A New Approach to Budgeting in Uzbekistan
Result-oriented Budgeting is an innovative approach to the planning and execution of state budgets, where budget performance is assessed not in terms of its execution, but in terms of its achievement of ultimate goals and results.
This was how Botir Pardaev, the Head of the Treasury of the Ministry of Finance of the Republic of Uzbekistan explained the concept of Result-oriented Budgeting at the seminar on ‘Strategic Planning and Budgeting for Results: International Experience and Application Opportunities in Uzbekistan’, organised by UNDP’s ‘Budget System Reform in Uzbekistan’ project.
- Results-oriented Budgeting is an approach to developing budgets which focus on the achievement of key objectives and goals.
- The innovative approach to budgeting has been identified by the Government of Uzbekistan as important to development.
He emphasised to the 40 ministry and government agency representatives attending the 2-day seminar that the new approach to budgeting considers not only where, when and on what funds will be spent, but also on what the end results should be.
According to international expert Nina Hajoyan, the Result-oriented Budgeting methodology has been used for many years around the world, and various models of Result-oriented Budgeting have so far been developed. In particular, one of these models is the programme method of planning and budget execution.
The advantage of this method lies in the fact that the planning and budget allocation is undertaken not by considering types of expenditures, but by selecting programmes based on their goals, objectives and measurable indicators.
The Results-based Budgeting approach therefore establishes a relationship between a programme’s objectives, the costs needed for its implementation, and its expected results. It does not necessarily facilitate the impact of an influx of budgetary resources, but it does create conditions for the efficient and effective use of public funds. In other words, it allows for a better management of costs while ensuring predictability.
UNDP’s demonstrative seminar allowed specialists from the Ministry of Finance, line ministries and regional finance departments to be better acquainted with international experiences in regards to the practical application of Results-oriented Budgeting, including programming methods. It particularly covered the related experiences of Asia, the Commonwealth of Independent States, and the Organisation of Economic Co-operation and Development.
The ‘Budget System Reform’ project has already held a number of seminars devoted to demonstrating the benefits and importance of Result-oriented Budgeting, but only a small number of specialists from the Ministry of Finance and selected line ministries have had a chance to learn about the new methodology.