Professional Documents
Culture Documents
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ACCA
IFRS Diploma
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Egypt 77
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Hazem HASSAN
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In The News 78
Egyptians Help Shape the World Bank Groups
Strategy in Egypt for the Coming Years
In a room overlooking the Nile in the
Upper Egyptian governorate of Aswan,
a group of Egyptians gathered to dis-
cuss their development priorities and
strategies to address them. Eventual-
ly, these discussions culminated in
them choosing to prioritize education,
health, poverty, infrastructure, and the
development of economic sectors.
Samir Kamel from the Future Associa-
tion for Development, Consumer Pro-
tection and the Environment, said he
wished everyone in Aswan could have
watched this meeting live to see an
international institution such as the
World Bank Group coming to Upper
Egypt to listen to our key issues.
These discussions comprised the first
phase of consultations held by the
World Bank Group ahead of drawing-
up its new Country Partnership
Framework strategy for 20152019.
The joint strategy involves three World
Bank Group institutions, namely the
World Bank, the International Finance
Corporation (IFC), and the Multilateral
Investment Guarantee Agency (MIGA).
The consultations, which started with
government representatives in early
March, were followed by three meet-
ings held throughout the month of
June with Egyptians from civil society
and youth organizations, rural devel-
opment societies, academia and the
private sector, in Cairo, Alexandria,
and Aswan.
This is the first time direct consulta-
tions with a broad range of Egyptians
from outside official institutions have
been held. A website has also been
created with a survey aimed at collect-
ing feedback.
The Country Partnership Framework
is the road map that spells out how the
World Bank Group will support Egypt
over the coming years, said Hartwig
Schafer, Country Director for Egypt,
Yemen, and Djibouti. We are collect-
ing ideas, opinions, views and sugges-
tions. Contributions from those who
know the country best will help us
shape the strategy.
In Cairo, the audience was diverse,
with more than 100 participants. Edu-
cation, social welfare, energy, agricul-
ture and health ranked high on their
agenda. In Alexandriawhere most
participants were youngthe list was
the same, though they added private
sector development. Participants in
Aswan were of more or less the same
opinion, adding infrastructure and
fisheries, minerals and tourism.
Examples of the contributions included
Ahmed Okasha of the Mubadra Center
in Alexandria, who emphasized:
Egypt faces challenges to elementary
education, the need for the develop-
ment of teachers and the curricula,
and changing the culture of the com-
munity. Mohammed Hani Al-Sebaai,
a founder of Al-Hassan Foundation for
Spinal Cord Injuries, chose the health
service. Disability issues should also
be the center of our attention.
Aswan was chosen intentionally by the
World Bank Group to mark the first
round of consultations as Upper Egypt
is underdeveloped.
"The consultations form a key part of
determining the World Bank Groups
priorities in Egypt over the next five
years, said Nada Shousha, IFC Country
Manager for Egypt, Libya and Yemen.
It was refreshing to hear from differ-
ent groupsranging from academia
and civil society to the government
and private sectoron what we
should be focusing on to help Egypt in
its transition."
A second round of consultations is
scheduled to be held ahead of the
launch of the new Country Partnership
Framework next year.
79
The Gulf
United Arab Emirates 80
Value of SMPs in Enhancing the Financial Inclusion of
Small and Medium Enterprises
The UAE as a Case Study
Bassel NADIM
CEO, UAE Association of Accountants and
Auditors (AAA). He is also an advisor to the
Board of Tanmia Capital Limited, a London
based consulting firm.
Economic authorities in the United Arab
Emirates (UAE) have focused attention and
planning on the development of Small and
Medium Enterprises (SMEs) with a view
towards improving employment and boost-
ing economic activity throughout the coun-
try. In seeking to support and promote
SMEs, their counterparts in the accountancy
profession - Small and Medium Audit Practi-
tioners (SMPs) play a critical role in support-
ing SME financial reporting, enabling SMEs
access to finance and improving financial
inclusion within economy.
SMEs Significant Role in the UAE Economy
The contribution of SMEs to the UAE Gross
Domestic Product (GDP) is roughly 60%,
which is well-above the global benchmark of
SME economic contribution (45%). As can be
seen in the graph to the right, Emirati SME
contribution to national employment also
rates much higher than regional and global
averages with Emirati SMEs contributing
roughly 84% to national employment. With-
in the UAE, a significant portion of SME ac-
tivity is centralized in the countrys business
capital of Dubai (45%) with almost 75% of
SME businesses being active in trade and
retail services
1
. The new UAE Federal Law
2/2014 is highly expected to enhance the
position and contribution of the SME sector
to economic prosperity given the structural
alignments envisioned through this law.
According to the law, the Ministry of Econ-
omy will establish and chair a national SME
Council. This council holds as its future
mandate to collaborate with public and
private shareholders in the development of
a national SME program. This program shall
perform activities in relation to capacity
building, conducting needed research and
coordination of local SME development
programs and schemes nationwide.
SMEs Financial Inclusion
The ability to access financial services is
defined as financial inclusion
2
. Obtaining
financing facilities is of particular im-
portance for all businesses - SMEs are not an
exception. The aforementioned Federal Law
has addressed that issue through two initia-
tives: market access and banking access. On
the market access side, this legislation sets
minimum levels designated for small busi-
ness contractor. Specifically the federal gov-
ernment and those corporations in which
the federal government owns more than
25% of their total capital, are obliged to
direct 10% and 5% respectively of their
budget towards procurement from SME
companies. On the banking access side, the
Federal Law has improved this aspect by
requesting Emirates Development Bank
(EDB) to allocate 10% of its financing expo-
sure toward SME financing. However, other
banks and financing companies (e.g., com-
mercial banks) are still free to construct
their lending portfolios as they deem fit. The
ultimate objective of this initiative is to ele-
vate SMEs financial inclusion in the country.
Loans to SMEs in UAE were recorded at the
level of US$ 4 billion by 2013 which consti-
tutes only 4.5% of the entire lending. Recent
reports from the World Bank
3
suggest that
the required funding needed for SMEs in
UAE is roughly US$ 25 billion. This is almost
6 times the amount of the existing SME
lending portfolio - a proposition that cur-
rently signifies a low financial inclusion ratio
for the SME sector.
SMPs as a Catalyst for Financial Inclusion
In most cases, SMEs look for financial advice
and professional support from SMPs as
trusted advisors who can offer accommoda-
tive professional fees and who operate with-
in a more SME-tailored framework when
compared to larger audit and strategy firms.
To be most effective in their role in advising
SMEs and facilitating their access to finance,
SMPs must develop a set of services and
products to address the challenges faced in
SME access to finance. Examination of the
reasons for rejecting SMEs lending applica-
tions may provide some strategic direction.
The matrix below identifies some of the key
reasons for lending application rejection and
suggest products and services that an SMP
may offer. In addition to tailoring and en-
hancing SMP provision of specific business
lines as highlighted above; general strength-
ening of SMP firms, the professional ac-
counting organizations (PAOs) which sup-
port and oversee them and the legal and
regulatory framework in which they operate
can all be seen as integral pre-requisites in
furthering SME financial inclusion. The bet-
ter equipped and more recognized the SMP,
the greater the strength of its reports and
the more positive response from lenders.
81
It is a common occurrence that banks
shortlist larger audit firms as approved audi-
tors and business advisors. With exception
of a few select SMPs, the majority of these
firms are not shortlisted by banks despite
the fact that they are licensed as chartered
accountants. This may be due in part to the
lack of proper internal review systems and
international systems of quality control
established within some SMPs.
UAE Accounting and Auditing Association
(AAA) Supporting and Strengthening Local
Emirati SMPs
Recent data from the Ministry of Economy
states that there are 105 chartered account-
ing firms in the UAE. Considering global and
regional rankings, SMPs comprise the vast
majority of these firms in operation within
the UAE. Although there are strong num-
bers of SMP firms, the aforementioned chal-
lenges hinder SMPs competitiveness in the
market and may limit SMEs choices, and
possibly result in SME growth stagnation. In
recognition of these challenges facing SMPs
and SMEs, the AAA has designed and draft-
ed a high-level SME model which appropri-
ately captures the inter-relationship be-
tween SMEs and SMPs in the UAE. This
model demonstrates the position of SMPs at
the heart of SME business advisory needs
and access to finance. Additionally, in June
2014, alongside the World Bank Exchange
2014 Conference, the AAA in partnership
with the International Federation of Ac-
countants (IFAC) and World Bank conducted
a capacity building workshop aimed at
transferring knowledge and good practices
in the SMP sector so as to better enable
local Emirati audit firms to reach their po-
tential in providing high quality services to
their SME clients. Finally, in recognition of
the need for a system of Audit Quality As-
surance to promote internal systems of
quality control and high quality services
amongst all audit firms; the AAA has held
dialogue with the World Bank and IFAC re-
garding the nature of such systems, their
components and their objectives.
