Public Finance October 2018 Taster

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Issue 10 October 2018

TALES OF THE CITY

TA ST E R E D I T I O N

How Latin America is rethinking urban space THE FAIR SEX?

Why South Africa needs gender budgeting GULF STATEMENTS

News and views from CIPFA’s international conference

OCTOBER 2018 • ISSUE № 10

Tracking progress towards sustainable development

DIFFERENCE

Pharma big four avoiding tax payment

Cybersecurity biggest risk for 2019

Four of the world’s biggest pharmaceutical companies could be avoiding $3.8bn in corporate tax, Oxfam has warned. It analysed data from 2013 and 2015 for 16 countries and estimated Abbott, Johnson & Johnson, Merck and Pfizer were not paying $112m a year of tax in developing economies and $3.7bn in advanced ones.

Cybersecurity is the top concern for internal audit professionals across Europe. More than two-thirds of chief internal auditors in the public and private sectors cited cybersecurity as the biggest organisational risk for 2019, according to a Chartered Institute of Internal Auditors poll. Data security and compliance were joint second.

Saffa: the �Jacob previous government relied too heavily on borrowing

Canada aims lowest poverty rate in its history The Canadian government is introducing a national ‘poverty line’ for the first time and will enshrine in law a goal to halve the number of people living in poverty by 2030.

It has proposed to introduce the first Poverty Reduction Act in Canada’s history, which would also see the rate of poverty in the country fall by 20% by 2020.

The Opportunity for All strategy defines poverty and what the ‘poverty line’ – the minimum level of income considered to be adequate – will be.

If the strategy is successful, Canada would have the lowest poverty rate in its history, the government said.

However, it has not yet announced any new funding or explained how it will meet the targets.

Sierra Leone looks to reform to cover deficit Fiscal consolidation is the number one priority for Sierra Leone as new finance minister Jacob Saffa embarks on what he describes as a challenging review of its tax system

By Simone Rensch

Sierra Leone is strengthening its tax system to ensure that it can cover its budget deficit and basic salaries – a task that is “quite challenging” – the new finance minister has told PF in an exclusive interview.

Jacob Saffa, who was appointed finance minister in May, said that the previous government relied too heavily on borrowing from private banks to finance each deficit and even basic salaries.

He explained that he would focus on ensuring the government could finance its own expenditure. “Fiscal consolidation is our number one priority. This means we need to mobilise revenue and rationalise our spending,” he told PF during a visit to London.

He added that tax is a major source of revenue and that the government would work to improve the system for more efficient tax collection and provide staff training to build capacity.

In 2017, Sierra Leone’s budget deficit was equal to 5.80% of GDP, and total domestic revenue was 3.0% short of its target for the year, according to the World Bank. www.publicfinance.co.uk/subscribe The finance minister said he could not disclose which taxes would change ahead of presenting the budget at the end of

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6 PUBLICFINANCE OCTOBER 2018

October. But he added that the changes would maximise revenue without hurting the poor in the country.

On 17 September, the country rolled out its landmark free education programme for primary and high school students, which covers tuition fees and textbooks for more than two million children in government-run schools.

This is part of the new government’s move to eliminate poverty and invest in education, health and social protection.

Saffa told PF that human capital was a top priority for the west African nation. “We have increased public spending on the education sector to 21% of the national budget,” he said.

The government also plans to improve the health system and child health in the country, including provision of school meals to optimise learning capabilities. The finance minister said he hopes this will be achieved within the next three years.

But he added that even if the maximum revenue that can be raised through taxes went only to health, education and social protection, the country faced a financing gap of around $300m for those three areas alone.

At an event at the Overseas Development Institute on 18 September, Saffa said Sierra Leone’s government needed the skills to negotiate with the private sector and to better manage contracts.

He told PF this would enable the government to borrow money more responsibly and create a “win-win” situation.

AfDB GROUP / ISTOCK

news

Stay flexible to keep PFM on the agenda Political drive is essential if public financial management reforms are to be successful in the long run, a session on transforming PFM was told.

