increasing transparency and social expenditure in public budgets iván fernández espinoza technical...
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Increasing transparency and social expenditure in public budgets
Iván Fernández Espinoza
Technical Secretary of the Social Front
Quito-Ecuador
Overview
Context and Background Some economic and social indicators Evolution of social spending 1995-2004
The program: Technical Secretariat of the Social Front-Ministry of Economics and Finance-UNICEF
Results of the program
Challenges: Social Spending, Transparency and Human Rights
Context and Background: economic indicators
Ecuador is located in Western South America, bordering the Pacific Ocean of the Equator, between Colombia and Peru. It has around 13 million inhabitants and the economically active population is about 5 millionThe GDP per capita of 2002 was 1,706 USD, which locates Ecuador among the least developed in the region The country has experienced various crisis. The last one in 1999, characterized by high and increasing inflation, a drop in production, worsening of external accounts, fiscal and financial crisis
Context and Background: social indicators
Year 1995 1999 1995 1999Total 34 56 12 21Urban 19 42 4 9Rural 56 77 23 38Source: INEC, ECV
POVERTY EXTREME POVERTY
Negative impact on the social sector
High levels of unemployment and undermeployment: 16% and 60% in 2000, respectively, around 10% and 50% in 2003, respectively.
Inequality, poverty and exclusion
Evolution of overall social spending 1995-2004
Downward trajectory of social expenditure between the 1980’s and the 1990’s. Low investment in priority social programs. Poor administration of social sector’s resources. Cyclical expenditure. Social expenditure among the lowest in Latin AmericaLow levels of civil society participation and lack of transparency in social expenditure figuresThe trend has been reversed during the previous years, with an increase of public social expenditure (education, health, welfare, employment and housing) and an increase in social programs’ investment.
Evolution of overall social spending 1995-2004
Evolution of Nominal, Real and Per capita Social Expenditure
0.0
500.0
1000.0
1500.0
2000.0
95 96 97 98 99 00 01 02 03 04***
Year
Mill
ion
s o
f U
S
do
llars
0.0
50.0
100.0
150.0
US
Do
llars
Nominal Social Expenditure Real Social Expenditure
Nominal per capita social expenditure Real per capita social expenditure
The program: Social Front, Ministry of Economics, UNICEF
Basic Social Agenda: five componentsSocial support network Conditional cash transfer (Bono de Desarrollo Humano) Subsidies: food and nutrition provided by social programs
Programs targeted towards vulnerable population Children development fund
Plans for provision of universal services (education and health)Plans for job creation and micro-financingCommon component: protection of social expenditure, expenditure targeting and impact evaluation
The program: Social Front, Ministry of Economics, UNICEF
Ecuador has started a process of public social expenditure transparency: Budget formulation Expenditure follow-up Expenditure evaluation
Strategic alliances had been formed: Ministry of Economics and Finance, UNICEF, The Social FrontActive participation of civil society, for example: Fiscal policy observatory and Children’s rights observatory
The program: Social Front, Ministry of Economics, UNICEF
Elaboration Negotiation
ApprovalUNICEF TSSF
Execution
Evaluation and control
Closing
Programming
Technical Assistance
Information and technical assistance
Civil Society monitoring
Information and civil society monitoring
Resources
Results: increasing social spending
Conditional Cash transfer (BDH)
146.28
160.09
200.00
2,002
2,003
2,004
Year
Millions of USD
Fre Maternity
8.00
12.00
19.88
20.84
2,001
2,002
2,003
2,004
Year
Millions of USD
Immunization program
5.60
10.00
12.00
2,002
2,003
2,004
Year
Millions of USD
Results: increasing social spending
Child care program (ORI)
16.93
19.43
25.37
29.47
2,001
2,002
2,003
2,004
Ye
ar
Millions of USD
Food and nutrition program (PRADEC)
10.00
10.00
16.00
2,001
2,002
2,003
Ye
ar
Millions of USD
Food program for elementary schools
17.50
25.75
30.65
29.65
2,001
2,002
2,003
2,004
Ye
ar
Millions of USD
Results: increasing transparency
Social Front Minister’s Council: Budgetary discussions and definition of a negotiation strategy with the Ministry of Economics and FinanceBudgetary dialogs (2000-2004): Congress, The Social Front, Ministry of Economics and Finance, Fiscal Policy Observatory, UNICEF, Civil Society, Mass mediaFollow up and monitoring of Social Expenditure: quarterly monitoring of overall social expenditure and priority social programs. The Social Front, UNICEF, Fiscal Policy Observatory.
Results: increasing transparency
Information flow: Social expenditure module. Coordination with the Ministry of Economics and Finance, Ecuador’s Central Bank, UNICEF and the Social Front. Information with institutional, geographic and administrative-unit
disaggregating Information that has been verified at three levels and spread out
through periodic publications Civil society informed and interested about social expenditure
Technical assistance processes (Technical Secretariat of the Social Front and UNICEF) have strengthened institutional capacities: Ministries and Congress.
Challenges
Integration of economic and social policyImprove the amount and quality of social expenditure Quantity: International standards. Reduce cyclical variations in
social expenditure Quality: coverage goals and services provided, priority social
programs focalization
Budgets should be understood as a shared responsibility between the government and civil society Strengthening of information culture Public expenditure as a way to reduce poverty, inequality and to guarantee human rights.
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