International Budget Project September Newsletter, 8/30/06

This issue of the IBP newsletter draws on a broad range of budget-related initiatives around the world. Just before the newsletter went to print, the IBP and country partners launched the Open Budget Index. This is a path-breaking study of budget transparency produced by the IBP in collaboration with independent organizations in 59 countries. Sergio Baierle reports on the political problems undermining participatory budgeting in Porte Alegre, the city that launched this movement. It shows that our victories on transparency and accountable budgeting must be closely guarded. We also report on important new initiatives in several countries: HIV/AIDS resource tracking in Nigeria, working to improve the impact of the auditor-general in Tanzania, and on new opportunities for budget work Kenya and Cambodia. Finally, work in Peru and around the world reminds us that while criticism is central to our watch-dog activities, taking time to highlight what is working in government can also be a powerful strategy to creating change. We hope you find this newsletter useful and welcome your comments and ideas. And remember, that the IBP website and our new Guide to Tax Work for NGOs are further resources to support your work.

The past two decades have seen growing interest in promoting public access to government budget information. This interest reflects the understanding that access to information on government budgets and financial activities is essential to ensuring that governments are accountable to their citizens. Timely access to such information enables citizens to participate in, and understand, policy decisions that have profound impacts on their daily lives.

This interest also reflects broad global developments. The wave of democratic openings in many countries during the 1990s focused attention on issues such as combating corruption, ensuring effective public service delivery, and community-led development. In addition, a series of wrenching financial crises during the 1990s drew the attention of the international community to the implications of the lack of government transparency and financial accountability in the affected countries.

Against this background, the International Budget Project (IBP) began to develop the survey instrument that forms the basis of the current study in 2002. For the past two years, the IBP has worked with civil society and academic partners in 59 countries to collect comparative information to implement the survey and analyze its results.

The Open Budget Index is the first index to rate countries on how open their budget books are to their citizens. While the index finds that most countries provide at least some information to their citizens about the budget, the vast majority fail to provide the basic information necessary for good governance.

"In 53 of the 59 countries examined, citizens are limited by lack of access to information. In 10 countries, government accounts are closed books," said Warren Krafchik, director of the International Budget Project, which coordinated work on the index. "A country's ranking on the Open Budget Index is a measure of that government’s commitment to accountability and transparency."

The Open Budget Index provides citizens, legislators, and civil society advocates with the comprehensive and practical information needed to gauge a government’s commitment to budget transparency and accountability. Armed with this kind of information, lenders, development advocates, and aid organizations can identify meaningful budget reforms needed in specific countries, and increase the impact of their development work.

The Open Budget Index 2006 was calculated by the International Budget Project based on detailed questionnaires completed by local experts in 59 participating countries from every continent. The Index assesses the availability of key budget documents, the quantity of information they provide, and the timeliness of their dissemination to citizens in order to provide reliable information on each country’s commitment to open budgeting.

"Having access to information gives us a voice in our country's budget. It allows us to push for improvements in people's lives in Mexico," said Helena Hofbauer, executive director of the FUNDAR Center for Analysis and Research, which conducted the research in Mexico. "Without information, we have no voice. The Open Budget Index provides accurate, independent information so that we know what reforms are needed."

For the 59 countries surveyed, the major findings from the Open Budget Index 2006 include:

Only six of the countries — France, New Zealand, Slovenia, South Africa, the United Kingdom, and the United States — provide the extensive budget information necessary for government accountability.

More than 50 percent (32) of the countries — fail to make public all of the seven key budget reports they produce. These governments produce this information for their own internal use or for international donors, but do not make it available to their citizens.

Six countries keep their budget secret until after it is adopted by the legislature – effectively barring any public participation in the budget's consideration (Angola, Burkina Faso, Chad, Egypt, Mongolia, and Viet Nam).

In 16 of the countries, the executive can fire the head of the country's external auditing body without the consent of the legislature or judiciary. The failure to provide security of tenure to the chief of the national auditing agency indicates the lack of a fundamental institutional safeguard to guarantee the office's independence from the executive.