1. Dubai SME, The State of Small and Medium Enterprises (SMEs)
in Dubai, 2013. Small and Medium-Sized Enterprises in the EU,
2011/12 (Ecorys)
2 The Global Findex Database
3 The Status of Bank Lending to SMEs in the Middle East and
North Africa Region: Results of a Joint Survey of the Union of Arab
Bank and the World Bank 2011
Strategic Directions for SMPs offers
Reasons for rejecting a financing application from an SME What services an SMP can provide
Clarity of the project details and its cash flow projections* Co-developing proper business case
More than usual risk in the operation of the applicant* Co-developing a business plan, with focus on achievements,
stress scenarios and risk development framework.
The submitted file is incomplete* Filling guidance and administrating
Poor technical competence in addressing the lenders questions* Financial advice
Providing financial management on outsourcing bases
Loan- collateralization ratio is not well established* Assets and business valuation.
Structuring a financing scheme to meet the collaterals status.
Confidence in the applicant business profile* Operational excellence programs
Quality assurance systems
Accounting and auditing
Technical competence in fulfilling the regulatory requirements** Investing in knowledge of certain industries and regulatory
framework. Showcase thought leaderships
* D&B Business Insight Series SME Lending in UAE, 2008.
**SMP Development in UAE and the work of the Accountants & Auditors Association (AAA) Bassel Nadim
*** Conflict of interest rules shall be observed
Connecting Voices - THE BLOG - October 2014
Kingdom of Saudi Arabia 82
Interview
Dr. Ahmad AL-MEGHAMES
Secretary-General of the Saudi Organi-
zation for Certified Public Accountants
Interview conducted by Riham Hussein, Fi-
nancial Management Specialist, Governance
Global Practice, MENA, The World Bank.
The Saudi Organization for Certified Public
Accountants (SOCPA), founded in 1992,
works under Royal Decree to promote the
accounting and auditing profession and all
matters that might lead to the development
of the profession and improve its status.
SOCPA has 5,000 members and has been a
leader and active member of the Interna-
tional Federation of Accountants (IFAC). We
recently interviewed Dr. Ahmad Al-
Meghames, Secretary-General of SOCPA, to
discuss current developments in the ac-
counting profession in Saudi Arabia and
what role SOCPA is playing. Dr. Al-
Meghames completed his Doctorate of
Business Administration (DBA) in 1997 from
Mississippi State University, majoring in
accounting. He taught for a few years at the
university level before joining SOCPA as
Deputy Secretary-General in 2003. Since
2006, he has taken charge of SOCPA as its
Secretary-General.
CV MENA: What would you say is the
greatest challenge for young accountants
starting their careers in Saudi Arabia?
AA: The major challenge is to find a curricu-
lum that incorporates the international
standards (accounting and auditing) into the
Arabic language, and to find an Arabic lan-
guage faculty expert in both the Interna-
tional Financial Reporting Standards (IFRS)
and the International Standards on Auditing
(ISAs).
CV MENA: What are the challenges facing
Micro, Small and Medium Enterprises
(MSMEs) in Saudi Arabia in the area of
accounting, and what role is SOCPA playing
in meeting these challenges?
AA: Training and development in the Arabic
language is the biggest challenge. SOCPA is
currently working actively in the following
areas:
SOCPA has entered into agreements
with leading publishers and other
agencies to translate into Arabic some
quality books and training materials
on IFRS and ISAs.
SOCPAs nominee has been appointed
to the SME Implementation Group of
the International Accounting Stand-
ards Board.
Memoranda of Understanding
(MOUs) have been forged with lead-
ing world professional accountancy
bodies, such as the Institute for Char-
tered Accountants of England and
Wales, the Institute of Chartered Ac-
countants of Pakistan, the Institute of
Chartered Accountants of India, and
theAssociation of Chartered Certified
Accountants.
In addition, the development and capacity
building of SMPs will be a focus area for
SOCPA in the next few years.
CV MENA: What is the rate of compliance
by companies with the International Finan-
cial Reporting Standards?
AA: Currently, banks and insurance compa-
nies are required to apply IFRS. In addition,
SOCPA standards apply to all other compa-
nies, listed and unlisted. SOCPA has ap-
proved an IFRS convergence plan by which
listed entities other than banks and insur-
ance companies would be required to re-
port under IFRS as adopted in Saudi Arabia.
The IFRS transition plan is part of a project
called SOCPA Project for Transition to In-
ternational Accounting and Auditing Stand-
ards. SOCPA started the project in 2012,
and expects to complete it around 2017.
SOCPAs stated goal for the project is to
make a transition toward IFRS after requir-
ing some additional disclosures explaining
the nature of transactions for Shariah-
conscious users. SOCPA is also translating all
of the IFRS into Arabic as part of this project
under an agreement with IFRS Foundation.
CV MENA: Can you tell us about your new
partnership with The Institute of Chartered
Accountants in England and Wales
(ICAEW)? What opportunities do you think
this will create for your members? Do you
have any plans for future partnerships with
other international organizations?
AA: Recognizing the importance of mutual
cooperation in the development of the pro-
fession of accounting and auditing, SOCPA
signed an MOU with the ICAEW for the ad-
vancement of the accounting and auditing
profession. The Memorandum aims to es-
tablish closer cooperation in various profes-
sional areas, including the conducting of
technical research, holding joint profession-
al activities, and providing joint advice to
other professional bodies. This agreement
will allow for mutual work between the
parties to consolidate the Saudi accounting
sector and ensure its sustainability through
the advancement of accounting knowledge,
professional and intellectual development,
as well as to increase the number of mem-
bers of both parties. Furthermore, im-
portant initiatives may be developed. Expe-
riences and expertise may be exchanged for
the benefit of the accounting sector and its
members in the Kingdom, and across the
region in the future. After signing this MOU,
SOCPA has also signed an MOU with The
Institute of Chartered Accountants of India
(ICAI). However, the most successful MOU
experience has been with The Institute of
Chartered Accountants of Pakistan (ICAP),
where both the bodies have supported each
other in a variety of areas. A major initiative
under the MOU with ICAP is a joint confer-
ence scheduled for March 2015.
83
CV MENA: An area of weakness in other
countries is usually the Quality Assurance
(QA) program. Can you tell us about
SOCPA's QA program, and if it has been
effective in ensuring a high degree of quali-
ty among auditors?
AA: SOCPAs QA program is one of the most
comprehensive programs among the Gulf
Cooperation Council (GCC) countries (The
GCC countries include Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia, and the United
Arab Emirates). It is modeled on the Ameri-
can Institute of Certified Public Accountants
(AICPA) program, and almost in line with
the requirements of the International
Standard on Quality Control (ISQC) 1. In this
context, SOCPA is currently reviewing its
program and is trying to upgrade it with the
help of accountancy bodies, such as ICAEW,
ICAP, and so on.
CV MENA: Can you share any news on the
upcoming shift to International Public Sec-
tor Accounting Standards (IPSAS) which is
expected in Saudi Arabia?
AA: In September 2013, the Council of Min-
isters in Saudi Arabia agreed to apply the
Guidance of Governmental Accounting
Standards, Objectives, and Concepts, pre-
pared mainly on the basis of the interna-
tional public sector accounting standards
issued by The International Public Sector
Accounting Standards Board (IPSASB). This
application shall be implemented according
to a number of procedures including the
formation of a special committee within the
General Auditing Bureau consisting of spe-
cialists from the General Auditing Bureau,
Ministry of Finance, the Institute of Public
Administration, the Saudi Organization for
Certified Public Accountants, and other
bodies that the Committee considers ap-
propriate.
CV MENA: Since assuming the Director-
General position, which activities and
achievements are you most proud of?
AA: There are a number of achievements
and activities to highlight:
1. Becoming the IFAC Professional Ac-
countancy Organization (PAO) Devel-
opment Committee Deputy Chair.
2. Having the Board of Trustees of the
IFRS foundation choose our nominee.