Leadership changes while PFM reforms are being implemented can mean that priorities shift away. It was therefore important for public finance leaders to be flexible to keep PFM on the agenda.

�Delegates in Abu

Dhabi heard how auditors must find a ‘more intelligent way of talking to politicians’ to ensure they are part of the SDG conversation

Gill: ‘If all �Simon that you address are fellow auditors or accountants, you are not going to help”

Burst the bubble to achieve SDGs

ISTOCK

Corruption: an ‘infinite game’ The world may never win the fight against corruption, but governments should ensure they stay on top of the issue, CIPFA’s head of counter fraud training has said.

Les Dobie told the conference that, realistically, the world may never “beat the problem of corruption” and should think of it as an “infinite game” rather than a short-term fight that can be won.

“You may defeat the current players, but new players will come in… no matter how many structures and controls we put in place,” Dobie said.

Government’s job was to create conditions where people were not tempted to behave corruptly, he added.

Time to gen-der up

Finance ministries around the world need to understand gender issues better – and focus less on numbers - to successfully implement equality into their budgets, CIPFA’s international conference heard.

Technical focus isn’t sufficient to help the world Although gender budgeting has been around for almost 30 address ‘the wicked problems we have’, warns ODI years, there is a still a lack of understanding on how it

By Simone Rensch works, the panel at CIPFA’s Finance professionals need to step out of their “technical bubble” if Abu Dhabi conference agreed. they want to achieve the Sustainable Development Goals, urged “It’s a great tool. It’s about Simon Gill of the Overseas Development Institute. doing what you’re already Gill, who is the ODI’s acting managing director, economics and doing [budgeting], just a little finance, told delegates that good governance and the SDGs posed bit better,” said Herdís Sólborg a complex and “wicked” problems that cannot be solved by Haraldsdóttir, head of division “a straightforward logical approach”. of the Department of Fiscal “You can’t just sit in your technical bubble and hope you are going Affairs in the Icelandic to make an impact,” Gill said. “If all that you address are fellow Ministry of Finance and chair auditors or fellow accountants, you are not going to help your of the OECD Gender Budgeting country or the world address the wicked problems that we have.”

Experts Committee.

Vivi Niemenmaa, national expert on sustainability at the European But she added: “We [finance Court of Auditors, told a panel discussion: “There are no SDGs professionals] rely too much without good governance.” She added that achieving the SDGs on the data – and the wrong requires a whole-of-government approach and long-term kind. Instead of focusing on perspective. This posed a challenge for auditors who are used to the social aspects, we are just looking backwards at what has already happened. looking at numbers. Focus on Khalid Hamid, executive director at the UAE State Audit Institution, the right things instead of www.publicfinance.co.uk/subscribe told the session that auditors are often left out of the dialogue counting some nonsense,” she surrounding the SDGs but should be part of the conversation. urged finance ministries.

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the BREXIT debate

No-deal Brexit would be ‘dire’ for UK economy A no-deal Brexit will entail “dire consequences” for the UK economy, which would rapidly start to contract, the International Monetary Fund chief has warned.

Speaking at the Treasury on 17 September, Christine Lagarde said that, under any outcome, there would be costs for the UK economy – and “to a lesser extent” for the EU. In the event of a no-deal exit in March, Lagarde said: “If that happened there would be dire consequences… in terms of reduced growth, an increase in the [budget] deficit and a depreciation of the currency.

“In relatively short order, it would mean a reduction in the size of the economy.”

In the event of a smooth exit from the EU, the latest IMF annual assessment of the UK economy predicts growth of 1.5% next year.

New service for public contracts

Damned if you deal, damned if you don’t

A free e-notifications service will replace the Official Journal of the European Union if the UK leaves without a deal. A technical note said public contracting authorities needed to ensure their notices were published on the new service but added that there would be “more engagement… nearer the time”.

Brexit will leave British families worse off, regardless of what deal the UK gets, the Joseph Rowntree Foundation has warned. Analysis conducted with Cambridge Econometrics found that even if “favourable” trading arrangements were agreed, there would be negative effects on living costs and wages.

