Yuba Raj Khatiwada

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MDG NA and Costing Methodology
Yuba Raj Khatiwada United Nations Development
Programme MDGI, Regional Centre in Colombo
Serving Asia and the Pacific
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Contents

• Objectives and Elements of MDG NA
• Guiding Principles of MDG NA and Costing
• Steps for MDG NA
• Addressing Important Capacity Constraints
• Methods and Tools
• Experience so far and lessons for further UN MDG
  NA Support

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Objectives and Elements of MDG NA Objectives

• Answer the question What will it take to
  achieve the MDGs?
• Translate long-term goals into operational
  targets.
• Develop a strategy for increasing absorptive
  capacity.
• Strengthen coherence between planning and budget
  processes.
• Provide a monitoring accountability framework.
• Support the national policy dialogue
  negotiations with development partners.

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Objectives and Elements of MDG NA Key Elements

• Ambition- national targets are at least as
  ambitious as MDG targets for 2015
• Scope- the range of sectors identified is broad
  enough to achieve all the MDGs
• Rigor -for each sector, the strategy is based on
  a detailed, bottom-up needs assessment
• Timeline -the medium term plan/strategy is nested
  in a long term MDG framework
• Financing -sources of financing are determined in
  line with ensuring access to MDG G S.

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Guiding Principles of MDG NA and Costing

• Identify all interventions that require full or
  partial public financing
• Include both capital and operating costs for all
  sectors
• Undertake total, not incremental costing
  (financial cost, not economic costs)
• Strive for maximum dis-aggregation
• Address Absorptive capacity constraints through
  investments in HR, infrastructure management
  systems.
• Make periodic revision of targets/interventions
  based on new information and implementation of
  programs

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Steps for MDG Needs assessment
1. Identify interventions
2. Specify targets for each intervention
3. Estimate resource needs
4. Check results Synergies and trade-offs
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1. Identify Interventions

• Interventions are defined as investments in
  goods, services and infrastructure as distinct
  from policies and institutions
• Infrastructure (classrooms, roads, hospitals,
  toilets, water and electric connections)
• Human resources (teachers, doctors, nurses,
  training staff, administrative support staff)
• Goods (books, medicines, improved stoves,
  computers)
• Demand side interventions to reduce barriers
  (scholarships for girls, microfinance, abolition
  of school and health care fees, cash incentives
  to families)

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2. Specify Targets for Each Intervention

• Coverage targets need to be specified for
  interventions. For example, by 2015 to reach
• Net primary school enrollment to 100
• Immunization service to 100 of the children
• Access to safe drinking water to 100 of the
  population
• Rural electrification coverage to 80 of the
  households
• Access to decent shelter to 10 of the poor HH
• Micro credit coverage to 50 of the poor women

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3. Estimate Resource Needs
Estimate All Required Inputs
Infrastructure and equipments needed
Direct and indirect financial costs
Human Resources Needed
Total Needs
Direct Financial Cost
Operating Cost

• Estimate
• Total Cost

Human Resource Cost
Capital Cost
Infr. Equip. Cost
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4. Check ResultsSynergies and trade-offs

• Identify synergies iteratively refine estimates
• Make comparisons of the costs with those of
  similar countries
• Reiterate coverage targets and mode of
  intervention if costs are extremely high
• Recheck the data entry and calculations to
  conform the costs

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Addressing Important Capacity Constraints

• Need to map out long-term investment strategies
  in
• Human resources (pre-service training in-service
  training review of salaries and benefits
• Infrastructure (capital costs, operating costs)
• Public management systems (civil service reform,
  equipment, IT services)

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NA Method and Tools (1)

• Bottom up approach of identifying interventions,
  costing them, and linking to national development
  strategy done in a sequential manner.
• Targets are specifically set, unit costs are
  worked out and total cost for achieving the
  target estimated.
• All types of inputs or resources like financial,
  human and infrastructure related ones are
  identified and costed.
• The MP tools applied to do the NA and costing.
  UNESCO Model for Education, Resource Need (now
  UNDP) model adopted for costing HIV/AIDS.