3. Becoming a trusted arm for the Saudi
government in areas related to consul-
tation in accounting and auditing.
4. Achieving financial independence for
SOCPA.
5. Approval of a SOCPA Project for Transi-
tion to International Accounting and
Auditing Standards.
6. Approval of an Accounting Standards
Project for non-profit organizations.
7. Electronic filing of financial statements
under eXtensible Business Reporting
Language (XBRL).
8. Using web-based applications to pro-
vide our services.
Additional projects under development can
be found on SOCPAs website at:
www.socpa.org.sa.
Kuwait
Interview
Bassam RAMADAN
Kuwait Country Manager
MENA, The World Bank
Interview conducted by Moad Alrubaidi,
Senior financial Management Specialist,
Governance GP, MENA, The World Bank
Bassam Ramadan, a Lebanese national,
joined the Bank in 1989 as a Young Profes-
sional. He started as an economist with the
MENA regional Human Development Net-
work (HDN), and then as a Senior Econo-
mist and Lead Operations Officer. He also
worked in Africa from 2004 to 2008 as a
Sector Leader for Human Development
before he became Sector Manager for
Social Protection and Labor in the HDN
anchor in 2008. Since 2011, he has been
based in Kuwait as the World Bank Country
Manager for Kuwait.
CV MENA: How do you see the develop-
ment of the Country Program in Kuwait?
BR: First, let me congratulate the MENA
Financial Management team for taking on
this important initiative to share
knowledge and experience. The World
Bank has had a strong relationship with
Kuwait for decades. Kuwait is a contrib-
uting member to the World Bank and a key
development partner. The Country Pro-
gram in Kuwait has continued to grow over
the years, which led to the opening of the
World Bank Office in 2009. The Kuwait
Reimbursable Advisory Services (RAS) Pro-
gram is built around the following three
main pillars which are aligned with the
priority areas of the Five-Year Plan of the
government of Kuwait.
(1) Improving public sector performance.
Activities include supporting the Ministry
of Finance in: modernizing the tax admin-
istration system; enhancing public financial
management; streamlining outdated pro-
curement and project cycle regulations and
practices; and strengthening the policy,
institutional, information and regulatory
frameworks for better public land man-
agement.
(2) Enhancing economic diversification
through private sector development. Activi-
ties include: supporting the recently estab-
lished Small and Medium Enterprise Fund;
supporting Kuwaits Direct Investment
Promotion Authority; helping the newly
established Competition Protection Au-
thority, and revamping the countrys insol-
vency laws.
(3) Enhancing human development. Key
activities include a large program in the
education sector, as well as health, labor
markets, and social safety nets.
84
Overall, the program in Kuwait is very ac-
tive and has grown several fold over the
past five years and I expect that it will
continue to grow. The program ranges
from building institutions (for example,
advising the recently established anti-
corruption authority, building a new tax
administration), to providing advice on
reforming the education system and
streamlining the business environment.
The Bank Program is providing cutting-
edge knowledge and policy advice, includ-
ing the how to of implementing best
practices in various sectors. In this context,
the Bank is seen as an honest broker and a
credible partner.
CV MENA: What do you think are the key
challenges and opportunities in Kuwait?
BR: Kuwait is one of the early pioneers in
the Gulf in many areas. Kuwait has one of
the oldest universities in the region, an
elected Parliament and active civil society,
and one of the largest Sovereign Wealth
Funds in the world. However, their econ-
omy like the rest of the Gulf Cooperation
Council (GCC), is overly dependent on oil,
and would benefit from further economic
diversification and streamlining of the gov-
ernment bureaucracy, which would also
help the private sector to develop and
grow further. In addition, the quality of the
education system needs improvement. The
public sector is the main employer of Ku-
waiti nationals (90 percent of the labor
force) who are offered generous benefit
packages that further crowd out the pri-
vate sector. The Bank RAS program in Ku-
wait is addressing many of these issues and
is helping the government take the neces-
sary policy reforms to correct these distor-
tions. While the Program has been growing
in size, the challenge now is to grow the
program while maintaining quality and
responsiveness. The governments ability
to make decisions in a timely manner is
key, and that is why it is critical to
strengthen the center of government and
improve the decision-making mechanism
that should accompany the implementa-
tion of the various reforms. On the Bank
side, the challenges are: how to maintain
the balance between responding to in-
creased client demand for our services and
selectivity; what the right mix of Bank staff
and Consultants is for any given task; and
how we can ensure that our interventions
buy the best value for money for our cli-
ents and maximize impact on the ground.
These are all real issues in any RAS pro-
gram, and require careful evaluation be-
fore embarking on new tasks. They also
require a continuous revision in the way
we do business in these countries to keep
up with their rapid pace of change.
CV MENA: What distinguishes the World
Banks work in Kuwait?
BR: The Bank in Kuwait is seen as a credible
and independent advisor and not as a con-
sultant fulfilling specific terms of reference
(TOR) and there is a big difference. We
provide our clients with global best prac-
tices, with the objective of offering the
best integrated solutions to their develop-
ment challenges. By doing so, we may
sometimes provide advice that does not
necessarily agree with certain vested inter-
est groups, but it is our professional and
moral obligation to provide it so that gov-
ernment can have the right options when
making policy decisions. We also offer
better quality advisory services at a cheap-
er cost than many of the well-known global
consulting firms. In addition, the client
respects the internal quality assurance
mechanisms the Bank goes through in the
preparation and implementation phases of
the program. The RAS program is a growing
area in most middle-income countries
(MICs) across the Bank. In my opinion,
more and more countries will request as-
sistance through the Banks various RAS
programs as their economies evolve and
they become less dependent on our finan-
cial support. This in turn implies that
greater attention by the World Bank
should be given to this growing business
line to ensure that we remain relevant and
competitive.
85
CV MENA Events
Events 86
MAAREFAH
MAAREFAH
Mechanisms against Fraud
and Corruption: A Case
Study on Morocco
April 17, 2014, Online
One of the main reasons behind the lack of
effectiveness and efficiency in anti-
corruption programs and measures initiated
by several governments, mainly of develop-
ing countries, is the lack of a comprehensive
and targeted anti-corruption strategy.
Moroccos Central Authority for Corruption
Prevention (ICPC) recommended the design
and the effective implementation of a na-
tional anti-corruption strategy in Morocco.
Subsequently, the ICPC performed a prelim-
inary assessment of corruption and pro-
posed several measures to prevent and fight
corruption.
The Moroccan government recently
launched the nationwide study for the de-
sign of a national anti-corruption strategy. In
this interactive event, Mr. Ahmed Yassine
Foukara shared the reasons behind the fail-
ure of previous anti-corruption initiatives in
Morocco as well as the reasons for the suc-
cess of the current strategy.
He discussed the different approaches and
tools Morocco is using to prevent and fight
corruption, as well as the importance of
finding the right remedies for different
countries and regions.
MAAREFAH
Integrated Reporting:
An Introduction
May 20, 2014, Online
Integrated Reporting (called <IR> for
short) is a tool that enables the corporation
to report on its financial as well as on the
environmental, social, and governance as-
pects of its business. It is a powerful in-
strument to enhance governance, transpar-
ency, and accountability in the corporate
and public sectors. Professor Robert Eccles
who popularized the concept of Integrated
Reoporting through his award-winning
book, One Report, described the evolution
of the concept of Integrated Reporting and
its current stage as well as the public policy
implications of <IR> especially in terms of
environment sustainability.
MAAREFAH
Value Added Tax: Rele-
vance, Administration, Con-
trols and Good Practices
May 27, 2014, Online
In this event, Dr. Sebastian James explained
the major differences between the Value-
Added Tax (VAT) and the General Sales Tax
(GST), and discussed how these two taxes
are best implemented, administrated, UN-
CLEAR rephrase charged and accounted
for the decrease incidents of evasion or
avoidance, UNCLEAR He described which
services or goods are exempted, and de-
tailed how VAT revenues may be best dis-
tributed between national and sub-national
governments. As part of his presentation, Dr
James provided examples of good practices
in VAT implementation and administration
as a reference for tax policy makers in the
MENA region who are embarking on its
adoption.
MAAREFAH
Governance and Anti-
Corruption (GAC) in Bank
Financed Operations: Les-
sons, Experience, Pain, and
the Way Forward
July 24, 2014, Online
In this interactive event, Ms. Maria Vannari
shared her wide experience in dealing with
GAC issues in Bank investment operations.
