ISLAMABAD: The World Bank has pinpointed deficiencies in Khyber Pakhtunkhwa’s budget utilisation, and suggested looking into high-budget execution needs in combination with the quality of budget formulation in order to make the budget contributions to service delivery more meaningful.

An analysis of budget management in KP for improved service delivery, released by the World Bank shows that one of the challenges on moving forward with Public Finance Management (PFM) reforms is that the incentives for maintaining the status quo are strong as the existing weaknesses offer officials vast discretions.

The budget management analysis was carried out at the request of the KP government from July 2016 to March 2017. During the dialogue with the government an action plan has been designed taking into account the likelihood of resistance to change, complexity of activities and the time and effort required to sequence and roll out the reform measures.

The World Bank has been engaged with the KP government and particularly since the establishment of the Multi-Donor Trust Fund (MDTF) and during the design phase of the governance and policy project aided the government in problem-articulation.

The PFM reforms do not carry the incentives to attract the officials; therefore, one of the reasons for including the short-term actions was to exhibit the quick wins within the government to sustain the momentum, induced competition amongst the players, and to strengthen the coalition of key players that support the reforms.

In the last decade, the provincial government has displayed strong ownership for reforms, and formulated a PFM reform strategy in 2010. Based on this experience, the KP government was devising another and broader strategy to sustain the pace of reforms.

Implementation will require close monitoring of progress. When actions are stalled or blocked by interests benefiting from the status quo, the Bank and Steering Commi­ttee may need to shift quickly to other reforms areas, experimenting to see what works, and what is too difficult to pursue at this time.

A majority of the sectors lack sector-specific investment strategies. There are strategies for the health and education sectors; however, the implementation is patchy, as is evident from the gap between commitments for the health sector and actual budget allocated.

The infrastructure sector revealed wider gaps. The communications and works department, the lead department for infrastructure development, does not have a sector strategy.

Published in Dawn, October 30th, 2018