Is professionalizing procurement essential to development?
The amount of money spent on government procurement around the world represents an enormous amount of money, between 13 and 20 percent of a country’s GDP on average, according to the Organization for Economic Co-operation and Development. In developing countries that percentage can be even higher.
Yet despite the amount of money involved, public procurement systems are often the some of the least professionalized parts of government, leading to obvious problems of corruption and wasted resources.
“Procurement is just under-recognized, it’s ignored, it is generally considered not sexy and boring, and it’s often underfunded,” said Jean-Marie Meyer, senior director of program procurement policy at the Millennium Challenge Corp.
Meyer took part in a panel organized by the Center for Strategic and International Studies in Washington, D.C. on Wednesday. During the debate, experts called on the aid community to raise the profile of procurement reform as an essential part of development agenda going forward.
How donors can help
MCC’s compact with Indonesia — which includes a large procurement reform project — was held up as an example of how donors might be able to assist with institutional reforms of country procurement systems.
The project aims to professionalize procurement in the Indonesian government, and for the first procurement officers will be included in the country’s civil service.
Meyer said that one of the hardest things about getting the project approved was overcoming resistance from the economists at MCC: “[The Indonesian government] came and said we really want help in reforming out procurement system, and MCC said, well we don’t do that, what does that have to do with economic growth?”
But the idea of prioritizing procurement reform is starting to catch on.
As the World Bank goes through its own reform of its decades-old procurement policies, using country systems is going to be at the center of the changes, noted Christopher Browne, chief procurement officer at the bank.
“We see a very strong role for the bank in helping to support systems development, improving client arrangements, but also taking opportunities, when there are good systems that are there, actually supporting those countries to use those systems for projects.” he said “That’s the big change that we’re proposing. It’s quite controversial, to say the least, but until we start helping countries to use their own systems, we won’t be able to deliver the development outcomes.”
Strengthening the system
Efforts to reform country procurement systems will also help the bank deliver on it’s new goal of speeding up project delivery times.
For instance, Brown mentioned how it takes an average of 270 days to deliver a project in Africa. In general, a third of that delay is caused by the bank’s processes and two-thirds by the client country.
“Of course delivering projects on the ground is critical, but what goes hand in hand with that is strengthening the systems,” he said. “Because until we strengthen the systems and we get procurement working effectively then we’ll always be compromising delivery.”
The working paper put out by CSIS makes several recommendations on procurement to the development community starting with putting procurement on the development agenda.
It also suggests using procurement reform as a starting point to tackle issues of corruption and transparency, and to monitoring the MCC-Indonesia compact as a potential model.
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