Background and Organization. With new reforms being introduced to improve Uzbekistan’s social budgets, UNICEF saw an opportunity for children to be strongly represented in the debates that would influence the design of these new policies. UNICEF highlighted three budget policies that are important in ensuring programs for children are well-financed. The first is the Welfare Improvement Strategy of Uzbekistan (WIS) of 2008-2010, which promises to improve access to basic educational services and healthcare. The second is the gradual adoption of advanced budgeting methods (Results-Based Budgeting (RBB), cost-benefit analysis, mid-term budget planning), which ties budgets to the quality of delivered services and ensures that government policies are part of longer-term strategies, and that funding is stabilized over this course. Third is expanding fiscal space and leveraging resources for vulnerable children by supporting the government in assessing Social protection system and making it more child-sensitive.
At the same time, UNICEF found challenges in Uzbekistan that could potentially be addressed by stronger social budgeting interventions. For one, the country’s expenditures for health (2.4% of GDP) and education (6.2%) are below average compared to other developing countries. For another, systems in place for both national and local budgets incorporate incentives that encourage inefficiencies, such as inflated expenditures and deflated tax revenues. In 2010, the government pledged to target about 60% of the state budget to social sector. However, the critical question in UNICEF agenda is not how much is spent but how much those resources are efficiently spent.
With reforms to build on and a system that needs to be changed, UNICEF’s social budgeting initiative focuses on mapping out child-friendly programs and funds, micro level fiscal analysis and identifying resource gaps in healthcare and education sectors as well as limitations in the public finance management system in place and advocating for increases in social expenditure that benefits children.
Activities and Tools. In order to have a more comprehensive analysis of social budgets, UNICEF also identified non-state sources, while noting that the government remains the top provider of funding for child-friendly programs. Non-state sources include contributions of non-profit organizations, private businesses and individual philanthropists. For instance, the company running the refinery in Ferghana provides support to populations close to oil deposits. For another, the government passed the Law on Charity in 2007 to further encourage philanthropy and other charitable contributions for financing social and child-friendly programs.
UNICEF then breaks down social budgets at program level, in the process: (a) identifying what the child-friendly programs of the governments are; (b) tracing how each program is funded; and (c) analyzing the possible financial vulnerabilities of each program. For instance, National and Regional Action Programs do not have legally mandated sources of financing, making them more vulnerable to risks of fund insufficiency and lack of quality monitoring. On the other hand, clothing and school kits are financed centrally, better guaranteeing their delivery.
Next, UNICEF discussed the various limitations of Uzbekistan’s budgeting system, such as:
· The timing of the budget cycle, which forces the allocation stage of local budgets – especially at town-level – to be completed even before evaluation and discussion of previous budgets take place.
· The system’s creation of incentives that results in overinflated budget requests, underreported local tax revenues, and little to no evaluation of budget performance.
· The budgetary process of basing a year’s budget on the previous year could prevent financing optimization for projects, especially those that require more funding in the latter years. For instance, managers of a project that needs a larger sum in the third year and little on the second would be forced to ask for high allocations in the second, or risk receiving too little on the third.
Apart from budget analyses, UNICEF is also involved in a Local Capacity Building (LCB) project, which trains local governments in the effective management of resources and basic services. Further, this initiative, which is part of the Country Program Action Plan signed with the Government of Uzbekistan, keeps discussions open for substantially increasing child-friendly budgets – a goal UNICEF shares with the government. Further, LCB has resulted in numerous decisions being taken in favor of children at the local level. New CPAP gives more priority to decentralized planning and strengthening local capacities in disaggregated data collection and situation analysis for better child rights monitoring and evidence-based advocacy for children. For instance, UNICEF jointly with the President’s Academy of State and Society Construction is delivering capacity building programmes for national and local government officials on monitoring and evaluation, regional planning and result-based budgeting. In late 2010, it is planned to launch an academic curricula on Social services subject in the Academy.
Roles of Actors. UNICEF’s analyses are supported by the Tahlil Social Research Center. Aside from government and legislative documents, the efforts draw from in-depth interviews with the staff of hokimyats (municipal administrations), oblast finance departments, local authorities, and mahallas.
Impact and Learning. UNICEF’s budget analysis work in Uzbekistan is intended to support on-going reforms in Uzbekistan. For one, it points out which programs have less stable budgets and therefore are more vulnerable to shocks. For another, it advocates for changing systems that promote inefficient practices. Thus, it could impact into the stabilization of child-friendly budgets, and also result in less leakage in the budget cycle.
UNICEF’s capacity building work also benefits from the budget analysis work, and has resulted in the training of over 225 local government representatives from 2005 to 2007. Collaboration between UNICEF and the government also resulted in an initial goal of larger social budgets, targeting a 2009 figure that is 20% larger than 2004. However, the date for accomplishing this target has been delayed.
Sustainability. Recommendations from UNICEF’s budget work are creating follow-up activities in terms of exploring issues in greater detail, and developing more concrete and actionable solutions. These recommendations are being fed into the cooperation between the Government of Uzbekistan and UNICEF as priority areas for a new six-year country program (2010-2015).
Currently, the Uzbek government is working on second generation of Welfare Improvement Strategy for 2011-2014. UNICEF is actively participating in the process and providing support in terms of information and expertise sharing. This is a good entering point for UNICEF to integrate policy recommendations of evaluation studies and bring its agenda to the policy table of the government.
Contact Person Hayrullo Malikov
Phone +998 71 233 9512
Fax +998 71 120 6508
Address UNICEF Tashkent, Uzbekistan
Poytaht Business Center, 3rd Floor