SG PFTAC
SG PFTAC 20Mar06
20 Mar 2006 22:57:55 PACIFIC FINANCIAL TECHNICAL ASSISTANCE CENTRE
TRIPARTITE STEERING REVIEW COMMITTEE MEETINGS
Sheraton Denarau Resort, Nadi, Fiji, 20-21 March, 2006
THE PACIFIC PLAN AND NATIONAL DEVELOPMENT
Mr Greg Urwin, Secretary General, Pacific Islands Forum Secretariat
Ladies and gentlemen: I would like to thank you for inviting me to say one or two things tonight. I have been asked to say a little about the Pacific Plan and what it might mean for our member countries, particularly in the area of economic governance.
Regionalism and the Pacific Plan
2. But first, permit me, if you will, to say something about the background against which Forum Leaders called for a Pacific Plan to strengthen regional cooperation and integration. It is, I think, like most things, 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 word, 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. Work undertaken last year in the development of the Pacific Plan considered several different concepts of regionalism and concluded that, in broad terms, there were two key areas which might be expected to provide the highest gains in the Pacific , that is: (i) the regional provision of goods and services to compensate for and overcome capacity limitations at a national level; and (ii) increasing development opportunities through integration and the creation of larger markets.
4. As you may know, the Pacific 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 and political oversight and guidance of a Pacific Plan Action Committee (PPAC), chaired by the Forum Chair, this year Papua New Guinea. There are obviously a number of aspects to this matter of implementation, but a good deal of it is going to get down to better coordination, something we have not, over the years always excelled at. Coordination among the member countries themselves, 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 implementation of the Plan, we are strengthening our cooperative abilities by developing a regional institutional framework that is appropriate for these new approaches to regionalism. That is a complex subject in itself, but one that will need to be pursued with vigour if we are to make the most effective use of valuable regional resources represented by these organisations.
National development
5. The Pacific Plan is based on the assumption that regional approaches are best taken, certainly at this stage, only if and when they add value at a country level. I make this obvious, but often misunderstood, point that regionalism is not intended to replace national policies and programs, but to support and complement them. Providing goods and 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 effective national sovereignty is, in fact, a key goal of regionalism. This can seem counter-intuitive, as many regional initiatives do pool services into a regional body, and it is clearly an equation which might vary over time. It seems to me, though, that it is a more realistic view that national governments can, in fact, enhance their sovereignty by allowing regional bodies to implement some of their policy decisions (in effect, as service 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 spending scarce resources on costly, duplicative services whose overhead costs might be shared with others.
6. Having said that, implementation of regional decisions at the national level has, I'm sure we would all agree, been pretty patchy thusfar. If strengthened regionalism is to make a positive impact on the lives of Pacific people, then we will have to find better means of matching our regional good intentions with national interest and commitment. The successful implementation of the Plan will depend on the political will and commitment of resources by countries to pursue some of their important national policies and strategies more cogently and cost-effectively through regionalism.
7. In this connection, the Secretariat is now putting a lot more effort into national capacity building and coordination. We are assisting countries with the formulation of their National Sustainable Development Strategies. We will be placing people in our smaller member states to help make better connections between national needs and regional resources. We are also working with regional organisations and others to establish 'virtual' technical teams to provide concerted and integrated assistance to member countries. And we will be assisting member countries to develop the mechanisms which will enable them to translate Pacific Plan initiatives into their national circumstances.
Economic governance
8. The measures identified for early implementation within the framework of the Plan are practical in character or intended to be so, and many are grounded in pre-existing activity. They are also seen as measures to underpin the expansion of regional integration into the future. Early consideration is starting to be given to moving progressively towards a comprehensive framework agreement among all members, one that includes free trade in goods and services (including labour), and broader-based economic cooperation.
9. To move in that direction with any confidence, sustained efforts are required to improve economic governance an area in which, as we know, many of our countries labour under critical disadvantages. Thus, an important basis of the Pacific Plan has been the assessment of the costs of a package of several strategic economic management initiatives. These include initially:
" The strengthening of regional capacity to assist customs officials in collecting revenue;
" A regional ombudsman, with power to assess the merits of citizens' complaints about administrative acts and decisions of government agencies, including alleged violations of the Forum Eight Principles of Accountability, and to recommend remedial action;
" Strengthened audit capacity through training and common standards; further support to the South Pacific Association of Supreme Audit Institutions; and, possibly, creation of a regional panel of auditors that could audit national and Pacific regional agencies; and
" Establishment of an accountable and independent macro-economic and micro-economic technical assistance mechanism (including statistics), to strengthen treasury and finance functions and provide economic analysis.
10. Our analysis suggests that the offsetting benefits of critical interventions such as these would be a reduction of the potential costs of continued indifferent economic governance to Pacific islanders. One is never, of course, obliged to take such maters completely at face value, but for PNG, Solomon Islands, and Fiji Islands, the potential of these benefits is estimated, in a very preliminary way, to be of the order of US$8 billion (discounted over a 10-year period).
