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Minas. Results Oriented State. Minas. Results Oriented State. Presentation Transcript

  • Government of Minas Gerais — Results-Oriented State, April 2008
  • Syllabus — The World Bank Minas Gerais Management Shock – 1st generation Management Shock – 2nd generation World Bank partnership
  • State of Minas Gerais ‣ 587,000 Km2, covering 853 municipalities (same as the French system) ‣ Total n. of municipalities: 853 Brazil ‣ Population: 20 million Urban: 84,6% Rural: 15,4% Minas Gerais ‣ Capital: Belo Horizonte: 2,4 million Metropolitan area: 4,9 million ‣ GDP: US$ 130 billion, 9 % of country’s (3rd in the country, close to that of Chile) Agriculture and Livestock: 8,8% Industry: 33,4% Services: 57,8% Minas Gerais
  • Economy ‣ 2nd Largest National Exporter Accounting for 1/3 of the trade balance surplus ‣ Industrial Production (2nd in the country) Largest iron and steel production in Brazil and 3rd largest in Latin America; 2nd largest automotive industry, 1st in internal sales of vehicles, and largest concentration of biotechnology companies in Latin America ‣ 2nd largest agricultural and livestock production Minas Gerais is the leading coffee, milk and potato producer in the country; 2nd cattle and bean producer; 3rd sugar cane and swine producer and 4th orange producer in the country Minas Gerais
  • Infrastructure and services ‣ Tancredo Neves International Airport is the 1st industrial airport of the country (free trade area system) ‣ The state has the largest road and railway network in Brazil ‣ CEMIG, the largest electric utility network in the country, serves more than 18 million people in 774 municipalities, and generates 13.8% of the total Brazilian electric energy generation ‣ 100% of the state territory is covered by mobile telephone, and broadband access to the Internet is available in most of the urban areas of the state ‣ Minas is the leading provider of biotechnology and software development services in the country Minas Gerais
  • Human development and regional features ‣ MHDI 0,799 Minas Gerais Human Development Index - 2000 ‣ Minas Gerais provides a synthesis of the socio-economic features of Brazil More wealth and highest HDI in the southern, western and central areas of the state (pattern of the southeastern Brazilian region) Less wealth and lower HDI in the northern and eastern areas of the state (pattern of the northern and northeastern Brazilian regions) 0,568 a 0,667 (171) 0,668 a 0,707 (171) 0,708 a 0,743 (175) 0,744 a 0,770 (173) 0,771 a 0,841 (163) Minas Gerais
  • Syllabus — The World Bank Minas Gerais Management Shock – 1st generation Management Shock – 2nd generation World Bank partnership
  • National Context ‣ Democratic opening and expansion of social spending (current), yet with unsatisfactory improvement of social indicators ‣ “Fake dilemma” between economic growth and social development linked to the role of the State: Between 1994 and 2005, average annual growth reached 2,7% (8,8% in the 1970s). The increase in current spending was funded mainly by suppression of investments and increase of the tax load Management Shock 1st generation
  • Minas Gerais Context R$2,4 billion – 12% of the total budget – of the deficit anticipated for 2003 (approximately US$ 1 billion) Precarious infrastructure Difficulty to fulfill obligations Difficulty and public services in a timely manner to raise resources Linkages consumed 103% of R$1,3 bi ( US$ 550 million) of Federal transfer of current net revenues (CNR): outstanding debt with suppliers Constitutional 63% resources suspended Debt 13% Payment default to the Federal Government with resulting Lack of international credit Others 27% interests Inactive economy 72% of CNR spent on payment of salaries Lack of financial resources for payment of Christmas bonus Difficulty to pay state employees salaries on time Management Shock 1st generation
  • Minas Gerais Context — Fiscal Responsibility Act (2000) The main indicators of the Fiscal Responsibility Act were not achieved Personnel expenses (Executive Power) 62,80% 61,70% Executive Power Limit 53,60% 49% 48,30% 46,40% 44,60% 43,50% Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Management Shock Source: SIAFI Management Shock 1st generation
  • Minas Gerais Context — Fiscal Responsibility Act (2000) The debt blocked access to new credit operations Funded Debt / Current Net Revenues 262,70% 242,80% Debt ceiling 234,50% for the Fiscal 224,50% Responsibility Act (200%) 203,10% 189,10% 187,80% Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Source: SIAFI Management Shock Management Shock 1st generation
  • Inception of the Management Shock ‣ A combination of fiscal adjustment with vigorous development-oriented initiatives ‣ Adoption of necessary and hard short-term measures under long-term planning ‣ Comprehensive coherent management-change strategies vs focused fragmentary strategies Management Shock 1st generation
