FOURTH POVERTY REDUCTION STRATEGIES FORUM BOSNIA AND HERZEGOVINA

FOURTH POVERTY REDUCTION STRATEGIES FORUM

BOSNIA AND HERZEGOVINA

Ljerka Maric, BH Council of Ministers

26. June, 2007 Athens, Greece

MTDS - LATEST INFORMATION ON IMPLEMENTATION

Report on Implementation of MTDS is prepared on semi-annual basis. By the end of 2006, 922 measures were planned for implementation Close to 62% of the measures, or 569 measures were either completed or

in continuous implementation Out of the total number of measures, 66 measures were not implemented,

which is 7.2% of the total number of measures

922

569

Total number of measures

Completed or continuously implemeted

7.20%

31.10%

61.70%

Not implemented

In realization

Completed or continuously implemeted

62.10%61.50%

55.02%

B&H CoM RS GOVERNMENT FBIH GOVERNMENT

MTDS - LATEST INFORMATION ON IMPLEMENTATION (2)

Success in implementation of MTDS measures by B&H governments


Success in implementation of MTDS measures by B&H parliaments

90%

86%

76%

RS National Assembly

B&H Parliamentary Assembly

FBiH Parliament


Source: Report on implementation of MTDS for period August 2003-December 2006 12

Uspješnost u implementaciji mjera iz makroekonomskog okvira i rasta privatnog sektora

MA

KR

OFIS

KA

LN

IO

KV

IR

PO

SLO

VN

OO

KR

UZE

NJE

PR

IVA

TIZ

AC

IJA

FIN

AN

SIJ

E

TR

ZIS

TE

RA

DA

VA

NJS

KA

TR

GO

VIN

A

KO

RU

PC

IJA

JAV

NA

UP

RA

VA

STA

TIS

TIK

A

NIJE U TOKU REALIZACIJEU TOKU REALIZACIJEKOMPLETIRANO ILI SE KONTINUIRANO IMPLEMENTIRA

Izvor: Izvještaj o implementaciji Akcionog plana Srednjoročne razvojne strategije BiH za period avgust 2003 – decembar2006

Success in implementation of MTDS measures in area of macro-economic framework and private sector growth

13

Uspješnost u implementaciji mjera iz oblasti sektorskih prioriteta

SO

CIJ

ALN

IS

EKTO

R

OB

RA

ZOVA

NJE

ZDR

AV

STV

O

PO

LJO

PR

IVR

EDA

OK

OLI

S

VO

DO

PR

IVR

EDA

EN

ER

GE

TIK

A

INFR

AS

TRU

KTU

RA

IND

UST

RIJ

A

TUR

IZA

M

DEM

INIR

AN

JE ICT

GEN

DE

R

LJU

DSK

A P

RA

VA

KOMPLETIRANO U TOKU REALIZACIJE NIJE U TOKU REALIZACIJE

Izvor: Izvještaj o implementaciji Akcionog plana Srednjoročne razvojne strategije BiH za period avgust 2003 – decembar2006


Success in implementation of MTDS measures in area of sectoral priorities

BASIC ECONOMIC INDICATORSGROSS DOMESTIC PRODUCT

10,71311,599

12,829 13,44314,678

15,791

17,553

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2000 2001 2002 2003 2004 2005 2006*

Bruto domaći proizvod, mil. KM

*EstimateSource: BiH Agency for Statistics

Gross domestic product, KM million

FOREIGN TRADE SECTOR

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000K

1-2

00

3

K3

-20

03

K1

-20

04

K3

-20

04

K1

-20

05

K3

-20

05

K1

-20

06

K3

-20

06

K1

-20

07

Imports Exports Deficit

Source: BiH Central Bank

Introduction of VAT

REGISTERED NUMBER OF UNEMPLOYED IN B&H, MONTHLY DATA (in ,000)

400

420

440

460

480

500

520

540

560

I II III IV V VI VII VIII IX X XI XII

2003 2004 2005 2006 2007

Source: Employment agencies of FBiH, RS and DB, DB Statistical office

AVERAGE WAGES IN B&H (in KM), MONTHLY DATA

420

440

460

480

500

520

540

560

580

600

620

640

I II III IV V VI VII VIII IX X XI XII

2003 2004 2005 2006 2007

Source: BiH Agency for Statistics

25342869

30373402

4343

11521391

16021812

2666

0

1000

2000

3000

4000

5000

2002 2003 2004 2005 2006

Road Toll Customs Duties VAT Total indirect taxes

Source: B&H Indirect Taxation Authority

January 1, 2005 – Transfer of all authority for collection of indirect taxes to B&H Indirect Taxation Authority

INDIRECT TAXATION INCOME (in KM million)

January 1, 2006 – Introduction of VAT

B&H APPROACH TO DEVELOPMENT

Post-war BiH has had two types of documents which define strategic development directions at the state level, to date:

1. Documents oriented towards World Bank / IMF documents targeting international donations and loans/credits (PRSP, MTDS..)

