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Public Sector Reform INTRODUCTION The Public Sector Modernization Project (PSMP) began in 1996. It is financed by the GOJ, World Bank, British Government and EU Grant funding. The total estimated cost of the PSMP was US$57 million. This was to include a US$28 million loan fund, US$6 million Grant fund with the balance being GOJ counterpart funding of US$22.6 million. The Project plan was reviewed recently and the total estimated cost of the Project has been revised. The overall estimate now stands at US$37 million with a revised total GOJ contribution of less than US$9.8 million. The Project will be completed in June 2002. Project Components The Project has a number of components. The first component (funded partly by the UK Department for International Development (DFID) and partly from the World Bank loan), involved the establishment of the first four Executive Agencies which were created on 1 April 1999. These Agencies are:
The reported financial outputs of these Agencies, indicate that they are well on the way to achieve the targets set. In the first 6 months of FY 1999/00, the above agencies earned J$106 million and remitted J$53 million to the Consolidated Fund. Direct savings for the entire Project are likely to be (on a cash basis), approximately J$1.3 billion. This amount is nearly twice the revised total cost estimates for the Project, without calculating the wider benefits to be conveyed – the wider effectiveness and efficiency gains that are included among the Project’s purposes. The first four (4) agencies are undergoing the transition to a performance culture, expected in introducing a new paradigm. Nonetheless, the success to date of the first four Executive Agencies, provides a degree of confidence that the remainder can also succeed. The reform outcomes – increased effectiveness and efficiencies – will comprise even wider benefits for the Government’s fiscal state, the country’s welfare and customer service. For example, the reform of the Customs Department will ensure that revenue collection is improved. Reform of the other tax agencies will ensure that improved tax compliance is achieved and this will help consolidate Jamaica’s fiscal gains. The modernization of the Environment, Planning and Land Agencies will streamline development processes and contribute to a better investment climate. The other components of the PSMP are: Cluster I
Cluster II
Cluster III
Cluster IV
Project Cost Reduced costs for the PSMP have been projected and this is expected to yield significant benefits to the public. Virtually all the diagnostic phases of modernization have been completed, and the project is poised to commence implementation of the modernization plans. The remaining agencies will be in transition to becoming executive agencies in 2001 and the two pilot Ministries, namely, the Ministry of Transport & Works and the Ministry of Land and Environment are slated for re-orientation in order to focus on policy – driven initiatives. The latest review of the Project has resulted in an estimate of the following changes in expenditure requirements for the PSMP over its total Project life (1996-2002).
* Includes J$123 million in UK grant funds.This revision means that the cost to the GOJ is likely to be significantly less than originally anticipated while deriving the same benefits that the Modernization Plans have projected. Ministries Performance Improvement Programmes Strategic reviews of four major Ministries - National Security and Justice, Education and Culture, Health, and Finance and Planning have been pursued with UK DFID funding support. While these do not incur an immediate financial commitment to the PSMP, implementing some of the recommendations of those reviews will generate some costs to the GOJ. In turn, the benefits accrued will set the basis for wider reforms, thereby creating a more technically and institutionally equipped public sector. The changes are essential to Jamaica’s future economic development and welfare. || Previous | Table of Contents | Next||
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