Following the opening remarks by the Chairperson, the Forum was officially opened by Mr. Nitin Desai, Under Secretary-General, United Nations Department for Economic and Social Affairs. The keynote speaker in the first session was the Hon. Ms. Ruth Richardson, former Minister of Finance of New Zealand.

Mr. Nitin Desai spoke of the changes engulfing the world and the general disenchantment with the capacity of the state to respond. There is also a widely shared perception – often based on misreading of evidence – that market-based development has been more successful. In addition, there is a sense among governments that their scope for autonomous public action is being reduced because of globalisation and the emerging ecological, economic, financial and technological inter-dependence. And this combination of globalisation and inexorable market forces, seem to have convinced many governments of the ineffectiveness of traditional public policy instruments and that development should be left to the play of the market. As a result, many governments seem to believe that their main role is to create an enabling environment that will allow market forces to operate. It is in this context at both the national and global level that most governments have begun to re-assess their role in development.

Since the beginning of the 1990s, the UN has organised a series of global conferences. In a development environment increasingly shaped by the play of market forces, an important objective of these conferences was to define a consensus on the role of public policy. These conferences were in fact an attempt to develop a paradigm of the role of the state in development. Because, when it comes to the conditions of children and women, we cannot leave these matters to the market. The same applies to the environment, to human rights, the issue of population growth and human settlements. These issues will require state interventions in the form of regulations and policy frameworks.

The global UN conferences were special events in many ways. Although an attempt to re-define the role of the state and public policy, these conferences were a unique political process. By combining the insights of professionals with the commitments of governments and concerns of non-governmental organisations, they developed a consensus on policies that could be implemented at the national and global level. How to implement this substantive agenda is now an important role for public administration in all countries. The elements of this new agenda are well known. We are concerned about democratisation and public participation; accountability for property and for government actions; partnerships with civil society and devolution and decentralisation. And it is through deliberations on these issues at all levels, that you will re-define the role of the state.

The efforts of the UN to promote good governance are not geared towards developing an agreement on concepts and approaches. However, what we sense is that there is a genuine need among governments going through the process of re-inventing themselves to share experiences and to learn from each other through meetings like this one.

In her Keynote Address, the Hon. Ms. Ruth Richardson argued that governments have become over-extended, poorly focused, and involved in activities where they have no legitimate role. Partly as a result of this, they have performed badly in core areas. As a result, people’s choices are restricted and the quality and responsiveness of government services are severely reduced. The capacity to govern within limits is crucial if the government is to realise the best social outcomes for its citizens. The government must have a clear idea of the tasks it should leave to the market and of the tasks it should be undertaking itself.

Good governance is far more critical to the well being of people and nations than either natural resources, or culture, or geographic size or location. The primary function of the government is to empower its citizens. This can only happen effectively, and be sustained, within a well-established and maintained legal framework, which encourages the growth of a strong civic culture and private sector. The major task of government is therefore to decide the mix of policies that produce the desired results, including, where it should be involved and the most effective and efficient manner to carry out its responsibilities.

The most important role of the state is to uphold a stable legal framework within which contracts can be made with confidence. And the courts must be able to uphold the law in a competent and in-corrupt manner as possible. Competitive markets are the best means for producing most goods and services. In sharp contrast to command systems of governance, dysfunctional ideas or mechanisms have no built-in protection and are therefore driven-out quickly in a market based economy. And good ideas are quickly rewarded and disseminated, or copied.

The same basic arguments can be used to support free trade in the global arena. Again, very similar arguments can be used to support the introduction of free labour markets. It should be the right of the individual to choose whether to negotiate with an employer directly or to do this through a trade union. The state should not arbitrarily restrict the ability of citizens to enter into contracts. Free labour markets can result in improved productivity, greater industrial harmony and enhanced job satisfaction. They will also keep involuntary unemployment to a minimum. Sufficient competition among employers will limit opportunities for the exploitation of labour. Experiences from East Asia, the USA, Britain and New Zealand, support this argument.

Apart from providing a stable and impartial legal environment, the role of the state is to provide a narrow range of public goods. Public goods should be non-exclusive, meaning that the ability to pay should not be a factor in their enjoyment; and non-rivalrous, meaning that their enjoyment by one individual or group should not prevent their enjoyment by others. In health and education, the role of the state should be to fund and regulate their provision but not to provide these services directly. Social safety nets should be provided for those unable to support themselves, taking into consideration the need to maintain necessary incentives for able-bodied individuals to work.

When it comes to public sector management, poor performance is frequently a result of: poorly defined responsibilities and departmental objectives; central control of inputs which restricts the ability of departments to manage themselves; accounting systems that only measure cash flows rather than total resource use; budgeting procedures which encourage full spending, because under-spending results in a reduced budget; and a restricted capacity to reward good performance and sanction bad performance.