Regional economic and statistical technical assistance
11. A considerable amount of short- and long-term economic and statistical technical assistance has been provided over the past decade or so to Pacific Island Countries by international financial agencies and bilateral donors in an effort to improve economic and financial management. Unfortunately, improvements in countries' performance as the result of this sometimes coordinated, but often uncoordinated, assistance are sometimes difficult to discern.
12. Pacific Plan initiative 12.8 intends to explore whether a significantly larger and more coordinated technical assistance effort would lead to substantially better outcomes in economic management. This approach also has in-principle support through the Australian Government's draft White Paper on Aid recommendation to broaden the scope of PFTAC beyond the current model. 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 laudable, in some cases heroic; all rhetoric aside, the Centre has played a vital and unique role in providing quick response assistance to countries the PFTAC model has, it seems to me, proven itself. And the recent meeting of public sector financial management professionals and imminent establishment of a Pacific Islands Financial Management Association (with PFTAC as the Secretariat), seems to me to show much promise, particularly in linking public financial management to the action plans developed by Forum Economic Ministers.
13. 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 various donors that are 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.
14. Of course, the form of such a mechanism needs further consideration and consultation with Pacific Island Countries. Preliminary cost benefit analysis undertaken last year examined the wider range of economic and technical assistance provided by the OECD Secretariat, including in respect of statistical databases. It also looked at a system of mentoring of public officials responsible for putting new policies in place, as a means of improving implementation. And it looked at options for merging most of the existing economic and statistical technical assistance resources from various regional and other bodies presently supported by international agencies and bilateral donors possibly into the existing PFTAC with local offices in several of the Pacific countries to provide the necessary breadth and intensity of interaction with government departments. Forum leaders have asked for an update on how these ideas might be progressing at their annual meeting in Tonga later this year.
Aid effectiveness
15. The Pacific Plan, if pursued and developed in a sustained and credible way, has the potential to play an important role as an overlaying 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.
16. 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 under the Paris Declaration and being tackled by the Working Party on Aid Effectiveness.
17. On this basis - and particularly in the context of technical assistance in economic management 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 one with another and with national priorities and processes. Approaches under the Pacific Plan framework provide a mechanism, not yet fully developed, for achieving this.
18. 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
19. There is now both considerable enthusiasm for and heightened expectations of the Pacific Plan. To reach for the usual cricket cliché, however, runs will need to be put on the board if the kind of cynicism which sometimes bedevils our efforts is not to reappear. 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, without, I hope, being pretentious about it, I do urge those who care about that future to look closely at the Pacific Plan and see what they might do about bringing it to a full, long and productive life.
20 Mar 2006 22:57:55 PACIFIC FINANCIAL TECHNICAL ASSISTANCE CENTRE
TRIPARTITE STEERING REVIEW COMMITTEE MEETINGS
Sheraton Denarau Resort, Nadi, Fiji, 20-21 March, 2006
THE PACIFIC PLAN AND NATIONAL DEVELOPMENT
Mr Greg Urwin, Secretary General, Pacific Islands Forum Secretariat
Ladies and gentlemen: I would like to thank you for inviting me to say one or two things tonight. I have been asked to say a little about the Pacific Plan and what it might mean for our member countries, particularly in the area of economic governance.
Regionalism and the Pacific Plan
2. But first, permit me, if you will, to say something about the background against which Forum Leaders called for a Pacific Plan to strengthen regional cooperation and integration. It is, I think, like most things, 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 word, 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. Work undertaken last year in the development of the Pacific Plan considered several different concepts of regionalism and concluded that, in broad terms, there were two key areas which might be expected to provide the highest gains in the Pacific , that is: (i) the regional provision of goods and services to compensate for and overcome capacity limitations at a national level; and (ii) increasing development opportunities through integration and the creation of larger markets.
4. As you may know, the Pacific 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 and political oversight and guidance of a Pacific Plan Action Committee (PPAC), chaired by the Forum Chair, this year Papua New Guinea. There are obviously a number of aspects to this matter of implementation, but a good deal of it is going to get down to better coordination, something we have not, over the years always excelled at. Coordination among the member countries themselves, 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 implementation of the Plan, we are strengthening our cooperative abilities by developing a regional institutional framework that is appropriate for these new approaches to regionalism. That is a complex subject in itself, but one that will need to be pursued with vigour if we are to make the most effective use of valuable regional resources represented by these organisations.
National development
5. The Pacific Plan is based on the assumption that regional approaches are best taken, certainly at this stage, only if and when they add value at a country level. I make this obvious, but often misunderstood, point that regionalism is not intended to replace national policies and programs, but to support and complement them. Providing goods and 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 effective national sovereignty is, in fact, a key goal of regionalism. This can seem counter-intuitive, as many regional initiatives do pool services into a regional body, and it is clearly an equation which might vary over time. It seems to me, though, that it is a more realistic view that national governments can, in fact, enhance their sovereignty by allowing regional bodies to implement some of their policy decisions (in effect, as service 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 spending scarce resources on costly, duplicative services whose overhead costs might be shared with others.
