leaders endorsedthe so-called Base Erosion and Profit Shifting(BEPS) package, designed to curb tax evasionand other illicit tax-related behavior. EnterTADAT, a diagnostic tool that can helpnations figure out where to start. Launched

publicly on Wednesday by the IMF, WorldBank, and a number of other partners, theTADAT is a framework designed to evaluatesystematically the performance of acountry’s tax administration. It looks at areasof good outcomes, using factors such as

transparency, the percentage of taxpayerswho pay on time, and whether anindependent, accessible dispute-resolutionsystem exists. It can help countries identifyconcrete reforms and measure progress. It’sa vital, pragmatic first move away frompromises and toward action. As I said at theTADAT launch event, this tool comes atexactly the right time. The internationalcommunity is paying attention, and our

clients are hungry for technical assistance.This tool will change for the better how wedeliver that assistance. It is a move towardtransparency, openness, and clarity in howwe do analysis. In the past, that assistancehas been largely bilateral and uncoordinated

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– while this is not necessarily bad, it meantthat different countries got different types ofadvice. TADAT brings uniformity to the focusand scope of assessment. With TADAT, evenif a regular citizen in Canada or Burundicouldn’t use the tool, she would at least

know the categories in which hergovernment is being evaluated. Yes, Canada.

That’s because this tool is equally applicableto developed countries. It looks at allcountries, regardless of their level ofdevelopment, in terms of performance. Atthe launch event, we heard from twocountries that had pilot-tested TADAT:Norway and Zambia. Hans Christian Holte,director general of the Norwegian TaxAdministration, said he appreciated that theassessment is evidence-based, and said itwas useful in pointing out areas forimprovement. He noted that the process wasdemanding and should be done by peoplewho have a solid understanding of the tool.Berlin Msiska, commissioner general of the

Zambia Revenue Authority, said TADATshowed his administration had a stronggovernance structure. It validated previousreforms, and identified successful practices.The tool also showed some weaknesses,including in areas that had not receivedmuch attention, such as bottlenecks causedby the use of third-party information. He said

it “should be embraced like a health check,”and planned to sign up for a re-assessmentearly next year. We also heard some debateabout how it should be implemented. Oneaudience member suggested opening upTADAT training to people without deepexpertise in tax administration, including civilsociety. Another suggested extending thetool to other agencies that collect revenues,such as those tied to natural resources ortaxes charged at the border. And I think thatin time, we should be looking at TADAT at asubnational level, where the tax types aredifferent, but the quest for performance isvery similar. One of our jobs now, as

development partners, is to guide the use ofTADAT in a wide range of contexts – thosethat include data gaps, corruption, andcapacity constraints – and to make sure thatwe can adapt it to our clients’ needs. Taxpolicy and tax administration are complex.But we believe they are also essentialelements of a well-functioning state. Taxes

can strengthen a legitimate relationshipbetween citizens and the state. Whenthey’re well designed, they can help reduceinequality and enable countries to chart theirown future. Smart taxation helps growth anddevelopment. TADAT may seem part of aspecialized world, but it drives forward acritical, global movement: increasing thefinancial independence of developingcountries. While there’s a long way to go – from analysis to policy reforms to materialchanges in reducing poverty and improvinglives – the movement can’t progress withouttools such as this one.

Accounting Reform

Cash versus Accrual Basis Accounting

in National Accounting

Michael SchaefferSenior Public Sector Specialist

Pierre MessaliSenior Public Sector Specialist

This article has benefitted fromconsultation with Manuel Vargas(Lead Public Sector SpecialistMENA). The Authors alsobenefitted from reviewingPatrick Mordacq’s “Why CashIPSAS matters?” UnpublishedArticle.

An international public sectorreform trend has seen manygovernments of most developedcountries, and many developingcountries, adopt some aspects ofaccrual accounting as the basis fortheir reporting. Supporters ofaccrual accounting argue that: i)at the aggregate level, accrual-based fiscal indicators provide betterinformation about the sustainability of fiscalpolicies; ii) provide a stronger basis forgovernment accountability; iii) provide abetter measure of the effects of governmentpolicies on aggregate economic demand;and iv) at the organization level, accrualbased financial statements provide bettermeasures of organizational efficiency and

effectiveness, and reduce opportunities forfraud and corruption. Opponents of accrualreporting contend, among other things that:

i) few countries have implemented accrualaccounting; ii) implementation andoperation is difficult and expensive; iii) theemphasis should be on getting the basics ofpublic financial management right first; and,iv) accrual accounts are more difficult tounderstand. Whatever the case, lessons

regarding the implementation of

accrual accounting in manycountries have been identified – including the importance ofcommunication, qualityassurance, and the use ofcommercially availableaccounting software. This articleconsiders the various lessonslearned from internationalexperience and provides theprimary tools for understandingthe nature of cash versus accrualbasis of accounting. This article

provides that for the successfulimplementation of accrualaccounting: i) implementationstrategies and timing should becarefully considered; ii) politicalcommitment is essential; iii)suitably qualified accountingpersonnel are necessary; iv) afinancial management systemshould be in place and fullyoperational; v) supreme audit

agencies must be suitably staffed andresourced; and, vi) the exercise of movingtowards accrual accounting should be seen

as part of a wider public sector managementreform. The authors also describe the natureof the various accounting arrangements;examine the features that support or impedeaccounting reforms; and suggest criteria forevaluating proposed accounting reforms.

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Basis of AccountingThe basis of accounting refers to theprocessing mechanism that is adopted by anentity, corporation or governments todetermine when, where and how atransaction or events should be recognized,processed and recorded for financial

reporting purposes. The basis of accountingthat is adopted by any government willdetermine the extent of information that anaccounting system can collect, process, andtherefore report. As an example, a purecash-based system can only report on a cashbalances and cash flows (inward andoutward), while cash payment or receipt isusually only a small element in the history ofa governmental financial transaction. Forinstance a purchase transaction might gothrough the following stages, each of whichcould generate specific different accountinginformation: Commitment of funds; Issue ofpurchase order for the supply of goods;Receipt of the goods and of the invoiceclaiming payment; Payment of invoice; and,De-commitment of excess funds committed.Pure cash accounting does not provideuseful information for managing payablesand receivables. In the preceding paragraph,an accrual system would show the amountowing to the supplier, and then when fullpayment occurred, the amount owing wouldbe extinguished. An additional shortage withthe cash accounting base is the lack ofaccounting sub-systems for receivables, and

without this, managing revenues is far lessefficient. For instance if sums due are notedonly in files, and not entered into a double-entry accounting system, they can easilyescape attention. Moreover the files may bedisplaced or lost. An accrual accountingsystem provides a systematic method ofrecording and managing sums due,something which many governments sorelylack.

Figure 1 above illustrates the path fromcash basis to full accrual accounting. Theprimary classification and definitions for theaccounting basis are as follow:

Cash Basis: under cash basisaccounting transactions will berecognized and recorded when the cashis received or paid, therefore all theinformation and reports that preparedaccording to this basis will inform aboutthe cash transactions that receipt andpaid during certain period, as well asthe available cash balance at thebeginning and end of the accountingperiod. Cash basis accounting

measures the financial results of theaccounting period as differencebetween the cash payments andreceipts. In spite of the capability torecord the non-cash transactions(flows), most of the accounting systems

that use cash basis do not record thenon-cash transactions, because theconcern is focusing about the cashmanagement not about the flow ofresources.

Accrual Basis, according to this basisthe transactions will be recorded at the

time of economic value occurring ortransferred or replaced or ownershiphandover. In other words, the recordingof the economic events (expendituresor revenues) will be made at the time ofoccurring, regardless if there any cashreceived or payment was occurred. Itrecords assets and liabilities and istherefore associated with theproduction of balance sheets. It is alsoassociated with providing depreciationon assets with finite lives. Table 1below attempts to summarize the

comparative usefulness of accrual andcash accounting in government.

Status of Accrual Accounting in OECDCountriesTable 2 below, reviews the status of accrualbasis accounting in a number of countries. Table 2 reveals that many countries haveintroduced aspects of accrual accountingand more intend to do so in the future.European Union (EU) member countries arerequired to prepare government forecastsand financial statements in accordance withthe European System of Accounts (ESA 95).

ESA 95 uses an accrual-based financialreporting framework to calculate budgetbalance (the economic balance set forthunder the Maastricht Treaty). This balancecombines all central governmentdepartments, social security funds, and localgovernment units. However, as the balancedoes not consider estimated expenditure(i.e. depreciation and provisions), it mightbest be described as a modified accrual basisof accounting.

Lessons Learned from InternationalExperiencesTo varying extent, many countries haveimplemented accrual accounting over thepast decade. However, wide adoption islikely to take a longer period, for thefollowing reason(s):

Implementation is difficult andexpensive. Some aspects of actualaccounting implementation are moredifficult than cash implementation. Forexample, it is difficult for a governmentorganization to know the full amount oftax revenue that it is likely to receive at

a given time.

Emphasis should be on getting thebasics right first. There is a view thatcountries should get the basic(foundations) of public financial

management right before attemptingmore advanced reforms, such as accrualaccounting. This reflects the experiencethat basic record keeping and cashaccounting should be strengthened firstbefore moving forward with moreextensive reforms.

There are a number of pre-implementationissues that need to be considered before the actual transition to the accrual basiswhich may lead to a successfulimplementation, some of the essentialtechnical and conceptual elements that needto be already exist or are created anddeveloped later before starting new accrualaccounting implementation, these basicelements can be outlined as follow: Reliable cash accounting based system

that include adequate budgetclassification, chart of account (CoA),double entry based general ledgerrecording system, and adequate fiscalreporting are essential starting point foraccrual framework.

Legislative and executive ownership ofthe transition concept is crucial to beaccepted, adopted, and supported bythe highest levels of bothparliamentarians and governmentalofficials.

Adequate technical capacities andcapabilities is more essentialrequirements before moving to accrualaccounting, this include human

resources skills (accounting, IT, etc.). Institutional and professional grounds

(e.g. well-established and regulatednational professional accounting body;a well-functioning supreme board ofaudit; effective parliamentary publicaccounting and financial committees).

The scope of automation, computingand networking is a key element toimplement a successful transition toaccrual, although cash or accrualaccounting can be implemented withmanual systems, but the existence of amodern governmental financialmanagement information system(FMIS) will support and simplified thetransition to accrual.

While recognizing the benefits of accrualaccounting, it should be noted that thereare a number of barriers and constraintsfaced by many countries in attempting toupgrade their accounting framework. Figure 2 provides possible transition stepsthat many countries have used in movingtowards accrual basis accounting. Significant

efforts have been made by a number ofcountries in improving their basic recordkeeping and cash reporting, but many ofthese efforts have also failed due to a lack ofongoing commitment, resource constraints,

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and complexity. The following are generalconclusions for consideration:

Gradual transformation from cash basisaccounting to the accrual basisaccounting, through setting of amedium-term strategy (3-10 years) thatinclude the commencement of

adoption the international accountingstandard for financial reporting inaccordance with the cash basis,followed by the adoption of modifiedforms of accounting bases (modifiedcash and modified accrual) up to theadoption of the international publicsector accounting standards (IPSAS)

that based upon full accrual basis ofaccounting.

For the success of governmentaccounting reform efforts, politicalsupport and assistance from thedecision-makers in the appropriategovernment levels is a necessity,developing the necessary plans which

include allocating sufficient funds,recruitment of qualified staff, change orissue supporting legislations, as well asthe development of nationalappropriate accounting standards thatare compatible to the internationalstandards or adoption of relatedinternational standards e.g. (IPSAS).

Logical and practical transition pathsthat aim to achieve successfulbudgeting basis reforms include thefollowing sequential scenarios:Implementation of a full accrualaccounting system should not beattempted until the government’sexisting cash-based systems are

soundly based with continuation ofcash budgeting framework; and,Implementation of accrual budgeting ismore complex and generally should notbe attempted until accrual accountingsystems have been firmly establishedand functionally utilized.

Figure 1: The Path from Cash Basis to Full Accrual Accounting

Table 1: Summary Comparison of Cash and Accrual Accounting

Criteria Cash Accounting Accrual AccountingEase understanding Simpler Greater complexity

Ease of manipulation Relatively easy to manipulate, but theissuance of Cash Basis International PublicSector Accounting Standards (IPSAS)Regulations is a step forward

Ease of manipulation depends upon accounting and auditingstandards

Comprehensiveness Cash information only Includes cash information together with other information

Usefulness for Managing Liquidity Provides only basic information Provides cash information and commitment information (e.g.,payment arrears)

Non-financial asset management No information provided Provides information on asset use

Comparability Countries use a range of cash accountingpractices, policies are general not explained

well, not consistent with GovernmentFinancial Statistics (GFS) IMF

Countries use different accrual accounting standards; Consistentwith GFS

Measuring sustainability of fiscalpolicy

Very limited usefulness Useful, but needs to be supplemented with additional information(e.g. demographic profiles)

Credibility Limited Credit rating agencies and lenders are more familiar with accrualstatements. Can lead to lower borrowing costs.

Basis for Determining FiscalStrategy

Limited Good in conjunction with cash information

Accountability Limited Provides information on accountability for resources (e.g., fixedassets)

Disincentives for Fraud andCorruption

Limited Better than cash, but depends on the internal controlenvironment, etc.,

Implementation Information system cost can be higher(because of customization and limitedavailability)

Although information system costs may be initially be lower,additional efforts and costs are required to identify and valueassets (etc...)

Cash BasisAccounting

Full AccrualAccounting

Modified CashAccounting

Modified AccrualAccounting

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Table 2: Status of Accrual Accounting in Various Countries

Figure 2: Cash to Accrual - Possible Transition Steps

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Navigating through Fragility

Procurement Solutions for Iraqi Education

Elisa Mosler,Nazaneen Ismail Ali,and Rachel Lipson1

While the Iraqi education system was widelyregarded as one of the best in the MiddleEast and enjoyed near-universal primaryenrollment until the 1980s, the next decademarked a serious downturn in results.Beginning in the 1990s, the educationsystem in Iraq deteriorated sharply as twodecades of conflict and economic sanctions

took their toll. The sector witnessed lowprimary and secondary enrollment andattendance, outdated curriculum content,and deteriorating learning outcomes. Behindthis was a collapse in public investment ineducation and a resulting standstill in policyand system development in the sector.

After the 2003 regime change, the newgovernment had many critical servicedelivery needs and was struggling to meetthem. Among the most urgent were those ineducation. In order to get children back toschool, the government needed large, fast,

and quality investments in the educationsystem. In this context, $100 million wasallocated to the education sector under theWorld Bank Iraq Trust Fund (ITF), set up jointly by the World Bank Group (WBG) andthe United Nations Development Group(UNDG) to administer donor funding for Iraqireconstruction. However, in order toimplement these investments, efficient andeffective public contracting and purchasingprocesses were needed.

This Note summarizes how innovativeapproaches to procurement led toexemplary service delivery results in Iraq’seducation sector. The focus is on twobreakthrough achievements: large-scaletextbook printing and delivery under theEmergency Textbook Provision Project, andschool construction in the newlyrehabilitated marshlands of Southern Iraqunder the Marshlands School ConstructionProject. By developing a unique strategy forprocurement that was responsive to localconditions, the Bank was able to support thegovernment in issuing printing contracts,securing book delivery arrangements, and

acquiring the construction materials andsupplies needed to achieve the projects’development objectives. Portfolioimplementation in a fragile and conflict-affected state (FCS) like Iraq is not “businessas usual.” It calls for a delicate balance of

realism, effective risk management, andflexibility. Given the insecurity andweakened capacity at the time, the Bankmade sure that these concepts, along with a

keen understanding of the market, were keytenets of its program.

The Emergency Textbook Provision Project

Among the urgent reforms passed by theIraqi government in the post-2003 era wasrevisions to the country’s nationalcurriculum. This required a set of primaryand secondary school textbooks to beupdated, printed and delivered across thecountry. A grant of US$40 million was givento the Iraqi Ministry of Education (MOE) tofinance the printing and distribution of

approximately 69 million textbooks,benefitting 6 million students for the 2004-2005 school year. Before the war, the Iraqigovernment had used the same set oftextbook printers and suppliers for decadeswithout competitive methods to awardcontracts. As a result, local printing housesdominated the textbook market— but withhigh prices, and unreliable delivery andquality. Moreover, given the ongoingemergency situation in the country, otherrisks to procurement were identifiedthroughout the project. For instance, Iraq

does not have a real procurement law2

or, atthe time, standard bidding documentation.Both of these factors impacted efficiencyand left space for potential corruption.3

Other risks included:

• The inability of Bank staff to supervisethe projects in the field due to thesecurity situation;

• The weak capacity of the project

management team in procurement andmanagement of large contracts;• The high-risk and weak-control

environment;• The low capacity of local companies to

provide needed supplies;• A lack of interest of international

contracting companies to do business inthe country because of securityrestrictions; and

• Major delays in implementationbecause of the lack of experience inprocurement planning in the ministry.

Faced with the time-sensitive task ofreprinting millions of textbooks within a fewmonths in fragile security conditions, anurgent intervention was needed. To addressthe identified risks, a number of measureswere taken to facilitate effectiveimplementation. First, the team ensuredthat World Bank procurement guidelines andthe Iraq Master Implementation Manual(MIM) were followed. Second, a local Bankconsultant based in Iraq assisted in thesupervision of the project and conductedspot physical inspections. Bank staff from

outside Iraq also closely supervised theprocurement. Third, a dedicated andqualified procurement manager wasassigned to manage the project. Fourth, theproject design was kept simple. And, fifth,the team introduced flexibility in biddingdocuments to encourage international and

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local bidders. In addition, to meet servicedelivery needs, the Bank helped thegovernment introduce a number ofimportant changes to the way in which theMinistry of Education managedprocurement. These changes would increasesupplier competition, reduce supplier prices,and increase transparency while also

building MOE capacity.

[Photo] Iraqi marshlands areas in the 3governorates of Basrah, Thi Qar and Missan.

The measures taken included:• Opening the market to international

competition: Based on the assessment ofthe capacity of the local printing industryto deliver large quantities of textbookswithin a very short timeframe, thedecision was made to use bothInternational Competitive Bidding (ICB)and National Competitive Bidding (NCB)procedures. The Bank used regionalnewspaper advertisements (inneighboring countries) and other methodsto attract new suppliers to take part in thebidding process for textbook printing.Procurement was carefully packaged toencourage international as well as localbids.

• Use of stocks of paper procured by theprevious government: Without this, localprinters could not have received paperdeliveries in time to meet printing anddistribution deadlines for the 2004-2005

academic year.• Dividing printing contracts between those

involving printing and distribution only(paper supplied by the MOE), andcontracts requiring the procurement ofpaper: The number of lots for printing-only contracts was determined by theamount of paper available in Baghdad,and adjusted at appraisal when evidenceof more available paper came to light.

• Strengthening MOE capacity: Frequenttraining, skills transfer and on –the-jobguidance was provided to the projectteam and MOE staff for procurement andproject management both before andduring project implementation.

These actions had significant effects, mostnotably resulting in lower prices. The use ofICB attracted international firms (mainlyJordanian and Lebanese), and broughtmillions in cost savings through lower unitcosts. In the first round of procurement, theunit costs of textbooks printed through theNCB contracts were higher than the unitcosts obtained through ICB. As a result, theMOE used ICB for the second round and Iraqi

companies still won contracts, as theylowered prices to match internationalbidders. Second, it resulted in standardizedprocedures and bidding documents. Theproject’s focus on capacity building led the

MOE to standardize procedures and bidding

documents for procurement of textbooks toimprove national procurement practices,and produce its own standard biddingdocuments, including conditions ofcontracts.

Marshlands School Construction Project

Starting in 1991, the Iraqi government at thetime drained the southern Iraqi marshlandareas of Basrah, Thi Qar and Missan, awetland ecosystem covering some 20,000square kilometers. The draining wasintended to drive out indigenouscommunities and ensure that oppositionmilitias did not take refuge in themarshlands. Thousands of people wereforced to abandon their homes andlivelihoods and were displaced to otherareas of Iraq and Iranian refugee camps.The marshlands have since beenrehabilitated and are now protected zones.Some 36 communities have resettled andthe government has had to urgently provide

them with social services, including primaryeducation. Contract management andprocurement capacity in the local MOEgovernorate staff was predictably low andhampered by a fragile security situation.

Given the importance of quickly stabilizingthe resettled communities, the MOE soughtBank support to construct the schools. Anamount of $6 million was allocated from theIraq Trust Fund to the MOE for theconstruction of 36 new schools in the threemarshlands governorates in a 12-monthperiod. The Bank focused on supporting thegovernment in introducing procurementprocesses that would rapidly implement aschool construction project, as well as helpbuild the capacity of local MOE staff.

The following methods and strategies werecritical to the project’s success:

• Encouraging local involvement: Provisionsthat encouraged the hiring of local

companies and labor were part of theproject bidding documents. This was keyto the project’s success, as it ensured local

and community buy-in.

• Decentralizing authority: The centralgovernment authorized the localmunicipality to manage the procurementprocess by introducing decentralizedbidding. This allowed for simultaneouscontracting locally and in Baghdad, forexample, by issuing bidding documents,bid submissions, and bid openings. Havingthis occur at the local level was veryimportant in encouraging participation bylocal construction companies.

• Strengthening local MOE capacity:Training and skills transfer helped to

increase project management andstakeholder engagement capabilities.

• Utilizing civil society and local NGOs forsite improvement small works: theseactors were contracted to find localstakeholders to assist in school siteselection, construction monitoring andbuilding maintenance.

The focus on local engagement increasedcommunity ownership for the project,enabling smooth delivery. It also boostedemployment as locals carried out works andother activities, thereby strengthening localSMEs that participated in governmentcontracts for the first time. Capacity buildingmeasures enabled local MOE staff to driveactivities, such as site selection and projectmanagement. As a result of these measures,

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the MOE also improved its performanceindicators, for example, including enrollmentby gender for the first time. The projectsuccessfully adapted procurement to thelocal market by changing procurementpackages to numerous smaller-valuecontracts; encouraging local labor; andremoving constraints such as bid guarantees

and stringent financial requirements toencourage participation by local firms.

Tangible results included:

Emergency textbook provision: Theproject’s main success factors were its

simple design, capacity-building focusand multi-sectoral management usingboth operational and technicaladvisors. Furthermore, the integrationof project management measuresguaranteed Project Management Teamstability despite ongoing changes to theMOE. This was key to delivery success.

The project achieved its main objectiveand closed on time. Experience hasshown the value of early and visibleimpact, and the importance ofresuming normal schooling operationsto focus on wider systemic issues.

The objective of the project was theprinting of about 69 million textbooksfor the 2004-2005 school year. Theproject exceeded this objective. In fact,

80.25 million textbooks were printedand distributed on time.

Approximately $9 million of savingswere made from competitive biddingfor the 2004-2005 school year. Thesesavings were used to print additionaltextbooks for the next school year.

The government standardized biddingdocuments and contract conditions fortextbook purchases.

With regard to the Marshlands schoolconstruction, the project’s strong focus oncapacity building for local MOE staff andcommunity consultations was key to success.This latter emphasis was especially crucial,reducing local concerns, building ownershipand facilitating timely implementation.Achievements included:

• 30 primary schools were built withoutmajor cost or time overruns;

• 5,400 local students benefitted;• There was a 53 percent increase in school-

age girls’ school enrollment; and

• Civil society was involved in siteimprovement and small works for schoolsites.

The success of these projects helpedestablish the Bank’s credibility in Iraq,

establishing good precedents, and settingthe stage for World Bank support to the

education sector. This was the first WorldBank project in Iraq since the 1970s, and amodel for subsequent Bank-funded projectsin terms of implementation arrangements. Italso represented the first public bid opening

in Iraq, as well as the first time the Ministryof Education managed its own procurement.

Conclusion

Many MENA countries have relied onuncompetitive and inefficient procurementstrategies for many years. Iraq’s educationsector was an example of such practices,including outdated and opaqueprocurement procedures that inflated costs,slowed delivery times, and hampered

effective service delivery. Yet, the WorldBank’s experience in Iraq shows thatadopting different approaches can deliverrapid results that help thousands of citizensto meet their everyday needs, even undervery challenging and unstable conditions.These projects also demonstrate that thereare long-term positive spillovers effects fromthe use of procurement systems andpractices introduced through World Bankprojects. For instance, the ProjecctManagement Teams in Iraq have citedpositive impacts from the use of the Master

Implementation Manual (MIM) on Iraqi

government procedures, including, amongothers, guidance on good practices forfinancial management and procurement, abreakdown of the procurement process(with detailed step-by-step guidance),standard bidding documents forprocurement, model forms of contracts, andgeneral conditions of contracts. In addition,

the Iraqi government has developed, withBank support, general Standard BiddingDocuments (SBD) and Specialized sectorSBDs (based on MIM’s bidding documents)for education and other sectors, as well as a

National Implementation Manual (againbased on the MIM), for use in government-financed projects. Finally, in both projects,the Iraqi MOE at the local and national levelsconsiderably strengthened their capacity in anumber of crucial procurement areas. Thisincrease in national capacity was crucialbecause it improved the long-term prospectsfor sustainability of these projects and forfuture successes in the Iraqi educationsector.

1 The authors are all members of the PublicIntegrity and Openness Department of the WorldBank’s Governance Global Practice, supporting theMENA region. This note was prepared under theguidance of and clearance by, Yolanda Tayler,Practice Manager.2 CPA Order 87, imposed by the TransitionalAuthority, is not generally regarded as applicableand is for the most part ignored by practitioners.3 Iraq’s vulnerability to corruption is demonstratedby the country’s poor rankings in TransparencyInternational’s Corruption Perception Index. It

ranks lowest of all countries in the region.

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Internal Audit

Enhancing Public Financial Management in MENA

Through the Development of Internal Audit Functions in the Public Sector

Walid Al-NajarInternal Control Technical Practice (IATP)MENA Co-Leader and Financial ManagementSpecialist.

The year 2015 was quite a turbulent andunstable year in the Middle East and NorthAfrica (MENA) Region. It was also a year ofinteresting milestones for the internal auditpractice. The failure to provide the expectedlevels of public services combined withinsufficient progress on developmentagendas in some countries have contributedto an increase in the awareness by high

public officials and civil societies of thenecessity of finding internal assurancesystems and sound internal controls.Governance specialists consider thedevelopment of internal audit (followinginternational standards and best practices)in MENA countries, vital for efforts to reformpublic financial management (PFM). Goodinternal audit practices help to ensureeconomy, cost-effective internal controls,transparency and accountability of PFMpolicies and transaction-based execution.Promoting the establishment andmaintenance of local professional bodies inmember countries facilitates work indeveloping internal audit roles in the publicsector. It helps to bring togetherprofessionals acquainted with the rich localcontext and PFM officials in building internalaudit (assurance) functions and engaging inpolicy dialogues. Aware of key elements ofPFM and corporate effectiveness,professional interaction within and amongMENA countries has helped to reinforceseveral internal audit associations andprofession development organizations.Advanced associations such as those in

Lebanon, Tunisia and the United ArabEmirates (UAE) have worked on helpingother associations in the formation stages.Although internal audit practitionersthroughout the region are affiliated in oneway or another with the Global Institute ofInternal Auditors (IIA), which is leading thedevelopment of the professioninternationally, practitioners have also foundit very useful to come together and affiliatewith local associations. The advantagesinclude thriving exchanges of domesticexperiences, recognition and agreement onprofessional development, and promotion oflocal experts to the public and privatesectors. In the second half of 2015, Jordanestablished its first professional body forinternal auditors, the Jordan Internal AuditAssociation (JIA), with a membership ofmore than 200 professionals. JIA approached

the IIA for international recognition toward

becoming an IIA chapter in Jordan afterfulfilling requirements that are usuallyprocessed and agreed to by IIA over a spanof 1-2 years. The JIA is also outreaching topolicy makers and opening a dialogue withpublic sector officials on the role of internalaudit in Jordan, including the added valuesuch a function can bring to theachievements of the government’s mid-termstrategies. Another success story comesfrom Yemen, where despite the ongoing warthat started end of March 2015, The YemeniAssociation for Internal Auditors (YAIA), withmore than 300 members, has worked hard toobtain IIA status of its “IIA InternationalChapter-under-Formation,” which is theinitial step toward the full IIA internationalaffiliation. Similar formation of associationstook place in Saudi Arabia and Kuwait, whichinterestingly started with high momentumand dedication toward initiating policydialogue and fostering discussions onadvanced professional topics. Furthermore,the professional bodies in MENA exploredthe the idea of establishing an ArabFederation for Internal Auditors during theUAE’s 5th Internal Audit conference, an old-

new initiative. The Arab Federation isexpected to become the regionalprofessional body that supports MENAcountries’ developmental efforts, assumingthe position of a key player in theinternational arena. The head of delegatesthat met in the 5th Conference agreed to

expand discussions on the draft formation

constitution with other MENA countries’bodies and accelerate the formation of thisFederation in the near future.

World Bank support for the developmentof the IA function in MENA can help public

sector entities achieve organizationalobjectives, identify opportunities for

improvement in operations, reduce riskexposure, as well as enhance citizens’

confidence in public organizations.

The World Bank’s support to enhancedgovernance, PFM reforms and strengtheningprograms in the MENA region takes intoaccount the vital role of internal audit. Itrecognizes the need to mobilize expertiseand disseminate world-class knowledge tomember countries, working side-by-sidewith counterparts on development ofinternal audit in the public sector. The WorldBank team can offer professional andevidence-based analysis and advice onestablishing an audit function that best fits acountry and its institutional circumstances.

World Bank support consists of technicalassistance to support the: strengthening ofinternal audit functions; enhancing the roleof internal audit in the implementation ofthe Bank-supported projects; anddevelopment of local professional internal

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audit associations. The World Bank MENAregion works with other internationaldevelopment organizations, such as theEuropean Union and the IIA Global inproviding customized support and technicalassistance to governments. Ongoing supportto Iraq, Lebanon and Tunisia is characterizedby excellent collaboration with governments

in taking public sector internal audit to thenext level. The Internal Audit and InternalControl Technical Practice (IATP) in MENAwas launched with the objectives ofproviding clients with expert knowledge and

global experience and helping them to buildregional knowledge platforms, includingcommunities of practice. The IATP has set astrategy with specific objectives, activities tobe carried out, and expected results along aprojected timeline. The IATP advocatesstronger internal controls, enhancedassurance systems, risk management,

transparency and accountability. The keychallenges faced by the IATP in its workinclude: (i) getting each country’s internalaudit “basics” right; (i) bridging the internalaudit awareness and knowledge gaps

through assistance in dealing with rapidchanges in risk landscapes and anticipatingthe needs of stakeholders; (iii) raisingawareness of benefits of using professionalstandards designed for flexibility in internalaudit work; (iv) helping with technology use;and (v) supporting internal audit humancapital formation to ensure sustainability of

interventions, while promoting theunderstanding that internal auditdevelopment is an incremental process.

Highlights of World Bank Activities Supportive of Public Sector Internal Audit in the MENA Region

Country Internal Audit Activities

Tunisia Strengthening the IA function in the Ministry of Finance.

Iraq Improving governance through strengthened financial management, including internal audit.

Lebanon Support for a pilot of a modern internal audit function in the Ministry of Finance.

Yemen Policy dialogue, establishment and capacity building of modern Internal AuditDepartments (IADs).

Enhancing the role of IA in Project Implementation Units (PIUs).

Use of Independent Audit Firms to provide IA services in projects.

Egypt Support for a first pilot of a public sector internal audit function.

In Their Own WordsWorld Bank Group President Jim Yong Kim Congratulates Tunisia

on the 2015 Nobel Peace Prize

World Bank Group President Jim Yong Kim congratulated the Tunisian National Dialogue Quarteton being awarded the 2015 Nobel Prize for Peace in Stockholm, Sweden:

"The Tunisian National Dialogue Quartet embodied the spirit of the Nobel Peace Prize

through their tireless efforts to promote a more inclusive society and

advance the full potential of all Tunisians after the Jasmine Revolution of 2011.Tunisia demonstrated to the world the value of building institutions

that allow the broadest participation of society,

showing that people can come together to resolve political challenges

through compromise and consensus.

The National Dialogue Quartet was instrumental to this remarkable achievement.

The Nobel Peace Prize is a fitting recognition of the social and

political accomplishments of the Quartet and the Tunisian people.”

Dr. Jim Kim,

President,

World Bank Group

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Join the WBGIntegrated Reporting <IR>

Community of Practice

“Value Creation through

an Integrated Thinking Process”

What?A holistic approach to better governance

and sustainability in the public sectorthrough reporting on value of financial,

natural, manufacturing, intellectual,human, and social capital

Why?To breakdown traditional management,

decision-making, and reporting silos

Who?Peer-to-peer and expert knowledge

exchange

Want to hear aboutupcoming events and

join the conversation?

Send your name, organization,and valid email address to:

[email protected]

mailto:[email protected]

mailto:[email protected]

8/19/2019 2016-02 CVMENA MAG #5


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Corporate Governance

& Financial Reporting

Education 17

IFRS for SMEs 19

Doing Business Report 21

Education

The Value of National Professional Qualifications:

Perspectives from the Institute of Chartered

Accountants in England and Wales

Nicola Maher,

ICAEW Capacity Building Executive

Mark Campbell,ICAEW Head of International CapacityBuilding

Increasing globalization, competitivemarkets and a shortfall in the number ofaccountants characterize the landscape thatmost professional bodies in developingcountries face. The strengthening orlaunching a national professionalqualification (PQ) is essential if localaccounting institutes are to withstand thechallenges from foreign competitor bodies.Such qualification also aids in developing avibrant and growing accountancyprofession. Students who qualify through

the national PQ will be the local institute’smost dedicated members, helping to ensureits future. However, in order to stay relevantand compete for the best and brighteststudents, the national PQ must also bealigned with international standards and

benchmarks. A PQ prepares the students oftoday to be the professional accountants oftomorrow. A successful PQ requires aninternationally-aligned modern syllabus, arigorous examination regime, good learningmaterials, tuition providers, pathways into

the PQ for suitable students, a practical work

experience regime, and successfulmarketing and communications of the PQ. Aforeign PQ does not typically offer local taxand law training, and the registration andexamination fees paid leave the country andare instead invested in countries that willgenerate higher returns for the foreignprofessional body. Subsequently,investment in aligning a national PQ with thelocal university syllabus, tailoring it to theneeds of the market, and investing inmarket-specific continuing professional

development courses may be lost. Investingin a national qualification helps to improvethe quality of local accountants, therebyimproving audit quality, internationalrecognition, reliability, and greatertransparency and accountability of

published financial data. This in turn canincrease investor confidence and ultimatelythe climate for inward investment.

Importance of partnering

Many national professional accountancyorganisations (PAOs) in developing countriesfind it helpful to seek the support, guidanceand mentoring of longer establishedprofessional bodies. Benefitting from theexperience of another reputable body helpsit to improve its accountancy profession’squalifications, thereby enabling it tosuccessfully compete in the market place.The Institute of Chartered Accountants inEngland and Wales (ICAEW) has beenworking in the international developmentspace for nine years. During that time, itsdedicated capacity building team has

undertaken about 35 projects with PAOs,financial regulators and governmentagencies — revising and launchingprofessional qualifications, reformingregulatory and legal landscapes, andassisting with the adoption of internationalaccountancy standards and best practices.The ICAEW’s main goal is to work closelywith counterpart bodies in developingnations to strengthen their institutionalcapacity and the capacity of the accountingprofession. The ICAEW’s own chartered

accountancy qualification, the Associate

Chartered Accountant (ACA), is one of themost advanced learning and professionaldevelopment programs available. Withmore than 20,000 students worldwide,ICAEW has developed much relevantinternational experience. In this context, it

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understand the value and importance ofhaving a high quality national PQ. The ICAEWpartners with counterpart bodies indeveloping nations and does not competewith them. Its strategy is to build a networkof partnerships with other professionalbodies to encourage the adoption ofinternational standards and good practice.

ICAEW wants PAOs in developing countriesto become stronger and remainindependent.

Furthermore, the ICAEW is now workingwith many national PAOs to evaluate andimplement or improve the national PQ,focussing not only on the syllabus, but onother international benchmarks forimproving the outcomes for students inlearning and qualification.

The ICAEW has assisted developing nationsacross Africa, Asia, Europe and the MiddleEast to implement or improve a PQ.

This work typically involves a series of logicalsequential steps:

Carrying out a diagnostic review of thelocal environment and currentqualification.

Reviewing the qualification (includingthe curriculum) against internationalbenchmarks.

Recommending appropriate reforms tothe syllabus, exam system, trainingcontracts and work experience regime,

and so on. Assisting in the implementation of the

recommendations.

In Myanmar, for example, since 2013 theICAEW has been working in partnership withthe Myanmar Institute of Certified PublicAccountants (MICPA), the Auditor General,and Myanmar Accountancy Council on aUnited Kingdom Foreign andCommonwealth Office-funded projectaimed at enhancing transparency throughstrengthening the accountancy profession.

The project included the preparation of astrategic plan and roadmap (2014 –2016) tostrengthen accountancy capacity and theoverall accountancy profession in Myanmar.

A key area of the strategic plan involves thetraining and certification of accountants. Assuch, an important recommendation was toreform the current PQ, or develop a new onein line with international standards andbenchmarks. After much analysis andconsultation, there was consensus that anew PQ should be introduced for a firstintake of students in 2016. The ICAEW has

provided implementation support inreaching this goal, including drafting a newsyllabus, assisting with an implementationplan and engaging a suitable learningmaterials provider.

Creating a high-quality PQ

The ICAEW believes there are eight keydimensions to developing a high-quality PQ.These include: (i) a modern and up to datesyllabus; (ii) an examination system that isreliable, credible and consistent; (iii) high-quality training provision and learningmaterials; (iv) a range of pathways to entry;

(v) a practical work experience regime; (vi)

capable administrative capacity in theprofessional body; and (vii) a brand knownand trusted in the market place.

It is a rigorous task to undertake and onethat needs careful consideration if it is to besuccessful. While the PQ will be targetingnational students, it should be acombination of international and nationalcomponents so the qualification remainscompetitive internationally. One of thebiggest issues faced by developing countriesis the shortfall in the number of professionalaccountants. For example, in Myanmarthere are only about 3,000 qualifiedaccountants in a country of 66 millionpeople. It is therefore vital that morepathways are established into studying for

the qualification so as to attract the best andbrightest students and professionals. Anobvious solution is a non-graduate route.Many professional accountancy bodiespermit entry of non-graduates to theprofession. This is often via a technicianqualification. This provides access forexcellent candidates who, for variousreasons, may be unable to follow a moretraditional academic career into theaccountancy profession. The syllabus whichincorporates both local topics and those thatwould be expected in any internationally

recognised accountancy qualification shouldbe modern and up to date. The paperscovering the local area (generally tax andlaw) must be developed to a high standard,as these are often a key differentiatingfeature from foreign competitor bodies. In

many developing countries, the publicsector is often at a disadvantage with theprivate sector in the recruitment ofaccountants. Therefore, it is also imperativethat areas of public finance management,International Public Sector AccountingStandards or public sector auditing andassurance be included in the syllabus.

Establishing a practical work experience

regime to reinforce classroom trainingshould not be overlooked. Indeed, it is arequirement of the international educationstandards of the International Federation of

Accountants (IFAC). Ideally, partnering withboth private and public sector organizationswill help to meet demand and balance theneeds of employers. The key element ofsuch a scheme would be that only employerscapable of offering the appropriate range ofexperience should be authorized, and anindividual within the firm would takeresponsibility for the student. Theexamination setting and marking process iscrucial to the credibility and reputation of aPQ, the organization(s) responsible for it, aswell as that of the profession as a whole.Therefore, examiners and markers must be

trained to ensure that the examinations andthe marking are of an appropriate standard.

The aspirations of all PAOs for their PQ isthat they should have:

Good demand from studentsentering the professional body.

High pass rates (good studentsrecruited and properly preparedand trained).

Attaining such a good reputationthat it is easy to achievereciprocal arrangements with

other professional bodies.

While it may seem a daunting task toundertake, with the right guidance andsupport, developing nations can take on thischallenge. It is therefore crucial that capacity

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building within the accountancy professioncontinue and the value of having a nationalPQ aligned to international benchmarksvoiced.

The ICAEW notes eight dimensions of asuccessful PQ, as listed in box 1.

1. The PQ syllabus and curriculum vis-à-visinternational standards/benchmarks.

2. The quality of examinations and relatedstudent regulations

3. The quality of tuition providers.4. The quality of learning materials.5. The quality of practical work

requirements and ethical training.

6. The quality of pathways into the PQ andthe quality of university degrees.

7. The quality of the education andtraining department in supportingstudents.

8. The perceived strength of the brand bystudents and employers.

The IFRS for SMEsRecent Developments

Michael WellsDirector, IFRS Education Initiative, IASB

In May 2015 the International AccountingStandards Board (IASB) made a limitednumber of changes to the InternationalFinancial Reporting Standard for Small andMedium-sized Entities (IFRS for SMEs). Theamendments are effective for annual periodsbeginning on or after January 1, 2017.However, earlier application is permitted.

This paper discusses the changes made anddraws attention to the support beingprepared for those affected by them.

Implementation support

The IFRS Foundation Education Initiativesupports those implementing and applyingthe IFRS for SMEs by:

Publishing comprehensive trainingmaterial and, with the support of others,translating that material into widely-spoken languages, including Arabic (see:http://go.ifrs.org/SME-training-modules); and

Facilitating multi-day regional IFRS forSMEs ‘train the trainer’ workshops, withthe support of the World Bank andothers, as set out in the following worldmap. (The presentations used in those‘train the trainer’ workshops areavailable from: http://go.ifrs.org/SME-ppts-workshops).

To support the implementation of the recentamendments, the education staff are nowupdating the 35 training modules to takeaccount of the 2015 amendments to the IFRSfor SMEs. The updated training material is

expected to be posted on the IFRS website in2016.

Use of the IFRS for SMEs

To assess progress towards the goal of globalaccounting standards, the IFRS Foundation isdeveloping profiles of application of IFRS andthe IFRS for SMEs in individual jurisdictions(see: http://www.ifrs.org/Use-around-the-world/Pages/Analysis-of-SME-profiles.aspx).Of the 140 jurisdictions whose profiles areposted so far, 73 require or permit the IFRS for

SMEs, including Bahrain, Iraq, Israel, Jordan,Palestine, Saudi Arabia, United Arab Emirates,and Yemen in the MENA region. In SaudiArabia, the IFRS for SMEs will be the financialreporting framework for unlisted companiesstarting in 2018. Use of the IFRS for SMEs isalso currently under consideration in a further14 jurisdictions. In requiring or permitting theIFRS for SMEs, 64 of the 73 jurisdictions madeno modifications to its requirements.

Recent amendments

The May 2015 amendments to the IFRS forSMEs are discussed as follows:

Amendments that introduce accountingpolicy options (available in IFRS)

Options to use:

the revaluation model for property, plantand equipment; and

the equity method for investments insubsidiaries, associates and jointlycontrolled entities in separate financial

statements, if presented.

