The Current Two Big Issues Regarding Jordan Public Financial Reform
Introduction
The Government of the Hashemite Kingdom of Jordan (GOJ) financial reform programs (FRP) should aim at helping the government fiscal policy in achieving its objectives, maintaining fiscal stability and avoiding financial crises through efficient allocation of available financial resources according to national priorities and improved financial management to improve the delivery of Government programs.The (FRP) should aims at strengthening effectiveness, transparency and accountability of government financial management and resource allocation. The specific objectives of the financial management reform should improve:
- Transparency and compliance with international best practices in budget execution.
- Accuracy, timeliness and relevance of fiscal reporting at each level of government;
- Budget execution by ensuring that payments are made in accordance with the budget and within spending limits and cash constraints; and
- Fiscal sustainability through more effective and efficient management of cash and public debt.
The reform should covers three levels:
- Modernizing the institutional structure of the Ministry of Finance (MoF) and building its capacity
- Building (FRP) to help Jordan's fiscal policy in achieving its objectives, namely maintaining fiscal stability and avoiding financial crises through more efficient allocation of available financial resources according to national priorities;
- Activating linkages between (FRP) keystone and other public sector reform pillars
Tow main area the (GOJ) can concentrate and achieve early and sustainable success, the procurement reform and Asset Management
Procurement Reform
The (GOJ) has acknowledged that one of the major driving factors in the transformation of the Jordan economy is the government itself which is the largest producer and consumer of goods and services in the country. It also recognizes that current government processes and public service delivery can be substantially improved by adopting and supporting public procurement reform among other factors. The ultimate goals of the Government are to better organize its internal operations, to improve service delivery (in particular at the Budget Institutions level), and to enhance its interaction with the suppliers.
public procurement reform needs to be integral part of larger development processes related to public sector modernization and financial management reform. In relation to the latter, the Government is preparing a Medium Term Fiscal Framework (MTFF) which will bring together the macro-economic planning process (Ministry of Planning and International Cooperation) and the revenue forecasting process (Ministry of Finance and the General Budget Department GBD). This will be complemented by a Medium Term Expenditure Framework (MTEF), under the responsibility of GBD. In terms of public sector reform, the Government is still working on specific strategies and areas of intervention but has acknowledged the importance of public procurement reform as a driving force behind the long-term administrative reform process.
The current National policy is to rely on world class acceptable national procurement systems for procurements of goods, services and works, or selection of international consultants. The education and continuing professional development of those individuals involved in public procurement has been a primary objective of the Governmental Purchasing Agencies.
Importance of Public Procurement
The importance of public procurement comes from the increased awareness of governments worldwide, that (i) the expenditure in public procurement represents about 10-20% of the GDP; and (ii) a considerable part of the country resources are channelled through the country procurement systems. Therefore making procurement efficient and ensuring value for money would translate into more schools and text books for children, more health care centres, and overall better public services for the people.
Recent estimates in Jordan indicate that close to 40% of total national budget for line ministries is used for the procurement of goods, works and services. In 2008, this amounted to a little over 4 billion US dollars. It is thus not surprising that public procurement reform has been identified as a key priority areas for the Government of Jordan, and one that can provide not only cost benefits but also improved efficiency and enhanced transparency of public institutions.
Asset Management
The need of a Government Asset Management System (AMS)
The objectives and the functional requirements of GFMIS do not include the Asset Management functional requirements, although an efficient and effective Asset Management System(AMS), currently not existing in Jordan, would be fully consistent with the Financial Reform strategy of the MOF. In fact, the GFMIS shall form an integral part of a government-wide Government Resource Planning (GRP) solution, supporting only financial management functions initially, but having the capability of supporting the full range of financial and associated resource management functions such as Payroll, HR management and Asset Management
Furthermore, the GOJ intends to create a unified automated AMS able to:
- provide timely information related to the Assets held by GOJ their value, their cost-effective
- share the same information between all the Government Institutions in order to satisfy the needs of each one, giving the possibility to exchange resources between entities, saving money and reducing costs
- facilitate the assessment of the soundness of government institutions for many purposes, such as privatization
- reduce the cost of inventories, minimize errors
- build capacities for government institution staff
- meet the international requirements and reporting