Migration not cause of social care issues Lack of sustainable funding is the key to solving the sector’s problems, according to a new expert report

By Vivienne Russell Problems affecting the social care sector are not related to European migration but rather reflect the lack of a sustainable funding model, an expert report commissioned by the government has concluded.

On 18 September, the Migration Advisory Committee published its final report on the impact of migration from the European Economic Area, including the effects on public services and public finances.

Commissioned by then home secretary Amber Rudd in July 2017, it concluded that EEA migrants pay more in taxes than they receive in benefits. However, it also said it was “not convinced” that attention was sufficiently focused on ensuring that funds were available to manage the impacts of immigration.

On social care, the independent public body that advises on migration policy noted that the sector struggles to recruit and retain sufficient workers and that demand for services was “rising inexorably”. “The basic underlying problem is poor terms and conditions, in turn caused by the difficulty in finding a sustainable funding model,” the report stated. It added that sufficient and sustainable funding for social care, allowing “competitive wages” to be paid to UK residents, would solve many recruitment problems.

“Unless working in social care becomes more desirable to UK workers, chiefly through higher wages, migrant workers will be Migration �The Advisory

Committee concluded that sustainable funding for social care would drive improved pay and conditions

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10 PUBLICFINANCE OCTOBER 2018

necessary to continue delivering these services,” the report said.

But the same factors are also likely to make working in the sector unattractive to migrants, “who may look to change sector at the first opportunity, even if hired to work in social care”.

Responding to the report, the Cavendish Coalition, which brings together health and social care bodies to consider Brexitrelated issues, said it was “pleased” the report highlighted the social care funding crisis.

Co-convenor Danny Mortimer said: “It would be completely unacceptable to allow vital social care services to close under the strain of not having the people required to provide good care, and so we welcome the recognition that sustainable funding would drive improved pay and conditions.”

The MAC found that EEA migrants contribute much more to the NHS and social care in terms of financial resources and the work they provide than they use in services. It also noted that the sectors employ greater numbers of non-EEA migrants.

In education, the report said there was no evidence that migration had reduced parental choice in schools or the educational achievements of UK children.

The document also stated that migrants were only a small proportion of people in social housing but a rising fraction of new tenants. The number of new tenancies going to migrants from new EU member states in particular was rising.

“Given there is little building of new social housing, this is inevitably at the expense of other potential tenants,” the report said.

SHUTTERSTOCK

brexit watch

watchdog watch

WHAT’S GOING ON IN AUDIT AND REGULATION —

EUR O P E AN C O U RT O F A U DI TO R S ⦁ The European Union should make more effective use of cohesion funding, as it is often “used in a rush” at the end of a programme period, the bloc’s spending watchdog has urged.

The European Court of Auditors found countries were slow to progress with cohesion plans in a September report focused on the 2007-13 spending round, when a total of €346bn of funding was allocated.

It found much of the problem lay with delays in member states adopting the legal framework required by the EU before it pays out funds. This means the money is received later in the spending period.

The Cohesion Fund is a major plank of EU spending, and finances projects that are intended to stimulate local economies, reduce social inequalities and improve sustainability.

“It is crucial to avoid a situation where large amounts of money need to be used in a rush at the end of a programme period, because insufficient consideration may be given to value for money,” said ECA member Henri Grethen.

“Making use of the money becomes an end in itself, rather than a means of achieving policy objectives.”

A separate ECA study focused on how projects receiving money from the Cohesion Fund were selected, finding many received cash on a ‘first come, first served’ basis rather than merit.

“It is critical that this funding is allocated effectively, namely through the delivery of expected results,” the report said.

the frame: �Inthe ECA found

that funding delays were often the result of late adoption of the required EU legal framework

€346 bn

Cohesion funding allocated in 2007-13 spending round

“Making use of the money becomes an end in itself, rather than a means of achieving policy objectives” ON DELAYIN G C O H E S I O N F U ND S P E ND I NG D E C I S I O NS : H EN RI GRET H E N, E CA

GHANA AUD I T SE RV I CE ⦁ Ghana’s government auditors have been asked to help “clean up” the government payroll to remove phantom workers.