"There is much work to be done around the world before budgets are an open book to citizens," said Pamela Gomez, project leader of the Open Budget Initiative at the International Budget Project. "But countries could achieve major reforms simply by releasing all of the budget documents they already produce to the public. With that small change, more than half the countries would improve their performance and, more importantly, citizens would be significantly more informed about the budget."

For the full 2006 report, high resolution images of the Open Budget Index findings, information on the participating civil society organizations from 59 countries, and press materials in Arabic, French, Portuguese, Russian, and Spanish, please visit www.openbudgetindex.org. For further information send a message to: communications@openbudgetindex.org.

Budget planning and execution do not always live up to electoral campaign promises, and Porto Alegre, Brazil — the city that gave birth to participatory budgeting (PB) — is no exception. After 16 years of Workers' Party rule, Porto Alegre has been under a new government since 2005. The current mayor, José Fogaça, from the Popular Socialist Party (PPS) promised during his election campaign to keep PB as well as address the city's fiscal crisis and put an end to what he said was the over-politicization of government. Yet today, citizens of Porto Alegre are struggling to keep PB alive.

PB has four core principles: direct participation in government decision-making, self-rule based on social justice, full budget disclosure, and government accountability. While none of these principles has been fully realized, between 1988 and 2003 PB succeeded in turning the city's budget priorities in favor of the poorest areas of the city, as the chart below shows.

IMPROVING BASIC SERVICES IN PORTO ALEGRE
	1988	2003
Share of population without water	5.3%	0.5%
Amount of unpaved roads	690 km	390 km
Share of population without connection to sewage pipelines	54%	16%
Share of population without sewage treatment	98%	73%
Share of population without garbage collection	15%	0%
Share of population with irregular housing	25.8%	18.4% (2001)
Illiteracy rate	5.6%	3.3%
Child mortality (per 1,000 live births)	18.6 (1992)	12.9 (2005)
SOURCE: Porto Alegre City Hall, 2004.

Nevertheless, Porto Alegre faced worsening fiscal conditions at the beginning of the new millennium due to factors such as rising health care costs and a reduction in state aid. From 2002 to 2004, the city faced a budget deficit and was forced to delay implementation of PB projects. In 2005, fiscal adjustment took precedence over PB, as the city produced a budget surplus through cuts in social spending and other essential services, such as garbage collection.

Investment, Nominal Surplus/Deficit and Debt Service as Percentage of Total Yearly Revenue

In 2006, the city did not publish the investment plan for the year until several months into the year.

Far from transparent, budget information was scarcely distributed at all. The government claimed that it had executed 199 PB projects, but the Urban Studies and Advice Center (CIDADE) identified only 48 projects. CIDADE is still waiting for the government’s explanation of this discrepancy, which was promised to the group in April. Moreover, publication of PB council meetings — which should be available online — has been delayed for more than six months, causing increasing tension during PB sessions.

Also in 2006, the local parliament passed a law to postpone the date by which the mayor must deliver his annual budget proposal. There was no legitimate need for this change. The mayor does not need additional time to prepare the budget, since the mayor’s discussions with PB delegates and councilors over the budget have not been expanded, and delaying the budget's submission to parliament will limit opportunities for parliament and the public to review it.

In addition, the government presented two different versions of its 2006 budget, one to PB participants and the other to the local parliament. When this fact came to light the government apologized but did not provide PB participants with a hard copy of the version presented to parliament. The version received by PB participants did not include data on tax exemptions or social targets.