Government should focus on outputs, while allowing the public service maximum flexibility to determine how these are best achieved. The public service should be rewarded for doing this well. Regulatory functions should be isolated into separate agencies. In New Zealand, for example, in any given area of policy, there is likely to be a small ministry giving policy advice, and other agencies acting as purchaser or provider.

 The commercial functions of government should be completely separate from the other functions of government departments. State-owned enterprises should be required to operate very much as private enterprises, open to competition from the private sector and responsible for financing their own operations. The task of the supervising minister is to appoint and monitor the performance of the board and to set dividend policy.

Results of corporatisation moves in New Zealand have been extremely positive, including significant real reductions in electricity and telecommunications prices, as well as productivity improvements and better customer service. Tax revenues have also gone up. Privatisation was designed to produce the best possible asset price without creating private monopolies.

Apart from the direct costs involved, a poorly designed tax system can impose considerable indirect costs. These take the form of disincentives to work, save and invest. Tax systems should therefore aim to minimise these indirect costs. Generally, low tax rates spread over a broad base are preferable. Uneven taxation encourages tax-driven investment, which will rarely be the most rational from an economic or social point of view. In New Zealand, a flat-rate goods and services tax has replaced varying-rate sales tax and allowed marginal rates of personal income tax to be reduced. But mechanisms for institutionalising prudent fiscal behaviour are also necessary, including requirements to run balanced budgets on average over a reasonable period of time; to reduce government debt to reasonable levels; to pursue policies which result in predictable future tax rates; and to ensure fiscal openness.

New Zealand’s solution to the problem of price instability was to give its central bank operational autonomy and to combine this with a statutory authority over price stability. Accountability, transparency and predictability have been central features of governance reform in New Zealand. The connections established at all levels between performance and reward, the availability of good quality information, and the existence of clear and impartial operating rules have all been critical to the success of New Zealand’s reform programme. The New Zealand experience suggests that successful reform is usually characterised by a clear strategy among ministers, and a consistent application of that strategy, throughout the public sector. Also important is the placing of high quality people in key public sector positions and an effective communication strategy.

Lively discussions followed the presentation of Hon. Ms. Ruth Richardson. Below is a brief summary of these discussions.

India argued that a big-bang approach would not be suitable for large developing countries. A cascading approach to reform might be more realistic where improvements in literacy and income level are mainstreamed into the reform process. Implementing a big-bang approach in this context was in many ways like designing a large irrigation system while trying to jump over the users of the water. Limitations in organisational capacity and literacy in large developing countries clearly pointed toward gradualism as a practical necessity. So governance has to be introduced differently to different people. It does not have the same definitions for both countries like New Zealand and India. Essentially the reform process is the same but the level of economic and social development in developing countries largely determines its speed.

Bangladesh explained that for a long time the private sector and civil society had been weak in the country and therefore unable to assume significant responsibilities in the development process. However, in recent years, both sectors have flourished and are assuming a much stronger role in development of the country. Non-governmental organisations are now responsible for the delivery of many services and cooperatives are assuming a larger developmental role in agriculture and poverty alleviation.

Tunisia supported many of the principles advocated by Hon. Ms. Richardson. Restructuring of economies is no longer an option taking into consideration the global transformation underway. However, the state should control certain strategic sectors (e.g. basic infrastructure, water, electricity, roads), although the private sector could have a role. The state should provide a clear political, legal and social platform and real will to implement changes, including the separation of powers and safeguard human rights that allow society to achieve a certain internal balance. Another point raised was that donors often demand stringent criteria for the provision of public services in remote areas, which are not attainable in that country’s context.

Chile supported the good governance principles advocated by Hon. Ms. Richardson. The success of the Chilean economy over the last seven years reflects our adherence to good governance principles. The economy has growth by 7 percent annually; unemployment has gone down from 25 percent to 6 percent and investments in education, health and housing have increased by three-fold since 1990. The importance of a national consensus on the need for reforms was also highlighted. In Chile, a political agreement between the various forces in parliament had played an important part in enabling the reforms in Chile.

Hon. Ms. Richardson responded to some of the earlier speakers. She emphasised that although there were legal and constitutional barriers to reform, these could be overcome. The political barriers to reform on the other hand were more difficult. What happens to a courageous government that decides to govern in the public’s interest and not to perpetuate for privilege? However, the greatest barrier facing governments is the lack of urgency – the feeling that we can postpone change. And for many nations, including New Zealand, it took a crisis for the government to come to senses. The only difference between a developing country and a developed country is that the latter can afford for a longer period to ignore governance. In reforming the public sector, the most important is not to let the protected, the negative and the privileged to set the agenda. Leadership is beyond the selfish. The genuine liberation of any country calls for a far higher order of political courage and policy expertise. There is a lot of evidence from around the world that the big-bang approach is more successful than other approaches. However, it is bad implementation that has created a bad name for many public sector reform efforts.