She presented practical cases and discussed
the way to interact with the various stake-
holders when addressing GAC issues at the
project level. She also explored the Banks
effort to render the projects more GAC
responsive. Additionally, she discussed the
different approaches to prevent, identify
and fight corruption at the project level. She
also noted the importance of finding the
right remedies while taking into considera-
tion the specificities and context of each
project.
Events 87
BOOT CAMP
BOOT CAMP
A Round Table on the Chal-
lenges and Opportunities
of Parliamentary Financial
Oversight in Lebanon
Beirut, Lebanon, March 20, 2014
As part of its Connecting Voices of the Mid-
dle East and North Africa (CV MENA) initia-
tive, and within the mandate of its Su-
preme Audit Institutions and Legislative
Scrutiny Technical Practice (SAI-LS TP), the
World Banks MENA Financial Management
Unit organized a round table on the Chal-
lenges and Opportunities of Parliamentary
Financial Oversight in Lebanon.
The key note speaker was Member of Par-
liament, Mr. Ibrahim Kanaan, the Chair of
the Parliamentary Finance and Budget
Committee. He was joined in the discus-
sions by Mr. Alain Bifani, Director General
in the Ministry of Finance, and Mr. Elie
Maalouf, Judge at the Court of Accounts.
The Round Table was chaired by Mr. Ferid
Belhaj, World Bank Country Director for
Lebanon, and attended by a number of
participants from the World Bank, the Min-
istry of Finance, the Court of Accounts,
Parliament, and other agencies.
In the context of the World Bank's Country
Partnership Strategy for Lebanon, partici-
pants recognized the importance of effec-
tive oversight of the use of public re-
sources for service delivery and accounta-
bility. The mandate and achievements of
the Lebanese Parliamentary Finance and
Budget Committee and the enabling roles
of both the Ministry of Finance and Court
of Accounts were explored. International
good practices on parliamentary engage-
ment in the budget process and the use of
Supreme Audit Institution (SAIs) reports
were shared. To promote knowledge-
sharing and capacity enhancement through
regional and global networks, the partici-
pants discussed what the World Bank Insti-
tute, the Arab Institute for Parliamentarian
Legislative Studies and Training, and the
Arab Parliamentarians against Corruption
can offer.
Key messages
Cooperation and collaboration among
the Parliamentary Finance and Budget
Committee, Court of Accounts and the
Ministry of Finance is continuing as it
relates to instrumental matters, such
as account accuracy and timeliness,
budget comprehensiveness, and audit
independence.
With 54 sessions within three and a
half months, the parliamentary com-
mittee has been active, seriously
studying and being vocal about chal-
lenging issues related to the budget.
The Court of Accounts is aware of its
capacity development needs and the
impact of the challenging political
economy. Indeed, it seeks to play a
constructive role in suggesting
measures to address these challenges.
All participants agreed on the rele-
vance of the World Bank's agenda in
supporting governance to the three
main functions of parliament: repre-
sentation, oversight, and legislative
activity.
BOOT CAMP
Consultation for Parlia-
mentary Stakeholders in
MENA
Center for Mediterranean Integration,
Marseilles, France, April 7-9, 2014.
As part of its work on Public Financial
Management (PFM), the World Bank (the
World Bank Institute and the Middle East
and North Africa [MENA] Financial Man-
agement Unit) organized The Middle East
and North Africa Consultation for Parlia-
mentary Stakeholders in collaboration
with McGill University, Laval University, the
Westminster Foundation for Democracy
and the United Nations Development Pro-
gram.
The objective of the consultations was to
develop a better understanding of how
parliaments in the region scrutinize the
public budget one of the key tasks of
legislatures. Gaining a better understand-
ing of the prevailing practice in the region
will help the World Bank design a strategy
for strengthening the capacity of parlia-
ments to perform these critical PFM func-
tions. Importantly, the event provided a
forum for knowledge exchange between
attending country delegations.
Participants included Members of Parlia-
ment and parliamentary staff from the
finance/oversight committees in Algeria,
Iraq-Kurdistan Regional Government (KRG),
Jordan, Morocco and Tunisia, as well as
officials from the Supreme Audit Institu-
tions (SAIs) of Iraq, Iraq-KRG, Morocco and
Tunisia.
Discussions revolved around legal man-
dates for parliamentary scrutiny, organiza-
tion of parliamentary committee work,
resourcing of parliamentary committees
and parliamentary research capacity. The
event also explored the powers and func-
tions of SAIs in the region and their rela-
tionship with parliaments.
Given the limited systematized knowledge
about parliamentary budgetary oversight
in countries with a French administrative
heritage, the McGill and Laval Universities
of Canada are currently carrying out a re-
search project with support from
lAssociation des secrtaires gnraux des
parlements francophones (The Association
of Secretary-Generals of Francophone Par-
liaments- ASGPF). The event provided an
opportunity for the researchers to obtain
first-hand information from the partici-
pants about the regional situation.
Discussion Highlights
The role of parliament in the prepara-
tion and oversight of the budget var-
ies greatly between countries, but
generally the participating countries
have a limited role for parliament in
the preparation phase. There was a
call for stronger involvement in the
early stages of the budget cycle.
In several countries, oversight com-
mittees have held inquiries into al-
leged misuse of public funds, some-
times with a high degree of transpar-
ency. For example, the results of an
investigation in Algeria were posted
online, and in Morocco parliamentary
hearings have been broadcast on TV.
Reports of the plenary have also been
published in the official gazette.
The prevailing distinction between the
Francophone and Westminster par-
liamentary models is being chal-
lenged. Indeed, there are opportuni-
ties for learning between them. For
example, Morocco has recently estab-
lished a committee similar to a Public
Accounts Committee, which is not
common in Francophone systems. The
relationship between the SAI and par-
liament has traditionally been weaker
in Francophone systems than in
Westminster systems, but the exam-
ple of Morocco shows that this can
change.
BOOT CAMP
Introducing the Public Ex-
penditure and Financial
Accountability (PEFA)
Framework
The Exchange, Abu Dhabi, United Arab
Emirates, 12 June, 2014
On June 12, 2014, Mr. Phil Sinnett, Head of
the Public Expenditure and Financial Ac-
countability (PEFA) Secretariat, presented
an overview and update for a technical
session of The Exchange conference. The
session attracted the participation of
around 100 attendees interested in public
financial management in the MENA region,
including senior officials from ministries of
finance, supreme audit institutions and
academia.
The format of the session included a formal
presentation by Mr. Sinnett providing an
overview of the program and how it was
developed. He explained that it aims to
strengthen the ability of both the recipient
and the donor to assess the condition of a
countrys public expenditure, procurement
and financial accountability systems. Like-
wise, it also helps to develop a practical
sequence of reform and capacity-building
actions in a manner that encourages coun-
try ownership. The PEFA Framework helps
to: (i) reduce the transaction costs to
countries; (ii) enhance donor harmoniza-
tion; and (iii) allow for the monitoring of
progress of country public financial man-
agement (PFM) performance over time. As
such, it can lead to improved impact of
reforms.
Key points
The Framework provides a high-level over-
view of all aspects of a countrys PFM sys-
tem performance (including revenues,
expenditures, financial assets/liabilities and
procurement). It also examines whether
there are tools in place to deliver the three
main budgetary outcomes, namely: aggre-
gate fiscal discipline, strategic resource
allocation, and the efficient use of re-
sources for service delivery.
PEFA consists of a set of 31 indicators along
with a concise report providing a narrative
about the indicators, and drawing a sum-
mary conclusion from the analysis. The
indicators are calibrated on a 4-point Car-
dinal Scale (A, B, C, D), reflecting interna-
tional good practice. Most indicators have
between two and four dimensions, and
each should be rated separately. Dimen-
sions for an indicator are aggregated using
one of two methods (M1: weakest link or
M2: average).
Drawing on the established PFM interna-
tional standards and codes and other
commonly recognized good practices, PEFA
supports country-led reform for which
analytical work, reform design, implemen-
tation and monitoring reflect country prior-
ities and are integrated into government
institutional structures. It builds on donor
and international financial institution har-
monization and alignment around the
country strategy, with a focus on monitor-
ing results. In addition, it offers a shared
information pool about PFM systems and
their performance, which is commonly
accepted by and shared among the stake-
holders at the country level thus avoid-
ing potentially duplicative and inconsistent
analytical work.