THEMES	3 FIRST PRIORITIES ALONG THE YEARS
THEMES	07	06	05	04	03	02	01	00	99	98	97	96	95	94	93	92
SEWAGE							3		1	3	3	2	3	3	1	1
HOUSING	1	1	1	1	1	1	2	1	3	2	1	3	2	1	3
PAVEMENT			3		3	3	1	2	2	1	2	1	1	2	2	3
EDUCATION	2	2	2	3	2	2										2
HEALTH		3						3
SOCIAL CARE	3			2
SOURCE: CIDADE, 2006

These various problems are taking a toll on PB efforts. Housing has been PB's top priority in the budget since 2002 (see table above), but when PB councilors looked at the government’s proposal for housing in its 2007 investment plan, they realized that the government's figure addressed just one project: the Integrated Project for the City Entrance, which involves the development of a slum area that is highly visible to visitors entering the city. The mayor’s office argued that the fiscal crisis precluded additional investments in housing, but it should be noted that the mayor is also proposing to spend several million dollars on consultants and experts to improve the city’s management, including public-private partnerships. (Though the mayor agreed to reallocate a few million dollars from these projects in order to help fund some basic budget priorities, in a budget of more than $1 billion this is still very little.)

As the PB annual cycle unfolds, regional and thematic weekly meetings are continuing. But the more PB participants criticize the government, the more the government threatens to reduce their power. Recent events demonstrate that just as there is no free lunch in business, there is no free legitimacy in politics. For further information contact Sergio Baierle at baierle@ongcidade.org.

This article presents updates from three organizations — AIDS Alliance Nigeria, Human Support Services, and Journalists Against AIDS — on their efforts to monitor HIV/AIDS funds in Nigeria. This work is important not only because of the large amounts of funding Nigeria has received to combat HIV/AIDS ($141 million from the Global Fund alone), but also because of the large number of Nigerians living with HIV/AIDS (2.9 million out of a population of 133 million). Both donors and people living with HIV/AIDS want to see that as much money as possible directly benefits those afflicted by the disease.

Even though the Nigerian government has made a national effort since 1999 to combat HIV/AIDS, serious gaps remain in providing basic HIV/AIDS prevention, support, and treatment services at the community level. With a total population of 133 million, for example, Nigeria has only about 75 antiretroviral treatment sites.

According to Theresa Guthrie of the AIDS Budget Unit of IDASA, resource tracking can improve AIDS care by identifying resource providers and receivers, measuring the services reached those resources, identifying areas where resources have yet to reach, and measuring trends over time. Efforts are underway by the OECD, the Netherlands Interdisciplinary Demographic Institute, and the World Health Organization to track resources designated to HIV/AIDS in Africa as a whole.

HIV has crept into every community in Nigeria, sweeping away the dreams of the future. Recently, hope has come with the discovery of life-saving antiretroviral drugs. To make these drugs more accessible, particularly to people in resource-poor countries, the funding focus for HIV/AIDS activities has shifted towards the provision of antiretroviral (ARV) treatment to those who need it.

In 2002 the Nigerian government initiated an ARV treatment program, which aimed to provide drugs for 10,000 adults and 5,000 children within one year. The program suffered a major setback in 2004, when a shortage of drugs delayed treatment for some people for up to three months, but the program resumed when more drugs were received.

Since the creation of the Global Fund and the President's Emergency Plan for AIDS Relief, donor funding for ARV treatment and other HIV/AIDS-related activities has increased to over $285 million by 2005, while funding from the U.S. Agency for International Development funding grew from $2.7 million in 1999 to $34.5 million in 2005. In response, the government also increased its funding through the National Action Committee on AIDS (NACA), from 1 billion Naira in 2003 to N1.47 billion in 2006.

Undoubtedly, contributions by civil society would have enriched the government’s 2006 budget, for example. In most cases, funds for HIV/AIDS activities are buried in the budget with other activities, and the exact amount of funding specifically aimed at HIV/AIDS is not easily discernible.

AIDS Alliance Nigeria (http://www.aidsalliance.org/sw7216.asp) believes that civil society organizations can play a much stronger role in ensuring accountability, transparency, and high-quality service delivery if they work with the government to build a relationship of trust and respect. With this goal in mind, AIDS Alliance has started training civil society organizations, government agencies, and groups representing people living with HIV/AIDS on budget-tracking skills. The first phase of this project was the publication of "HIV/AIDS: The Disease Burden and the Level of Funding in Nigeria, 1998-2004," followed by a training by the Nigeria Resource Tracking and Advocacy Group for HIV/AIDS stakeholders from six states.