Antigua and Barbuda pointed out the peculiarities of small micro states when it comes to public sector reforms. Although there are many common principles, size really mattered. Micro states tend to have a strong public sector and weak private sector. There is a need to downsize the public sector but it is politically difficult because the private sector is not able to absorb the excess staff. In this context, the public sector’s trade union often has considerable power over policy. One approach might be to shift to executing agencies and hence move some of the responsibilities away from the public sector. Due to the smallness of the state, decentralisation was not an option. The importance of rightsizing and downsizing without capsizing was emphasised.

Zimbabwe stated that there was no lack of vision among leaders in African countries. The leadership was in place and there was a sense of urgency to reform. The success of the public sector reform in New Zealand was primarily due to the country’s sophisticated infrastructure, good education and health services and the skills and professionalism of the population, already in place. New Zealand embarked upon reforms from a position of strength. This was a completely different situation from most developing countries. For example, pursuing such a big-bang approach in Zimbabwe, would guarantee any minister a very short tenure in office and would most likely bankrupt the country.

Gambia explained that after two years of transitional military rule, the country had just reverted back to democratic form of government in the beginning of this year. So far, special emphasis has been given to reforms in local government. These reforms aim to improve service delivery and to enhance opportunities for the population to participate in the development process. Future reforms will focus on strengthening democratic and administrative institutions and to strengthen the capacity of central government for policy analysis and policy development.

Ghana explained that efforts to re-organise governance in the country were conditioned by its history and special circumstances. Since its independence in 1957, Ghana has experienced with socialism, military rule and more recently with a democratic market economy. A national governance workshop was held recently which included participants from all the domains of governance. At this workshop, participants discussed the priorities of the National Governance Programme and decided on a systematic series of interventions to achieve its objectives. The role of parliament was particularly discussed in the workshop, having been an "endangered species" for almost forty years. Since 1992, parliament has been revived but still faces many difficulties, including lack of resources and new parliamentarians unfamiliar with the parliamentary system. Civil society is also weak in Ghana and needs to be strengthened to ensure more accountability in the various branches of government. The independence of the judiciary from the executive also needs to be enhanced. At the workshop, participants called for consensus building, pluralism, diversity and cooperation and it was agreed to institutionalise this forum as a mechanism for dialogue among the various governance actors.

The representative of the territory of Anguilla noted that he supported the principles advocated by Hon. Ms. Richardson. However, the particular status of the territory made it difficult for its local government to implement reforms to improve economic development and to attract foreign direct investment in the territory. He asked what the United Nations could do for dependent territories like Anguilla that have no formal representation in the United Nations.

Dominican Republic argued that particular attention should be given to the speed and rhythm of public sector reforms. The speed of reform should depend on the circumstances in the country concerned. More important than the speed of reform was the quality of the reform strategy. Participation of the population in the reform process was crucial because without a cultural change or change in the behaviour of citizens, the reform process would not be sustainable. There was, however, no magic formula but the experience of his country suggested that countries should "make haste slowly".

Malawi argued that public sector reforms as proposed by Hon. Ms. Richardson was an imperative in African countries and not a matter of choice any longer. As soon as a country has liberalised its political process, citizens would demand economic liberalisation as well. Having to reform both processes at the same time makes the reform of the public sector very challenging. In this context and to ensure the sustainability of the reform process, it was very important to build a national consensus on the new policy. A strong public sector trade union could also be a major obstacle to reform. In addition, the experience from Malawi confirmed the political importance of addressing the needs of low-income people, adversely affected by the reform process. However, the pace of the reform process was very much dependent on the internal capacity in government as well as in the private sector and civil society.

Guinea stated that the big-bang approach had worked in that country, with major changes happening in a very short period. Public services were privatised to both national and foreign investors. The new policies, however, had been heavily influenced by the World Bank and the IMF. A delegate from St. Lucia argued that before embarking on a major reform programme, the government should have a clear understanding of its own capacity as well as that of the private sector and civil society to implement and sustain reforms. The private sector in St. Lucia is still in infancy and may not yet be able to assume major new responsibilities. Concern was also raised about the continuity of reforms in the context of political pluralism.

Cote d’Ivoire explained that the Government was implementing similar reforms as advocated by the Hon. Ms. Richardson. Many state-owned companies had been privatised and their profitability had increased as a result. However, as far as democracy is concerned in Africa, there was no standard approach. Local circumstances, culture and political maturity would have to be taken into account. Cote d’Ivoire, however, echoed the need to avoid hasty reforms, particularly when inexperienced political parties come to power. Consensus on the new policy and participation of the population was essential for the success of reforms. The representative of Tanzania emphasised the important role of the state in maintaining law and order. Where peace prevails, human development and equitable economic development thrives.