Through repeat assessments in a country,
PEFA is capable of demonstrating perfor-
mance changes over time. The Framework
was launched in June 2005 and updated in
January 2011. It covers the entire financial
management cycle focusing on the central
government. However, the application of
the Framework at the sub-national gov-
ernment level, for which guidelines were
developed in 2008, has since become
widespread.
Mr. Sinnett highlighted that the Frame-
work is currently being revised to incorpo-
rate some editorial clarifications, and will
be updated to include accepted good prac-
tice in light of the recent evolution in PFM.
Further, it will improve on certain areas of
weakness. He stressed that there is no
intention to change the purpose of the
Framework or undermine its comparability
over time. However, continuing relevance
is of paramount importance.
The Framework is expected to remove
donor indicators and introduce new indica-
tors for credible fiscal strategy, public in-
vestment management and asset man-
agement. Finally, Mr. Sinnett went through
the indicators to be revised, explaining
their current problems and the proposals
to improve them. The new version of the
Framework is expected to be finalized early
in 2015. The presentation was followed by
case studies, whereby participants rated a
number of indicators.
Interactive discussions were held during
the session and participants were given the
opportunity to comment and ask ques-
tions. One of the questions raised was if
PEFA can be used to compare PFM perfor-
mance in different countries. Mr. Sinnett
stressed that the PEFA Framework was
developed to measure progress over time
in one country not for country compari-
sons. Rather, it is a development tool that
guides a countrys PFM reform priorities.
Another question was if PEFA reports are
publicly available. Mr. Sinnett confirmed
that, subject to government approval, a
countrys report is made publicly available
on the PEFA website. Most finalized re-
ports are currently available and can be
accessed via the assessment portal.
BOOT CAMP
Training on the Supreme
Audit Institutions Perfor-
mance Measurement
Framework (SAI PMF)
The Exchange, Abu Dhabi, United Arab
Emirates, 12 June, 2014
Effective Supreme Audit Institutions (SAIs)
provide an important contribution to the
accountability for the use of public funds.
In order to successfully fulfill this role, SAIs
need to be independent from the execu-
tive, have a certain organizational capacity,
and a strong audit methodology. Continu-
ous improvement is required for SAIs to
remain relevant and support improved
public sector management.
To facilitate the process of continued im-
provement, the International Organization
of Supreme Audit Institutions (INTOSAI)
has developed a new tool to enable SAIs to
better measure, manage, monitor and
report on their performance the SAI
Performance Measurement Framework
(SAI PMF). The tool facilitates an evidence-
based assessment of SAI performance as
compared to high-level requirements con-
tained in the International Standards of
Supreme Audit Institutions (ISSAIs). Use of
the tool is currently being rolled out global-
ly, and the INTOSAI Development Initiative,
as coordinator of INTOSAIs SAI PMF Task
Team, has developed training materials to
facilitate widespread learning on the use of
this tool.
As part of The Exchange conference orga-
nized by the World Bank in Abu Dhabi on
June 10-12, 2014, a workshop on the SAI
PMF tool was held. The workshop was led
by two certified SAI PMF facilitators, Has-
sine Boussandel from the Court of Ac-
counts of Tunisia and Mohammed Abdul-
gaffar from the National Audit Office of
Bahrain. The event was attended by 50 SAI
staff and representatives of other public
sector institutions from the Middle East
and North Africa region, including Lebanon,
Morocco, Oman, Tunisia, and the West
Bank and Gaza.
The topics of the SAI PMF workshop:
Understanding SAI PMF
What is SAI PMF?
Why SAI PMF?
Developing SAI PMF
Structure of the SAI PMF; the 7 do-
mains of performance
Scoring SAI PMF
Performance indicators and scoring
Conducting SAI PMF
The SAI PMF assessment process;
planning and key considerations
SAI PMF Reporting: Sierra Leone Case
Study
The SAI PMF Performance Report
BOOT CAMP
Strengthening Small and
Medium Audit Practition-
ers (SMPs) to Be Support-
ers of MSME Development
Abu Dhabi, United Arab Emirates,
12 June, 2014
The workshop was designed to offer Ex-
change Conference participants and those
from the local Emirati Small and Medium
Practitioners (SMPs) community an oppor-
tunity to discuss in a more intimate setting
the importance of strengthening SMPs. In
so doing, their ability to provide more tai-
lored audit and business advisory services
to better meet the needs of their Micro-,
Small- and Medium- Enterprise (MSME)
clients can be enhanced.
This event was structured to build upon
the previous World Bank CV MENA Solu-
tions Lab event entitled International
Standards on Auditing (ISA) for SMPs held
in December 2013, which provided an in-
troduction to the subject of proper applica-
tion of ISA amongst SMP practices.
Co-Sponsored by the World Bank,
MNAFMs CV MENA Initiative, the World
Banks MSME Facility, the International
Federation of Accountants (IFAC) and the
Association of Accountants and Auditors
(AAA) of the United Arab Emirates (UAE),
the "Strengthening Small and Medium
Audit Practitioners to Be Supporters of
MSME Development" event continued the
momentum and interest by offering partic-
ipants innovative insight into how best to
support SMPs in their provision of high-
quality services to MSMEs.
Event sessions focused on the following
issues:
Development of SMPs in the UAE and
the work of the American Accounting
Association (AAA) in supporting SMP
strengthening and expansion of ser-
vices to MSME clients. This session
provided an overview of the nature of
SMP development in the UAE, and the
work of the AAA in supporting the de-
velopment of this important sector of
their financial services industry.
Appropriate application of Interna-
tional Standards on Auditing (ISA), ef-
ficiency advice for practitioners, and
current guides and resources for their
proper application. This session pro-
vided an overview of global highlights
of the IFAC Small and Medium Prac-
tices (SMP) Quick Poll research which
was conducted in December 2013.
Additionally, presenters provided the
audience with an update on the input
of the SMP Committee into standard
setting, as well as the structure of the
International Standards of Auditing
(ISA). Further, an in depth review of
ISA 220, 201, 200, 315, 230 and Inter-
national Standard of Quality Control 1
was also presented.
Provision of information technology
support to SMPs and how to support
and select appropriate audit soft-
ware. Presenters focused on the ex-
perience of the Belgian Institute of
Accountants and their design and de-
velopment of services to support the
SMPs among their membership. Addi-
tionally, this session provided insight
into the Belgian Institutes develop-
ment of Pack PE-KE Audit Software. It
also offered advice and guidance on
the selection of audit software to
support SMPs.
Development and research in manag-
ing SMP practices. This session pro-
vided insight into the results of the
IFAC SMP Quick Roll MENA regional
research, as well as information and
the results of research conducted by
IFAC and other organizations on the
subject of practice management and
strengthening.
Expanding SMP services beyond audit
and toward supporting integrated
reporting and other business adviso-
ry services crucial to MSME devel-
opment. This session provided coun-
try examples of new service offerings,
and explored the concept of shaping
professional accountants as Trusted
Business Advisors. Related topics dis-
cussed included: marketing, staff, in-
formation technology, clients and ser-
vices structuring. Finally, discussions
were also held regarding the implica-
tions for integrated reporting to serve
SMP clients in MENA and throughout
the world.
Participants expressed 82 percent satisfac-
tion with the overall workshop event, not-
ing particular value from the content, skills
application in practice, and the support
that this workshop provided to their im-
plementation of international standards
and good practices.
Session presenters included: Mr. Bassel
Nadim, Chief Executive Officer of the AAA
of the UAE; Ms. Gail McEvoy, IFAC Board
Member and previous Technical Advisor to
the IFAC Small and Medium Practices
(SMP) Committee; Ms. Inge Saeys, Member
of the IFAC SMP Committee and active
audit partner in PLC Van Cauter-Saeys &
Co., a member of JPA International; Mr.
Hechmi Abdelwahed, previous Member of
the IFAC SMP Committee from 2004, and
current Member of the Conseil National de
la Comptabilit (Tunis), President of the
Fondation de lAudit Financier (FAF), and
Treasurer of the APIQ (Association pour
lInnovation et la Qualit); and Mr. Wassim
Khrouf Technical Advisor for the IFAC SMP
Committee and Board Member of the Tu-
nisian Certified Public Accountants body,
Ordre des Experts Comptables de Tunisie
(OECT- Institute of Chartered Accountants
of Tunisia).
