On 24-25 November 2008, the MENA SBO was officially launched at a high level meeting in Cairo (Egypt). The meeting was chaired by Mr. Hany Dimian, Deputy Minister of Finance in Egypt. Nearly 50 delegates from thirteen MENA and seven OECD countries as well as representatives from the European Union, World Bank and International Monetary Fund participated in the meeting.
Established in 1980, the Working Party of Senior Budget Officials (SBO) regularly brings together budget directors and other senior officials from OECD member countries to discuss main public expenditure concerns and relevant policy options. The SBO offers a platform for exchanging experiences on innovative budgeting and is recognised today as a leading international forum on budgeting practices.
As part of the OECD’s co-operation programme with non-member countries, several SBO regional networks have been established in recent years, following the model introduced by the OECD. The SBO Regional Network for Asia was the first of the regional SBO networks to be established in November 2001. The SBO Regional Network for Latin America (2003) and the SBO Regional Network for Central and Eastern Europe (2004) followed this initiative. In November 2008, the fourth regional SBO network assembling countries from the Middle East and North Africa has been launched: the SBO Regional Network for the Middle East and North Africa (MENA SBO).
From the Working Group on the Governance of Public Finance to the MENA SBO
The SBO Regional Network for the Middle East and North Africa (MENA) emerged from the Working Group on the Governance of Public Finance of the Good Governance for Development (GfD) in Arab Countries Initiative. Senior officials from OECD and MENA countries have regularly met since 2005 to address a wide variety of budget and public financial management issues within this Working Group that is chaired by H.E. Mr. Yousef Boutros Ghali, Egyptian Minister of Finance and co-chaired by Sweden and the United States.
Stakeholders from MENA and OECD countries were keen to create a permanent network allowing for exchange on budgetary and financial management matters in the MENA region. Until the creation of the MENA SBO, a permanent forum for regular exchange on budget issues did not exist. In keeping with the objective of a self-sustained and permanent MENA SBO network, delegates appointed at the MENA SBO launching meeting a committee to develop options on the networks’ structure, organisation and financing. The chairmanship of the SBO is ensured by Egypt as chair of the Working Group. The OECD Secretariat provides the MENA SBO with administrative support and technical expertise.
In the past, the OECD invited delegates from MENA countries as observers to SBO meetings in Eastern, Central and Southern Europe or most recently to the SBO Symposium on Public Private Partnerships on 22-23 February 2008 in Zürich, Switzerland. The participation of MENA countries in these meetings and the collection of information from peers on the benefits of the SBO network proofed that such an institution would provide the MENA region with a novel and efficient instrument for policy dialogue and innovation dissemination on financial governance. To support the creation of a MENA SBO, the third regional meeting of the Working Group on Governance of Public Finance on 30 May 2007 was organised back to back with the OECD annual Senior Budget Official (SBO) meeting in Istanbul. At the meeting in Istanbul, the Working Group delegates decided unanimously to officially launch a MENA SBO in November 2008.
Content of Discussions
In the first session, participants reviewed the lessons learned from the most important budget reform of recent years in OECD countries, the transformation of the French budgetary system. They draw comparisons with current budget reform in Morocco, based on a similar approach. Three sessions then dealt with performance budgeting, each comparing issues and strategies of a MENA and an OECD country. Performance budgeting was approached successively from the angles of sequencing and pacing of reforms, information systems and indicators, linking of performance information with medium term expenditure frameworks. In response to the request of MENA countries as expressed at the fourth regional meeting of the Working Group in Rabat (May 2008), one session addressed ways to address the budgetary consequences of price shocks for commodities whose consumption is heavily subsidised. The detailed and candid presentations as well as discussions ranged from policy changes with compensatory features for the poor to hedging against risks in future markets.
However, the MENA SBO was not only a meeting in which delegates discussed current developments and trends. It gave a clear vision on what Arab countries would like to focus on budgetary and financial management matters. Firstly, one focus of interest for MENA countries is the design of performance indicators. In comparison to OECD countries, MENA countries are still in an initial stage of performance management and budgeting, but are at the same time aware that indicator design is a difficult task with significant risks, as previous experiences in OECD countries have shown. Secondly, another focus of interest for MENA countries lies on the use of performance measures. Delegates from MENA countries expressed interest in learning about systematic approaches to using performance information in budgeting, also as a tool to rationalise and eventually reduce public expenditures.
Thirdly, some MENA countries started budgeting with Medium Term Expenditure Frameworks. Performance indicators and multi-year perspectives attract their attention in two ways: ensuring that performance management is integrated in multi-year perspectives and in the design of indicators as experience accumulate.
In their evaluation of the meeting, MENA delegates expressed great satisfaction about the depth of technical and policy discussions among participants from the region. Delegates requested that the next MENA SBO meeting keeps to this format that allows for focusing on a small number of related themes. Qatar expressed its interest in hosting the next MENA SBO meeting that could deal with responses to the ongoing financial crisis.