2012 05-28 what can we learn about sustainability from developing nation governments


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  • Sustainability has become a “meme” – a pervasive cross-cutting concept
  • As in: are you sure that haircut is sustainable?
  • The implication is not trivial in developing countries where gross domestic income per capita is low. This seems to be linked to measurements of government effectiveness – notice that the income scale, from left-to-right, is exponential. You will be pleased to note that the World Bank ranks Canada highly in government effectiveness. World Bank governance indicators: http://info.worldbank.org/governance/wgi/sc_country.aspGNI per capita: http://en.wikipedia.org/wiki/List_of_countries_by_GNI_(nominal,_Atlas_method)_per_capita
  • What am I talking about? The environment, climate change?
  • Or fiscal sustainability – paying down the debt, ability to pay for entitlements
  • The critical calculus in developing countries is that environmental sustainability and financial sustainability are fully linked
  • This has visceral environment effects. Poor environmental oversight could result in sinking an entire country into the ocean, as publicized by the former President of the Maldives http://en.wikipedia.org/wiki/Mohamed_Nasheed with an underwater cabinet meeting http://www.thehindu.com/news/international/article34170.ece
  • Here in Canada, the federal government is ending the printing of business cards for public servants. It will save some money…
  • And some trees. But will we notice the financial impact in a big country like Canada? Or, the environmental impact...unless you live down-wind from a pulp mill…http://www.rfu.org/cacw/PulpPrimer.htm
  • Here’s where saving 10$ per public servant per year has an impact: in the bottom 1 billion people http://earthsky.org/human-world/how-many-people-in-the-world-today-are-hungry
  • There are hundreds of millions of people surviving on less that $1.25 per day purchasing power. Imagine distributing $10 per Full Time Equivalent to the poor in South Asia. Sustainability can have a transformational effect. http://www.economist.com/node/12010733?source=hptextfeature&story_id=12010733
  • Financial sustainability is important because it affects the fiscal space – the cost for borrowing. The Government of Canada has an excellent credit rating.http://en.wikipedia.org/wiki/Human_development_indexComposite credit ratings from Standard & Poors, Fitch, Moody’s and Dagong
  • So, borrowing is a problem for us – even when compared to other countries in the G8. In other words, we can finance our way out of financial valleys.Public debt: http://en.wikipedia.org/wiki/List_of_countries_by_public_debtDepartment of Finance:http://www.fin.gc.ca/ec2009/ec04-eng.asp
  • We might gripe about gasoline priceshttp://www.nyse.tv/nymex-crude-oil-price-history-chart.htm
  • But energy prices can make food too costly in developing countries – people can starvehttp://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
  • Not to mention the economic costs of natural disasters that torment developing countrieshttp://issues.tigweb.org/disasters
  • So, good public financial management saves lives and saves the environment
  • Governments are cutting because of the financial crisis. Many believe that job cuts by governments in Canada could cost liveshttp://news.nationalpost.com/2012/04/11/budgets-cuts-mean-100-fewer-food-safety-inspectors-in-canada/http://www.obj.ca/Other/Special-Reports/2012-03-29/article-2942826/2012-BUDGET%3A-DND,-Public-Safety-hit-hardest/1http://www.safetyeh.ca/2012/05/02/will-cuts-affect-rail-safety-for-canadians/
  • But here’s a story of what goes around comes around. This gentleman might not be familiar to you. He’s the former President of Malawi http://en.wikipedia.org/wiki/Bingu_wa_Mutharika. Through economic mismanagement and policies that donors didn’t like, his government was cut off from aid. He had a heart attack. The inexpensive drug to save him was not available, so they put him on life support. Everyone heard about the heart attack and put their TVs, PCs and radios on. That brought down the electric grid. They put on back-up generators, but ran out of fuel. And he died. They couldn’t complete an autopsy in Malawi
  • Financial sustainability is a not optional in developing countries. It’s not “nice to have”. It’s a necessity. There’s so much to gain. The good news is that there has been a reduction in global poverty, but there remains much more to do. That’s why good governance is so important.http://mjperry.blogspot.ca/2012/03/despite-food-fuel-and-financial-crises.html
  • What can we learn from these developing nation governments?