In his Keynote Address, Professor Balcerowicz referred to pre-reform Poland as an example of an over-extended state, characterised by a repressed civil society and private sector, over-centralisation, nominal or free services in areas such as education and health, relatively high level of social protection, under-developed regulatory frameworks and undemocratic political system. As a result, this highly inefficient economic system was not able to solve basic human problems and caused a significant damage to the environment. And special institutions to deliver targeted social assistance were under-developed or non-existent.

In the view of Prof. Balcerowicz, there are three basic steps in planning and implementing any reform. First, a diagnosis of the inherited conditions, second, visioning a target system (setting objectives) and, thirdly, the implementation itself – that is the transition from the inherited condition to the target system. There are important trade-offs but also complementarities between these goals. In visioning the target system, it is very important to define the criteria that the system should meet. The transition from the inherited conditions to the target system will require a mixture of skills, including, technical knowledge, political skills and very effective communication abilities.

Although countries represented in the conference have very different inherited conditions, their ultimate targets may be similar. Based on lessons learned from reforms in Poland, there appear to be four main enabling factors that facilitate the success of economic and financial reforms. Firstly, a high and sustained level of growth, secondly, a reasonable level of security, including social security and property rights, thirdly, the creation of a policy environment conducive to savings and, fourthly, citizen participation.

Of these goals, the most important one is high and sustained level of economic growth. Without economic growth, we cannot meet other expectations of our citizens. Citizen participation will not be secured unless there is satisfactory economic growth. And the attitude of citizens towards the state and involvement in politics largely depends on the economic situation.

Prof. Balcerowicz stressed that in order to revive economic growth, it is very important to downsize the state and to ensure the independence of those institutions that are necessary to create the foundations for sustained economic growth. This includes institutions to ensure a sound monetary management, to secure property rights and contracts and an effective judicial system.

In addition, it is very important for the state to strengthen its analytical capacity, particularly, its ability to think globally. Those institutions that need to think globally should have a very strong position within the structure of government and shielded away from political pressure, compared to those institutions that tend to focus only on a particular sector. And the new state should be reasonably decentralised.

The transition from the inherited conditions to the target system will require two main processes: first, downsizing the government and, secondly, strengthening the basic functions of the state. The most important aspects of downsizing are privatisation and liberalisation. Downsizing or privatisation is absolutely necessary to revive economic growth and to lay the groundwork for strengthening the capacity of the state. Economic development will not take place without economic freedom and downsizing provides economic rights to the people. And downsizing and liberalisation are interdependent. Liberalisation cannot take place without downsizing or privatisation of the state.

If the interests of the state are very intertwined with the economy, it may be difficult to implement various laws and regulations such as those dealing with the environment. In addition, an over-extended state will face serious information and decision-making constraints. The whole process of law making, setting and executing policies and regulations, creating regulatory frameworks for certain markets is very important, particularly for the financial market. And the process of downsizing and strengthening the core functions of the state should be implemented simultaneously.

Due to special interests and the fear of loosing employment, the process of privatisation and liberalisation is bound to be difficult. Here it is very important to move very fast and use the first opportunity after a political breakthrough or economic crisis. Special privatisation programmes can also be used to increase the popularity of the downsizing process. For example, massive participation in privatisation or linking revenues from privatisation to other reforms like education, health or pension is very important.

Effective communication to citizens through the print and electronic media is a key element in the success of the reforms. In this context, the costs should always be compared to the cost of doing nothing. In Poland, targeted communication minimised the problems arising from launching the reforms and getting them off the ground.

At this stage it is also vitally important to attract the most qualified individuals to the reformed state and to build-up a political culture in the country through effective political parties. Without capable individuals at the service of the state you cannot have a capable state. And the determining factor during this period will be capacity of the state to learn from other states and institutions. For the success of the reforms, it will be very important to create a cohesive team with a clear leader to spearhead the reform efforts and this group should have a very strong position within the structure of government.

It is becoming increasingly clear that there is an urgent need for states in developing countries to transform their role from that of an entrepreneur and provider to that of collaborator and facilitator. States in developing countries have generally become involved in too many activities while at the same time not performing their core functions. The whole of Africa urgently needs serious public sector reforms. The political objective of public sector reforms is to re-define the scope of the state, while the social objective is to spread ownership to the largest number of citizens possible. However, the methodology for implementing public sector reforms is yet to be developed.

H.E. Prof. Nsibambi argued that public sector reforms should be concerned with privatising most of the state corporations, taking measures to decentralise authority for planning and decision-making and generally putting in place a machinery for making the development process more participatory. In Africa, there are seven priority areas for public sector reforms: (1) right-sizing the civil service, (2) privatising state corporations, (3) decentralising and rationalising government structures, (4) re-tooling the civil service, (5) upgrading the standard of personnel management in the civil service, (6) reducing power distance, and (7) reducing political interference.

