As in real life: money matters, but it doesn’t buy you happiness Carolina Rentería Lead...

As in real life: money matters, but it doesn’t buy you happiness

Carolina RenteríaLead Economist, World Bank Group

Former Director of National Planning Department and Budget Director, Colombia

London - November 13, 2014

OVERSEAS DEVELOPMENT INSTITUTE - 2014 CAPE CONFERENCE

DOES MONEY MATTER? THE ROLE OF FINANCE IN ACHIEVING THE SUSTAINABLE DEVELOPMENT GOALS

6 points from Colombia1. MDGs: were just one element of Colombia’s

development strategy

2. Colombia formulated its own policies on how to

achieve the 2015 goals (Conpes #91)

3. Specific responsibilities were mainstreamed across

government

4. Financing was linked to strategies and MDGs: own

resources main source of financing

5. MDGs mainstreamed into National Strategies: share

significance with other priorities such as macro

stability, security, peace, competitiveness,

infrastructure …

6. Policies, quantitative targets and monitoring were

essential

Did it work? Is the homework finished?

One example: MDG2 - Achieving Universal Primary Education

(Time permitting)

Population: 48.3 million

Size: 1,1 million square Km

GDP: US$ 378 billion

2014 expected growth: 4.8%

Doing Business position: 34

Upper Middle Income

GNI per capita: US$ 7,560

Poverty rate: 32.7% (National Poverty Line)

(5% at $1.25 a day - 11.3% at $2 a day)

Inequality: Gini coefficient 0.54 (2012)

ODI 2014 CAPE CONFERENCE, London, October 13, 2014

1. MDGs: were just one element of Colombia’s development strategy

• MDGs = one (of many) important inputs for the design of development and sector strategies, public policies, financing plans, allocation of resources and M&E frameworks.

• MDGs = a helpful instrument for defining priorities, setting goals, benchmarking Colombia vis a vis developing countries, assessing regional disparities, inviting private sector and NGOs into policy making and financing

• CONPES # 91 (March 2005): Targets and Strategies for achieving Colombia’s MDG in 2015


2. Colombia formulated its own policies to achieve MDGs (Conpes #91)

• MDG to be integrated into the National and Territorial Development Plans.

• Sectors to include the strategies and goals in their strategies and policies, priority setting exercises and to be measured on their targets evolution

• Financing is responsibility of National, Regional and Local Government with support from private sector, international agencies and civil society. Financing is only one relevant item …


3. Specific Responsibilities were mainstreamed across government

• Linked to a Ministry or Agencies• National targets were defined• Strategies and policies were defined or

modified• Baseline information was collected (gaps were

detected)• Indicators were developed• Financing needs and sources were identified


4. Crucially financing was linked to the MDGs

MDG 1 MDG 2 MDG 3-6 MDG 7 TOTAL

National Budget (NB) 3,669,210 1,654,463 3,247,326 1,498,964 10,069,964

Earmarked revenue (NB) 488,688 - 9,125,925 612,247 10,226,860

Decentralized Government resources 6,769,596 84,559 - - 6,769,596

Intergovernmental Transfers from NB to Subnational Govs - 7,696,664 31,473,915 6,271,934 45,442,512

Subnational Govenments own resources 2,055,871 628,627 2,160,103 2,330,215 7,174,816

Private Participation - 3,188,972 6,150 10,889,343 14,084,465

International Cooperation 481,900 3,250 - 12,176 497,327

TOTAL 13,465,266 13,256,536 46,013,419 21,614,879 94,350,099

Source: Conpes # 91, 2005

• Own public resources by far main source of financing. Includes taxes, debt:

internal, external (markets, multilateral loans).

• Given that education and health responsibilities are decentralized in Colombia, sub national Governments key players

• Private Sector plays a relevant financing role

• Very small reliance on international cooperation Really?


5. MDGs mainstreamed into National and Regional Strategies, Policies and financing

NDP 2006-10: DEVELOPMENT FOR ALL• Defense and Democratic Security• Poverty Reduction and promotion of equity

and employment• High and permanent economic growth:

base for equitable development• Sustainable Development• Better Service Delivery for Citizens


NDP 2010-14: PROSPERITY FOR ALL: • Regional development and convergence• Sustainable growth and competitiveness• Equality of Opportunities for Social

Prosperity• Consolidation of Peace

6. Quantitative targets and monitoring were essential


https://sinergia.dnp.gov.co

https://sinergia.dnp.gov.co/

https://sinergia.dnp.gov.co/

Did it work?


Source: Center for Global Development: Who Are the MDG Trailblazers? A New MDG Progress Index - Working Paper 222, August 2010. For each target, the Index compares a country's actual performance over time with the rate of improvement needed to reach the target by 2015 (8 highest score possible).

COLOMBIA

Is the homework finished? Just a few challenges ...

• 7th most unequal country in the World (2012 data)

• One of the countries in the world most affected by natural disasters (related and not related to

climate change)

• Large regional disparities and pockets of poverty (averages / per cap figures disguise)

• Second largest # of displaced people in the world (at least 5.7 million)

• Reintegration of paramilitaries and demobilized guerrilla

• Peace negotiations with FARC (oldest guerrilla in the world, 1/2 century of violence)

• Narcotrafic, BACRIM, homicides, kidnappings, terrorism

• Since 2006 we have been trying to link the savings in pension funds (US $80 billion) to the

financing of infrastructure needs, mainly roads .. No success yet ….