Auditor general Daniel Yaw Domlevo said it was a “great worry” that the government was using 45% of locally generated revenue to pay salaries of workers when, out of a total population of 28 million, fewer than 700,000 people are employed by the Ghanaian government.

It was “unacceptable” that some people were drawing salaries from the state but not working for it, he said.

Auditors urged leaders to be vigilant when validating electronic payment vouchers to ensure only people working under their supervision were paid.

The clean-up ran from 11-21 September.

O FFI CE O F THE AUD I TO R GENERA L NEW Z EALAND ⦁ Public sector organisations in New Zealand need to regard information as a strategic asset and develop a plan for its management and governance, the country’s auditor general said.

A review found some bodies had a good understanding of the information needed to inform decision-making, and deployed technology effectively to collect and manage it. But others “struggled” .

“Although there are obvious cost implications for IT solutions, it is important that public organisations keep reviewing their systems and processes for www.publicfinance.co.uk/subscribe managing information,” said New Zealand’s auditor general John Ryan.

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Future-proofing finance starts with good talent management

A

t the heart of strong public financial management is a pool of talented finance people, writes CIPFA’s Lindie Engelbrecht. Both experienced accountants and millennials at the start of their careers are key to the future of the public sector. We also know from our conversations with public sector organisations around the world, whether we look to developing or developed countries, that attracting and retaining finance talent is a challenge.

With automation, artificial intelligence and blockchain all promising to bring big changes to how we undertake financial management, audit and accounting in the future, the public sector must make sure it has the right talent to adapt. This is why CIPFA, on behalf of the International Colloquium on Financial Management for National Governments, surveyed 72 public sector organisations around the world to better understand the challenges in building sustainable talent.

The report we’ve developed from our research – Talent Management in Government Finance – is a world first, and should kick off a much-needed conversation about talent management strategies. It will also provide an initial evidence base from which we can start to develop a truly sustainable workforce for public financial management.

Among the results, we found the government sector has ‘category issues’ to overcome in attracting the best talent to its workforce. Respondents highlighted how bureaucratic processes, organisational conservatism and lower pay than corresponding corporate positions all contribute to negative perceptions of careers in government. Conversely, factors such as pensions, job security, a supportive culture and the uniquely challenging complexity and variety in the roles available could – with the right emphasis – far outweigh the perceived drawbacks of a government job.

What this highlights is the increasing need for the public sector to be agile when it comes to managing, developing, and retaining financial talent. Partly, this means ensuring that finance teams get the chance to explore continuing professional development opportunities, which are critical to engagement and retention strategies in any profession. Whether you are providing mentorship or secondments, government employers need to make sure they are providing their finance teams with timely and relevant opportunities that support individuals at differing stages of their careers.

However, supporting CPD is not the only key to drawing in and retaining talent, and this was highlighted by the organisations we talked to. Whether it’s work-life balance, job stability, the public sector ethos – or, for organisations thinking ahead, arrangements such as homeworking and flexible hours – in a competitive job market, these dynamics can make all the difference to attracting fresh talent into the public sector.

This research also shows how, in the next 10 years, the public finance professional will need to take on more complex skills and undertake an increasingly strategic role, focusing on planning and resourcing. They will need to understand and encompass digital technology, exponential growth in the availability of data and adapt to changes in working practices. Making this happen requires getting the strategies in place now. If the finance profession in government can get this right, it can build a high www.publicfinance.co.uk/subscribe performance workplace, encourage a learning environment and contribute to a more diverse workplace. ●

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cover feature

JUST

The UN’s Sustainable Development Goals set ambitious targets for a world without poverty, hunger and pollution.

Three years on from TO ACCESS THE what FULL their adoption, VERSION OF PUBLIC FINANCE progress hasMAGAZINE been made , SUBSCRIBE HERE and how is it www.publicfinance.co.uk/subscribe best assessed?

