Hsharif Closing Statement

Transcript of Closing remarks by Hamid Sharif Principal Director, COSO Asian Development Bank 25 August 2009 As the last session has shown, this has been very interactive and some good questions raised. I would sort of take off from this last discussion. First of all, while in principle, ADB wants to support this, it is by now finally decided. So if you tell us that this is a bad idea, we will accept this as a bad idea and we will not proceed with it. Because you know, and I absolutely agree that we have partners, we have donors and no one wants to see money wasted. I think some of the considerations behind getting a Forum like this going and whether we name this Forum an initiative, that would be another thing to consider as we go further into designing it. An initiative has to be more realistic, it does not give it that permanent structure which has to be funded forever so that might be a better way to name it. But some of the considerations we had in mind when we proposed this idea was that when you look around the debate on procurement with allude respect to DAC, the World Bank and ADB, we are part of all that, my sense is that there is not enough voice for developing countries. I worked on other areas of public reform. I think very often, we get ideas generated as to what is good practice, best practice, from a first world perspective. There needs to be a third world perspective represented and one of the ideas was that a Forum like this would actually generate and become a platform or choice for developing countries who have to suffer the consequences as to what is defined as best practice. So that was one idea. The second idea, and this comes from my own experience, with a much, much tougher area of reform and that is judicial reform. For a number of years, for example, a number of judicial forums have been funded by different donors. I started out as a skeptic. Just like Neil at the back, and I thought this is just talk shop, this is just an excuse for guys to get together, what a junket. But then you get the hard cases where you get the Chief Justice dismissed. You get some other judicial interference going on in some country and you see this guy standing up for their colleagues. It creates a moral pressure. It becomes much tougher for political interference to work. The fact that this is a body of international players who are joining which is saying this sort of behavior is unacceptable. I am not saying that this is where the Forum may head but this is where other Forums have had a very positive effect.

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The third thing that a Forum like this can potentially have a benefit of, while it is true that a lot of information is now available on the internet and so on but I think you know that when the real hard cases come and if you are a procurement agency and you are dealing with a case of PPPs for the first time, you can go on the internet and read a lot stuff on PPPs, a lot of it is very generic. How do I do this PPP in this particular context? You are able to get on the phone to meet some person face to face or send an email and say: Hey, have you done this ? Can you help me out? I tell you, on a lot of instances, in other areas, I can tell you money cannot buy this sort of a quick service. This networking which will be a very important aspect of this Forum or the Initiative. I think it should not be underestimated. You may not see it immediately but what I can tell you in a lot of areas, is that this sort of service becomes invaluable. Having said this, let me try to sum up a lot of very, very rich discussions which have gone on over the last couple of days. One thing I am very pleased to know is that you did not get bogged down into the substantive issues. And I think there has been, as the last session shows, has been a very, very active brainstorming and I think a lot of good ideas have been generated. I think what is good is that we have tried to look at the overall critical challenges, possible responses that might form as the core of the Forum. I will try to look at summarizing three particular areas. First of all, let us look at the Forum content. At the outset, Bob and Omar have identified six areas around which this Forum should be organized. I believe that you had a voting on these six areas. So, here are the results: There were 31 stickers for the number 1 choice which is Building Procurement Capacity. Number 2 priority identified by you with 30 stickers was Improving Procurement Execution. Number 3, two areas which got just about the same support, Strengthening Procurement Performance Management and Performance Monitoring and Oversight: 4 stickers Strengthening Procurement Management and 22 stickers Performance Monitoring and Oversight Some things which did not get into the top three items are : • •