Funding for HIV in Nigeria has almost quadrupled in recent years. The challenge now is not obtaining more funds, but making existing funds work for the purpose for which they were given. In other words, the main tasks now are to ensure accountability and transparency in resource allocation, disbursement, and implementation.

Human Support Services (HSS) (http://www.humansupportservices.org/), an NGO dedicated to the needs of disadvantaged groups in Lagos, Nigeria, works on issues related to health, democracy, governance, and development. HSS's health work focuses on reproductive health and preventing HIV/AIDS.

HSS is collaborating with the Civil Society for HIV/AIDS in Nigeria on a project called "Increasing Participation of Civil Society in the Assessment, Monitoring and Evaluation of Resource Mobilization and Utilization on the Impact of HIV/AIDS Mitigation Efforts in Nigeria." The project works to increase resource allocations to HIV/AIDS and ensure a more efficient use of these funds in the Nigerian states of Lagos (Ikeja), Gombe, Cross River, Enugu, and Plateau.

The project's goals are to enhance the transparency and accountability of public bodies, international development partners, and NGOs involved in mobilizing, allocating, and using funds to combat HIV/AIDS. The project also tries to build relationships between civil society and government to create an effective HIV/AIDS response system and produce "best practice" models for monitoring and tracking resources at national, state, and local levels.

The need for the project stems from the 2001 Abuja African Heads of State Declaration on HIV/AIDS, TB, Malaria and other Infectious Diseases, in which Nigeria and other members of the Organization of African Unity (http://www.uneca.org/adf2000/Abuja%20Declaration.htm) vowed to increase their health budgets and to use these added funds, along with increased funding from donor agencies and multilateral organizations, to achieve the Millennium Development Goals.

HSS believes that it is important to build civil society organizations' capacity to play a more active role as watchdogs on HIV/AIDS. For this reason, the project has concentrated thus far on capacity-building and training for civil society groups on public finance and budget analysis at the state and local levels.

In addition, the project created the Community Action Committee on AIDS, which trains community facilitators to address HIV/AIDS issues in local communities. These facilitators report that the project has developed their capacity — empowering them, for example, to facilitate the removal of a local government chairman in Ikeja who was not transparent and accountable to the community. Other accomplishments to date include:

Journalists Against AIDS (JAAIDS) (www.nigeria-aids.org) was founded in 1997, after AIDS claimed the life of Fela Anikulapo-Kuti, one of Nigeria's most popular musicians and an anti-military crusader. Omololu Falobi established JAAIDS to serve as a platform for media activism around the issue of HIV/AIDS.

In 1998-1999, JAAIDS held seminars in newsrooms and talked with editors and reporters about their needs and constraints in covering AIDS. In collaboration with the Nigerian Union of Journalists in Lagos, JAAIDS also facilitated a dialogue between AIDS workers, reporters, and editors about the reality of the AIDS epidemic, providing valuable HIV/AIDS information to more than 900 journalists.

JAAIDS was instrumental in the formation of the Treatment Action Movement and the Nigeria HIV Vaccine and Microbicide Advocacy Group, which work on issues related to HIV/AIDS prevention, treatment, and care, and it continues to play an important role in shaping civil society's advocacy skills around HIV/AIDS at the national and regional levels. JAAIDS also helped establish the African Civil Society Coalition on HIV/AIDS, which had a strong influence on the outcomes of the 2006 African Union Summit on AIDS, TB and Malaria and the 2006 United Nations High-Level Summit on AIDS. Until December 2005, JAAIDS served as the African NGO representative on the program coordinating board of UNAIDS.

JAAIDS' current projects include budget advocacy and HIV/AIDS expenditure monitoring. Through its MONITOR (Monitoring Initiative to Strengthen Accountability and Monitor Implementation of the National Response to HIV/AIDS) project, JAAIDS carries out research studies to analyze the effectiveness and promote the accountability of AIDS spending in Nigeria. The JAAIDS study on HIV/AIDS allocations in the 2006 budget has earned the organization much respect for its work in this area.