Amendments that change requirementsChanges most likely to affect SMEs:

alignment of the main recognition andmeasurement principles for income taxwith IFRS;

modification of the criteria to be a basicdebt instrument to ensure that mostsimple loans qualify for amortized costmeasurement; and

Requirement that if the useful life ofgoodwill or another intangible assetcannot be established reliably,management’s best estimate is used, but

must not exceed 10 years. Previously, a

http://go.ifrs.org/SME-training-modules


http://go.ifrs.org/SME-ppts-workshops


http://www.ifrs.org/Use-around-the-world/Pages/Analysis-of-SME-profiles.aspx








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default 10-year life was presumed insuch cases.

Changes to the requirements for the followingless commonly encountered transactions bySMEs (not expected to affect most SMEs):

liabilities extinguished by issuing the

entity’s own equity instruments, such asshares;

leases with an interest rate variationclause linked to market interest rates;

compound financial instruments withcomplex characteristics; and

Exploration and evaluation assets.

Amendments that add undue cost or effort:exemptions and requirements

Amendments that exempt an entity from thefollowing requirements when applicationwould cause undue cost or effort:

measurement of investments in equityinstruments at fair value;

recognizing intangible assets separatelyin a business combination;

offsetting income tax assets andliabilities; and

Measuring the liability to pay a non-cashdividend at the fair value of the assets tobe distributed.

The IASB has also added guidance toemphasize that an undue cost or effortexemption is not intended to be a low hurdle.In particular, an entity is required to carefullyweigh the expected effects of applying theexemption on the users of its financialstatements against the cost or effort ofcomplying with the related requirement.

Amendments that add other exemptions

(based on similar exemptions in IFRS)Two common control exemptions:

an exemption from the fair valuemeasurement requirements for equity

issued in a business combination ofentities under common control; and

an exemption from the fair valuemeasurement requirements fordistributions of non-cash assetscontrolled by the same parties beforeand after the distribution.

An exemption that simplifies the accountingrequirements when part of an item ofproperty, plant and equipment is replaced.

Amendments that modify presentation ordisclosure requirements

A requirement that an entity mustdisclose its reasoning for using anyundue cost or effort exemption;

A requirement that investment property

measured at cost less accumulateddepreciation and impairment ispresented separately on the face of thestatement of financial position;

A requirement that entities group itemspresented in other comprehensiveincome on the basis of whether they arepotentially reclassifiable to profit or loss;

A requirement that an entity mustdisclose the factors that make upgoodwill recognized in a businesscombination and the useful life of

goodwill;

A requirement to disclose the carryingamount of subsidiaries acquired andthose held for sale or disposal;

An alignment of the definition of arelated party with IFRS. The reviseddefinition is unlikely to affect mostrelated party relationships; and

A relief from disclosing prior yearreconciliations of balances for biological

assets and share capital and fromdisclosing the accounting policy fortermination benefits (for consistencywith other requirements of the IFRS forSMEs).

Amendments for first-time adopters

The IASB has included three options and twonew areas of guidance for first-time adoptersof the IFRS for SMEs based on amendments toIFRS issued since the IFRS for SMEs wasissued.

Amendments that provide minorclarifications

The remaining amendments are minor andare not expected to result in changes inpractice, or to affect the financial statementsfor most SMEs.

Such amendments are of the following types:

clarifying definitions or guidance;

clarification of the scope of a fewsections; and

redrafting of unclear requirements orremoving minor inconsistencies.

Transition and effective date

Entities reporting using the IFRS for SMEs arerequired to apply the amendments for annualperiods beginning on or after January 1, 2017.Earlier application is permitted provided all ofthe amendments are applied at the sametime.

Amendments must be appliedretrospectively, unless impracticable, with

the following exceptions:

if an entity chooses to apply therevaluation model to any classes ofproperty, plant and equipment, it mustapply the related requirementsprospectively from the beginning of theperiod (that is, the period in which it firstapplies the amendments);

an entity is permitted to apply therevised income tax requirementsprospectively from the beginning of the

period; and

an entity must apply the clarifiedterminology ‘date of acquisition’prospectively from the beginning of theperiod (only applicable if an entity hasbusiness combinations).

Note: ABWA= Association of Accountancy Bodies in West Africa; ACS= Accounting Standards Council (Singapore); ACSA= Association of Chartered System Accountants; ADB= Asian

Development Bank; BNDES= Brazilian Development Bank; CA= Chartered Accountants of Sri Lanka; CAPA= Confederation of Asian and Pacific Accountants; CCC= Chilean College of

Accountants; CPAS= Institute of Certified Public Accountants of Singapore; DED= Department of Economic Development (Abu Dhabi); DUOC UC= Pontificia Universidad Católica de Chile;

ECCB= Eastern Caribbean Central Bank; ECSAFA=Eastern Central and Southern African Federation of Accountants; FACPCE= Argentine Federation of Professional Councils in Economic

Sciences; FMITI= Federal Ministry of Industry, Trade and Investment (Nigeria); FRC= Financial Reporting Council (Nigeria); HKICPA= Hong Kong Institute of Certified Public Accountants;

IASCA= International Arab Society of Certified Accountants; ICAB= The Institute of Chartered Accountants of Bangladesh; ICAB= Institute of Chartered Accountants of Barbados; ICAC=

Institute of Chartered Accountants of the Caribbean; ICAEC= Institute of Chartered Accountants of the Eastern Caribbean; ICFM= Institute of Certified Financial Managers (Ukraine);

MASB= Malaysian Accounting Standards Board; MIA= Malaysian Institute of Accountants; MICPA= Myanmar Institute of Certified Public Accountants; MoF= Ministry of Finance; PAFA=

Pan-African Federation of Accountants; SAFA= South Asian Federation of Accountants; SCAAK= Certified Accountants and Auditors of Kosovo; TASB= Turkish Accounting Standards Board;

TURMOB= Union of Chambers of Certified Public Accountants (Turkey); UAE= United Arab Emirates.

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Doing Business ReportDespite Conflict, Business Reforms Pick Up in the Middle

East and North Africa, says Doing Business Report

The pace of business regulatory reforms picked up during the past

year in the Middle East and North Africa (MENA), despite conflict andturmoil in the region, according to the World Bank Group’s annualease of doing business measurement.

Doing Business 2016: Measuring Regulatory Quality and Efficiency finds that 11 of the region’s 20 economies implemented a total of 21

reforms facilitating the ease of doing business. This is a significantincrease compared to the annual average of 16 reforms during thepast five years.

The United Arab Emirates (UAE) is the region’s top ranked economy,with a global ranking of 31, while countries experiencing conflict andviolence are among the world’s lowest ranked, including Iraq (ranked

161), Libya (188), Syria (175) and Yemen (170).

“Despite the turmoil in several economies in the Middle East and North

Africa, the pace of business reforms activity in the region is

encouraging,” said Rita Ramalho, Manager of the Doing Businessproject “There is a lot of room for improvement, however . The share

of economies reforming in the region remains lower than the global

average, and Getting Credit is harder in the Middle East and North

Africa than anywhere else, partly due to the absence of comprehensive

credit bureaus that provide information relevant for assessing credit-

worthiness.”

Morocco and the UAE continue to lead the region in reform activity,as both economies undertook four reforms each during the past year.

Morocco made starting a Business easier by eliminating the need tofile a declaration of business incorporation with the Ministry of Labor.The UAE was the only economy in the region that reformed in the areaof Enforcing Contracts. As a result, commercial disputes in the UAEare now resolved in 495 days, which is less than the average of 538days in the high-income Organisation for Economic Co-operation andDevelopment (OECD) economies.

Both Saudi Arabia and Oman improved the most globally in the areas

of Registering Property and Getting Electricity, respectively. SaudiArabia introduced a new computerized land registry system. It nowtakes an entrepreneur only six days to register property in SaudiArabia, faster than in the Republic of Korea. Oman enhanced itsmeasurements and tracking of power outages, making it is easier toassess the reliability of the electrical grid and its effect on theproductivity of firms.

Economies in the region carried out the most reforms in the area ofGetting Electricity (4 reforms), followed by Starting a Business (3),Dealing with Construction Permits (3) and Trading across Borders (3).However, challenges remain in a number of areas. For example,regarding Starting a Business, it costs an average of 26 percent of

income per capita for local entrepreneurs to start their business,compared to 3 percent in the OECD.

This year’s Doing Business report completes a two-year effort toexpand benchmarks that measure the quality of regulation, as well asthe efficiency of the business regulatory framework, in order to bettercapture realities on the ground. With respect to the five indicatorsthat saw changes in this report — Dealing with Construction Permits,Getting Electricity, Enforcing Contracts, Registering Property andTrading across Borders — the MENA economies do not perform well.On Getting Electricity, for instance, the new dataset finds that severalregional economies face either frequent outages or do not track themadequately.

The ranks of other large economies in the region are Algeria (163),Egypt (131), Iran (118), Morocco (75), Qatar (68), Saudi Arabia (82)and Tunisia (74).

The full report and accompanying datasets are available athttp://www.doingbusiness.org/

http://www.doingbusiness.org/



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Public Sector

Government Spending 22

Corruption 25

PIM 26

Government SpendingAchieving More with Less in Government Spending:

Can Efficiency Units be Part of the Solution?

Robert BeschelGlobal Lead, Center of GovernmentGovernment Global Practice [1]

The significant decline in oil prices with littleprospect of near-term reversal is prompting

many hydro-carbon rich states in the MiddleEast to look for expenditure savingswherever they can find them. In Qatar, theEmir Tamim bin Hamad al-Thani noted in the2016 budget discussions that citizens shouldno longer be dependent upon the state “toprovide f or everything” and argued that thenew budget will focus on efficiency ingovernment spending. In October 2015,Kuwait’s Emir called for “speedy actions toadopt serious and fair measures” to

complete economic reforms and reducepublic expenditures. In November, the IMFwarned that the Saudis, Omanis andBahrainis need to adjust their spending orthey risk running out of financial assetswithin the next five years.[2] Governmentsthroughout the GCC and beyond areresponding to these challenges in a variety ofways. Some are looking to delay majorcapital projects; reform costly subsidyschemes; float bonds; and even to revisit theimplicit social contract, in which many oftheir citizens are given comfortable jobs forlife within the public sector. But a broaderquestion remains as to how MENAgovernments can use the current downturn

to institutionalize the quest for greaterefficiency within government. One approachthat a number of OECD countries havepursued, which is being scrutinized forpossible adoption in other oil-dependenteconomies such as Nigeria, is the creation of

efficiency units in the center ofgovernment. This note briefly summarizescomparative experience with efficiency units(or the broader effort to institutionalize thequest for efficiency) within government infive settings: Canada, France, Hong Kong, theUnited Kingdom and the United States. Onlytwo of these countries—the United Kingdom

and Hong Kong—have actually establisheddedicated efficiency units. Two others,Canada and France, created program reviewunits that were more specialized but serveda similar function. The United States hassought to drive efficiency gains throughexisting agencies and institutional

mechanisms, making modest changes intheir role and function to strengthen theirfocus on cost savings. Taken together, thesecountries provide a wealth of experience asto how governments grounded upondiffering administrative and bureaucratictraditions have structured themselves topursue their shared goal of greater efficiency

in government expenditure. The differingpaths they took illustrate many of thepossibilities and tradeoffs involved in suchexercises. Their experience is worthstudying for Arab governments nowconfronted with a similar need to rationalize

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expenditure to achieve optimum value foreach dirham, dinar or riyal spent.

Canada [3]

In the mid-1990s, the Canadian governmentwas facing a series of unsustainable budgetdeficits and anemic economic performance

that required drastic action. Through aseries of program reviews in the 1995 and1996, budgets, the federal government wasable to achieve significant reductions inprogram spending (on the order of 8.8percent over a two year period) in every areasave interest payments. The net result wasthat the national debt ultimately declined byover half, from 68 percent of GDP in 1995-96to 29 percent in 2008-09, while economicgrowth was robust and unemploymentdeclined. The crux of Canada’s spending

transformation centered upon a number ofhighly successful program reviews that tookplace over two rounds in the 1995 and 1996budgets. The program reviews wereexplicitly aimed at fiscal consolidation toreign in high deficits and reduce debt. Toughagency-specific savings targets wereestablished, with some as high as 50 percentand others ranging between 15-25percent. Within the context of their overallexpenditure ceiling, line departments werethen asked to review their programs andactivities in accordance with six establishedcriteria: (1) does the program area or activitycontinue to serve a public interest; (2) is

there a legitimate and necessary role forgovernment in this area; (3) is the currentrole of the federal government appropriate,or should it be realigned with the provinces;(4) should the program or activity betransferred in whole or in part to the privateor voluntary sectors; (5) if the programcontinues within the public sector, how canits efficiency be improved; and (6) is theresulting mix of programs and activitiesaffordable within current fiscalconstraints? Throughout the process, thePrime Minister strongly and visiblysupported his Minister of Finance againstspending ministers. The process wasoverseen by a Cabinet subcommittee ofdeputy ministers chaired by the Clerk of thePrivy Council.[4] A Program ReviewSecretariat was created in the Privy CouncilOffice, which was tasked with analyzingdepartmental strategic plans. It was assistedin this task by the Department of Finance andTreasury Board Secretariat. Publicexpectations were managed by acommunications strategy that underscoredthe dangers of doing nothing while informingthe public of the advantages of decisive

action. Public servants were kept involvedand motivated by creating a sense ofurgency. Bargaining with sub-nationalgovernments featured concessions to easethe offloading and contracting of federalresponsibilities.

France

Building on the successful Canadianexperience referred to above, the Frenchgovernment launched a general review ofpublic policies from 2007-2012. This reviewlooked aimed to improve the quality of

government services, modernize andsimplify public bodies, move to a more digitaland sustainable model of publicadministration and increase efficiency andeffectiveness of public spending. In order tofurther this particular aim, the authoritiesset up a high-level administrative committeewith Cabinet backing. This was supported bythe General Finance Inspectorate, the eliteinternal audit and advisory body of theMinistry of Finance, as well as line ministryinternal audit bodies. An overall audit ofpublic spending was undertaken, withsupport from outside consultants. Thisresulted in significant savings, in particularon discretionary expenditure (procurement,real estate management, utilities,etc.). During the same period, deficitpressures resulted in the non-replacementof a proportion of civil servants who hadretired, which was not a popularmeasure. Following a change of governmentin 2012, this review was replaced by thePublic Administration Modernization effort,which focused more on the performance ofpublic services than on cost-cutting.However, the Finance Inspectorate

continues to identify opportunities forgreater cost-effectiveness and hasdeveloped a strong expertise in that area.The Budget Directorate routinely uses theirfindings in budget negotiations.

Hong Kong [5]

Hong Kong created an Efficiency Unit (EU) in1992 to “secure continuous improvement inpublic services through an ongoing programof public sector reform and promotion ofbest practice in management.“ The EUprovides an in-house managementconsultancy to assist public service agencieson a flexible basis through a range ofservices, with the goal of improving thequality and value of public services. It alsohelps to develop new service models andwith the application of design thinking formore engaging and effective publicservices. The unit also runs 1823—a onestop call service for the public to obtaininformation about government services andto report problems—and the GovHKwebsite’s youth portal. These initiativeshave allowed the agency to better

understand evolving trends and dynamics inthe use of public services. An example ofconsultancy services provided by the EUwould include business processreengineering (which has been a major areaof focus), along with organizational

restructuring, enhancing the use of IT(including both improved informationmanagement within government as well asmajor systems, such as HR management),performance management, and privatesector engagement in helping to meetbroader social needs, as well as generalmanagement and consultancy support. The

EU reports up through the Chief Secretaryfor Administration, who heads theGovernment Secretariat and is the mostsenior official within the specialadministrative region government, reportingup to the Chief Executive and the LegislativeCouncil. It is organized into six bureaus andten departments. As of 2015, it has anestablishment size of around 88 and anannual operating budget of US$28.5 million.

The United Kingdom [6]

Within the United Kingdom, the Efficiencyand Reform Group (ERG) is a part of theCabinet Office, where it reports up throughthe Permanent Secretary to the Minister forCabinet Office. It was established in 2010with an emphasis upon driving cost savingsand enhancing economic growth. It works inpartnership with the Treasury through theChief Secretary to pursue a number ofobjectives, including:

Delivering savings by ensuring thatgovernment acts as “one customer”through combining government’s buyingpower, increasing its pool of suppliers

(including small and medium-sizedenterprises) and expediting procurement;

Assuring the delivery of government’smost significant projects, on time, withinbudget and to a high quality;

Transforming public services by beingdigital by default, focusing on the needs ofusers and making sustainable savings forgovernment; and

Reforming government’s managementinformation and driving a clear, evidencebased approach to efficiency programsacross government.

The ERG has an annual budget of £72 millionand a staff of around 1,125, with offices inLondon, Newport, Norwich andLiverpool. Its current priorities involveworking collaboratively with departments toachieve significant cost savings (theytargeted at least £12 billion in 2013 and2014); supporting the adoption of newdigital technologies and commercial modelsto improve the delivery of public services;minimizing losses due to fraud and error inthe distribution of benefits; and improvingthe collection of debts owed to the

government, among others. It has a strongemphasis upon procurement relatedreforms, including renegotiating contractswith major suppliers; the implementation ofa centralized procurement process; a reviewof major government projects; and the

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creation of a new Property Unit. NationalAudit Office reports from 2011 and 2013noted that in 2011-12, the unit estimatesthat it has influenced around £5.5 billion ingovernment expenditure, including £1.5billion in staff costs; £1.8 billion in reportedsavings on consultants and other temporarystaff; £1.5 billion in other areas; and £.8

billion in spending on capital projects. It alsonoted that the agency has struggled with anumber of staffing issues, including arelatively high turnover (around 18 percent),as well as difficulty in attracting staff with therequired expertise in corporate finance andIT systems.

United States [7]

While the United State has no single unit oragency dedicated to promoting efficiency ingovernment, the President’s Office ofManagement and Budget (OMB) has longmade efficiency in public expenditure amajor priority. Most recently, PresidentObama announced a campaign to cut waste,fraud and abuse in government expenditurein 2011. He signed two executive orders: (1)Executive Order 13576 on Delivering anEfficient, Effective and AccountableGovernment in June 2011; and (2) ExecutiveOrder No. 13589 in November 2001, whichurged all government agencies to develop adedicated plan for efficiency gains alongmultiple dimensions (see below). A numberof institutional arrangements were

developed to take forward theseinitiatives. The Vice President was chargedwith convening periodic meetings withCabinet members and the Director of OMBto monitor progress in implementation. TheFederal Chief Performance Officer, a seniorofficial within OMB, was tasked with workingwith agencies to ensure that robustperformance metrics were in place andfrequently updated. Each agency’s ChiefOperating Officer and Chief Financial Officerswere also tasked with deliveringperformance gains and cost savings. Inaddition, a new Government Accountabilityand Transparency Board was established toprovide strategic guidance and direction forthis effort. It is comprised of 11 members,including agency Chief Financial Officers,Deputy Secretaries, a senior official fromOMB, and several agency InspectorsGeneral. A number of areas have beenflagged for review, consolidation andcancellation, including the proliferation ofgovernment websites (where there arecurrently almost 2,000 across the federalgovernment); eliminating poorly performingtechnology projects; curbing spending on

contracts; eliminating improper payments;leveraging the federal government’spurchasing at scale; and improving themanagement of federal realestate. Subsequent priorities have includedreducing travel expenditures throughexpanded use of teleconferencing andvideoconferencing technologies, as well as

the increased use of government propertiesfor conferences; reviewing inventories of ITdevices and establishing controls on theiruse; reducing the publication of documentsand relying more heavily upon electronicdissemination; and improving the fuelefficiency of vehicle fleets and optimizingtheir size.

Conclusions

In conclusion, several observations are inorder: The mandate of these units can vary

significantly. Some, such as the Office ofManagement and Budget in the UnitedStates, act with the full authority of thePresident and can—at least in principle ifnot in fact—compel agencies to adhere tovarious directives through ExecutiveOrders and the like. Others, such as HongKong’s Efficiency Unit, operate as what isin essence an in-house consultinggroup. The French Finance Inspectorate,which sits within the Ministry of Finance,cannot normally compel line ministries tocomply with its recommendations, but its

findings are used extensively in annualbudget negotiations.

A closely related question is how relationswith line ministries and departments willbe structured. Efficiency Units operate ina range of modalities betweencooperation and compliance, and anyMENA government will need to thinkcarefully about how its unit will bepositioned and supportedpolitically. Backing from the highest levelsof government will be critical to thesuccess of the effort, and carefulconsideration will need to be given to itsoversight. Line ministries that cooperateand achieve efficiency gains would needto be rewarded in some fashion (maybewith more flexible funding), whereasothers could be penalized (through aproductivity tax associated with budgetallocations).

In Canada, France and the United States,efficiency drives were accompanied bysignificant attention to the institutionalmechanisms for coordination betweenministries and agencies in pushingthrough efficiency gains, including inter-

agency working groups below the cabinetlevel.

The size of these units can besignificant. The UK office has a staff ofover 1,100 and an annual budget of £72million. The Hong Kong unit, while muchsmaller, has over 80 staff and a budget of$28 million. A small and under-resourced

unit may not be particularlyeffective. Staffing can also be problematic,and even countries such as the UK havestruggled to attract staff with the requisiteskills, particularly in areas such as financialanalysis or IT systems.

Finally, several of these units are playing amajor role with regard to procurement,whether gaining savings throughpurchasing in bulk; getting greaterdiversity in the government supplier base;or carefully tracking the implementationof large capital projects.

As the discussion above indicates, there is no“one size fits all” solution to this

challenge. The approach ultimately takenwill need to be carefully adopted to localcircumstances, politics and administrativetraditions. However, it is also doubtful thatMENA countries will achieve the savingsnecessary through a series of ad-hoc cost-cutting measures. To truly succeed in theirquest for greater efficiency in expenditure,careful consideration must be given as tohow such efforts can be institutionalizedthroughout government on a sustained

basis, starting at the top. Towards this end,the experience of others—such as the fivebrief examples cited in this note—canprovide a valuable guide. ________________________________

[1] The author wishes to thank Renaud Seligmann for hisextensive contributions to an earlier version of thisarticle.[2] The Kuwait and Qatar citations are from Al ArabiyaNews on October 27 and November 3, 2015. The Saudi,Omani and Bahrain examples are cited from BloombergBusiness, October 21, 2015.[3] For more information, see InstitutionalizingMonitoring & Evaluation systems: Five Experiences fromLatin America”, World Bank, 2005.

[4] The position is analogous to the Secretary of Cabinetand is the most senior civil servant position within theCanadian government.[5] More information can be found on the followingwebsite: http://www.eu.gov.hk/en/index.html[6] More information can be found on the followingwebsite:https://www.gov.uk/government/organisations/efficiency-and-reform-group/about[7] More information can be found on the followingwebsites:https://www.whitehouse.gov/goodgovernment/actions/campaign-cut-wastehttps://www.whitehouse.gov/the-press-office/2011/11/09/executive-order-13589-promoting-efficient-spending

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CorruptionHow corruption affects businesses around the world, in 5 charts

Ravi KumarOnline Communications Officer

We know corruption in developing countries affects poor people the most. It also impacts firms in many ways. Here are five charts showing howcorruption is affecting businesses from South Asia to Sub-Saharan Africa. These charts are based on surveys of more than 13,000 firms in 135countries, by World Bank Enterprise Surveys. It collects data directly from firms to study an economy’s private sector.

Over 50% of companies in Middle East and North Africa identifycorruption as a major constraint

1 in 4 companies in South Asia are expected to give "gifts" to get anoperating license

27% of companies in Sub-Saharan Africa are expected to give "gifts"to public officials "to get things done"

Almost half of firms in South Asia are expected to give "gifts" tosecure a government contract

1 in 3 firms are expected to give "gifts" to get a construction permitin East Asia and Pacific

http://www.enterprisesurveys.org/data/exploretopics/corruption

http://www.enterprisesurveys.org/data/exploretopics/corruption

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PIMSelecting and prioritizing development projects:

How to be more effective in delivering public services

Michael SchaefferEmmanuel CuvillierAuthors both World Bank PFM/PIMSenior Public Sector Specialists

Public Investment Management SelectionCriteria Guidelines have been prepared bythe PIM Technical Practice to assist publicadministration officials in drafting andprioritizing their development (investment)project requests. Transparent projectselection and evaluation selection criteriashould be agreed and established prior tothe preparation, and funding, ofdevelopment project requests. Byarticulating the project selection criteriaupfront, project funding should more tightlyalign to the needs of citizens, and servicedelivery should significantly improve.

However, no project selection andevaluation criteria process is perfect. Not allcriteria will apply to every project. Good judgment, common sense, and politicalconsiderations will continue to playimportant roles in the project selection

process. Nevertheless, carefully preparedcriteria will sharpen distinctions amongprojects, narrow the range of disagreement,provide a basis for discussion and, hopefully,make the entire process more transparent.It is critical that project selection besupported by accurate and relevantinformation in order for the public sector tobe more effective in delivering services tocitizens. Practical experience shows that it isdesirable that the development (investment)project priority setting process have thefollowing characteristics: i) Isunderstandable to all users and stakeholdersof the process; ii) Is practical in terms of cost,time and personnel available to carry it out;iii) Considers all major consequences of aproject; iv) Is supported by reliable, relevantinformation; v) Indicates clearly whether thekey value judgments (i.e., assigning“weights” to each criterion) are to be made

by technical experts, public officials, and civilsociety; vi) Provides information not only onthe relative ranking of projects but on theirindividual merits or value; and vii) Identifiescritical and non-critical projects according tothe national and sectoral development. The

MENA regions project selection criteriaguidelines should assist government officialsinvolved in capital budget preparation tounderstand clearly and manage efficientlythe use of project selection and prioritizationcriteria in the project cycle through the

following approach:

Projects should be compatible withnational priorities: All projects that aresubmitted for government fundingmust be compatible with the majority

of national and sectoral priorities inorder to be considered for furtherevaluation and appraisal.

Link between development projects,sector strategies, and budgetdecisions: The link between sectorstrategies and budget decisions maynot be consistently maintained andpolitical pressures may weigh in on thefinal selection of projects. Under thetop down approach (Medium TermBudget Framework) the aim is tocalculate available funds in the next and

following two years, select mostimportant priorities of the nationalstrategy that can be financed from theavailable funds and, establish budgetceilings for recurrent and developmentspending. With the bottom-uppreparation, line ministries arerequested to prepare detailed budgetcalculations for selected priorities andwithin given ceilings. Upon receipt ofdetailed budget submissions, thebudget department analyses thesesubmissions and discuss them duringthe budget hearings. Based on theoutcomes of budget hearings, a draftnational budget is compiled forCabinet’s review and consequentParliament approval.

Project lifecycle: The project lifecycle isa process by which an idea istransformed into a concrete solutionthrough the analysis of alternatives andthe choice of the most profitablealternative from the economical point

of view. As the project moves throughits lifecycle, the focus of managerialactivities shifts from planning tooperating and controlling activities. In astrategic planning exercise, theemphasis is on “investment efficacy” oron spending on the right public assets.Spending should promote theachievement of strategic priorities, andresources should be allocated only tothose areas that are best aligned withthe government’s objectives at bothcentral and local levels.

Must-have features in projectidentification and screening: It isnecessary to have a clearly articulatedstrategy and formal process in place toensure adequate project screening. Themost important documents on whichpublic investment decisions are basedare the sector level strategies whichidentify the economic growth path withclearly defined objectives and form thefoundation of public investment sinceall projects need to be linked back tohow they will contribute to the delivery

of the strategy. Using project appraisal to strengthen

the selection criteria: The desirability of a project can andshould be interpreted from the point ofview of the investor (financial analysis)

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or from a wider national perspective(economic analysis). After choosing thebest among project alternatives andverifying the financial viability of aselected option, the next step is to testthe economic viability of that option.The initial step in testing the economicviability of a project is to identify,

quantify and value the economic costsand benefits. A fundamental aspect ofproject appraisal is the comparativeanalysis of the costs and benefits ofalternative ways of achieving theobjectives. The development of optionsshould include the creation ofalternative ways to achieve theobjectives, and of a “do the minimum”

option.

It is also necessary to define a projectweighting scheme for ex-ante evaluation.Relevance, short term assumptionperformance, efficiency, effectiveness andsustainability are assigned variable weightsdepending on their importance in relation tothe stage in the project cycle and to types ofevaluation. After the project-level evaluation

results aggregation, projects should beranked in their specific level (for example,sector at governorate level) according totheir respective score. Then proposedprojects for state funding should be rankedby their evaluation score and result band,and the decision taken for their selection inaccordance with the availability of budgetary

resources. The higher the evaluation score,the better the anticipated or actual projectperformance.

Project selection needs to be integrated intothe budget. Not just the initial financing butmaintenance and operational costs alsoneed to be integrated into the budget. Allappraised projects should be recorded in adata base ranked by priority for budgetconsideration. Rejected projects should alsobe recorded so that they may be revisitedwhen circumstances have changed and theyare likely to generate net positive benefits.

For project implementation, it is alsonecessary to develop the institutionalarrangements associated with maintenanceof the capital infrastructure, after its

completion and during the operation phase(all recurrent expenditures relating to theoperation and maintenance of the assetsmust also be included in the budget).

ConclusionThere is a very strong argument that theavailability of public funds should be more

strongly linked to good investment practices.Although many projects may demonstratepositive cost-benefit ratios, the relative costeffectiveness of project designs, policyoptions, and alignment with national andsectoral policy directives should be givenmore attention. The selection of individualprojects within the overall strategic planshould be driven by high-quality analyticalassessments of competing projects, which inturn could more effectively inform politicaladministrative decisions. The World Banks’

Project Selection guidelines should serve asa basic forerunner to discussions and toolsfor developing good project selection andevaluation criteria in order to be moreeffective in delivering public services.

Improving Service Delivery by Strengthening the Investment Project Selection Process

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Governance&

Water

Cover Story

Overview 29

Interview 30

Insights 35

Institutions & Incentives 38

Government in Action 39

Books 41

Water is a global issue. It is a source of life and prosperity. It has a wide impact in everythingranging from agriculture, industry, energy and transport to climate change, and public health.Water is also a cause of hardship and conflict. Water scarcity is reaching alarming levels withreports focusing on the fear of increased conflict around water leading to “water wars”, andGoldman Sachs described it as “the petroleum of the next century”. Water is also a globaldevelopment challenge. OECD estimates tell us that by 2050 water demand will rise by 55%and that 240 million people will remain without access to clean water and 1.4 billion withaccess to basic sanitation services. With the global community having set the SustainableDevelopment Goal on Water and Sanitation (SDG 6) to achieve“ universal and equitable access

to safe and affordable drinking water for all and adequate and equitable sanitation andhygiene for all by 2030, the challenge of managing water resources is none too soon.

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Overview

The Role of Governance in the Water Sector

How societies choose to govern their waterresources has profound impacts on people’slives and their ability to prosper, as well as onenvironmental sustainability. On the ground,this means that some groups or individualswill benefit while others will lose out whenwater allocation changes are made. Having afair water provision can, for many people, bea matter of daily survival. How and for whomwater is being governed has impacts on riverflows, groundwater tables and pollutionlevels, affecting both upstream and tail-endwater users. The capacity of countries topursue poverty reduction strategies andIntegrated Water Resources Management

plans, meet new demands, manage conflictsand risks depends to a large extent on theirability to promote and put into place soundand effective governance systems

It is increasingly recognized that the so-called ‘water crisis’ is essentially a crisis ofgovernance (UNDP 2004; United Nations(UN) 2005, 2006). In water services thismanifests itself in the fragmentedinstitutional structures, the lack of clarity ofroles and responsibilities, questionableresource allocation, patchy financialmanagement, low capacity of implementingorganizations; and in the pervasive leakageof sector resources, weak accountability ofpoliticians, policy-makers and implementingagencies, unclear or non-existent regulatoryenvironments, and unpredictability in theinvestment climate for private sector actors(UN 2006). In many developing countries thegovernance of the water sector as a whole isin a state of confusion and dysfunction withlittle responsiveness or accountability tocitizens (Tropp, 2005). The lack ofinstitutional clarity is a well-known aspect ofgovernment failure. Over the past few

decades the water sector has beensuccessful in developing the technicalsolutions it needs but it has only recentlybegun to come to terms with issues ofgovernance. There is a now a growingrecognition that increasing the focus anddepth of future efforts on the governance ofthe sector – in all its dimensions – is critical ifpoor people are going to gain access tobetter, more sustainable services. Thenotion of governance for water includes theability to design public policies andinstitutional frameworks that are sociallyaccepted and mobilize social resources in

support of them. Water policy and theprocess for its formulation must have as itsgoal the sustainable development of waterresources, and to make its implementation

effective, the key actors/stakeholders mustbe involved in the process. Governanceaspects overlap with technical and economicaspects of water, but governance points usto the institutional elements of solving aproblem or exploiting an opportunity.Governance of water is a subset of the moregeneral issue of the creation of a nation’s

physical and institutional infrastructure andof the still more general issue of socialcooperation.

The reform of the institutional aspects ofservice delivery can be the game changer inthe quest for improving service delivery in

the water and sanitation sector. According toJunaid Ahmad, Senior Director of the WorldBank’s Global Water Practice, fundinginfrastructure has to be done in a way thatthe organization can use the funding toimprove service delivery by setting upsystems of capacity, systems ofaccountability and systems of management,in other words the overall systems ofgovernance, instead of mere asset creation.This underscores the need to understandand strengthen the institutional aspects ofservice delivery both for Governmentsthemselves as well as for financing agenciessuch as the World Bank.

Three key issues come to the front in reformof the institutional setting for water servicedelivery. They are:

The formal and informal institutional

relationships in water service delivery :Water service delivery involves the interplayof several institutions such as Central andSubnational/Local Governments, waterutilities, regulatory agencies andcitizens/civil society organizations. While the

formal institutional relationships betweensome of these institutions may be clearlydefined (such as the Ministry of Waterresources and water utilities), otherrelationships (such as between a localgovernment and water utility) may not bethat well defined. Understanding theseformal institutional relationships isbecoming increasingly important incountries (such as Kenya and India) wheredecentralization reforms are redefining therelationships between local governmentsand service delivery entities such as waterutilities. Equally important is the

understanding of the informal relationshipsbetween the various stakeholders within asystem. Understanding of the politicaleconomy underlying these relationships is

central to the understanding of the forcesthat drive or hinder reforms and enableefficient and accountable service delivery.

Financing aspects of water and sanitation

service delivery : the traditional model offinancing water and sanitation servicesthrough budgetary resources beingproviding in the form of capital and recurrentbudgets to utilities is found inadequate tomeet the burgeoning needs for water andsanitation services. Therefore options forattracting private capital as debt financing(in some rare cases equity financing throughPublic Private Partnerships) is increasingly

being considered. Access to market basedfinancing sources requires strengthening thefinancial management and operationalefficiencies of utilities. Also moving awayfrom input based project financing, countries(such as Egypt) are in the process of linkingfinancing with service delivery performance.

Transparency and Accountability in service

delivery : Inefficient and ineffective servicedelivery performance by water sectorinstitutions in many developing countrieshave resulted in citizens demandingincreased accountability from suchinstitutions. Though there are good models(such as Water User Associations) thatincentivize robust participation by citizensand stakeholders, much more needs to bedone to strengthen the social contractthrough enhanced citizen engagement. Inaddition to strengthening downwardaccountability of water service providersthrough social accountability tools,reforming the formal systems of upwardaccountability is also being reformedthrough the use of innovative reportingtechniques such as Sustainability/Integrated

Reporting.

List of References:Rethinking Governance in Water Services (2007), Janelle Plummerand John Slaymaker. Working Paper #284, Overseas DevelopmentInstitute, LondonGupta, J., A. Akhmouch, W. Cosgrove, Z. Hurwitz, J. Maestu, andO. Ünver. 2013. Policymakers’ reflections on water governanceissues. Ecology and Society 18(1): 35. htt p://dx.doi.org/10.5751/ Iza, A. and Stein, R. (Eds) (2009). RULE – Reforming water

governance. Gland, Switzerland: IUCN.OECD (2011), Water Governance in OECD Countries: A Multi-level

Approach, OECD Studies on Water, OECD Publishing.http://dx.doi.org/10.1787/9789264119284-en

Rogers, Peter and Hall, Alan W (2003) Effective WaterGovernance. Global Water Partnership TechnicalCommittee.World Bank MENA Development Report 2007 – “Making the Most of Scarcity – Accountability for Better WaterManagement in the Middle East and North Africa”

Jagannathan, Vijay, Mohamed, Ahmed, and Kremer, Alexander“Water in the Arab World – Management Perspectives andInnovations” – World Bank MNA Region, 2009Manghee, Seema and Poole, Alice “Approaches to ConductingPolitical Economy Analysis in the Urban Water Sector” – WorldBank Water Papers, September 2012

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Interview

Junaid Ahmad

Senior Director - Water Global Practice

Rama Krishnan Lead Financial Management Specialist

[Shortly after this interview wascompleted, Junaid was selected as the

Chief of Staff, Office of thePresident. We wish him the very best

in his new position.]

Rama Krishnan: What are your priorities forthe World Bank’s Water Global Practice

(GP)?

Junaid Ahmad: Across countries it is evidentthat economic development is “thirsty”business. In this context, our overarchingpriority is to support our clients createsystems of water and sanitation thatunderpin their national growth anddevelopment strategies. The specific focuswill vary country by country, covering areassuch as water resource management,financing of hydraulic infrastructure,delivering on the promise of universal accessto services, or promoting institutional

change in the way water is delivered. But, atall times our focus is on the relationshipbetween water and the welfare of nations – what we call “water-writ-large” – and therole of water in boosting prosperity anderadicating poverty. It is about building awater-secure world for all.

Rama Krishnan: As the world transitionsfrom the Millennium Development Goals(MDGs) to the Sustainable DevelopmentGoals (SDGs), and with water and sanitationcontinuing to be a global priority, what isthe role that the Bank and the Water GP canplay in influencing this global agenda?

Junaid Ahmad: I think it's very interestingthat President Kim has introduced GlobalPractices in time to coincide with the arrivalof the SDGs. Today, for the first time in thehistory of the Bank, all components of thewater family make up the Water GlobalPractice -- covering areas as diverse as accessto water and sanitation services, water andsanitation for health, water for agriculture,water resource management, andtransboundary issues. The GP structure can

potentially allow us to be one of theimplementing arms of the Water SDGs. But,this will only be possible if we are able to lookat water in an integrated way.

Water is not about a sector; it's about anagenda underpinning food and energy

security, sustainable urbanization, universalaccess to services, and importantly, in aworld replete with risks and uncertainties,building the resilience of nations againstclimate change, conflict, and pandemics. Wehave moved away from looking at waterprimarily as an input into particular sectorsto assessing how overall water influences

development of nations.

On the issue of climate change, we have justcompleted some important analytical workwhich shows that how water is managed,priced, and governed can not only dampenbut reverse the negative impacts of climatechange on economic growth. The Bank is in aposition to be one of the foremost globalinstitutions that can help nations buildresilience against climate change and thewater agenda has a major role to play in thiseffort.

In terms of investment, the Water GlobalPractice has an asset base of US$ 22 billiongrowing at a gross rate of about US$ 4-5billion a year with the potential to grow atUS$ 7-8 billion per year. This core resourcebase if appropriately structured can be

leveraged several fold to help fundpartnerships, knowledge, and servicedelivery across our client countries andcrowd in public and private finance. Thiswould be our contribution to the SDGchallenge in water. But, the key will be tomove away from the narrow definition ofoperations and use the Global Practice

structure to leverage public and privatefunds.

Rama Krishnan: Although historically thewater sector in the Bank focused primarilyon infrastructure investments, of late therehas been a great deal of discussionregarding governance issues in the watersector. What do you think is the reason forthis shift in attention to the governanceaspects of water?

Junaid Ahmad: Experience has shown us

that economic growth depends not only onthe stock of infrastructure and how this stockgrows – the Solow growth model -- butimportantly how it is managed, operated,and maintained. These are, however, not just technical issues. They are also about thegovernance and politics of how you manage

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a water utility, a dam, or a river embankmentprogram. Putting it differently, converting astock of infrastructure into service delivery isan intensely political affair, and if you do notrecognize that fact, you will not be able toensure the sustainability of theinfrastructure stock or its conversion intoservices for farmers, businesses, and

households.

In the context of water, governance plays avery important role in the allocation of wateracross sectors and for ensuring equity inservice delivery. With growing demands onwater from industry, energy, municipalities,environmental concerns, the health sector,and households, countries have to create

mechanisms for the efficient and equitableallocation of water. Creating property rights,regulation, and markets to manage thisallocation problem is the role of the state andits system of governance. It is imperative thatthe Water GP support countries tackle thischallenge of water allocation.

Finally, governance will be critical for

ensuring that capital markets can beleveraged to fund infrastructure. In thecoming years, I expect that the Bank’spolitical risk insurance instruments andguarantee instruments can help leverage andscale up private capital into theinfrastructure sector. But, a pre-conditionwill be a basic level of governance aroundservice delivery for private capital to betriggered. In water, I would predict that theSabsp model -- the water utility of Sao Paulo

– of a public, corporatized provider accessingcapital markets may well be the norm in

developing countries.

Rama Krishnan: Picking up on a point thatyou mentioned regarding the governance ofwater service delivery, we have heard youspeak eloquently about the importance offixing the institutions that fix the pipes

rather than merely fixing the pipes. Can youelaborate on that concept?

Junaid Ahmad: Yes, I think the water team isvery used to hearing me say time and again"Don't fix the pipes, fix the institutions thatfix the pipes." But, I did not come up withthat phrase. I adapted it from a statement

made by President Mandela when he metwith the team tasked with bringingJohannesburg out of bankruptcy. He wasreported to have said "Don't fix the lights. Fixthe institutions that fix the lights" suggestingthat the focus should be on fixing how thecity is managed, financed, and linked to itscitizens. In other words, how it is governed.

I discovered the same in the water sector.When I first started working in India, forexample, I was surprised to learn that thecapital of India which had one of the biggestwater agencies was only delivering five hoursof water a day. My first reaction was, "Is itbecause they face water scarcity?" Well, itturns out that Delhi receives more water, percapita, per day, than a city like Paris or

London, or Dakar. Yet each of these citiescan provide water 24 hours/7 days a week,but Delhi cannot. The problem was nottechnical. India has some of the bestengineering minds and, in particular,infrastructure engineers. Rather, thechallenge is around the politics of how waterdelivery is managed.

This includes important issues such asseparation of powers – whether thefunctions of policy makers, regulators, andproviders are undertaken by different parts

of government so that judge and jury are notone and the same; the accountability ofproviders to citizens; and the issue of whopays and how subsidies are provided. Whenyou take such a perspective you realize thatutility turnaround and investment has to beconsidered in the context of the rules of

management and accountability. This is why,when we work with countries to invest in theinfrastructure, we must make sure that whatwe are doing is not just fixing the pipes, buthelping countries create better institutionsto serve their citizens.

Rama Krishnan: You mentioned a very

important point about accountability as akey issue that affects service delivery in thewater sector. We know that there aredifferent types of accountabilityrelationships in service provision. What canbe done to strengthen these differentaccountability relationships?

Junaid Ahmad: You are absolutely right thatthere are different types of accountabilityrelationship in service delivery. ShantaDevarajan and Ritva Reinneka invited a teamof us to work on the WDR 2004, MakingServices Work for Poor People. We pulledtogether an understanding of servicedelivery using the lens of accountability. Atthe center of this framework is the citizen,and the story we share is one where thesuccess of service delivery depends onwhether states and service providers areaccountable to citizens and what strengthensthese relationships. I would invite our GlobalPractices to re-discover the 2004 WDR asthey respond to the challenge of deliveringthe SDG goals. In response to your questionI would like to share three takeaways.