Procurement reform strategy Assessment of performance systems

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•

Performance evaluation

I think what prioritization reflects is something which I tried to say in my opening remarks, you can focus a lot on designing a system, regulating reform and so on but the proof of the pudding really is in the execution. So, I am very glad to see the prioritization you have done because it really emphasizing implementation. It is action oriented agenda. I think it is really, really great. But this is a first cut at the priorities and I do not think we should overemphasize. I think it is a good first cut from which we can further work. The Forum I think also threw up a number of very interesting themes and I will try to summarize what these were: I think there were a bunch of institutional issues which you have thrown up. I think a very important one is independence of public procurement agencies, both these regulatory and financial independence. I am trying to delineate the correct sphere or roles for the government, the procurement agencies and civil society, watchdogs and civil society organizations. I think that has been a very interesting discussion. There has been an emphasis in terms of institutional issues on upgrading of national procurement training and certification or accreditation, the whole area of professionalization. Finally, 10 years ago when I came to this Bank, procurement was kind of a low key area. But over the years, that is very, very quickly changing. It is now a well established view that this is very professional area and it needs specialists. In fact, within the ADB, we are about to launch our own accreditation program. A number of other international organizations are doing that. I think the fact that you have identified that is an issue I think further underlines that procurement is now at the stage where a lot of professionalization is required. Under institutional issues, the third issue which you have identified is development independent, skilled practitioners and procurement agents while at the same time, developing capacity of line agencies and civil service personnel. I think the whole area of to what extent can you outsource some of these procurement functions and who you would outsource it to. Again, it talks about a certain degree of professionalization and availability outside of government of practitioners in procurement. The fourth area identified by you under institutional rubric is the need for public disclosure and transparency. I think that is something which the NGOs civil society representatives here have had a lot of contributions in identifying. And last but not least, the need for proper and clear legislative and regulatory frameworks for public procurement because without those, there are going to be gray areas and there is going to be a lot of difficulty in trying to delineate the roles and responsibilities of

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different stakeholders. So, a clear regulatory framework is clearly recognized by everybody. Certainly, there are a bunch of organizational issues I think we should identify, adequate civil service reform to ensure meaningful incentives for procurement professionals. I often say this in countries of judicial reform. There are countries in the region which pay judges less than $100 per month and these judges can hang people and it is not surprising when funny things happen. So if you are going to pay peanuts, you are gonna get monkeys. You are not going to get the right sort of professionals. You are not going to get the right sort of procurement decisions. All this comes at a huge cost. This is a real false saving which governments make because a lot more is lost through corruption than through relatively fairer salaries. The second organizational issue relates to carrying out or implementing integrated training programs using regional and international private educational and state institutions perhaps interfaced with civil service academies or similar public service providers and coupled with performance or output based monitoring of training effectiveness. Again, this area links up with the professionalization. We have got to figure out smarter ways to get training to procurement professionals. I think the Asia Links Project is a great way to try to bring that professionalization in this particular region. A third area you have identified is upgrading of public procurement online management information systems for proper data collection and management and dealing with the issue of the mode and extent of data dissemination. Again, this is an extremely moded (muted) area. We, ourselves, in ADB are really working on a number of initiatives that we capture the data that we receive. It is so important in creating a knowledge bank because it will help you later on to make decisions with respect to similar cases. I think, again, it is a very important area you have identified and much more efficiently and much more consistently. Apart from the whole aspect and transparency and the fact that the public and the policy makers also need to know what is going on. I think collecting data over a period of time helps to paint a macro picture for policy makers and I think that is extremely important. Strengthening the skills and interface, accountability of all stakeholders and actors in the procurement process, bidders, executing agencies and implementing agencies. NGOs etc. I think again, is a very important area you have identified. Last but not least, improving oversight through mechanisms like monitoring procurement audits is increasingly going to become important, as I think, to policy makers and politicians through let me say, pressure from civil society organizations and journalists. We are seeing that in a lot of countries. We also get a lot of complaints under our own systems, complaints when things go wrong. We get complaints from bidders and sometimes things leak out into the press. All of that actually, from our perspective, is great because we want to get it right. So if there

