SG Auditors General
SG Auditors General 3 April 2006
17 Apr 2006 16:39:37 SOUTH PACIFIC ASSOCIATION OF SUPREME AUDIT INSTITUTIONS
AUDITORS GENERAL WORKSHOP
Mocambo Hotel, Nadi, Fiji, 3-7 April, 2006
REGIONALISM AND THE PACIFIC PLAN
Mr Greg Urwin, Secretary General, Pacific Islands Forum Secretariat
Ladies and gentlemen: I would like to thank you for inviting me to speak tonight and the EU for making this week's workshops possible. It probably won't come as a surprise to you that I'd like to say a little about regionalism and the Pacific Plan and what it might mean for our member countries, especially in regard to the oversight functions of governance such as public auditing.
Regionalism and the Pacific Plan
2. But please allow me, first, to say a little about the background against which Forum Leaders called for a Pacific Plan to strengthen regional cooperation and integration. The Plan is, I think, very much a creature of its time - a time when the immediate post-independence phase in our region has more or less come to an end, and when our member countries' views about how their sovereignties might most effectively be expressed, may be changing. Our Leaders, certainly in the decisions they have taken over the past couple of years, have recognised that the Pacific has moved into a new period which calls for new approaches to some of the challenges we face. And they have recognised that, as the changes encapsulated in the term 'globalisation' intensify, so should our ability to make our regional cooperation more relevant and effective - a view which seems to me impossible to deny.
3. As you may know, this Plan, with its range of priority initiatives under the four inter-related goals of economic growth, sustainable development, good governance and security, was adopted by the Forum Leaders at their annual meeting last October. These activities are now being progressed under management of the Forum Secretariat, with political oversight and guidance of a Pacific Plan Action Committee (PPAC), and chaired by the Forum Chair, this year Papua New Guinea. There are obviously a number of aspects to implementing the Plan, but the essential ingredient is better coordination - something we have not, over the years always excelled at. Better coordination among the member countries themselves, better coordination with development partners and among the existing regional organisations. We have embarked on specific consultations with our partners to this end. And because the regional organisations are playing a key role in the implementing the Plan, we are striving for better coordination by developing a regional institutional framework that is appropriate for these new approaches to regionalism to make the most effective use of valuable regional resources represented by these organisations.
National development
4. The Pacific Plan is based on the assumption that regional approaches should, at least at this stage, only be taken if and when they add value at the national level. Regionalism is not intended to replace national policies and programs, but to support and complement them. Providing services regionally means that only the management of delivery is shifted to a regional mechanism, not the policy making which underpins it. Protecting and enhancing national sovereignty is, in fact, a key goal of regionalism. This can seem counter-intuitive; we have been accustomed to think of our sovereignty as something wholly and solely defined by our national institutions. It seems to me, though, that it is a more realistic view that national governments can, in fact, enhance their sovereignty by participating in regional mechanisms to implement some of their policy decisions (such mechanisms to act, in effect, as serve providers). This devolution of service provision to regional mechanisms can allow national governments to focus on critical priorities and the direct needs of their people rather than spend scarce resources on costly, duplicated services which, in any event, they may not be able to provide sufficiently well.
5. In going down this track, we do need to recognise, however, that implementation of regional decisions at the national level, their transfer to national circumstances, has thus far been very patchy overall. There are a range of reasons for this, many of them legitimate and understandable in the historical circumstances. If stronger regionalism is, however, to make a positive impact on the lives of Pacific people, then we have to find better means, practically speaking, of connecting our regional good intentions with national action, of seeing it all as part of the same effort. This requires work at both regional and national levels, but I cannot stress enough that the success of the Pacific Plan depends on the political will by countries to pursue some of their key national policies and strategies more effectively through a regional approach, where, of course, such an approach seems likely to produce dividends. It follows, equally and for the ongoing good health of regional cooperation, it needs to follow that where those dividends are not apparent there is not a lot of point in going down a regional track.
Good governance and oversight institutions
6. The measures identified for early implementation by the Plan are practical in character and many are grounded in pre-existing activity. They are also seen as measures to underpin the expansion of regional integration into the future. To move in that direction with any confidence, sustained efforts are going to continue to be required, among other things, to build and maintain transparency, accountability, equity and efficiency in the management and use of resources in the region. A key focus of this good governance section of the Pacific Plan is to do with strengthening the functions of countries' key oversight agencies. It is clear that where oversight institutions are supported by political will, are free from external influence, have control of their own budgets, are adequately resourced and have effective relationships with enforcement branches within the law and justice sector - they perform well. In our region, some oversight institutions have these high levels of performance. Some do not. We need to work out why and give our members the opportunity to do something about that.