BOOT CAMP
Municipal PEFA
Tunisia, Tunis, July 1, 2014
The Tunisia FM Team, with support from
the PEFA Secretariat, organized a Munici-
pal PEFA Boot Camp.
The objective was to raise awareness
about the tool and its application in a sub-
national and municipal context. Jean-
Michel Champomier from the PEFA Secre-
tariat (making a short stop-over on his way
back from France to Washington) delivered
most of the content, which included three
short case studies. The 17 participants
were from the municipality of Sfax, which
is planning to conduct a PEFA this year lead
by AFD (Agence Francaise de Developpe-
ment), with PPIAF funding, from the Minis-
try of Finance (Budget, Accounting, Local
Government Unit), from the CFAD (Training
Center for Local governments) and from
the Parliament (adviser at the Budget and
Finance Committee) as well as from donors
including AFD, EU, GIZ, and SECO.
The tool is already well known in Tunisia
because of the 2010 central government
PEFA. However, it has never been used in
the Maghreb even if interest for use at this
level is rising in Morocco (Agadir, Marra-
kech) and in Tunisia. The Financial Man-
agement unit plans to roll-out the tool in
additional municipalities with funds re-
ceived from the Country Management
Unit.
Did You Know? 90
A recent review of 25 years of Financial Management Information System (FMIS) World Bank funded
projects identified the top ten reasons why they were not fully successful.
Source: Financial Management Information Systems, 25 Years Experience on what Works and What Doesnt. Authors: Cem Dener, Joanna
Watkins, William Dorotinsky. 2011.
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The Exchange CV MENA: Participant
Feedback
Rank Failure Factors in Completed FMIS Projects
1 Inadequate capacity to sustain
2 Institutional resistance
3 Weak project planning/preparation
4 Complex project design/Number of procurements
5 Organizational structure not suited to integration
6 Inadequate ICT infrastructure
7 Lack of leadership commitment
8 Project team not skilled
9 Inappropriate technology
10 Ineffective project coordination
91
Cross-Cutting Topics
Books 92
MENA Books
OVERNANCE
Inside Inequality in the Arab Republic of
Egypt: Facts and Perceptions across Peo-
ple, Time, and Space by Paolo Verme,
Branko Milanovic, Sherine Al-Shawarby,
Sahar El Tawila, The World Bank.
This book joins
four papers pre-
pared in the
framework of the
Egypt inequality
study financed by
the World Bank.
The first paper
prepared by
Sherine Al-
Shawarby reviews
the studies on inequality in Egypt since the
1950s with the double objective of illus-
trating the importance attributed to ine-
quality through time and of presenting and
compare the main published statistics on
inequality. To our knowledge, this is the
first time that such a comprehensive re-
view is carried. The second paper prepared
by Branko Milanovic turns to the global
and spatial dimensions of inequality. The
objective here is to put Egypt inequality in
the global context and better understand
the origin and size of spatial inequalities
within Egypt using different forms of
measurement across regions and urban
and rural areas. The Egyptian society re-
mains deeply divided across space and in
terms of welfare and this study unveils
some of the hidden features of this ine-
quality. The third paper prepared by Paolo
Verme studies facts and perceptions of
inequality during the period 2000-2009,
the period that preceded the Egyptian
revolution. The objective of this part is to
provide some initial elements that could
explain the apparent mismatch between
inequality measured with household sur-
veys and inequality aversion measured by
values surveys. No such study has been
carried out before in the Middle-East and
North-Africa (MENA) region and this
seemed a particular important and timely
topic to address in the light of the unfold-
ing developments in the Arab region. The
fourth paper prepared by Sahar El Tawila,
May Gadallah and Enas Ali A. El-Majeed
assesses the state of poverty and inequali-
ty among the poorest villages of Egypt. The
paper attempts to explain the level of ine-
quality in an effort to disentangle those
factors that derive from household abilities
from those factors that derive from local
opportunities. This is the first time that
such study is conducted in Egypt. The book
should be of interest to any observer of the
political and economic evolution of the
Arab region in the past few years and to
poverty and inequality specialists that wish
to have a deeper understanding of the
distribution of incomes in Egypt and other
countries in the MENA region.
The Second Arab
Awakening and
the Battle for
Pluralism by
Marwan Muash-
er. Yale Universi-
ty Press.
This important
book is not
about immediate
events or poli-
cies or responses to the Arab Spring. In-
stead, it takes a long, judicious view of
political change in the Arab world, begin-
ning with the first Awakening in the nine-
teenth century and extending into future
decades whenif the dream is realizeda
new Arab world defined by pluralism and
tolerance will emerge. Marwan Muasher,
former foreign minister of Jordan, asserts
that all sidesthe United States, Europe,
Israel, and Arab governments alikewere
deeply misguided in their thinking about
Arab politics and society when the turmoil
of the Arab Spring erupted. He explains the
causes of the unrest, tracing them back to
the first Arab Awakening, and warns of the
forces today that threaten the success of
the Second Arab Awakening, ignited in
December 2010. Hope rests with the new
generation and its commitment to toler-
ance, diversity, the peaceful rotation of
power, and inclusive economic growth,
Muasher maintains. He calls on the West
to rethink political Islam and the Arab-
Israeli conflict, and he discusses steps all
parties can take to encourage positive
state-building in the freshly unsettled Arab
world.
Reconstructing Iraqs Budgetary Institu-
tions: Coalition State Building after Sad-
dam by James D. Savage. Cambridge Uni-
versity Press.
The invasion of
Iraq led to a
costly nine-year
state-building
and reconstruc-
tion effort. Re-
constructing
Iraq's budgetary
institutions
proved to be a
vital element of
the state-
building project,
as allocating Iraq's growing oil revenues to
pay salaries and pensions, build infrastruc-
ture, and provide essential public services
played a key role in the Coalition's counter-
insurgency strategy. Consistent with the
literature on state building, failed states,
peacekeeping, and foreign assistance, this
book argues that budgeting is a core state
activity necessary for the operation of a
functional government. Employing a histor-
ical institutionalist approach, this book first
explores the Ottoman, British, and
Ba'athist origins of Iraq's budgetary institu-
tions. The book next examines American
pre-war planning, the Coalition Provisional
Authority's rule making and budgeting
following the invasion of Iraq in 2003, and
the mixed success of the Coalition's capaci-
ty-building programs initiated throughout
the occupation. The budgetary process
introduced by the Coalition offered a
source of institutional stability in the midst
of insurgency, sectarian division, economic
uncertainty, and occupation. This book
sheds light on the problem of "outsiders"
building states, contributes to a more
comprehensive evaluation of the Coalition
in Iraq, addresses the question of why Ira-
qis took ownership of some Coalition-
generated institutions, and helps explain
the nature of institutional change.
93
The New Arabs: How the
Millennial Generation is
Changing the Middle East
by Juan Cole.
The Awakening of Muslim
Democracy: Religion, Mo-
dernity, and the State by
Jocelyne Cesari. Cambridge
University Press.
Taking to the Streets: The
Transformation of Arab
Activism edited by Lina
Khatib and Ellen Lust.
Johns Hopkins University
Press.
Diaries of an Unfinished
Revolution: Voices from
Tunis to Damascus edited
by Layla Al-Zubaidi and
Matthew Cassel. Penguin.
A History of Modern Tunisia
2
nd
edition by Kenneth Per-
kins. Cambridge University
Press.
The New Middle East:
Protest and Revolution in
the Arab World by Fawaz
A. Gerges. Cambridge
University Press.
BANKING, FINANCE & ACCOUNTING
GOVERNANCE
Bringing Down the Banking System: Lessons from Iceland by
Gudrun Johnsen. Palgrave Macmillan.
The combined collapse of Iceland's
three largest banks in 2008 is the
third largest bankruptcy in history and
the largest banking system collapse
suffered by any country in modern
economic history, relative to GDP.
How could tiny Iceland build a bank-
ing system in less than a decade that
proportionally exceeded Switzer-
land's? Why did the bankers decide to
grow the system so fast? How did
businesses tunnel money out of the
banking system? And why didn't any-
body stop them? Bringing Down the Banking System answers
these questions. Gudrun Johnsen, Senior Researcher with Ice-
land's Special Investigation Commission, tells the riveting story of
the rise and fall of the Icelandic banking system, describes the
commission's findings on the damaging effects of holding compa-
ny cross-ownership, and explains what we can learn from it all.