  • Short-term Measures ‣ Emergency measures: Closing of 6 Secretariats, 43 Superintendencies and 16 Directorates, and extinguishing of 3,000 commissioned positions and functions Salary ceiling set Renegotiation of debt - Auction Contingency of 20% of the expenses funded by Treasury Funds ‣ New management model: Extinguishing of supplementation (Apostilamento) Centralization of payrolls Replacement of service time benefits with additional compensation based on performance - Results agreements and Incentive bonus Mandatory public bidding (electronic reverse auction) and creation of electronic price quotation Management Shock 1st generation
  • Short-term Measures The results of the matrix expenditure management generated a flow of resources for the prioritary programs of the Government Reduction of R$ 304 million (US$ 130 million) in budget expenditure (2003/2004) Price reduction Consumption reduction Through centralized acquisitions, Reduction of materials and services bidding, and registration of the prices consumption by setting goals and of food, communication, computing, control systems (fleet, medicine and maintenance, health, outsourcing and prison system) vehicles Management Shock 1st generation
  • The Technology of Planning Turn Minas Gerais into the best state in which to live Reorganize and Promote sustainable Recover the modernize the public social and economic political strength administration development of Minas Gerais Management Shock 1st generation
  • The Technology of Planning HDI Public Management Social Development Management shock Health Efficiency Education Fiscal responsibility Safety Revenues Social Inclusion Investments Infrastructure and Economic Environment Development Transportation Wealth Energy Income Sanitation Employment Environment Management Shock 1st generation
  • The Technology of Planning DOUBLE PLANNING GERAES Strategic Management of Resources and State Actions Design of plans (medium and long Transform the main strategy of the terms) and budgets (short term) state into results coherent with the objective of reaching our vision of the future Include the structural projects involved in the long - (PMDI), medium- (PPAG) and short-term (LOA) planning tools Incorporate management-intensive project techniques Introduce mechanisms to encourage achievement of the structural projects objectives Permit evaluation of the coherence between resources and the strategy and agility of corrective measures Management Shock 1st generation
  • Syllabus — The World Bank Minas Gerais Management Shock – 1st generation — Results Management Shock – 2nd generation World Bank partnership
  • Results — Public Management The state has had 4 consecutive years of positive fiscal results, after one entire decade of fiscal imbalance Fiscal result (since 1995) 222 190 91 81 -102 -391 -441 -389 (R$ milion) -677 -751 -941 -1.223 -1.433 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Management Shock Management Shock 1st generation - Result
  • Results 9.000 — Public Management (all sources and state-owned companies) Investments made with state treasury funds grew 546% between 2003 and 2007 Investments of US$ 2 billion Investments (Treasury funds) with state treasury fiscal 3.590 resources are expected in 2008, and R$ 9 billion (US$ 5 billion) considering the total budget of (R$ milion) 2.356 2.182 the Government 1.645 2004-2007: Committed expenditure 848 2008: Budgetary proposal Ordinary sources and other state treasury 338 discritionary sources, and State-owned companies Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Management Shock 1st generation - Result
  • Results — Public Management As a result of higher efficiency and the fiscal relief implemented by the Minas Gerais government, even with a tax reduction program, Value Added Tax (ICMS) collection was raised above that of the Southeastern region and Brazilian average Nominal Variation of ICMS Revenue — Minas Gerais X Brazil X Southeast — 2006/2003 54,3% 44,7% 42,4% Minas Gerais Southeast Brazil Source: Conselho Nacional de Política Fazendária – National Council of Public Treasury Policy Management Shock 1st generation - Result
  • Results — Public Management Value Added Tax (ICMS) reduction for 152 low-end consumption products Food Building Materials Cleaning and Personal Teaching Materials Hygiene Products Source: National Council of Public Treasury Policy Management Shock 1st generation - Result
  • Results — Public Management ‣ Individual Performance Evaluation – ADP Approximately: 100.000 state employees evaluated 18.000 evaluators 7.000 Evaluation Commissions ‣ 23 results agreements executed and prizes in the amount of R$ 112 million (US$ 48 million) awarded between 2003 and 2006 Management Shock 1st generation - Result
  • Results — Public Management ‣ Public-Private Partnerships (PPP) 2004 2005 2006 2007 2008 PPP state laws Warranties made Delivery of prison MG 050 PPP Publication of public approved available for the unit modelling agreement signed – notice for PPP for first PPP (3,000 vacancies) 1st Public-Private construction of a Implementation operations Road Partnership Prison Complex of the PPP Unit in Brazil (3,000 vacancies) The 25 years PPP’s PPP approval for delegation of MG maintenance and 050 (372 km) control of the state foresees private road network investment close to R$ 645 million (US$ 364 million) (R$ 320 million (US$ 181 million) in the first five years), and maximum state annual counterpart of R$ 7,89 million Management Shock 1st generation - Result