First, accountability can be strengthened bylearning across sectors. A sole focus ontechnical features of service deliveryemphasizes the uniqueness of differentsectors such as water, education, andtransport. Adopting an accountabilityframework, on the other hand, offers a lensbased on incentives and governance andallows for a common understanding fromdifferent sectors about what determines thescale up and sustainability of service delivery.Within water, for example, there was a sensethat irrigation and water supply have little incommon; a framework based onaccountability is allowing staff to compareand contrast service delivery to farmers withservice delivery to businesses andhouseholds. Similarly, the design andmanagement of water basins can draw onlessons we have learned from the design andmanagement of corporatization of utilitysystems.

Second, in the framework of accountability,it is important to recognize that there is adifference between a citizen's and abeneficiary or a client's role in service

delivery. When I am a recipient of a waterservice, and I pay for it through a bill, I'm aclient or beneficiary and my relationship iswith a service provider. But, when I am acitizen, my relationship is with the state andits regulatory agencies. The latter is what we

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traditionally call voice and the former is whatthe WDR 2004 team called client power. Indesigning service delivery we often confusethe two. Instruments that strengthen voice

– e.g. the mechanisms for citizens’participation in local councils, theassignment of roles and responsibilitiesbetween different tiers of government, and

the design of fiscal transfers and theavailability of this information to citizens – are different from the instruments thatreinforce client power – e.g. reform ofservice provider, e-billing and payment, andenabling competition in servicedelivery. Take for example, communitydriven development: under which conditionsis CDD an instrument of voice or aninstrument of client power? What we areincreasingly recognizing is that for achievingscale up and sustainability in service delivery,voice needs to reinforce client power. Forexample, understanding the relationsbetween water and federalism may well beessential in designing well managed andoperated irrigation systems.

Third, it is important to look at the linksbetween different channels ofaccountability. For example, we often

develop “citizen report cards” in a context

where citizens do not have access togovernment at any level. A citizen's reportcard on water delivery, for example, hasgreater impact in a context of utility reform,strengthening of the regulatory regime, andthe improvement of the state's oversight.Accountability is best approached in acomprehensive and not in a piecemeal wayor at the very least we need to ensure that

interventions are tactically sequenced.

Rama Krishnan: Water sector reform isoften impacted by strong political interestswithin a country. What are the critical risksthat you see in the progression of

governance reforms in the water sector?

Junaid Ahmad: The one critical politicaleconomy issue that has the potential ofputting the brakes on governance reform inthe water sector is pricing!

Interestingly, today, in the context of climate

change, the world is seeking to put a price oncarbon but there is uncertainty on how tovalue water. Yet, more than ever, pricing andvaluation of water has become essential.Pricing will need to play the role ofsupporting water efficiency and reducingwaste; facilitating the allocation of waterbetween competing needs such as energy,agriculture, and municipal sectors; creatingaccountability in service delivery; meetingenvironmental needs; and importantly,securing universal access and affordability. Asingle price cannot meet these differingobjectives, but not pricing water orunderpricing water leads contrary to popularbelief to inefficiency, inequity, and mis-governance.

In fact, we now recognize that the mostexpensive water, especially for the poor, isfree water. Time and again studies have

shown that subsidies in water are oftencaptured by better off in society and poorrevenue streams for provider underminetheir accountability and ability touniversalize service delivery, leaving poorhouseholds outside the ambit of formalservice delivery. The Gordian knot of pricingwater can only be cut in the context ofinstitutional reform and sector governance,while distributional and equity goals can be

addressed through effective safety netsfinanced separately and securely by theState. This is at the heart of the politics ofwater.

It will be important that a global dialogue is

started on the issue of valuing water andshowing how pricing can ensure that waterresources are protected and access isuniversalized. All stakeholders need to beinvited to participate in this importantdiscussion – it will take time and effort, but itis a dialogue that needs tohappen. President Kim and Secretary

General Ban ki-Moon have just recentlyannounced the formation of a Heads ofStates Panel on Water. A select group ofstate leaders is being asked to pull togetheractions and programs for theimplementation of SDG6 – the waterSDGs. This Panel is well placed to lead theglobal dialogue on the valuation and pricingof water.

Rama Krishnan: Let me just turn slightly toone other issue for more of a globalperspective on water. Water is sometimesseen as a source of conflict. When you lookat some of the recent conflicts, in one wayor another, there have been connections towater. What can the Bank do to addressthese issues that have an impact ongovernance and development?

Junaid Ahmad: The connection betweenconflict and water is not a simple one.Historically there are few – indeed any --examples of war between countries overwater while trans-national wateragreements are quite common. Historytherefore does not support the dire

prediction that water will be the next sourceof a major war. Take for example the IndusTreaty between Pakistan and India. In themiddle of conflict technical teams from bothcountries have crossed their borders toensure that the Treaty remainedfunctional. In the context Middle Easternpolitics today, we see a growing dialoguebetween Israel, Jordan, and Palestine aboutwater transfers. So, contrary to popularexpectations, I believe that water can be abridge and not a cause of war betweennations.

The story of water and conflict, I wouldpropose to you, is perhaps a more of a localstory where conflict over water and naturalresources between communities hasemerged inside nation states. Leftunresolved, these localized conflicts canpotentially destabilize the nation state withforced migration and refugee flows acrossnational boundaries. Examples abound inregions like sub-Saharan Africa, South Asia,and the Middle-East and NorthAfrica. Indeed Darfur, the Chad and Syriaconflict, and part of the refugee movement

into Europe has water origins that started aslocal problems inside nation states. Which iswhy today the Water GP is assessing howtensions over local water can lead to conflictand what can be done about it.

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We are also investing in teams that work ontrans-boundary river basins -- covering waterbasins of the Nile, the Ganges, theBrahmaputra, the Mekong, and in CentralAsia. Climate change and growing energydemands – the energy-water nexus, isputting a greater focus on the sharing ofwater across national boundaries. But I am

optimistic that this increased demand onshared waters will further prove that watercan be a bridge and not a separator ofnations.

Rama Krishnan: The Bank’s regional

strategy for MENA emphasizes four criticalthemes: Renewing the Social Contract,Regional Cooperation, Resilience tointernally displaced persons (IDPs)/refugeeshocks, and Recovery and Reconstruction.These are what we call “the Four Rs”. Can

you elaborate on how you see the waterpractice in MENA, addressing these Four Rsin particular?

Junaid Ahmad: I am very proud that thewater team’s work has contributed to the

development of the MNA strategy and itsfocus on the four Rs. For example, the Egyptsanitation program – long a black spot on ourportfolio -- is now a utility reform program,which is empowering and improving thegovernance of water utilities to deliversanitation in complete collaboration withcitizens. The devolution of power to waterutilities, changing the governance of water

utilities, and the involvement of citizens inthe service delivery process meanscompletely re-writing the compact betweenthe state, service providers and citizens.

Another example is our focus on waterscarcity. MNA is a region with the higheststress in terms of water. We are beginning tolook at integrated water management whichincludes more efficient provision of water,desalinization, water transfers and water re-

use. By focusing on integrated watermanagement at both a country and city level,we are supporting governments in MNAreduce the potential of conflict over waterscarcity. We are therefore focusing onregional peace and nation building byaddressing one of the potential drivers ofnational and regional instability – waterscarcity.

A couple of years back, as part of theSustainable Development team, weextended the framework of resilience from

the climate change talks to addressing theimpacts of political shocks. We recognizedearly on that unlike the refugee crises of thepast – and despite the emergence andvisibility of large camps – the majority of thedisplaced communities are not moving intospecial refugee camps but insteadembedding themselves in host communities.This crisis has created a large shock on themanagement and financing of municipalservices as existing capacity can no longer

cater to the needs of both local residents andthe influx of displaced communities. Not onlyare residents seeing a deterioration ofservice standards, there is now the risk oftension and violence between residents andthe newcomers over access to services andspace. Mayors and heads of municipalitieshave become the “first responders” in thisgrowing pressure on cities and towns. In thiscontext, the assistance paradigm ischanging. It is no longer one of exclusivelyproviding relief to refugees in camps. It isnow increasingly about building the

resilience of cities and towns to deliver basicmunicipal services to residents and thedisplaced population. It is also aboutstrengthening the governance capacity ofcity and municipal leaders. The Syrian crisis isgradually triggering a discussion about therole of cities in bottom up governance intraditionally centralized setting.

Overall, service delivery will be key tokeeping the fabric of a nation-statesustainable – especially if we use servicedelivery to trigger both voice and clientpower. In this context, and particularly in aregion characterized by water scarcity, waterwill play a very, very big role in delivering onthe promise of the four Rs.

Rama Krishnan: It is interesting that youmention the Egypt sanitation Program forResults (PforR) program since the design ofthe program introduced an institutions-focused approach that is different from thetraditional investment-focused approach towater sector operations in the Bank. Whatare the key lessons of the Egypt PforRoperation that can be replicated in water GP

operations in the Bank? How can theGovernance GP partner with the Water GPin such operations?

Junaid Ahmad: We could have addressed theEgypt sanitation challenge by solely fundingmore infrastructure through existing systems

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of delivery. Instead, we are funding theneeded infrastructure in a way that ensuresthat the provider of that infrastructure canactually deliver the service in a sustainableway. In this context, the P4R instrument issupporting Government of Egypt to set upsystems and institutions in the water sectorand through this process trigger the much

needed investments in sanitation.

Across the Bank, we are just beginning tounderstand the real value of the PforRinstrument. It is an instrument that enablesus to partner with a country to build thecountry's institutions and systems. In thecase of Egypt, we are helping Egypt reform itswater utility and service provision andstrengthen the oversight by citizens. Fromthe perspective of improving the quality ofour portfolio management, a P4R offers abetter way to strengthen portfoliomanagement and disbursement comparedto traditional investment loans. The P4R inEgypt was used as a catalyst to restructureexisting investment loans in the sanitationsector that have not been performing forseveral years.

This project could easily have been anoperation run by the governance team. It is“governance applied to water”. I think moreand more we need to examine how servicessuch as solid waste, water, electricity,transport and others can be delivered in thismode using the P4R instrument to help build

local institutions of service delivery whileaccelerating infrastructure investments.

I think that the future of the GovernancePractice lies less on advising on governanceissues at the macro level of a nation. I thinkthe future will be about governance andservice delivery. I believe this is the bigagenda waiting to unfold, and Egypt'ssanitation program and the collaborationbetween the governance team and the water

team, is a perfect example.

Rama Krishnan: We are very happy to takenote of your positive view about how theGovernance GP can partner with the WaterGP. Can you advise the Governance team onhow we can engage more with the WaterGP?

Junaid Ahmad: I think it will be important toengage at several levels. First, a partnershipat the operational level can ensure thatsuccesses through operations can grow our

collaboration. The water and the governanceteams need to look at water portfolio andsee whether we can adopt and adapt theapproach we used in Egypt in other places.For example, we are doing utility reform inBotswana. Here too we can focus on thegovernance of utilities. Similarly, we arediscussing integrated urban watermanagement in Morocco and Kenya. Can weapproach this program through the

governance of how cities manage integratedwater management? In sum, we need to veryconcretely identify a cluster of projectswhere we can engage the governance andthe water teams.

Second, I would like to see joint learningevents between the two practices. I think

that it is important for the water team tounderstand better the tools of governance,and the governance team to betterunderstand the water sector. In this context,the Global Leads who are expected to form

the backbone of the knowledge architectureof the GPs, can create the linkages betweenthe two Practices. The next Water Weekcould offer an excellent platform to designprograms that link the Water andGovernance GPs.

Third, we should be bold enough to hiremanagers who go beyond the boundaries ofour practices. I would like to see governancespecialists apply for practice managerpositions in the Water GP. I would hope thatthe Governance Practice could also begin to

look at the service provision practices forfuture managers to lead the governanceteams.

In summary, operations, learning events,exchanges between the global leads, andcrossover in terms of management fromeach sector, are some of the mechanisms toembed a greater collaboration between thetwo Practices.

Rama Krishnan: Thank you for giving us anopportunity to talk to you. Wishing you allthe best.

Junaid Ahmad: My pleasure.

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Insights

Steven Schonberger & Hisham Waly

The Governance-Water Nexus

Steven Schonberger, is the

Practice Manager of the Water GlobalPractice at the World Bank.

Hisham Waly, is the PracticeManager of the Governance GlobalPractice at the World Bank

The new MENA regional strategy iscentered on the “four Rs” — Renewing theSocial Contract, Regional Cooperation,Resilience to deal with refugee andmigration shocks, and Recovery andReconstruction. How can the Governanceand Water Global Practices (GPs) worktogether to realize these strategicobjectives for the region?

Steven: Both the Water and Governance GPsare directly aligned with the 4Rs of the WorldBank MENA Strategy, with governance beinga critical enabler and water services andresources being key outcomes. Specifically,we have seen globally that access to waterservices — drinking water, sanitation,irrigation — are among the most visiblepublic services to citizens, and the reliabilityof their provision is often taken as a proxy forstate effectiveness and responsiveness.However, competition for water from trans-boundary rivers and aquifers is often

perceived as a potential source of regionalconflict — particularly in a water-scarceregion such as MENA. At the same time,global experience has shown that the mutualrecognition by countries of the criticalimportance of water has led to regional

technical cooperation and agreements,which have been extraordinarily resilient.For example, India and Pakistan havemaintained their cooperation over the IndusRiver for three wars. Vietnam and Thailandcontinued to discuss management of theMekong throughout the Vietnam War, andcloser to home, Jordan and Israel havemaintained a continuous dialogue regardingmanagement of the Jordan River since 1956.

Hisham: I fully agree with Steven. Both of ourGPs’ interventions are directly aligned withthe new MENA strategy, providing us with aclear platform to engage in the importantagenda of water governance. What I likeabout the new MENA strategy is therecognition that our focus needs to be onusing development to promote peace and

social stability instead of waiting for peace tostart engaging in development. Here, I wouldalso like to stress the evolving regionalcontext that is making us look at innovativeand pragmatic ways to support the people ofMENA. Indeed, fragility and conflict are aglobal challenge. However, when you lookback to 2012 there were 700,000 Syrianrefugees and around 2 million internally-displaced persons (IDPs), whereas today wehave 4 million Syrian refugees and 8 millionIDPs. In addition to the tragic impact on therefugees, this has serious implications on thehost communities in countries such asLebanon and Jordan — impacting theirability to deliver services in water,education, health, and transportation. Thereare numerous examples from across theworld that drive home the close connectionsbetween governance and water. The policy,

institutional and financing aspects of waterservice delivery are a critical part of theeffort of countries to manage their waterresources in a sustainable way. At the WorldBank, the Governance GP is workingtogether with the Water GP to look at theseissues in a coherent and coordinated way.

The recently approved Egypt RuralSanitation Program-for-Results (PforR)operation introduced an institutions-focused approach that is different from thetraditional investment-focused approach towater sector operations in the Bank. Howcan this model of designing water sectoroperations — while also focusing ongovernance and service delivery issues — be replicated in other countries in theMENA region?

Hisham: The key driving force that isimpacting the governance of waterresources is the demand for accountable andefficient service delivery. There is increasingpressure on central governments todecentralize service delivery responsibilitiesto the tiers of the state that are closest tocitizens. In Egypt, the historical model ofwater and sanitation service provisionthrough centralized agencies was found tobe ineffective, and the government was keento strengthen the performance andaccountability of sanitation services. TheEgypt Sanitation PforR operation was a“game changer” as it redefined theinstitutional and financial relationshipsbetween the central government and waterservice companies by creating incentives forimproving utility performance, reforms and

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accountability. This was achieved by linkingthe financing of sanitation services toinstitutional performance. These linkagesbetween institutions, incentives andaccountability form the core of thegovernance engagement in the water sector.Applying the World Development Report2004 framework on service delivery to the

water sector — that is, strengthening thelong route of accountability that connectscitizens, service providers and policy makers— requires that appropriate institutional andfinancing mechanisms need to be in place.Such mechanisms will strengthen theperformance and accountability linkages ofservice delivery.

Steven: The Egypt dialogue is a perfectexample of how governance enablesinstitutional change in water. In this context,institutional changes in water can be theleading edge of broader governance reformsin terms of accountability to citizens. Theoperation has embedded, in a significantway, the empowerment of local serviceproviders, transparency with regard toperformance assessments and incentives,and citizen engagement in ways that manysaw as unattainable as recently as six monthsago. What we have learned from thisoperation and what we want to replicate inother countries in MENA and globally is theneed to approach water sector reform froma governance perspective. The unofficialmotto of the Water GP is “Don’t focus on

fixing the pipes, but rather focus on fixing theinstitutions which fix the pipes”. So, instead,we approach the overall sector and assesshow good governance is incentivized in theoverall water service delivery system interms of downward accountability tocustomers/citizens and upwardaccountability to shareholders andregulators. Based on this assessment, weprovide governments with global examplesof countries which have worked through theimplementation of needed policy andinstitutional reforms in terms of thetechnical and political economy aspects. Weare pursuing similar work with theGovernance team in Tunisia, where this ispart of a broader state-owned enterprise(SOE) reform. We are also opening updialogue space for this ambitious approachwith other countries in the MENA region.

What are the areas in which theGovernance and Water GPs couldcollaborate in addressing the governancechallenges in the water sector in the MENAregion?

Steven: The two GPs can collaborate inanalyzing the accountability framework forthe sector, as well as in designing theinstitutional structures and incentives topromote transparency and performance inthe provision of water supply, sanitation and

irrigation services. This then needs to beintegrated into the practical nuts and bolts offinancial flows, procurement andperformance reporting.

Hisham: Let me start by pointing outsomething interesting, some would say evencontroversial, that is, the Oxford Handbook

of Governance opens with the followingcharacterization: “Governance is said to be

many things, including a buzzword, a fad, a

framing device, a bridging concept, an

umbrella concept, a descriptive concept, a

slippery concept, an empty signifier, a weasel

word, a fetish, a field, an approach, a theory

and a perspective”. In other words,governance is a broad theme that can mean

many things to different people, which is nota bad thing as it allows us tailor ourresponses to specific country circumstances.

For instance, when we looked at the variousentry points to promote governance in theregion, we found that the water sector canact as a catalyst of change for the prevailinggovernance systems in many countries. To alarge extent, this shaped our governanceprogram at the country, sector and projectlevels. So, we are working with the water GP

to reinforce the key elements of good watergovernance including transparency,participation, accountability, equity andresponsiveness.

At the operational level, how can theGovernance and Water Task Teamscollaborate more effectively to designinnovative solutions to client problems and,

at the same time, ensure robust operationalquality?

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Hisham: Let me go back to the Egypt PforR,as we are now reflecting on the experienceto draw lessons and to think throughquestions such as: What are the appropriateinstitutional arrangements that will enableefficient and accountable service deliverywhere service delivery responsibilities aredevolved to sub-national governments (for

example in Iraq)? How can the existinginstruments for public financing for waterand sanitation services be reformed toprovide the right incentives for performanceand accountability? How can serviceprovision be made more accountable tocitizens and other stakeholders? How caninstitutional performance be strengthenedthrough a mix of incentives andaccountability? How can sustainablefinancing arrangements be put in place in amulti-level governance framework whereservice delivery responsibilities aredecentralized to sub-national governments?As you can see, there are a number ofimportant and difficult questions. Both theGovernance and Water teams have beendiscussing these issues together. We arelooking at comparable country exampleswhere these issues have been addressed,either as part of Bank operations or othermeans.

Steven: We have been really happy with thecollaboration across the Governance andWater teams. There really is a sharedagenda and recognition of how our work

together generates much greater resultsthan our work separately. Of course, themanagement of both GPs also ensures that

the staff involved in this good collaborationare encouraged and recognized.

A critical issue that impacts service deliveryin the water sector is the weakaccountability of service providers tocitizens. How can the Governance andWater GPs work together to create robust

models of accountability in water andsanitation service delivery in the MENAregion?

Steven: We need to take advantage of theopportunities to incorporate performancetransparency of service providers. Howcontinuous is service? Are utilities reducingleakages which, left untreated, raise the costfor everyone? We also need to supportcitizen engagement, but throughmechanisms which provide space for citizensand utilities to work together toward acommon service objective. We are seeing inMENA what we saw in countries in Asia andLatin America, where central governmentsare more comfortable “decentralizing”responsibilities and accountabilities toservice providers than to locally-electedgovernments. Therefore, we have to ensurethat these utilities demonstrate that such adevolution results in greater citizensatisfaction which, in turn, encouragesfurther steps in local empowerment. Ourexperience to date demonstrates that tomake this work, we must providecontinuous, on-the-ground technical

support to both the customers and theservice providers to learn how to engageconstructively. In this regard, we are veryfortunate in the Water GP to have our

colleagues from the Water and SanitationProgram who are based in the countries andwho bring tremendous experience to thiswork.

Hisham: People in the region rightly expectquality services, whether in education,health or water. Yet we find badly managed

public schools, ill-equipped health clinics,and many people with undependable accessto clean water. Part of the problem is that inthe region, water supply and sanitationservices are mostly delivered through centralgovernment agencies and their subsidiarieswith little consultation and engagement withcitizens. As a result, critical investmentdecisions often do not reflect localpreferences. This, in turn, results in poorquality of services delivered. Local WaterSupply Companies that are in a position togauge local citizen preferences and that areresponsible for delivering services could notbe held accountable because they did nothave much of a say in operational andfinancial decisions. This weakened theaccountabilities of service providers toconsumers/citizens, thereby contributing tothe poor quality of services. The old socialcontract in many MENA countries violatedthe rights of citizens to a clean and safeenvironment. It often excluded the poorestfrom deriving a livelihood from naturalresources. This contributed to poor quality ofservice delivery, environmental pollutionand unfair distribution of natural assets. This

is why our work with the Water GP isextremely important and I personallyconsider it a priority in our program.

CASE STUDY

Water

Against The Current: How to Shape an Enabling Environment for

Sustainable Water Service Delivery in Nigeria

The case study is part of a series on Doing Development Differently in

Nigeria. This series seeks to support the World Bank’s Nigeria country team

in strengthening its effectiveness by tailoring interventions to the local

context using World Bank support to leverage systemwide change and

systematically learn by doing. This case study is also part of the Science of

Delivery case study program that is contributing to the Global Delivery

Initiative’s Library of Delivery Case Studies. The Global Delivery Initiative is

a collaboration across the international development community to forge anew frontier in development efforts worldwide.

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Institutions & Incentives

Improving Water Supply and Sanitation Institutions

and Incentives to Strengthen Sector Performance

By Norhan Sadik and Gustavo Saltiel from the Global Water Practice

Since 1990, an additional 2.1 billion people worldwide have gainedaccess to improved sanitation and 91 percent of the global populationis now using an improved drinking water source. Yet, those who haveaccess still often cope with poor service quality, including intermittentsupplies, and many of the poorest are still without access. Continuedenvironmental degradation and financially weak service providersalso put into question the sustainability of the services that are beingprovided.

Misaligned incentives have led Governments to opt for investmentsin highly visible infrastructure projects and to allocate less resources

for improvements in quality of service delivery. Policy andinstitutional arrangements for WSS services are oftentimes ineffectiveat empowering service providers to deliver sustainable, quality WSSservices. In this context, achieving the Sustainable Development Goalon Water and Sanitation (SDG 6) that sets out to “ensure availability

and sustainable management of water and sanitation for all” is amajor challenge. This global challenge demands a new integratedapproach that addresses the institutional, policy and incentiveaspects of service delivery to achieve sustainable WSS services for all.

In addition, the world-wide trend for decentralization of servicedelivery responsibilities and increasing demands for accountability inservice delivery is also impacting the water sector. The traditional

centralized model that places emphasis on capital investments, assetcreation and regulation has not been found to be very effective inaddressing these demands as it does not create the necessary

incentives for accountable service provision and cost recovery.Therefore countries are looking for alternative institutional, financialand accountability structures and relationships that would strengthenservice delivery and reinforce accountability by the state as well asthe service providers to citizens, consumers and other stakeholders.

Addressing institutional and incentive constraints to WSS servicedelivery is not an uncommon challenge to the majority of the WorldBanks’ client countries. To better serve our clients, and to unlockinstitutional and incentive bottlenecks in WSS service delivery, theWater Supply and Sanitation Global Solutions Group (WSS GSG) of theWater Global Practice, working closely with the Governance GlobalPractice, is currently exploring the institutional and incentiveconstraints to sustainable WSS service delivery and will work towards

developing a number of tools that would allow client countries toanalyze, identify and address institutional and incentive problemsthrough comprehensive solutions that would address institutional,incentive, policy and regulatory aspects of service delivery in parallel.Analytical work is underway that includes the development of a globalstudy on policies, institutions and incentives – to provide an in-depthanalysis of the policies, institutional structures and financingmechanisms that, if addressed in an integrated manner, could providean adequate set of incentives to achieve sustainable universal accessto water and sanitation services. The work will look at internationalexperiences in relation to regulation, financial instruments,decentralization, fiscal transfers and incentives, and the role of civilsociety. Learning from the findings of the global study, the intention

is to work with one client country to design a detailed plan of how toimplement a model based around improving policies, institutions andincentives to raise performance within the WSS sector nationwide.

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From Across the World Bank

odernizing Uzbekistan’s Water Sector

with Citizen Engagement

Uzbekistan has made substantialinvestments in upgrading its water supplyand sanitation (WSS) services over the pastdecade, amassing the largest publicborrowing portfolio for WSS projects of anycountry in Central Asia. Despite suchprogress, the country’s citizens continue toface challenges in accessing clean andreliable water services. For instance, thehouseholds of more than half the population(roughly 31 million people) remainunconnected to a piped water system.

A recent World Bank study, Social Impact

Analysis of Water Supply and SanitationServices in Central Asia: the Case ofUzbekistan, aims to assist the Uzbekistangovernment and WSS service providers indesigning policies to improve the watersector – by providing information onconsumer experiences and readiness forreform in Uzbekistan. Statistics about accessto WSS services tell us little about the qualityof those services, and reliable evidence onthe continuity of service, water quality andaccountability of service providers is scarcein Uzbekistan. The study, therefore, builds

upon this evidence base with much-neededcitizen feedback and stakeholder views onWSS modernization needs.

In 2014, a team of Uzbekistan-based WorldBank researchers conducted 17 focus groupdiscussions with consumers, 19 in-depthinterviews with government and WSS utilityfirm officials, and 10 household case studiesacross Uzbekistan. Comments and feedbackby Uzbek citizens who participated in thefocus group discussions are included in thestudy.

A formal survey of 300 randomly selectedhouseholds was also conducted. Data wasgathered in Tashkent and threegeographically contrasting regions:Karakalpakstan in the west, Jizzak in thesouth, and Fergana in the east. Within theseregions, 30 households were selected ineach of three different location types: thecenter of theoblast (province); the center ofthe raion (district); and rural areas.

On 26 January, 2016, the findings of thestudy and its policy recommendations were

discussed at an event in Tashkent bystakeholders including representatives fromthe Uzbekistan Ministry of Finance, theMinistry of Economy, the TashkentVodokanal(water utility firm), and the Centerfor Economic Research and the Institute for

Social Studies. The Swiss Agency forDevelopment Cooperation (SDC) – a donorto the Central Asia Energy-WaterDevelopment Program (CAEWDP), whichfunded the study – was also represented atthe event, along with other World Bankdevelopment partners such as the AsianDevelopment Bank and the European Union.

"I believe this is a very useful report. It is

always interesting to listen to consumers,

and the problems are there. Lack of data is a

real issue for us; our customer databases are

incomplete. But let’s not forget that the

government is making substantial

investments in the WSS sector. Cost recovery

is key. But that requires reducing system

losses and increasing the accountability of

water utility providers for the amount of

water that is supplied. I believe that raising

the drinking water tariffs will not be a good

idea unless we substantially improve service

delivery and the transparency of service

providers, so that we can justify those higher

tariffs. Resolution 306, which decentralizes

WSS management decisions to the regions, is

an important step towards institutional

reform needed for better performance of the

sector."

Ms. Sadjida Rustemova

Uzbekistan Ministry of Finance

Key findings from the study:

Surveyed households in Tashkentmostly experience good quality drinkingwater and sanitation services, butnearly all households outside Tashkentexperience an intermittent supply of

water (if connected to a centralizedpiped water network).

Many households outside Tashkentwho participated in the study usedmultiple sources of water, includingoutside taps and water pumps in theyard, and public standpipes.

Surveyed low-income households oftenhave no choice but to use unhygienic

open sources of water, such asirrigation canals and rivers or ponds,which can take more than half a day tocollect in some areas.

Photo: World BankSurveyed households in Tashkent mostly experience good

quality drinking water and sanitation services, but nearly

all households outside Tashkent experience an

intermittent supply of water.

More than half of surveyed householdswith taps inside their property that areconnected to a water network reportedwater quality problems, specificallyturbidity and high salinity levels.

Only one quarter of all surveyedhouseholds had access to a centralizedsewerage system, and no surveyedhouseholds in the raion centers andrural areas were connected to such asystem.

Water utility officials indicated that theVodokanals (water utility firms) oftenhave severe debts and cannot evenafford basic operating expenses for

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delivering their services, partly due tolow tariffs and system inefficiencies.

When all costs to meet a household’sdrinking water and sanitation needs areadded up, households not connected toa piped water supply network systemoften spend more than twice as muchas those that are connected to such a

network. This does not include non-monetary costs.

Surveyed households that have a watermeter pay less than those that pay afixed amount per month, based onfamily size. Focus group discussionssuggest that many households believethat meters will provide incentives forVodokanals to deliver water tohouseholds, as they will only be able tobill households for the actual amount ofwater delivered.

Many households in the sample, notconnected to a piped network, reportedthat they were willing to pay double thecurrent tariff provided they receivedgood quality piped water in sufficientamounts 24 hours a day.

The study’s quantitative findings are

intended to be approximate, as the surveysample size was relatively small. The authorssuggest, therefore, to conduct a morecomprehensive and representativehousehold survey in order to confirm thefindings. It is also recommended that theGovernment of Uzbekistan regularly conducta nationally representative householdexpenditure survey that includes detailedquestions on the quality of current utilityservice conditions and on the costs that

households incur for meeting their WSSneeds.

"Studies like this can really add value in

countries like Uzbekistan and other Central

Asian countries, where collecting feedback

and other data from citizens on utility service

performance is not common practice. Itbuilds trust, injects a sense of reality in WSS

reform plans and broadens the debate.

Understanding consumer experiences and

perceptions is essential for coming up with

sensible plans and policy reform measures. "

Rob Swinkels

World Bank Senior Social Development

Specialist and lead author of the study.

New ReportMore Money and Better Service Delivery:

A Winning Combination for Achieving Drinking Water

and Sanitation Targets

In addition to money, strong institutions,accountability and mechanisms that turn

investment into effective services for peoplewho need it, are critical to achievinguniversal water access and safe humanwaste management, according to a report bythe World Bank’s Water and SanitationProgram (WSP) in partnership with theWHO/UNICEF Joint Monitoring Programmefor Water Supply and Sanitation.

Today, 2.4 billion people still live withoutaccess to improved sanitation, about onebillion people defecate in the open, andmore than 640,000 people lack improveddrinking water sources. With the adoption of

the Sustainable Development Goals onwater and sanitation (SDG 6), countries ofthe world committed themselves to changethis situation over the next 15 years not onlyby reducing to zero the number of unservedpopulation but also upgrading the currentlevels of water, sanitation and hygieneWASH (6.1 and 6.2) services [1].

The study, The Costs of Meeting the 2030Sustainable Development Goal Targets onDrinking Water, Sanitation, and Hygiene,reveals that current levels of investment are

likely to be sufficient to provide basic waterand sanitation services [2] for all by 2030. Ifthe current global expenditure, estimated ataround $28.4 billion per year, were to betargeted properly, every household in theworld would have access to drinking water,

an adequate toilet and a suitable place towash their hands by 2030 [3].

But the SDG water and sanitation targets 6.1and 6.2 go beyond basic services. They setthe goal for a world where all people alwayshave access to drinking water nearby andtheir fecal wastes are safely managed. Thetotal cost of providing WASH services atthese levels is estimated at around $114billion per year, three times the currentinvestment levels.

“Considering the amount of estimatedinvestment needed, efforts to meet the SDGtargets on drinking-water and sanitation will

require not only additional public funding,but also greater service efficiency andincreased engagement from civil society andthe private sector,” according to WSP SeniorEconomist Guy Hutton, the lead author ofthe study.

“There is no doubt higher levels of financingare needed; however, universal andsustainable WASH services also requirestrengthened institutions and betterpolicies,” according to Jyoti Shukla, WSP’s

Senior Manager. “Countries need to assess

the best way to spend their resources, whichinfrastructure to build, how to operate theservices, what funds are available, and whattariff structure to adopt while also remainingsensitive to affordability. Institutionalstrengthening is fundamental to ensure that

investments translate into effective servicedelivery over time.”

In order to encourage deeper analysis, thereport includes results and analysis by worldregions. The underlying country data areavailable via the World Bank website; themain purpose is not to replace nationalfigures and plans but to provide key inputsfor governments to define the most suitableWASH services for all.

The publications and data sets are availablefor download at:http://www.worldbank.org/en/topic/water/publication/the-costs-of-meeting-the-2030-sustainable-

development-goal-targets-on-drinking-water-sanitation-and-hygiene

The Water and Sanitation Program is a multi-donor partnership, part of the World BankGroup's Water Global Practice, supportingpoor people in obtaining affordable, safe,and sustainable access to water andsanitation services.

[1] The Sustainable Development Goal on water andsanitation (SDG 6) is comprised of 8 sub targets that covera wide range of issues such as environment,management, and transboundary cooperation. This studyfocuses on the sub targets related to water, sanitation,

and hygiene (6.1 and 6.2).[2] Basic water supply includes an improved communitywater source within a 30-minute round-trip; basicsanitation includes an improved toilet; and basic hygieneincludes a hand-washing station with soap and water forevery household.[3] Note that the study covers 140 middle- and low-income countries and off-track developed countries.OECD countries are largely excluded.

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Governance in Action

Egypt Sustainable Rural Sanitation Services (SSRS)

Program for Results (PforR)

Innovative Governance Solutions to Enhance Sustainability of Service Delivery

By Norhan Sadik, Osama Hamad, Yogita

Mumssen, Fadel Ndaw and Rama Krishnan

Venkateswaran

Photo Credit: ESRISS Project

The Government of Egypt (GoE) launchedthe National Rural Sanitation Program(NRSP) in 2014 as a Presidential priorityprogram to address the challenge of criticallylow sanitation coverage levels in particular inthe Nile Delta area with huge health impacts

on the poorest population: only 12 percentof rural Egypt currently has access to thesewage network. As one of the key partnersof the GoE in the rural sanitation sector, theBank is working to support the GoE toachieve its development priority to increaseaccess to improved sanitation services - yetnow with a different approach. Given themarked weak sector performance to date,including for example severeimplementation delays of infrastructureconstruction lasting up to thirty years insome cases, the announcement of the NRSPwas seen by the Bank as a real opportunity

for the sector to move from an inefficientcentralized approach to more decentralizedservice delivery.

While the traditional focus in the sector wason investments through Investment ProjectFinancing, the Program for Results (PforR)instrument was considered the mostappropriate instrument that would allow theBank to support the GoE improve the designand implementation of the NRSP usingcountry systems and, by directly linking theachievement of results to the disbursement

of Bank funds, incentivize implementation oflong-stalled institutional improvementsessential for improved sanitation servicedelivery. The SSRS PforR was designed bydrawing on the wealth of experienceobtained from previous operations in therural sanitation sector which suffered fromslow project initiation and implementationas well as high costs. The PforR adopts anapproach that seeks to build moresustainable and accountable service -providers through the implementation ofinnovative governance measures that willlead to the achievement of the three

Program results areas: (i) improvedsanitation access, (ii) improved operationalsystems and practices of WSCs, and (iii)strengthened national sector framework.

The separation of institutional roles andresponsibilities for investment planning andconstruction from operation andmaintenance has been a major contributorto the sector’s poor performance. The

Program, therefore, follows theGovernment’s strategic choice to shift froma centralized model of service delivery to adecentralized model that empowers thelocal Water and Sanitation Companies(WSCs) to improve service provision byplacing responsibility for investmentplanning and operation and maintenancewith the WSCs. Whereas previously, theWSCs were institutionally beholden to

central level organizations, under theProgram, three Delta WSCs (Beheira,Dakahlia and Sharkeya) will assume fullimplementation responsibility frominvestment planning to implementation andoperation and maintenance. Accordingly,the Program is centered on empowering theWSCs since they are the service deliveryentities closest to the beneficiaries and assuch are best suited to respond to citizens’

demands. The Program provides significantcapacity building support to the WSCs inaddition to training of the technical staffengaged in operation and maintenance. Inthis regard, the Water and SanitationProgram (WSP) administered by the WorldBank will complement the PforR with aninitial USD 3.5 million programmatictechnical support program to strengthen thecapacity of the Program implementing

entities particularly the WSCs as they work todeliver improved sanitation services.

As part of these institutional reforms, theGovernment is for the first timeimplementing a system of PerformanceBased Capital Grants (PBCGs) through theProgram. These will provide transparent andpredictable financing to WSCs, enablingthem to address their service deliveryresponsibilities effectively. Disbursement ofthe PBCGs are linked to an incentive-basedregime of Annual Performance Assessments(APAs) that will be designed andimplemented in a transparent manner. The

APAs will assess the institutionalperformance of WSCs specifically in theOperational, Financial, Institutional, andCitizen Engagement dimensions of water andsanitation service delivery. Achieving themandated threshold scores will enable theWSCs to be eligible and to receive the PBCG.A base grant entitlement will be provided tothe WSCs based on their ability to meet apredetermined threshold and additionalgrant entitlements will be provided to theWSCs if they exceed a set threshold, thusrewarding better performance. To allow theWSCs to deliver on their annual performancetargets stipulated in the APAs, they willreceive technical support embodied inPerformance Improvement Action Plans,similar to business plans, and would includemeasures to improve each WSC across thefour areas of service delivery.

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Accountability to citizens for greater voiceand inclusion form a critical pillar of theProgram. Citizen engagement throughcitizen report cards/ beneficiary feedbacksurveys, Grievance Redress Mechanisms,awareness campaigns, community outreach

guidelines, and strengthenedcommunications systems of WSCs, as well asthe development of a strategy for serving thepoor, are all incorporated in to the Programeither through results-based incentives,required measures (e.g. covenants), orthrough capacity building programs. Overall,an important framework has beenembedded in the operation to leverageclient feedback, make WSCs performanceand responsiveness information publicallyavailable to clients, the strengthen role ofthe regulator and independent verificationunderpinning these processes.

The Program also supports a number ofpolicy and regulatory initiatives to provide astrong enabling framework for empoweringthe WSCs to become efficient andaccountable service delivery institutions,

including the strengthening of the capacityand role of the Egyptian Water andWastewater Regulatory Agency (EWRA).Further, a new water and wastewater tariffis to be developed by the Ministry ofHousing, Utilities and Urban Communities(MHUUC) in order to enhance financial

sustainability of the sector. The MHUUC isalso developing an updated national ruralsanitation strategy that is consistent with theNRSP and the SSRS PforR, which will clarifythe existing overlap of institutional roles andresponsibilities that are currently deterringclear intuitional accountabilities.

Thus the SSRS Program contrasts withprevious sector operations and reformefforts in several critical ways. It seeks toimplement a unified approach thatcomprises decentralized services, utilityreform, financial sustainability, and

performance enhancement through thecreation of incentives for investment andthrough strengthened accountabilitymechanisms including enhanced citizenengagement, and strengthened regulation,policy and institutions. This combination of

incentives and accountability mechanismsembodied in the SSRS PforR are designed toaddress the previous projectimplementation challenges that haveimpeded the achievement of increasedaccess to sustainable sanitation services forEgypt’s rural communities. Although many ofthe abovementioned aspects are to be

implemented for the first time in Egypt, theGovernment is strongly committed toimplementing the necessary institutionalimprovements, with the capacity buildingand institutional strengthening support fromthe Bank.

The Program is also unique in the way it wasprepared. Unlike previous sector operationswhere task teams were comprised almostentirely of sector specialists, the SSRS wasprepared through a collaborative effortbetween the Water and Governancepractices. This approach of addressing adevelopment challenge by bringing togetherskills and experience from two practice areaswithin the Bank. The task team broughttogether the technical and operationalexperience of the Water practice and theinstitutional development and public sectorreform experience of the Governancepractice to create a solution that wasinnovative and integrative.

Key Lessons Learned:

1. The Program adopted aninnovative design thatincentivized institutionalperformance and accountabilityand linked financing to servicedelivery results while piloting amore decentralized approach.

2. The task team for thepreparation of the operationbrought together Water and

Governance specialists thatresulted in the institutionaldevelopment focus of theProgram. The ability of the teamto take a broad based approachinstead of a siloed approach wasinstrumental in creating aseamless operational design forthe operation.

3. The use of the PforR instrument

enabled the Government andthe Bank team to focusattention on results instead ofgetting bogged down on rulesand procedures.

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World Bank Financed Operations

Strengthening Institutional Capacity

in the Palestinian Water Sector

The World Bank’s US$2 million grant to the Palestinian water sectorwill help strengthen the capacity of the water authority andcontribute to the implementation of reform initiatives as outlined inthe water law. The grant will supplement ongoing capacity buildingwork in the water sector.

“With the new water law, the Palestinian authority has a good

framework to deal with the severe challenges the sector faces such as

limited resources, insufficient wastewater treatment and reuse, and

an alarming situation in Gaza where 96 percent of water resources are

unfit for human use,” said Steen Lau Jorgensen, World Bank CountryDirector “We are proud to be supporting the continued strengthening

of state institutions in this essential sector for the future of all

Palestinians.”

The project will help establish streamlined water institutions withclear roles and responsibilities in line with the new water law thatstipulates the establishment of the Water Sector Regulatory Council,independent from the Palestinian Water Authority. The World Bankwill provide capacity building support to both institutions through theexisting Water Sector Capacity Building Project and this additionalgrant.

The World Bank supports building institutions at the national level andfinancing infrastructure and capacity building through projects, suchas the Northern Gaza Emergency Sewage Treatment Project, the GazaWater Supply and Sanitation Improvement Project, the HebronRegional Wastewater Management Project, and the West BethlehemVillage Improvement Project.

“The investment in the Palestinian water institutions is a strategic

priority in the context of acute water problems and future needs as a

result of a growing population. The improvement and expansion of

infrastructure must be accompanied by the capacity-building required

for Palestinians to run the water sector independently and efficiently,” said Iyad Rammal, Senior World Bank Infrastructure Specialist.

The additional financing comes from the Partnership for Water andUrban Development, the Multi-Donor Trust Fund that receivedcontributions from the Swedish International Development Agency(SIDA), France’s Agence Française de Développement (AFD), and thegovernments of Croatia, Denmark, Finland, the Netherlands, Norway,and Portugal.

BOOKS

Water

Arab Water Security:Threats and Opportunitiesin the Gulf States (International Hydrology),by Hussein A. Amery. CambridgeUniversity Press.