The process of decentralisation reduces the workload of central government ministries, leaving them to concentrate on developing policies, policy guidelines as well as providing training to lower levels of government. However, there are serious inhibitors to public sector reform, including, (1) vested interests in the status quo, (2) economic nationalism, (3) suspicion that state-owned-enterprises are being sold at give-away prices, (4) lack of a government strategy for ‘marketing’ reforms, (5) money saved from down-sizing not being used to improve the wages of civil servants as expected and wages are not indexed to cost of living, (6) lack of an independent institution to oversee the implementation of the reform process, and (7) lack of capacity to absorb the reforms undertaken.

In Uganda, President Museveni realised that ministers would be reluctant to sell state enterprises under their respective ministries. The President therefore set-up a sub-ministry, the Ministry of Privatisation, under the Ministry of Finance, which focuses the attention on the process of privatisation. And an independent firm has been hired to disseminate the benefits of privatisation. There are signs that the general public is now better informed about the rationale behind privatisation.

The experience from Uganda demonstrates that the benefits of privatisation need to be much better disseminated to generate public support. In his budget speech for 1997, the Minister of Finance of Uganda has revealed the following positive outcomes of privatisation: (1) overall employment in the privatised industries rose by 11 percent, (2) salaries were increased in more than 75 percent of the privatised enterprises, (3) production has increased by 88 percent with some companies achieving a five hundred percent growth, (4) 78 percent of the privatised companies have started to pay taxes to the government.

To remove the public’s fear of public sector reform and to promote a new value system, it is very important to have from the outset a clear communication strategy. It is also crucial to raise the salaries of the restructured civil service, including indexing salaries to cost of living increases. As a result of the work of the Public Service Review and Reorganisation Commission, the public sector in Uganda was reduced from 320,000 to 180,000 public servants without detrimental effects on the delivery of public services.

The experience from Africa also reveals that not appointing an independent commission to oversee public sector reforms can be a major inhibitor to success. In the view of H.E. Prof. Nsibambi, it is not fair and realistic to expect the public service to reform itself. Due to the high costs involved in implementing public sector reforms, the reform programme has typically been phased over a long period. This is unfortunate because it creates anxiety and uncertainty among civil servants.

Mozambique explained that the reform process in that country had begun in 1987 with the economic rehabilitation programme. The three major areas of reform are financial, administrative and legal reforms. The major constraint facing Mozambique in implementing these reforms has been lack of financial resources. The inadequate training of human resources has also been a major impediment to reforms. Mozambique has a large number of people in the public sector being affected by the reforms but there is lack of knowledge on how to train them to be able to seek employment in the private sector. With the private sector reviving, it has also become difficult for the government to retain highly qualified staff due to low salaries. Mozambique would like to learn more about how Uganda managed to reduce significantly its civil service without major social problems.

Jamaica raised the issue of what incentives can be used to attract and retain qualified staff in the public service. This is of great importance to most developing countries as the private sector was increasingly attracting the best staff from the public sector. The delegate from Grenada pointed out that the number of staff in the public service had decreased as a result of reforms in the country while the total budget had increased.

An intervention by the representative of Honduras centred on frustration with the press. Despite the many reforms and overall progress made in decentralising power, lowering corruption, improving credit ratings and the economy, the Honduras press continued its drumbeat of biased reporting. There were clear signs of modernisation, privatisation, decentralised government, volunteer military service and 16 percent reduction in the size of the civil service. Nevertheless, the press presented the reduction in civil service as putting people ‘on the streets’ although the situation prior to the reforms had been characterised as that of a ‘bloated government’.

Mongolia stated that the techniques used in New Zealand were applicable to both developing and developed countries. Mongolia had benefited from networking with New Zealand, UNDP and other international and bilateral institutions. The delegate from Jordan, however, did not consider the New Zealand model applicable to all countries. Reforms would have to be based on local conditions and circumstances.

Pakistan remarked that that downsizing the public sector needs more caution. There are no quick fixes and reforms must be home grown. Despite problems in implementing reforms in Pakistan, some results have been achieved. Three state-owned banks had been privatised; the tax system has been overhauled and tariffs are now among the lowest in the world. And the state has re-defined its role in development to that of a facilitator.

Egypt explained that public sector reforms in that country had already had major positive impact. Service delivery had improved; investments had been made in human resource development and technologies to facilitate enhanced public administration, including increase in the salaries of civil servants; and significant regulatory reforms were enacted. The population had been well prepared for the reforms and regular communication was maintained throughout the reform process. Without public support, it would not be possible to bring about successful public sector reforms. However, the success of the reforms was somewhat hampered by lack of cooperation by some administrators and the difficulty to bring new technologies to remote areas.

