26 February 2011

Executing and allocating Timor-Leste's Budget

A longer version of this article is on La'o Hamutuk's website (also Tetum). It is also in Tempo Semanal this week.

The 2011 State Budget authorizes the Government to spend $1.3 billion dollars this year, twice as much as the original 2010 budget. Since the big numbers and politics, can be confusing, we have prepared two graphs to help explain what the budget contains.

These graphs include information about budget execution of each Ministry during 2010, although we believe that spending money is not the purpose of government. A Minister could steal or waste his or her entire appropriation and achieve 100% execution – but the people who require the services the Ministry is intended to provide would be in trouble. However, budget numbers don’t show the work done (or not done) by state agencies and whether that work satisfied people’s needs – people can see that with their own eyes.

Notes for this graph, which you can click on to see larger:
1. “Whole of Govt” includes fuel for EDTL and the Prime Minister’s “contingency fund.
2. “Other” includes all organs and ministries which were allocated less than $5 million in 2010.

The graph shows the amount of money allocated to the functions of each Ministry in the final 2010 and 2011 budgets. The categories on the left portion are state organs, while the right part shows large sub-categories. The heavy oil and infrastructure bars are so large that the other categories look small, but each one spent more than $5 million.

The colors in the left bar for each organ show the execution of the 2010 budget. The red part is how much money was actually spent, green is obligations, and white was appropriated but not used.

The right bar shows the 2011 budget, and the colors show which part of the budget the money comes from. The vertically striped blue part is the $682 million Consolidated Fund. The other two colors are the new Special Funds: brown diagonal stripes represent the $599 million Infrastructure Fund, and yellow is the $25 million Human Capital Development Fund. These Special Funds are not managed by individual ministries, and the Minister of Finance can shift their allocations from one year or project to another. They are initially allocated to projects within the competence of particular ministries, and we show them that way. The largest allocations from the Infrastructure Fund are $447m for the national electricity project (shown with the Ministry of Infrastructure), $45m for the “MDG-suco” program to build local community housing (shown with MSS), $19m for studies related to the Tasi Mane project (shown with SERN), and $8m for the FreeBalance software program (shown with the Ministry of Finance).

This shows how public money was spent in 2010 and how it will be spent this year, and illustrates where public resources will go. It is clear that investment in human and local productive capital – education, health and agriculture, gets much less money than physical infrastructure and subsidies.

Notes for this graph
1. We do not have budget execution data as of 12 November for the functions on the right, so we have assumed the ratio between the first and second parts of the last trimester is the same as for the relevant ministry.
2. The left-most bar shows a constant rate of spending – if a state organ executed its entire budget, spending the same amount every week of the year.

The second graph shows when each ministry or function spent its money during 2010, as a percentage of their total appropriation. Each bar represents the total amount spent during the year; if they had spent the entire allocation , it would be 100%. The white lowest part of the bar bar shows spending during the first trimester (January to March), the yellow bar during the next three, and the speckled orange bar during the third trimester. Since a lot of money is spent at the end of the year, we have divided the last trimester in half: The diagonally striped part is from 1 October to 12 November, and the solid dark red is from 15 November through the end of 2010.

The green line to the right of each bar shows (on the right-hand scale) how many times faster each agency spent money during the last six weeks of 2010 than they did during the rest of the year.

This graph is based on data from the Ministry of Finance. We find it hard to believe that some ministries could spend the people’s money during Independence Day and Christmas more than five times faster than they did between January and mid-November, but we leave it to you to decide if the outcomes are good, the numbers are wrong, or the money was wasted.

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