Good Governance for Development (GfD) Good Governance for Development (GfD) in Arab Countries Initiativein Arab Countries Initiative

Thematic Group III Thematic Group III on Governance of Public Financeon Governance of Public Finance

Working Group MeetingWorking Group Meeting(4(4thth Meeting) Meeting)

May 20, 2008May 20, 2008Rabat, MoroccoRabat, Morocco

ARAB REPUBLIC OF EGYPTARAB REPUBLIC OF EGYPTMINISTRY OF FINANCEMINISTRY OF FINANCE

Egypt leading thematic Group IIIEgypt leading thematic Group IIIGovernance of Public FinanceGovernance of Public Finance

Ever since Egypt has embarked on its economic reform Ever since Egypt has embarked on its economic reform program in 90s, it has explicitly accepted the challenge to program in 90s, it has explicitly accepted the challenge to restructure its institutions and its managerial system by restructure its institutions and its managerial system by undertaking serious actions towards increasing undertaking serious actions towards increasing transparency and accountability through adopting the transparency and accountability through adopting the concept of Good Governance. concept of Good Governance.

In this respect, Egypt has contributed in the Good In this respect, Egypt has contributed in the Good Governance for Development (GfD) Initiative and headed Governance for Development (GfD) Initiative and headed the third theme concerned with “Governance of Public the third theme concerned with “Governance of Public Finance”.Finance”.

33 Working Group Meetings were Working Group Meetings were Conducted:Conducted:

1st WGIII meeting …. Cairo, October 1-3, 20051st WGIII meeting …. Cairo, October 1-3, 2005 2nd WGIII meeting …. Cairo, May 7-8, 20062nd WGIII meeting …. Cairo, May 7-8, 2006 3rd WGIII meeting …. Istanbul, May 30, 20073rd WGIII meeting …. Istanbul, May 30, 2007

Government of Egypt ProposalGovernment of Egypt Proposal

On the first regional meeting of member countries, the WG On the first regional meeting of member countries, the WG III supported in principle the proposal made by the III supported in principle the proposal made by the Government of Egypt for the creation of a Government of Egypt for the creation of a "Regional Public "Regional Public Finance Training Institute",Finance Training Institute", that will be based in Cairo and that will be based in Cairo and linked to other Institutes in the region.linked to other Institutes in the region.

At that time, the Egyptian Ministry of Finance offered to At that time, the Egyptian Ministry of Finance offered to devote the premises and facilities of its Tax Training devote the premises and facilities of its Tax Training Center for such purpose, which is a well equipped center, Center for such purpose, which is a well equipped center, till there is a more developed idea for the capacity needs of till there is a more developed idea for the capacity needs of the Regional Center.the Regional Center.

Rationale behind the idea of Developing Rationale behind the idea of Developing A Regional Public Finance Training A Regional Public Finance Training

InstituteInstitute In recent years MENA countries have undertaken significant In recent years MENA countries have undertaken significant

modernization initiatives in aspect of public Finance such as modernization initiatives in aspect of public Finance such as revenue collection, budget reform, tax and tariff administration, revenue collection, budget reform, tax and tariff administration, and management of other financial systems.and management of other financial systems.

These reforms have changed the operational needs of the These reforms have changed the operational needs of the Institutions in charge of Financial management.Institutions in charge of Financial management.

Today, public finance agencies strive for excellence and best Today, public finance agencies strive for excellence and best practices in finance, require new skill sets to enable the new practices in finance, require new skill sets to enable the new more complex operational needs.more complex operational needs.

Regional Training Center would promote networking of officials Regional Training Center would promote networking of officials in financial management, that would facilitate policy dialogue and in financial management, that would facilitate policy dialogue and enhance transfer of techniques, experiences, and knowledge, enhance transfer of techniques, experiences, and knowledge, closing the gap between the different stages of financial closing the gap between the different stages of financial modernization in the MENA countries.modernization in the MENA countries.

The Regional Training Center would provide shared training The Regional Training Center would provide shared training Resources to MENA countries and Financial Modernization Resources to MENA countries and Financial Modernization

effortsefforts

ADVANTAGESADVANTAGES

The Center would allow for economies of scale in skills development offering, The Center would allow for economies of scale in skills development offering, which would be infeasible for small countrieswhich would be infeasible for small countries

Serving Ministries of Finance in the Arab worlds (MOFs) and their affiliate Serving Ministries of Finance in the Arab worlds (MOFs) and their affiliate organizations develop well trained, highly qualified, specialized technical organizations develop well trained, highly qualified, specialized technical cadre, capable to carry and implement the ongoing and planned major cadre, capable to carry and implement the ongoing and planned major changes and reforms in financial governance or public finance, utilizing changes and reforms in financial governance or public finance, utilizing common learning materialscommon learning materials

The center will cater to special MENA Expertise, focusing on skills shortages The center will cater to special MENA Expertise, focusing on skills shortages and problems that are specific to the MENA region, ensuring that the public and problems that are specific to the MENA region, ensuring that the public finance management procedures applied in the participating countries are finance management procedures applied in the participating countries are fully compatible with best international practice;fully compatible with best international practice;

Given its institutional nature, this Regional Training Center will continue to Given its institutional nature, this Regional Training Center will continue to serve Arab MOFs after the GfD initiative is concluded.serve Arab MOFs after the GfD initiative is concluded.

