The New Today


What Institutional changes are needed?

Last week’s article alluded to the need for institutional changes to help the government ramp up implementation and reset its agenda. This article will attempt to identify the organisational changes necessary to do so.

The development planning and public sector investment system underwent significant reforms during the period of economic adjustments in the late eighties and early nineties.

The government of the day, with assistance from international donor agencies, set up a comprehensive multi-layered system that managed development planning and public sector investments at the sectorial and national levels.

The system worked well enough to see development finance resources to Grenada increased over the previous last two decades and maintenance of an implementation rate over eighty percent. However, since 2013, the defeated government went out of its way to systematically dismantle that system and replace it with a number of disjointed project implementation functions scattered across the public service with a weak central coordination planning structure.

Ideally, there ought to be a central coordination entity either in the form of a department or ministry to guide the system of development planning through the conduct of sector analysis working with the various sector ministries and alignment of international donor priorities with the country development needs done during country partnership engagements.

The system of development planning should have been further strengthened to enable Grenada to benefit from the emergence of global trust funds, such as the Green Climate Fund (GCF) instead of the decentralised siloed approach that has sprung up driven by incompetent senior managers who want to create their own fiefdom to make themselves appear indispensable in the eyes of ministers.

If the new government is to succeed, it must move with urgency to address this systemic breakdown by reverting to the comprehensive system of development planning that existed and build on that foundation to create one that would enable Grenada to maximise its ability to attract funding from these new sources of development finance.

The new government does not have to reinvent the wheel to do so. Instead, it needs to take bold steps to make the system function as it should. All ministries with large capital projects and programs should have a planning unit or officer who must work closely with the technical functions of their ministries to undertake sector analysis, identify problems and needs of the sector, and prepare project concept notes that would be further developed in collaboration with either a department or ministry of development planning.

That ministry or department will lead the process in preparing projects and programs working with respective line ministries and other stakeholders. Once the project documents are prepared and vetted to determine alignment with the government’s priorities, they would be sent to suitable funding agencies whose own priorities are in line with the projects for consideration.

After funding is approved, the new Ministry of Implementation, Transformation, and Mobilisation ought to work with the project executing ministry to ensure efficient and timely implementation.

Though the process sounds straightforward, there must be a proper institutional structure to drive it. At present, the structure is broken and disjointed, which has led to long delays in project implementation, dismally low implementation, and loss of funding for major projects.

The alignment of portfolios under the new government appears not to have appreciated the extent of the breakdown of the system and have further compounded the problem. However, if the government wants to arrest the situation, here are some immediate steps it can take to remedy the situation.

Ministries with large capital portfolios must have Permanent Secretaries with knowledge of and demonstrated understanding of the development planning process, project cycle management, managerial experience at the mid to upper level of the public service and have a proven track record as a proactive problem solver able to understand the importance of working with structure and process, and is considered a team player.

This means that most of the senior managers who now lead major ministries will have to move to lesser ones and be replaced with persons within the service who have the qualifications listed above along with at least a first degree.

They also need to ensure that each of these ministries have well-functioning planning units or experienced planning officers who are capable of working with the technical functions of the ministries to identify projects and prepare concept notes. This will in short order improve the planning process at the sector ministry level.

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At the central level, in order to make the Ministry of Implementation more effective, the Procurement Unit that is now at the Ministry of Finance should be immediately placed in that ministry. It was a mistake to place that unit in a Ministry of Finance without a development planning function and may suggest a misunderstanding of the roles of the central procurement board and a procurement unit.

The central procurement board is a fiduciary responsibility of the Ministry of Finance, whereas the Procurement Unit manages a central project implementation activity.

Projects are implemented by procuring goods and services, purchasing materials, and equipment to build bridges, roads, schools, etc, and hiring services consultants to design structures such as roads, buildings, as well as to conduct workshops and deliver programs to beneficiaries.

All are essential project implementation activities that suggest a better fit in the Ministry of Implementation.

I was informed by someone in the know that the World Bank in a mission last year flagged procurement as a major delay in the implementation of projects. If the Ministry is to carry out one of its main mandates to improve the implementation rate, it must be given the tools to do so.

Another area that must be given immediate attention is the economic and sustainable development planning function. Many countries in the sub-region have full fledged planning ministries or powerful economic and sustainable development departments as part of a Ministry of Finance that drive the economic, social, spatial planning, and resource mobilisation functions.

The decision to place that function with the Ministry of Tourism was not a prudent one, although in a few countries such as Cayman Islands and Turks and Caicos, they are merged. In instances where these two major ministries are merged, the islands don’t depend on traditional development finance.

Instead, there are dependencies who rely heavily on grant aid and private sector financing. Grenada is heavily dependent on development financing to finance its development and as a result it must have a well-developed development planning ministry once that function is removed from the Ministry of Finance. To place it with the Ministry of Tourism has diminished its importance.

The new Ministry of Economic and Sustainable Development, and Planning should be strengthened and given a mandate to drive the economic, social, and spatial development of the country in a sustainable manner.

This ministry will further strengthen project implementation by managing the development planning process and working closely with line ministries to ensure projects and programs are properly prepared, properly aligned to relevant donors, and timely loan and grant approvals.

The Physical Planning Unit should be brought under the control of the ministry and appropriate structures established to monitor multilateral agreements under these global trust funds to make sure Grenada is able to attract significant grant funds under these funding facilities in light of its restrictions on bowering under the Fiscal Responsibility Framework.

It is this ministry that would take the lead in getting major new projects funded as implementation of the ongoing comes to an end.

If steps are taken to strengthen the development planning function and give the ministry a prominent role on par with the Ministry of Finance, the government’s ability to get new projects and programs under its agenda funded for implementation to commence in the second half of its tenure will be severely hampered and weaken its chances of a second term.

After the NNP election projects are implemented, there are no new projects on the horizon to fill the gap. The government must act now to make institutional changes if it wants to ramp up implementation, prevent further loss of funding, and a dramatic decline in economic activity with all its resultant negative impact on employment and aggregate demand in the economy.

The ill-conceived project implementation unit set up under the South American snake in the Ministry of Physical Development, where officers are paid additional on their salary supposedly to implement the same World Bank projects that are in dire straits should be moved immediately to the Ministry of Implementation.

The ball is in the government’s court so let’s see how they would play it. Will they continue to delay draining the swamp and maintain the broken system that caused the dismally low implementation rate or make the changes that would rebuild the system to improve implementation, generate economic activity, and lower unemployment?

Special Correspondent