Islamic Finance and Economic Development: Risk Management,
Regulation and Corporate Governance by Amr Mohamed El Tiby
and Wafik M. Grais. Wiley.
Islamic finance, like conventional finance is a
business of financial intermediation. Its dis-
tinctive features relate to the requirement
that it abides by Shari'a rules that promote
fairness of contracts and prevention of ex-
ploitation, sharing of risks and rewards,
prohibition of interests, and tangible eco-
nomic purpose. In Islamic Finance and Eco-
nomic Development: Risk, Regulation, and
Corporate Governance, authors expound
how these distinctive features bear on the opportunities and chal-
lenges facing the Islamic finance industrys development, risk
management, regulation and corporate governance. Covers the
history and basics of Islamic finance, and provides insight into
current conditions and future landscape. Explores regulatory
framework and presents an approach to developing a systemic
Shari'a governance framework to govern operations in the Islamic
finance industry.
Accounting: A Very Short
Introduction by Christo-
pher Nebes. Oxford Uni-
versity Press.
The Economist Guide to
Financial Management:
Principles and Practice, 2
nd
edition by John Tennent.
PublicAffairs.
The Essentials of Risk
Management, 2
nd
edition
by Michel Crouhy, Dan
Galai and Robert Mark.
McGraw-Hill.
Fail-Safe Management:
Five Rules to Avoid Pro-
ject Failure, Au-
thors/Editors: Jody Zall
Kusek, Marelize Goergens
Prestidge and Billy C.
Hamilton.
Laws and Regulations in
Global Financial Markets by
Ray Girasa. Palgrave Macmil-
lan.
Handbook of Accounting
and Development edited
by Trevor Hopper, M.
Tsamenyi, S. Uddin and
Danture Wickramasinghe.
Edward Elgar.
94
The Politics of Accounting
Regulation: Organizing
Transnational Standard
Setting in Financial Re-
porting by Sebastian Bot-
zem. Edward Elgar.
Global Leaders in Islamic
Finance: Industry Mile-
stones and Reflections by
Emmy Abdul Alim. Wiley.
Economic Development
and Islamic Finance edit-
ed by Zamir Iqbal and
Abbas Mirakhor. World
Bank.
GOVERNANCE & PUBLIC SECTOR
Redesigning the Aeroplane While Flying:
Reforming Institutions by Arun Maira
The development
of institutions that
conform to both
democratic princi-
ples as well as
market-capitalist
ideas is one of
human history's
unfinished tasks.
Perhaps it has
become modern India's destiny to help
finish the task. Institutions and institutional
processes provide stability, are a means to
progress and thus fulfil the needs of socie-
ty. This functionality, however, has been
lost in recent times and citizens around the
world are losing confidence in institutions
of government and democracy, free mar-
kets and capitalism. Reforming institutions
has thus become the most urgent task for
leaders across the world. Not an easy task:
it is as risky as redesigning an aero plane
while flying in it; it shakes up the founda-
tions of stability. This insightful book,
penned by a member of India's Planning
Commission, looks at how India, the
world's largest democracy, which em-
braced capitalism twenty years ago, has
become the principal laboratory for institu-
tional reform. It provides new ways to
think about institutions and the process of
reforming them and explains how we
should go about reformation as a nation.
The principles given in this book apply to
institutions of government and business in
all countries. Timely and incisive, Redesign-
ing the Aeroplane While Flying addresses
the most essential need of the hour. Arun
Maira is a thought leader and author of
several books on leadership, institutional
transformation and the future of India. He
was a member of India's Planning Commis-
sion from 2009 to 2014. Prior to that, he
was with the Tata Group in India and
abroad for twenty-five years, consulted in
the USA for ten years with Arthur D. Little
Inc. and was the chairman of the Boston
Consulting Group, India.
Municipal Finances: A Handbook for Local
Governments edited by Catherine D. Far-
vacque-Vitkovic and Mihaly Kopanyi.
This handbook
aims to help local
government practi-
tioners, particularly
staff of medium
and large cities,
improve strategic
management of
municipal finances.
The demands for
pragmatic knowledge are fueled in part by
decentralization and fiscal pressures, as
transfer of responsibilities from central to
local governments are not often accompa-
nied with an adequate transfer of re-
sources. Practitioners seek ideas and tools
to control expenditures, strengthen reve-
nues, as well as to tap large external funds,
achieve creditworthiness, and adopt good
borrowing practices. Advocating sound
municipal management based on improved
governance and enhanced accountability,
this handbook provides a comprehensive
picture of municipal finances with a broad
scope. The eight chapters cover such topics
as fiscal decentralization and intergovern-
mental finances; management of metropo-
lises; instruments of good financial man-
agement; management of revenues, ex-
penditures, assets, and external resources;
and performance measurement. Focusing
on the perspectives of local officers, this
handbook combines theory, pragmatic
how-to advice, best practices from global
experiences, and possible solutions.
Financial Management Information Sys-
tems and Open Budget Data: Do Govern-
ments Report on Where the Money Goes?
By: Authors/Editors: Cem Dener and Saw
Young (Sandy) Min
Financial Man-
agement Infor-
mation Systems
and Open Budget
Data: Do govern-
ments report on
where the money
goes?' is a World
Bank Study, initi-
ated in 2012 after
an extended
stocktaking exer-
cise, to explore
the effects of Financial Management In-
formation Systems (FMIS) on publishing
reliable open budget data, as well as the
potential improvements in budget trans-
parency. A rich data set was created by
visiting the government public finance web
sites in 198 economies, and collecting evi-
dence on the use of 176 FMIS in publishing
open budget data. This study is not intend-
ed to develop another index or ranking on
budget transparency. The scope is limited
to the budget data disclosed by the gov-
ernments on the web for the details of
budget revenues and expenditures, as well
as the results achieved. This is a tour
around the world in search of reliable open
budget data, in order to share some of the
good practices and possible answers to a
key question: 'Where does the money go?'.
The primary audience for this study in-
cludes World Bank teams, government
officials, oversight agencies, civil society
groups, and other specialists involved in
FMIS and Opend Budget Data projects. The
study shows that, as of today, only a small
group of governments provide opportuni-
ties to the citizens, civil society groups or
oversight agencies for access to reliable,
accurate, and meaningful open budget
data from underlying FMIS solutions.
95
However, there is an increase in demand
from citizens and civil society for improved
and complete open budget data about all
financial activities, and many governments
around the world are trying to respond to
this democratic pressure. Several cases
demonstrate that the innovative solutions
to improve budget transparency can be
developed rapidly with a modest invest-
ment even in difficult settings, if there is a
political will and commitment. In order to
further help governments within their en-
deavor and to encourage those who are
showing little or no visibility of public fi-
nance information on the web, the report
concludes with several achievable recom-
mendations and guidelines on publishing
open budget data benefiting from existing
FMIS solutions.
Closing the Feedback Loop : Can Technolo-
gy Bridge the Accountability Gap? By
Bjrn-Sren Gigler and Savita Bailur, Editors
Enhanced transparency, accountability, and
government or donor responsiveness to
people needs are imperative to achieve
better and more sustainable development
results on the ground. The rapid spread of
new technologies is transforming the daily
lives of millions of
poor people around
the world and has
the potential to be
a real game changer
for development.
Improved account-
ability and respon-
siveness are critical
for reaching the
goals of eliminating
extreme poverty and promoting shared
prosperity with a focus on improving the
well-being of the most vulnerable and mar-
ginalized groups in society. Within the
broader political economy context, many
questions remain unanswered about the
role that new technologies can play to act
as an accelerator for closing the accounta-
bility gap. Within this context, this report
brings together new evidence from leading
academics and practitioners on the effects
of technology-enabled citizen engagement.
The report aims to address the following
four main questions: how do new technol-
ogies empower communities through par-
ticipation, transparency, and accountabil-
ity?; are technologies an accelerator for
closing the accountability gap - the space
between supply (governments, service
providers) and demand (citizens, communi-
ties,civil society organizations) that must be
bridged for open and collaborative govern-
ance?; under what conditions does this
occur?; and what are the experiences and
lessons learned from existing grassroots
innovators and donor-supported citizen
engagement and crowdsourcing programs,
and how can these programs be replicated
or scaled up?. The report presents a theo-
retical framework about the linkages be-
tween new technologies, participation,
empowerment, and the improvement of
poor people's human well-being based on
Amartya Sen's capability approach. The
book provides rich case studies about the
different factors that influence whether or
not information and communication tech-
nology (ICT)-enabled citizen engagement
programs can improve the delivery and
quality of public services to poor communi-
ties. The report analyzes in depth both the
factors and process of using new technolo-
gies to enhance the delivery of primary
health services to pregnant women in Kar-
nataka, India, and of several community
mapping and crowdsourcing programs in
Guinea, Haiti, Kenya, Libya, Sudan, and
other countries.