• ………


Happy Planet Index 2012: Colombia ranked # 3 (out of 151)


Colombia's HPI score reflects a relatively high life expectancy, relatively high levels of experienced well-being, and a moderate ecological footprint. - http://www.happyplanetindex.org/countries/colombia/#sthash.DgmFneIK.dpuf.: “The Happy Planet Index (HPI) is the leading global measure of sustainable well-being.”

COLOMBIA

http://www.happyplanetindex.org/countries/colombia/



An Example: MDG 2: Achieving universal primary education

1. To eradicate extreme poverty and hunger2. To achieve universal primary education3. To promote gender equality and empower women4. To reduce child mortality5. To improve maternal health6. To combat HIV/AIDS, malaria and other diseases7. To ensure environmental sustainability8. To develop a global partnership for development

National Planning Department (DNP)

Ministry of Education

Presidential Office for Gender Equality

Ministry of Social Protection

Ministry of Environment, Housing and Local DevelopmentPresidential Agency for International Cooperation


Indicators and targets


• Target 1: 100% coverage for basic education: pre-k + elementary (5th grade) + secondary (9th grade) and 93% for intermediate education (11th grade) Baseline 1992: 76.08% (basic) 59.11% (intermediate)

• Target 2 Illiteracy rate: 1% people between 15 and 24 years old. Baseline 1992: 3.77%

• Target 3: Reach an average of 10.63 years of education for population between 15 and 24 years Baseline 1992: 7 years

• Target 4: Reduce repetition to 2. 3% in basic and intermediate education Baseline 1992: 6.1%

Target 1 information


INDICATOR

DEFINITION

CALCULATION

MEASUREMENT UNITSPERIODICITYCOVERAGEDISAGGREGATION

INFORMATION SOURCE

NATIONAL GOVERNMENT ACTORS

TARGET 1

Sectorial Strategies and Policies for achieving MDG 2 targets

• Progressive universal coverage starting with Pre-k (+ “catching up strategies”)• Regional focus: priority rural areas (higher gaps)• Direct subsidies to poorest population• Incentivize private provision of education to expand supply and coverage• Incentivize innovation: in rural education (Escuela Nueva – best practice worldwide), TICs

and competences focus in education• Improve quality substantially• Teachers training and evaluation• Expand education infrastructure• Strengthen information systems at territorial entities (responsible for delivering

education) • Improve execution of integovernmental transfers (main source for financing education)

and identify new sinstruments for financing education (e.g. vouchers)

MINISTRY OF EDUCATION REQUIRES OF OTHER SECTORS AND PLAYERS TO DELIVER ON ITS MDG COMMITMENT


Targets and Financing forecasts for MDG 2

OBJETIVOS DE DESARROLLO DEL MILENIO – 2015

METAS ESTABLECIDAS PARA EL CUMPLIMIENTO DEL OBJETIVO 2: LOGRAR LA EDUCACIÓN PRIMARIA UNIVERSAL

METASLínea Base

19922005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mantener la tasa de cobertura bruta en 100% para educación básica (preescolar, básica primaria y básica secundaria)

88.1% 89.1% 90.1% 91.2% 92.4% 93.5% 94.6% 95.7% 96.9% 98.1% 99.2% 100%

- Preescolar 44.9% 48.5% 52.2% 55.9% 59.6% 63.2% 66.9% 70.6% 74.3% 77.9% 81.6% 85.3% - Básica primaria 114.6% 114.3% 114.1% 113.8% 113.6% 113.4% 113.1% 112.9% 112.7% 112.4% 112.2% 111.9% - Básica secundaria 75.5% 77.1% 78.8% 80.4% 82.0% 83.7% 85.3% 86.9% 88.6% 90.2% 91.8% 93.5%Tasa de analfabetismo 1% para personas entre 15 y 24 años 2.4% 2.2% 2.1% 1.9% 1.7% 1.6% 1.4% 1.3% 1.1% 0.9% 0.8% 1%

Tasa de cobertura bruta en 93% para educación media 74.4% 76.1% 77.8% 79.5% 81.2% 82.9% 84.6% 86.3% 88.0% 89.7% 91.5% 93.2%

Tasa de repetición de 2,3% en educación básica y media 6.1% 5.7% 5.3% 5.0% 4.7% 4.3% 4.0% 3.7% 3.3% 3.0% 2.7% 2.3%

10,6 años promedio en educación para personas entre 15 y 24 años

7 años 8,85 años 9,03 años 9,20 años 9,38 años 9,56 años 9,74 años 9,92 años 10,09 años 10,27 años 10,45 años 10,63 años


FINANCING 2005 … 2015 TOTAL

TOTAL MDG 2 344,326 2,065,954 13,256,536

Central Government Budget 258,345 1,654,463

Royalties 13,178 84,559

Transfers Central Government to Territorial Entities 1,199,480 7,696,664

Own resources Territorial Entities 97,968 628,627

Private Sector 496,983 3,188,972

ODA - 3,250

Units: Million pesos

MDG 2 was achieved!


THANK YOU

As in real life: money matters, but it doesn’t buy you happiness Carolina Rentería Lead...

Documents

Transcript of As in real life: money matters, but it doesn’t buy you happiness Carolina Rentería Lead...