  • Results — Infrastructure Various contracts are being signed for recovery and maintenance of roads during five years, following road standard indicators km contracted by ProMG Pleno 8.981,7 By 2011 all the state road network will be maintained by 1.795 the ProMG Pleno and the 716,3 PPPs. 0 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Source: SETOP Management Shock 1st generation - Result
  • Results — Infrastructure Commitment to provide paved road access to 224 municipalities not served is being fulfilled Number of municipalities with paved road access 100% of municipalities served 853 760 131 Municipalities with 708 road constructions 681 concluded - 4.746 km 659 629 632 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Source: DER-MG Management Shock 1st generation - Result
  • Results — Economic Development The state presented the best industrial dynamics of the country in 2007 Percent variation of the physical-industrial production – General industry (past 12 months ended in December 2007) 8,6% 7,5% 7,5% 6,7% 6,2% 6,0% 5,4% Minas Gerais Espirito Santo Rio Grande do Sul Paraná São Paulo Brazil Santa Catarina Source: PIM-PF Regional/IBGE Management Shock 1st generation - Result
  • Results — Social Development In the state schools network, the % of students with the recommended level of reading competence was increased to 35% (2006-2007) % of students with the recommended level of reading competence 100,0% Leading position in the ranking of Brazilian schools performance recovered Champion of the Brazilian Math Olympics 65,7% Best literacy performance in the country First Brazilian state to implement the 9- 48,6% year fundamental school and distribute textbooks to all students Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 * First year of evaluation of the recommended level of reading competence Source: Ceale/UFMG, Caed/UFJF e SEE Management Shock 1st generation - Result
  • Results — Social Development Sewage treatment has been continuously been expanded % treated sewage collected 75% 42% 39% 29% 29% 26% Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Source: Copasa Project Vida no Vale (Life in the Valley) will ensure access to basic sanitation to all households by 2010 in the Northern and Northeastern regions of Minas Gerais. Management Shock 1st generation - Result
  • Results — Social Development Minas reduced hospital internment by offering the most comprehensive preventive health care program in Brazil % hospital internment for sensitive conditions 37,4% 33,1% 32,5% 29,0% Sep/02 Sep/03 Sep/04 Sep/05 Sep/06 Sep/08 Sep/08 Sep/09 Sep/10 2011 Aug/03 Aug/04 Aug/05 Aug/06 Aug/07 Aug/09 Aug/09 Aug/10 Aug/11 Source: SES Management Shock 1st generation - Result
  • Results — Social Development Minas Gerais has been consolidating its social defense policy by gradually reducing violence in the state Violent cases per 100 thousand inhabitants in Minas Gerais 108.591 109.030 101.720 92.335 85.526 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Source: SEDS Management Shock 1st generation - Result
  • Results — Environment The government expanded the regularization of protected areas: 41 thousand hectares of areas purchased for conservation Regularized hectares 121.159 40.794 0 836 1.529 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Source: SEMAD Management Shock 1st generation - Result
  • Results — Environment Deforestation in Minas reduced 30% (2006-2007), and, as a consequence, native forest area will start expanding in 2011. Average annual deforastation (hectares) 75.000 55.000 2003 - 2005 2006 - 2007 Management Shock 1st generation - Result
  • Syllabus — The World Bank Minas Gerais Management Shock – 1st generation Management Shock – 2nd generation World Bank partnership
  • Basic Commitments ‣ Fiscal Quality Fiscal balance as a prerequisite for governmental actions Increased strategy investment, simplification and facilitation Stabilize and implement public spending reduction as a proportion of the state GDP. This step is necessary for a sustainable policy of fiscal load reduction. Expand the participation of public investments that increase the competitiveness of the economy within total expenditure Increase the quality and productivity of the sector expenditure with different annual goals aimed at the growth of target costing (positive) and of support activities (negative) – anticipated reduction of US$ 500 million in 4 years Management Shock 2nd generation
  • Basic Commitments ‣ Efficient management Sectorial focus: quality and productivity of sectorial expenditure and public relations ‣ Results Monitoring and evaluation: Government performance measured by the improvement of outcomes Governance: Government coordination by Results Areas Incentives: the results agreement of the sector contractualizes the result areas Management Shock 2nd generation