Azerbajan stated that reforms had led to decentralisation and an enhanced role for NGOs. However, the reforms which had begun in the early 1990s were still in progress and achieving full results would take some time. The representative of the Palestine Authority explained how the conflict with Israel had resulted in significant lowering of GNP and the decline of exports by more than 50 percent. Accordingly, these were major factors impeding reforms.

Chad pointed out that the country was a huge land-locked country, plagued with droughts and instability. Reforms have begun in the 1990s to improve the efficiency of the public sector; to strengthen education and health programmes; to mainstream women in the development process; to reduce poverty; and to strengthen the private sector. The experience from Chad had confirmed the importance of downsizing the public sector and transferring some of its functions to the private sector and to civil society organisations.

Burkina Faso has established a special ministry dealing with public sector reforms. The main aim is to modernise the public sector and accelerate economic growth to enable the state to address not only national and regional challenges but global ones as well. The Burkina Faso plan also tries to build broad citizen support for the reform and actively seeks advice from more advanced countries. Like Burkina Faso, Bolivia has established a special ministry to deal with public sector reforms. The establishment of the ministry in Bolivia is seen as an essential tool in combating corruption, decentralising government and in maintaining citizen-centred reforms.

The reforms in Mexico began fifteen years ago and have resulted in the downsizing of the government. Experience has revealed the importance of pursuing integrated policies rather than piecemeal changes. However, establishing a special ministry to deal with the downsizing of the government was considered somewhat a paradox by the delegate from Mexico.

In responding to a question from Mongolia, Professor Balcerowicz stated that it was clearly important to avoid the mistakes made in the past by developed countries. One example was over-regulation of the labour market; another was the design and funding of pension systems, some of which had been too dependent on the state. It was also important to invest heavily in strengthening the basic institutions of the state such as the legal and judicial systems, including law enforcement. The general lessons in combating corruption in different countries confirmed that only by de-regulating licences, paying civil servants higher salaries and by providing an economic safety net could governments make major inroads against corruption.

The Hon. Ms. Richardson reiterated that the differences between countries are how they managed transitions. Countries like New Zealand are setting new benchmarks for countries that want to establish proper performance management and accountability systems for their public sector. Countries should follow the example of Mongolia, which is trying to adopt modern management tools for its public sector. New Zealand was also the first country to adopt cost based accounting and budgeting; the first to give its managers full discretion in using inputs; the first to introduce strong incentives for the efficient use of capital; the first to require advance specification of outputs to be purchased and the first to establish a comprehensive accountability regime.

The keynote speakers in this session were the Hon. Ms. Netumbo Nandi-Ndaitwah, Minister of Women’s Affairs, Office of the President, Namibia, and H.E. Mr. S.R. Balasubramoniyan, Union Minister of State for Personnel, Public Grievances, Pension and Parliamentary Affairs, India.

At least in one area do developed and developing countries share a similar record. The involvement of women in decision-making at all levels is insufficient because values and attitudes do not encourage it. Most societies still do not see women as playing a central role in public life. Because of social practice and traditions, legislative attempts to rectify gender imbalances frequently fail. Education that makes women more capable and confident of filling leadership roles, is an essential precondition for enhancing their position. Decentralisation to local level is also an important means to bring the locus of power within the reach of women in rural areas.

History has told us that women have all the skills needed for development but unfortunately for too long these skills have been confined to the home environment. Women’s experience in conflict resolution is a very appropriate training for leadership. However, women who make it to leadership positions are subject to much closer scrutiny than men as if there is an expectation that they will fail. Often the failure of women is seen as evidence against women in general rather than being confined to the particular individual.

Young boys and girls for example should be brought up in a way that they see each other as equal partners in development. When this message is reinforced in our schools, we will start to see a fundamental change occur in people’s values and attitudes. Unless values are changed, the setting of quotas could have a negative effect in the longer term because of the dependencies it tends to create. That’s why basic education programmes in Namibia give prominence to women’s issues.

In Namibia, since independence, sensitisation workshops have been held for traditional leaders, judges, ministers, parliamentarians and senior government officials and civil society leaders and this has helped to advance the position of women without the setting of quotas. As a result, a large part of the Namibian community is now gender sensitive. And it is now clear that there must always be a gender representation. Quotas should also be seen as a temporary measure. In some countries the representation of women in parliament has fallen when quotas have been abolished.

Since independence, the number of women in the Namibian parliament has more than doubled from seven to fifteen and the goal is to raise their number significantly in the next election. The experience from Namibia has also revealed that addressing environmental problems will not be successful unless we empower women in our rural areas. So women have to be educated to understand the importance of protecting the environment for their future livelihoods.

