SPB Newsfeed: Bringing a Medium-Term Perspective to the Budget Process–The Way Forward for SEE

Many budget decisions have impacts that extend well beyond the current budget year. To make rational budgetary decisions, decision-makers must focus on the medium- and long-term implications. While the potential benefits of effective medium-term budgeting are well documented, the introduction of medium-term budget process in South East Europe as elsewhere has proved to be a difficult process and often divorced from the annual budget preparation process. To address these challenges, specifically in the light of the EU accession processes, we organized a training event on this topic.

The objective of the workshop was to discuss objectives and features of multi-year budgeting, to identify the challenges and bottlenecks in introducing medium-term budgeting and to share experiences with colleagues in other South East European countries about how to overcome these challenges. We had 22 participants from eight countries attending the course from both finance and line ministries, and we invited six lecturers to share their experience: Dirk-Jan Kraan from the International Monetary Fund, Marija Bednaš from the Slovenian Institute of Macroeconomic Analysis and Development, Peter van den Berg from the Dutch Ministry of Finance, Bojan Paunović from the Ministry of Finance of Montenegro, and André Lundvall and Thomas Wilhelmsson from the Ministry of Finance of Sweden.

The overall evaluation results from the event were overwhelmingly positive, with all the participants confirming their full satisfaction with the course content and organization, as well as the course usefulness for their daily job. Participants appreciated the practical orientation of the workshop. On day 2 participants played the role of finance and line ministries and negotiated the medium-term budget framework (MTBF); this simulation exercise was much appreciated as it allowed them to understand better what deserves a special attention when negotiating an MTBF.

“I really enjoyed your training event. The workshop will help us raise our performance in general and individually. In this way we can get closer to the European standards in the field of public financial management. I would to like attend a CEF workshop again in the future,” said Sherif Dobra from the Ministry of Education, Science and Technology of Kosovo. Tanja Levajkovic, Assistant Minister at the Ministry of Interior of Macedonia, added: “The workshop was organized very professionally and it was very useful for all the participants to the workshop.”

“It is useful to share best practice on MTBF with other experts in the region where countries face similar challenges. For Montenegro, the MTBF is an important tool in the overall budget process. The CEF course included both finance and line ministries’ representatives and the added value of the workshop was the knowledge participants gained on the MTBF and its role in strategic planning and budgeting,” stressed Bojan Paunović, public finance expert from Montenegro and member of the SPB Steering Committee.

The workshop was organized as part of the Strategic Planning and Budgeting project, funded by the European Union. The overall objective of the project is to contribute to strengthening of beneficiary countries’ capacity to design and implement medium-term macro-fiscal policy. For more information on the project, please refer to the project web page: www.cef-see.org/bcpdi/spb.

See the video from the course to learn more about this training activity and topics discussed: http://animoto.com/play/8qKpd2IMtYXOXGNvVWz5Tg