Confronting ClimateUncertainty in Water ResourcesPlanning and Project Design:The Decision Tree Framework by Patrick A. Ray and Casey M.Brown. World Bank.

The Last Drop:The Politics of Water by Mike Gonzalez andMarianella Yanes. Pluto Press.

Connecting the Drops:A Citizen’s Guide to Protecting

Water Resources by Karen Schneller-McDonald.Cornell University Press.

COVER STORY

http://www.amazon.com/Connecting-Drops-Citizens-Protecting-Resources/dp/1501700286/ref=sr_1_1?s=books&ie=UTF8&qid=1449262316&sr=1-1&keywords=connecting+the+drops

http://www.amazon.com/Last-Drop-Politics-Water/dp/0745334911/ref=sr_1_1?s=books&ie=UTF8&qid=1449262295&sr=1-1&keywords=last+drop:+politics+of+water

http://www.amazon.com/Confronting-Climate-Uncertainty-Resources-Planning/dp/146480477X/ref=sr_1_1?s=books&ie=UTF8&qid=1449262339&sr=1-1&keywords=confronting+climate+uncertainty

http://www.amazon.com/Arab-Water-Security-Opportunities-International/dp/1107042291/ref=sr_1_40?s=books&ie=UTF8&qid=1443126842&sr=1-40&keywords=gulf+countries

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Maghreb

Interview 44

Morocco 46

Tunisia 50

Libya 52

InterviewWorld Bank Country Director for the Maghreb,

Marie Francoise Marie-Nelly

World Bank Priorities, Strategy and Activities for the Maghreb

Laila MoudenFinancial Management Analyst

Laila MOUDEN: Marie-Francoise Marie-Nelly, congratulations on your new post asthe World Bank Country Director of theMaghreb Country Department. How does it

feel to join the Middle East and North Africa(MENA) region?

Marie Francoise Marie-Nelly: This is animportant moment to be in the MENA regionand I am very excited. As you are aware,there are many issues deeply relevant to theworld today which this region is at the coreof, such as the crisis of refugees fleeing theirhomes to other fragile countries in theregion and Europe, the post-Arab Springrecovery, and the renewal of the socialcontract in countries such as Tunisia which is

still facing challenges to complete its politicaland economic transition. In addition, thereare the increasing number of radicalizedgroups which bring violence and fragility,and finally the wide-spread youthunemployment issue, as well as exclusion,which could become a social implosion ifunattended. At the same time, with therecent political agreement in Libya, there ishope that this country can regain somestability and that the World Bank Group(WBG), in partnership with others, can play arole in helping to rebuild key stateinstitutions and restore physical

infrastructure. Due to such anunprecedented complexity of issues, theWBG is being challenged to think of newways in shaping its response. The new MENAstrategy offers a unique opportunity tochange the way we are doing business and to

design innovative solutions, including in theway we interact with various stakeholders.For example, in our Maghreb countriesstarting with Tunisia, we are nowestablishing an interactive youth forum toseek young people’s inputs and shapesolutions for them. So, although the region isfacing a diversity of challenges, it also offers

unique potential for development. Indeed,there are many opportunities for the WBG tocontinue to make a difference. This makesmy job very rewarding.

LM: In your new post, how would youdevelop and advance the strategicpartnerships with the Maghreb countries,while keeping in line with the World BankGroup’s MENA regional strategy?

Overall, the new MENA strategy is wellaligned with the priorities of the Maghreb

countries in that all countries are working todefine a new relationship with their citizens.Obviously, the process varies from countryto country, but helping to forge a new socialcontract between the government and thecitizens is central to what we are doing inthese countries. In Libya, where a political

accord was recently reached, we arelaunching an initiative on economic recoveryas well as prioritizing and sequencing actionstoward fostering social stability. The idea isto help Libyan opinion leaders andinfluencers to prepare for the post-conflictperiod by helping to shape a consensus on acommon diagnosis, priorities, and options

for fast-tracking economic recovery andsocial stability in the aftermath of theconflict. The challenge will be to focus on theimmediate post-conflict needs, whilestarting to develop a vision for the long term.In Tunisia, the challenge is to support thecountry’s effort to get back on an economicrecovery path while ensuring thatopportunities are created for those leftbehind, notably youth, women and the mostvulnerable in lagging socio-economicregions. We are also deepening ourpartnership with Algeria, focusing on both

short- to medium-term issues such asimproving the business environment,revitalizing the agriculture sector andassessing social protection mechanisms. Inaddition, we are undertaking a long-termvisioning exercise with a view to define waysto move the country away from large public

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funding to a more efficient market economy.In designing our programs, we ensure thatour activities do not perpetuate the oldsocial contract model,2 but rather promote anew dynamic where the citizens and localactors play an active role in shaping thesolutions and holding their governmentsaccountable. For example, in Tunisia, we are

supporting a local government program,which is designed to empower communitiesand elected local authorities.

LM: What do you think are the keygovernance challenges and opportunitiesfor the Maghreb countries given thediversity of the countries?

MFMN: Again, while there are some aspectsspecific to countries, there are somecommon challenges as well, such as: (i) howto ensure that institutions are strong andaccountable; (ii) how to ensure that publicresources are allocated and managedtransparently with a focus on results, (iii)how to ensure that there is a level-playingfield and that people can openly accesseconomic opportunities; and (iv) how toensure that the citizens are engaged andprovide checks and balances so that servicesare delivered in a fair, efficient and timelymanner. I am pleased that our governanceteam has helped us develop acomprehensive approach, which will allowour operational teams to look at both the bigpicture and at specific sectoral issues.

Moreover, defining a clear road map willenable us to seize opportunities when theyoccur, while working on strengthening theinstitutions that underpin a stronggovernance system. This effort usuallyrequires a lot of time and is therefore a long-term agenda. While the context is oftenperceived as challenging, there are also anumber of opportunities. First of all,governments increasingly realize that theyneed to allow citizens to access information,and efforts are being made to review thelegal framework for this to happen. Forexample, in Tunisia, budget information isnow made available on line through theplatform “Mizaniyatouna” (Our budget) with

a great level of detail. The question is howcan we support this development to makesure that this new transparency model isused to result in greater publicaccountability? Both Morocco and Tunisiahave adopted access to information laws3.This new environment provides greateropportunities for citizens to challenge thedecisions made by their governments.Secondly, all countries are complex andunderstanding the quickly evolving contexts

of our countries in the Maghreb is key to oureffectiveness as an institution. It isimperative that we broaden the scope of our

2 The old social contract refers to the post-independencemodel by which the State provided jobs, free health andeducation, and subsidized food and fuel and expected the

due diligence work and understand thepolitical economy of our activities. This willhelp us understand who is likely to benefit,who is likely to resist reform efforts, as wellas how we can support locally-ownedsolutions which may build on internationalbest practice principles while tailoring themto diverse local realities. Our role in theMaghreb can help support a new socialcontract. An in-depth contextual knowledgeis key to ensuring that we play a positive rolein building local solutions aimed at achievingthe WBG’s twin goals of ending poverty and

promoting shared prosperity. Thirdly, andrelated to this, the new openness in many ofour client countries means that we are nowable to engage a broader array ofstakeholders which will provide us with abroader basis of information and knowledgeon which to build our support. We can usethis opportunity to liaise candidly about theroot causes of persistent problems andrealistic solutions which will require theengagement of multiple actors andcoalitions. So, while it is true that thechallenges are considerable, newopportunities are also being presented and it

is our responsibility to seize these andchallenge ourselves to be problem solvers

citizens to keep their voices low, the so called“authoritarian bargain”.

that support locally-facilitated solutionsamong a wide array of actors.

LM: You joined the Maghreb departmentafter spending years in the Africa region. Doyou see opportunities for cross-fertilizationbetween the two regions, and in theMaghreb countries in particular?

MFMN: It is interesting to note that theWorld Bank has divided the continent intotwo parts; yet I see that the Maghreb and theSub-Saharan countries have reallyunderstood the potential and theopportunities for cross-fertilization.Obviously there are countries more active

than others in this regard. Morocco, forinstance, has made this partnership withSub-Saharan Africa a government priority

3 For Morocco, the adoption of the access to informationlaw has not yet received Parliamentary approval.

Mrs. Marie-Françoise Marie-Nelly, the new Country Director for the Maghreb countries

and Malta, was invited to join the Moroccan Professional Accounting Organization (PAO)annual event as a panelist for the session on “Growth and Competitiveness – Developing

Synergies in Africa”. Key issues for discussion included doing business in Africa,opportunities for micro, small and medium enterprises (MSMEs), and the changing roleof the accountant in this process, as well as using Morocco as a good sample and platformfor greater cooperation and synergy between African economies. Mrs. Marie-Nellyfocused on the potential and the opportunities for south-south cooperation in sectorssuch as agriculture industrialization, technology, and air connectivity. The outcomes ofthe event were broadly to enlarge the accountant role from certification of financial

information to strategic information, which is of interest to investors. It will consolidateits role as the expert with essential professional reference in the service of investmentand decision-making.

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which is already percolating at all levels. Forexample, the recent National Conference ofChartered Accountants in Marrakech wasopened to the entire continent. This hasgenerated very rich discussions andopportunities for greater collaboration. Anumber of companies from the Maghrebhave also successfully invested in sub-

Saharan African countries. There are win-winopportunities which can build on therespective comparative advantages of thecountries. Agriculture forms the basis for anyindustrialization and the continent has a lotof potential. So, this is an area where the tworegions can develop greater synergy andcomplementarity in the use of technology,such as the use of appropriate fertilizers,climate resistant seeds, and so on. At thesame time, there is a need to improve theenabling environment to facilitate suchcooperation. For example, connectivityneeds to be improved significantly: shippinglines do not operate efficiently along the

coast and air transportation connectionsneed to be developed further.

LM: The World Bank Group deals with awide range of issues. Is there one issue inparticular that you feel strongly about?

MFMN: I feel strongly about a lot of issues as

I have been fortunate enough to work inmany countries which are faced with avariety of unique challenges. However, oneof the issues which I have found to becommon and which keeps me up at night isthe youth challenge. How can we find a newapproach to mobilize all actors to createopportunities, training, entrepreneurship,and participation in community work and inkey public decisions? There are manyorganizations which are providinginteresting solutions to the issue of youthunemployment. Another fundamental leverto pull would be the cross fertilizationbetween institutions of education andinstitutions of work and then to scale up

successful pilots. In this sense, there must bea deeper acceptance by educationalinstitutions of the changing nature of theworking world, and their curricula andstructures should reflect this. The youthhave a voice in this and should be listened toin shaping solutions for them.

Morocco

Social Contract and Civil Liberties

Paul Prettitore

Senior Public Sector Specialist

The Arab Spring and its aftermath haveinspired much discussion of the socialcontracts that have defined the relationshipbetween citizens and the state in the Arabworld. In the past, the typical social contractof a state in the Middle East or North Africabroadly afforded that citizens would beprovided jobs and public services, andpresumably political stability, in return forlimiting civil liberties that could be used tochallenge governing regimes. The politicaltransition in Morocco has provided space for

addressing civil liberties in the debate onnew social contracts. Moroccans, like manyin the MENA region, have long resented thatattempts to fully exercise civil liberties couldresult in heavy-handed responses by securityservices and courts. Activists, journalists, andeven music rappers have been singled out forviolations of rights by governmentauthorities. However, many other citizenswere systematically denied civil liberties asthe result of weak safeguards within the justice sector. Discussions on the inclusion ofcivil liberties in new social contracts hascentered mostly on citizen engagement,

largely looking at access to information,transparency, and public consultations.There has been less discussion on other keyaspects of civil liberties, namely protectionfrom ill-treatment by governmentauthorities and the right to a fair trial. Prior

to the Arab Spring, such liberties were oftenviolated through the use of arbitrary arrestand detention; torture and other forms of ill-treatment of detainees; lengthy pre-trialdetention; and restricted access to legalassistance. Political interference in the courtsby the executive branch was not uncommon.Further, civilians could be sent for trial

before military courts, which lacked the mostbasic fair trial safeguards. Later, Morocco’s

Charter for the Reform of the Judicial System,adopted in 2013, highlighted a number ofgaps in the exercise of civil liberties,particularly in relation to fair trials and

treatment of detainees. Morocco’s NationalHuman Rights Council has noted thepersistence of abuses by prison staff againstinmates and poor treatment of juveniles indetention in the past. Morocco scored poorlyon the Economist Intelligence Unit’sDemocracy Index (2014) measure of civilliberties. Its lowest score on the 2013 World

Governance Indicators (WGI) is for Voice andAccountability, which covers civil liberties.However, on a host of other WGI indicators,including the rule of law and governmenteffectiveness, it scores well above theaverage for lower-middle-income countries,

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suggesting the government can be effectivewhen it wants to be. The government ofMorocco has taken steps to enhance civilliberties. The Constitution adopted in 2011outlawed the practices of arbitrary arrestand detention, torture and ill-treatment. Italso enhanced fair trial safeguards and setthe basis for criminalization of torture and

arbitrary arrest and detention. The mandateof the National Human Rights Council wasexpanded to allow more pro-activemonitoring, investigation, and interventioninvolving cases of violation of civil liberties.The Charter for the Reform of the JudicialSystem set policy objectives for improvingfair trial safeguards and the treatment ofdetainees, and for limiting the use of pre-trialdetention. The trial of civilians by militarycourts was outlawed in January 2015.

These reforms are relatively recent, and theextent of implementation remains unclear.Yet violations in Morocco have beenhighlighted in the last several years by theUnited States (U.S.) State Department’sMorocco Human Rights Report 2014, theUnited Nations (U.N.) Working Group onArbitrary Detention, the U.N. SpecialRapporteur on Torture, Human RightsWatch, and Amnesty International. Forexample, the U.S. State Department has

pointed to the continued practice ofarbitrary arrest and detention, and theexcessive use of pre-trial detention, often forperiods longer than allowed by law, takingplace throughout 2014. Ensuring the socialcontract covers the full range of civil libertiesis important for several reasons. Civilliberties should be respected as a matter of

legal principle. These rights are well-established under international law, andguaranteed in Morocco’s constitution andinternational human rights treaties that ithas signed. The exercise of civil liberties bycitizens, and their protection bygovernments, is integral to promoting goodgovernance. Violation of civil liberties withimpunity by government authorities is apowerful deterrent to citizens’ fullyexercising their rights. The exercise of civilliberties is also linked with citizen well-beingand agency. Ill-treatment by police, prison,and security officials undermines well-being,including physical and mental health.Families of the detained are also affected.Unnecessary detention also underminesagency—those in detention are severelyrestricted in the exercise of choices in, andcontrol over, their lives. This may last beyondthe period of detention, for example in termsof access to employment and education. Theviolation of civil liberties also imposes

economic costs. Wrongful detentionseparates individuals from employment andreduces financial assets at the family level.This presents a particularly precarioussituation in Morocco, where most detaineesare men and the labor force participation ofwomen, especially married women, remainslow. Furthermore, much of these costs are

likely avoidable. For example, Morocco’s rateof pre-trial detention (per 100,000 ofpopulation) is comparable with countriessuch as Bolivia, Brazil, Colombia, El Salvador,and Mexico — all of which have considerablyhigher rates of homicides and other violentcrimes. This raises the question as towhether Morocco needs such high levels ofpre-trial detention. Finally, the poor are likelyto suffer disproportionately from violationsof civil liberties. The poor are more likely tobe involved in crimes and come into contactwith the police, prisons and courts. They aremore frequently held in pre-trial detentionbecause they cannot afford legal assistancefrom a lawyer, bribes or bail, and lack thepersonal connections to navigate the courtsystem. In addition, they cannot rely onfunctioning legal aid systems to ensureaccess to lawyers. The economic costsincurred may push the vulnerable intopoverty, or exacerbate the conditions ofthose already in it.

MoroccoMaking Government more Accountable to Citizens

Fabian SeidererSenior Public Sector Specialist

The World Bank recently announced aUS$200 million operation to support ongoingreforms in Morocco to make governmentmore efficient and more accountable to itscitizens. The Transparency and

Accountability Development Policy Loan(DPL) is the second operation of acomprehensive program designed to assistthe government in laying the foundations formeeting the governance goals outlined in thenew Constitution. The new Constitutionresponded to public discontent over poorservice delivery and government institutionsthat were out of reach to ordinary citizens.The Transparency and Accountability DPLprogram was designed to support thegovernment in taking the critical first steptoward putting the Constitution into practiceby developing the relevant policies and legalframework. The first DPL supported a broadpackage of reforms to improve performanceand transparency of key public institutionsand allow for greater citizen participation bymaking the chain of accountability clearer.This second DPL provides further momentum

through deepened support to policies forfiscal transparency and citizens’ access toinformation and the right to petition. Thenew operation also promotes increased

efficiency in the overall handling of publicfunds, with a focus on better financialmanagement at the central and localgovernment levels, as well as by state-ownedenterprises.

“Morocco is undertaking an ambitious

overhaul of its governance framework and

the World Bank is pleased to support these

reforms with this comprehensive program,”

said Marie Françoise Marie-Nelly, WorldBank Country Director for the Maghreb. “This

program not only supports reforms but also

aims to provide the capacity building needed

to ensure they can be implemented. What

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matters now, however, is that Moroccans see

the results of change, and that reforms lead

to greater participation of citizens in public

life.”

The program, also titled Hakama, or‘Governance’ in Arabic, is a joint effort withthe European Union and the African

Development Bank who have bothcontributed a further US$250 million insupport of the budget, procurement andopen governance reforms. In parallel withthe financial support, Hakama providestechnical assistance to the central and localgovernments as well as to the Parliament forthe implementation of the governancereforms, including training on performancebudgeting, monitoring and evaluation, fiscaldecentralization and citizen engagement.

“The translation of these new constitutional

governance rights and principles into specific

laws and policies is a key milestone of the

program” said Fabian Seiderer, World BankPublic Sector Specialist and task team leaderof the program. “The next phase will focus on

the implementation of these policies with a

view to improving the quality of public

services to Moroccans and allowing citizens

to make effective use of these new rights.”

Programme d’appui aux réformes de

gouvernance au Maroc (Hakama)

Qu’est-ce que le programme Hakama ?

Le programme de gouvernance (Hakama) dela Banque mondiale, est ancré dans lanouvelle Constitution marocaine. Il soutientles réformes du Maroc visant à renforcer lesmécanismes de transparence et deredevabilité dans la gestion des ressourcespubliques et la concrétisation des nouveauxdroits et principes constitutionnels pour unegouvernance plus ouverte, pour undéveloppement économique et social plusinclusif et une amélioration de l’efficience et

de la qualité des services et des programmespublics. Il s’agit d’un programme holistique et intégré lancé en 2012, qui vise à maximiserles synergies des réformes de Gouvernance àtravers le secteur public, tant au niveau del’administration centrale, des collectivitésterritoriales et des Entreprises et desEtablissements Publics (EEP), afin derenforcer les résultats tangibles pour tous lescitoyens.

Quelles sont les réformes constitutionnellesappuyées par le programme Hakama ?

Le programme Hakama comprend deuxpiliers : Pilier I - Amélioration de la

transparence et de la redevabilité dans lagestion des ressources publiques et Pilier II

– Promotion d’une gouvernance ouverte

Pilier I

La réforme pour une budgétisationprogrammatique axée sur laperformance,

La réforme de la passation des marchéspublics,

Le cadre juridique et institutionnel pourles partenariats public-privé,

La gouvernance des agences et desentreprises et établissements publics(EEP),

La régionalisation et la gouvernancelocale.

Pilier II

Les réformes qui visent à renforcer latransparence budgétaire,

L'accès à l'information, La consultation du public et les pétitions

des citoyens pour favoriser unengagement croissant et direct descitoyens dans la conception et la miseen œuvre des politiques publiques etprogrammes qui les concernent.

La fourniture en ligne de servicespublics aux citoyens, comme lescertificats de naissances

Le programme Hakama c’est aussi :

une série d’appuis budgétaires de 400

millions de dollars sur la période 2013-

2016, dont la seconde opération vientd’être approuvée par le Conseild’administration de la Banquemondiale;

un projet d’assistance techniqued’appui au nouveau cadre de

gouvernance, de 4 millions de dollars,financé par le Fonds de transition, quisoutient la mise en œuvre des politiques

sur la consultation et la pétitionpubliques, la réforme budgétaire, lesréformes de la passation des marchés etde la décentralisation budgétaire ;

le projet de jumelage institutionneld’appui à la mise en œuvre de la Loiorganique des finances (LOF) – financépar le projet ci-dessus ;

un projet de renforcement descapacités et de formation duParlement ;

de l’assistance technique à la refonte dela passation de marchés ;

des diagnostics des finances publiques(PEFA) et des études sur la gouvernancedes services publics

des séminaires, formations etcommunautés de praticiens (financespubliques, passation de marchés,…)

Les partenaires : Le Parlement, le SecrétariatGénéral du Gouvernement, les ministèresdes Affaires Générales et de la Gouvernance,le ministère de l’Economie et des Finances,

de l’Intérieur, des relations avec le Parlementet avec la Société Civile, de la FonctionPublique et de la réforme de

l’Administration, les ministères sectorielsmettant en œuvre la LOF, les EEP mettant en

œuvre le code de bonne gouvernance, lescollectivités territoriales, les associations,L’Union européenne et la Banque Africainede Développement.

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Morocco

Overhauling a Fragmented Identification System

Diego Angel-UrdinolaSenior Economist

For years, Morocco has relied on multipleidentity systems, each highly developed in itsown way. In the late 1970s, the governmentintroduced a national identity system. Thiswas replaced in 2008 with an electronicidentification system, Carte Nationaled’Identité Electronique (CNIE) with

approximately 20 million electronic ID cardsissued to date. Besides CNIE, Morocco’sidentification systems include the civilregistry which records births and deaths, the

National Register of Children (MASSAR), acompletely electronic system that managesaspects of the scholastic life of children, theRAMED database (introduced in 2011), a freemedical insurance program for the poor, andthe Social Security register (CNSS) by whichemployers register their employees in thesocial security scheme.

A Missing Link

And yet, for many reasons, Morocco foundthat its complex identity ecosystem was nolonger serving all its identification needs. A

key issue was lack of interoperability. Eachsystem had created its own identificationnumber; none of these systems or numberswas interoperable or even followed the samelogic or standards. Many of the functional IDprograms required prospective beneficiariesto possess a CNIE but could only use this todo on-the-spot manual verification. Withoutelectronic access to the CNIE database, therewas no way to truly verify that beneficiarieswere, in fact, who they said they were. Thislack of electronic verification made systemssusceptible to fraud. Further, it resulted inindividuals appearing differently acrossdatabases with slight variations in names,spellings and addresses. In the long run, thislack of electronic integration resulted in awaste of time and money for theadministration and burdened individualswith the need to repeatedly prove theiridentity in order to access services and rights.

An Incomplete System

The introduction of the RAMED and Tayssirsocial safety net programs only underlinedthe country’s need for a new identification

system. Both programs were introduced tohelp the poor cope with the inevitable rise incost of food and fuel as the Moroccangovernment began to phase out its energy

subsidy. Through RAMED, the governmentplanned to provide free health insurance tothe poor while Tayssir was a conditional cashtransfer to encourage poor families to sendtheir children to school.

At first, the CNIE seemed the logical choice ofdatabase by which to identify andauthenticate beneficiaries for these newprograms. Both RAMED and Tayssir required

potential beneficiaries to possess CNIEs as aprerequisite for enrolment. However, it soonbecame evident that the CNIE could not beused to verify RAMED and Tayssirbeneficiaries for the simple reason that it hadenrolled neither the poorest of the poor norchildren. Deterred by the high cost (roughlyUSD $8.5) of enrolling in CNIE, the poorturned out to be an excluded segment of thepopulation in the database; children belowthe age of 18 were anyway not covered bythe CNIE. It seemed the government wouldhave to find another way to target andidentify poor families and their children.

Besides not meeting the needs of RAMEDand Tayssir, CNIE had other issues. It couldnot be considered a true digital identity as itlacked certain digital assets including aunique identifying number (UIN).

A New Approach

To implement a true digital identificationsystem capable of supporting access toservices and rights for all, the Government ofMorocco called on the World Bank for

financial and technical assistance. After athorough assessment of the country’spresent systems, the World Bankrecommended the development of both a

National Population Register (NPR) with aUnique Identifying Number, and a SocialRegister (SR).

The NPR will be a comprehensivefoundational database of all individuals whohave the right to reside in the country. Bydrawing on the existing databases—the CNIEfor adults above 18, the MASSAR for childrenbetween the ages of 6-18, and the civil

register (once it is put online) for those underthe age of 6—the NPR will be able to createa unified register. Each individual in theregister will be assigned a unique identifyingnumber (UIN) which will be the key to linkingthe disparate databases. Once the multipledatabases are able to use the UIN tocrosscheck and link identities, there will beno room for identity fraud. The NPR will alsobe available for use by Morocco’s registriesand social programs, existing and in thepipeline, to make secure and transparenttransactions such as payment of socialbenefits.

The SR will be used to create a unifiedregister of applicants of different socialprograms. By collecting and crosscheckingtheir socioeconomic information as well asthat of their households, the SR will ensurethat the right groups are receiving the rightkind of help from the government. The SRwill be periodically updated, verified, andintegrated with other information systems(such as taxes, utilities, and social security)for data controls and cross verification.

This approach will give Morocco the digitalidentification system it needs for the 21stcentury.

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TunisieLe Budget Participatif: Un pas vers la démocratie locale en Tunisie

(expérience de la commune de Sfax)

Guidara Ahmed Conseiller des services publics,Directeur Financier de la commune deSfax

Le Budget Participatif est défini souventcomme « un processus de démocratiedirecte à travers lequel les citoyens décidentde manière souveraine et indépendante,avec l’accord de la commune, sur une partie

du budget et des dépenses de leur commune». Il améliore la relation entre citoyens etcommune et contribue à construire un

rapport de confiance entre eux. Les travauxexécutés à travers le Budget Participatifrépondent directement aux besoinsprioritaires des citoyens et améliorentl’infrastructure et les équipements d’unecommune. En effet, les communestunisiennes sont habituées à décider sur lebudget communal derrière des portesfermées. Les citoyens, quant à eux, nes’intéressaient guère aux affaires de la

commune et n’y participaient plus,négligeant par la même occasion de payerleurs impôts locaux en motivantgénéralement leur incivisme fiscal par le

manque de transparence dans la gestionfinancière de la commune et par lamédiocrité des prestations fournieslocalement. La démocratie représentativeatteint ses limites et les citoyens ont lessentiments que les conseillers élus sontdéconnectés de la réalité vécue et quel’intérêt général est rarement respecté. Le

Budget Participatif aide à surmonter cesdifficultés par un apprentissage de l’intérêtgénéral au profit de la commune et descitoyens. Cet article va exposer l’expérience

de budgétisation participative de la

commune de Sfax [1] qui a commencé en2015.

I. LES PHASES PRÉLIMINAIRES DES FORA DESZONES D’HABITATION

Dans le cadre des nouvelles orientations enmatière de décentralisation et en cohérenceavec les dispositions du chapitre 7 de laconstitution tunisienne de 2014 et plusprécisément avec l’article 139[2], lacommune de Sfax s’est engagée pour l’année

2015 dans une expérience de budgétisationparticipative pour inclure les projets choisis

par les citoyens dans le projet du budget de2016, voté lors de la 3ème session ordinairedu conseil municipal qui a eu lieu le 28 juillet2015 en séance plénière. Le conseilmunicipal a exprimé son fort engagementpolitique pour entamer cette expérience

considérée comme une préparation àl’application de l’approche participativeinstaurée par le chapitre 7 de la nouvelleconstitution tunisienne [3].

Préparation et cadre réglementaireLors de sa première session ordinaire de2015 tenue le 25 février 2015, le conseilmunicipal a approuvé la décisiond’affectation d’une enveloppe budgétaire de3 millions de dinars du budgetd’investissement dans les rubriques de lavoirie, l’éclairage public et la construction detrottoirs et leur pavage. Par la suite, lacommune a lancé à Travers un communiquéde presse un appel à manifestation d’intérêt

aux associations actives dans le territoirecommunal pour l’adhésion au processus.Plus de 40 associations ont répondu. Les forades zones d’habitation sont animés par des

facilitateurs locaux proposés par les

associations signataires des conventions àtitre de bénévolat. Aussi, et pour respecter laméthodologie du budget participatif, lacommune a procédé au découpage duterritoire communal en zones d’habitationqui fera chacune l’objet d’un forum citoyen

pendant 2 jours consécutifs. Le choix del’enveloppe budgétaire a été arrêté suivant

les bonnes pratiques internationales : entre5 et 15% du budget communal.

La campagne de sensibilisation et decommunication La communication et la sensibilisation est laphase la plus importante qui conditionne laréussite même de l’expérience du BP. Ainsi,une forte corrélation positive existe entrel’efficacité de la campagne decommunication et de sensibilisation et letaux de participation aux fora citoyens.

Photo n° 1 : Tract distribué dans le cadre duBudget Participatif

II. LE DÉROULEMENT DES FORA DANS LESZONES D’HABITATION

La Description des fora des zonesd’habitation Le forum citoyen dure 2 jours, le premier jourqui se tient le samedi est consacré à laprésentation des finances locales et desréalisations d’investissement dans les

domaines relatifs à la voirie, trottoirs etéclairage public. Le but de cette réunion estd’instaurer une culture de transparence etde redevabilité chez les responsables desautorités locales et de restituer la confianceperdue entre le citoyen et son administrationlocale [4]. Durant cette journée, des affiches

en couleur illustrant un budget citoyen [5]élaborées par des experts ont été exposées.Ces affiches présentent des agrégats relatifsà la gestion financière de la commune,essentiellement la structure des recettes etdes dépenses, l’évolution de ces agrégats

depuis 2012, l’évolution des principalesressources et dépenses ainsi que des ratiosde structures relatifs à l’endettement, àl’effort d’investissement et à la marge demanœuvre de la commune en matière dedépenses. Le langage utilisé dans les fora esttrès simple et les présentations en powerpoint étaient animées essentiellement pardes histogrammes et des camemberts.L’objectif était de simplifier les conceptsrelatifs à la finance locale et àl’investissement. Durant la deuxième journée du forum citoyen, la contribution ducitoyen devient plus manifeste. Afin que la

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parole ne soit pas monopolisée par lesorateurs les plus habiles ou les personnes lesmieux dotées en capital culturel, lacommune a fait appel à un professionnelneutre pour animer les débats et distribuerla parole durant cette journée. Assemblés engroupes de 10 à 15 personnes, les citoyensdiscutent ensemble pour proposer des

projets (en précisant leurs emplacements etleurs compositions techniques sommaires).Après le recueil de toutes les propositions deprojets des différents groupes, lespropositions seront numérotées et affichéesdevant le public qui fait la queue pourcommencer le vote. Durant chaque forum, ilest demandé aux participants de postulerpour être délégué de quartier et parconséquent mandaté par les citoyens pourdéfendre leurs intérêts. Après consultationdes participants, et dans l’objectif de

préserver la neutralité du processus de touteinterférence politique, les candidats désirantdevenir délégué de quartier et qui serontconnus par les participants comme membresactifs d’un parti politique (les simplesadhérents n’étant pas concernés par cette

interdiction) ne sont pas acceptés. Aussi, lesdélégués de zones d’habitation doivent êtreobligatoirement un homme, une femme etun jeune (dont l’âge varie entre 18 et 35ans)[6] et ce pour permettre d’avoir unereprésentation de toutes les catégories de lasociété parmi les délégués de chaque zoned’habitation. Les délégués élus doiventassister aux réunions relatives à un forum de

délégués pour contribuer à la priorisationdes projets et à retenir les idées qui serontprises dans le cadre du budget participatif.Les délégués de zones d’habitation doivent

aussi assister aux réunions de préparationdes procédures de passation de lacommande publique et d’exécution des

projets choisis. Il est même envisagé depermettre aux délégués d’assister auxréunions de la commission des marchés[7] etd’avoir des badges pour accéder même aux

chantiers d’exécution des travaux. A la fin dechaque fora, les participants votent 3 projetset 3 délégués (voir photo n°4).

Interprétation des résultatsAu total presque 2000 citoyens ont assistéaux fora citoyens, ce qui présente un taux departicipation très satisfaisant pour une villedurant son premier exercice de budgetparticipatif. La deuxième journée aenregistré la participation de presque 70 %des citoyens présents dans les fora àl’encontre de 30 % durant la première journée. La progression enregistrée dunombre de participants entre les 2 journéesest expliquée par l’intensification de l’effort

de communication durant la matinée dudimanche et aussi grâce à l’effet positif de la

communication de bouche à oreille et mêmede mobilisation des citoyens présents lors dela première journée dans leurs quartiers.

Répartition des participants au fora deszones d’habitation par sexe

24.53% des participants étaient des jeunes(entre 18 et 35 ans). 26.77 % des participantsétaient des femmes et 73.23 % des hommes.A la fin du forum de délégués animé par une

équipe de facilitateurs professionnels, 25projets ont été choisis parmi les 30 proposésaprès avoir fixé des critères de priorité (VoirPhoto n° 7). Après un débat très riche et unéchange d’avis dans le respect total des

principes du dialogue et de la toléranceenvers l’autre, les délégués, à eux seuls, se

sont concertés sur la liste des projets dans lalimite de l’enveloppe budgétaire allouée au

budget participatif en utilisant lesévaluations financières préparés par lesservices techniques de la communementionnées sur étiquette collé sur chaquecarte de projet. Il est à remarquer que lavisite programmée avant la tenue du forumde délégués aux différents sites de projetsdécoulant des 10 foras de zones d’habitationa amené à un consensus sur les priorités àadopter au lieu du vote, concrétisant ainsi laprimauté de l’intérêt collectif sur l’intérêtparticulier exigu.

Photo n° 7 : Priorisation des projets durant leforum des délégués

Le coût de tous les projets choisis lors duforum de délégués d’une manière

consensuelle (25 projets) est de l’ordre de3.010.000 dinars répartis comme suit :2.706.000 dinars pour des projets de voirie et304.000 dinars pour l’éclairage public. Lacommune, quant à elle, a intégré les coûtsdes 25 projets choisis dans le projet dubudget de l’année 2016 qui été voté lors de

la troisième session ordinaire duconseil municipal du mois de juillet 2015avec la présence des délégués des zones

d’habitation. Il s'agit pour les délégués deszones d’habitation, non seulement d'êtreassociés à des réunions administrativestraitant des questions budgétaires, maisaussi de prendre effectivement part à ladécision, aux différents niveaux deconception et de mise en œuvre des projets.L’expérience internationale a montré que de

nombreux délégués, à condition qu’ils aientété suffisamment investis dans le processus,sont devenus plus informés à la suite de leurexpérience de participation, acquérant dessavoirs techniques, politiques et pratiquesqu’ils ne possédaient pas auparavant. Ladynamique créée par cette expérience incitela commune à continuer dans ce projet et dela reproduire l’année prochaine pour une

enveloppe plus importante et pour d’autreschamps d’intervention. Les citoyens appuyés

par la société civile active peuvent dèsmaintenant commencer un plaidoyer dans cesens. ________________________________

[1] La Banque met en oeuvre un programme d’assistance

technique auprès des municipalités tunisiennes incluantsept évaluations des systèmes de finances publiquesmunicipales (PEFA), dont Sfax en partenariat avec l’AFD

ainsi que des actions d’AT ciblées. L’experience de budget

participatif à Sfax a été appuyée par l’Action Associative,ONG tunisienne et bénéficie d’un financement de GIZ. [2] l’article 139 stipule que : « Les collectivités locales

adoptent les mécanismes de la démocratie participativeet les principes de la démocratie ouverte afin de garantirla plus large participation des citoyens et de la sociétécivile à la préparation des projets de développement etd’aménagement du territoire et le suivi de leur exécution,

conformément à la loi »,

[3] Suspendu pour le moment jusqu'à la promulgation destextes d’application y afférents.[4] Le faible taux de présence des citoyens dans lesdifférentes réunions de la commune ainsi que l’incivisme

fiscal remarquable prouvent ce constat.[5] Un projet de conception d’un Budget citoyen est

encours de finalization[6] C’est la même définition du jeune utilisée par lesautorités centrales pour les politiques publiquessectorielles[7] La réglementation actuelle des marchés publicsautorise la présence des délégués et de la société civiledans la commission des marchés.

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Libya

A debate show keeps discussion alive

Christine PetreConsultant MNAEC

You never know what you might hear on theLibyan debate showHiwar Mushtarak, or‘Shared Debate.’ The show aims to foster anopen dialogue about the country’s currentchallenges and its potential future bybringing together Libyans of all stripes. Thereare panel discussions featuring a diverserange of Libyan politicians and civil societyactivists, and the audience is encouraged toengage, giving a voice to ordinary Libyancitizens. For a recent show to commemorate

Libya’s February 17 revolution, which fiveyears ago led to the ousting and death offormer leader Muammar Gaddafi, a paneldebated the question: What is the wayforward?

On a stage at the Science City Auditorium inTunisia’s capital Tunis, where the show wasrecorded, panelist Amal Labeidi, Professor ofPolitics at University of Benghazi, began byhighlighting the need for disarmament. Sheinsisted that securing the large amount ofweapons circulating within the country’sborders was a primary concern that needed

to be addressed first. “No democraticprogress can be achieved without security,”

said Labeidi. The discussion remainedfocused on how to build a secure and stablestate. Panelist Hisham al-Wendi,independent participant in the UN Libyatalks, insisted that priority needed to begiven to creating a culture of tolerance andforgiveness. To which Giuma Atiqa, formerVice President of the Tripoli-based GeneralNational Congress (GNC), added theimportance of reconciliation. “There is a linkbetween national reconciliation andsecurity,” he said. Efforts to heal wounds arean integral part of re-building society,observed Atiqa. For Mustafa El Sagezli,Director of General Libyan Program ofIntegration and Development, who works onre-integrating former fighters, it wasessential that all willing parties are includedin the dialogue about the country’s future.“With exclusion you feed hate,” he said.Najwa al-Fitouri, Member of Voice of LibyanWomen for Peace, emphasized that the timefor dialogue was ripe.

Along with listening to panelists, one of the

principal aims of Hiwar Mushtarak is to givethe audience a rare opportunity to voicetheir opinions freely. “The aim is to supporta culture of dialogue,” explained the show’s

producer, 23-year-old Libya Idris from the

development charity BBC Media Action,which has trained and supported the show’sLibyan staff.

The around 200 audience members for thisepisode followed the debate closely. Inaddition to security, the show addressedtopics such as the Government of NationalAccord (GNA), terrorism and whether or notto support a Western intervention to targetthe Islamic State. On the latter, most of theLibyans present seemed to reject the idea.One of them, a young man in the audience,opposed any foreign interference. “Werefuse to become another Iraq,” he said tothe panelists.

“This is a collective effort to overcome

divisions and hopefully circulate ideasthrough, for example, social media,” said

panelist Labeidi after the show. “The morewe discuss our problems, the better.”

”There are no debate shows like this in

Libya,” said Nemat Ghanimi from Tripoli,who was temporarily in Tunisia and tookadvantage of the opportunity to join theaudience. According to the 19-year-old, theshow empowers young people by givingthem a way to communicate withpoliticians. For another of the young womenin the audience, 19-year-old JananAbdulkader, this was the second time joiningthe program. When she came to the lastshow she was immediately captivated. Shehad never heard of a show where anyone inthe audience could openly ask questions.Politics had held little interest for her before,but she is now keen to get involved in the

show. But most of her Libyan friends inTunisia are reluctant to come. She has triedconvincing them but they are afraid it couldcause them problems.

“The program shows that you can have aheated debate without using violence,” saidthe show’s host, 30-year-old Raafat Belkhair,“Libyans can find a common ground.” Tohim, it is especially important at this periodof time in Libya’s transition to emphasize

that expressing one’s opinions is a right.While Belkhair likes an interactive andheated debate he admits that sometimes thediscussions can get overly heated, and thenit is important to remain neutral and well-organized.

This episode was recorded in Tunisia butBelkhair, who is from Tripoli, is hoping that

the show will return to Libya in the very nearfuture. Ghanimi agrees. It sends the wrongmessage having the show in Tunisia and notin Libya, she said. Despite supporting theinitiative she is skeptical it will lead to anyconcrete solutions. The next episode will berecorded in April, this time in London, a citywith a large Libyan diaspora. “And perhapsthe one after will be in Libya, inshallah (Godwilling),” said a hopeful Abdulkader.

Towards the end of the show, Belkhair askedthe audience: Are you optimistic about theGNA? About half of the audience raised theirhands, which may reflect the divided andcautious political opinion among manyLibyans five years after the revolution.

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Libya

Governance and Public Administration

Vito IntiniMichael Schaeffer

After more than a year of civil war, almostfour years of fraught transition, and monthsof intensive U.N.-led negotiations, Libyansare poised to form a Government of NationalAccord (GNA) and begin the process ofreunifying the country. However, withoutswift and bold action by the GNA thesituation in Libya will remain prone to reformreversal and instability due to fragmentedstate institutions, disrupted oil exports,

shrinking government revenues, localpolitical monopolies, and violence fromradical groups. Indeed, the GNA and theLibyan institutions will be put to a difficulttest as they will have to quickly deliver in atime when demand from Libyans has neverbeen so pressing, against a backdrop ofweakened public services, under a globalscenario of persistently low oil prices (andhence their revenues) and a regional contextof increasing political instability andpolarization. The overthrow of the regime in2011 did not lead to a peaceful transitionalprocess in Libya but to ongoing localizedconflict that varied in intensity. As this articleis being formulated, Libya is currently stillsplit between two rival governments andtheir allied coalitions, with significant partsof the country under the control of extremistgroups that will continue acting as spoilers tothe transition. Yet there is a glimmer of hopethat a government of National Accord mayemerge.