Even though, the benefits of the new Regional Even though, the benefits of the new Regional Training Center are evident, there are still a Training Center are evident, there are still a

number of Important factors to be considered:number of Important factors to be considered:

What will be the underlying governance of the What will be the underlying governance of the Center?Center? In order to maintain a regional perspective, the Center would need In order to maintain a regional perspective, the Center would need a decisioning body representing key regional stakeholders and a decisioning body representing key regional stakeholders and their interests. The governance body will be responsible for their interests. The governance body will be responsible for ensuring Center’s financial sustainability and maximizing ensuring Center’s financial sustainability and maximizing performance.performance.

The current suggested management structure is:The current suggested management structure is:

Board of Trustees or Governors (Supervisory Board)Board of Trustees or Governors (Supervisory Board) which which includes the ministers of finance of the member countries. includes the ministers of finance of the member countries.

Advisory CommitteeAdvisory Committee with representation from the donor countries, with representation from the donor countries, organizations and technical experts. organizations and technical experts.

Executive or Managing BoardExecutive or Managing Board, for executive issues, headed by the , for executive issues, headed by the Director of the Center.Director of the Center.

Important factors to be considered: Important factors to be considered: (Cont(Cont’’d)d)

What is the optimal modus operandi for the Center?What is the optimal modus operandi for the Center?

The core operations of the Center should Not be limited to training The core operations of the Center should Not be limited to training delivery only, rather focus on the larger training value chain which delivery only, rather focus on the larger training value chain which includes needs definition, training design, delivery effectiveness includes needs definition, training design, delivery effectiveness measures and staff development Support. Well – defined performance measures and staff development Support. Well – defined performance indicators will measure the success of Center’s operations.indicators will measure the success of Center’s operations.

International Experiences: International Experiences:

In designing the Center programs, curriculums, tuition, certification, materials,In designing the Center programs, curriculums, tuition, certification, materials,…etc, …etc,

the Center will seek the technical support of other international and regional the Center will seek the technical support of other international and regional organizations (OECD, WB, IMF, AMF,…etc). organizations (OECD, WB, IMF, AMF,…etc).

As well as getting into collaboration with some international institutions such as As well as getting into collaboration with some international institutions such as "Center of Excellence in Finance" (CEF) based in Ljubljana, Slovenia , The "Center of Excellence in Finance" (CEF) based in Ljubljana, Slovenia , The "Chartered Institute of Public Finance & Accountancy" (CIPFA) based in the "Chartered Institute of Public Finance & Accountancy" (CIPFA) based in the UK, and Singapore Regional Training Institute to make use of the readily UK, and Singapore Regional Training Institute to make use of the readily available successful programs and curriculums developed by these institutions.available successful programs and curriculums developed by these institutions.

Important factors to be considered: Important factors to be considered: (Cont(Cont’’d)d)

What is the right program and content? What is the right program and content?

The training courses should be based on primary training The training courses should be based on primary training demand, anticipated changes in financial administration and demand, anticipated changes in financial administration and international best practices. According to International international best practices. According to International Experiences, the most effective training programs are those Experiences, the most effective training programs are those tailored to the needs of the trainees (i.e. local and/or regional). tailored to the needs of the trainees (i.e. local and/or regional).

3 kinds of programs suggested :3 kinds of programs suggested :

- The “Responsive Programs”… offers short (2-5 days) seminars on - The “Responsive Programs”… offers short (2-5 days) seminars on specific topics;specific topics;

- The “Certification Programs” … Internationally certified program- The “Certification Programs” … Internationally certified program

- “Train the Trainers” programs.- “Train the Trainers” programs.

Egypt Steps to Develop the Regional Egypt Steps to Develop the Regional Training CenterTraining Center

1.1. Assess Training Needs:Assess Training Needs:As a step to figure the willing of the Arab countries to As a step to figure the willing of the Arab countries to support the Regional Training Center and use of its support the Regional Training Center and use of its facilities, the Egyptian ministry of finance designed a facilities, the Egyptian ministry of finance designed a survey and delivered it to the MOFs of the MENA survey and delivered it to the MOFs of the MENA member countries to state the kind of programs needed, member countries to state the kind of programs needed, expected number of trainees, in addition to other issues.expected number of trainees, in addition to other issues.

