| Overview : In recent years the policy of the government of the Islamic Republic of Afghanistan (IRoA) has been to introduce a number of budget process reforms aimed at strengthening public expenditure management and planning, and improving financial control. The most important pieces of legislation in the field have been the Public Finance and Expenditure Management Law (PFEML) and the Public Finance Expenditure Management (PFEM) regulations. These reforms have two key objectives (i) to develop expenditure priorities and budget plans over the medium term and, (ii) to base budget allocation decisions on the economic and social priorities of the country.
These developments have taken place in parallel with the creation of a strategy for the future development of the nation – the Afghanistan National Development Strategy (ANDS). This plan, agreed in August 2008 between IRoA and the international donors supporting Afghanistan’s development, sets out the medium-term development framework covering the social, economic, governance and security agendas for Afghanistan over the next five years. The strategies set out in the ANDS document also work towards the attainment of the United Nations Millennium Development Goals (MDGs).
At the London Conference in 2010 and the July 2010 Kabul Conference, the government of Afghanistan planned and adopted a change policy to strengthen the delivery of the ANDS accompanied by a public financial reform management agenda. The implementation of the policy documents committed the government to among others design, plan and cost the 22 national priority programmes in consultation with the international community and broad based consultation at the national level.
Making Budget and Aid Work UNDP funded project within the Ministry of Finance is providing support to this process and thus provide technical assistance to the Government in the policy development, strategic implementation and monitoring of the ANDS, inclusive of its 22 National Priority Programs (NPPs).
The links between the ANDS, National Priority Programmes (NPPs) and the national budget process is therefore of crucial importance in view of linking plans/policies to budgets and to know which mechanism works most effectively in order to implement national strategies. The study visits in Malaysia precisely aims to overcome this challenge and to learn from the Malaysian wide experience and practical successful implementation of this system.
In line with South South collaboration and given the successful implementation by the Malaysian government of national strategies, result based budgeting and outcome based resource allocation, the study visits should address the following challenges:
- Interactions and linkages between public finance, national budgeting process and national policies;
- National policy process and formulation and relevant monitoring and evaluation of implementing strategic objectives of key priority programme policies;
- How policy is formulated, translated and implemented at the different levels of governance;
- How national policies are monitored and evaluated once approved and implemented by the Malaysian government;
- Involvement of stakeholders into the policy formulation and public private partnerships;
- How budget allocation is conducted within Malaysian Ministries.
Malaysia has been selected because it is an excellent role model for developing countries, particularly with regard to its successful national development initiatives and results-based management strategies, approaches, and systems.
The Malaysian budget and policy cycles are closely linked, strategic planning being at the core of the budget formulation. In addition budget allocation and policies are closely intertwined and the Afghan participants in the study tours will highly benefit from understanding the Malaysian current practices in order to improve the current Afghanistan budget and policy formulation and execution processes.
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