FE Today Logo

BD budgeting 'least transparent' in SA

IBP survey finds independent fiscal institution virtually nonexistent here

Mehdi Musharraf Bhuiyan | February 24, 2018 00:00:00

Bangladesh's budgeting process is least transparent in South Asia as the system lacks sufficient public participation or oversight, says a survey that attributed the lapses to institutional shortcomings.

The survey on budget transparency across the world noted that, since 2015, Bangladesh had decreased the availability of budget information by "failing to publish the In-Year Reports online in a timely manner and also by failing to produce the Citizens Budget."

An independent agency styled 'International Budget Partnership' has conducted the global survey on budgeting practices in countries and come up with such observations on Bangladesh situation on the basis of scores.

Moreover, IBP said in its latest 'Open Budget Index 2017', Bangladesh also couldn't make progress in budget transparency for not making the pre-budget statement available to the public and not producing an audit report.

Such deficiencies mean that Bangladesh's score in budget transparency has decreased drastically -- from 56 in 2015 OBI to 41 in the latest 2017 OBI.

Such squeeze in score has also placed Bangladesh behind all its South Asian peers, as even Pakistan has fared better in terms of budget transparency as per the IBP survey.

The Open Budget Survey of IBP is based on 109 equally weighted indicators that assess whether the central government makes eight key budget documents available to the public online in a timely manner and whether these documents present budget information in a comprehensive and useful way.

These documents are: Pre-Budget Statement, Executive's Budget Proposal, Enacted Budget, Citizens Budget, In-Year Reports, Mid-Year Review, Year-End Report and Audit Report.

Among these aforementioned documents, it was noted that Bangladesh currently produces no 'citizens budget' or 'audit report' while 'pre-budget statement' is produced for internal use only.

Meanwhile, the 'mid-year review' is not published online while 'in-year reports' are published late.

The IBP report also bears a critical note about the budget-oversight process in Bangladesh. It says legislatures and supreme audit institution provide limited budget oversight in this country while any independent fiscal institution is virtually nonexistent.

Highlighting the limited budgetary oversight of the legislature, the report noted that the Budget Proposal should be provided to legislators at least two months before the start of the budget year, which is not happening.

At the same time, a legislative committee should ideally examine or publish reports on in-year budget implementation online, which is not taking place in Bangladesh either.

"In practice, as the budget is implemented, the legislature is not consulted before the government spends unanticipated revenue or reduces spending due to revenue shortfalls," the report further said about the flip side of budgeting and fiscal matters of the country.

The watchdog, in its survey report, was also sceptic about the independence of the supreme audit institution of Bangladesh.

"While the head of the institution cannot be removed without legislative or judicial approval, they are not appointed by the legislature or judiciary, which calls into question its independence," IBP said in its country summary on Bangladesh.

It also pointed out that the supreme audit institution is provided with sufficient resources to fulfil its mandate, but its audit processes are not reviewed by an independent agency.

Apart from transparency, the OBS survey also assessed the degree to which the government provides opportunities for the public to engage in budget processes.

In this parameter, Bangladesh's score is only 13 out of 100- which, although not the lowest in South Asia, is still low compared to global standards.

Asked about significance of the latest Open Budget Index findings, experts opined that the OBI rightly pointed out the need for greater budget transparency in the country.

"Although the budgeting process in Bangladesh has become more consultative than it was 15 years ago, still the progress is not enough compared to other parts of the world," said Professor Mustafizur Rahman, Distinguished Fellow of the Centre for Policy Dialogue.

"There are immense scopes for making the budgeting process more consultative," the CPD economist told FE.

For example, he added, in many countries of the world opposition political parties and civil societies come up with 'shadow budget' which can be introduced in Bangladesh.

Meanwhile, International Budget Partnership, in its report, has recommended that Bangladesh publish a Mid-Year Review and a Pre-Budget Statement online. In-Year Reports should also be posted online in a timely manner.

Simultaneously, it has also called for producing and publishing an audit report and a citizens' budget for the country.

When it comes to budget oversight, IBP suggests ensuring that the Budget Proposal is provided to legislators at least two months before commencement of the budget year.

At the same time, it also called for ensuring that a legislative committee examine and publish reports on in-year budget implementation online and that audit processes are reviewed by an independent agency.

The IBP also recommended setting up an independent fiscal institution to further strengthen budget oversight.

To ensure enough public participation in budget making, it has called for introducing a pilot mechanisms for members of the public and executive branch officials to exchange views on national budget matters during both the formulation of the national budget and the monitoring of its implementation.

It has also recommended holding legislative hearings on the Audit Report, during which members of the public or civil-society organizations can testify.

Lastly, the IBP has called for establishing a formal mechanism for the public to assist the supreme audit institution in formulating its audit programme and to participate in relevant audit investigations.

[email protected]

Share if you like