David Lahl, Project Leader, Public Finance Reform

Sound Finances Key To SDG Implementation

The objective of the German Development Cooperation is to support the Serbian government in its efforts to improve good financial governance in the context of the 2030 Agenda. Adequate capacities to plan and execute budgets, as well as transparency, accountability and participation in budget processes, are crucial to the efficient implementation of the Sustainable Development Goals

David Lahl, Project Leader, Public Finance Reform

Good financial governance is key to the effective and efficient implementation of the United Nations’ Sustainable Development Goals (SDGs). According to UN estimations, achieving the SDGs will require trillions of dollars worldwide. “A big share of these amounts will be channelled through national public financial management (PFM) systems,” says David Lahl, the GIZ expert who manages the German contribution to this important project.

“First of all,” says Mr Lahl, “governments need to mobilise resources, then they have to allocate funds to the institutions in charge of implementing the SDGs. Furthermore, government institutions need to have sufficient capacities to plan and execute budgets. Finally, transparency, accountability and participation have to be ensured in budgeting processes.”

Considering your vast experience of introducing principles of good financial management to developing countries, what are your key recommendations for the Serbian government?

– I arrived in Serbia one month ago, so I’m still in the process of learning how Serbia’s public financial management system functions. However, as far as I can see, quite a comprehensive reform programme is in place in the area of public financial management, which is making progress on implementation. I think some analytical work still needs to be done regarding how public finance reform can contribute effectively to achieving the SDGs in Serbia. For example, the following questions should be analysed in slightly more detail: are the right amounts of funding assigned to the implementing institutions of SDGs or is there a need to shift funds according to the country’s priorities e.g. to the municipal level or certain sector-specific ministries? Do government institutions at all levels have appropriate technical capacities to manage funds for the implementation of the SDGs? Is additional revenue potential available that still could be used to finance the achieving of the SDGs, including funds sourced from taxes, development assistance, capital markets and the private sector? Which instruments could be used in Serbia to ensure budgets are aligned with the implementation of the SDGs? How can state institutions, academia, civil society, the private sector and development partners work together to promote accountability and transparency in the implementation of the 2030 Agenda?

In which segments of financial and tax administration reform have you provided the greatest support to the Government of Serbia?

– Our project aims to strengthen the public finance system and policy coordination for implementing the 2030 Agenda. The project advises the Ministry of Finance, the Tax Administration, the State Audit Institution, the Cabinet of the Minister without portfolio in charge of coordination of the implementation of the 2030 Agenda and the Public Policy Secretariat in five key areas: implementing the Public Financial Management Reform Program 2016-2020, the Tax Administration Transformation Programme, internal and external financial control, budget transparency and policy coordination for the implementation of the 2030 Agenda. The current active phase of the project started in 2018. Overall, German development cooperation has been supporting good financial governance in Serbia for more than 15 years.

The Serbian Ministry of Finance and GIZ can be extremely satisfied with the effectiveness of implementation of the Good Financial Governance project to date

To mention just a few results of the project. The Economic Reform Programme for the 2018-2020 period was elaborated as a strategic document. A training program has been developed for the department responsible for combating irregularities and fraud in the handling of EU funds (Anti-fraud coordination service – AFCOS). For the Serbian Tax Administration, informative material and the brand “Your Tax Advisor” (in Serbian VAŠ POREZNIK) were designed and have contributed to better access to information on tax issues. Training of tax police inspectors on methods of tax crime investigation carried out in cooperation with the Academy for Criminalistic and Police Studies, has increased the efficiency of the Serbian Tax Administration in detecting and proving tax crimes. In the area of coordination of the 2030 Agenda, mapping of the national strategies in relation to the SDGs has been conducted. How satisfied are you with the effectiveness of the implementation of the Good Financial Governance project to date? – In an evaluation conducted last year, the project was rated as very successful. The evaluators underlined, in particular, the relevance of the project and its efficiency. Most of the intended results have been achieved. It can be noted that the performance of the Serbian Tax Administration (STA) has improved remarkably over the last few years. Consequently, the total revenue available to the Serbian Government has increased. The outreach of the STA to improve voluntary compliance has been significant and has contributed to improving the public perception of the STA. Advice on Good Financial Governance was also very relevant to the process of European integration. While it cannot be said that all results are solely attributed to the project’s interventions, as the reform commitment of the Serbian government was also high, it can be said that the project’s interventions have contributed to improving PFM in Serbia.

In your opinion, how successful has Serbia been in establishing a national strategic framework in relation to the SDGs?

– During the formulation of the 2030 Agenda, Serbia took an active role in the process of defining the SDGs. Serbia was also among the first countries to establish a government body in charge of coordinating the implementation of the Agenda. In the meantime, Serbia has developed various strategies in different sectors that are highly relevant to the SDGs. However, as in many other countries, establishing a coherent framework remains a challenge.

We hope that by showing Dobrosav ‘Bob’ Živković’s illustrations of the 17 development goals we will raise interest in the 2030 Agenda among visitors of the Belgrade fortress, and we also invite your readers to visit this exhibition

How are you familiarising citizens with the 2030 Agenda?

– It is important that citizens know the central messages of the 2030 Agenda and how they relate to them. That’s why we support efforts to disseminate information about the SDGs to the general public. For example, we are planning an exhibition about the SDGs in Kalemegdan Fortress Park from 17th September to 17th October 2018. Serbian illustrator Dobrosav ‘Bob’ Živković has created caricatures representing the SDGs in an entertaining way. We hope that by showing the Živković illustrations of the 17 development goals we will raise interest in the 2030 Agenda among visitors of the Belgrade fortress, and we also invite readers of your magazine to visit this exhibition.

Only citizens who are informed about the SDGs will be able to hold their governments accountable to achieve of these goals.