India’s attitude to gender issues is reflected in women’s central position in religion and culture, and their prominence in the thinking of scholars and poets. In government this interest has taken such forms as a separate Department of Women and Child Development (set up in 1985), a National Commission for Women, and a Human Rights Commission that has been mandated to look into human rights involving women. In 1995, a National Policy for the Empowerment of Women was drafted whose goal is to bring about the advancement, development and empowerment of women through the elimination of all forms of discrimination, the active participation of women in all spheres of life, the incorporation of gender perspectives, the translation of de jure equality of women into de facto equality, and affirmative action. India is also a signatory to the Convention for the Elimination of Discrimination against Women.

Constitutional amendments have provided for 33 and one third percent representation of women at local levels, thereby transforming the nature of local governance. This change has brought hundreds of thousands of women into the political arena. In India there is an heightened awareness of women’s contribution, both visible and invisible, to the economy and participation in the work force.

Many examples can be found which demonstrate the ways in which gender issues are being pursued across a number of fronts in India. For example: (1) a national scheme for access to information and opportunities, known as the Mahila Samridhi Yojana (scheme for women’s prosperity), which promotes saving by opening accounts in women’s names in post offices; (2) the National Credit Fund for Women which meets the credit needs of women through partnerships with voluntary agencies; (3) the Support to Training and Employment Programme (STEP) which trains women for employment; and (4) the Lok Jambish Movement in Rajasthan which encourages girls to enter, and remain in, the educational system.

In all of this there is recognition that many of the problems which remain to be tackled have to do with deeply entrenched ways of thinking. It is with this in mind that the Indian government has in the last few years introduced gender training at all levels of government. Moreover, the evolving general setting of governance within India is supportive of these developments. In particular, the opening-up of the economy, and attempts to make governance at all levels more transparent and accountable, have increased opportunities for women. Likewise, greater devolution to local levels and a concerted effort to work with civil society organisations have had an important positive effect on levels of women’s empowerment.

Vigorous debate followed the presentations by the keynote speakers. Here below is a summary of these discussions.

The representative of Bangladesh stated that the Government of Bangladesh is committed to the strategy of mainstreaming women in development and has recently adopted a National Women’s Development Policy. Bangladesh was one of the first countries in the world to constitute a full fledged ministry to work for women’s advancement. And special measures are being taken to ensure the participation of women in the formulation and implementation of public policy at all levels, including a quota system for appointment in the public service. It is estimated that nearly 66 percent of women participated in the 1996 parliamentary elections.

The representative of Morocco stated that without women’s participation in governance, sustainable growth and equity could not be achieved. Women are still victims of discrimination. They are the least educated, the poorest, and the most marginalised. In Morocco, women have been able to regain some of their rights, particularly in the judicial area. As an example, marital authorisation is no longer needed to get a passport or salary and one third of households in Morocco are now led by women. And there are plans to cast aside all provisions reflecting any sort of discrimination against women.

The representative of Trinidad and Tobago stressed that both state interventions and a change in people’s mindset were needed to enhance women’s role in society. Changing laws would not suffice, people’s values would have change as well. While the parliament can change laws, women will have to organise themselves better to enhance their position in the structures of state power.

The representative of Uganda noted that women in that country have made great strides in the last decade. The Vice-President of Uganda is a woman, probably the only woman in Africa to reach that level. And a woman has been named to the Supreme Court. Every constituency is required to provide a woman candidate for parliament and one-third of seats in local councils is reserved for women. Women’s enthusiasm to participate in decision-making is beginning to be felt at the school level with more and more girls exercising leadership in their schools. And concerted actions are being made to increase the enrollment of women in universities. These changes, however, have happened as a result of a deliberate policy that the government has pursued since 1986.

In a response to the representative of Morocco, Hon. Ms. Ndaitwah stated that there was no single solution or institutional structure that would lead to the advancement of women in society. The issue was to change the attitude of society towards women. In Namibia for example, the Department of Home Affairs is entrusted with mainstreaming gender issues into government policies. It develops guidelines for other ministries on how to incorporate the gender dimension into their programmes and has focal points in each ministry. It has also set-up five sub-committees to further link the gender work of various ministries. The department is also conducting training programmes to promote women in business. H.E. Mr. Balasubrmoniyan commented that quota systems were not sufficient. In order to change people’s attitudes, which will take quite some time, we need to work on various fronts, including the raising of literacy, improving healthcare and providing new employment opportunities for the people.

The representative of Rwanda described that after the horrifying events of 1994, women now constituted 70 percent of the population and 60 percent of those women are widows from the 1994 genocide. Today, twelve of seventy parliamentarians are women – a record in the country’s history – and a cabinet minister and five ministers of state are women. However, Rwanda is in dire need of support to shelter millions of refugees and to build-up its agriculture. The country also needs assistance to empower women to take a more active part in the governance of the country.