A Recent History: All Libyan governmentssince 2011 have been transitional in nature.Their primary mandate has been

stabilization and the immediate response tothe needs of the Libyan people. The electionof the General National Congress (GNC) tookplace in July 2012 with a political controversyover when its mandate should end.Opponents of GNC believed it had a mandateuntil February 2014. The elections of theHouse of Representatives (HoR) were held inJune 2014, following the protests againstGNC for having renewed its mandate beyondFebruary. Only 630,000 Libyans turned outto vote in 2014, a significant reduction of the1.7 million votes posted during the GNCelections in 2012. Each post-Qaddafigovernment has failed to build consensusamong the Libyan public and its manystakeholders on a common national agenda.The divisions within Libya are not new, butfollow the ‘divide and rule’ politics that wasencouraged by the regime. Several

interrelated layers of conflict coexist in Libyatoday, with the localized groups and militiasfighting each other—some due toalignments with the two competinggovernments, some in support of or againstextremist groups, and others over access to

resources in specific locations. The differentmilitias in Libya hold considerable weightthat they use to influence political systems orprocesses, and have a history of getting theirdemands met through the use of —or threatto use—violence. By the 2011 uprising,Libyan society lacked even weak or partiallyindependent social institutions that couldhelp manage a peaceful transition: Libya hadno political parties, regional or localgovernments, trade unions, independentlegislators or judges, independent or robustcivil society groups, or even prominentreligious or traditional organizations. To

their credit, the civil society groups that didexist (or have since emerged) have beenquite active, as have the newly independentmedia. Libya’s 2013 Human Development

Index stood at 0.784, against 0.641 in 1980,positioning the country in the 55th out of 187countries. This is explained by the goodperformance in terms of education andhealth (at least from a merely quantitativeperspective) and the high GDP per capitaincome generated from oil. Between 1980and 2013, the mean years of schoolingincreased by 5.3 years. Over the same

period, life expectancy increased by 11.1years. Libya has one of the highest literacyrates in the Arab region (90 percent ofpeople aged 15 and over in 2012, 96 percentfor males and 83.7 percent for women). In2008, the net enrollment ratio in primaryeducation was 98.2 percent, while the infant

mortality rate was 17.6 deaths per 1000 livebirths. The poverty rate was estimated at11.8 percent in 2003 (the latest year forwhich official data are available) and,according to the 2009 MDG report, Libya waswell on track to achieve the MDGs by 2015

before the conflict erupted. The economy,traditionally dependent on oil, has sufferedgreatly from ongoing conflict and statefragmentation. The sabotage of portterminals and production facilities hascaused significant fluctuations in oil exports,and hence government revenues,throughout the transitional period.Smuggling economies have developed.Economic growth is negative, as the fightinghas damaged infrastructure, and foreigninvesting has stopped. Strong economic,social, and security ties between Libya andits neighbors Tunisia and Egypt mean that

instability in Benghazi and Tripoli are felt inTunis and Cairo as well. The violence andeconomic instability in Libya has beenincreasingly correlated. Indeed, one of thekey drivers of the fragmentation of theLibyan transition was the issue of controlover oil revenues (See Figure 1). Politicalgroups in Libya are understandably hesitantto allow their rivals to control these largerevenue streams. Even if all the factionscommitted to the fair distribution and non-military use of oil revenues, there are fewmechanisms to enforce such a deal. As a

result, macroeconomic health has worsenedas the fighting damaged infrastructure, andbusiness and consumer confidence declined.The collapse in international oil prices sinceJune 2014 has cut the country’s foreignexchange revenues and the outlook based

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on protracted low prices is not encouragingfor the country’s economy.

Measures of Governance Have Declined:The initial upheaval that swept Libya andgave civil society a stronger voice which hasbeen demanding transparency andaccountability from the government.

However, the post-Gaddafi governmentswere unable to end armed conflict, stop thedeterioration of the security situation andimpose authority which resulted in theworsening of the governance situation.Indicators in the figure below showgovernance performance between 2009 and2013. All indicators recorded significantdrops except for voice and accountabilitywhich showed improvement. Libya’sgovernment performance is deficient (SeeFigures 3-8, below). Compared to othercountries with an average GNI per capitahigher than $10,000, Libya scored lowest forall governance categories by at least twopoints for each of them. TransparencyInternational’s Corruption Perception Index(CPI), which ranks how corrupt a country’s

public sector is, also confirmed that Libya isrelatively more corrupt. In 2014, it rankedLibya 166/175 with a score of just 18 (on a

scale 0-100, where 0 is very corrupt, 100 isvery clean). The two primary elements ofstates i.e. 1) the monopoly on the use offorce; and 2) the collection of taxes; arecurrently absent in the Libyan context. Theover-reliance on budget revenuesproceeding from oil reserves was induceddue to the absence of wide taxation base. As

a result, the paramount task of any futuretransition government is to build rather thanrebuild public administration, startingperhaps from a clearly articulated vision andpolicy that defines nature, mandates androles of the country’s governance system atcentral and local levels.

Public Administration Lacks Transparencyand Accountability: In the Libyan publicadministration apparatus, there is absenceof transparency and accountabilitymechanisms. Policy processes remainconfusing and arbitrary. In recent timesthere has been an intense discussioninvolving government agencies,international organizations, and othersabout the alternatives for improving thecurrent system. Summarizing some of theprimary issues that have been identified inthe debate as slowing down the

consolidation of subnational local autonomyand the decentralization process as follows:1) the lack of an integrated vision ondecentralization in policy formulation; 2) theinfluence of the central public authorities’representatives on the activity of local publicauthorities; 3) the lack of clarity with respectto the administration of services; 4) the lack

of transfer of some competences to a localadministrative authority; and, 5) the absenceof an equitable transfer system. Lack ofvertical and horizontal coordination isparamount. As a result, the level ofinteraction between deconcentratedgovernment offices and municipalities ischaracterized by lack of clarity on roles andresponsibilities.

1 The World Bank and UN (ESCWA) finalized “LIBYA’S

SOCIO-ECONOMIC AND PFM CHALLENGES ANOPPORTUNITIES” by Vito Intini UN (ESCWA) and MichaelSchaeffer (WB); December 2015. The Joint World Bankand UN (ESCWA) paper is intended to stimulatediscussion and debate as to the future prospects of Libya.The paper aims to show how developmental andhumanitarian aspects can be closely related to theinstitutional and governance ones, including publicfinance issues.1 Libya HDR data, HDR 20141 CIA World Fact book1 The Millennium Development Goals In the GreatSocialist People’s Libyan Arab Jamahiriya: Towards 2015:Achievements and Potentials (2009)

Figure 3: Oil Production and Violence in Libya (2010-2015)

Sources: US Energy Information System; ACLED; WB and ESCWA staff

calculations.

Figure 4: Governance Indicators for Libya (Percentile Rank)

Source: WGI, World Bank. Note: WGI capture Governance

performance of Libya before, during and after the 2011 civil war.

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Control of CorruptionGovernment EffectivenessPolitical Stability and Absence of Violence/TerrorismRegulatory Quality Rule of LawVoice and Accountabilit

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Figure 5: Relationship between GNI per Capital and Political Stability

Source: WGI, World Bank. Note: Estimate of governance (ranges fromapproximately -2.5 (weak) to 2.5 (strong) governance performance)

Figure 6: GNI Per Capital and Government Effectiveness


Figure 7: GNI per Capita and Voice and Accountability Indicator


Figure 8: GNI per Capita and Regulatory Quality Indicator

Source: World Bank. Note: Estimate of governance (ranges fromapproximately -2.5 (weak) to 2.5 (strong) governance performance).

Figure 9: GNI per Capita and Rule of Law Indicator


Figure 10: GNI per Capita and Control of Corruption Indicator

Source: WGI, World Bank. Note: Estimate of governance (ranges fromapproximately -2.5 (weak) to 2.5 (strong) governance performance).

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banonM

orocco

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c u r r e n t $ ) ,

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c u r r e n t $ ) ,

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Libya

Lebanon

Algeria

Egypt

Mauritania

Morocco

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Qatar

UAE

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Mashreq

Jordan 56

Lebanon 64

Jordan Poverty and Legal Problems:

Defining the Relationship

Paul Prettitore


Introduction: Many persons will experiencesome type of legal problem during their livesstemming from civil, criminal or familymatters. Jordanian citizens are no exception

– a household survey conducted in Jordan in2011 found that roughly 20% of families hada member experience a legal problem in theprevious five years. Legal problems willrange in severity from the minor to theincredibly complicated. They may affect anindividual only, but are also likely tosomehow impact the family unit. There is arelationship between legal problems andpoverty. Legal problems, left unaddressed,can cause an economic or social shock thatpushes vulnerable persons into poverty. Forexample, pre-trial detention and

imprisonment, wrongful termination ofemployment, financial debt or denial ofsocial safety net benefits can cause personsvulnerable persons to fall intopoverty. Unresolved legal problems can alsoprevent an individual in poverty fromescaping it. Data at least suggests that insome contexts legal problems are likely tomultiply once an individual falls into poverty,complicating any attempts at povertyalleviation. Understanding this relationship isimportant for targeting public sector servicesto address legal problems. These servicesare important on a number of levels. Froman equity standpoint, the poor and near-poorneed equal access to services thatsubsequently enhance opportunities toexercise their rights. Taking the equityargument a step beyond equal access toexisting services, governments should

develop special services that target thespecific needs of the poor in resolving legalproblems. These services also have value associal protection and poverty alleviationmeasures. They can protect the vulnerablefrom falling into poverty because ofeconomic shocks caused by legalproblems. For example, an employee couldbe reinstated in a job from which they werewrongfully terminated before loss of salaryhas detrimental effect. They can also resolvelegal problems that are perpetuating poverty

for those already in it. Ensuring financialtransfers related to wrongfully denied socialsafety net benefits or nonpayment ofalimony and child support payments to poorfemale-headed households. Defining theRelationship: Defining the relationshipbetween legal problems and poverty is not a

simple task. The first step is identifying thetypes of legal problems that are most likelyto affect the poor and the near poor, andcomparing this with wealthiercitizens. There are two dimensions. The firstis assessing the general frequency thatspecific problems affect the poor. The otherdimension is identifying legal problems withconsiderable gaps in the extent to which theyeffect the poor versus the non-poor, even ifthe overall frequency of such problems isrelatively smaller. This first step is relatively

more straightforward. Household surveysare increasingly being used to identify suchlegal problems. The downside of householdsurveys are that they are expensive and relyto an extent on individual respondents’understanding of what constitutes a legalproblem. Another source of data is case

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information from legal aid service providers,but this source does not allow forcomparisons with the non-poor. Useful datacan also be found from courts andadministrative complaints mechanisms ifthere is information on income levels, or away to identify it, of the complainants. Thesecond step is to identify within this group

the types of cases that are most likely to havesome kind of poverty impact on the poor andnear-poor. This is considerably morecomplicated. And data sources are muchmore limited. Identifying relevant legalproblems: Defining the relationship betweenlegal problems and poverty in Jordan iscomplicated by the lack of comprehensivedata. There is more evidence available fortaking the first step – identifying the types oflegal problems most likely to affect thepoor. A 2011 household survey in Jordan(Statistical Survey on the Volume of Demandof Legal Aid Services - Legal Aid Survey) is themost comprehensive attempt to collectrelevant data. Among its general findingswere the following:

The near poor were most likely to facelegal problems, followed by thepoor. Together these two expenditurequartiles accounted for 68% of reportedlegal problems.

The poor and near poor were less likelyto have access to courts or lawyers tohelp address legal problems.

Awareness of special services, namely

legal aid services, targeted to assist thepoor resolve legal problems is almostnon-existent (roughly 2% ofrespondents).

The types of legal problems reported byrespondents varied by expenditurequartiles.

The last point above can be elaborated asfollows. Families in the lower twoexpenditure quartiles, which cover roughlythe poor and near poor, were more likely toexperience legal problems related to all

types of general legal problems – family law,civil law and criminal law. But the gap iswidest in relation to family law problems,where they account for nearly 80% ofreported legal problems, versus 68% for civillaw and 65% for criminal law. There isadditional variation within these broadcategories of legal problems, furtheringidentification of the most relevant legalproblems. (Figure 1) Regular householdsurveys can also be useful sources ofinformation. For example, the Populationand Family Health Survey administered bythe Department of Statistics on a regular

basis includes questions on domesticviolence. It has shown that women in thelowest wealth quintile were the most likelyto report having been a victim of physical,sexual and emotional violence. Data fromcivil society organizations (CSOs) providing

services to poor persons is also useful. Ininterpreting such data it needs to beconsidered that CSOs often serve particularconstituencies. For example, in somecontext women may be more likely to accessCSOs for assistance. The Justice Center forLegal Aid provides legal aid services(awareness, information, counseling and

legal representation) to the poor and near-poor. Roughly 70% of their counseling andlegal representation services are related tofamily law problems, 20% for civil lawproblems and around 10 for criminalproblems. The most common type ofproblem for which services are provided isalimony, encompassing spousal alimony andchild support, which accounts for nearly 25%of cases, followed by separation/divorce(15%), theft (15%), child custody (4%) andlandlord-tenant (4%). Of beneficiaries ofTkiyet Um Ali (TUA), a civil societyorganization providing food assistance to themost poor, nearly 18% have reported sometype of legal problem. The most commontype of problems, in order of decreasingfrequency, are: divorce; alimony and childsupport; criminal matters; domesticviolence; and family estrangement. Linkinglegal problems and poverty: The data alreadyavailable helps us identify good staringpoints for assessing links between legal

problems and poverty. We know what typesof problems the poor and near-poor are mostlikely to experience, and we know what typesof problems are likely to impact the poor andnear poor versus others. It is then importantto consider the poverty characteristics ofJordan. The most recent poverty estimates,from 2010, put poverty at 14% of thepopulation, which is relatively low byregional and international standards. Sharedprosperity, measured by consumptiongrowth of the bottom 40% of the population,showed positive trends between 2006 and2010, though Jordan’s performance on this

measure is modest in comparison to other

upper middle income countries. Progress onreducing welfare inequality, measured by theGini coefficient, was more erratic during thesame period. One of the more uniqueaspects of Jordan’s poverty profile is therelatively high levels of transient andseasonal poverty. Nearly 19% of Jordanians,though not officially considered poor,

experience poverty in at least one quarter ofthe year, making them ‘transient poor’. Thistransient poverty is also experienced bysome lower-middle income families, whichwe know from the Legal Aid Survey are someof the most likely to experience legalproblems. Combining the poor and transientpoor means that 33% of Jordaniansexperience poverty during the course of ayear. It is also important to consider theextent to which social and economiccharacteristics affect legal problems. Forinstance, the low labor force participation ofwomen makes them more vulnerable topoverty in relation to legal problems aroundalimony, child support andinheritance. Access to public services ishighly dependent on location, with areas ofhigher poverty usually underserved. Sothere are likely to be considerable problemslinked with access to basic services. Themajority of poor in Jordan are working poor,and likely susceptible to legal problems

related to labor abuses, such as unpaidwages, non-payment of benefits and illegaltermination. There are areas whereadditional data would be helpful. The LegalAid Survey suggests that the poor and near-poor are more likely to experience multiplelegal problems, which is likely to exacerbatevulnerability and poverty. What is lessunderstood is how certain legal problemstrigger additional problems, for examplewrongful termination from employmenttriggering debt and housing problems. This isparticularly important in the context ofassessing whether legal problems are in anyway linked with transient poverty. Also in

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need of further understanding is the way inwhich legal problems cluster for thepoor. Better understanding of bothtriggering and clustering of legal problemswill come from more in-depth surveys in thenear future of the beneficiaries of JCLA andTUA.

Conclusion: Understanding the relationshipbetween legal problems and poverty isimportant for a number of reasons. Legalproblems cause and exacerbatepoverty. They can also undermine somepoverty alleviation mechanisms. Legalproblem cause not only direct economiccosts, but undermine other aspects of

development such as exercise of civil andpolitical rights, well-being andagency. Greater knowledge of thisrelationship will help policy-makers developthe appropriate tools to address theseproblems.

Figure 1 - Legal problems, by expenditure quartiles

Source: Statistical Survey on the Volume of Demand of Legal AidServices

Figure 2 - Violence against women(since age of 15), by wealth quintile

Source: Jordan Population and Family Health Survey

Jordan

Developing an Efficient

Public Investment Management System

Emmanuel CuvillierSalam Almaroof 4

Introduction The primary objectives of “ Jordan 2025: A

National Vision and Strategy ” are to addressthe challenges of increasing living costs,

poverty, and unemployment and ensureenhanced prosperity over the next 10 years.Vision 2025 envisions Jordan as an economicgateway to regional markets that takesadvantage of free trade agreements signedwith several countries. The most significantchallenge that Jordan is confronting isachieving a qualitative improvement in itspublic investments. In order to achieveaccelerated, export-led growth, Jordanneeds to improve its primary infrastructureand the efficiency and effectiveness ofpublic investments.There is evidence of inefficiency in public

investment management (PIM) in terms of:(i) a poor selection of projects that do nottransform into productive assets; (ii)

4 This project was supervised by Emmanuel Cuvillier,

Senior Public Sector and Governance Specialist (TaskTeam Leader) [email protected], and by Salam

unrealistic schedules in ex-ante appraisaland consequent delays in completion; (iii)chronic under-execution of capital projects;(iv) cost over-runs; and (v) neglect inoperating and maintaining newly-createdassets.Based on the government’s interest in PIManalytical work and related technical

assistance from the World Bank (see Figure1), the Ministry of Planning andInternational Cooperation (MoPIC)developed a three-step roadmap in line withthe content of the International MonetaryFund (IMF) Stand-By Agreement.Specifically, it focuses on: (i) designing a PIMframework that includes public-privatepartnership (PPP) procedures; (ii) a detailedassessment of the current PIM system; and(iii) preparation of a three-year PIM actionplan.

The PIM Framework

Since April 8, 2015, a formal system of publicinvestment/PPP project appraisal hadprovided the basis and conditions for the

Almaroof, Public Sector Analyst [email protected],World Bank Governance Global Practice (GGODR). This

Government of Jordan (GoJ) to moveforward only those initiatives that aredemonstrably the most economicallyattractive. Such a system allows for thetransformation of “investment ideas” into“public investment/PPP projects”, and, then

into “public investment/PPP decisions”.

This system is designed to put projectsthrough the Project Life Cycle (Figure 2),starting with identification of a projectidea/concept and ending with the finalhandover of operations, and finally to theex-post evaluation stage:• As seen in the figure below, the first phase

of the project cycle is the generation ofproject ideas. These should be informed bypriorities set out in the Vision 2025 to ensurethat they contribute to national objectives.• Project profiles require a rigorousidentification process, that is, theidentification of economic needs and

investment priorities for the public sector.• The Pre-Feasibility Study shouldbe done in nine required modules/studies.

MENA Knowledge and Learning Quick Note was cleared byHisham Waly, Practice Manager (GGODR).

020406080

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The first five modules are the “project

building blocks” (that is, demand,technical/engineering inputs, humanresources and administrative support,environmental, and institutional/legalstudies). The last four are the “analytic

modules”, that is, financial appraisal,economic/social appraisal,

distributional/basic needs appraisal, thefinally the risk analysis modules.• The Feasibility Study is normally the mostexpensive and it is also the last opportunityto stop a bad project beforeimplementation, that is, it is the last chancefor the relevant PIM government agency toappraise project quality.• The final investment decision may be to

provide funding, either through thetraditional fiscal budget, PPPs, or throughinternational cooperation (grants and/orloans), and to proceed to the execution ofthe project. In the final investment decision,new actors5 may become involved with theproject during this stage.

The Project Operation Phase refers to when

the project is able to produce its final and

fully operational deliverable (for example, a

new plant, product, system, and so on). The

management processes now shift toward

the effective and efficient delivery of the

products and outputs from the new services.

• The Project Execution Phase is when theproject execution plan designed in the priorphases of the project is put into action.

The purpose of project execution is todeliver the expected project results, that is,deliverables and outputs.• Ex-post project appraisal involvesassessing the actual operational results of aproject and comparing them to plannedforecasts. The focus is on establishingwhether the project represents “value formoney”, as well as on learning lessons forfuture similar projects.• The Treatment of Public-PrivatePartnerships: In the lower part of Figure 2,there is a special procedure for projects thatcould potentially become PPPs. Figure 3 ismuch more specific in terms of the specialprocess for PPPs. The Integrated Bank ofProjects (IBP-Data Base) is the commonbackbone for all kinds of project files,including those that later become PPPs.

PIM Assessment (2015)

The Government of Jordan, as all othergovernments, faces the challenge ofallocating scarce resources (natural, humanand capital) toward obtaining maximumsocial and economic benefits. Thedevelopment of an integrated budgetexecution system will provide thegovernment with a solid base for

improvements that should complementbudget planning and the subsequentinvestment process. Improvements shouldcontribute to the integration of all lineministries and independent budget agenciesin sectoral strategic plans as well asprocurement processes, budget approvalsand execution of public infrastructureprojects, thereby establishing a solidfoundation for inter-sectoral coordinationand budget integration in line with Jordan’s

priorities.

The PFM legal framework is based on acombination of constitutional, legislativeand regulatory provisions that often differ inpurpose and are not well linked. Moreover,recent budget preparation reforms are notadequately specified in the legislation whichdoes not appropriately describe the uniquefeatures of the preparation cycle ofinvestment projects.

5 Project managers, hedge funds, unit trusts,

pension funds, and so on.

Figure 1: PIM Support to Jordan (WBG)

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Figure 2: PIM Framework (PIP)

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The main recommendations of the 2015Jordan PIM Assessment were as follows:Legal framework: A new public financialmanagement (PFM) law is needed in Jordan.Setting up of a PIM central unit: Theestablishment of a PIM central unit will helpensure that all investment projects followthe pre-investment project cycle (that is,

profile, pre-feasibility, feasibility study) andestablish the three filters or “stage gates”6.The unit will be a part of all three stage-gatecommittees and provide the “seal ofapproval” only if projects successfully pass

Stage Gate 3. To manage the IntegratedBank of Projects (the project database), itwill provide full access to, as well asrestricted access to line ministries andindependent budget units.Strategic Planning: Strategic planning will benecessary to: i) to complete all thedeliverables of the strategic planningexercise; (ii) put in place a system ofincentives with rewards and penalties, tyingthe key performance indicators (KPIs) with aperformance budgeting exercise; (iii)gradually replace all project ideas/proposalsin the Executive Development Plan (2016-2018) with ready-to-go projects (that is, withthe seal of approval); and (iv) include amandatory log-frame matrix in allinvestment initiatives.Project appraisal guidance: Project appraisalguidance will: (i) gradually prepare thefollowing set of project documentation:general project evaluation manual;

guidelines on policies and procedures;guidelines per life-cycle phase;methodologies per project type; check listsfor the end of the phase or stage gatereviews; (ii) impose the obligatory use of asingle, consistent database of unitarymarket prices for the valuation of projectinputs and outputs; (iii) commission thecalculation of a set of key nationalparameters and shadow prices and imposetheir mandatory use; and (iv) include projecttemplates and case studies in order tofacilitate the matching training process.Information integration: Informationintegration will: (i) establish a proprietaryIntegrated Bank of Projects (IBP) for Jordan,or buy an existing IBP and adapt it to thegovernment’s organizational structures andPIM processes and conditions; (ii) focus onthe first subsystem (that is, the Technical –Economical Analysis Sub-system) because itdeals with the pre-investment phase ofprojects; and (iii) a new, complex andcomprehensive information technology (IT)tool, such as the proposed IBP, must beadapted to the government’s conditions.Likewise, the current organizational

structure and PIM processes of the Ministry

of Finance, MoPIC and line ministries mustbe adapted to the new IBP.Capacity building: Capacity building willinvolve: (i) the rolling out of the PIM capacitybuilding strategy to create a critical mass ofpublic officials who can be experts in projectdesign/formulation, appraisal, and selectionin order for this system to function at the

national, governorate, and municipal levels;(ii) priority should be given to public officials’

training on the Log Frame Approach andproject key performance indicators (KPIs) ingeneral, and to preparation of pre-feasibilityand feasibility studies by line ministries inparticular; and (iii) the training institute ofthe Central Bank of Jordan should prepareannual courses to train public officials indifferent topics of interest in publicinvestment, including the use of the newIBP.Establishing management functions insidethe PIMS: Specifically, this will involve: (i) theintegration of all line ministries,independent budget agencies andgovernorates in sector strategic planning, aswell as procurement processes (ii) ensuringthat all public investments progress througha strengthened PIMS that ensuresestablished quality controls — both in termsof technical effectiveness and economicefficiency; (iii) ensuring that projects remainwithin their budgets and have confirmedsources of financing; and (iv) keepingstrategic projects on track, while makingroom for immediate priorities (security, and

refugees in particular).Defining project selection criteria for themedium and long term: This involvesdefining and formalizing project selectioncriteria for public investment prioritizationfor the period 2016 –2018. In the mediumterm, the government should improve theprocess of project prioritization, and defineand formalize a project selection criteria forpublic investment prioritization for 2019and subsequent periods. In the long term,the government should improve the processof project prioritization.

Improving public investment in terms ofproject management: Specifically, this willinvolve: (i) creating PIMS units for projectmanagement (execution, monitoring andfollow-up) in line ministries. These units willbe a group within a government agency thatdefines and maintains project managementstandards for several related project (ii)developing guidelines, methodologies,templates and tools for projectmanagement (execution, monitoring andfollow-up). Any project executionmethodology should be based on a global

project management standard; (iii)implementing training programs in project

management (execution, monitoring andfollow up). A professional projectmanagement training program shouldprovide a qualification that reflects the roleof individuals who possess a soundtheoretical knowledge base and who canuse a range of specialized, technical ormanagerial competencies to plan, carry out

and evaluate their own work and/or thework of a project team; (iv) improving theex-post evaluation process in order to builda framework for ex-post evaluation; (v)strengthening and modernizing the publicprocurement system. This action willsupport the high-priority publicprocurement reform activities in Jordan thatare aimed at modernizing the publicprocurement system and strengthening itsmanagement through modernizing the legalframework, the issuance of standard biddingdocuments, templates, and procurementplans, as well as the promotion of theprofessionalism of the procurementworkforce.

PIM Action Plan (2016-2018)

This PIMS for Jordan was developed as acomprehensive set of concepts, techniques,standards, and methodological procedures,and as a uniform information and documentdepository and management system for theformulation, preparation and evaluation ofprojects. In accordance with internationalbest practices, it is proposed that thefollowing activities be developed in Jordan

in order to improve the current publicinvestment procedures and to install acomplete PIMS in the country (Figure 4).These actions and correlated activities areproposed in a calendar for short- andmedium-term implementation (2016 –2018).

These actions are intended to strengthenthe Jordan PIMS to ensure an efficientinvestment process, to maximize theexpected return on investment projects, andto ensure their contribution to increasingnational welfare.

[1] This project was supervised by EmmanuelCuvillier, Senior Public Sector and GovernanceSpecialist (Task Team Leader)[email protected], and by SalamAlmaroof, Public Sector [email protected], World BankGovernance Global Practice (GGODR). This MENAKnowledge and Learning Quick Note was cleared

by Hisham Waly, Practice Manager (GGODR). [2] Project managers, Hedge Funds, Unit Trusts,Pension Funds, etc.[3] Stage Gate No1 for Project Profiles; Stage GateNo2 for Pre-Feasability Studies; Stage Gate No3for Feasibility Studies.

6 Stage Gate 1 for Project Profiles; Stage Gate for Pre-Feasibility Studies; and Stage Gate 3 for FeasibilityStudies.

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Figure 3: PIM Framework (PPP)

Figure 4: 2016-2018 PIM Action Plan

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Jordan

Report from the Field:

Working To End Violence against Women

Paul Prettitore


Grasping the full extent of violence againstwomen is difficult everywhere. In the MiddleEast, it can be both difficult and dangerousfor women to report abuse given socialattitudes toward the roles of women andmen within the family. In Jordan, theviolence against girls and women embodiesthe problem.

The Jordanian government’s Population and

Family Health Survey captures only a portionof the scale of violence against women.Social norms are at play; roughly 70 percentof Jordanian women think there arecircumstances that justify a husband beatinghis wife.

Over one-third (34 percent) of Jordanianwomen report that they have experiencedsome form of physical violence since the ageof 15. One in three Jordanian womenexperienced some form of emotional,physical, and/or sexual violence from their

spouse, and almost 1 in 10 experience sexualviolence at least once in their lifetime.

One of the major concerns resulting from thesurvey is that almost half (47 percent) of thewomen reporting violence did not seek anytype of help, with less than 5 percent takingsteps to address sexual violence. Very fewwomen seek help from medical providers,police, lawyers or social serviceorganizations.

Over the past four years, the World BankGroup has been collaborating with the

Justice Center for Legal Aid (JCLA), aJordanian civil society organization, to pilotlegal aid services for poor Jordanians as wellas Iraqi, Palestinian and Syrian refugees.

As is often the case, poverty status is a strongindicator of the likelihood of violence inJordan. Poorer women were more likely toreport all types of violence, and higherfrequency of such violence. They are alsomore likely to believe such violence is justified. The legal aid program providesawareness /information, counseling and

legal representation by a lawyer to aid thepoor in addressing legal problems. Themajority of JCLA beneficiaries — just over 70percent — are women. One of the ‘justice

gaps’ identified by JCLA is in providingeffective legal services to female victims ofviolence.

Jordan adopted legislation to protect victims

of domestic violence in 2008, for the firsttime giving victims the access to protectionorders — one of the most effective tools inaddressing violence. Victims can also receivedirect compensation. It also providedconfidential proceedings and procedures todetain alleged abusers.

A specialized institution, the FamilyProtection Department of the Ministry ofInterior, was established to implement thereform, providing access to multipleservices, including complaints/investigation,medical care and social counseling.

Yet the law left a number of gaps in place. Itapplies only to perpetrators living with thevictims. As such, ex-husbands, boyfriendsand brothers may not be covered, and thesurvey shows they are often responsiblecommitting the abuse.

It also leaves in place a heavy focus onreconciliation, to the possible detriment ofprotecting the victims. A lack of shelters forvictims, along with the inability to linkrequests for child custody and child support

with protection orders, may prevent manywomen from seeking help. To date, JCLA’s

assistance has been focused primarily

around awareness and information forvictims.

This focus is now about to expand. With theassistance of the World Bank Group, JCLA is

launching an initiative to provide morecomprehensive services to female victims ofviolence. The plans include establishing areferral system in the Family ProtectionDepartment and placing a legal aid lawyer ateach of the Department’s in-take centers.What do we hope to achieve? There areseveral opportunities.

The overarching goal is to ensure that poorwomen can access services and achievesome level of justice to address the violencethey suffer. More specifically, the referralsystem should aid in providing victims the

legal services they need to initiate andnavigate criminal proceedings, includingobtaining and enforcing protection orders.Victims will also have assistance inaddressing legal problems commonly linkedto domestic violence, such as divorce, childcustody, child support and alimony.

As a lawyer, I volunteer my timerepresenting poor persons, including womenseeking protection orders, at the SuperiorCourt in Washington, D.C. I understand theimportance of providing legal assistance to

female victims of domestic violence, and amencouraged to see such an initiativelaunched in Jordan.

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Lebanon

The Lebanese Association of Certified Public

Accountants - LACPA

An Active Association with a Clear Vision

The LACPA is the sole professional bodygoverning the public accounting professionin Lebanon. It was formed in 1994 under thedecree number 364/94 issued on August 1st1994. Qualified persons who wish to practicethe audit profession in Lebanon should belicensed from the LACPA and meeting itsprofessional requirements. Although it is arelatively young association with limitedresources, it has paved its way into becomingglobally recognized by the professional andfinancial community as well as an activemember in the International Federation ofAccountants (IFAC). In May 2014, a newcouncil, having a professional and ambitiousprogram with a well-defined roadmap andvision for the advancement of theassociation was elected. This council’spresident, Elie Abboud, is an MBA and anAmerican CPA holder with an institutionalvision, leadership skills and an activepersonality. The program of the councilvaried from (i) monitoring the professional

development of its members and keepingpace with the international professionalrequirements to (ii) creating partnershipwith regulatory authorities and (iii) buildingan effective presence within the regionaland international professional accountancyorganizations (PAO).

(i) Monitoring the professionaldevelopment of its members and keepingpace with the international professionalrequirements: In 2010, the LACPA adoptedthe Quality Control and Peer ReviewManuals: two manuals issued by the

association to help monitor the CPA firm’spractice (“practice monitoring”). The goal of

practice monitoring, and the program itself,is to promote quality in the accounting andauditing services provided by the LACPAmembers and firms, thus serving the public

interest and enhancing the significance ofthe LACPA membership. This programresulted in several subsequent relatedevents and programs. Therefore, during2015, the LACPA developed the Audit FileManual and the related working papers tobe used as guidance for small, medium andlarge practice firms as well as solepractitioners and before the application ofthe quality control program. Once works onthe manual were finalized, the LACPAworked on securing a training program for

around 700 of its members all over theLebanese territory. In parallel, the QualityControl Supervisory Commission, anindependent commission in charge of thesupervision and implementation of theQuality Control and Peer Review Program,was formed. In November 2015, the LACPAorganized a training workshop for 70 peerreviewers from Lebanon, Jordan and Egyptconducted by trainers from the AmericanAssociation of Certified Public AccountantsAICPA. Hence, the association took theinitiative to widen the peer review vision inthe region. Moreover, the LACPA started

opening several communication channels

with leading international PAOs whereby itsigned cooperation protocols with theAssociation of Chartered CertifiedAccountants (ACCA) in England and theAssociation of Accountants and the FinancialProfessionals in Business (IMA). As per thoseprotocols, the LACPA members and traineescan now benefit from preferential rates onthe certificates offered by theseassociations: Diploma in International

Financial Reporting, Audit and Assurance,and Managerial Accounting certificates.Additionally, in this context, and in order tomaintain excellence and broaden serviceofferings of accounting professionals, theLACPA signed a cooperation protocol withthe American Association of Certified PublicAccountants (AICPA) to share information,training materials and expertise with theAICPA. This cooperation intended to offerthe LACPA members a wide variety ofcontinuing professional education

publications, programs and certificatesdeveloped by the AICPA as well as to sharedifferent perspectives from articles of theAICPA Journal of Accountancy to bepublished in LACPA’s publications.

ii) Creating partnership with regulatoryauthorities: Since the audit profession isclosely related to various professional bodiesin Lebanon, in the public and private sectors,the LACPA worked on strengthening therelationship with the local government andvarious regulatory bodies. This relationshipwas evidenced by their active participation in

all LACPA activities. Furthermore, the LACPA

took the initiative in organizing, with thecooperation of the Special InvestigationCommission and the Central Bank inLebanon, the Anti-Money LaunderingForum which was addressed to theregulatory authorities, the businesscommunity and the external auditors. Theforum closed with recommendationsregarding (i) the pursuit of good governanceand the application of global governance and

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regulations associated to fight moneylaundering and terrorism financing and (ii) tospeed up the passage of laws relating toamendment of the anti-money launderingand terrorism financing and (iii) the money-transfer law and (iv) the cross-borderexchange of tax information. Moreover, theLACPA organized jointly with the Ministry of

Finance the Specialized Technical Congresson

The Application of the International PublicSector Accounting Standards (IPSAS) incollaboration with the World Bank regardingthe application of the International PublicSector Accounting Standards (IPSAS). Thethree-day congress included severalworkshops which addressed the definitionsand practical applications of theInternational Public Sector AccountingStandards (IPSAS) and was attended byabout 150 participants including CertifiedAccountants, employees from the Ministryof Finance and the Public Sector. Theseprofessional activities confirmed thecredibility of the LACPA and its closecooperation with the governmental andofficial supervisory bodies where theassociation used its international network toserve Lebanon. Furthermore, the LACPA had

an active participation in the discussion ofthe draft amendment to the Lebanese Codeof Commerce. During these discussions, itwas realized that some articles lack a clearvision. Therefore, in order to create a newdynamism in the legislation and a realpartnership between the regulators andprivate sectors.

The LACPA signed a Memorandum ofUnderstanding with the Beirut BarAssociation where both associationscontribute to the proposal and the study oflaws, decrees, decisions and instructions ofministerial projects in the fields of publicfinance, taxation, trade and economy andfinancial markets, each within itscompetencies.

(iii) LACPA effective presence on theregional and international level: Asmentioned earlier, the LACPA took theinitiative to spread the peer review visionregionally and discussed issues related to theregional challenges through activeparticipation with all regional events. On theother hand, the presence of the LACPAactivated and strengthened the cooperationwith all international regulatory as well asprofessional bodies: from active presence in

the International Federation of Accountants(IFAC) meetings, to the professional practiceand the commitment to the statements ofmembership obligations (SMO) in IFAC.Moreover, and in the same context, it isworth to mention that the LACPA wasranked first in the MENA region and fifth inthe top ten countries worldwide in

responding to the IFAC Global SMP Survey in2014, a survey that the IFAC conducts onannual basis with an objective to understandthe business environment facing small andmedium practitioners (SMPs) and their SMEclients.Moreover, the LACPA was an activeparticipant with other internationalprofessional organizations as for example byproviding work papers in the Public InterestOversight Board (PIOB) forum in 2015 and inthe ISAR-UNCTAD group of experts meetingsin Geneva in 2014. In an obvious turnaroundand boost in its internal strategy and vision,the LACPA was able to prosper and stand outas a pioneer in an otherwise challenging timeand economic environment. Meeting theprofessional and developmental goals of itsmembers has always been its majormotivational factor. The LACPA was able tobecome the beam of light projecting into abrighter future for the profession.

In The News

World Bank Group Launches New Strategy for the

Middle East and North Africa (MENA) Region

Given the ongoing fragility and conflict in the region, the World BankGroup has prepared a new regional strategy for the Middle East andNorth Africa. Instead of taking conflict and violence as given andworking around it, this new strategy, entitled "Economic and Social

Inclusion for Peace and Stability in the Middle East and North Africa:

A New Strategy for the World Bank Group" puts the goal ofpromoting peace and social stability in the MENA region at its center.The strategy is built around four pillars (“the 4 R’s”) that respond to

both the underlying causes of conflict and violence, as well as theurgent development interventions that will help foster inclusion andshared prosperity. The four pillars of the strategy are as follows:

•Renewing the social contract – to generate a new developmentmodel that is built on greater citizen trust; more effective protectionof the poor and vulnerable; inclusive and accountable servicedelivery; and a stronger private sector that can create jobs andopportunities for MENA’s youth;

•Regional cooperation – particularly around regional public goods andsectors such as education, water, and energy so as to foster greatertrust and collaboration across MENA countries;

•Resilience - to refugee and migration shocks by promoting thewelfare of refugees, internally-displaced persons (IDPs), and host

communities by focusing on building trust and building their assets;and

•Reconstruction and recovery – through a dynamic approach thatbrings in external partners, leverages large-scale financing, and movesbeyond the humanitarian response to longer-term developmentwherever and whenever conflict subsides.

In implementing this strategy, the World Bank Group will rely heavilyon both deepening and expanding partnerships with national,regional, and global actors, especially the Islamic Development Bank.With respect to financing, the World Bank Group will continue toexpand its investment in the region. In addition to our own funds, thecore focus will be on leveraging and mobilizing global resources tomeet the extraordinary financing needs of the region throughinnovative mechanisms. Finally, our knowledge work (including ourgrowing Reimbursable Advisory Services [RAS] program) will be ofprime importance in informing and mobilizing the support for thestrategy and will lead (rather than follow) our lending.

International Bank for Reconstruction and Development (IBRD)/International Development Association (IDA) lending for the MENAregion increased from US$2.8 billion in fiscal year (FY) 2014, to US$3.5billion in FY15 and is expected to reach US$3.7 billion in FY 2016.

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World Bank Financed Operations in MENA

World Bank Provides a US 1.2 billion Loan to Support

Iraq amid Challenging Economic Situation

A US$1.2 billion World Bank loan will support Iraq in strengtheningfiscal stabilization and improving efficiency in the energy sector tohelp counter the effects of the drop in oil prices, as well as risingsecurity costs. The World Bank Group’s Board of Directorsacknowledged the government of Iraq’s engagement in a rigorousreform program and approved the Emergency Fiscal Stabilization,Energy Sustainability and State-Owned Enterprise TransparencyDevelopment Policy Financing. The operation is aligned with thegovernment’s recovery blueprint for 2015-2018, that commits toreforms to achieve inclusive growth, efficient service delivery andimproved social protection.

“The World Bank’s support for the current reform momentum in Iraqis very important at this critical time as the country grapples with long-standing challenges in the financial sector, public financialmanagement and energy efficiency and security,” said Ferid Belhaj,

World Bank Director for the Mashreq Region.

The proposed operation will focus on reforms in three areas.Reforming the public wage system by reducing the highest salariesand increasing the lowest ones will improve expenditure allocation.There will also be reforms in public investment and debtmanagement, and the pension scheme. Reducing gas flaring,expanding gas-to-power generation and reducing electricity subsidies

will help support more sustainable energy supply. A third area ofreform focuses on addressing the lack of transparency amongfinancial and non-financial, state-owned enterprises.The support to Iraq is very much in line with the World Bank’s strategyfor the Middle East and North Africa, which was launched in October2015. This strategy builds on four pillars: (i) renewing the socialcontract in fragile states in the region; (ii) regional cooperation; (iii)resilience to refugee shocks; and (iv) reconstruction and recoverywhere needed. In order to achieve these goals, calculated risk takingin countries such as Iraq is required.

“The Development Policy Framework is a critical part of the Bank’s

efforts to help address fragility and increase stability in Iraq and thebroader Middle East and North Africa region,” said Eric Le Borgne, the

World Bank’s Lead Economist for Iraq.

With the US$1.2 billion Development Policy Financing, the WorldBank’s present engagement in Iraq rises to nearly US$2 billion,including US$355 million for the Transport Corridors Projects toimprove transport connectivity and road safety, and US$350 millionfor the Emergency Operation for Development, which supports thereconstruction and rehabilitation of municipalities that have sufferedrecent damages from the ongoing conflict.

World Bank Signs US 1 Billion in Development

Finance to Support Economic Reforms in Egypt

Egypt and the World Bank signed a US$1 billion development policyfinance operation to support the government’s economic reformsprogram across key economic areas. Recently, the World BankGroup’s Board of Executive Directors also approved the First Fiscal

Consolidation, Sustainable Energy, and CompetitivenessProgrammatic Development Policy Financing (DPF). This is the first ina programmatic series of three annual development finance loans toEgypt.

“This operation supports key economic policies essential for buildingcapacity of domestic institutions, promoting investments and creating

jobs in Egypt” said Asad Alam, World Bank Country Director for Egypt,Yemen and Djibouti. “This program is central to our new CountryPartnership Framework that scales up World Bank Group support toEgypt to about US$ 8 billion over 2015-19” he added.

The programmatic approach would support reform implementation,over three years in order to achieve sustainable reform outcomes.The second and third DPFs would be prepared sequentially, subject toimplementation of the multi-year reform program, particularly withrespect to an adequate macroeconomic framework. The DPF

program is based on collaboration with development partners,especially the African Development Bank which is providing parallelfinancing. The program was coordinated by an inter-ministerialworking group comprising 6 ministries of the government led by theMinistry of International Cooperation, reflecting close collaborationand team work within different governmental departments. The

program focuses on three pillars: (i) fiscal consolidation throughrationalization of tax regimes, moderation of wages, and strongerdebt management; (ii) ensuring sustainable energy supply throughreforming energy subsidies, promoting clean energy, and liberalizingthe energy market to allow for greater private sector engagement;and (iii) enhancing the business environment through a package ofreforms designed to cut red tape, reduce barriers to entry, andpromote better competition policies.

“The policies supported by program would help unlock the privatesector investment in key sectors, that are integral for job creation,”

said Ashish Khanna and Ahmed Kouchouk, co-Task Leaders of theprogram from the World Bank. “Among other things, the DPF programseeks to unlock Egypt’s energy supply potential by reforms to attract

investments into the gas and electricity sectors, support for theregular publishing of public debt management strategy, andenhancement of the competition and enabling environment forbusinesses,” they added.

The current portfolio of the World Bank in Egypt includes 28 projectsfor a total commitment of US$6.47 billion. The World Bank finances

projects for faster delivery of benefits to the people of Egypt in keysectors, including social safety nets, energy, transport, water andsanitation, agriculture and irrigation, housing, health, as well assupporting employment-intensive projects and financing for microand small enterprises.