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is civil society out there which is active, which helps to make sure that things are done properly and which checks corruption, we welcome that and I think that is a very important thing which ought to be encouraged. Networking, again a bunch of interesting issues and observations which you have made that sharing experiences, good practices, increasing regional communication interface, I think that has been well echoed over the last couple of days. Developing and follow up on regional or sub-regional action plans through talking and Forum in order to promote dialogue, that is something which needs to take away and look at further experiences in view of the discussion which we just had earlier. Using the Forum as a network to improve and promote dialogue between developing partners, donors and civil society is also a very clear yes from this Forum. I want to emphasize this last one because a couple of procurement forums I have attended are I actually found them very uninteresting. I will be very blunt. I think the last thing that anyone wants to see is country representative after country representative putting up a slide show and telling us what a great job they are doing without any civil society representation or business representation there to tell us “Oh hang on, this does not work”. I think if you want to have a forum or a meaningful initiative, you have got to put in all stakeholders in and that is why in this Consultative Meeting, we wanted to bring civil society in because we do not want this to be a monologue between procurement agencies. That is not the idea of this Forum. Procurement, like anything else nowadays, is linked with so much of what goes on in a country in terms of its linkages to efficiency, of public expenditures, larger policy issues that that I think all stakeholders have to be brought into a procurement forum so that we could have a holistic view and we get sensible outcomes. So what could be the possible deliverable outputs from this ? I think some of the interesting ideas which I would like to outline is the idea of having online technical working groups on specific subjects. This could be at the regional or sub-regional levels. If these technical working groups working online and working very efficiently at relatively low cost if they can generate knowledge products periodically, I think that is something which will be extremely useful. I think two - three words to sum up some of the possible outputs: roadmaps, benchmarks, best practice guides, templates etc. If there could be an active sharing by players within the Asia Pacific region on that, I think that would be extremely useful. Despite some of the reservations, I would like to think that there is a broad support for some sort of Forum or Initiative which I think developing countries within the region will find useful. We will look at the recommendations which have come throughout the Forum as to how the Forum could be organized. Like what Micheal said at the end, I think we have to keep it simple, simple and flexible. Because if we start with a very rigid and complicated structure, it will become unmanageable and worse, it will not be able to respond to issues as

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they arise. So we do not want to be hamstrung. It is important to have to think through a structure which allows us to respond and which allows us to be very dynamic and specific. I think Kathleen Moktan during her presentation of the OECD-ADB anti corruption issues, I think that there are a number of lessons we can learn and we can take a harder and harder look at that. Whatever way we go, a couple of things are very clear from ADB’s experiences with the anti-corruption and other initiatives. We won’t do this unless there is a high degree of country ownership, and we won’t do this unless there is a broad representation. It is important as we said earlier to make sure that all stakeholders are in because it and it is not all about procurement, it is not all about holding a host of other issues. For ADB, it goes to the heart of development effectiveness. We can talk, people who do not do procurement can talk all they like about it. There ain’t gonna be any So for us development effectiveness without efficient procurement so it is critical. For us, procurement is a very important aspect of development effectiveness. I am sure this is not a fair summary of all the issues. This has been a very, very rich discussion. I would like to say that we will take on board all of your ideas and we will spend a lot of time digesting the rich comments which have come from you. And if all goes well, we will try to get this, I think that will give us sufficient time to get it off the ground. We will get the website working in a few weeks time even before this Technical Assistance itself is approved. Let me at the end, ask you to join me in giving a very big hand to a number of individuals who, for the past 10 days, 2 weeks, 3 weeks went crazy to try and see this Forum up and make all the arrangements: Bob, Omar, Mart, Clarisse, Butch and Ed. Can you join me in giving them a big hand. Last but not least, I would like to thank you all very much again. I was very impressed with the tremendous response we had. I know that some of you, at very short notice, came here. That has meant a lot to us. At least it has confirmed to us that thee is a lot of interest in this subject. Where we go with the interest is something we will have to figure out in the next few weeks. Thank you very much from ADB Management I would like to really express our gratitude for coming here. Thank you.

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