  • What are you talking about Hadden? Have you gone mad? Learn from under-developed countries?Can Developing Countries Leapfrog in Government Performance Managementhttp://www.freebalance.com/blog/?p=2348
  • We all know about these countries. And usually, the word “endemic” or “chronic”is in front of these terms like “corruption”
  • On the other hand, problems are more visible in developing countries. But there is more to sustainability in developing countries.http://www.un.org/millenniumgoals/
  • Consider this – in 5 years from now, there will be more economic development in emerging economies that developed countrieshttp://www.economist.com/node/21525373
  • Who could have predicted that these so-called “backward” countries would be more resilient to the global financial crisis? It’s part of what is called the “new normal”.
  • An example of this “new normal” is the rise of immigration from Portugal to Angolahttp://www.bbc.co.uk/news/world-14716410
  • These are the 4 basic areas of sustainable public financial management that we can learn from developing countries
  • Here’s why technology is important: it’s not called IT. It’s called ICT4D: Information and Communications Technology for Development and M4D: Mobile for Development – it’s critical to country growth, particularly mobile
  • Look at Estonia – the digital country with E-everything. It’s an e-country. According to the President of Estonia: “98% of Estonians under 35 use the internet regularly and systematically”… Estonians are “e-believers” I don’t think that bandwidth providers are throttling. After all, this is where Skype was invented.http://e-estonia.com/news/12-03-22/he-president-toomas-hendrik-ilves-foreword-estonian-ict-demo-center-newsletter-----------" Today, 98% of Estonians under 35 use the internet regularly and systematically. This, I submit, represents an altogether different population than a generation ago, a population that already demands an altogether different approach from its government.The first thing to get right is to understand that the internet is not paper. Simple transference of the logic of paper-based administration to HTML is guaranteed to fail. If you want to create a quality e-service on the web, it is necessary to think of the root goals of data collection and its management and think of how to get necessary information to the user/citizen as quickly and as comfortably as well as securely as possible and to validate this electronically. This applies to virtually all applications.In other words, E-government is not about making it possible for people to fill out the same old forms and questionnaires online, but rather is about achieving the goals of administration and services in the most intelligent and citizen-friendly way using the opportunities offered by IT.The Estonian digital signature system, e-elections, e-police, the state portal, e-banking, e-taxdeclarations, e-health, e-school, the latest e-census (62% of population enumerated online) etc, prove that we are e-believers. We are proud of being pioneers in e-government as well as one of the hottest spots in the start-up scene.We are openly willing to trade and share experiences with the rest of the world. After all, it is the exchange of information that allows knowledge to grow." ToomasHendrikIlves,President of the Republic of Estonia
  • Electricity is unreliable and expensive in developing countries– this is material to the government budget and http://www.gallup.com/poll/151973/africa-power-reliability-similar-business-sectors.aspx
  • power generation has a negative environmental impacthttp://www.epa.gov/oms/renewablefuels/420f09024.htm
  • Governments don’t have the same legacy technology that we have – like old client/server ERP systems, so they can reduce power consumption
  • And stop throwing hardware at software problems
  • Skip over software bloat where unneededfeatures are added by vendors. More features = more hardware = more power consumption.http://www.successful.com.au/
  • Which is ironic because so many enterprise software companies now provide tools to measure power consumption and carbon footprints. These companies produce slick sustainability reports and yet do little to reduce the technical footprint of their software packages. This includes the unnecessary features that also require additional database storage operating on legacy code that isn’t efficient and generates the need for an additional translation layer from client/server to web. The designs are monolithic meaning that you can’t package just the features that you want and there is a large minimal footprint just to run basic features. And, these companies have proprietary middleware for scaling, transaction processing, database connectivity, operating system porting etc. that is not efficient. My sense is that putting all of this into hardware appliances is not going to solve the power consumption problem.