Survey Results:Survey Results:

Countries Responded:Countries Responded: Palestine, Libya, Saudi Arabia, Palestine, Libya, Saudi Arabia, Yemen, Oman, Iraq, Qatar.Yemen, Oman, Iraq, Qatar.

Suggested ProgramsSuggested Programs were to cover specialized areas were to cover specialized areas related to budget formulation and execution, debt related to budget formulation and execution, debt management, Performance Based Budgeting, management, Performance Based Budgeting, Broadening Tax Base, direct and indirect taxation, and Broadening Tax Base, direct and indirect taxation, and other issues.other issues.

Egypt Steps to Develop the Regional Egypt Steps to Develop the Regional Training Center (Cont’d)Training Center (Cont’d)

2.2. Co-coordinating with International Co-coordinating with International Consultant officeConsultant office::

In defining a vision, strategy and design for the proposed In defining a vision, strategy and design for the proposed regional training Institute, The Egyptian Ministry of regional training Institute, The Egyptian Ministry of Finance seeked the assistance of One of the Finance seeked the assistance of One of the International Expert Offices ( Booz Allen Hamilton )International Expert Offices ( Booz Allen Hamilton )

•Co-coordinating with International Consultant office: Co-coordinating with International Consultant office: (Cont’d)(Cont’d)

Booz Allen Proposed Project Approach and Time Frame

Assess MOF Training Needs

Assess MOF Training Needs

1

Identify Participants

Identify Participants

2

Define Financial

Requirements

Define Financial

Requirements

Define Training Center

Strategy

Define Training Center

Strategy

5

Create Governance

Model

Create Governance

Model

6

Project DemandProject

Demand

3

Develop Standup Plan

Develop Standup Plan

9

Phase I: Definition

4

Define Modus Operandi

Define Modus Operandi

7

Phase II: Strategy Phase III: Operating ModelPhase IV: Standup

Define Private Sector Participation

Define Private Sector Participation

8

4 weeks 2 weeks 4 weeks 2 weeks

Total Estimated Timeframe: 12 weeks

Requirements Report

Deliverable 1

TC Strategy

Deliverable 2

TC Operating Model

Deliverable 3

Standup Plan

Deliverable 4

Egypt Steps to Develop the Regional Egypt Steps to Develop the Regional Training Center (Cont’d)Training Center (Cont’d)

3.3. Investing in a specially designed premises for the Investing in a specially designed premises for the Regional Training Center:Regional Training Center:

LocationLocation The newly designed premises for the center is located in a The newly designed premises for the center is located in a

very central area on a main Autostrade, that connects very central area on a main Autostrade, that connects Cairo Main roads.Cairo Main roads.

AreaAreaThe total built up area of the building is 21,000 m2.The The total built up area of the building is 21,000 m2.The building consists of basement, ground and four typical building consists of basement, ground and four typical floors. Each floor has a total area of 3500 m2. The building floors. Each floor has a total area of 3500 m2. The building can be divided into different sizes lecture and training halls can be divided into different sizes lecture and training halls in addition to the 300 seats auditorium.in addition to the 300 seats auditorium.

Egypt Steps to Develop the Regional Egypt Steps to Develop the Regional Training Center (Cont’d)Training Center (Cont’d)

4.4. Seeking Donors Technical and Financial Seeking Donors Technical and Financial Assistance:Assistance:

We are currently aiming at going beyond the "approval – in – We are currently aiming at going beyond the "approval – in – principle" stage and to secure concrete support for launching the principle" stage and to secure concrete support for launching the Regional Training Center from both Donors and MENA member Regional Training Center from both Donors and MENA member countries.countries.

It is hoped that funding assistance can be offered by donor It is hoped that funding assistance can be offered by donor countries & organizations as soon as possible, so that we would be countries & organizations as soon as possible, so that we would be able to launch the regional center over the next year able to launch the regional center over the next year

And it’s worth mentioning that, under the umbrella of this initiative, And it’s worth mentioning that, under the umbrella of this initiative, the Government of Netherlands expressed their interest to allocate the Government of Netherlands expressed their interest to allocate funds for the Training Center and we are now in the process of funds for the Training Center and we are now in the process of finalizing the contract and receiving the allocated fund (almost 1.5 finalizing the contract and receiving the allocated fund (almost 1.5 Million Euro for the Local training).Million Euro for the Local training).

Thank YouThank You