7. Leadership and the presence of champions for good governance within oversight agencies is crucial. So is education and outreach as, it seems to me, oversight institutions perform most effectively when there is public demand for good governance and state accountability. National governments and donors can foster this demand by supporting, encouraging and facilitating dialogue with representatives of civil society, the media and NGOs. It seems to me that oversight agencies also need to constantly build on the important linkages they share with each other and the judiciary, Attorneys General offices, departments of public prosecution, the police and affiliated statutory bodies such as leadership, electoral and human rights commissions. By way of example, this group of Auditors General gathered here tonight is crucial in providing management and information on the way public funds are raised, expended and acquitted. While you have a critical role in monitoring and supervising government accounts, funds are susceptible to mismanagement when they are not effectively tracked and recorded in financial management systems. The relatively new Financial Intelligence Units now operating under new legislation in many of our countries, are providing tools to monitor the flow of funds and can assist oversight agencies in their supervision of public expenditure.
8. Regionalisation of some oversight services, as suggested in the Pacific Plan, can offer economies of scale in delivery. This can be achieved without compromise of national sovereignty. Countries might supplement their own oversight agencies by referring to a regional authority when required. Alternatively, they could delegate activities directly to regional bodies, if they wished to do so. This could be particularly relevant for the smaller states which may not have the resources available to maintain effective oversight in all areas. In all cases, however, - and I need to emphasise this again - the regional capacity would be used in the service of a national priority and not as some kind of stand-alone activity. We are, after all talking about important national functions here, part of the definition of what makes a state.
Regional audit
9. In the preparatory work done on the Pacific Plan a general assessment of the costs and benefits of strengthened audit capacity in the region was undertaken. This assessment concluded, unsurprisingly, that sustained public sector auditing would help reduce the economic costs of poor or indifferent governance. Those costs may be high indeed. One is never, of course, obliged to take such matters completely at face value, but for PNG, Solomon Islands, and Fiji Islands, the potential of these benefits was assessed, in a very preliminary way, to be of the order of US$8 billion (discounted over a 10-year period).
10. Just what this may entail needs, of course, much further consideration and consultation with Pacific Island Countries - with, yourselves to determine what the preferred options may be. Initial thinking on this includes a stronger focus on training and common standards; further support to the South Pacific Association of Supreme Audit Institutions; and through that, support for the Samoa Accords of 2004; and, possibly in the future, the creation of a regional panel of auditors that could audit national and Pacific regional agencies, if required to do so.
11. As was, I believe, discussed at your workshop today, to progress these ideas, the ADB, with the cooperation of the Forum Secretariat, has begun working with many of you to progress a Pacific Regional Audit Initiative. Consultations will continue in coming months, at, for example, the ADB Annual Meeting in Hyderabad in early May and at your own 2006 Congress in Saipan at the end of May. Forum Leaders have asked for an update on how these ideas might be progressing at their annual meeting in Tonga later this year and I would urge you all to take a strong leadership role in this process.
2006 FEMM
12. I would like to congratulate and thank this Association's ongoing support for the FEMM Principles of Good Governance. There can, I think, be little question that these Principles have changed the discourse in the region and have done much to establish the standards which we have a right to expect in important areas of public life. That said, the considerable amount of short- and long-term technical assistance which has been provided over the past decade or so to Pacific Island Countries by international financial agencies and bilateral donors in an effort to support good economic and financial management, has sometimes not been as effective as it might have been, either because donor effort has not been sufficiently well coordinated, or because the support on offer has simply and for whatever reason not been taken up.
13. The Pacific Plan intends to explore whether a significantly larger and more coordinated technical assistance effort would lead to substantially better outcomes in these areas. PFTAC's efforts in providing a coordinated set of technical assistance covering public financial management, financial sector supervision, tax administration, and economic and financial statistics have been in my view, praiseworthy. The Centre has played a quite central role in providing quick response assistance to countries, the PFTAC model has, it seems to me, proven itself. And the imminent establishment of a Pacific Islands Financial Management Association, seems to me to carry considerable promise, particularly in the linkages it may provide between public financial management and the action plans developed by Forum Economic Ministers.
14. However, budgetary and capacity constraints, both on the providers' side and in the countries concerned, show up frequently in lack of coordination of assistance and effective implementation of reforms. While acknowledging, of course, the complexity of the challenges in these areas, a proposal that the donors providing such support to the Pacific Island Countries, might pool their resources, in a concerted way, to establish a single, larger mechanism for economic and statistical technical assistance, would appear to merit very close examination.