  • That’s why many developing countries skip old generations of technology. The growth benefit of telecommunications provides for developing countries was of higher magnitude than that for developed economies for every telecommunications service. Developing countries are less likely to have an investment in old technology on one hand. On the other, the benefits of technology are higher: improves market efficiency, reduces transaction costs, improves productivity. http://live.worldbank.org/information-communications-technology-development
  • These countries also tend to acquire turnkey IT systems often with a 5 year TCO calculation for all costs with the exception of the lower right. It stands to reason for example that a software system from vendor A may be less expensive to buy than from vendor B. Yet, the software for vendor B may be more complex, require more customization, demand more hardware and generates a higher burden when upgrading.The purpose of the presentation was to discuss sustainability. Since that time, many FMI PSMW 2012 attendees wanted to discuss the high cost & TCO associated with using ERP systems for public financial management. Additional content is available here:What is Sustainability in Government Resource Planning?http://www.freebalance.com/blog/?p=2458ERP or FreeBalance: What’s the lowest TCO for Government Shared Serviceshttp://www.freebalance.com/blog/?p=2072Beware the ERP License Policehttp://www.freebalance.com/blog/?p=2699Rethinking the Business Case for ERP in Governmenthttp://www.freebalance.com/blog/?p=2578E in ERP – does it stand for “economies of scale”http://www.freebalance.com/blog/?p=2042IT cartels in govhttp://www.freebalance.com/blog/?p=2078ERP Innovation – Is that all there is?http://www.freebalance.com/blog/?p=1992Cheesy Technology “Innovation"http://www.freebalance.com/blog/?p=2365More Evidence that ERP Software should not be used for Government Shared Serviceshttp://www.freebalance.com/blog/?p=2325Are victims to blame for failed ERP projects?http://www.freebalance.com/blog/?p=2315The Myth of “Best Practices” in Public Financial Managementhttp://www.freebalance.com/blog/?p=1663Does Technology Matter in Public Financial Management?http://www.freebalance.com/blog/?p=1266ERP not “up to snuff” for Government?http://www.freebalance.com/blog/?p=1159Meeting Government Financial Management Needshttp://www.freebalance.com/blog/?p=979What if ERP companies made chewing gum?http://www.freebalance.com/blog/?p=2264Fudd or FUD? What ever happened to Competitive Intelligence among ERP vendors?http://www.freebalance.com/blog/?p=2685Enterprise Software Lingo – what does it really mean?http://www.freebalance.com/blog/?p=2170(What’s so Funny ‘Bout) Standards, Agility and Accountability (in government)http://www.freebalance.com/blog/?p=2165
  • So IT financial sustainability is similar to the total cost of ownership. We often miss one critical element to IT sustainability.
  • Human capacity: a critical factor in IT decisions in developing countries
  • That’s why many developing nation governments make knowledge transfer from consultants mandatory – a condition of doing business so that governments can become self-sufficient. To reduce the overall total cost of ownership
  • You won’t know this – the Government of Afghanistan was able to roll-out FreeBalance government financial management software to every regional government in the country – including all the ones you’ve heard of on TV. Amount paid to foreign consultants and FreeBalance for implementation services? Zero. http://www.freebalance.com/news/whitepapers.aspPublic Financial Management Case Study: Islamic Republic of AfghanistanThis Case Study details the Government of the Islamic Republic of Afghanistan's success at improving governance through PFM reform. The Islamic Republic of Afghanistan PFM Case Study covers the sequence of PFM reform from 2002 to the present day. PFM reform is critical to improving good governance. Good governance is critical to economic development. Public Financial Management Case Study: KosovoThis Case Study covers the sequence of PFM reform in Kosovo from 1999 to the present day. The PFM Case Study analyzes Public Expenditure and Financial Accountability (PEFA) assessments. The Government of Kosovo has achieved excellent results (B and higher) for over half of the assessment criteria.
  • Developing country governments are now adopting good practices to prevent cost overruns, delays using risk-based approaches. We see significant scrutiny about program management, change management and capacity building to address elements with a high risk of cost overruns
  • These countries have a holistic approach to sustainability. It’s not a series of 1-off initiatives. It’s a view of interconnection.
  • There’s a focus on what is important. There are over 200 developing country governments that have had a PEFA assessment. Many have had 2. Developed countries? 1 – Norway which was done as an exercise by the Norwegian Aid department as training.
  • Provides a prescription for public financial management reform
  • This creates PFM Reform Action Plans, support for international public sector accounting standards and sequencing of functions in order that will have the most important effect
  • At the factors that are most critical for successhttp://www.scribd.com/icgfmconference/d/55923750-Free-Balance-Surveys-at-ICGFM
  • This goes beyond traditional project management 101 to practices critical for the government domain
  • Because public financial management reform has to get momentum – that’s another aspect of sustainability, the Platform approach is considered a good practiceshttp://blog-pfm.imf.org/pfmblog/2010/07/the-platform-approach-in-pfm-reform-positive-for-cambodia-so-far-but-not-necessarily-the-magic-bulle.html
  • Which brings us to sustainable planning. If a government doesn’t plan effectively, the bridge doesn’t get built. Or it can’t be maintained. That has a huge economic impact.
