Strengthening Public Financial Management through Transparency in Timor-Leste

http://transparencycamp.org/sessions/46/

Transparency Camp April 30, 2011

Confusion?

Strengthening Public Financial Management in Timor-Leste 2

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Congress cuts transparency funding

How can Timor-Leste afford government transparency?

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Timor-Leste United States Comparison

Independence 2002 1776 3.4%

GDP Per Capita $2,600 $47,400 5.5%

GDP Growth 8% 2.7% 338%

Unemployment 20% 9.7% 206%

Below poverty line 42% 12% 350%

Life Expectancy 67.95 78.92 86%

Literacy 58.6% 99% 59%

globalization

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= competition

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choice

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citizens are watchingStrengthening Public Financial Management in Timor-Leste 8

empowered

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Democratic Republic of Timor-Leste

(RDTL)Transparency

Objectives

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build civil society

build infrastructure

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build capacity

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build citizen involvement in government

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improve government performance

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GDP Per Capita (PPP, logs)

UG

AN

DA

PA

PU

A N

EW

GU

INEA

AU

ST

RA

LIA

-3

-2

-1

0

1

2

3

209 Countries

Norm

aliz

ed G

overn

ment

Eff

ect

iveness

Index

HIGH

LOW

Benefits of Transparency Government Effectiveness and GDP*

* At purchasing power parity

Source: The World Bank

Higher the government effectiveness = higher the country GDP Per Capita

GDP Per Capita (PPP, logs)

UG

AN

DA

PA

PU

A N

EW

GU

INEA A

US

TR

ALI

A

-3

-2

-1

0

1

2

3

207 Countries

Norm

aliz

ed

Voic

e a

nd

Acc

ounta

bili

ty Ind

ex

.

HIGH

LOW

Benefits of Transparency Voice and Accountability and GDP*

* At purchasing power parity

Source: The World Bank

Higher the government accountability = higher the country GDP Per Capita

GDP Per Capita (PPP, logs)

UG

AN

DA

PA

PU

A N

EW

GU

INE

A

AU

ST

RA

LIA

-3

-2

-1

0

1

2

3

204 Countries

Norm

aliz

ed C

ontr

ol of

Corr

upti

on Index

HIGH

LOW

Benefits of TransparencyControl of Corruption and GDP*

* At purchasing power parity

Source: The World Bank

Higher the control of corruption = higher the country GDP Per Capita

= stability

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= investor confidenceStrengthening Public Financial Management in Timor-Leste 21

avoid theresource curse

l

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technology leapfrog

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use what works

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skip what doesn’t work

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skip stages

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modernize

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rapidly

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review

Transparency and Accountability

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The next generation of public financial management technology will allow the public to

track the budget live, to see where every dollar is being spent, and to gain renewed confidence in

the process

staged

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Public Financial Management – Foundation for Country Growth

FMIS(software and

hardware)

Human Resource

Development

Capacity Building

(Training)

GoTL LAWS

Procurement Commission

Autonomous Agencies

Ministries

Decentralization

Public Financial Management

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1. International StandardsStrengthening Public Financial Management in Timor-Leste 33

IPSASInternational Public Sector Accounting

Standards

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EITIExtractive Industries

Transparency Initiative

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GFSGovernment Financial Statistics

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MTEFMedium Term

Expenditure Frameworks

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IATIInternational Aid

Transparency Initiative

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2. Manager’s Dashboard

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review

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examines budget execution data

integration with macro-economic data

3. Document Management

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manages correspondence with

senior managers

repository for freedom on information

4. e-Procurement Portal

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review

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government tenders published

vendor alerts

tender results published

5. Transparency Portal

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review

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10 years of budget & financial data

www.transparency.gov.tl

drill down through the chart of accounts

output in RTF, Word, Excel, PDF, Text, XML,

HTML

http://www.transparency.gov.tl

Goodbye Conflict, Welcome Development

Timor-Leste will be the country that goes down in history as the

nation to put a stop to falling victim to large companies and

the resource curse

Prime Minister Xanana Gusmão

When we in the developing world face these types of crisis, which we do on a

more regular basis than our colleagues in more

economically advanced nations — then we are

repeatedly told to increase our openness to the global

economy, to trust in the market but to regulate them

well. To be honest this approach has worked

Minister of Finance Emilia Pires

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Benchmark

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Timor-Leste United States Comparison

1. Standards GFS, IPSAS, EITI, IATI, MTEF ? Leaped

2. Performance Management Manager’s Dashboards Various tools across

government To leap

3. Document Management

Manager Document Management

Various Records & Correspondence Catching Up

4. e-Procurement August 15 FedBizOpps To leap

5. Transparency Transparency Portal Data.gov & others - underfunding

Leaping

www.revenuewatch.org

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another transparency comparison thanks to Jed Miller at Revenue Watch

www.freebalance.com/blog

@freebalanceStrengthening Public Financial Management in Timor-Leste 50