15. Forum Economic Ministers will discuss ideas for advancing this and other regional economic integration initiatives at their annual meeting in July in Honiara.
Aid effectiveness
16. The Pacific Plan, if pursued and developed in a sustained and credible way, has the potential to play an important role as a general framework for development activity in the region and will at the best ultimately form the regional partnership framework within and between Pacific countries, and between the Pacific and the rest of the world.
17. A key initiative of the Pacific Plan is enhanced dialogue and cooperation with development partners and international organisations to ensure improved ownership of development interventions, and alignment with national and regional priorities to reduce transaction costs, including more efficient reporting systems to reduce the burden on Pacific countries (refer Initiative 15.3). These are the very issues addressed by the Paris Declaration on Aid Effectiveness, to which all our major partners subscribe.
18. On this basis - and particularly in the context of technical assistance to oversight agencies in the Pacific and associated planning and budgeting processes - I very much hope that we will now see stronger engagement by all development partners and international organisations in the business of better aligning their programmes with one another and with national priorities and processes. Approaches under the Pacific Plan framework provide a mechanism, not yet fully developed, for achieving this.
19. The Forum Secretariat is now struggling and I choose that word with care - to compile a stocktake of activities currently undertaken and planned across the region in relation to delivery of Pacific Plan initiatives. This includes commitments made and activities undertaken by national governments, donors, regional organisations and multilateral agencies and international organisations. This exercise is, pretty self-evidently, critical in implementing the Plan and, more broadly, has the potential to become a quite powerful policy tool. While attempts have been made in the past to establish a similar type of database, the region still has no comprehensive 'snapshot' of what is happening at a regional or national level. The Pacific Plan now provides an opportunity to drive this process forward based, I would suggest, on the work being undertaken at the international level on the gathering of information required for international aid effectiveness indicators.
Conclusion
20. There is now both considerable enthusiasm for and heightened expectations of the Pacific Plan. But much will depend on political will, on good organisation and cooperation among our partners and on sheer staying power. The Plan does not, for all its range of measures, attempt to provide an all-encompassing solution to the many challenges facing Pacific people. I would suggest that it is, however, here to stay as a mechanism for shaping the region's longer-term future. So, I do urge those who care about that future to look closely at the Pacific Plan, and the new ideas of regionalism it embodies, and see what they might do about bringing it to a full, long and productive life.
17 Apr 2006 16:39:37 SOUTH PACIFIC ASSOCIATION OF SUPREME AUDIT INSTITUTIONS
AUDITORS GENERAL WORKSHOP
Mocambo Hotel, Nadi, Fiji, 3-7 April, 2006
REGIONALISM AND THE PACIFIC PLAN
Mr Greg Urwin, Secretary General, Pacific Islands Forum Secretariat
Ladies and gentlemen: I would like to thank you for inviting me to speak tonight and the EU for making this week's workshops possible. It probably won't come as a surprise to you that I'd like to say a little about regionalism and the Pacific Plan and what it might mean for our member countries, especially in regard to the oversight functions of governance such as public auditing.
Regionalism and the Pacific Plan
2. But please allow me, first, to say a little about the background against which Forum Leaders called for a Pacific Plan to strengthen regional cooperation and integration. The Plan is, I think, very much a creature of its time - a time when the immediate post-independence phase in our region has more or less come to an end, and when our member countries' views about how their sovereignties might most effectively be expressed, may be changing. Our Leaders, certainly in the decisions they have taken over the past couple of years, have recognised that the Pacific has moved into a new period which calls for new approaches to some of the challenges we face. And they have recognised that, as the changes encapsulated in the term 'globalisation' intensify, so should our ability to make our regional cooperation more relevant and effective - a view which seems to me impossible to deny.
3. As you may know, this Plan, with its range of priority initiatives under the four inter-related goals of economic growth, sustainable development, good governance and security, was adopted by the Forum Leaders at their annual meeting last October. These activities are now being progressed under management of the Forum Secretariat, with political oversight and guidance of a Pacific Plan Action Committee (PPAC), and chaired by the Forum Chair, this year Papua New Guinea. There are obviously a number of aspects to implementing the Plan, but the essential ingredient is better coordination - something we have not, over the years always excelled at. Better coordination among the member countries themselves, better coordination with development partners and among the existing regional organisations. We have embarked on specific consultations with our partners to this end. And because the regional organisations are playing a key role in the implementing the Plan, we are striving for better coordination by developing a regional institutional framework that is appropriate for these new approaches to regionalism to make the most effective use of valuable regional resources represented by these organisations.