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South Africa’s post-apartheid constitution is arguably one of the best in the world, but public money is still not used as well as it could be to improve the lives of women and girls

SHADOWS OF INEQUALITY

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30

GETTY

►

idea that it is an economic problem, and that if you don’t solve this you are never going to become a developed country.

There is an enormous cost to inequality within a city.”

In practice, most city authorities are already prioritising urban infrastructure for the most vulnerable citizens, paying particular attention to social housing.

Gallego says: “Investment in either infrastructure or economic opportunities for the poorer segments of the population is critical. I think most countries now recognise this and you see that in different areas, particularly in housing, where the social contract we have in Latin America is unmatched.”

Inevitably, transforming cities also requires financial innovation and a revolution in how they manage budgets.

Multilateral organisations such as ECLAC are at the forefront of efforts to resolve the urban funding challenge.

Cities work with the International Finance Corporation to de-risk

investments, and the Inter-American Development Bank, through its Emerging and Sustainable Cities Initiative.

Gallego says the IDB focuses on land-value capture policies – popular in cities such as São Paulo, which are aiming to recapture gains in land prices buoyed by public investment – and on improving local fiscal systems to mobilise resources, boost borrowing and improve financial planning.

“It is very important for cities to have an overarching financing plan for investments based on the optimal distribution of risks and capacity, then to define which parts should be done by public or private sectors and which by a public-private partnership.”

Two themes now shape thinking about Latin American urban policy: accessibility and space.

The concept of accessibility – a byword for inclusion – has emerged as a key measure of urban wellbeing, referring to the ability of households and firms ►

POWER TO CHANGE

Mexico’s moment Jorge Wolpert has high hopes for Mexico’s cities. “We are facing probably the biggest opportunity in recent Mexican history to enhance the urban situation in our country and properly enforce a New Urban Agenda-oriented national plan.”

The optimism of the directorgeneral of Mexico’s National Housing Commission (CONAVI) is based on the prospect of president-elect Andrés Manuel López Obrador coming to power and pushing to transform the lives of the 8 million Mexicans lacking proper homes.

Due to take office in December, López Obrador built an unrivalled reputation as an effective city mayor. His success in Mexico City from 2000–2005 catapulted him to runner-up position in the 2004 World Mayor Prize – and earned him an 84% approval rating.

He made a significant dent in inequality, lured private investment into housing, reduced the city’s notorious congestion and launched the Metrobús transit service.

Wolpert foresees real progress in tackling homelessness. “We have an opportunity to lead a social housing revolution by making a big change in the immediate future,” he says.

His optimism is reinforced by the president-elect’s emphasis on TO using the power the state ACCESS THEofFULL to tackle OF social problems.

VERSION PUBLIC FINANCE “This constitutes the MAGAZINE, biggest opportunity in a generation SUBSCRIBE HERE to establish a much more www.publicfinance.co.uk/subscribe sustainable territorial strategy.”

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case studies

Progress knows no borders CIPFA’s work to improve public financial management, reporting and public audit around the world continues at pace. PF caught up with bid and programme manager Sara Breen about progress on two very different projects in Central Asia and East Africa

Tajikistan: Chamber of Accounts Tell us about the project

In January, CIPFA began work as the lead partner on a large and interesting project to overhaul government external audit processes in the former Soviet state of Tajikistan.

The programme is financed by the World Bank and the money comes from the second tranche of the Public Finance Management Modernisation Project, a PFM reform scheme that the bank is backing in Tajikistan.

There is a team of about 10 international and Tajik experts working on the project.

Their focus is improving organisational development and capacity in the country’s Chamber of Accounts, which is Tajikistan’s supreme audit institution.

Tajikistan wants to move from its Soviet-style control process to become a more modern body that applies the International Standards of Supreme Audit Institutions.

So we’re helping it to develop the required standards and guidelines, and supporting the adaptation of legislation in line with this. It has some standards in place already, while others need to be established. We’ll then support it to develop the capacity of the audit staff within the institution, so they can apply the standards in day-to-day work.

What needs to change?

The old system was very much about inspection and control. Auditors would go in looking for errors and punish the perpetrators, rather than trying to improve performance over time. It was very compliance-focused, identifying wrongdoing instead of helping the organisation to operate as effectively as possible.