Global Governance That
Works by Richard Jolly.
Routledge.
Governance and Finance of
Metropolitan Areas in Federal
Systems edited by Enid Slack
and Rupak Chattopadhyay.
Oxford University Press.
Retooling Global Develop-
ment and Governance edited
by Rob Vos and Manuel F.
Montes. United Na-
tions/Bloomsbury.
Divided Nations: Why Global
Governance Is Failing, and
What We Can Do about It by
Ian Goldin. Oxford University
Press.
Fiscal Monitor April 2014: Pub-
lic Expenditure Reform: Making
Difficult Choices. International
Monetary Fund.
Innovative State: How New
Technologies Can Transform
Government by Aneesh
Chopra. Atlantic Monthly
Press.
Transparent Government:
What It Means and How You
Can Make It Happen by
Donald Gordon. Prometheus
Books
The Industrial Policy Revolution
I: The Role of Government
Beyond Ideology edited by
Joseph E. Stiglitz and Justin Yifu
Lin. Palgrave Macmillan.
Comparative Public Budget-
ing: Global Perspectives on
Taxing and Spending by
George M. Guess and Lance
T. Leloup. SUNY Press.
Complexity and the Art of
Public Policy: Solving Socie-
tys Problems from the Bot-
tom Up by David Colander
and Roland Kupers. Princeton
University Press.
The Persistence of Innovation
in Government by Sanford
Borins. Brookings Institution
Press.
Good Government: The
Relevance of Political Sci-
ence edited by Soren
Holmberg and Bo Rothstein.
Edward Elgar.
Why Government Fails So
Often And How It Can Do
Better by Peter H. Schuck.
Princeton University Press.
Failed States and Fragile Socie-
ties: A New World Disorder?
edited by Ingo Trauschweizer
and Steven M. Miner. Ohio
University Press.
Administering Fiscal Re-
gimes for Extractive Indus-
tries: A Handbook by Jack
Calder
Excerpt
Subsidy Reform in MENA
However, subsidies are often ineffective and biased against the poor. Generalized price subsidiesthe most
common form in MENA countriesare neither well targeted nor cost-effective as a social protection tool. Though
they may reach the poor to some extent, they benefit mostly the better off, who consume more of the subsidized
goods, particularly energy products: in 2008, in Egypt, the poorest 40 percent of the population received only 3
percent of gasoline subsidies (Figure 2). Moreover, subsidiesespecially those on energy products impose wel-
fare costs by distorting relative prices in the economy, which fosters overconsumption and resource misallocation.
This, in turn, reduces exportable resources and thus limits wealth accumulation for energy-exporting countries,
and weakens the current account of energy-importing countries. In addition, overconsumption leads to adverse
impacts on traffic congestion, health, and the environment, and to inefficient specialization of domestic produc-
tion, often in less labor and high energy-intensive industries. Finally, subsidies hurt growth. Although they can be
used to provide short-term support to the productive sector, in the long run subsidies have a dampening effect on
growth potential, through price distortions, under-investment in labor-intensive and energy-efficient sectors,
crowding out of productive spending on human and physical capital, and higher inequality linked to inefficient
support of the poor.
International Monetary Fund
Author/Editor: Subsidy Reform in the Middle East and North Africa: Recent Progress and Challenges Ahead
Carlo A. Sdralevich ; Randa Sab ; Younes Zouhar ; Giorgia Albertin
Date: July 09, 2014
Comic Relief 97
From Our Windows 98
We asked some of our Governance Global Practice staff in MENA for photos of what they see every day outside their of-
fice windows. Below is a short trip across the world we live in through the windows we look out from.
Did You Know?
The FM team of the Governance GP
in MENA comes from:
Bolivia, Burkina-Faso, Canada, Costa
Rica, Egypt, France, India, Jordan,
Lebanon, Morocco, Norway, Poland,
Tunisia, United States,
West Bank and Gaza, and Yemen
The team speaks:
Arabic, Croatian, English, French,
Hindi, Malayalam, Norwegian, Polish,
Portuguese, Russian, Serbian,
and Spanish.
The Governance GP / MENA 99
The Financial Management team of the Governance Global Practice (GGP) in MENA focuses on two strategic objectives:
Helping developing partner countries build their FM capacity, and
Providing reasonable assurance that financing provided by the Bank is being used for the intended purposes with economy and efficiency.
Project Country Region
The FM Unit provides assessment, design, and
implementation support services to ensure
that, for Bank-financed operations, partner
countries have in place appropriate FM ar-
rangements.These include support for the
achievement of project development objec-
tives, compliance with Bank FM requirements,
and the development of sustainable FM ca-
pacity. It actively seeks to use country FM
systems where they are assessed as adequate.
Provides information on the overall fiduciary
environment and risks, and promotes and
supports building FM capacity as appropriate
for each countrys development priorities
and institutional environment. It provides
FM diagnostics, policy and technical advice,
advisory services, and technical and project
assistance to partner countries. It also facili-
tates FM learning, knowledge exchanges,
and access to relevant global expertise.
Establish arrangements for portfolio and budget monitoring
of operational services, ensuring value-for-money and con-
sistent quality across the board. It also promotes region-
wide initiatives to create and disseminate knowledge. The
Connecting Voices of MENA initiative provides a platform
for learning and dialogue among relevant regional stake-
holders to promote sound public financial management and
corporate financial reporting.
Unit Management Team
Hisham WALY (Manager) Manuel VARGAS (Lead FMS)
Practice Management: (1) Public Financial Manage-
ment, (2) State-owned Enterprises, and (3) FM sys-
tems and processes - Operational Services: Poverty
Reduction and Economic Management, Human Devel-
opment, Financial and Private Sector Development
Rama KRISHNAN (Lead FMS)
Practice Management: (1) Decentralization and Local Govern-
ment, (2) Social Accountability, Citizen Engagement; (3) Corpo-
rate Financial Reporting, including integrated reporting <IR>,
and (4) Fragility and Conflict - Operational Services: Sustainable
Development.
Countries Technical Practices (TP)
Franck BESSETTE (Sr. FMS)
Tunisia
Algeria
Morocco
Libya
Rima KOTEICHE (Sr. FMS)
Lebanon
Djibouti
Jad MAZAHREH (Sr. FMS)
Jordan
Iraq
Mohamed YEHIA (Sr. FMS)
Egypt
West Bank & Gaza
Moad ALRUBAIDI (Sr. FMS)
Yemen
GCC
Public Financial
Management (PFM)
Corporate Financial
Reporting (CFR)
Cross-Cutting
Themes
Financial Controls
Jad MAZAHREH
Walid AL-NAJJAR
Internal Audit
Rima KOTEICHE
Yngvild ARNESEN
Government
Accounting
Hosam DIAA
Kamel BEZZINE
Decentralization
Moad ALRUBAIDI
Nadi MASHNI
Extractive Industries
Franck BESSETTE
Mohamed YEHIA
SAIs & Legislative
Scrutiny
Mona EL CHAMI
Yngvild ARNESEN
Accounting & Auditing
Gabriella KUSZ
Riham HUSSEIN
Islamic Finance
Gabriella KUSZ
Nadi MASHNI
State-owned
Enterprises
Gabriella KUSZ
Hosam DIAA
Banking & Insurance
Gabriella KUSZ
Hosam DIAA
Integrated Reporting
Gabriella KUSZ
Shirley FORONDA
Micro, Small, and
Medium Entreprises
Gabriella KUSZ
Riham HUSSEIN
Fragility & Post Conflict
Mohamed YEHIA
Saleh MANARY
GAC in Projects
Jad MAZAHREH
Rock JABBOUR
Social Accountability & Citizen
Engagement
Mona EL CHAMI
Wael EL SHABRAWI
Trust Funds
Rima KOTEICHE
Laila MOUDDEN
Knowledge Tools
Denis LARGERON
Ali SALAMAH
Disbursement & Risk
Management Systems
Shirley FORONDA
Ali SALAMAH
cvmena@worldbank.org