Improving Public Investment Management

Sep 19 – 21, 2016 Ljubljana, Slovenia No Fee
Aug 30, 2016
English

“Improving Public Investment Management” was the third PFM learning initiative delivered under FAD’s “Strengthening Economic Governance and Public Financial Management” program funded by the EU. The workshop followed up on a range of regional learning initiatives on Capital Budgeting delivered by the CEF together with FAD experts in recent years.

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Workshop Day 3

Workshop Day 2

Workshop Day 1

Recruitment Stage

ABOUT

Public investment is an important driver for economic growth in the region, yet it is the first to be cut during periods of fiscal constraints. In many countries, this has exacerbated project delays and cost overruns and often led to arrears and stalled or unfinished projects (white elephants). Over the last three years ahead of the workshop, the Fiscal Affairs Department (FAD) of the IMF has focused attention on the efficiency of public investment (see policy paper) and prepared an assessment tool (PIMA, annexed to the policy paper) to assist countries in establishing a baseline for improvement. The PIMA assessment, which includes peer benchmarking of public investment and capital stocks, covers 15 institutions, each of which comprise 3 indicators.

The FAD, in collaboration with the World Bank, has also renewed its attention on the related topic of public-private partnerships (PPPs), an increasingly popular mechanism for funding public investment, for which it has also developed a fiscal risk assessment tool for countries to use when considering PPP proposals (PFRAM).

In the months ahead of the workshop, the FAD has carried out PIMA assessments in Kosovo, Serbia, and Albania. The Kosovo PIMA is available online, the other two are also likely to be made publicly available soon.

The Workshop took an overall look at the three key stages of the public investment cycle – planning, allocation and implementation – to identify the critical areas where efficiency and effectiveness of public investment could be improved. For the Planning Stage, the institutions include fiscal rules, national and sectoral planning, central-local coordination, control and oversight of PPPs, and oversight of public enterprise sector investment. For the Allocation Stage, the institutions include multi-year budgeting, budget comprehensiveness, budget unity, project appraisal (including cost-benefit analysis), and project selection. For the Implementation Stage, the institutions include protection of investment, availability of funding, transparency of execution, project management, and management of assets. The Workshop included in-depth analysis in selected institutions – appraisal and selection processes, analyzing PPP proposals, creating fiscal space for investments in MTBFs, managing contracts and multi-year commitments, public investment and maintenance.

The Workshop also included a presentation by the EC on the Western Balkans Investment Framework, feedback on recent PIMA assessments in the region, practical experience in managing public investment projects with external financing, country presentations of experience in managing public investment and PPP projects, and a group work exercise.

How you will benefit

The workshop“s primary objective has been to better understand key factors which undermine the efficiency of public investment spending, how shortcomings in country institutions and procedures can be effectively identified and assessed, and what improvements can be made to ensure better outcomes in public investment.

After attending this workshop, participants are able to:

  • Understand the PIMA assessment tool and the PFRAM PPP evaluation tool, and how these can be used to identifying public investment challenges in their own countries.
  • Point out the challenges of externally financed public investment projects, including those under identified through the Western Balkans Investment Framework, and how to integrate them effectively within their own country’s overall public investment management process.
  • Describe the key stages and institutions of public investment and how these can affect the efficiency of public investment.
  • Identify specific areas of weaknesses in public investment institutions in their own countries, and what could be done to address them.
  • Contribute to improving public investment and PPP management in their own countries.

Target audience

The Workshop had been designed primarily for senior level public officials working at ministries of finance, central agencies, and line ministries in South East Europe who actively participate in planning and implementation of public investment.

Contributions from participants

The Workshop included hands-on group work on assessing public investment and PPPs, and participants also learned from the first-hand experience of PIMA assessments in Kosovo, Serbia, and Albania. Participants have been active in discussions throughout the Workshop.

FACULTY

Isabel Rial, Senior Economist, M1 Division, FAD, IMF

Isabel Rial is a senior economist of the Public Financial Management Division in the Fiscal Affairs Department of the International Monetary Fund. During the last 10 years in the Fund she has worked on a range of cross-country fiscal policy issues, particularly focusing on public-private partnerships, fiscal risks management, and fiscal rules. She has more than 10 years of experience in the public sector prior joining the Fund as chief of Fiscal Policy Analysis Division in the Central Bank of Uruguay. Ms. Rial holds a Master’s degree in Applied Macroeconomics from the Pontifical Catholic University of Chile (Chile).

Duncan Last, PFM Advisor for South East Europe, FAD, IMF

Duncan Last is the IMF PFM Advisor for South East Europe, having previously been based in IMF headquarters for the last 8 years. Prior to that he had been working in the field for 20 years covering various topics in public financial management, including: PFM advisor in the IMF’s AFRITAC East Regional Technical Assistance Center; budget and treasury advisor in Slovenia also covering various countries in the region, during which time he helped establish the Center of Excellence in Finance; budget and IFMIS advisor in Mali and Papua New Guinea, debt management advisor in Papua New Guinea, and debt management software designer at the Commonwealth Secretariat in UK.

Andreje Jerina, National Coordinator EU Macroregional Strategies, Ministry of Foreign Affairs, Slovenia

During Slovenia’s EU pre-accession, Ms. Jerina acted as National Aid Coordinator, negotiating more than 30 financing memoranda with the European Commission, and establishing the required national programming, monitoring and evaluation systems. After EU accession, Ms. Jerina was appointed Head of the Managing Authority for Structural and Cohesion Funds, in charge of preparing the 2004-2006 programming documents and setting the overall coordination for implementation and financial management of the funds. Recorded absorption capacity of that period for Slovenia was above 95%. She participated in the work of the Council and the European Commission in negotiating the multi-annual financial perspectives 2007-2013 and 2014-2020, in particular regarding Cohesion Policy and Enlargement (incl. IPA regulations). In 2005-2008, she acted as Supreme State Auditor at Slovenia’s Court of Audit, being responsible for auditing expenditures from the EU budget. She participated in several parallel audits on EU funds jointly performed by Supreme Audit Institutions of EU Member States (incl. the European Court of Auditors). In 2008-2012, she was State Secretary for EU Affairs (incl. the enlargement process and accession negotiations). In 2012-2015, she has been State Secretary for the Environment; among others, responsible for implementing over 1 billion of EU investment projects. Ms. Jerina currently works at the Ministry of Foreign Affairs of Slovenia, managing Slovenia’s involvement in EU macro-regional Strategies (Danube, Adriatic-Ionian and Alpine).

Marcin Brauhoff, Programme Manager – WBIF Coordinator, DG NEAR, EC

Marcin Brauhoff is a programme manager for EU policies in the Western Balkans Directorate of DG NEAR at European Commission headquarters in Brussels. Currently, his major focus is on the Western Balkans Investment Framework (WBIF), the cooperation with International Financial Institutions, and the Single Project Pipeline exercise aiming at planning and prioritizing infrastructure investments in the Western Balkans. In his nearly 10 years of service at EU institutions, he has also worked as attaché in the EU Delegation to Turkey and the Task Force for the Turkish Cypriot community. Mr. Brauhoff holds Master's degrees from the School of Business – National-Louis University, the University of Amsterdam and the College of Europe in Bruges.

Partners

This FAD/CEF activity was financed with the support of the European Union under the program Strengthening Economic Governance and Public Financial Management, which supports fiscal reforms in six countries of South Eastern Europe – Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia.

International Monetary Fund European Union Ministry of Finance, the Netherlands
Ministry of Finance Slovenia