  • So governments budget on a medium term – rolling 3 to 5 year budgets. It might sound like “long live the 5 year plan”, but it is a far more sustainable planning method than adding or subtracting a % to yearly budgets.http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPUBLICSECTORANDGOVERNANCE/EXTPUBLICFINANCE/0,,contentMDK:20235448~pagePK:148956~piPK:216618~theSitePK:1339564,00.html
  • What does this mean from a practical perspective? Planning capital projects across multiple years. Recognizing costs that span these years to prevent short-term thinking and re-estimating based on economic changes.
  • Aligns with the macroeconomic realities on one hand (the fiscal framework) for effective planning. It takes the reality that outcomes take a few years to accrue and tied to other economic factors
  • Which is all about government performance, as it is exposed to Ministers in Timor-Leste
  • Which brings me to engaging citizens. What we learned from the Arab Spring is: if you don’t crowdsource to improve conditions, you might find yourself crowdsourced. And you might not like it.
  • Something invented in Brazil – engaging citizens in the creation of budgetshttp://en.wikipedia.org/wiki/Participatory_budgeting
  • Why engage citizens? It’s so difficult to determine result measurements in government because there is no bottom line like profit. Why not engage citizens to achieve “value for money”?
  • Why do that? To have citizens monitor spending and effectiveness. The press to find corruption. Competitors to discover bad procurement decisions.Does Open Government Mean Audit is a Civic Dutyhttp://www.freebalance.com/blog/?p=2582Citizen Audit Use Cases and Public Financial Managementhttp://www.freebalance.com/blog/?p=2539
  • There is a significant shift in democracy and engagement from representative democracyDavis, Mills. What is the Role of Cloud Computing, Web 2.0 and Web 3.0. Semantic Technologies in an Era of Connected Governancehttp://www.slideshare.net/Mills/what-is-the-role-of-cloud-computing-web-20-and-web-30-semantic-technologies-in-the-coming-era-of-transparent-collaborative-connected-egovernanceMicrosoft. Social Media Survival for U.S. Public Sector Professionalsdownload.microsoft.com/.../PublicSectorSocialMediaSurvivalGuide.pdf
  • To participationDavis, Mills. What is the Role of Cloud Computing, Web 2.0 and Web 3.0. Semantic Technologies in an Era of Connected Governancehttp://www.slideshare.net/Mills/what-is-the-role-of-cloud-computing-web-20-and-web-30-semantic-technologies-in-the-coming-era-of-transparent-collaborative-connected-egovernanceMicrosoft. Social Media Survival for U.S. Public Sector Professionalsdownload.microsoft.com/.../PublicSectorSocialMediaSurvivalGuide.pdf
  • Truly an opportunity to leverage open government to leapfrog more developed countries - to improve governance, to sustain those improvements to improve government resultshttp://www.opengovpartnership.org/
  • That’s why
  • And open government may save money if you consider the cost to manage freedom of information requestshttp://www.infosource.gc.ca/bulletin/2011/b/bulletin34b/bulletin34b05-eng.aspThe Real ROI for Government Open Datahttp://www.freebalance.com/blog/?p=2329
  • What can we learn?
  • Cut IT costs
  • Take a more holistic view of sustainability aligned with public financial management
  • Conduct effective medium term planning
  • And engage citizens to improve results
  • Who is FreeBalance?
