EU-UNICEF Public Finance Facility for South and Southeast Asia
Analysing gaps and opportunities in social spending coverage
The EU and UNICEF launched a partnership to establish the Public Finance Facility (PFF) in South and Southeast Asia to support the best possible use of public social sectors’ budgets. The four-year initiative covers seven countries, Cambodia, Lao PDR and Myanmar in Southeast Asia, and Bangladesh, Nepal, Pakistan and Sri Lanka in South Asia.
Government budgets are the most important public policy instruments for the realization of the rights and well-being of children, as stipulated in the Convention on the Rights of the Child (CRC). The decisions governments make about how to fund social services are critical to the equitable development of children. If allocations are insufficient, concentrated on better-off groups, or used poorly, all children, and especially the most disadvantaged, risk losing access to services and programmes that enable them to survive and thrive, learn, live free from violence and exploitation and have an equitable chance in life.
Public finance for the social sectors underpins UNICEF and EU programme approaches, guided by the commitments set out in the CRC and the EU Strategy on the Rights of the Child with the goal to reduce poverty, ensure sustainable development, and promote democracy, human rights, and the rule of law across the world.
Public Finance analysis is important to help identify where gaps or vulnerabilities in social spending coverage exist. These gaps might be in the form of governments not spending enough, and in-effective and/or in-efficient spending. Another issue encountered with public spending at times is lack of equitable allocations of funding to sectors. Access to public services can be inequitable, an issue both caused and exacerbated by poor public financial management (PFM) and oversight.
Children are a vulnerable and marginalized population group requiring sufficient and equitable spending for positive and sustainable child outcomes. South and Southeast Asia may have achieved some gain in terms of fiscal space for children to date, but countries in both sub-continents still witness challenges linked to the prioritisation of social sectors and the best use of public expenditure in the sectors which concern children.
The COVID-19 pandemic and other crises have increased the projected number of children living in poverty and significantly affected the demand for additional fiscal space for social sectors. Governments struggle to maintain expected levels of public spending in social sectors, while at the same time more people are living in poverty.
To respond to the challenges, the EU and UNICEF launched a partnership in 2019 to establish the Public Finance Facility (PFF) in South and Southeast Asia to support the best possible use of public social sectors’ budgets. The four-year initiative covers seven countries, Cambodia, Lao PDR and Myanmar in Southeast Asia, and Bangladesh, Nepal, Pakistan and Sri Lanka in South Asia.
The objective is to enhance the adequacy, effectiveness, and efficiency of social sector spending for children’s rights and development.
To increase PFM effectiveness in areas relevant to children, the facility provides technical assistance in three core areas:
- Analysis on budget allocations and expenditure
- Generating evidence
- Promoting transparency
The key sectors supported are Education, Nutrition, Health, WASH and Social Protection.
The target groups are governments, including ministries of finance and/or planning, social sector ministries, parliaments and local authorities, as well as civil society organizations that advocate for improved public expenditure for children, and the general public.
While the objectives are common to all countries participating in the initiative, the activities for each country correspond to its specific needs and political context.
In Cambodia, the Facility produces evidence (such as budgetary analysis) to influence the annual budget formulation process focusing on social sectors and social assistance programmes. The PFF further invests in evidence and advocacy for improved budget transparency with the preparation and dissemination of ‘Citizen Budget’ and increasing public participation in sub-national budgeting. Also, the EU and UNICEF partnered for the expansion of the disability allowance programme, as well as analysis of multidimensional child poverty in the country.
In Lao PDR, the Facility focuses on PFM and advocacy on nutrition budget briefs, review and costing of the National Costed Plan for Nutrition, as well as the public investment needs assessment for children.
In Myanmar, the Facility includes reviewing of the last decade social policy and budget reform process in Myanmar for the children, understanding and generating evidence of SAZ (special administrative zone) local governance for investment on children and social sector and monitoring of union level social sector related budget and expenditures allocated to children, with the emphasis on before and after the military coup of February 2021.
In Bangladesh, the Facility focuses on advocacy work to increase allocation and to improve the efficiency and effectiveness of public expenditure for children through public expenditure reviews on social protection, child-responsive budget analyses, strengthened nutrition initiatives and integration of a child poverty measurement into national resource decisions. The Facility supports greater engagement of civil society and parliamentarians in the budget process.
In Nepal the Facility strengthens the national budgeting processes, to promote equitable child outcomes through strengthening analysis (budget briefs), deprivation linked inter-governmental transfers, capacity of federal, provincial governments and local governments and enhancing public participation through the Citizen's Budget initiative. Under this umbrella, UNICEF and the EU are partnering with the Ministry of Finance for operationalizing an Economic Lab aimed at enhancing evidence-based national investments.
In Pakistan, the primary objective of the public finance work is to generate evidence to help provincial governments analyze public expenditure for children, review strategic trends, shifts and priorities in social sector budget setting and enhance systemic efficiency and capacity for evidence-based budget making, implementation and monitoring processes. The goal is to generate evidence that can influence the Medium-Term Expenditure Review Framework in Pakistan. To this end, activities also focus on strengthening upstream advocacy for increased fiscal space for children and delivery of essential services mainly in social protection, nutrition and education.
In Sri Lanka, the Facility produces sound evidence to inform policies and strengthen the case for continued, adequate and equitable investment in social sectors in a context of shrinking fiscal space. Particular focus is paid to evidence on multidimensional child poverty, sectoral budget analyses and a public expenditure review on social protection, as well as a budget allocation criteria analysis. The facility also develops and strengthens pathways for citizens’ participation in budget planning and discussions, for example through Citizen’s Budgets.
Regional Level: Delegation of the European Union to Thailand, UNICEF EAPRO and UNICEF ROSA
While the facility works closely with governments and other partners at the country level, it is at the regional level that the facility further catalyses the power of public finance management to catalyse results for children and their families, including the most vulnerable. The regional level strengthens the knowledge and supports national teams and stakeholders to tailor the strategic choices in the generation of evidence. Region-wide advocacy plans map out the means by which partners can influence the allocations of social sector spending at the national levels. Analyses done at the regional level seek to understand trends both within countries and across Asia as a way to comprehend the impact of external shocks on public finance and social sector spending, and the consequences for children and their families. Finally, at the regional level, national partners, country offices and governments are provided fora through which to share experiences, develop common understandings of good practice, and learn from those across national borders.