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NA Methods and Tools (2) Available tools

• Education (UNESCO, World Bank)
• Health (WHO, UNFPA, UNICEF/World Bank, UN
  Millennium Project)
• Gender (UN Millennium Project)
• Water and sanitation (UN MP, World Bank)
• Energy (UNDP)
• Roads (World Bank, UN Millennium Project)
• Agriculture (UN Millennium Project)
• Environment (UNDP, BDP)
• HIV/AIDS (UNDP RCC in partnership with UNAIDS
  BDP).

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NA Methods and Tools (3) Addressing cross cutting
Issues

• Two pronged approach on incorporating Gender,
  Environment, ICT, and CD under MDG NA
• mainstreaming gender, ICT, capacity development
  (CD), and environment interventions in sectoral
  NA and costing and
• Costing separately additional NA for the cross
  cutting, policy and institutions related areas
  under gender, ICT, CD and environment.
• Governance related issues to be built in the NA
  process whether or not they are additional
  country specific goals.

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NA Methods and Tools (4) Policies Affecting
Costing

• Policies affect resource estimation in 2 ways
• Direct impacts (e.g., legislative research,
  analysis, administration and enforcement of
  policies, conditional cash transfers, service
  delivery policies, salary reforms, etc.)
• Indirect impacts (e.g., conditional cash
  transfers, user fees, etc.)
• Policies can fall into both categories and are
  critical in ensuring the utilization of effective
  services to meet the Millennium Development Goals
  and other national priorities.

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NA Methods and Tools (5) Addressing Policy Issues

• Key policy lapses and gaps to be identified in
  the bottom up approach of identifying
  interventions, costing them, and linking to
  national development strategy.
• Existing policies, plans, strategies, and
  programs to be reviewed and credible ones
  incorporated into MDG NA.
• Policies having implication for higher or lower
  public sector engagement -- like creating space
  for private sector in socio economic services --
  to be factored in the NA process.

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Experience so far lessons for further UN MDG NA
Support (1)

• Countries engaged in MDG based planning-
• Many African and some Asian countries already
  successfully completed MDG NA and costing work.
• Mongolia preparing long term (15 year)
  development strategy based on MDG NA.
• Bhutan preparing medium term plan (2008-12) based
  on MDG NA.
• Nepal developing its Interim Plan (2007-10)
  focusing on MDGs.
• Afghanistan looking for MDG-nizing and costing
  Afghanistan National Development Strategy (ANDS).
  
• PNG initiating MDG based development strategy

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Experience so far lessons for further UN MDG NA
Support (2)

• Experience so far
• Interventions not sufficiently discussed and
  refined, running the risk of being wish lists.
• Sequencing of interventions often ignored NA
  task force works often lack proper prioritization
  and sequencing of interventions.
• Financing strategy not considered as a part of NA
  costing exercise thus costs arrived at might
  be unrealistically high for some task forces.
• No pre determined criteria for priority setting
  in case of resource constraint in the short term.
  
• Achieving all MDGs without trade offs in the
  macro economic front not always possible.

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Experience so far lessons for further UN MDG NA
Support (3)

• Experience so far..
• NA taken more as a technical exercise than a
  process of evolving strategies policies while
  identifying interventions setting targets.
• Perceived as having high transaction cost - being
  an intensive and time taking work.
• Impression like an initiative for new programs
  and projects which would garner more financial
  resources.
• Mistaken as a parallel exercise for planning and
  budgeting to what is being done or is already
  existing.

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Experience so far lessons for further UN MDG NA
Support (4)

• Lessons
• Institutionalizing MDG NA work within Ministries
  for updating NA using it as live document for
  annual programming budgeting.
• Customizing tools to address the sectoral needs
  assessment costing demands mainstreaming
  cross cutting issues.
• Encouraging governments to make the MDG NA a
  highly participatory process.
• Developing synergy in the engagement of UN and
  other agencies in the NA, Costing and Planning
  process.