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Offering the World a Public Good:A Meeting of Parliamentarians and Donor Agencies regarding

Neighboring Country Support for Syrian Refugees

Fueled by intractable and violent conflicts inIraq, Libya, and Syria, the refugee crisis hasmade headlines for surging to anunprecedented scale in neighboring MiddleEast and North African (MENA) countriesand, more recently, for reaching theEuropean shores of the Mediterranean Sea.More than 4 million Syrian refugees areregistered with the United Nations, making itthe largest refugee crisis the world haswitnessed since World War II. It is againstthis backdrop that the External and

Corporate Relations' Global Engagementteam and the Parliamentary Network (PN)on the World Bank and InternationalMonetary Fund co-hosted a briefing viavideoconference to facilitate discussionbetween parliamentarians from both sidesof the Mediterranean committed toaddressing this most pressing developmentissue. The PN is an independent, non-governmental organization that provides aglobal platform whereby Members ofParliament (MPs) advocate for increasedaccountability and transparency in goodgovernance practice and development

initiatives.

The Challenge of Meeting Both the

Development and Humanitarian Needs of

Refugees

Country Director Farid Belhaj noted the widediscrepancy between what Lebanon requiresin the way of financial support and what theinternational community has put on thetable. Relying on funds channeled throughhumanitarian agencies such as the UnitedNations High Commission for Refugees(UNHCR) is not sufficient, he noted that

current levels of support are "still a far cry from what the country needs." Indeed, witha fourth of its population now made up ofSyrian refugees, Lebanon is struggling tomeet the basic needs of its local constituencyin health, education services, electricity,water and sanitation, said MP MohammadKabbani. While refugees have attempted tointegrate in the social and economic fabric ofhost countries, the magnitude of the influxhas exerted significant pressure on the jobmarket, thus putting the most fragile fringeof the local population under considerablerisk of reverting back to extreme poverty. In

light of these alarming trends, the WorldBank has scaled up its support to help

mitigate the impact of the crisis in MENAhost countries, primarily in Jordan andLebanon. Between 2012 and 2014, the Bankcommitted US$700 million in loans andgrants to help Jordan maintain access to

essential healthcare services and basichousehold needs for the population affectedby the impact of the Syrian crisis. The WorldBank has also recently announced a jointinitiative with the United Nations and theIslamic Development Bank to rally theinternational community around a globaleffort to raise the scale of funds needed forrecovery and reconstruction in MENA. Animmediate priority is to provide Jordan andLebanon with sources of concessionalfinance, which as middle-income countriesthey do not currently have, for the long-termsupport required to build up their resilienceto shocks and allow them to focus on thedevelopment needs of refugees.

A Call for Global and Concerted Action

But with an ever-increasing number ofrefugees trying to cross the Mediterraneanto seek protection in Europe, the crisis is nolonger confined within the borders of theMiddle East. As European Union (EU)countries have recently been called upon toaddress stronger flows of migration, thebriefing was also an occasion to channel theconvening power of MPs to explore ways to

strengthen international collaboration.Greek MP, Niki K. Kerameus, and Turkish MP,

Yusuf Ziya Irbec, both urged Europe to takein more refugees to help ease thedemographic pressure on MENA countries.The issue of immigration remains acontentious and politically sensitive one in

Europe, but EU countries might be moreopen to stepping up their financial support inMENA host countries, advised Jeremy Lefroy,MP for the United Kingdom and Chair of thePN. However, they will do this only with theassurance that aid will not be diverted fromthe most in need, cautioned Austrian MPGerald Zelina. He noted that "We need to

ensure that international financial support is

not diverted from the refugees and the most

in need.” The conference showcasedcountries' diverging views on the best courseof action, and parliamentarians came out ofthe session with a keener sense of thechallenge at hand, as well as a renewedcommitment to bringing this issue to theattention of their respective decision-makers. Beyond raising awareness,parliamentarians are set to play a critical rolein crafting the legislation and monitoring thegovernmental actions necessary to addressthe humanitarian crisis without overlookingthe developmental needs of localpopulations. MPs are on the front line, as"they are the ones who authorize the

disbursement of aid," concluded FeridBelhaj. “ After all, it is the legislative branch

that holds the financial strings.”

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Kuwait

Embedding a tax culture in an oil-rich economy

Joey GhalebSenior Public Sector Specialist

The tax department at MoF is led by a middlemanager who assumes the dual role of taxand financial affairs section head – amandate that reflects the low importance oftaxes in Kuwait’s public administration. Thetax team has been implementing a coupleinstruments (e.g., religious zakat, corporatetax on select foreign firms), utilizing basic

excel-based systems and processes with abase of ~2,000 taxpayers. In other words, thetax department, and its operationsgenerating less than 1% of state revenues,were not on the radar screen of mostgovernment official and internationalagency.

Fast forward to 2011, a political decision wasmade at the Gulf Cooperation Council (GCC)level to introduce a value added tax (VAT) todiversify revenues across this six-nationcustom union. The Government of Kuwait, a

signatory, asked the Ministry of Finance(MoF) and the Tax and Financial AffairsDepartment to execute. The task wasimmense for the staff who lacked specializedskills and were immersed in dailybureaucratic and transaction-type work.After some iteration between the options ofseeking a consulting firm to carry out thepreparations, having the Bank take on thepreparations, or MOF doing the preparationswith the support of the Bank, the latteroption was chosen. The primary reason fromMoF's perspective was their need to buildtheir own capacity in tax administration and

a corresponding concern that using aconsulting firm would not have built anyorganic capacity in the ministry.

The World Bank engagement focusedinitially on reviewing and proposing a new

legislative and institutional infrastructure.The work also entailed heavy on-the-jobcapacity building coupled with awarenessraising to secure the buy-in of seniormanagement on the required reform

agenda. This was aided by the long term ofpresence of Arab-speaking Bank tax advisor.The World Bank engagement was makinginroads but with the Arab Spring creepinginto neighboring Oman and public unrestobserved on the streets of Kuwait, anotherpolitical decision froze the introduction ofnew taxes for at least three years and with itthe VAT project faced its toughest test. Insimilar circumstances, the parties reluctantto undertake change would haveoverpowered the core group of reformersand succeeded in killing the fragile project;turning it into yet another one of thenumerous failed experiments that Kuwaitobserved in recent decades.

This was not the case. The reform agendaand progress to date had garnered enoughmomentum, and senior management at the

Ministry requested in early 2013 from theBank to realign its assistance towardsmodernizing the administration. Theobjective was more strategic. Theadministration wanted to be ready to

implement any tax instruments. The Bankteam went back to the drawing board, and acomprehensive long term engagement wasborn.

The restructured project included six maincomponents and they were: 1) legislativeand regulatory, 2) institutional, 3) processesand IT infrastructure, 4) compliance, 5)capacity building and 6) changemanagement. To deliver on this ambitioustask, the Bank adopted the “incubator”model by deploying a strong team of 4resident advisors, all of whom spoke Arabic.Language proved to be a major factor andthus a large share of short term consultantswere recruited from the Middle East. TheMinistry, on the other hand, created adedicated reform team and empowered it by

GCCKuwait 68

Bahrain 69

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putting the head of the Tax Department asits chief.

The work modality, was by and large, a jointeffort driven by the three-partite teamcomposed of the Bank resident team,regional and international experts, and thelocal MoF team. Together a long list of

important deliverables were producedwithin two years. This approach allowed foron-the-job capacity building, transfer ofinternational know-how, and exposure toregional experiences. To date, the list ofoutputs include draft laws (e.g., VAT law, taxprocedure code), a new organizationstructure for headquarters, regional officesand a Large Taxpayer Office, over 60processes reengineered and detailed, acustomized IT interim solution, a strategicplan, a change management plan, draft auditselection strategy, a risk management plans,in addition to numerous workshops, studytours and the like.

The engagement is judged by the client, andby peers, to be a success and there areunderlying features behind this outcome. Atax culture is indeed being created in this oil-rich economy and an administration is nowadapting to good international practices anddefending – internally and externally - thereform agenda. The secret to this hardfought success is attributed to more thanone factor, but the key element is thepresence of an embedded Arab-speaking

team of tested tax experts with managementexperience. It is not sufficient to have any

resident advisor. This expert must also beseasoned, a solid manager, and above all anArab speaker. The approach of spaced-outmissions with aide memoires at their tail endwould have turned this engagement into anexpensive academic exercise with nochampions within MoF and no real impactachieved.

Despite all the progress registered, there arelimitations to any Bank engagement and thisis summarized by the challenge ofimplementing the reforms and renderingthem operational. Implementation is nowthe main issue when it comes to achievingthe objective of putting in place an effectiveand efficient tax administration. Movingtowards this objective is not only a technicalmatter but important and key politicaldecisions have to be taken. First of all, thegovernment has to make a decision aboutthe model of tax administration they want toestablish. The options include a Directorateunder the purview of MoF, a semi-autonomous revenue body, or anotherhybrid model. Vesting autonomy in taxadministration has been a predominantfeature of tax reforms in many regions acrossthe globe in the past two decades.Autonomy in the areas of human resourcemanagement and procurement is expectedto improve performance by reducingpolitical interference and increasing themandate of technical managers.Looking ahead, and with a profit tax and a

VAT looming in the horizon, the readiness ofMoF is put to a real test. There are key

consideration the Ministry and the reformteam has to consider. First, theadministration has to be assume fullownership and responsibility of keyfunctions such as IT operations. Additionally,a special attention has to be given to HRmanagement policies since the lack of skilledstaff is one of the main concerns of the Bank

team. Moreover, MoF has to promptlyinitiate the implementation of basic andacross-the-board on-line registration andcollections processes which aim atfacilitating taxpayer compliance. Theestablishment of a full-fledged LargeTaxpayer Office should be another milestonewithout overlooking the need to strengthenthe tax audit function.

The final stages of this tax engagementremain critical and may define the lastingimpact of this World Bank technicalassistance. First and foremost, the phasing-out of Bank support has to be timely and wellplanned to avoid sudden ruptures or abortedreforms. But there are other considerationsto account for. For instance, will thedeparture of resident advisors in the futurecreate a void or weaken the mandate of thereformers at MoF? In other words, has theBank struck the right balance and properlymitigated the potential risk of capture anddependency, or is the MoF staff well trainedand empowered to take over and drive homethe reform agenda? Time will only tell.

Bahrain

Training Vocational Accountants in the Middle East

Justin Kyriakou

Global Development Manager,Association of Accounting Technicians

Justin Kyriakou is Global Development

Manager at AAT (Association of Accounting

Technicians), the UK’s leading qualification

and membership body for vocational

accountants, working across the globe with

around 135,000 members in more than 90

countries.

The Association of Accounting Technicians(AAT) has been operating in the Middle Eastfor over twenty years, training students inthe region in practical financial skills that canbe used in real-world work. AAT buildsrelationships with local organizations,combining knowledge and expertise todevelop local financial intelligence.

AAT’s Accounting Qualification combines

the latest industry insight with practical workskills to help prepare students for careers inaccounting or other finance-based roles. It is

comprised of three different levels, making itaccessible even for individuals with noprevious financial background. Thequalifications can also be studied flexibly,meaning individuals can study when it suitsthem, in the evenings or on weekends.

Currently, AAT works with six organizations,known as training providers, in Bahrain andone in Abu Dhabi, United Arab Emirates toprovide the Accounting Qualification. AAT

also has plans to expand its operationsfurther by moving into Dubai, UAE, Oman,Qatar, and Saudi Arabia. One of AAT’sstrongest connections at the moment is withBahrain, where the organization has beenactive for a number of years. Although it wasone of the first states to discover oil, Bahrainis less dependent on it than other the Gulfcountries, balancing it with a thriving bankingand financial services sector. Bahrain is aglobal hub for Islamic finance, with theCentral Bank of Bahrain supporting thissector. In 2001, Bahrain became the firstcountry in the world to develop and

implement regulations specific to the Islamicbanking industry. Tourism is another industrythat has grown in Bahrain, with largeamounts of visitors from the Gulf region, butalso increasing visitors from outside of theregion as well. These different sectors have

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combined to help strengthen the Bahrainieconomy. Mr. Abdulla Marzooq, ManagingDirector of the training company, ScoreTraining, one of the training companies AATworks with says:Bahrain’s economy is improving year by year,

with real gross domestic product (GDP)

moving from 3.4 percent in 2013 to 5.4

percent in 2014. Draft reports for this yearindicate that it is still stable at that level.

There has also been a rise in tourist numbers,

which will lead to improvements of hotels

and other leisure facilities – further fuelling

Bahrain’s economy and performance.

As part of its diversification from being aneconomy reliant solely on income from oilproduction, the government of Bahrain hasmade it a priority to provide support to trainthe local population and equip them withpractical skills required in the workplace. Thegovernment is particularly keen to offerqualifications that are United Kingdomregulated, but also recognized globally, andwhich also provide progression opportunitiestoward chartered accountancy qualificationsand university. In addition, these financeskills are extremely valuable for growingbusinesses. In this context, the governmentfunds students in the country who want tostudy for an AAT qualification, paying thecosts for their course. AAT is also widely usedin the Bahraini public sector. The BahrainCentral Bank owns the Bahrain Institute ofBanking and Finance, which is a training

organization AAT works closely with to offerAccounting Qualification. Bahrain alsoestablished an organization called Tamkeenin August 2006 to assist with thegovernment’s economic vision. Its twoprimary objectives are to:

Foster the creation anddevelopment of enterprises; and

Provide support to enhance theproductivity and growth ofenterprises and individuals.

Tamkeen is roughly equivalent to the UnitedKingdom’s Skills Funding Agency, and is an

avenue through which individuals can obtainfinancial support to study professionalqualifications to advance in their careers.AAT’s Accounting Qualification is amongthose Tamkeen make available. Indeed, it isthe most popular certificate they offer.

As Mr. Abdulla Marzooq noted:

As Bahrain has a dynamic economy and an

open, competitive market, there are many

opportunities for AAT-qualified students. In

the past 3 years, many qualified personnel

have gone into a range of sectors, frominformation technology (IT) and distribution

to education and auditing, thanks largely to

the government’s Tamkeen human-capital

scheme to sponsor training for Bahrainis and

help prepare them for the labor market.

I think Bahrain’s economic and financial

landscape will be stable over the next

decade, provided that government spending

on capital projects and private sector

subsidies is maintained at the current level.

As the investment hits home, I foresee that

certain business types will take off, such as

training institutes, private universities andsoftware houses.

Given our dynamic, globalized economy,

accountants planning to work here should

definitely have world recognized professional

qualifications, such as the AAT, the

Association of Chartered Certified

Accountants (ACCA) and the Certified Public

Accountant (CPA), as there is such a high

demand for qualified staff.

Batool Mohammed was 21 years old when

she began studying AAT. She wasencouraged to study for the qualification, asshe was working in a job doing the accountsat a company which rented out partyequipment. She studied for the qualificationpart-time in the afternoons after work. Sincecompleting it, she has received a pay rise andnow has an additional job as an AATAssessor, assessing the work of otherstudents who study for the qualification. Sheis also planning to use the knowledge shegained from studying the AAT qualification toprogress to a Chartered Institute ofManagement Accountants (CIMA)qualification.She noted that: “Obtaining the AAT

qualification helped change my career in

many ways. It’s helped me change my

position, increase my salary, build my self-

confidence, and has given me my new role as

an assessor.”

AAT is pleased to support the developmentof financial skills and knowledge in theMiddle East, working with employers toensure they get the highly qualified staff theyneed and with individuals looking for a

qualification to help them succeed in theircareers. With its plans to expand into Dubai,UAE, Oman, Qatar, and Saudi Arabia, AATlooks forward to helping the region continueits financial growth.

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The World Government SummitShaping Future Governments

Dubai, United Arab Emirates

Leonard HesslingWorld Bank Consultant,Public Sector Expert

Since 2013 government officials, thoughtleaders, policy-makers and private sectorentrepreneurs have met at the WorldGovernment Summit in Dubai, United ArabEmirates (UAE) to discuss the best ways todevelop the future of governance based onthe latest developments andfuture trends in technology,innovation and society. Thesummit, a global networkingplatform on contemporaryquestions of government andpublic policy, has produced aseries of reports on such issues aswell as hosting roundtables andother meetings of thoughtleaders to create and share ideasand solutions that map to theneeds of governments globally.The Summit is accompanied byawards for innovation ingovernment and a number ofshowcases and exhibitions, suchas the Innovation Pavilion and theMuseum of Future Government Services. In

2015, the Summit embarked on a newexploration of not only policy, but the futureof policy and governance.

The 2015 Summit – Future Focus

Hosting over 4,000 government leaders fromover 90 countries, the third annual event ofthe Summit on “Shaping Future

Governments” took place on February 9-11,2015. With a firm focus on emerging trendsand technologies, the Summit’s futuristictheme led to an unparalleled sharing of bestpractices and innovations that had thepotential to impact government policies andservices. The 2015 event covered a widerange of topics; including education, health,empowering women, smart cities, andgovernment services. In the field of healthfor instance, discussions focused on thefuture of healthcare and the opportunities

for data collection and improvement ofservices linked to the so-called “quantified

self” and “the internet of things”. Furtherhighlights of the 2015 event included thekeynote address by UN Secretary-GeneralBan Ki-moon and speeches by practitionersand scholars such as Boo Keun Yoon ofSamsung and Professor Klaus Schwab of theWEF. The UN Secretary-General highlightedthe importance of using technology toengage citizens with government and saidthat information technology (IT) solutionscan help involve citizens more in developinggovernment services, and in linkinggovernment and business for economic

growth: “This communication can actuallycreate an environment wherein citizens are

involved with their governments in co-

designing solutions. On the back of

innovative information technology networks

and solutions, a society where the

government and its businesses come

together can be a showcase for sustainable

growth, collaborative governance, and

economic success” , he noted. The nexusbetween governments and the private

sector was another core theme of thesummit. "The future can only be solved by

governments, working in close cooperation

with businesses" said Klaus Schwab, founderand Chairman of the World Economic Forum,who also noted that "it is human imagination

and innovation that drives economic change.

Governments have an essential role to play

— though innovation has tended to come

from private business, governments have to

be catalysts, driving the innovation in this

ecosystem". Highlighting the importance ofthe digital revolution and government, Dr

Erik Brynjolfsson, Director of theMassachusetts Institute for Technology(MIT) Centre for Digital Business, warned ofthe risks for nations of being left behind andconsidered uncompetitive if they do notshow appetite to embrace the potential of

the digital revolution to benefit nationaleconomies:

“There is no doubt that we are living in an era

of rapid change. The evolution of digital

technologies has never been quicker and is

only continuing to accelerate. Meanwhile,

globally, our skills, organizations and

institutions are often lagging behind and

failing to adjust to the rapid progress. This

will not be solved by adopting a ‘business as

usual’ approach and nations should follow

the lead of Dubai in considering projects

which benefit the economy and people

across the full spectrum of society.”

The 2016 Summit

The upcoming fourth annual event of theWorld Government Summit will take placeon February 8-10, 2016 in Dubai. It isexpected to build on the success of previousyears by attracting world leaders and furthersparking debate on the future of governmentin the 21st century. It is conceptualized as a

gateway to the future, aiming tohighlight developmental andsocietal issues in the near term,medium term and long term future.The 2016 World Government

Summit is focused on looking ahead,to evaluating the impact ofinnovation and the changes wroughtby the speeding growth and ubiquityof technology, particularly in thegrowing series of massive inflectionpoints created by the wave of digitaltechnologies rolling out today and inthe foreseeable future. As eachtechnological shift creates benefit, italso drives change, sometimescreating benefits for some and

economic threat for others. Evaluating that

inter-connected series of events triggered byinnovation and human development is acore theme for the 2016 Summit. A series often changes to the 2016 World GovernmentSummit cement the themes of futurism andconnected policy. The Summit’s global focushas been formalized and the event has beentransformed from being an annualconference and meeting to a year-roundinitiative which aims to tie together bestpractices in global government with aparticular focus on planning for innovationand technologically-led disruption andmeeting future challenges. The Summit will

be tasked with creating a resource ofresearch and intelligence on a year-roundbasis. Increased focus on smarter, morefocused delivery means shorter sessions andmore interaction between speakers andaudience. Aiming to create shareable and

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Remarks by World Bank Group President Jim Yong

Kim at the World Government SummitInclusive Governance: The Foundation forBuilding Human Opportunity and Prosperity

Hello everyone. I’m very happy to be heretoday with you. I’m grateful to the people ofthe United Arab Emirates and His HighnessSheikh Mohammed bin Rashid Al Maktoumfor inviting me to participate in this year’sWorld Government Summit. For more than60 years, the World Bank Group has beenworking with governments in developingcounties to reduce poverty and promotehuman dignity. We’re a proud supporter ofthis event because good governance is thefoundation for all development. Delivering

quality public services and creatingconditions that encourage businesses tocreate jobs are fundamental to buildingopportunity and prosperity for all. The focusof this year’s conference – shapingfuture governments – comes at apivotal moment in modern history.Last year, for the first time, the rate ofextreme poverty was projected to fallbelow 10 percent. This is stunningprogress. It means that today thereare 1 billion fewer people living inextreme poverty than 15 years ago.But more than 700 million people stilllive on less than about $2 dollars aday. Our research and experience tellsus that three things have been criticalto reducing poverty and boostingprosperity: inclusive economicgrowth, investments in people’shealth and education, and insuringagainst risks that can plunge thevulnerable into poverty, risks likeunemployment, illness, climate change andpandemics. Shaping future governments sothey deliver on these responsibilities is ourshared responsibility and essential to

achieving our twin goals of ending extremepoverty by 2030 and boosting sharedprosperity. The global landscape suggeststhat reaching these objectives won’t be easy.

Economic growth – the most powerfulpoverty reduction force the world has everknown – is slowing globally. Many emergingmarkets are suffering sharp reductions ingrowth because of declining demand fromChina and lower commodity prices. Warmertemperatures potentially linked to climatechange made 2015 the hottest year inhistory; and the most powerful El Niño onrecord is affecting the lives and livelihoods ofbillions across the globe. Many parts of theworld are becoming more fragile, makingquality leadership and good governance evermore important. The Middle East and NorthAfrica, in particular, have been deeplyaffected by these changes. Lower oil prices

are forcing governments across the region toreevaluate policies that have been in placefor decades. Economies dominated by largefirms are not producing enough jobs, andthis is true for countries that both export andimport oil. Furthermore, economiesdominated by fossil fuels are currently notearning enough oil revenues to support largepublic sector expenditures and fuelsubsidies. Throughout the region, highlycentralized bureaucracies have not deliveredthe quality health and education servicesneeded to enable young people to competein the globalized marketplace. The net resultis a long period that discouraged innovationand entrepreneurship. This decline in

economic prospects are causing increasingfragility in a region that has alreadyexperienced too much instability. Conflictshave now forcibly displaced 15 million

people in the Middle East and North Africa,contributing to the worst humanitarian crisissince World War II. Fresh water and fertilefarmland are becoming scarcer, creatingmore potential flashpoints. The human

development consequences are worrying.Violent extremists are using thesechallenging circumstances to rally recruits totheir cause – with global implications. Deadlyattacks in West and East Africa, NorthAmerica, South and East Asia, and Europe,show that all of us have a stake in shapingfuture governments that are capable oftackling these challenges. For people whofeel excluded from or aggrieved by society,the feelings of anger and frustration can beoverwhelming. When you have studied hardand can’t find a job, or discover that youreducation did not help you develop the skillsto get a job, the personal disappointmentcan be profound. These circumstances givepeople powerful motivations to challengewhat they see as the source of their troubles.Five years ago, in 2011, Mohamed Bouazizi,a 26-year-old Tunisian vegetable seller and

breadwinner for his family of eight, lithimself on fire to protest treatment he hadreceived at the hands of hisgovernment. Bouazizi’s act was essentiallytriggered by the absence of good governancein his country. Ten days after his death,public protests brought down Tunisia’sgovernment. This anger exploded at a timewhen the national economy was growing.But opinion polls prior to the protestsshowed that, despite Tunisians’ awareness

of their country’s increasing prosperity, over80 percent considered themselves to bestruggling or suffering. Many indicated thattheir unhappiness was rooted in low qualitypublic services and infrastructure, and a

government that made their livelihoodsdifficult. Poor governance had stretched thecountry’s social fabric beyond repair. Governments that operate in opaque,

exclusive and unaccountable ways, or fail toempower local authorities, often plant theseeds of discontent. When governmentsdon’t allow the public to participate indecisions, they breed suspicion; when

governments make decisions on the basis offavoritism, social or ethnic divisions,discrimination or corruption, citizensbecome deeply aggrieved. The demands forgood governance, in fact, are not a recentphenomenon. The demands are rooted inthe traditions and history of many cultures,including the Arab and Islamic world. Thescholar Imam Muslim recounted words saidby the prophet, quote, “One whom I appoint

to a public office must render account oneverything, big and small.” The Arabphilosopher Ibn Khaldun wrote in his opus,the Muqqaddimah, that the social compactbetween the individual and tribes was asacred bond based on mutual accountability,protection, and proper and reliable deliveryof such basic services as security and justice. Ibn Khaldun said the worst kind ofstate is a tyranny wherein government

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usurps property rights and rules withinjustice against the rights of men. So what’sthe best way forward today? We believe thatthe answer is what we call inclusivegovernance. At the core of inclusivegovernance is a social compact betweengovernment officials and their citizens that isbased on three principles. First,

governments must be transparent in theiractions and fully engage with citizens.Second, governments must invest in theirpeople to give them opportunity to reachtheir full potential. And third, governmentsmust create business environments thatencourage innovation, competition andprivate sector investment, which will, in turn,create jobs and increase economic growth. Astory from Brazil illustrates the benefits ofgovernments being held accountable fortheir actions. The World Bank Group helpedthe government build a program calledBolsaFamilia, which is a targeted conditional cashtransfer program. It promotes opportunityfor the poorest by providing money to needyfamilies who keep their children in school

and ensure they receive vaccinations andregular health check-ups. The program hashelped one of the most unequal countries inthe world reduce income inequality, which isa powerful driver of social instability. Bolsa

Familia’s success is due in part toaccountability through its structures – asingle register, eliminating the layers ofbureaucracy, and making the systemtransparent. The outcomes from thisprogram have been remarkable: Studiesshow that the program funds help parentsbuy food, clothing and school supplies fortheir children. Since 2003, Bolsa Familia hasbeen responsible for up to 21 percent of thecountry’s decline in inequality. And the totalcost of the program is only 0.6 percent ofGDP. Here in Dubai, input from communitiesand parents has helped the Knowledge andHuman Development Authority improveeducation quality. Today, more than half ofthe emirate’s students are in good oroutstanding schools, compared to 30percent in 2010, and student achievementhas steadily improved over the last five

years. Sheikh Mohammed bin Rashid, yourinvitation last week to the UAE’s universities

– which you tweeted! – to identify a ministerunder age 25 to represent youth and “give

them a voice and role in governing thenation,” is among the most inspiring

gestures in governance of this still-newyear. Community engagement in Brazil and

the UAE has helped their governmentspromote investment in people – a secondimportant element of inclusive governance.We know that investing in people, especiallyin their health and education, is critical topromoting opportunity and prosperity.Research has shown that education helpspeople escape poverty at very high rates – starting at the earliest ages. Globally,earnings increase an average of 10 percentfor every year of education for employedworkers. Educated women and girls can beparticularly effective agents of social andeconomic progress, both for society andtheir children. Educated mothers earn higherwages and invest more in their children’shealth and education. In Pakistan, children

whose mothers have even a single year ofeducation spend an extra hour studying athome and achieve higher test scores.Governments that invest in people’s health

and education also create a powerful

counter-narrative to violent extremism.Instead of sowing seeds of discontent, thesegovernments promote opportunity, and thatopportunity, if coupled with improving thebusiness environment, can lead to more jobcreation. Governments must ensure that thebusiness environment helps sparkinnovation, entrepreneurship, andcompetitiveness. One example is China.China has produced a remarkable record ofeconomic growth and job creation over thelast 15 years – with the vast majority of those jobs created by the private sector. In the lastfive years – up to the end of 2015 – Chinacreated 64 million jobs. When governmentsdo not promote a fair and competitivebusiness environment, when they limitopportunities by favoring allies, they foster aform of crony capitalism that can lead toinstability and chaos. Experience shows that

governments can safeguard the fairness andintegrity of their business climates by usingspecial initiatives that reduce regulatorycosts for the private sector. UnderDenmark’s “Burden Hunters Project,”officials work with companies to simplifyrules that the business community perceivesas most burdensome. This cooperative

approach helped Denmark rank first inEurope and fifth in the world on the ease ofdoing business in the World Bank’s DoingBusiness report this past year. These are justa few examples. No doubt you will hearabout many more innovations in governanceover the course of this conference. For theMiddle East and North Africa, for all regionsin the world, the path to stability andprosperity is through inclusive governance – actions that foster individual opportunitythrough quality public services and an openand competitive business climate. Tunisiatoday shows this is possible. After thecountry’s revolution, the governmentadopted laws and policies that made itsbudget decision-making more transparent.

The public now has the right toofficial government information.Simplified and yet detailed data onstate revenue and expenditure,treasury funds and publicadministrative entities can beaccessed by anyone online. In 2013,when assassinations and socialunrest threatened to undo theseand other advances, the Tunisian

National Dialogue Quartet, acoalition of trade unions and legaland human rights organizations,used its moral authority to bringtogether citizens, political partiesand authorities in peaceful dialogue.While this process still has a ways togo, this dialogue has started to bringaccountability and government

engagement with citizens to theconstitution-building process, helpingdevelop consensus on a range of issuesacross political and religious divides. It alsoreduced violence and earned the Quartet the2015 Nobel Peace Prize. Now is the time foreven greater ambition for the Middle Eastand North Africa. Last week, in London, wecommitted to using innovative financial toolsto provide new support to Jordan andLebanon, Syria’s neighbors who have been

shouldering so much of the burden inhosting Syrian refugees. First, our Board ofDirectors is working with World Bank Groupmanagement on an extraordinary measureto provide $200 million dollars in directconcessional financing to create jobs andincrease access to education in Lebanon and

Jordan Second, with assistance from the UNand the Islamic Development Bank, we’re

seeking donors who will provide $1 billiondollars in grants that will then be leveragedto supply $3 to $4 billion dollars inconcessional financing to help fund public

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service delivery and other needs. These newfinancing initiatives, combined with ourexisting programs, are expected to totalabout $20 billion dollars in the next five years

– which is roughly triple our investment inthe region from the previous five years. Wemust act much more quickly in response tosuch humanitarian crises because we know

that a refugee can remain a refugee foryears, even decades. We must find ways tobring knowledge from developmentorganizations such as the World Bank Groupto improve the lives of refugees soon afterthey arrive in a host country – not years later.Indeed, I believe we must all respond towhat Martin Luther King Jr. called “the fierceurgency of the now.” He wrote, and I quote:

“There ‘is’ such a thing as being too late. Thisis no time for apathy or complacency. This isa time for vigorous and positive action.” Ialso believe that we must move urgently not just in response to humanitarian crises butalso to prevent these crises from happeningin the first place. In this region, in LatinAmerica, in Africa, and in Asia, that meansbuilding good governance. Another inspiring

figure to me is the Palestinian intellectualand writer Edward Said. His bookOrientalism, which is largely about howWesterns perceive the East, had a profoundimpact on my thinking. He also focused onthe power of good governance. He oncewrote, and I quote: “Power, after all, is not just military strength. It is the social power

that comes from democracy, the culturalpower that comes from freedom ofexpression and research, the personal powerthat entitles every Arab citizen to feel that heor she is in fact a citizen, and not just a sheepin some great shepherd’s flock.” This is themoment for all enlightened leaders in theregion and around the world to act and tobuild inclusive governance. It means thatleaders must be transparent in their actionsand engage with people so that -- as EdwardSaid says – they feel they are in fact citizens;it means leaders must invest in their people;and it means they must create businessenvironments that encourage private sectorinvestment. The greatest strength of theMiddle East and North Africa is its people – especially its youth. If leaders invest in young

people’s education and health, if they giveyouth opportunities by diversifying theireconomies and sparking the dynamism ofthe private sector, the future of this regionwill become far brighter. With goodgovernance, there will be greateropportunity and prosperity for all. One lastnote that I’d like to make directly to Sheikh

Mohammad bin Rashid. During this visit tothe UAE – my first -- I’ve been very impressed

by what you, Sheikh Mohammed bin Zayed,and other leaders here haveaccomplished. If the rest of the region cancommit to the kind of good governance thathas built the modern and dynamic UAE, theprospects for peace and prosperity wouldgreatly improve. I pledge that we willcontinue to learn from you and share thesuccesses here with other countries aroundthe world. I also pledge that we will stand byyour side and offer our assistance as youaccomplish things that we can’t imagine

today, but that all of us will experience in theyears ahead. Thank you very much.

Pictures from

The 2016 World Government Summit(Source: World Government Summit Twitter)

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CV MENA

Events

Exchange 78

Events 84

Bootcamps 90

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The Exchange

From Vulnerability to Resilience

Hammamet,

Tunisia

Leonard HesslingWorld Bank Consultant,Public Sector Expert

The Exchange conference series is anannual forum which provides a channel fordialogue. Enabling countries to shareexperiences, lessons learned, and bestpractices, the Exchange begins wheregovernance diagnostics leave off,supporting the creation of an enablingenvironment for reforms to move fromconcept to reality. The Exchange feeds intothe design of the other three components inthe regional Connecting Voices of MENA (CVMENA) initiative and partnership (BootCamps, Solutions Labs, and the Maarefahcommunity of practice).

From Vulnerability to Resilience. The tile ofthe fifth Exchange conference suggests atransition away from a state of vulnerability

towards increased resilience. Vulnerabilityand resilience represent two related yetdifferent approaches to understanding theresponse of systems and actors to change(Miller et al. 2010). In order to frame thedebate on governance in MENA, the twocomplex concepts of vulnerability andresilience first need to be understood,differentiated from related concepts, andnarrowed down to a working definition,before they can be contextualized andadapted to the complexities of a dynamicregion like MENA.

The MENA region is in a state ofvulnerability. The region is experiencingsignificant instability, with several violentconflicts and political transitions, which arefundamentally altering the political, social

and economic landscape. Underlying causesand dynamics are complex and multi-faceted, spanning sub-national, country andregional forces. The impacts andconsequences of violence and conflict arenot limited to individual countries, withsignificant spillovers on neighboringcountries and even globally (World Bank,2015b).

Drivers deepening vulnerability. Despitepositive economic growth and declininglevels of poverty in the MENA regionbetween 1990 and 2010 (Figure 1), severalstructural challenges contributed todeepening vulnerability, in particular due tothe trajectories of political transition,instability and conflict after the 2011 ArabUprisings. In summary, these structuralchallenges include: (i) Deep horizontal andvertical inequalities exacerbated byworsening global and regional economic

conditions that led to strengthenedperceptions of marginalization; (ii) Poorgovernance, characterized by inadequateservice delivery, lack of transparency andaccountability, lack of rule of law, andcorruption; and (iii) Increased socialfragmentation and polarization leading tothe fragmentation of the national and socialfabric in some countries, and the rise toprominence of identity-based agendas atthe expense of a collective national vision(World Bank, 2015b).

MENA countries are experiencing

transition, large-scale conflict, and acutevulnerability. Although overall warfare inMENA has been decreasing since 1990according to some measures, the region isexperiencing a renewed increase in state

fragility and warfare since the early 2000swith the number of major episodes ofpolitical violence and armed conflictincreasing steadily (Figure 2). While thedynamics of conflict and violence differsignificantly between countries, they can beroughly regrouped as follows: (i) Countriesundergoing complex transitions that haveaddressed some grievances and initiatedimportant reforms and institutionaltransformation, including throughconstitutional processes (e.g. Egypt,Tunisia); (ii) Countries experiencing large-scale conflict characterized by thebreakdown of institutions, major loss of life,significant population displacement,destruction of infrastructure, and economiccrises (e.g. Syria, Libya, Iraq and Yemen);and (iii) Countries in situations of acutevulnerability that have been significantlyaffected by conflicts occurring inneighboring countries, and that have been

directly impacted by the Syrian conflictthrough the influx of refugees, as well as thespill-over of conflict and violence acrossborders increasing their vulnerability todestabilization and conflict (e.g. Lebanon,Jordan). While vulnerability is registered notby exposure to hazards alone; it also residesin the resilience of the system experiencinghazard (Berkes, 2007).

The concept of resilience – a holisticmethodology. Resilience refers to “thecapacity to recover quickly from difficulties” and other notions include the ability to

“bounce back”, “return to equilibrium” andto “reorganize after a disturbance”. Resilience can be approached from multipleangles and historically it has been used inengineering, psychology and ecology.

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The approach of psychological resilience isuseful insofar as it defines the individual’s

ability to properly adapt to stress and

adversity, which can be extrapolated toentire societies (Cyrulnik, 2009). Theresilience perspective in ecology uses awider approach in order to understand thedynamics of social –ecological systems, andto the study of governance, the emergingnotion of ‘resilience’ serves as a perspectivefor understanding how societies cope with,and develop from, disturbances and change(Folke, 2006). Although resilience thinkingcontains substantial normative andconceptual difficulties for the analysis ofsocial systems, the resilience approach to

governance issues also shows a great deal ofpromise as it enables a more refinedunderstanding of the dynamics of rapid,interlinked and multi-scale change (Duit et.al., 2010). By bringing together thehumanitarian and developmentcommunities, resilience provides “themissing link” between relief and

development, between disaster riskreduction, climate change adaption andconflict prevention, thus offering a holisticmethodology to these and otherinterconnected issues (Mitchell, 2013).Including this “missing link” plays an

important role in the strategic approach togovernance in MENA.

The Exchange is built around the four pillarsof job creation in the private sector, stateinstitutions, service delivery, and rule oflaw. The conference will also coverassociated themes of citizen engagementand social accountability; and the concept ofresilience, its relevance and usefulnesswhen applied to public sector governance inMENA.

Understanding resilience. Althougheveryone is talking about resilience, somepeople find it difficult to understand whatresilience actually means. The followingtable aims to facilitate the discussion aboutresilience and its linkages to governance byproviding an overview of resilience-relatedterminology that shall serve as workingdefinitions for the Exchange.

Resilience and Governance in MENASince the 1990s the concept of goodgovernance has been an explicit part of theWorld Bank’s development agenda

acknowledging that inefficiencies andweaknesses in the institutional environmenthave a direct impact on the achievementand the quality of development results. The

increasingly complex, interconnected andevolving risk landscape of MENA in 2015requires a new approach linking the concept

of good governance with resilience. In anattempt to grasp the emerging thinking onresilience and by looking at tools such asresilience systems analysis, this session willexplore how resilience can be applied as aframework to good governance practices.

Resilience as an opportunity fordevelopment. For the present purpose ofanalysis of vulnerability in MENA after theArab Uprisings of 2011, resilience appearsrather as a process leading the region and itsgovernments back to a state of peace and

normality where perhaps the mostimportant element is the development ofadapting abilities of governmentsthemselves. Resilience appears as thecapacity to overcome difficulties despite, ormaybe because of the factors of risk andstress. In this sense resilient people andcommunities have the tendency to seeproblematic situations rather asopportunities than as barriers fordevelopment.

Resilience involves understanding thecomplex risk landscapes in each context

holistically. This means determining where – in which layer of society – those risks arebest owned and managed, and working tostrengthening these components ofresilience, and thereby empoweringdifferent layers of society with the ability tocope with those risks that they face in theireveryday lives. However, due to theinterconnectedness of risks, a certain layerof society can no longer be ‘selectively’

resilient, instead issues need to beaddressed holistically (Mitchell, 2013).

The added value of resilience thinking. Besides highlighting the interconnectednessof risks, building resilience and

strengthening the resilience of people andstates to shocks and stresses can helpprotect lives before a crisis hits, reduce

potential economic losses, and empowerpeople to take better decisions about therisks they, and those they are responsiblefor, face (Mitchell, 2013).

Different resilience approaches in differentcountries. Although MENA countries arefacing similar threats and governance issues,the disturbances to societies in the Levantare different from those in the Maghreb andthe Gulf. While a country’s resilience andlong-term perspective appears to beassociated with factors such as income

inequality, the size of the middle class,ethnic fractionalization, femaleparticipation in the labor force, educationlevels, public sector size, and public privatesector relations, states have differentcapacities to absorb disturbances and toreorganize. The challenge for the Exchangewill be to assess countries’ absorptive,

adaptive, and transformative capacities toaddress the impacts of negative events inMENA.

The resilience systems analysis tool. Developed by the OECD-led Experts Group

on Risk and Resilience, this tool is based ona conceptual framework consisting of fivesteps (Figure 1). The analysis process startswith (i) an understanding of the risklandscape in a particular context, then (ii) itlooks at how those risks will affect asociety’s systems, and (iii) it gathers

information about how systems are set upto cope with risks, and whether this makesthem resilient. The analysis (iv) determineswhat needs to be done to boost resilience;to help the different parts of the system toeither absorb shocks, adapt or transform.

The result (v) is a resilient system, which willthen change the overall context and risklandscape (OECD, 2014).

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The ExchangeFigure 1: Conceptual Framework for the Resilience Systems Analysis

Source: OECD, 2014

Table 1: Running OrderExchange Conference 2015 – “From Vulnerability to Resilience”

Day 1 – May 27, 2015 Opening Remarks, Welcome Address

Session #1: Citizen Engagement and Social Accountability

Session #2: Resilience and Governance in MENA

Session #3: Job Creation and the Private Sector

Day 2 – May 28, 2015 Session #4: State Institutions

Session #5: Service Delivery

Session #6: Rule of Law

Closing Session, Concluding Remarks

Table 2: Glossary of Resilience-related Terminology

Resilience-related Terminology

Resilience The ability of households, communities and nations to absorb and recover from shocks, whilst positively adapting and transforming theirstructures and means for living in the face of long-term stresses, change and uncertainty.

Resilience boosting To manage the impact of shocks and future issues of r isk, change and uncertainty, by strengthening the capacity to absorb shocks, or adapting to reduce exposure to shocks, or transforming so that the shock no longer has an impact on the system.

Resilient system The end result of building the resilience of a system, comprising components (or characteristics) that vary between different layers of society(household, community, nations). These components result from applying resilience-building capacities that better structure risk managementactions to development / vulnerability reduction / poverty reduction programs and other long-term programming.

Absorptive capacity The ability of a system to prepare for, mitigate or prevent the impacts of negative events using predetermined coping responses in order topreserve and restore essential basic structures and functions.

Adaptive capacity The ability of a system to adjust, modify or change its characteristics and actions to moderate potential, future damage and to take advantageof opportunities, all in order to continue functioning without major qualitative changes in function or structural identity.

Transformative capacity The ability to create a fundamentally new system when ecological, economic or social structures make the existing system untenable.

Risk The combination of the probability of an event and its negative consequences.

Shock A sudden event with an important and often negative impact on the vulnerability of a system and its parts. Shocks represent s ignificant negative(or positive) impacts on people’s means of living and on the functioning of a state.

Stress A long term trend, weakening the potential of a given system and deepening the vulnerability of its actors.

System A unit of society (e.g. individual, household, a group of people with common characteristics, community, nation), of ecology (e.g. a forest) or aphysical entity (e.g. an urban infrastructure network).

Vulnerability An expression of susceptibility to harm, and exposure to hazard.

Source: Berkes, 2007, Mitchell, 2013; OECD, 2014.