What’s happened so far?

We’ve carried out an ‘as is’ assessment of what is happening on the ground. We’ve also looked at the legislation that Tajikistan has in place and advised on where things need to be adjusted in order to be in line with the ISSAIs. We’re also undertaking a wholesale restructure of the Chamber of Accounts. We’ve assessed how it is currently structured, how it should ideally be structured, the departments

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they need and the staffing levels, and how much it is going to cost. In addition, we’ve developed a five-year business plan.

Currently, we’re waiting for the government to approve the strategy, so that we can move to the next stage of the project.

What is Tajikistan like?

It’s a deeply interesting country. Tajikistan was ruled by the Soviet Union for a very long time, but the culture is more Persian as it borders Afghanistan.

Achieving political reform in Tajikistan is challenging, but there is recognition that change is needed. The Tajikistan Ministry of Finance developed this project, and there is acknowledgement that international audit standards need to be met and that there are very good reasons for them.

Having said that, there is some resistance to change, which is often the case when you are dealing with systems that have been in place for many years, especially when they require cultural change.

However, we have a very good team leader in place. The first six months of the project were very challenging, but, with lots of discussion and many iterations of documents, we’ve made excellent progress. ●

Top tips…

Do ➊ Get buy-in from everyone, not just the finance team

➋ Keep updating ➌

stakeholders about what is happening and why Build internal capacity to meet long-term needs

Don’t ➊ Try to cut costs by

➐ ➎

➏

➐

Start with the big things It is easy to get lost in the minutiae of accounting standards and try to do everything at once. Prioritise. Think about the material balances and transactions and start with these. For example, identifying, valuing and recognising government buildings and other infrastructure will add more to the government balance sheet more quickly than assets of lower value, like vehicles and office equipment.

Once you have that information, politicians and leaders can have a more informed debate on the best use of the government estate. This will be the greatest motivator.

Be realistic Healthy competition is good, and the desire to be the fastest (and the best) is human nature. This is often seen as optimism bias in many countries wanting to implement accrual accounting quicker than everyone else. In other places, there is a realisation that it will take longer but it is not politic to say so, hence unrealistic timescales are set.

But if transition takes longer than originally promised, it risks damaging morale and credibility. Develop realistic timescales at the outset and deliver some quick wins in the implementation phase. Under-promise and over-deliver.

Use others’ experience Many countries have implemented accrual accounting and will have experienced challenges similar to those you face.

Reach out to them for practical insights to help you avoid the pitfalls they experienced. Professional accountancy organisations and supreme audit institutions may be able to provide support while they learn with you and develop their own capability. You are not alone.

➑ ➒

10

➋ ➌

reducing project management – central coordination is vital Over-promise then be forced to under-deliver Worry about making mistakes as you go along, or let perfectionism turn into inertia

Fail fast and adapt In some cases, the biggest block to progress is inertia. One cause is perfectionism: the search for better solutions may delay the process getting off the ground. Get the team to accept a less-than-perfect model – you can always refine it later. Fail fast, learn, adapt and move on. Fear of failure can also result in inertia. Accept that mistakes will be made and are necessary to learn. As Thomas Edison said: “I have not failed. I’ve just found 10,000 ways that won’t work.”

Choose the ‘vanilla’ option A major cost of implementing accruals is the IT system.

Resist the urge to tailor the system so it has the look and feel of existing processes and reports. It becomes costly when upgrades are required and governments will get locked in a cycle of expensive customisation. Instead: ● Standardise the chart of accounts ● Review processes – can they be streamlined? ● Review and integrate other functions, such as HR, finance, procurement and estates.

Any system implemented should be as ‘off the shelf’ as possible or ‘vanilla’.

Celebrate successes The going will get tough, so celebrate each milestone. Build in time to learn from things that did not go well and mark concrete achievements such as the approval of accounting policies or completing the fixed asset register.