2. Documents oriented towards EU targeting the EU accession process (EU Accession Strategy, NDP...)

Apart from those there are other policy analysis documents:

1. Variuos types of statistical research 2. UNDP Human Development Report3. Strategic donor documents, which represent the basis for their support

12

MAIN CHARACTERISTICS OF THE MTDS PROCESS

The planning of national development is the core of the MTDS document and process and it consisted and consists of the following steps :

1. Status diagnosis

2. Moves toward planning and allocation of funds

3. Policy Implementation process

4. M&E development

These steps should provide precondition for evident based policy making approach.

13

CHALLENGES IN IMPLEMENTING & MONITORING THE MTDS

MTDS has wide spread of terminology, targets and indicators

Multi level Government with variable response to implementation of MTDS measures

Limited capacity to manage implementation and monitor

MTDS not effectively connected with budgets

Very poor prioritization of the measures in the original MTDS

Little connection between macro goals and local planning

Many information and data gaps, particularly regarding social sector

EPPU/DEP Lacking of contacts at local levels to develop qualitative monitoring

Information related to administrative measures rather than impact on service delivery or Impact citizens

14

CHALLENGES IN IMPLEMENTING & MONITORING THE MTDS (2)

MTDS process represents progression and learning process

Up to date implementation & monitoring process increase capacity of public administration on state and entity levels for creation of evident base policy making

DEP and partners currently

o building capacityo developing new information and new processeso establishing local linkages to build up local level data and connectionso working on qualitative information on effective implementation performance

15

LESSONS LEARNED and MAIN RESULTS OF MTDS PROCESS

Common activities relating to development of B&H ( state, entities, DB) are possible

For successful implementation it is necessary to respect political reality Commitment of the decision makers required for achievement of goals Prioritisation of activities and resource allocation required Introduction of responsibilities Initial steps in capacity building of the public administration bodies Better coordination between governmental structures on all levels Creation of the structure for support of evidence base policy making Creation of the structure for M&E of implemented tasks and activities Cooperation with civil society is crucial for the success of the process Without support of international community B&H would not be able to implement

the process 16

EU INTEGRATION PROCESS - FROM MTDS TO NEW DEVELOPMENT STRATEGY (DS) and STRATEGY for SOCIAL INCLUSION (SIS)

EU integration process includes several milestones:

Stabilisation and Accession Process (SAP)

Stabilisation and Accession Agreeement (SAA)

Preaccession road starts

European partnership

The status of country candidate

This process also includes preparation of development documents like B&HDS 2008-2013 that will be a basis for NDP.

17

NEW B&H DS 2008-2013 – BASIC CONTEXT

In accordance with obligatory directives of the Community, new Strategy as a basis for NDP should contain:

National development goals;

Instruments to be used for achieving these goals;

Financial and institutional conditions necessary for implementation;

18

DS – STRUCTURE

In accordance with obligatory provisions and informal guidelines of EC, the new DS ( and future NDP) should includes the following:

Analysis of situation (estimate of current social –economical situation)

SWOT analysis of situation

Development strategy and goals

Ex ante evaluation (estimation of feasibility and expected impacts of programmes before their implementation)

Coherency and consistency of strategy

Financial tables: budgetary and others programmes

The Action Plan for implementation of measures must be connected to DS

19

ACTION PLAN

An Action plan would include

Brief description of operational programmes

Action plan of activities

Institutional structure of implementation

A detailed DS and Action Plan could be a preliminary NDP

20

SOCIAL IINCLUSION STRATEGY (SIS), JOINT INCLUSION MEMORANDUM (JIM) AND NATIONAL ACTION PLAN (NAP) Considering that the new B&H DS 2008-2013 will be more focused to economic development of the B&H, DEP will also prepare Social Inclusion Strategy.

The reasons for preparation of SIS are:

The number of excluded citizens in B&H is extremely high ( 50,32% ) but some groups are more jeopardize than others

Momentarily the social policy in B&H is more focused to social protection than to social inclusion

The main characteristics of social protection and spending for social protections are: lack of targeting (defining the groups of users), lack of adequacy and efficient centralization

21

SOCIAL IINCLUSION STRATEGY (SIS), JOINT INCLUSION MEMORANDUM (JIM) AND NATIONAL ACTION PLAN (NAP) -3

In 2007 B&H will start with preparation of the first SIS The purpose of SIS is to ensure better social inclusion and equal treatment of all B&H citizens as

well as to fulfil precondition for EU integration.

Beside sectoral and intersectoral orientation the SIS will be focused to specific target groups as well

The main elements and strategy recommendations from B&H Strategy for disabled persons will be part of SIS

The values from DS and SIS will be framework for JIM.

The JIM has to prepare country for full legal participation in Open method of coordination of social inclusion.

Under this process, every country has to prepare a National Action Plan for exclusion (NAP/inclusion) for every two years based on common goals.

RELATIONSHIP BETWEEN DS, SIS and MTDS, MTEF and OTHER DEVELOPMENT DOCUMENTS

The new B&H DS and SIS should take account of existing:

Previously adopted socio-economic development documents of the country (The priorities from MTDS that were not implemented)

Four year or three year fiscal strategy & Public investment documents

Sectoral strategies

EU accession documents

24

CONCLUSION

B&H is to embark on successor to MTDS

This should be a natural development from the PRSP and MTDS process toward the EU models and new DS and SIS

Take account of MTDS learning

Reflect current needs of B&H including jeopardized groups (disabled persons, as well)

Be coordianted through DEP

24