  • Efficient Management Management shock development 1st Generation 2nd Generation Institutional Reorganization for reduction Institutional Reorganization to achieve of expenditure strategy Management Agenda Management model Management Agenda Sectorial approach applicable to all sectors of the administration stemming from strategy Strategy – Geares Intensive Project Results-oriented State and Geraes Strategic Management Budget-Plan Integration management of the portfolio and monitoring of results Implementation of Results Agreement; Additional compensation based on Adequacy of Results agreements and performance; Productivity prize productivity prize to the strategy State employee valuation Salary Expansion of state employee payments on time, settlement of overdue professionalization Occupational salaries and restructure of careers ertification Managerial development Management Shock 2nd generation
  • Management Model — Acceleration of Learning Management Shock – 1st generation Products Inputs Activities Results Long term (What the project (Outputs) (Resources) accomplishes) (Goods and (Outcomes) results Services) Schools Elaboration of a Elaborate Reduction of Increased methodology for the methodology Teaching acceleration of learning the number of human welfare materials Qualified teachers unmatching Increased Distribution of teaching age/school Teachers materials Students productivity Students attended level groups in Teacher qualification Fundamental Classes and High Schools 2a. Management Shock - generation Source: Banco Mundial Management Shock 2nd generation
  • New structure of the Management Model Outcomes Sector Management Strategic Projects Agenda Development Improvement and Expenditure Rationalization Indicators Management Shock 2nd generation
  • Minas: the best state in which to live Integrated Development Plan 2007/2023 - strategy Human Capital Competitive Investment Network Eqüity and Environmental Integrated Territorial and Business of cities welfare sustainability Perspective Integration Results-Oriented State Result Areas Investment and Added Poverty Reduction and Network of Cities and Quality Education Value of Production Services Productive Inclusion Quality and Innovation Public Management Innovation, Technology Environmental quality Healthy Life and Quality Development of the Fiscal Quality Northern Area of Minas Development and Gerais: Jequitinhonha, Juvenile Protagonism Mucuri and Rio Doce Social Defense Integration Logistics Public Policy Addressees Dynamic and Equity between Qualified, healthy, Protagonist Safe well-cared innovative people and educated people youth for cities companies between regions Management Shock 2nd generation
  • Minas: the best state in which to live Integrated Development Plan 2007/2023 - strategy Human Capital Competitive Investment Network Eqüity and Environmental Integrated Territorial and Business of cities welfare sustainability Perspective Integration Results-Oriented State Result Areas Investment and Added Poverty Reduction and Network of Cities and Quality Education Value of Production Services Productive Inclusion Quality and Innovation Public Management Innovation, Technology Environmental quality Healthy Life and Quality Development of the Fiscal Quality Northern Area of Minas Development and Gerais: Jequitinhonha, Juvenile Protagonism Mucuri and Rio Doce Social Defense Integration Logistics Public Policy Addressees Dynamic and Equity between Qualified, healthy, Protagonist Safe well-cared innovative people and educated people youth for cities companies between regions Management Shock 2nd generation
  • Quality Education — Strategic objectives ‣ Achieve a leap in the average schooling of the population under an efficient system with high levels of equity, guided by international cost and quality standards ‣ Reduce regional learning discrepancies in Minas Gerais ‣ Achieve a quality leap in teaching, guided by international standards Management Shock 2nd generation
  • Quality Education — Examples of end results agreed upon Indicator Status Goal 2011 6,6 anos em 2004 7,5 years Increase average schooling of 15-year-old boys and girls 6,8 anos em 2006 8,4 years in 2004 10 years Increase average schooling of 18-year-old boys and girls 9,1 years in 2006 45,2% in 2006 Increase the number of readers at the age of 8 years. 100% 58,1% in 2007 189,7 in 2003 225 Improve fundamental school learning -Mathematics 196,5 in 2007 Management Shock 2nd generation
  • Quality Education — Structural Projects and Sectorial Agenda Outcomes Strategic Projects Sector Management Agenda Full time schooling Optimize the structures and the scope of the Regional School Superintendencies. School and Teaching Quality Assessment Systems Strengthen qualitative and quantitative Teacher Qualification and Performance partnerships with the Third Sector New Management and Basic Education Improve and consolidate the cost system Standards of the Secretariat of Education Management Shock 2nd generation