National development
4. The Pacific Plan is based on the assumption that regional approaches should, at least at this stage, only be taken if and when they add value at the national level. Regionalism is not intended to replace national policies and programs, but to support and complement them. Providing services regionally means that only the management of delivery is shifted to a regional mechanism, not the policy making which underpins it. Protecting and enhancing national sovereignty is, in fact, a key goal of regionalism. This can seem counter-intuitive; we have been accustomed to think of our sovereignty as something wholly and solely defined by our national institutions. It seems to me, though, that it is a more realistic view that national governments can, in fact, enhance their sovereignty by participating in regional mechanisms to implement some of their policy decisions (such mechanisms to act, in effect, as serve providers). This devolution of service provision to regional mechanisms can allow national governments to focus on critical priorities and the direct needs of their people rather than spend scarce resources on costly, duplicated services which, in any event, they may not be able to provide sufficiently well.
5. In going down this track, we do need to recognise, however, that implementation of regional decisions at the national level, their transfer to national circumstances, has thus far been very patchy overall. There are a range of reasons for this, many of them legitimate and understandable in the historical circumstances. If stronger regionalism is, however, to make a positive impact on the lives of Pacific people, then we have to find better means, practically speaking, of connecting our regional good intentions with national action, of seeing it all as part of the same effort. This requires work at both regional and national levels, but I cannot stress enough that the success of the Pacific Plan depends on the political will by countries to pursue some of their key national policies and strategies more effectively through a regional approach, where, of course, such an approach seems likely to produce dividends. It follows, equally and for the ongoing good health of regional cooperation, it needs to follow that where those dividends are not apparent there is not a lot of point in going down a regional track.
Good governance and oversight institutions
6. The measures identified for early implementation by the Plan are practical in character and many are grounded in pre-existing activity. They are also seen as measures to underpin the expansion of regional integration into the future. To move in that direction with any confidence, sustained efforts are going to continue to be required, among other things, to build and maintain transparency, accountability, equity and efficiency in the management and use of resources in the region. A key focus of this good governance section of the Pacific Plan is to do with strengthening the functions of countries' key oversight agencies. It is clear that where oversight institutions are supported by political will, are free from external influence, have control of their own budgets, are adequately resourced and have effective relationships with enforcement branches within the law and justice sector - they perform well. In our region, some oversight institutions have these high levels of performance. Some do not. We need to work out why and give our members the opportunity to do something about that.
7. Leadership and the presence of champions for good governance within oversight agencies is crucial. So is education and outreach as, it seems to me, oversight institutions perform most effectively when there is public demand for good governance and state accountability. National governments and donors can foster this demand by supporting, encouraging and facilitating dialogue with representatives of civil society, the media and NGOs. It seems to me that oversight agencies also need to constantly build on the important linkages they share with each other and the judiciary, Attorneys General offices, departments of public prosecution, the police and affiliated statutory bodies such as leadership, electoral and human rights commissions. By way of example, this group of Auditors General gathered here tonight is crucial in providing management and information on the way public funds are raised, expended and acquitted. While you have a critical role in monitoring and supervising government accounts, funds are susceptible to mismanagement when they are not effectively tracked and recorded in financial management systems. The relatively new Financial Intelligence Units now operating under new legislation in many of our countries, are providing tools to monitor the flow of funds and can assist oversight agencies in their supervision of public expenditure.
8. Regionalisation of some oversight services, as suggested in the Pacific Plan, can offer economies of scale in delivery. This can be achieved without compromise of national sovereignty. Countries might supplement their own oversight agencies by referring to a regional authority when required. Alternatively, they could delegate activities directly to regional bodies, if they wished to do so. This could be particularly relevant for the smaller states which may not have the resources available to maintain effective oversight in all areas. In all cases, however, - and I need to emphasise this again - the regional capacity would be used in the service of a national priority and not as some kind of stand-alone activity. We are, after all talking about important national functions here, part of the definition of what makes a state.
Regional audit
9. In the preparatory work done on the Pacific Plan a general assessment of the costs and benefits of strengthened audit capacity in the region was undertaken. This assessment concluded, unsurprisingly, that sustained public sector auditing would help reduce the economic costs of poor or indifferent governance. Those costs may be high indeed. One is never, of course, obliged to take such matters completely at face value, but for PNG, Solomon Islands, and Fiji Islands, the potential of these benefits was assessed, in a very preliminary way, to be of the order of US$8 billion (discounted over a 10-year period).
10. Just what this may entail needs, of course, much further consideration and consultation with Pacific Island Countries - with, yourselves to determine what the preferred options may be. Initial thinking on this includes a stronger focus on training and common standards; further support to the South Pacific Association of Supreme Audit Institutions; and through that, support for the Samoa Accords of 2004; and, possibly in the future, the creation of a regional panel of auditors that could audit national and Pacific regional agencies, if required to do so.
