World Bank welcomes reforms on public spending in Azerbaijan
Policymakers in Azerbaijan have introduced reforms on improving the budgeting process with the support of the World Bank (WB), and the Swiss State Secretariat for Economic Affairs (SECO), News.Az reports citing the WB.
“The objective of this program is to strengthen the efficiency, strategic orientation and transparency of public expenditure in Azerbaijan, with the aim of enhancing impact and sustainability of public spending as well as boosting private sector development,” the WB said.
The Medium-Term Expenditure Framework (MTEF) program, under which the reforms are initiated, is focused on several pillars addressing public financial management.
The first pillar defines macroeconomic targets to guide policy coordination, budget planning and prioritization, which will boost public finances sustainability, macroeconomic stability, and provide a more strategic focus on public spending.
“The second pillar aims to support the Ministry of Economy in improving the strategic alignment of the government investment program, including the use of Public-Private Partnerships (PPPs), to the needs of the country. Specifically, it will seek to promote best practice in public investment management,” the WB said.
The third pillar includes the support for the Ministry of Finance in improving the strategic and effective orientation of the budgeting process by focusing on capacity-building for the implementation of existing laws and regulations on MTEF. This will include the gradual introduction of processes linking funding with results.
The fourth component of transparency and accountability will improve the quality and timeliness of fiscal information. It will also support the Chamber of Accounts of Azerbaijan, which plays a central role in ensuring accountability in the use of public funds.
The fifth component of change management will support the adjustment process throughout the program. The change management strategy will accompany the implementation of reforms, which will require increased coordination and cooperation between several institutions.
“This engagement has a strong demand-driven approach. The program is country led and works in collaboration with international finance agencies and donors that provide advice, technical assistance and financing for the reform programs or for the government’s budget at large,” the WB concluded.