  • Syllabus — The World Bank Minas Gerais Management Shock – 1st generation Management Shock – 2nd generation Implementation of the Strategy World Bank partnership
  • Examples of results Agreements Minas: the best state in which to live Integrated Development Plan 2007/2023 - strategy Human Capital Competitive Investment Network Eqüity and Environmental Integrated Territorial and Business of cities welfare sustainability Perspective Integration Results-Oriented State Result Areas The Secretariats of Education, Sports Network of Cities and Investment and Added Poverty Reduction and and Youth, and SocialProduction Quality Education Value of Development Services agreed with the Governor on the goals Productive Inclusion Quality and Innovation for Juvenile Protagonism Area Public Management Innovation, Technology Environmental quality Healthy Life and Quality Development of the Fiscal Quality Northern Area of Minas Development and Gerais: Jequitinhonha, Juvenile Protagonism Mucuri and Rio Doce Social Defense Integration Logistics Public Policy Addressees Dynamic and Equity between Qualified, healthy, Protagonist Safe well-cared innovative people and educated people youth for cities companies between regions Management Shock – 2nd generation Implementation of the Strategy
  • Examples of results Agreements Minas: the best state in which to live Integrated Development Plan 2007/2023 - strategy Human Capital Competitive Investment Network Eqüity and Environmental Integrated Territorial and Business of cities After that, the Secretary of Education welfare sustainability Perspective Integration agreed with the Governor on a set of goals for their Result Areas Results-Oriented State Result Areas Investment and Added Poverty Reduction and Network of Cities and Quality Education Value of Production Services Productive Inclusion Quality and Innovation Public Management Innovation, Technology Environmental quality Healthy Life and Quality Development of the Fiscal Quality Northern Area of Minas Development and Gerais: Jequitinhonha, Juvenile Protagonism Mucuri and Rio Doce Social Defense Integration Logistics Public Policy Addressees Dynamic and Equity between Qualified, healthy, Protagonist Safe well-cared innovative people and educated people youth for cities companies between regions Management Shock – 2nd generation Implementation of the Strategy
  • New structure of the Results Agreement Outcomes Management Shock Results Stategic Projects Sector Agenda Agreement 1ª stage Spending and Performance Improvement Rationalization Indicators Results Agreement Goals development per team 2nd stage Management Shock – 2nd generation Implementation of the Strategy
  • Incentives ‣ Productivity prize (results-oriented bonus) Fiscal Balance is a prerequisite Bonus amount considers the grade obtained in the Results Agreement Prize granting to teams based on performance ‣ Other incentives Meal tickets Transportation vouchers Autonomy to reestructure job titles – merger, demerger – according to the strategy More budgetary and acquisition policy autonomy Management Shock – 2nd generation Implementation of the Strategy
  • Syllabus — The World Bank Minas Gerais Management Shock – 1st generation Management Shock – 2nd generation World Bank partnership
  • World Bank partnership ‣ Strengthening of the governance model Improve the relationships between end indicators, projects and products Support and legitimate the monitoring and evaluation of the strategy ‣ Support to sectorial management shocks Technical cooperation aimed at achieving fiscal quality and efficient management Support to implement management reform in 7 Result Areas ‣ Ensure more scaling and agility in the implementation of the strategy of nine selected Result Areas Total eligible expenditure (2008-2010): R$ 10,9 billion (US$ 6 billion) Maximum BIRD reimbursement after reaching the annual goals of eligible expenses: R$ 1,7 billion (US$ 976 million) Counterpart: accomplishment of result areas end indicators World Bank partnership
  • World Bank partnership ‣ Social Governance: expand the participation of the society in the definition, follow up and evaluation of public policies Expand or allow participation of the civil society in State Councils, Result Agreements assessment committees, and in other sites of political debate Qualify the society and release information about the implementation of public policies ‣ Using the experience of Minas Gerais, offer support to national reforms aimed at achieving: Fiscal quality Efficient management Innovative public policies for social development World Bank partnership
  • Performace Evaluation — Government of Minas Gerais 100% 95% 94% 93% 93% 90% 90% 90% 91% 92% 84% 85% 85% 74% 20% 11% 10% 9% 8% 9% 6% 6% 5% 5% 5% 5% 4% 4% 6% 5% 5% 4% 4% 2% 1% 1% 1% 2% 2% 2% Mar 03 Sep 03 May 04 Jul 04 Dec 04 Feb 05 Dec 05 Mar 06 Dec 06 Apr 07 Jul 07 Dec 07 Mar 08 Source: FIEMG/Vox Populi Institute Positive Negative NR / NS World Bank partnership
  • Thank you — April 2008