11. As was, I believe, discussed at your workshop today, to progress these ideas, the ADB, with the cooperation of the Forum Secretariat, has begun working with many of you to progress a Pacific Regional Audit Initiative. Consultations will continue in coming months, at, for example, the ADB Annual Meeting in Hyderabad in early May and at your own 2006 Congress in Saipan at the end of May. Forum Leaders have asked for an update on how these ideas might be progressing at their annual meeting in Tonga later this year and I would urge you all to take a strong leadership role in this process.
2006 FEMM
12. I would like to congratulate and thank this Association's ongoing support for the FEMM Principles of Good Governance. There can, I think, be little question that these Principles have changed the discourse in the region and have done much to establish the standards which we have a right to expect in important areas of public life. That said, the considerable amount of short- and long-term technical assistance which has been provided over the past decade or so to Pacific Island Countries by international financial agencies and bilateral donors in an effort to support good economic and financial management, has sometimes not been as effective as it might have been, either because donor effort has not been sufficiently well coordinated, or because the support on offer has simply and for whatever reason not been taken up.
13. The Pacific Plan intends to explore whether a significantly larger and more coordinated technical assistance effort would lead to substantially better outcomes in these areas. PFTAC's efforts in providing a coordinated set of technical assistance covering public financial management, financial sector supervision, tax administration, and economic and financial statistics have been in my view, praiseworthy. The Centre has played a quite central role in providing quick response assistance to countries, the PFTAC model has, it seems to me, proven itself. And the imminent establishment of a Pacific Islands Financial Management Association, seems to me to carry considerable promise, particularly in the linkages it may provide between public financial management and the action plans developed by Forum Economic Ministers.
14. However, budgetary and capacity constraints, both on the providers' side and in the countries concerned, show up frequently in lack of coordination of assistance and effective implementation of reforms. While acknowledging, of course, the complexity of the challenges in these areas, a proposal that the donors providing such support to the Pacific Island Countries, might pool their resources, in a concerted way, to establish a single, larger mechanism for economic and statistical technical assistance, would appear to merit very close examination.
15. Forum Economic Ministers will discuss ideas for advancing this and other regional economic integration initiatives at their annual meeting in July in Honiara.
Aid effectiveness
16. The Pacific Plan, if pursued and developed in a sustained and credible way, has the potential to play an important role as a general framework for development activity in the region and will at the best ultimately form the regional partnership framework within and between Pacific countries, and between the Pacific and the rest of the world.
17. A key initiative of the Pacific Plan is enhanced dialogue and cooperation with development partners and international organisations to ensure improved ownership of development interventions, and alignment with national and regional priorities to reduce transaction costs, including more efficient reporting systems to reduce the burden on Pacific countries (refer Initiative 15.3). These are the very issues addressed by the Paris Declaration on Aid Effectiveness, to which all our major partners subscribe.
18. On this basis - and particularly in the context of technical assistance to oversight agencies in the Pacific and associated planning and budgeting processes - I very much hope that we will now see stronger engagement by all development partners and international organisations in the business of better aligning their programmes with one another and with national priorities and processes. Approaches under the Pacific Plan framework provide a mechanism, not yet fully developed, for achieving this.
19. The Forum Secretariat is now struggling and I choose that word with care - to compile a stocktake of activities currently undertaken and planned across the region in relation to delivery of Pacific Plan initiatives. This includes commitments made and activities undertaken by national governments, donors, regional organisations and multilateral agencies and international organisations. This exercise is, pretty self-evidently, critical in implementing the Plan and, more broadly, has the potential to become a quite powerful policy tool. While attempts have been made in the past to establish a similar type of database, the region still has no comprehensive 'snapshot' of what is happening at a regional or national level. The Pacific Plan now provides an opportunity to drive this process forward based, I would suggest, on the work being undertaken at the international level on the gathering of information required for international aid effectiveness indicators.
Conclusion
20. There is now both considerable enthusiasm for and heightened expectations of the Pacific Plan. But much will depend on political will, on good organisation and cooperation among our partners and on sheer staying power. The Plan does not, for all its range of measures, attempt to provide an all-encompassing solution to the many challenges facing Pacific people. I would suggest that it is, however, here to stay as a mechanism for shaping the region's longer-term future. So, I do urge those who care about that future to look closely at the Pacific Plan, and the new ideas of regionalism it embodies, and see what they might do about bringing it to a full, long and productive life.