TO ACCESS THE FULL VERSION OF PUBLIC FINANCE MAGAZINE, SUBSCRIBE HERE in While these top tips will not negate all challenges

www.publicfinance.co.uk/subscribe implementing accrual accounting, keeping them in mind will help make the task easier. Good luck!

WWW.PUBLICFINANCE.CO.UK 45

numbers game

children

Greece exited its final eurozone bailout in August. The rescue package totalled €288.7bn – the largest amount ever disbursed by international creditors. European commissioner for economic and financial affairs Pierre Moscovici said the “worst is over” after eight “very difficult” years.

Spotlight on unemployment 1.43

Homicide reduction

Five countries with the largest reduction in intentional homicide rate (per 100,000 people) SUSTAINABLE DEVELOPMENT World, 2015 GOAL 16.1 South Africa Colombia Paraguay Kazakhstan

Average 1996-2005 Average 2006-2015

Albania 0

20

40

60

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There has been a dramatic fall in homicide rates in some countries, World Bank data has revealed. South Africa, Colombia, Paraguay, Kazakhstan and Albania have seen the biggest falls, although rates in South Africa and Colombia at more than 30 per 100,000 people are still well in excess of the global average, which is under 10. Sustainable www.publicfinance.co.uk/subscribe Development Goal 16 focuses on peace and justice – reducing deaths from violence (16.1) is a chief indicator.

Corrupt public officials may make it harder for citizens and businesses to access government services Percentage of firms experiencing bribery and gifts (informal payments), 2016

Firms expected to give gifts in meetings

Firms expected to give gifts to public officials East Asia & Pacific South Asia Sub-Saharan Africa Middle East & North Africa World Europe & Central Asia Latin America & Caribbean

SDG 16.5

0

10

20

30

40

50

0

10

20

30

40

Source: OECD

Spain

Sustainable Development Goal (SDG) 16 also focuses on reducing corruption and bribery (16.5), with a focus on bribery between public officials and businesses. World Bank data shows that bribery expectations are highest in the East Asia & Pacific region followed by the South Asia region. Expectations of gifts from public officials is lowest in Latin America & Caribbean and Europe & Central Asia regions. Globally, almost a quarter of firms said they expected to give gifts to public officials.

Source: World Bank Enterprise Surveys. WDI (IC.FRM.CORR.ZS; IC.TAX.GIFT.ZS)

48 PUBLICFINANCE OCTOBER 2018

Ireland

Finland

Italy

France

Netherlands

Portugal

Luxembourg

Germany

Put a stop to corruption

Source: UNODC. WDI (VC.IHR.PSRC.P5; SP.POP.TOTL).

Violent death rate falls

0.99 1.03

Austria

0.89 0.89 OECD average

Switzerland

0.63 0.78 Slovenia

Australia

Czech Republic

Canada

Latvia

Hungary

Sweden

US

Slovak Republic

New Zealand

Norway

Estonia

UK

Israel

0.57 0.75 0.43 0.43 0.46 0.47 0.

4 0 0.

5 6 0.

3 4 0.49 0.28 0.31 0.32 0.33 Korea

Japan

Turkey

Chile

Denmark

Total % of GDP, 2015 or latest

0.14 0.20

1.94

1.70 1.60 1.62 1.63

Expenditure on cash benefits

0.1

3.23

2.54

spent the least on unemployment. Japan has one of the lowest unemployment rates in the OECD at 2.4%, while Turkey’s is relatively high at 9.8% The OECD defines public unemployment spending as expenditure on cash benefits to compensate people for being out of work. This includes any publicly funded redundancy payments as well as paying pensions to beneficiaries under the standard pension age.

Iceland

Belgium, Spain and Ireland spend the greatest proportion of gross domestic production on unemployment benefits across the OECD area, at 3.23%, 3.11% and 2.54% respectively. This compared to an OECD average of 0.89%. Spain has an unemployment rate of 16.1%, well in excess of the OECD average of 5.4%.

Belgium and Ireland have unemployment rates much closer to the mean at 6.1% and 5.9% respectively. At the other end of the scale, Denmark, Chile, Turkey and Japan

3.11

Belgium

bn

Greek gift

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