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EVENT

Advancing Public Participation in the Audit Process:

A Capacity Building Workshop for the Middle East and North Africa (MENA)

Countries

Hammamet, Tunisia

Mona El-ChamiSenior Financial Management Specialist

Also Mehdi El Batti, Rama Krishnan, CarolinaVaira, Franck Bessette, Wael Elshabrawi, andKeith McLean[1]

Introduction: In recent years, many SupremeAudit Institutions (SAIs) around the worldhave begun pioneering different citizenengagement models to increasetransparency and accountability, enhancethe effectiveness of the audit process, andensure value for money in the use of publicresources. Despite increasing trends towardpublic participation, engaging citizensthroughout the audit process is fraught withpotential complications. Indeed, the formalmandate of all SAIs and the general limitedexperience and capacity of both SAIs andcitizens has made it difficult to collaborate ina meaningful and results-oriented way. The

challenges preventing effective engagementbetween SAIs and citizens are many. Forinstance, how can space be created forcitizens to interact with the audit process andenhance external oversight? How can a set ofguiding principles be created for SAIs andcitizens to interact and jointly work towardimproving the audit process? A recentcapacity building workshop held inHammamet, Tunisia on “Advancing PublicParticipation in the Audit Process” organizedby the Public Resource Mobilization and theManagement and the Governance andInclusive Institutions units at the World Bank’s Governance Global Practice (GGP)brought together representatives from theSAIs of Egypt, Iraq, Jordan, Lebanon andTunisia to explore the value of citizenparticipation in the audit process and identifyentry points for engagement. Tunisia casewas selected to be demonstrated as anexample form the MENA region supportedby its launched process of citizenengagement. International experts fromKorea and the Philippines also participated toshare their experiences.

The MENA Region: External scrutiny andaudit in MENA is generally characterized byweaknesses as noted in a World Bank review[2] that summarized the Public Expenditureand Financial Accountability (PEFA) exercises

in 6 countries. It also compared them toother countries with similar levels ofdevelopment. The weakness depictedconcern both the capacity of the SAIs and thelegislative body charged with following up onthe audit reports. (See Figure 1). Externalscrutiny and audit capacity in MENA iscomparable to these countries. Results froma regional survey [4] of MENA countriesexplored the perception of a sample of thesecountries’ civil society organizations (CSOs)(47) and media (27) concerning the quality ofpublic finance transparency and value ofSAIs. The survey provided information aboutcurrent interactions of different stakeholderswith SAIs. Sixty-six percent of those surveyedindicated that they have not interacted withtheir national SAIs in the last year. Those who

interacted, had done so mostly in the lastyear. When asked about their interest incollaborating with SAIs, 85 percent ofrespondents indicated that they would liketo engage on a range of initiatives includingtraining and/or the creation of jointcommittees and other related activities tobridge the relationship between the publicand the SAIs. (See Figures 2 and 3). Theresults of the survey will help to guideregional collaboration between SAIs, CSOs,and the media in the region, as well as WorldBank support for these processes.

The Case of Tunisia: Tunisia’s SAI, the Courdes Comptes (the Court), is one of the firstmovers of the MENA region in advancing acitizen engagement strategy that is expected

to gradually address means for SAI-citizenparticipation in the public audit process. TheCourt is increasingly looking for moreinnovative ways to make informationavailable to citizens, and to engage withthem in a more systematic manner. Nationaland Court efforts have been reinforced byglobal engagements, such as the OpenGovernment Partnership.[5]

The National Action Plan also helps tostrengthen the overall authorizingenvironment for the Court to advance publicparticipation in the audit process, forexample, by publishing an annual report onpublic sector audit activities in a simplified,easily accessible and understandable formfor citizens. The vision of the Court is led bythe principles of independence, integrity andprofessionalism. In this regard, the Court isseeking to respond to the legitimate

concerns of citizens by identifying the audittopics that matter to them. As the HonorableAbdellatif Kharrat, President of Tunisia’sCourt of Accounts, noted: “It is the SAI’sresponsibility to make its work known to and

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understood by the people” and “the work ofthe SAI is led by the need to respond to thelegitimate concerns of the people.” TheCourt’s new Communication Strategy (2015–

2019) provides guidance to foster acollaborative environment from which toadvance internal and external efforts onthree fronts: (i) Internal Communication:

Promoting transparency and the sharing ofinformation to create a sense of ownershipamong different staff of the Court; (ii)External Communication: Promoting theimage of the Court and strengthening itsrelationships with other stakeholders. Thework of the Court needs to be known andrecognized by the people that benefit fromits work; (iii) Leveraging the use ofTransparency International and engagingwith social networks to facilitate broaderoutreach and the timely dissemination ofinformation to communicate with externalstakeholders (with the support of bilateraland multilateral donors, such as theNetherlands Court of Audit, the World Bank,and the African Development Bank).

International Comparative Cases

South Korea: Korea’s engagement with its

citizens goes back to the 15th century duringthe Chosun Dynasty. By hitting a sinmungo(big drum), citizen concerns were elevated tothe Emperor. This tradition evolved when theBoard of Audit and Inspection (BAI) wasestablished in 1963. From 1971 to 2004, new

innovations such as the Civil Petition andComplaints Reception Center, the FraudHotline, the Open Audit System and theBusiness Complaints Reception Center wereintroduced as enhancements to the BAI’sexisting system. The benefits resulting fromparticipatory audits in Korea are enormous.Among the most important ones, citizenparticipation contributes to reducing blindspots for auditors. Citizens can help to pin-point problems that would otherwise beoverlooked. Most importantly, citizenparticipation has been instrumental inenhancing transparency and accountability,as well as in improving the performance ofpublic sector administration. The underlyingsuccess factors include the following: (i) alegal foundation should be in place to ensurecontinued operation and resource inflows;(ii) top management’s support is necessary

to provide motivation to auditors; (iii)offering various but related activitiesincreases citizen satisfaction; and (iv)enhanced access through various online andoffline media encourages more activeparticipation (Board of Audit and Inspectionof Korea).

The Philippines: The relationship betweenthe Philippines’ Commission on Audit (COA)and its engagement with citizens washighlighted through the lens of the Citizen

Participatory Audit (CPA) project. The CPA isan innovative initiative that focuses oncitizens and state auditors working togetherin the conduct of joint audits. Under the CPA,citizen representatives are included in theCOA audit team. They are trained in the auditprocess and encouraged to participate in theinterests of enhanced governmentaccountability. The project’s desired

outcome was to pilot citizen-governmentpartnerships to support theinstitutionalization of participatory audits in

COA. Since it was first launched in 2012,several milestones have been achieved inline with intermediate outcomes, includingthe establishment of an enabling frameworkfor citizen engagement (policies, systems,and processes), and the ability of civil society

organizations to articulate the citizen’sagenda. Within 24 months, the methodologyof the CPA was used to monitor theperformance of several key projects. Theunderlying success factors included thefollowing: (i) the importance of leadership;(ii) the use of pilot project(s) to ease thetransition of state auditors in working withcivil society; (iii) developing an appreciation

of the differences of each other’s institutionsand systems; (iv) clarifying roles andexpectations through a formal document to

manage expectations; and (v) state auditorsnow see citizens as force multipliers,especially given the limited number ofauditors in the country.

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Lessons for the MENA region: There hasbeen a strong power shift from thegovernment institutions to the people in anumber of MENA countries that experiencedthe Arab Spring. The people had voiced theirdemand to basic services, for transparency,and right to hold governments accountable.SAIs need to respond to the popular

demands for more accountability andinformation. Under participatory democracy,the importance of CSOs as stakeholders inSAIs has grown. New Constitutions maystipulate specific new responsibilitiesassigned to the government, the SAI and/orthe citizenry. Like in the case of Columbia andIndonesia, the legislations for SAIs wereamended to include in their mandate, theobligation to disseminate audit reports to allrelevant actors and implement participatorypractices during the audit process. The majorchallenges faced by SAIs in the MENA regioninclude independence, availability offinancial and human resources, and technicalcapacity. In addition, a key challenge is howto open spaces where they can interact withcitizens to enhance external oversight. Ageneral consensus emerged that SAIs fromthe MENA region could start taking ideasfrom the experiences of other SAIs aroundthe world. They could begin taking smallsteps toward designing tailor-made

interventions that can include citizens in thepublic audit process in the near future. SAIscan begin work with citizens in the areas ofleast resistance, for instance, in the auditdesign/planning stages. Like in South Koreaand Argentina, SAIs receive proposals onentities and programs to be audited for theirpotential inclusion in the annual plan. In this

context, parallel efforts need to be made toenhance CSO capacity so that they canconstructively engage with SAIs. Anotherentry point would be raising publicawareness through the dissemination ofaudit reports. These entry points could bechallenged by limited mutual understandingbetween the CSOs and the SAIs. They couldalso be made more difficult because ofexisting mandates, systems and processes, aswell as the complex nature of audit reports.Furthermore, integrating citizens withoutundermining objectivity and professionalismremains a challenge. Better and closercooperation would bring more opportunitiesfor joint workshops, training CSOs on theaudit process, and developing effectivecommunication plans.

Possible next steps could include a virtuallearning series incorporating additional goodpractices, as well as peer-assisted processesand technical assistance to promote better

SAI-CSO dialogue, the creation of workinggroups, the building of frameworks forengagement, and the development ofguiding principles for interaction during theaudit process

----------------------[1]. The authors all work in the Governance GlobalPractice (GGODR) of the World Bank.[2] Public Financial Management in MENA – A RegionalOverview, World Bank, 2012.[3] Public Financial Management in MENA – A Regional

Overview, World Bank, 2012.[4] Public Finance- Multi-Country Survey, World Bank,December 2013.[5] “Open Government Partnership … is an international

organization promoting multilateral initiative andseeking strong commitments from participatinggovernment institutions to promote transparency,increase civic participation, fight corruption, and harnessnew technologies to make government more open,effective, andaccountable.” https://en.wikipedia.org/wiki/Open_Government_Partnership

Figure 1. MENA PFM in Global Comparison [3]

Source: Public Financial Management in MENA – A Regional Overview, World Bank, 2012.

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Figure 2. Interaction with SAI

Source: Public Finance- Multi-Country Survey, World Bank, December 2013.

Figure 3. Cooperation with SAI

Source: Public Finance- Multi-Country Survey, World Bank, December 2013.

EVENTBuilding a strong, effective and accountable state:

Selected experiences

Istanbul, Turkey

August 16-18, 2015

Summary

The World Bank organized a capacitybuilding activity for Libyan civil servants inIstanbul, between August 16 and 18, 2015,

funded through the State and Peace BuildingFund. This event was the third in a series ofcapacity building activities for civil servantsin Libya including VCs (July 8) and thetraining delivered face-to-face in Istanbul(April 2015). Its objective was to build on theknowledge shared during the previousworkshop (April 2015) and show how othercountries have built their state institutionsand public administrations after years ofsevere civil war, while concentrating onspecific challenges. Building on the feedbackreceived at the end of the previous

workshop, this capacity building activitycovered four essential areas that areinherent to an effective transition process ina post-conflict environment: localgovernance, communication, transitional justice, and institution building. Regional andinternational experts with experience inconflict states as well as career publicservants from countries that haveexperienced similar democratic transitionprocesses shared a diverse set ofexperiences. The list of lecturers is includedin the Agenda in Annex 1. The participantshad also the opportunity to discuss how

experiences from other countries might berelevant and applicable to the Libya contextand also contribute to the discussionthrough a group exercise finalized with

presentations on local governance,communication, and transitional justice.26 senior civil servants and technical staff(the list of participants is included in Annex2) from the following selected agencies andministries attended the workshop: theBureau of Statistics & Census, MO(Planning),MO(Local Governance), MO(Labour),MO(Communication), MO(Oil & Gas),National Audit Bureau, MO(Economy),MO(Finance), MO(Industry), MO(Electricity),MO(Health), MO(Education), MO(Housing),Passport Authority, State PropertyAuthority, National Policy Decision Centre,

Economic Sciences Research Center,National Oil Cooperation, Tripoli University.The complete list of participants is includedin Annex 2.

The summaries of the topics covered in eachsession are included below.

Session 1: Setting the stage for institutionalbuilding in a post-conflict environment:selected country experiences and initiallessons learntThe first presentation exemplified thevulnerabilities (such as politicization of thepublic service, poorly trained staff, highlycentralized and poorly informed decision-making) that are common in post-conflictpublic administrations and theconsequences that derived from these

vulnerabilities in countries such as SierraLeone, Mozambique, Burundi, Sudan,Somalia. It has also addressed the dilemmaof how to achieve the balance betweenimmediate existential needs and conflicting

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longer term development and capacitybuilding needs. The second presentation wasbased on the findings of the WorldDevelopment Report 2011 and the helix thatpost-conflict/autocratic states have totransition through to move from violenceand fragility towards resilience to risk. Thepanelists also addressed the internal and

external stresses that countries facethroughout this process and underlined theimportance of inclusion and coalitions wellas on building on quick wins (e.g. electricityreform in Liberia) to restore the confidenceneeded in institutional transformation. Thespeaker emphasized two key messages: theneed for priority setting in the post-conflictphase and the difficult trade-offs that areinherent in the transformation/reconstruction process. During the Q&A theparticipants raised the following issues: theneed to draft a manual for decision making;the importance of political balance,prioritization, and conflict diagnosis; what isthe role of the international community inre-building institutions? What support canthe WB provide (the disconnection betweenthe WB mandate focused on economicissues and the current political needs whichare now priority in Libya)? The session wasparticularly appreciated because it includedmechanisms for effective institutionalbuilding and it stressed the importance ofcollaboration between institutions and ofbuilding trust between government andcitizens.

Session 2: Setting the stage for institutionalbuilding – The example of Croatia, 1995-2015This session focused on presenting thetransition experience of Croatia from post-conflict country in 1995 to EU and NATOstate member. The presentation discussedthe challenges encountered during thisprocess, the solutions implemented, andhow policy actions and steps wereprioritized. The four main components/stepsthat characterized the transition process inCroatia were creating the legislativearchitecture, building institutions,strengthening the institutional capacity(particularly human capacity), andimplementation and monitoring ofperformance. The lecturer underscored theimportance of having a vision, leadership,and inclusion as well as building a road mapbased on the vision and using “champions ofchange”. Examples such as the procurement

compliance and debt enforcement reform inCroatia were provided. The main message ofthis session was that ownership of thesolution has to reside within the country:

whatever the solution to the current politicaland security crisis, it needs to be owned bythe Libyans. The workshop participants wereinterested to find out what the biggestchallenge was that Croatia had to face during

transition and how the new governmentdealt with the supporters of the old regime.They considered this discussion helpfulbecause it reflected similarities with thecurrent situation in Libya and included anexample of framework to use duringtransition.

Session 3: Transitional Justice (TJ) – Anoverview This session introduced the participants tothe transitional justice concept and the fourapproaches that can be taken, alternativelyor complementary to achieve reconciliation:criminal justice, truth-seeking, reparationsand institutional reforms with focus on the

security sector, judiciary. The discussionaddressed the current situation in Libya andthe progress made between 2011 and 2013on deciding how the country should dealwith the past. The main take-aways from thisdiscussion were: the importance ofbalancing the need for accountability(including juridical) and moving the society

towards reconciliation, tailoring thetransitional justice model by combining andsequencing the four approaches, theimportance to have a comprehensive TJstrategy and social dialogue. Examples fromthe former Yugoslavia, Peru, Guatemala,Chile, Argentina and Morocco were sharedduring the workshop. The Libyanparticipants engaged actively during thissession and concentrated especially on theusefulness of the 2013 Libyan TJ Law and thebest time to apply it. Participants alsowondered which of the four approaches had

Libya made progress on. The session wasappreciated because it centered on ananalysis of the Libyan TJ law and the progressachieved until now in this area.

Session 4: Transitional Justice (TJ) – Thecase of Serbia The good practices from countries of theformer Yugoslavia (particularly Serbia), wereoutlined in this session: challenges andlessons learned from different criminal justice systems - e.g. the achievements ofthe International Criminal Tribunal for the

former Yugoslavia; the War CrimesProsecution Office, the War CrimesDepartments in Serbia - in the High Court inBelgrade (for trial) and in the AppellateCourt in Belgrade (for appeals); specializedunits for criminal justice prosecution in fourbiggest courts in Croatia, the hybridcharacter (national and international) of

criminal justice in Bosnia and Herzegovina.Additionally, the session includedrecommendations for truth-tellinginitiatives; types of material reparationsawarded by courts or by governments; aswell as institutional reform initiativesundertaken by former Yugoslavia countries,and lessons learned from the former

Yugoslavia case. The participants wereinterested to know how long it will take toachieve results in the TJ process. Most ofthem agreed that the lessons learned fromthis case could be applied to Libya despitecountry differences.

Session 5: Local governance anddecentralization – general overview. Thecase of YemenThe general presentation introduced themain functions of local governments intransitioning countries with focus on public

financial management and the followingquestions: what should the localgovernment structure look like? which levelof local administration should spend and onwhat (expenditure assignment)? what

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sources of revenue should be assigned tosub-national governments? how might fiscalimbalances be resolved? how is the timing ofrevenues to be managed and monitored?what Exists in Libya today? The presentationalso included international best practice forlocal government requirements and reformproposals for: expenditure assignments,

revenue mobilization, capacity building, ordeveloping a transparent equalizationtransfer mechanism. It was complementedby a study case of the decentralizationreform in Yemen before the 2011 revolutionand afterwards, a case study that displayedresemblances with the current situation inLibya. The Libyans were interested to learnmore about the technical assistancenecessary in this area and raised the need fortraining on how to implement a budgetreform.

Session 6: Local governance anddecentralization in BangladeshThis session presented the constraints andchallenges of the decentralization process inBangladesh, the current local governancestructure, and the WB MunicipalGovernance and Services Project, which aimsto improve municipal governance and basicurban services in municipalities and citycorporations, as well as other localgovernance support projects that wereimplemented in Bangladesh. The Q&Afollowing session 5 and 6 focused on thepitfalls of the current local governance law in

Libya, how local governments have thecapacity and resources to operate anddeliver services, and how the tribal elementplays into the decentralization process. TheLibyan examples and the tips in approachingthe local governance reform in Libya wereparticularly appreciated.

Session 7 and 8: The role of information andcommunication within the government andbetween the government and citizens – country examplesA WB senior communications expert chairedthe two sessions on the role ofcommunication in a post-conflict country.The first part was dedicated to policyoptions, country examples (such as Iraq) andwhat communication can achieve (i.e. publicopinion as the basis of power and legitimacy;communication as a market in which thesellers –governments, interest groups,business – can achieve the buyers’ – citizens

– loyalty and the organization of the mediasystem). This part also stressed the role ofcommunication in building a sense ofcountry identity and the importance ofknowing well the audience. The media

situation in Libya was also discussed. Thesecond session addressed the topics ofinternal government communication andoutreach to external parties, particularly

citizens (resources, capacity, etc.), pointingout to the interdependence between policyand communication. Specificrecommendations and a short exerciseasking participants to identify the mainchallenges in the communication realm werealso included. The participants expressed

interest in learning how to neutralize the

influence of old media, how to buildcommunication departments in ministries,and whether a local law to control media ismore appropriate vs. a nation-wide onewhile also expressing frustration regardingthe non-transparency of the Libyan media.They considered this topic timely because itis one of the biggest challenges facedcurrently. The workshop included also agroup discussion exercise at the end of thetwo day in which participants created threegroups and were asked to discuss the threemain topics of the workshop – localgovernance, transitional justice,

communication –, diagnose the currentstatus of the issue in Libya and identify themain challenges and root causes of problemsthat they face in each of the three areas.Each group presented its findings to the restof the participants and speakers offeringcompelling in-depth analysis of the issuesthat they currently confront as well asapproaches that the government could takein moving forward on each of the threesubjects.

Workshop evaluation. The participants wereasked to evaluate the relevance andusefulness in understanding the topicsdiscussed in each of the workshop sessionand to provide additional examples ofsubjects that they would be interested tolearn more about. Regarding the sessions inthe first day – institutional building andtransitional justice - 77% of the participantsrated their usefulness with 6 or above on aprogressive scale of 1 to 10, 47% using scoresof 8 or above. As for the sessions on localgovernance and communications in Day 2,80% of participants considered them helpfulrating the sessions with 6 or above, while

50% used scores of 8 or higher. Additionally,the participants appreciated the fact thatthis workshop was more focused than theone in April, narrowing down on a few topics

of interest, and that it included more countryexamples on each topic. The participantsalso pointed out as additional topics ofinterest for future VCs and Workshopevents: mechanisms to build up acomprehensive country strategy and designeffective policies for different sectors;

modalities to create a

road map and prioritize,ways to put in place themechanisms of decisionmaking and perform adiagnosis of thechallenges that need tobe addressed; fightingcorruption; reformingthe education system;creating profitable andlegal contracts;procurement; financialmanagement; achieving

and maintaining security; the psychologicalelement during transition. The organizersand presenters noted the Libyan civilservants’ interest and commitment toanalyze all the topics presented through theLibyan perspective and reality, and theirinterest for the presentations anddiscussions that were tailored to the currentsituation in the country and were close totheir experiences and jobs. Moreover theparticipants expressed interest in learningmore from successful country examples andfocused a lot on the implementation stage ofthe issues discussed.

Conclusion. The training was a successfulevent and achieved its stated objectives. TheLibyan participants expressed greatsatisfaction about the topics covered duringthe workshop and excitement about thegroup exercise. They showed interest inlearning more from international bestpractices and from the experience ofcountries which have gone through similartransition processes. Finally some of theparticipants created a core group that plansto build on the workshop discussions oncommunication and explore how theiranalysis on this topic could be translated inpractice in their institutions. Beyondreaching its objective, the workshoprepresented the basis for identifying areas offurther engagement with the Libyan civilservants and a rare opportunity toconsolidate relations with technical expertsin Libyan line ministries and academia.GGODR will plan further capacity buildingactivities for the Libyan civil servants,including through partnerships with otherinternational organization such as EuropeanUnion. The objective of these trainings is to

provide the Libyan civil servants knowledgeand skills that will enable them to translateinternational transition best practices in theLibyan system.

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Bootcamp

BTOR: Lebanon (CFR)

Quality Control and

Peer Review on Audit

Firms - Regional

Workshop

Beirut, November 3-5, 2015Cleared by Hisham Waly, PracticeManager, PRMM and PSP, GGP

Background & Objective: Under the patronage of his ExcellencyMinister of Finance Mr. Ali Hassan Khalil, theWorld Bank (co-TTLs, Gabriella Kusz, Sr. FMS,

and Rima Koteiche, Sr. FMS) hascollaborated with the Lebanese Associationof Certified Public Accountants (LACPA) andthe American Institute of Certified PublicAccountants (AICPA) to organize the“Qualitycontrol and Peer review on audit firms”training on November 3-5, 2015. An openingceremony took place on Nov. 3, 2015preceded the two- days technical trainingwhere keynote words were provided by: Mr.Ferid Belhaj, Country Director- World Bank,Mr. James Brackens, Vice President Ethicsand Practice Quality- AICPA, Mr. ElieAbboud, President- LACPA, Mr. Alain Bifani,

DG, MOF- Lebanon representing theMinister of Finance. The ceremony gathereddelegates from local, regional supervisoryand regulatory bodies, and government

officials, to launch the Peer review andquality assurance training reflectinginternational practices and its importance inthe financial business environment. A

System of Peer Review includes determiningwhether the firm’s system of quality control

for its accounting and auditing practice isdesigned and complied with to provide thefirm with reasonable assurance ofperforming and reporting in conformity withapplicable professional standards, in allmaterial respects. The two-day technicaltraining aimed to provide technical learningto practicing auditors on the peer review andquality assurance requirements and process,an important element in the membershipwith the International Federation ofAccountants (IFAC). This event is part of alarger program that the World Bank has beensupporting LACPA to lead the advancementof the profession of accounting and auditingin Lebanon both in the private and the publicsector.

Participants: More than 60participants attended the technicalworkshop. The participants wereprofessional practicing auditors from LACPA(Lebanon), the Jordanian Association forCPAs (Jordan) and the Egyptian Society forAccountants and Auditors (ESAA).

Content and Delivery: The two-day technicaltraining included several sessions whichaddressed the whole cycle of the peerreview: planning, performance, reportingand administering the review in addition toseveral practical case studies. The sessionswere delivered at the Institute of Finance-Basel Fleihan Institute by James W. Brackens,Jr, Vice President of Ethics and PracticeQuality at AICPA, and Michael L. Brand, chairof the Accounting and Review ServicesCommittee at the AICPA.

Outcomes: After the delivery of thisworkshop on Peer review and Qualityassurance, the participants are able now to:

Recognize the requirements for enrolment inthe peer review program.

Differentiate between the types of peerreviews and the objectives if each type

Recognize administrative requirements forperforming a peer review

Determine the correct organization of thereview team

Identify technical qualifications required toserve as a peer reviewer.

Next steps: Now that a large regional teamof trained peer reviewers are ready, thevoluntary peer review process will be kicked

off in Lebanon in the couple few months inalignment with the LACPA strategy and IFACmembership requirements. The pilot peerreviews will shape the process in Lebanon

and give confidence in the existence of anindependent oversight of the professionalconduct of practicing accountants andauditors from the point of view of protectingthe public interest.

Bootcamp BTOR: Lebanon (PFM)

Application of the

International Public

Sector Accounting

Standards (IPSAS)

Congress

Beirut, June 10-12, 2015Cleared by Hisham Waly, PracticeManager, PRMM and PSP, GGP

Background & Objective: Under thepatronage of his Excellency Minister ofFinance Mr. Ali Hassan Khalil, the World Bank(TTL, Rima Koteiche, Sr. FinancialManagement Specialist) and the LebaneseAssociation of Certified Public Accountants(LACPA) have organized the International

Public Sector Accounting Standards Congresson June 10-12, 2015. An opening ceremonytook place on June 9, 2015 preceded thethree- days technical training where keynotewords were provided by (i) MarianoD’amore, IPSAS board public member, (ii)Pierre Messali, World Bank Senior PublicSector Specialist, (ii) Mr. Elie Abboud, LACPAPresident, and (iv) His Excellency Mr. AliHassan Khalil, Minister of Finance. Theceremony gathered delegates from local,regional, and international supervisory andregulatory bodies, government officials andcorporate leaders, to reflect the IPSAS

application and its importance in a publicfinancial management system. The three-day technical training aimed to providetechnical learning to staff directly implicated

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by IPSAS application. This event is part of alarger program that the World Bank has beensupporting LACPA to lead the advancementof the profession of accounting and auditingin Lebanon both in the private and the publicsector. This event was supported by WorldBank team: Amal Chaoul, program assistantfor the logistical arrangements, while Joey

Ghaleb (Sr. Public Sector Specialist), andGretchen Biery (Sr. Governance Specialist)assumed the technical coordination with theFMR2 project.

Participants: More than 150participants attended the technical training.The participants were mainly from MOF, andLACPA that are directly and indirectlyinvolved with IPSAS application andimplication.

Content and Delivery: ( Attached above

agenda, WB keynote and press releases). Thethree-day technical training included severalworkshops which addressed the definitionsand practical applications of theInternational Public Sector AccountingStandards (IPSAS), specifically regarding:- Fixed Assets (properties, plant andequipment, service concessions).- Presentation of the Financial Statements(discussing the cash basis accounting)- Liabilities (Employee benefits)- Consolidated Financial Statements(includes comparing the budget prepared onthe cash basis to the one prepared on the

accrual basis)- Revenues (particularly Taxes and Grants inIPSAS 23).- Opening Balance Sheet & Transition toAccrual Accounting (including othercountries adoption experiences)- Financial instrumentsThe sessions were delivered at the Instituteof Finance- Basel Fleihan Institute by PaulMason, technical manager at IPSAS Board(IPSASB), and Ross Smith, technical managerat IPSAS Board (IPSASB).

Conclusions and key recommendations:Upon explaining IPSAS and its applicationmechanisms, especially by adopting clearbases and rules for preparing financialstatements, in such a way that reinforce theprinciple of transparency in theadministration and expenditure of the publicfinance, the following suggestions wereformed at the conclusion of the Congress:6. Supporting the guidelines of theMinister of Finance regarding the readinessof the public administrations in order tobenefit from the opportunity to developtheir systems in a way that is compatible

with the International standards, within hisvision to develop the work of the publicsector institutions.7. Establishing a global vision along with awork program that includes all the required

procedures, steps, time schedule andtransitional period to implement suchstandards.8. Forming an ad hoc body or committeecomprising representatives from theMinistry of Justice, the Ministry of Finance,LACPA, and the World Bank, in addition tointernational specialists in the domain in

order to establish an executional work planaiming at preparing the adequate ground forimplementing the IPSAS, including but notlimited to: preparing such standards to startimplementing them while establishing timedeadlines for all procedures and suggestionsincluded within the said work plan.9. Endeavouring to provide necessaryprofessional human resources, equipmentand software in order to start theimplementation of the standards subject tothe congress.10. The initial commitment by the legislativeand executive powers to implement suchstandards.

Bootcamp Training Libya, Lebanon

and Palestine SAIs on the

Supreme Audit Institution

Performance Measurement

Framework (SAI PMF)

Bootcamp

April 2015 Istanbul, Turkey Mona El-Chami, Rima Koteiche, NadiMashni

A bootcamp on INTOSAI’s Supreme Audit

Institutions Performance MeasurementFramework (SAI PMF) was organized by theWorld Bank Governance Global Practice,Public Resources Mobilization &Management team in Istanbul, Turkeyduring in April 2015. The Arabic-deliveredbootcamp brought together staff andmanagers of the Libyan National AuditBureau (NAB), Lebanese Court of Accounts

(CoA), and Palestinian SAACB in. Theobjective of the bootcamp was to: (i)understand the purpose of undertaking a SAIPMF assessment and how the reports can beused by the SAI and external stakeholders’ to

establish a baseline for measuring any futureprogress and stimulating strategic planningand further capacity development; (ii)understand the strengths and limitations ofthe SAI PMF; (iii) be able to apply theprinciples and methodology in planning,implementing and reporting on a SAI PMFassessment; (iv) be able to identify a suitable

process for conducting a SAI PMF accordingto the purpose of the assessment and thecountry context; and (v) to learn about theexperience of the Palestinian Supreme Auditand Administrative Control Bureau (SAACB)in conducting a SAI PMF. The bootcamp wasdelivered with support from ARABOSAI andSAACB. The participants were provided withcertifications of having attended the “SAI

PMF Assessors” training course by INTOSAI,which qualifies them to perform SAI PMFassessments.

Bootcamp BTOR: Lebanon –

Internal Audit and

Internal Control in the

public sector workshop

Lebanon Fiscal

Management Reform 2

project (FMR2)

Beirut, December 7-8, 2015

The World Bank organized in collaborationwith European Union and the Ministry ofFinance of Lebanon a workshop entitled“Internal Audit and Internal Control in thepublic sector” on December 7-8, 2015, aspart of the World Bank- financed project “Lebanon Fiscal Management Reform 2project”.

The objectives of the workshop whichgathered senior technical Lebanese stafffrom the Ministry of Finance, Inspection

General, and Court of Accounts were to:(i) underscore relevance and importance ofmodern internal audit function in a publicfinancial management system,(ii) present on the internal controls progressimplementation achieved within theLebanese controls framework(iii) share knowledge and provide a forum fordiscussion of good practices regardinginternal audit, internal controls, and externalaudit at the public level while drawing oninternational experiences and availablestandards and guidelines, and(iv) share actual successful implementationof public sector internal audit in othercountries (France and Turkey).

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The two-day workshop was a cornerstonetowards raising awareness on theimportance of the internal audit function inthe public sector and its distinction withother control functions such as theinspection general, and its complementarityto external audit function carried out by the

country Supreme Audit Institution (SAI).

Participants: More than 20 participants fromLebanon attended the workshop. TheLebanese participants were senior technicalofficials from Ministry of Finance, theInspection General, and the Court ofAccounts.

Content and Delivery:The two-day workshop included severalsessions which addressed the definition ofInternal Audit as per International Standardson Professional Practices of Internal Auditing(Institute of Internal Auditors) sand other

guidance and Internal control in a publicfinancial management system, as well as anoverview of the financial control frameworkin Lebanon and in MENA. The event wasmarked by presentations of the Frenchexperience in the Internal auditimplementation in France, its organization,and its relationship with Inspection Generaland the Court of Accounts. The French modelhighlights the presence of a centralharmonization Unit (CHU) that is a playing acrucial role in coordinating the interventionsof the several control bodies in France. Thishas helped tremendously the Lebaneseparticipants to get a better understanding onwhat can be achieved in Lebanon at thatlevel and how the different control bodieswork together efficiently towards a bettergovernance scheme in the country.Another successful implementation ofInternal Audit in the public sector wasbrought to this event by Turkey, that hasbeen successfully implementing internalauditing since more than ten years now, andhave reached a very advanced stage ofmaturity making it one of the top leaders inthat area and is currently providing technical

support to other neighbouring countries inIA implementation at the public sector level.

The event took place at the World Bankpremises- Beirut and delivered by:

· World Bank: Rima Koteiche, Sr. FMS(workshop facilitator and coordinator) ;Pierre Messali, Sr. FMS; Anna Staszewicz, Sr.Risk Management Officer; and Walid El-Najjar, FMS· European Union: HerveAllais, Resident consultant twinning

arrangement· France : M. Viault, Directeur desRisques MOF-France; M. Caze, Court ofAccounts – France· Turkey: Halis Kiral, Head of CentralHarmonization Unit- Turkey; AhmetKoray, Public financial Expert- MOF- Turkey· Institute of Internal Auditors: NajiFayyad, Governor, IIA –Lebanon Chapter

This event was coordinated with JoeyGhaleb, Sr. Public Sector Specialist, and TTLof FMR2 project, and supported by AmalChaoul, Program Assistant for the logisticalarrangements.

OutcomesAfter this workshop, the Lebanesestakeholders are now able to:1. Recognize the importance of Internalaudit in a public financial managementsystem.2. Differentiate among the different typesof control functions and the role andobjectives of each:a. Internal Audit vs. External Audit (CoA),b. Internal Audit vs. Inspection (Inspection

General), andc. Internal Audit vs. Internal controls.3. Recognize the impact of Internal Auditfunction and learn from successfulimplementation both in France and Turkey,and have the necessary technical awarenessto embark in the implementation of the pilotinternal audit.

Next steps:· Kick off the Internal Audit implementationat the MOF-Lebanon on a pilot basis; ToRsare already cleared and hiring of consultantsin charge of assessment, design,development of IA manuals and training arebeing currently processed (as part of theFMR2 project)· Additional focused round tables will bearranged as needed to reinforce theimportance of IA for improved synergieswith other control functions within theLebanese public financial managementframework.

Bootcamp

Libya PFM/PIM

The World Bank’s (WB) Governance

Practice (PFM/PIM) have been engagingwith Libya’s public administration over the

past several years. Most recently, the WB,in conjunction with the InternationalMonetary Fund (IMF), engaged in Libyannational budget discussions with 28members of Libya’s technical budgetadministration during theDecember 8-11,2015 period. The Libyan Publicadministration counterparts included

members of the Central Bank of Libya,Ministries of Finance and Planning, Audit,and the National Oil Company. TheseDecember budget discussions serve as afollow-up to earlier discussions in March2015 which provided the impetus for somebudget consolidation and the gradualreduction of government subsidies.During December 15-18, 2015, the WorldBank’s Governance, Social DevelopmentPractices, and Private Sector DevelopmentGlobal practices will engage in a jointUNDP/UNSMIL meeting with the technicalexperts from Libya to assist in planning a wayforward for the near-and-medium terms.

Bootcamp MENA: Advancing Public

Participation in the Audit

Process in MENA Bootcamp

May 2015 Hammamet, Tunisia Mona El-Chami, Mehdi El Batti, RamaKrishnan, Carolina Vaira, Franck Bessette,

Wael Elshabrawi, and Keith McLean

A bootcamp on “Advancing PublicParticipation in the Audit Process” wasorganized by the Public Resource

Mobilization & Management and theGovernance and Inclusive Institutions units

at the World Bank’s Governance Global

Practice (GGP) in June 2015. The bootcampbrought together representatives from theSupreme Audit Institutions (SAIs) of Egypt,Iraq, Jordan, Lebanon and Tunisia. Theobjective of the bootcamp was to explorethe value of citizen participation in the auditprocess and identify entry points forengagement between the citizens andSAIs. Tunisia SAI case was demonstrated asan example form the MENA region based on

its launched process of citizen engagement.Both the Korean and the Philippines relevantexperiences were drawn upon to enrich thediscussion and provide good examples ofcitizens-SAIs cooperation.

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Bootcamp MENA: Strengthening the

Role of Parliament in

Financial Scrutiny MENA

Regional Annual Seminar

April 2015 Beirut, Lebanon Mona El-Chami, Lida Bteddini, MiriamBensky

The MNA Regional Annual Seminar on“Strengthening the Role of Parliament inFinancial Scrutiny” was organized by the

Public Resources Mobilization &Management team and the ParliamentStrengthening Program at the World BankGovernance Global Practice in Beirut,Lebanon in April 2015. Hosted by the ArabInstitute for Parliamentary Training and

Legislative Studies and supported by theWestminster Foundation for Democracy(WFD), the seminar brought togetherMembers of Parliament from Finance andBudget Committees, Public AccountsCommittees, Committee Staff, and SAIs fromMorocco, Tunisia, Iraq and Lebanon. Theobjective of the seminar was to provide aforum for parliaments in the region toexchange experience and knowledge on howthey scrutinize the budget and exercise theirexternal audit function, in particular: (i)gaining a better understanding of globalresearch and international good practice onthe role of parliament in oversight of thenational budget; (ii) Enhancing theirawareness as to the different tools andprocesses parliamentarians can use inbudget scrutiny, including access to data,relationship with the SAI, and citizenengagement tools; (iii) Strengthening thecapacity of parliamentary staff to undertaketheir administrative and technicalresponsibilities; and (iv) Developing country-level action plans aimed at translatingregional and global knowledge into country-level action points. The seminar benefited

from presentations and interventions fromdifferent regions and countries includingEurope, South Africa, Canada, UK, andNigerian.

Bootcamp Iraq: Banking Regulation

and the Role of the

Parliament Round Table

April 2015 Beirut, Lebanon Mona El-Chami

A round table on the” Banking regulation andthe role of Parliaments” was organized bythe World Bank Governance Global Practice,Public Resources Mobilization &Management team in Beirut in cooperationwith the Finance and Markets GlobalPractice in Lebanon in April 2015. Theroundtable was hosted by the Training andLegal departments of the Central Bank ofLebanon and the École supérieure desaffaires. The general objective of the roundtable was to equip Iraqi legislators, inparticular the banking sub-committee of theFinance Committee, with the technicalknowledge to design policies andframeworks that will enhance the regulatoryframework of the banking sector. Thebanking sub-committee was in the process ofrevising the banking law and needed specificquestions answered. The choice of theLebanese experience was based on theresilient financial system that Lebanonmanaged to establish and maintain despite

all the odds.

Bootcamp

LACPA Conference

Quality Financial

Reporting Serving

the Economy

On November 25 and 26, 2015, I participatedin the 20th International Congress of theLebanese Association of Certified PublicAccountants (LACPA). This year’s congresswas titled “Quality Financial Reporting

Serving the Economy”. I represented theWorld Bank in a panel discussion of theInternational Public Sector AccountingStandards (IPSAS).

The panel discussion took place over a 90minutes session titled “Importance ofApplying IPSAS on Economic Growth andTransparency of Government Accounting”.Other members in the panel included theChairman of the Budget and FinanceParliamentary Committee of the LebaneseParliament, and the Director General ofFinance in Lebanon’s Ministry of Finance. Mypresentation focused on the IPSAS

contribution to better governance andtransparency, special considerations intransition to IPSAS, as well as examples ofsuccessful implementation of IPSAS.

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Cross-Cutting

Syria 94

Photography 95

Social Contract 97

Year in Review 100

Books 103

The Multiple Tragedies of Syria’s Displaced Women

Why the G20 Needs to Pay Attention

Omer KarasapanKnowledge Coordinator

Roughly half of the world’s 60+ million

displaced people are female. This figureincludes 19 million refugees and 41 millioninternally displaced people (IDPs). This thehighest number ever recorded and thenumbers continue to rise. According to theUnited Nation’s High Commissioner for

Refugees (UNHCR), Antonio Gutierrez, “Weare witnessing…an unchecked slide into an

era in which the scale of global forced

displacement as well as the response

required is now clearly dwarfing anything

seen before”.

Already facing multiple inequalities, womenface significantly greater risks indisplacement — especially discrimination,grinding harassment, and often sexual- andgender-based violence. Host and transitcountries need to be aware of the specificdangers faced by women and try to providefor the safety and special services they

require, especially for the most vulnerable,that is, unaccompanied women and children,female-headed families, and pregnant,disabled, and older women. However, manycountries are overwhelmed with the sheernumbers and are unable to adequatelyrespond, despite the efforts of local andinternational humanitarian agencies. Thesingle largest source of forced displacementsin the world remains Syria, with over 4million refugees and about 8 million IDPs. InOctober 2015, a further 124,000 Syrianswere displaced from their homes in Aleppo

and Idlib as the Syrian army, with Russianand Iranian support, went on the offensive.Currently, Turkey is estimated to host some2.2 million registered Syrian refugees, withover one million registered in Lebanon and

630,000 in Jordan. The actual numbers arehigher. Roughly a quarter of this population

are women and half are children under theage of 17. The trauma of being a refugee cutsacross gender, ethnic and sectarian lines, butwomen tend to fare worse when it comes tomany outcomes. In Egypt, Iraq, Jordan andLebanon, one in four families, or 145,000families, are female headed with tens ofthousands or more such families in Turkey. A2014 UNHCR report stresses thevulnerability of these families: “Life in exile

for these women has meant becoming the

main breadwinner and caregiver, fending for

themselves and their families, away from

their communities and traditional sources of

support. For most, the burden isoverwhelming, and many are entirely

dependent on outside assistance”. Thesehouseholds tend to have greater debt, lessfood, more children at work and are subject

to greater degrees of violence, sexual andotherwise. This is happening as winter

approaches and the situation for Syrianrefuges in neighboring countries isdeteriorating as funding for humanitariansupport runs low. Hundreds of thousandshave had aid sharply curtailed in Jordan andLebanon. The World Food Programme (WFP)states that 80 percent of Syrian refugees inJordan are living below the poverty line, andwell over half of those in Lebanon. Foodinsecurity afflicts 85 and 79 percent of theserefugees respectively and — echoing theUNHCR — underlines the much highervulnerability for families headed by women.The vulnerability of young displaced women

and girls has also led to massive increases ininvoluntary child marriages. With fears ofsexual violence, many families quickly marryoff their daughters for protection or for fearof the girl’s “honor”. Many also need the

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dowry payments. According to Isadora Quay,a Gender in Emergencies Specialist fromCARE, “We’ve seen a massive increase in

child marriages in Syria and Iraq and…as far

afield as Egypt”. Marriages of children under18 had trebled among refugees in Jordan in2014. Women refugees in Turkey also citethe pressure to enter into marriages as one

of their most serious challenges. Accordingto the UN, among rural Syrian families wheremarriage before the age of 18 was common,now girls as young as 13 and 14 are beingmarried, often to much older men. While inSyria the minimum age for marriage is 16 forgirls, it is 18 in Turkey and Jordan, though inthe latter a waiver is rare but possible.Therefore in both countries, marriages ofgirls under 18 are illegal. Also, many girls endup as second or third wives. In Turkey,where the practice of polygamy is illegal andhad practically disappeared, it is nowresurfacing. This means that many of these“marriages” are illegal, as can be the ‘urfi ortraditional marriages in Jordan and Lebanon

that are often not documented properly,leaving the women with little legalprotection. The impact on these girls can bedevastating with an increased risk of healthproblems, especially related to births, healthissues for the newborn, greater risk ofviolence within families, and the impact ofleaving one’s family, school and community

at an early age and its attendantpsychological impact. Leaving school early isalso strongly linked to being trapped in a lifeof poverty. The current large movement ofrefugees into Europe poses risks for allrefugees, but especially for young girls andwomen who need additional protection andappropriate services and shelter. Shelteringor incarceration with large numbers of men,and the sharing of facilities, is a challenge forwomen and children. Most at risk areunaccompanied women and children whoare falling prey to organized crime groupsintent not only on trafficking for sexualpurposes, but also to recruiting slave labor.The growing number of separated children

and women during the trek through Europeexacerbates this tragedy with the UNHCRreceiving reports of children engaging insurvival sex. With winter coming andneighboring and European nations strugglingto cope, it is vital that the G20 pay specialattention to the plight of women refugees— especially when under Turkey’s

Chairmanship and with strong EU support,they have decided to step beyond their usualnarrower economic mandate. It is not easyto focus host and transit countries on thisissue. Yet providing women with livelihoodsupport, safe shelters for them and theirchildren, health care, family reunification,protection from harassment, and makingavailable police and other professionals todeal with criminal activities and their victimsis imperative. The UNHCR sees Syrianwomen as the glue that holds a brokensociety together. Any support to them willgreatly facilitate the emergence of stable,adaptive communities whether back homeor abroad.