  • 2012 05-28 what can we learn about sustainability from developing nation governments

    1. 1. Version 7 section • brief discussionwhat can we learn about sustainability from developing nation governments? May 2012 Doug Hadden VP Products
    2. 2. & what Version 7 have to do with does that section publicVersion 7management? financial section• brief discussion
    3. 3. Version 7 section• brief discussion 3
    4. 4. Version 7 section effectiveness gap• brief discussion
    5. 5. Version 7 section what is sustainability? Version 7 section• brief discussion
    6. 6. Version 7 section financial• brief discussion 6
    7. 7. Version 7 section linked• brief discussion
    8. 8. Version 7 sectionenvironmental sustainability Version 7 section• brief discussion
    9. 9. Version 7have”? “nice to section• brief discussion 250 Premium Business Cards for $10.00
    10. 10. Version 7 sectionsweet smells of sustainability• brief discussion 10
    11. 11. Version 7 section poverty• brief discussion
    12. 12. Version 7 section poverty• brief discussion
    13. 13. fiscal space Version 7 section• brief discussion
    14. 14. Version 7 section fiscal space• brief discussion
    15. 15. Version 7 section energy prices• brief discussion
    16. 16. Version 7 section food security• brief discussion
    17. 17. Version 7 section natural disasters• brief discussion
    18. 18. Version 7 sectionsaves lives +saves environment• brief discussion
    19. 19. Version 7 sectionbudget impacts on public safety • brief discussion
    20. 20. Version 7 section what goes around…• brief discussion
    21. 21. Version 7 section “nice to have”?• brief discussion
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    23. 23. Version 7 section huh?• brief discussion
    24. 24. Version 7 section the “narrative”• brief discussion
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    26. 26. Version 7 section leverage innovation• brief discussion
    27. 27. Version 7 section predict?• brief discussion
    28. 28. Version 7 section “new normal”• brief discussion
    29. 29. Version 7 section themes• brief discussion1. sustainable ICT & PFM investment2. holistic approaches to sustainability3. sustainable planning4. sustainable citizen engagement
    30. 30. sustainable ICT & PFM investment Version 7 section ICT4D, M4D• brief discussion
    31. 31. sustainable ICT & PFM investment Version 7 section the digital country• brief discussion
    32. 32. sustainable ICT & PFM investment Version 7 sectionsustainability problem: power• brief discussion
    33. 33. sustainable ICT & PFM investment Version 7 section environmental impact• brief discussion
    34. 34. sustainable ICT & PFM investment Version 7 sectionoptimize the technical footprint • brief discussion
    35. 35. sustainable ICT & PFM investment Version 7 section hardware• brief discussion
    36. 36. sustainable ICT & PFM investment Version 7 section software bloat• brief discussion
    37. 37. sustainable ICT & PFM investment Version 7 section confusing• brief discussion
    38. 38. sustainable ICT & PFM investment Version 7 section skip• brief discussion
    39. 39. sustainable ICT & PFM investment Version 7 section turnkey• brief discussion
    40. 40. sustainable ICT & PFM investment Version 7 section IT fiscal sustainability ~ TCO Version 7 section• brief discussion
    41. 41. sustainable ICT & PFM investment Version 7 section human capacity• brief discussion
    42. 42. sustainable ICT & PFM investment Version 7 section consultants• brief discussion
    43. 43. sustainable ICT & PFM investment Version 7 section self-sufficient ICT & PFM• brief discussion
    44. 44. sustainable ICT & PFM investment Version 7 sectionovercome IT failure • brief discussion
    45. 45. holistic approaches to sustainability Version 7 section not a game• brief discussion
    46. 46. holistic approaches to sustainability Version 7 section focus on what is important• brief discussion
    47. 47. holistic approaches to sustainability Version 7 section diagnostics• brief discussion
    48. 48. holistic approaches to sustainability Version 7 section modernization• brief discussion
    49. 49. holistic approaches to sustainability Version 7 section• brief discussion
    50. 50. holistic approaches to sustainability Version 7 section project management• brief discussion
    51. 51. holistic approaches to sustainability platform approach to Version 7 section modernization• brief discussion
    52. 52. sustainable planning Version 7 section infrastructure• brief discussion
    53. 53. sustainable planning Version 7 section• brief discussion
    54. 54. sustainable planning Version 7 section medium term• brief discussion
    55. 55. sustainable planning Version 7 sectionspending reviews • brief discussion
    56. 56. sustainable planning Version 7 section alignment• brief discussion
    57. 57. sustainable planning Version 7 section performance• brief discussion
    58. 58. sustainable citizen engagement Version 7 section crowd• brief discussion 58
    59. 59. sustainable citizen engagement Version 7 section participatory budgeting• brief discussion
    60. 60. sustainable citizen engagement Version 7 section• brief discussion
    61. 61. sustainable citizen engagement Version 7 section transparency• brief discussion
    62. 62. sustainable citizen engagement Version 7 section citizen audit• brief discussion
    63. 63. sustainable citizen engagement Version 7 section• brief discussion
    64. 64. sustainable citizen engagement Version 7 section• brief discussion
    65. 65. sustainable citizen engagement Version 7 section• brief discussion
    66. 66. sustainable citizen engagement Version 7 section• brief discussion
    67. 67. sustainable citizen engagement Version 7 section access to information• brief discussion
    68. 68. Version 7 section summary• brief discussion
    69. 69. 1. sustainablesection Version 7 ICT & PFM investment• brief discussion
    70. 70. 2. holistic approaches to Version 7 section sustainability• brief discussion
    71. 71. Version 7 section 3. sustainable planning• brief discussion
    72. 72. Version 7 section4. sustainable citizen engagement • brief discussion 72
    73. 73. Version 7 section FreeBalance?• brief discussion