6. Having said that, implementation of regional decisions at the national level has, I'm sure we would all agree, been pretty patchy thusfar. If strengthened regionalism is to make a positive impact on the lives of Pacific people, then we will have to find better means of matching our regional good intentions with national interest and commitment. The successful implementation of the Plan will depend on the political will and commitment of resources by countries to pursue some of their important national policies and strategies more cogently and cost-effectively through regionalism.
7. In this connection, the Secretariat is now putting a lot more effort into national capacity building and coordination. We are assisting countries with the formulation of their National Sustainable Development Strategies. We will be placing people in our smaller member states to help make better connections between national needs and regional resources. We are also working with regional organisations and others to establish 'virtual' technical teams to provide concerted and integrated assistance to member countries. And we will be assisting member countries to develop the mechanisms which will enable them to translate Pacific Plan initiatives into their national circumstances.
Economic governance
8. The measures identified for early implementation within the framework of the Plan are practical in character or intended to be so, and many are grounded in pre-existing activity. They are also seen as measures to underpin the expansion of regional integration into the future. Early consideration is starting to be given to moving progressively towards a comprehensive framework agreement among all members, one that includes free trade in goods and services (including labour), and broader-based economic cooperation.
9. To move in that direction with any confidence, sustained efforts are required to improve economic governance an area in which, as we know, many of our countries labour under critical disadvantages. Thus, an important basis of the Pacific Plan has been the assessment of the costs of a package of several strategic economic management initiatives. These include initially:
" The strengthening of regional capacity to assist customs officials in collecting revenue;
" A regional ombudsman, with power to assess the merits of citizens' complaints about administrative acts and decisions of government agencies, including alleged violations of the Forum Eight Principles of Accountability, and to recommend remedial action;
" Strengthened audit capacity through training and common standards; further support to the South Pacific Association of Supreme Audit Institutions; and, possibly, creation of a regional panel of auditors that could audit national and Pacific regional agencies; and
" Establishment of an accountable and independent macro-economic and micro-economic technical assistance mechanism (including statistics), to strengthen treasury and finance functions and provide economic analysis.
10. Our analysis suggests that the offsetting benefits of critical interventions such as these would be a reduction of the potential costs of continued indifferent economic governance to Pacific islanders. One is never, of course, obliged to take such maters completely at face value, but for PNG, Solomon Islands, and Fiji Islands, the potential of these benefits is estimated, in a very preliminary way, to be of the order of US$8 billion (discounted over a 10-year period).
Regional economic and statistical technical assistance
11. A considerable amount of short- and long-term economic and statistical technical assistance has been provided over the past decade or so to Pacific Island Countries by international financial agencies and bilateral donors in an effort to improve economic and financial management. Unfortunately, improvements in countries' performance as the result of this sometimes coordinated, but often uncoordinated, assistance are sometimes difficult to discern.
12. Pacific Plan initiative 12.8 intends to explore whether a significantly larger and more coordinated technical assistance effort would lead to substantially better outcomes in economic management. This approach also has in-principle support through the Australian Government's draft White Paper on Aid recommendation to broaden the scope of PFTAC beyond the current model. 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 laudable, in some cases heroic; all rhetoric aside, the Centre has played a vital and unique role in providing quick response assistance to countries the PFTAC model has, it seems to me, proven itself. And the recent meeting of public sector financial management professionals and imminent establishment of a Pacific Islands Financial Management Association (with PFTAC as the Secretariat), seems to me to show much promise, particularly in linking public financial management to the action plans developed by Forum Economic Ministers.
13. 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 various donors that are 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.
14. Of course, the form of such a mechanism needs further consideration and consultation with Pacific Island Countries. Preliminary cost benefit analysis undertaken last year examined the wider range of economic and technical assistance provided by the OECD Secretariat, including in respect of statistical databases. It also looked at a system of mentoring of public officials responsible for putting new policies in place, as a means of improving implementation. And it looked at options for merging most of the existing economic and statistical technical assistance resources from various regional and other bodies presently supported by international agencies and bilateral donors possibly into the existing PFTAC with local offices in several of the Pacific countries to provide the necessary breadth and intensity of interaction with government departments. Forum leaders have asked for an update on how these ideas might be progressing at their annual meeting in Tonga later this year.
Aid effectiveness
15. The Pacific Plan, if pursued and developed in a sustained and credible way, has the potential to play an important role as an overlaying 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.
16. 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 under the Paris Declaration and being tackled by the Working Party on Aid Effectiveness.
17. On this basis - and particularly in the context of technical assistance in economic management 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 one with another and with national priorities and processes. Approaches under the Pacific Plan framework provide a mechanism, not yet fully developed, for achieving this.
18. 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
19. There is now both considerable enthusiasm for and heightened expectations of the Pacific Plan. To reach for the usual cricket cliché, however, runs will need to be put on the board if the kind of cynicism which sometimes bedevils our efforts is not to reappear. 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, without, I hope, being pretentious about it, I do urge those who care about that future to look closely at the Pacific Plan and see what they might do about bringing it to a full, long and productive life.
