Pd Opening Remarks Proc Forum 210809

Introductory Remarks at Procurement Forum Consultative Meeting Hamid Sharif Principal Director, COSO Asian Development Bank 24 August 2009

Ladies and gentlemen, participants representing our member countries and donors alike:

My name is Hamid Sharif and I am the Principal Director of ADB's Central Operations Services Office or COSO, the department that deals with procurement policy and issues in ADB and the departmental sponsor for this event.

A warm welcome to Manila and to ADB Headquarters! Thank you for taking time and trouble at such short notice to adjust your busy schedules to attend this consultative meeting to explore the idea of setting up a procurement forum in the Asia Pacific.

As Larry Greenwood, our Vice-President, has suggested in his opening remarks, it is clear that meaningful increases in poverty reduction and development effectiveness cannot be achieved without sustained improvements in governance. An important factor in any improved governance effort is improved public procurement. This is particularly for those developing countries – and this is not a small number – where public procurement related expenditure is a significant part of both capital expenditure and recurring budgetary outlays.

For countries planning significant infrastructure expenditure in coming years, this becomes a paramount consideration.

Inefficient, ineffective and in some cases corrupt procurement

systems increase costs of doing business and undermine the benefits of competition, transparency and fair play – which in turn compromise hard earned development gains for partner countries and donors alike and muddy the waters for future development gains. For ordinary citizens, this inefficiency translates into higher service charges such as utility bills or toll charges for roads. As countries move towards new forms for delivering public services, new challenges arise. For example, public-private partnerships are billed to be a significant modality for meeting infrastructure needs in many countries. The procurement issues around PPPs present significant challenges for public procurement agencies.

As I am addressing a room of senior and committed officials in public procurement, you all are, I suspect, fully aware of this significant correlation between good procurement practices, improved governance and enhanced development outcomes.

So let's get to the nitty gritty of this meeting:

Why are we here?

What should we aim to achieve during the next two days?

Why are we here?

Each of you may be aware in greater or lesser degree about the renewed focus on what the donors call 'aid effectiveness' – framed by the Paris Declaration and renewed at Accra recently with the AAA or "the Accra Action Agenda". OECD's Development Assistance Committee (DAC) has been instrumental in promoting implementation of these initiatives to improve development effectiveness – first in the form of the 'joint venture for procurement' but recently replaced by a 'cluster' approach and the newly constituted OECD DAC task force on procurement.

Ruby Alvarez and Pam Bigart, as co-chairs of this newly constituted OECD DAC task force on procurement, and Micheal Lawrance representing the OECD DAC secretariat, have most graciously agreed to join this consultative session. You will, therefore, get a clear picture of the most current thinking of donors and development partners on 'aid effectiveness' and assessment, including upgrading and using 'country systems' as a way to promote better practice in procurement.

This will help put the proposed procurement forum into a development context. But that is only a starting point. What is critical is to obtain your candid suggestions and deliberations on whether setting up a procurement forum is the preferred way to go to assist in this effort and, if yes, in what ways. An equally important consideration is whether – and to what extent – the proposed procurement forum should be a medium or mechanism to assist partners and donors in doing other things

related or perhaps unrelated to the OECD DAC country systems initiative but nevertheless of practical importance to your countries and regions.

There is, therefore, no pre-determined agenda of issues for consideration, and this consultative meeting is an effort to avoid that: the idea is to build the proposed procurement forum design around practical issues of agreed critical or central importance to our developing member countries.

To my mind there are three broad areas of possible support:

firstly, fostering or promoting meaningful policy dialogue around critical public procurement issues through learning from experience of other countries,

secondly, assisting in country driven and owned reform processes

and, thirdly, in providing needed resources for partner countries to upgrade and expand knowledge of good or best practice in procurement.

As you know, given two days, we have only limited time to identify a set of doable priorities that we hope might become the core objectives and deliverables for an Asia Pacific Procurement Forum. For that reason, we have drawn up an indicative agenda of topics for consideration by you during the course of this consultation.

These are based in part on the work of earlier procurement related events in the past few years such as the Regional Procurement Forums and Workshops held in 2008 in Dushanbe and Dhaka and the Public Procurement Forum at Issyk-kul in the Kyrgyz Republic held in April earlier this year.

You might add or drop topics. But the important point is to identify the critical issues or challenges in these or other procurement areas of importance to you and ways in which the proposed forum might assist to respond to such challenges.

From our participants' register, I notice that we have a significant number of attendees from our member countries who have listed certain areas of procurement related specialization:

procurement legislation and procurement management top this list, and other listed areas include capacity building & training and procurement and civil society. As a lawyer who has spent many years working in ADB's developing member countries, I can share with you my firsthand appreciation of the need for focus on sound legislative and regulatory frameworks. As a lawyer, I also know that establishing the right legislative and regulatory frameworks will take a lot more than lawyers. Critical government and civil society stakeholders must be drive this process.

However, often overlooked but of critical importance is the corresponding need to address the very real challenges covered by what we call 'procurement management'. This covers things like the

-quality of institutional and financial independence of public procurement agencies,

-possible political or vested interest interference or conflict of interest in agency actions and oversight, and

-the need for developing civil society awareness,

I hope your participation here can provide an opportunity to explore ways in which a procurement forum -- or some other medium or mechanism of your collective preference -- can assist you over time in finding more effective and efficient ways to handle procurement management and execution in your individual countries.

Having talked a bit about why we are here, now let me address the second question I raised in the beginning: What should we aim to achieve during the next two days?

What I would like to suggest is what we should not be doing over the next two days: we are not here to get into the deep detail of each of the topics or themes that you conclude constitute your collective priorities of focus for the future activities of any proposed procurement forum. Therefore, we should not, for example, get into a discussion over the next two days of what are the best legislative and regulatory frameworks. This and other priority

issues, might become an area for separate thematic workshops or conferences sponsored by the proposed procurement forum during the course of the next few years.

What we want here is, in a word, informed 'brainstorming'.

Thus what is needed is your identification of:  The set of priority challenges and possible responses that you collectively agree might be addressed or included (or, perhaps, not included) in any procurement forum agenda or 'action plan';  The set of possible ways in which the proposed procurement forum might be set up and managed to ensure maximum country and regional ownership and effectively deliver agreed outputs  The possible ways in which any proposed procurement forum can become selfsustaining in the longer term

On the basis of your conclusions, we can make efforts to move forward in designing regional technical assistance that might be best fitted to address the procurement related issues of importance to you.

Thank you again for your presence here and let me wish you or rather us good luck in our efforts and I look forward to the results of our collectively deliberations!