Outline of the Project

Project Name

Strengthening Public Investment Management System (SPIMS) Project Phase 2

Date R/D Signed

May 27,2019

Project Site

Dhaka

Term of Cooperation

September 28, 2019 to September 27, 2023

Implementing Organization

Programming Division, Planning Commission, Ministry of Planning

Background

Bangladesh has achieved remarkable socio-economic development since its independence in 1971. Especially in the last decade, the country's average economic growth marked more than 6% per annum, exceeded GDP per capita USD 1,000 in 2014, and reached USD 1,516 in 2017, transiting Bangladesh from lower income county to lower-middle income country as per the World Bank classification. The Government of Bangladesh (GoB) sets the long-term goals, achieving Vision 2021 and joining the class of middle-income countries by 2021, along with the Perspective Plan of Bangladesh 2021 and the Seventh Five Year Plan. In these overarching policy frameworks, GoB sets the targets of economic growth and poverty reduction; (i) raise real GDP growth to 8% in FY2020 and 10% in FY2021; and (ii) reduce the headcount poverty rate from 24.8% in FY2015 to 14% in FY2021.

To achieve these macroeconomic targets, public investment management (PIM) should play a catalytic role to create enabling environment for both public and private sector. The number of public investment projects under Annual Development Program (ADP) and its budget volume has been showing a drastic increase; 904 projects with BDT 250 billion in 2008 to 1,357 projects with BDT 1,550 billion in 2017.

However, Planning Commission (PC) recognizes the critical need to improve PIM (e.g. quality of Development Project Proposals/Technical Project Proposals, process of their planning, assessment and approval, strengthening linkage between ADP and Mid-Term Budgetary Framework (MTBF) the space of improvement), all of which calls for the necessity of PIM reform.

Under this circumstance, PC has been implementing "Strengthening Public Investment Management System Project (SPIMS)" since 2014. During the first four years, JICA provided technical cooperation to the PIM Unit formed at the Programming Division as well as concerned Ministries, Divisions and Agencies in two pilot sectors (power and energy, local government and rural development); developing a set of the PIM Reform Tools to mainstream the process of DPP/TPP planning, assessment and approval, and strengthen the linkage between multi-year public investment program and MTBF. In June 2018, the PIM Reform Tools were approved by PC and GoB endorsed to upgrade the PIM Unit to PIM Reform Wing, showing its high commitments to move PIM reform agenda forward.

On the other hand, full-scale introduction of the approved PIM Reform tools in two pilot sectors as well as development of PIM reform strategy and action plan, one of the main tasks of newly formed PIM Reform Wing, still remain as challenges. In the light of strengthening the linkage between multi-year public investment program and MTBF, the close consultation with the Finance Division is also indispensable.

With this backdrop, in continuation of the first phase of SPIMS, PC requested the Government of Japan to implement the second phase of SPIMS, focusing on developing PIM reform program and action plan, introduction of the PIM Reform Tools in two pilot sectors and its possible roll-out, and capacity development of concerned stakeholders, thereby contributing to more effective public investment management.

The Overall Goal

Public investment contributes to achieving mid-long term development plan

Project Purpose

Effectiveness of project and budget management in public investment is improved through PIM Reform Tools

Output

1. Implementation and monitoring system of PIM Reform Program and action plan are established.
2. Process of public investment project formulation, appraisal and approval is improved through PIM Reform Tools.
3. Strategic linkage between development budget and revenue budget is strengthened.

Project Activities

1-1	Review PFM Reform Strategy, Action Plan and other PIM related on-going initiatives
1-2	Develop PIM Reform Program with action plans in consultation with relevant stakeholders
1-3	Provide necessary supports to implement PIM Reform Program and action plans
1-4	Conduct regular monitoring and evaluation on PIM Reform Program and action plans
1-5	Update PIM Reform Program and action plans
1-6	Ensure alignment with PIM Reform Program and overarching policy framework (e.g. PFM Action Plan and 8th FYP)
2-1	Develop a procedure and schedule to fully introduce Ministry Assessment Format (MAF) and Sector Appraisal Format (SAF) in 2 pilot sectors
2-2	Develop plans and materials on MAF/SAF training
2-3	Organize dissemination workshops on MAF/SAF for stakeholders in 2 pilot sectors
2-4	Conduct TOT to develop master trainers on MAF/SAF and other related PIM issues (e.g. Cost Benefit Analysis and Logical Framework)
2-5	Conduct training on MAF/SAF and other related PIM issues (e.g. Cost Benefit Analysis and Logical Framework) for stakeholders in 2 pilot sectors
2-6	Provide On the Job Training (OJT) supports with stakeholders in 2 pilot sectors to utilize MAF/SAF
2-7	Provide OJT supports with stakeholders in 2 pilot sectors reflecting the contents of Sector Strategy Paper (SSP) and Multi-year Public Investment Program (MYPIP) into SAF
2-8	Review status of MAF/SAF utilization and identify improvement points
2-9	Review and update MAF/SAF formats and manuals
2-10	Review appraisal process and management of public investment projects in other sectors
2-11	Develop MAF/SAF roll-out plan for other sectors
2-12	Introduce MAF/SAF to extended pilot sectors (repeating 2-3~2-9)
3-1	Review current process and schedule of preparing Annual Development Program (ADP), Revised ADP, and Mid-term Budgetary Framework (MTBF)
3-2	Based on 3-1, develop and agree among concerned stakeholders in 2 pilot sectors on the procedure and schedule to introduce SSP and MYPIP
3-3	Conduct dissemination workshops on SSP/MYPIP in 2 pilot sectors.
3-4	Provide OJT supports with stakeholders in 2 pilot sectors to prepare ADP, RADP and MTBF by utilizing SSP/MYPIP
3-5	Review utilization status and identify improvement points on SSP/MYPIP
3-6	Review and update the procedure and schedule of introducing SSP/MYPIP
3-7	Conduct annual review to update Sector Results Monitoring Matrix of SSP and Forward Baseline Estimates and Fiscal Space of MYPIP
3-8	Review and update SSP/MYPIP guidelines
3-9	Review budget management status of public investment projects in other sectors
3-10	Develop SSP/MYPIP sector roll-out plan for other sectors
3-11	Provide supports to roll-out SSP/MYPIP to extended pilot sectors

Inputs
[Japanese side]

1. Experts
   - Team Leader/Public Investment Management (Planning)
   - Public Invetment Management (projects)
   - Public Finance Management
   - Training Development/Monitoring
   - Project Coordinator/Training Management
2. Local Consultants
3. Local costs
   workshop/seminars, training, etc
4. Overseas Training (Japan/Third Country)
5. Equipment

Inputs
[Bangladesh side]

1. Personnel
   PIM Reform Wing at Programming Division
   - One Joint Chief as PD
   - Two Deputy Chief (one as DPD)
   - Two Senior Assistant Chief (one as APD)
   - Technical Support Staff
2. Equipment and Facilities
   Office space and facilities at PIM Reform Wing at Programming Division
3. Local Cost
   - Salaries/remuneration and other allowances for C/P personnel attending meetings, trainings, workshops/seminars
   - running expenses for utilities, tax and CD/VAT, other necessary expense