CV MENA RecommendsCapturing the Refugee Crisis Through a Camera Lens

The Work of Emily Pinna

Interview by:

Franscesca Recanatini Senior Economist

CV MENA: Why is it important to use pictures to document this crisisand capture this story? How did this idea come about?Emily Pinna: I had heard so much about the refugee crisis and it wasgetting worse by the day. As many of us, I felt I had to do somethingto help and decided to narrate the crisis by using my skills and trainingas a visual storyteller. The format that I chose is that of a visualchronicle consisting of a few powerful selected pictures with extendedcaptions. In my experience, this is a powerful format that combinesthe instant power of images with concise and to-the-point narratives.It is very useful in creating an instant connection between theaudience and an event, while being informative at the same time. Inaddition, I really wanted to learn more about the refugees, who theyare, what reality they left behind, what their dreams are, and why theydecide to subject themselves and their children and elders to suchperilous journeys. It breaks my heart to see, after the most recentterrorist attacks in Paris, that people confuse refugees with terrorists.In many cases the refugees are the direct victims of those exactterrorists. If only we were all more compassionate!

CV MENA: How can these photos and information complement whatwe already know? How is this relevant for a developmentorganization like the World Bank?Emily Pinna: In my opinion, with exceptions, development

organizations approach communication with an angle that isexceedingly analytical. This approach is justified in the case ofcomprehensive development reports. However, the analytical angledoes not work as well in emergency/crisis situations. In such cases,too much focus on analysis and dry figures make reports hard to read

and disconnected from the actual issue — which in the end is thestories of human beings and their families as they face adversity,suffering, sometimes death, and hopefully redemption or success. Ibelieve bringing the human dimension into the narrative is veryimportant. It is the personal human stories that touch us the most.

CV MENA: What does this new way of conveying information offer todevelopment practitioners that is different and useful for their work?Emily Pinna: Visual storytelling — and the visual chronicle format inparticular — is very useful because it combines photography with

narrative. The former is essential to create an emotional link betweenthe reader and the subject of the photograph. This is critical to elicitin the reader an emotional response and a desire to learn more aboutthe subject of the photography. The extended caption provides theinformation that the reader is seeking about the events and people

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that are being photographed. I believe that this format whichcombines empathy with information has a role to play in the reportingand advocacy works of development organizations such as the WorldBank. With this specific work, I also wanted to communicate thepersonal dimension of the tragedy as I l ived it. As it happened, eventstook on a life of their own because just a few hours after landing inLesvos, I found myself helping out of a plastic dinghy 50 refugees fromAfghanistan, some of them literally collapsing in my arms. What

struck me was that, except for a handful of other helpers who like mehappened to pass by that stretch of coast at that time, there was nonetwork, no organization, no doctors, nothing. It was just one humanbeing helping another human being. It was overwhelming, and I wascertainly not prepared for that. One thing is clear, you do not board ashabby, overcrowded plastic dinghy, while wearing grass filled lifevests, putting your own and your children’s life at risk, if you have any

other thinkable option. These people are running for their lives, theysimply have no option.

CV MENA: Can visual storytelling more broadly help developmentpractitioners to better understand some of the challenges we face?Are there any other areas in which this approach could be applied tohelp Bank staff in their work?Emily Pinna: As I said, I believe visual storytelling and visualchronicling can and should be used more, especially wheneverawareness needs to be raised about an emergency or crisis situation,or when the human angle needs to be emphasized (which is often).As we know, images can convey information and emotions veryrapidly, and the extended captions provide a set of concise initialelements of information. Than the deeper, more analytical, figures,numbers, and extended narrative can follow. But the first impactshould always be visual in my opinion. This is an area in whichdevelopment organizations can improve. Non-governmentalorganizations (NGOs) are often better at this.

CV MENA: What did you learn from this particular project and

experience?Emily Pinna: I learned many things both as a professional and a humanbeing. As I think back about the refugees I met, especially thoseAfghans who I helped out of the boat, I am confronted with an urgeto learn more about where they are now and how fate is treatingthem. I would love to visually chronicle the journey of two or threerefugee families as they cross Europe to reach their destinations andattempt to settle. In the end, we are interested in specific humanexperiences that we can relate to. Getting to know our fellow humanbeings and learn about their stories as they develop. A sort of realitystorytelling. Between 50 to 100 of these 'plastic boats' are arrivingeach and every day to the shores of the Greek island of Lesvos,separated by the Aegean Sea from Turkey by only 10 kilometers.

Emily Pinna graduated from the MarylandInstitute College of Art with an innovativeMaster’s Degree in Social Design. She is acertified professional photographer(Washington School of Photography), and alsoholds a Master’s Degree in Communicationsfrom the University in Bonn/Germany. She is avisual storyteller, photographer and socialimpact designer. She has worked for severalinternational organizations, including the

community outreach program at the World Bank. She currentlydivides her time between Luxembourg and Washington, DC and

travels often on assignments. www.emilypinnaphotography.comTo see the full Blog//Visual Storytelling Chronicle, please visit:WWW.EMILYPINNAPHOTOGRAPHY.COM/BLOG

It is a desperate decision to board such an overcrowded, unfit boat, asthe likelihood that they will never reach the Greek shore is pretty high.It is also a business. The refugees pay between €800-2000 tosmugglers per person. The one who agrees to be the driver of the

boat, gets a free ride and a 5-minute introduction on how to 'drive'the boat. If the refugees are lucky, they are greeted by some verydedicated volunteers who provide some dry clothes, water and food— as there is no structure in place, no big humanitarian organizationdealing with this human exodus in a professional way. In this case, theboat did not arrive at Skala Skaminias — the shore where most boatsarrive — but just outside the capital of Mitilini. I happen to spot them,pull over and help the exhausted refugees out of the boat. There werearound 60 people fitted tightly into each boat. Luckily there wereanother three, more experienced, volunteers driving by who knewwhat to do, and together the four of us did what we could to help. Wehad people collapse in our arms, with no help or doctor nearby. Wedrove them to the nearest camp.

Children are the most vulnerable of travelers. There are no statisticsabout child mortality among refugees as they travel to Europe. Theboy above is among the lucky ones who made it safely to Europe.Others are not so lucky. When boats capsize, they are the first to die.The coast of eastern Lesvos is littered with thousands and thousandsof discarded life vests. If those of adults are fake and stuffed withsponge-like material or grass, those worn by children are pathetic

pieces of cheap plastic, originally intended as toys. In fact, many ofthese vests carry warnings in English, such as "does not preventdrowning" and "not for boating".

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What is the Social Contract?

Why does the Arab World Need a New One?

Shanta Devarajan,

Chief Economist, MENA Region

The ‘social contract’ is an idea that dates

back to the ancient Greeks, and refers to theimplicit agreement among members of asociety that defines their relationship witheach other and the state. That relationshipholds the key to unravelling the puzzle of the‘Arab Spring.’ To development economistslike myself, the uprisings that started inTunisia and spread to several countries inthe Arab world in 2010-11 came assomewhat of a surprise. For the previous

decade, almost all of the indicators ofeconomic well-being were strong andimproving. The growth in gross domesticproduct (GDP) was substantial, at about 5percent a year. Extreme poverty (defined aspeople living on US$1.25 a day) was low anddeclining. The conventional measures ofinequality, such as the Gini coefficient, were

lower than in other middle-incomecountries, and in some cases declining. InEgypt and Tunisia, the per-capita income ofthe bottom 40 percent was growing fasterthan the average. In terms of humandevelopment, the Middle East and NorthAfrica region recorded the fastest decline inchild mortality rates and the steepestincrease in school attainment. Yet, asvarious Gallup and World Values Surveysindicate, there was growing dissatisfaction

in these societies, which erupted inrevolutions in four countries and popularprotests in several others. While much ofthe protests were about voice and politicalaccountability, there is still a puzzle about

how there could have been so muchdiscontent in the face of seemingly strongand improving economic conditions. Thesolution lies in the nature of the socialcontract in these countries that, on the onehand, delivered the favorable indicators, buton the other hand, failed to meet theaspirations of the growing middle class, andespecially its youth. In almost all countries,governments provided free education andhealth, subsidies for food and, later, fuel, aswell as jobs in the public sector withguaranteed benefits for life. The result wasthat human development progressed at arapid pace. The economy grew thanks to oil-

related rents and public investments, andthe poor were protected with foodsubsidies. The outcomes included low anddeclining inequality, low poverty and, atleast by the World Bank’s definition, sharedprosperity.

On the other side of this social contract,however, were governments that wereauthoritarian, brooked very little dissent,and in some cases denied human rights tocertain groups. At the turn of the century,several aspects of this social contract werebeginning to fray. First, because ofsignificant fiscal deficits, the public sectorcould no longer be the “employer of first and

last resort.” In fact, the public sector startedretrenching. A generation of young people,

who had diligently gone to school thinkingthey would get a public-sector job, foundthemselves unemployed. Worse, their skillswere not suited to the private sector, whichnevertheless was not growing rapidly

enough to absorb them. The Middle Eastand North Africa found itself with thehighest unemployment rate in the world,with the unemployment rates for youngpeople and women in particular nearlydouble the overall rate. Moreover, about 80percent of the population believed thatmost jobs were based on connections ratherthan merit — adding to the frustration of thenewly-educated young population. Second,it was becoming clear that lagging privatesector growth was related to the autocraticnature of the regimes. In particular, friendsand families of the autocrats benefitedthrough monopoly rents in domestic

industries, undermining exportcompetitiveness and employment creation.For instance, the “Ben Ali firms” in Tunisia,although only 0.8 percent of industrialoutput, accounted for 21 percent of profits.These firms benefited from regulations thatrestricted foreign investment in sectors inwhich they were involved—transport,banking and telecommunications—which inturn raised prices for inputs to the exportingsectors and made them less competitiveglobally. As a consequence, growth wasinsufficient to absorb the large number ofyoung people entering the labor marketeach year. Third, the web of subsidies thatwere part of the social compact had becomemore of a burden than a benefit. Fuelsubsidies in particular accrued mainly to therich and resulted in an economic structurethat favored capital- rather than labor-intensive industries. There is also evidencethat, in Egypt, politically connected firmsbenefited disproportionately from fuelsubsidies. The previously free education andhealth, while it delivered on basic educationand health, was becoming increasinglyineffective at delivering quality. Teacher

and doctor absenteeism in schools andclinics were common. A private sectoremerged that made people pay for the sameservices to which they were entitled. As awoman in Egypt said, “You can go to theprivate clinic and lose all your money, or goto the public clinic and lose your life.” As areflection of these difficulties with the socialcompact, citizen satisfaction with theirgovernments was deteriorating, even whenother economic indicators looked promising.Resentment grew to the point where iterupted into widespread protests and infour countries, the autocratic leader was

removed from office. Understanding theArab Spring paradox points us to thesolution. It is clear that a new social contractis needed. Competition policy (a “level-

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playing field”) should be enforced. Subsidiesshould be replaced with targeted cashtransfers, which give poor citizens a choice

of what goods to consume. Further, thepublic sector should be rationalized toperform those functions that government

should perform, rather than simply being anemployer of first or even last resort.

Exchange between Author & Readers

COMMENTS SUBMITTED BY MOHGA

Sure youth unemployment was a factor but actually this piece totally ignoresother critical factors:- The start of Tunisia up-rise was the poor seller who was struggling to makeend meet and eventually was kicked out of the street which was the strawthat broke the camel’s back - The popular call of the Egyptian revolution: Bread, Freedom, Social Justice.Bread came first- Despite the nice figures quoted by WB and IMF there was rising income gapbetween those who scrap to feed their families and the top few who wereshopping in London and Paris. It was not the macroeconomic figures thatmattered but the rising inequality. I remember a provocative TV ad saying“break your old bathroom and buy a new one” showing picture of a dreambathroom where middle class neighbours were struggling with bad sanitationsystems!

- The combination of unemployment, high prices despite food subsidy(subsidy did not cover all basic food) and having to pay for health andeducation led to real suffering for the bottom 40%On several occasions I heard you speak about absenteeism of public sectorworkers as if it is their fault ! This vision totally ignores decades of chronicunder-funding of health and education that result in meagre salaries forworkers. It is strange that WB people who have decent salaries seem to expectpublic sector workers to continue working 9-5 on a salary not enough to renta flat –let alone to feed the family or pay for half decent education orhealthcare!

SUBMITTED BY SHANTA ON THU, 11/12/2015 - 21:39

Dear Mohga,

Thanks for your comment. Of course there was inequality in the MENA region.The point though is that this inequality was not higher than in other middle-income countries, such as those in Latin America, East Asia and EasternEurope. And we don't find systematic evidence that inequality was rising inMENA during the 2000s.The shopping trips in London you refer to is a sign of wealth inequality. Wefind that wealth inequality is higher than income inequality. However, heretoo, we don't find evidence that wealth inequality in MENA was higher thanin other parts of the developing world. Yet, only MENA had revolutions, whichis why we are suggesting that it was other factors, such as unemployment,that triggered the Arab Spring. Incidentally, the fruit seller who set himself onfire in Tunisia was frustrated because he couldn't get a formal sector job, and

because he worked in the informal sector, he was harassed by the police.Finally, teacher absenteeism is not just a function of teacher salaries, but howthe salaries are paid. For instance, we find that teachers in NGO-run schoolsget paid much less, and still show up for work.If teachers’ salaries were more closely tied to performance, absenteeism islikely to go down (as has been observed in India and elsewhere). I should addthat public sector teachers come from the 90th percentile of the incomedistribution or higher.

Shanta

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New World Bank StudyMiddle-Class Frustration Fueled the Arab Spring;

Economic Indicators Failed to Predict Arab Uprisings

Judging by economic data alone, the revolutions of the 2011 ArabSpring should have never happened. A long-time reliance oneconomic indicators as a barometer of progress in Middle Eastern andNorth African countries masked the level of frustration anddissatisfaction in the region ahead of the ‘Arab Spring.’ Indeed, thenumbers from the decades before had told a glowing story: the regionhad been making steady progress toward eliminating extremepoverty, boosting shared prosperity, increasing school enrollment,and reducing hunger, child and maternal mortality. Reforms wereunderway and economic growth was moderate.

And then, in late 2010 and early 2011, millions of people poured ontothe streets of major cities in the Middle East and North Africa (MENA),

calling for change, and the Arab street began to tell a story thatstandard quantitative indicators had notforeseen.

Now, a new study focusing on economicinequality, subjective wellbeing, and socialturmoil in MENA helps provide a possibleanswer to this ‘Arab inequality puzzle’ and,specifically, to two questions: what drovepeople to the streets and why did thenumbers miss this?The report attempts to resolve the apparentparadox presented by mass demonstrationsin the face of improving economic conditions.

In examining the causes of the Arab Spring,the report identifies sources of frustrationthat persist today, and run the risk of beingaggravated by the current economicslowdown.

The report finds that the Arab Springrevolutions were triggered by growing andbroadly shared dissatisfaction with the qualityof life. Ordinary people were frustrated bytheir deteriorating standards of living,reflected in a shortage of quality jobs in theformal sector, poor quality public services,

and the lack of government accountability. The old social contract ofredistribution without voice had stopped working. In the Arab world,the middle class wanted a say and more opportunities. The system ofgeneral subsidies could not compensate for these problems. Indeed,subsidies mattered less for the well-being of the middle 40 percent ofsociety than they did for the bottom 40 percent.

“On the eve of the Arab Spring, the Arab world was an unhappy place

for a variety of reasons,” said Shanta Devarajan, World Bank ChiefEconomist of the Middle East and North Africa Region. “The old

social contract of redistribution with limited voice had stopped

working, especially for the middle class, prior to 2011. People wanted

a say and real opportunities for economic advancement.”

According to the report, many countries in the region seemed primedto fall into disarray following the Arab Spring uprisings. Unless thereare global efforts to end regional conflicts and help countries renew

the social contract, a vicious circle of instability exacerbated byeconomic weakness could be the long term future for the MENAregion.

“The situation has continued to deteriorate in the region as many of

the factors that made people unhappy before the Arab Spring are still

present today,” said Elena Ianchovichina, World Bank MENA LeadEconomist and principal author of the report. “Though grievances

alone do not lead to civil wars, grievance-motivated uprisings can

grow into civil wars in societies polarized along ethnic or sectarian

lines. High male youth unemployment rates and the abundance of

natural resources increase the risk of conflict.”

Rather than inequality, the study finds that ethnic or sectarian inter-group inequality may have played a role in theincreased incidence of conflict in the MENAregion. The researchers of this study concludethat although grievances alone do not causecivil wars, they can motivate people to startfighting, especially if ethnic and sectariangrievances are used to garner public support.

Where societies are polarized along ethnic orsectarian lines, the combination ofunemployed young men and naturalresources also increases the risk of conflict. Itwas in this context that after the Arab Spring,

many countries in the region seemed primedto fall into disarray.

The report also provides an economic outlookfor the Middle East and North Africa,predicting that regional gross domesticproduct (GDP) growth will average 2.8 percentfor 2015. Continued low oil prices, civil warsand conflicts, and a likely global economicslowdown mean that prospects for fastergrowth are slim. Civil wars have severelyharmed the economies of Iraq, Libya, Syria,and Yemen, and have had adverse spillover

effects on the economies of Lebanon and Jordan. MENA’s oil-importing countries have not grown rapidly in the wake of low oilprices because they have been hurt, to varying extents, by terroristattacks, spillovers from neighboring wars, slow growth in the Eurozone, and political uncertainty.

The full report can be found at:http://documents.worldbank.org/curated/en/2015/10/25119063/inequality-uprisings-conflict-arab-worldThe World Bank Group recently launched a new Middle East andNorth Africa strategy focused on addressing the causes of conflict topromote peace and stability. One of the primary goals of the newstrategy is to rebuild the relationship between citizens andgovernments through improved service delivery and increased

transparency and accountability. Information about the World BankGroup’s MENA Strategy can be found at:http://www.worldbank.org/en/region/mena/overview#2

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Donna BarneTariq Khokhar

Now that we've reached the end of 2015, it's clear this was a year ofmajor milestones, emerging trends, and new beginnings. Amongother things, 2015 marked a historic drop in poverty, a major climatechange agreement, and record low child and maternal mortality rates.Take a look at what the data show.

1. The Global Poverty Rate Fell below 10%The share of the world’s population living in extreme poverty isprojected to hit a historic low of 9.6% of in 2015 – falling from 37.1%

in 1990. New estimates show 702 million people living below theupdated global poverty line of$1.90 per day, with the majority ofthem in Sub-Saharan Africa and South Asia. The milestone was hailedas the “best news in the world today” by World Bank Group PresidentJim Yong Kim, and marks real progress on the road to ending extremepoverty by 2030.

2. The World Reached an Accord on Climate ChangeRepresentatives of 195 nations signed on to the landmark Parisclimate agreement on Dec. 12, 2015. Each country pledged to lowergreenhouse gas emissions in what could mark a turning point in theglobal effort to slow climate change. The deal recognized the role ofincentives in reducing emissions, including carbon pricing. Currently,

about 40 countries and 23 cities, states, and regions are using acarbon price -- their outputs represent only 12% of annualgreenhouse-gas emissions. As part of the Paris deal, more than 90developed and developing countries have included carbon-pricingschemes among the actions they intend to take. Climate change could

have a significant impact on poverty levels. The World Bank Group isworking with 130 countries to help implement "climate-smart"development and will increase investments in climate finance to asmuch as $29 billion a year by 2020 -- a one-third increase over currentlevels.

3. A Record Number of People Were Forcibly DisplacedThe number of forcibly displaced people now stands at more than 60million -- the highest number since the Second World War. More thanhalf of the some 20 million refugees worldwide come from Syria,Afghanistan, and Somalia, and the majority find refuge in countriesclose to their own. The World Bank Group, United Nations, and Islamic

Development Bank announced in October they would tackle theworsening refugee crisis in the Middle East and North Africa by issuingnew bonds to raise billions of dollars to help displaced people andsupport reconstruction of the war-torn region. This month, the GlobalProgram on Forced Displacement launched a call for ideas to improvedevelopment response for refugees and internally displaced persons.

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4. The SDGs Set Ambitious Targets for 2030In September, the world’s countries came together to affirm theSustainable Development Goals (SDGs) -- a set of 17 goals for theworld. Their broad aims are to end extreme poverty, fight inequalityand injustice, and to address climate change. The goals are associatedwith a number of new targets and indicators. A World Bank studyearlier this year found that many countries in the world lack the datato reliably estimate trends in poverty, and the institution has recently

committed to filling these data gaps in the world’s poorest countries.This year also saw the launch of the Global Partnership for SustainableDevelopment Data, which aims to bring together a diverse group ofindividuals and institutions to make better use of data and technologyto both monitor and achieve the SDGs.

5. Finance for Development Needs to Move from Billions to TrillionsThe levels of Official Development Assistance (ODA) or “foreign aid”to developing countries are already dwarfed by private resource flows(such as remittances) and commercial foreign investment. Theambitious new Sustainable Development Goals (SDGs) require equalambition in using the “billions” in ODA and in available development

resources to attract, leverage, and mobilize “trillions” in investmentsof all kinds. Additional funds are expected to come from two main

sources: public domestic resources (such as tax revenues), where themost substantial development spending happens, and commercialfinance and investment, the largest potential source of additionalfunding.

6. Commodity Prices PlummetedThe decline in commodity prices that began with metals andagriculture four years ago -- joined by crude oil in mid-2014 --continued in 2015. According to the Commodity Markets Outlook,energy, metals, and agricultural prices were down this year, in partdue to increasing supplies, bumper harvests, weak demand and astronger U.S. dollar. This end of the “commodity super-cycle” will seeexporters in the Middle East, Africa, Latin America, and Europeadjusting to a new normal, while importers like India benefit fromreduced costs.

7. Ebola Left a Lingering LegacyA World Bank report estimated that the loss of health workers toEbola will likely affect non-Ebola mortality even after the countriesare declared Ebola-free. For example, maternal mortality couldincrease by 38% in Guinea, 74% in Sierra Leone, and 111% in Liberia -- rates last seen in these countries 15 to 20 years ago. The reportfound that Ebola has weakened already very fragile health systems in

these countries, and as of May 2015, Liberia, Sierra Leone, and Guineahad lost 8.07%, 6.85% and 1.45% of their entire country’s healthworkers -- rates far higher than deaths among their generalpopulations.

8. More than 60% of the World’s Economies Improved Business

Rules The 2016 Edition of Doing Business identified 231 reforms thatenhanced business activity in 122 countries around the world. For

example, data for the past 12 years show that in 2003, it took anaverage of 51 days worldwide to start a new business. This has nowbeen more than halved to 20 days. In addition, the data showsencouraging signs of convergence toward best practices, as lower-income economies have shown more improvement than high-incomeeconomies over time. The case of Mozambique illustrates this trend.In 2003, it took an entrepreneur 168 days to start a business, but nowit only takes 19 days. You can explore the data further in thisinteractive visualization.

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9. Changing Demographics Are Shaping Our FutureWhile the global working age population peaked at 66% in 2012, partsof Africa and Asia are seeing a surge in their working age populations,and countries in these regions have an opportunity for greaterprosperity and higher living standards. According to the 2015 GlobalMonitoring Report, Sub-Saharan Africa will account for more than halfof the world’s working-age population growth through 2050. Theworld’s population is set to reach 9.7 billion in 2050, and almost halfthe population growth will occur in just nine countries.

10. Maternal and Child Mortality Rates Hit Record LowsBetween 1990 and 2015, the under-5 and maternal mortality rates fell53% and 44% respectively. This means the number of children dyingbefore age 5 has fallen dramatically - from 12.7 million in 1990 to 5.9million in 2015. Millions have survived because of the use of suchevidence-based interventions against the leading infectious diseasesas insecticide-treated mosquito nets, rehydration treatment fordiarrhea, nutritional supplements, and therapeutic foods. However,

in spite of this progress, an estimated 16,000 children under 5 still dieeach day and, nearly half of these deaths are attributable toundernutrition.

11. The Bottom 40% Are Doing BetterRising incomes over the past decade have helped the bottom 40% ofthe population in many countries. Considering five-year periodsstarting about 2007 and ending around 2012, incomes of the bottom40% grew in 65 of the 94 countries with adequate and comparabledata. Among them, 47 countries registered a “shared prosperity

premium,” with the incomes of the bottom 40% growing faster thanthe incomes of the average population, thus reducing income

inequality between these groups.

12. Legal Restrictions Affect Working WomenThe 2016 Women, Business and the Law report finds 155 out of 173economies have at least one law impeding women’s economic

opportunities. In 100 economies, women face gender-based jobrestrictions. In these economies, women are restricted from pursuingthe same economic activities as men and in some cases are prohibitedfrom holding particular jobs, particularly in highly paid industries. Thereport finds that restrictions on women’s work lower their earningpotential relative to men.

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BOOKS

Tour

MENA Books

The Arab Spring Five Years Later, by Hafez GhanemHafez Ghanem gives a thorough assessment of the Arab Spring, beginning with political developments since therevolutions and changes in the legal and institutional frameworks that affect economies. Arab economies grew at

healthy rates before the revolts, but the benefits of economic growth were unfairly distributed. The politicallyconnected reaped great benefits, while educated youth could not find decent jobs, and the poor and middle classstruggled to make ends meet. Ghanem advises that Arab countries need to adopt new economic policies and programsthat enhance inclusiveness, expand the middle class, and foster growth in undeveloped regions. Key elements includestrengthening economic institutions, developing small businesses, reforming the education system to better prepareArab youth for the modern labor market, promoting gender equality with the objective of raising female labor marketparticipation rates, and setting up programs for rural and regional development to reduce inequality and eliminateextreme poverty.

Arab Dawn: Arab Youth and the Demographic Dividend They Will Bring by Bessma Momani. University of Toronto Press.Change is on its way in the Middle East, argues Bessma Momani, and its cause is demographic. Today, 1 in 5 Arabs isbetween the ages of 15 and 24. Young, optimistic, and increasingly cosmopolitan, their generation will shape the

region’s future. Drawing on interviews, surveys, and other research conducted with young people in fifteen countriesacross the Arab world, Momani describes the passion for entrepreneurship, reform, and equality among Arab youth.With insightful political analysis based on the latest statistics and first-hand accounts, Arab Dawn is an invigoratingstudy of the Arab world and the transformative power of youth.

Trust, Voice, and Incentives: Learning from Local Success Stories in Service Delivery in the Middle East and NorthAfrica by Hana Brixi, Ellen Lust, and Michael Woolcock. World Bank.This report examines the role of incentives, trust, and engagement as critical determinants of service deliveryperformance in MENA countries. Focusing on education and health, the report illustrates how the weak external andinternal accountability undermines policy implementation and service delivery performance and how such a cycle ofpoor performance can be counteracted. Case studies of local success reveal the importance of both formal and informalaccountability relationships and the role of local leadership in inspiring and institutionalizing incentives toward better

service delivery performance. Enhancing services for MENA citizens requires forging a stronger social contract amongpublic servants, citizens, and service providers while empowering communities and local leaders to find 'best fit'solutions. Learning from the variations within countries, especially the outstanding local successes, can serve as a solidbasis for new ideas and inspiration for improving service delivery. Such learning may help the World Bank Group andother donors as well as national and local leaders and civil society, in developing ways to enhance the trust, voice, andincentives for service delivery to meet citizens' needs and expectations.

A Political Economy of the Middle East by Melani Cammett, Ishac Diwan, Alan Richards, and John Waterbury. FourthEdition. Westview Press.This book provides a comprehensive analysis of developments in the political economy of the region over the pastseveral decades, examining the interaction of economic development processes, state systems and policies, and socialactors in the Middle East. This new/fourth edition, with new authors Melani Cammett and Ishac Diwan, has beenthoroughly revised, with two new introductory chapters that provide an updated framework with which to understand

and study the many changes in demography, education, labor markets, urbanization, water and agriculture, andinternational labor migration in the recent years. The new edition also includes: a new chapter that charts the politicaleconomy of the Gulf states and, in particular, the phenomenal growth of oil economies; a new chapter on the rise of"crony capitalism;" and increased coverage of the changes in civil society and social movements in the region, includingan exploration of the causes, dynamics, consequences, and aftermath of the Arab uprisings.

http://www.amazon.com/Political-Economy-Middle-East/dp/0813349389/ref=sr_1_71?s=books&ie=UTF8&qid=1443126509&sr=1-71&keywords=middle+east

http://www.amazon.com/Trust-Voice-Incentives-Learning-Delivery/dp/1464804567/ref=sr_1_16?s=books&ie=UTF8&qid=1443126692&sr=1-16&keywords=north+africa

http://www.amazon.com/Arab-Dawn-Demographic-Dividend-Insights/dp/1442628561/ref=sr_1_1?s=books&ie=UTF8&qid=1449256690&sr=1-1&keywords=arab+dawn:+arab+youth+and+the+demographic

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Politics andGovernance in theMiddle East by

Vincent Durac andFrancescoCavatorta. PalgraveMacmillan.

The New MiddleEast: The Worldafter the Arab

Spring by DanielDanahar.Bloomsbury.

ExpandingOpportunities forthe Next

Generation: EarlyChildhoodDevelopment in theMENA by S El-Kogaliand Caroline Krafft.World Bank.

Political andConstitutionalTransitions in NorthAfrica: Actors andFactors by J Frosini

and F Biagi.Routledge Studies inMENADemocratizationand Government.

EconomicImplications ofLifting Sanctions onIran by ShantaDevarajan and Lilli

Mottaghi. WorldBank.

Improving theQuality of FinancialIntermediation inthe GulfCooperation Council

Countries. WorldBank. EngagementNote.

Champions Wanted:Promoting Exportsin the Middle Eastand North Africa byMélise Jaud andCaroline Freund.World Bank.

Contentious Politicsin the Middle East:Popular Resistanceand MarginalizedActivism Beyondthe Arab Uprisings edited by F A.Gerges. PalgraveMacmillan.

Iran’s Political

Economy since theRevolution bySuzanne Maloney.CambridgeUniversity Press.

Learning in the Faceof Adversity: TheUNRWA EducationProgram forPalestinianRefugees by H

Abdul-Hamid, H APatrinos, J Reyes, JKelcey, and A DiazVarela. World Bank.

The Penguin Stateof the Middle EastAtlas by Dan Smith

Saudi Arabia inTransition: Insightson Social, Political,Economic andReligious Change byBernard Haykel and

ThomasHegghammer.CambridgeUniversity Press.

The Negotiator: AMemoir by GeorgeMitchell. Simon andSchuster.

Oman Reborn:Balancing Traditionand Modernization by Linda PappasFunsch. PalgraveMacmillan.

From the FirstWorld War to theArab Spring: What’s

Really Going on inthe Middle East?by M. E. McMillan.Palgrave Macmillan.

http://www.amazon.com/First-World-War-Arab-Spring/dp/1137522046/ref=sr_1_1?s=books&ie=UTF8&qid=1449260954&sr=1-1&keywords=From+the+First+World+War+to+the+Arab+Spring:+What%E2%80%99s+Really+Going+on+in+the+Middle+East

http://www.amazon.com/Negotiator-Memoir-George-Mitchell/dp/1451691378/ref=sr_1_1?ie=UTF8&qid=1447794249&sr=8-1&keywords=the+negotiator+george+mitchell

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi14Meo_8LJAhVDOT4KHbW4AZgQjRwIBw&url=http://www.amazon.com/Learning-Face-Adversity-Education-Palestine/dp/146480706X&psig=AFQjCNEMFyH6P5HebOtb5yVEnHJzuA5SsQ&ust=1449345596673409

http://www.amazon.com/Irans-Political-Economy-since-Revolution/dp/0521738148/ref=sr_1_1?s=books&ie=UTF8&qid=1449258723&sr=1-1&keywords=Iran%E2%80%99s+Political+Economy+since+the+Revolution

http://www.amazon.com/Contentious-Politics-Middle-East-Marginalized/dp/1137537205/ref=sr_1_1?s=books&ie=UTF8&qid=1449258665&sr=1-1&keywords=Contentious+Politics+in+the+Middle+East:+Popular+Resistance+and+Marginalized+Activism

http://www.amazon.com/Champions-Wanted-Promoting-Directions-Development/dp/1464804605/ref=sr_1_1?s=books&ie=UTF8&qid=1449258502&sr=1-1&keywords=Champions+Wanted:+Promoting+Exports+in+the+Middle+East+and+North+Africa

http://www.amazon.com/Political-Constitutional-Transitions-North-Africa/dp/1138816388/ref=sr_1_fkmr0_2?s=books&ie=UTF8&qid=1443138633&sr=1-2-fkmr0&keywords=constitutional+reform+north+africa

http://www.amazon.com/New-Middle-East-World-Spring/dp/1408870177/ref=sr_1_4?s=books&ie=UTF8&qid=1443126264&sr=1-4&keywords=middle+east

http://www.amazon.com/Politics-Governance-Middle-Vincent-Durac/dp/0230361331/ref=sr_1_1?s=books&ie=UTF8&qid=1449256917&sr=1-1&keywords=Politics+and+Governance+in+the+Middle+East,+by+Vincent+Durac+and+Francesco+Cavatorta

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Business, Banking, Finance and Accounting

Exploring Assurance on Integrated Reporting and Other Emerging Developments in External Reporting. IFAC.

The purpose of this publication, prepared by the Integrated Reporting Working Group, is to inform stakeholders aboutthe IAASB’s ongoing work to explore assurance on integrated reporting and other emerging developments in external

reporting. It explains that the IAASB established the Integrated Reporting Working Group to inform the IAASB as to howand when to respond to these developments most effectively in the public interest, and outlines the group’s activities.

Interpretation and Application of IPSAS by Caroline Aggestam-Pontoppidan. Wiley Regulatory Reporting.

Interpretation and Application of IPSAS provides practical guidance on the implementation and application of theInternational Public Sector Accounting Standards. This book brings readers up to date on the standards, and describestheir proper interpretation and real-world application. Examples and mini-case studies clarify the standards' rolesthroughout, giving readers a better understanding of complex processes, especially where the IPSAS deviate from IFRS.Readers also gain insight into smoothly navigating the transition for a public sector entity, which is moving to eitherIPSAS under accrual basis of accounting or to cash accounting IPSAS, plus an overview of IPSAS adoption status and

methods around the world. Global public sector accounting is highly diversified, resulting in ongoing moves toharmonize standards worldwide. The IPSAS are international standards that largely follow the IFRS model, but differ insome key areas and include standards in places where IFRS has none. This book provides complete guidance to IPSAS,with clear explanation and expert insight.•Understand the meaning and role of each standard •Apply the standards to real-world scenarios ,•Manage the process of transition to IPSAS

These standards are meant to be followed by all public sector entities, including national and regional governmentsand local authorities. They've been adopted by the UN, NATO, the European Commission, and others, and either havebeen or soon will be adopted in Malaysia, Switzerland, Spain, and more.

BenchmarkingPublicProcurement 2016:Assessing PublicProcurementSystems in 77Economies. WorldBank.

Public SectorAccounting, by TjerkBudding, GiuseppeGrossi and TorbjornTagesson.Routledge.

Doing Business2015: GoingBeyond Efficiency,by InternationalFinanceCorporation (IFC).

Islamic Financeand the NewFinancial System:

An EthicalApproach toPreventing FutureFinancial Crises byTariq Alrifai. WileyFinance.

Principles of IslamicAccounting by NabilBaydoun and Maliah

Sulaiman. WileyFinance.

A Director’s Guide

to IntegratedReporting,

Deloitte.

BusinessSustainability:Performance,Compliance,Accountability andIntegratedReporting by ZRezaee. GreenleafPublishing.

Risk Managementfor Islamic Banks:Recentdevelopments fromAsia and the MiddleEast, by I Wahyudi, FRosmanita, M BudiPrasetyo and NIwani, S Putri. Wiley.

Women, Businessand the Law 2016:Getting to Equal. World Bank.

http://www.amazon.com/Women-Business-Law-2016-Getting/dp/1464806772/ref=sr_1_1?s=books&ie=UTF8&qid=1449265392&sr=1-1&keywords=women,+business+and+the+law++World+Bank

http://www.amazon.com/Risk-Management-Islamic-Banks-Developments/dp/1118734424/ref=sr_1_1?s=books&ie=UTF8&qid=1449263772&sr=1-1&keywords=Risk+Management+for+Islamic+Banks:+Recent+Developments+from+Asia+and+the+Middle

http://www.amazon.com/Business-Sustainability-Performance-Compliance-Accountability/dp/1783535040/ref=sr_1_4?s=books&ie=UTF8&qid=1443138100&sr=1-4&keywords=integrated+reporting

http://www.iasplus.com/en-gb/publications/global/other/directors-guide-to-integrated-reporting/view

http://www.amazon.com/Principles-Islamic-Accounting-Wiley-Finance/dp/1119023297/ref=sr_1_54?s=books&ie=UTF8&qid=1443127202&sr=1-54&keywords=islamic+finance

http://www.amazon.com/Islamic-Finance-New-Financial-System/dp/1118990633/ref=sr_1_4?s=books&ie=UTF8&qid=1443127082&sr=1-4&keywords=islamic+finance

http://www.amazon.com/Doing-Business-2015-Beyond-Efficiency/dp/146480351X/ref=sr_1_1?s=books&ie=UTF8&qid=1449263102&sr=1-1&keywords=doing+business+2015

http://www.amazon.com/Interpretation-Application-IPSAS-Regulatory-Reporting/dp/1119010292/ref=sr_1_1?s=books&ie=UTF8&qid=1443138213&sr=1-1&keywords=ipsas+adoption

https://www.ifac.org/system/files/publications/files/IAASB-Integrated-Reporting-Working-Group-Publication_0.pdf

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General Economics, Development Economics and the Global Economy

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik. W.W. Norton & Company, Inc.

In the wake of the financial crisis and the Great Recession, economics seems anything but a science. In this sharp,

masterfully argued book, Dani Rodrik, a leading critic from within, takes a close look at economics to examine when itfalls short and when it works, to give a surprisingly upbeat account of the discipline. Drawing on the history of the fieldand his deep experience as a practitioner, Rodrik argues that economics can be a powerful tool that improves theworld―but only when economists abandon universal theories and focus on getting the context right. Economics Rulesargues that the discipline's much-derided mathematical models are its true strength. Models are the tools that makeeconomics a science. Too often, however, economists mistake a model for the model that applies everywhere and atall times. In six chapters that trace his discipline from Adam Smith to present-day work on globalization, Rodrik showshow diverse situations call for different models. Each model tells a partial story about how the world works. Thesestories offer wide-ranging, and sometimes contradictory, lessons―just as children’s fables offer diverse morals.Whether the question concerns the rise of global inequality, the consequences of free trade, or the value of deficitspending, Rodrik explains how using the right models can deliver valuable new insights about social reality and publicpolicy. Beyond the science, economics requires the craft to apply suitable models to the context. The 2008 collapse ofLehman Brothers challenged many economists' deepest assumptions about free markets. Rodrik reveals that

economists' model toolkit is much richer than these free-market models. With pragmatic model selection, economistscan develop successful antipoverty programs in Mexico, growth strategies in Africa, and intelligent remedies fordomestic inequality. At once a forceful critique and defense of the discipline, Economics Rules charts a path toward amore humble but more effective science.

The Economics of Inequalityby Thomas Piketty and Arthur Goldhammer. Harvard University Press.

Thomas Piketty―whose Capital in the Twenty-First Century pushed inequality to the forefront of public debate―wrote

The Economics of Inequality as an introduction to the conceptual and factual background necessary for interpretingchanges in economic inequality over time. This concise text has established itself as an indispensable guide for studentsand general readers in France, where it has been regularly updated and revised. Translated by Arthur Goldhammer,The Economics of Inequality now appears in English for the first time. Piketty begins by explaining how inequalityevolves and how economists measure it. In subsequent chapters, he explores variances in income and ownership of

capital and the variety of policies used to reduce these gaps. Along the way, with characteristic clarity and precision,he introduces key ideas about the relationship between labor and capital, the effects of different systems of taxation,the distinction between “historical” and “political” time, the impact of education and technological change, the natureof capital markets, the role of unions, and apparent tensions between the pursuit of efficiency and the pursuit offairness. Succinct, accessible, and authoritative, this is the ideal place to start for those who want to understand thefundamental issues at the heart of one of the most pressing concerns in contemporary economics and politics.

The Great Surge:The Ascent ofthe Developing

World by StevenRadelet. Simon &Schuster.

Development Goals inan Era of DemographicChange, Global

Monitoring Report:2015/2016. WorldBank.

Global FinancialDevelopment Report:Long-Term Finance,

2015/2016. WorldBank.

Global FinancialStability Report. InternationalMonetary Fund(IMF).

World EconomicOutlook. InternationalMonetary Fund (IMF).

International DebtStatistics 2016, WorldBank Group

http://www.amazon.com/World-Economic-Outlook-October-2015/dp/1513520733/ref=sr_1_1?s=books&ie=UTF8&qid=1449265502&sr=1-1&keywords=world+economic+outlook+imf

http://www.amazon.com/Global-Financial-Stability-Report-Vulnerabilities/dp/1513582046/ref=sr_1_1?s=books&ie=UTF8&qid=1449265459&sr=1-1&keywords=global+financial+stability+imf

http://www.amazon.com/Global-Financial-Development-Report-2015/dp/1464804729/ref=sr_1_1?s=books&ie=UTF8&qid=1449265296&sr=1-1&keywords=Global+Financial+Development+Report+2015/2016.++World+Bank

http://www.amazon.com/Great-Surge-Ascent-Developing-World/dp/1476764786/ref=sr_1_1?s=books&ie=UTF8&qid=1449265084&sr=1-1&keywords=the+great+surge

http://www.amazon.com/Economics-Inequality-Thomas-Piketty/dp/0674504801/ref=sr_1_3?s=books&ie=UTF8&qid=1443127423&sr=1-3&keywords=thomas+piketty

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