The representative of Honduras pointed out that in that country all state universities are headed by women. In Honduras, there are also women ministers, parliamentarians, members of the Supreme Court and in various other presidentially appointed positions. This had been achieved without any affirmative action policies. In this setting, the removal of legal impediments was seen to be more critical than the setting of quotas. Advances by women in Honduras had been fought for rather than conceded. A representative Egypt argued that the role of women in all arenas of society should receive attention not only their role in decision-making. For example, women played an important role in building social cohesion, in political life and in rural communities. And Egypt has women ministers and more than twenty women ambassadors abroad. Competence, however, should be the guiding principle in recruiting individuals for management positions.

A representative of India said that too little was known about the effects of structural adjustment programmes on women. The impact of reduction in public expenditures and the resulting decrease in subsidies or benefits to women need to be better understood. Similar questions need to be raised in relation to privatisation. How will it affect the salaries and working conditions of poor women? We need to take a more holistic approach in assessing the impact of various macro-economic policies on women and governance. Typically, there are a number of departments that deal with women’s issues at the national level. To avoid confusion, international agencies need to promote aid programmes that work across different departments. The quota system will not work unless women’s capacity is systematically built-up to effectively exercise their new leadership position. Women should have much greater control over the implementation of government programmes in areas such as basic health, education and nutrition. Women, however, must be better trained and educated for these roles.

The representative of Botswana said that in that country considerable progress had been made in improving the position of women in society. The life expectancy of women is now sixty-seven years. A national seminar was held in 1995 to identify priority areas for action following the Beijing Conference. The national action plan includes the following areas: (1) women and poverty and the economic empowerment of women; (2) women and power in decision-making; (3) education and training of women; (4) women and health; (5) the girl child; and (6) violence against women, including human rights. There has also been a significant growth in women’s organisations in the country, which are now playing an increasingly important role in promoting gender equality at the national level. These organisations have now established an umbrella organisation to coordinate their efforts.

Before concluding the session, the Chairperson, Mr. Tsagaan, offered the Hon. Ms. Ndaitwah to respond to some of the comments made. Hon. Ms. Ndaitwah agreed with the representative of Egypt that there was a need to look at women’s contribution in all spheres of social life, not only in decision-making. However, it also mattered in what position women were employed in the different sectors. There was a need to undertake research to determine the impact of structural adjustment programmes on women and to assess the contribution of women in the national economy. Economic empowerment was also a factor of great general significance, which clearly cut across national and cultural boundaries. Likewise, she said that the notion of privatisation was not well perceived in her own country because the idea of communal ownership has deep traditional roots. Privatisation implies a violation of this principle, and people therefore object to it. Accordingly, in Namibia the term ‘commercialisation’ is preferred to ‘privatisation’, and it is emphasised that commercialisation will often ensure continued public ownership.

Moderator: Mr. R.Shyam Khemani, Group Manager, Competition and Strategy, Private Sector Development Department, World Bank,

Panelists: Hon. Ms. Ruth Richardson, former Minister of Finance, New Zealand

The panel identified six key elements to be dealt with in developing a regulatory framework for accelerated economic growth and development:

1. Sequencing and timeframe of the reform process;
2. Linkages with the world economy;
3. Credibility of the policy setting;
4. Citizen commitment to reform;
5. Issue of foreign direct investment (FDI); and
6. Privatisation.

 There are three sets of policies that constitute the backbone of a sound regulatory framework. The first set of policies relate to the integration of the country with the world economy, dealing with issues such as international trade, FDI, technology transfer, intellectual and industrial property rights etc. The second set of policies relates to the business environment, including the system of property rights, collateral, business security, financial market regulations etc. The third set of policies relate to the nature and extent of competition.

Macro-economic stability is essential but not enough. What must follow is a fundamental and often radical restructuring of institutions that design and implement economic policy. The reform of the state is equally important in order to create a credibility of the policy setting. This refers not only to the state but also to the judiciary and the legislative branch. Good institutional structure is fundamental to the success of the reforms. Independence of the central bank, framework for the conduct of fiscal policy, transparency in the conduct of public affairs and accountability are all-indispensable in this context.

In New Zealand, authorities pursued an integrated approach to reform. The ultimate goal was to shift the incentives that face businesses and to free the economy from high degree of government control. Instead of the classical approach where the labour market is de-regulated first, the reforms in New Zealand began with the de-regulation of the financial and product markets. "What mattered was not the sequencing but the fact that we obtained the results we setout to achieve", explained Hon. Ms. Richardson. The competition law was re-drafted in a comprehensive manner. Representatives from the Russian Federation, Kazakstan and Mongolia, explained the difficulty in pursuing such a approach in their respective countries due to weak markets, lack of adequate legal frameworks and unfamiliarity with the principles of competition. De-regulation cannot succeed without a competitive environment.

Ms. Reynolds pointed out that experiences from Eastern Europe had revealed that the only way to provide political support for a consistent and integrated approach for the creation of a competitive environment was the establishment of property rights. In these countries the creation of a legal framework is imperative. The government will also have to commercialise businesses or corporatise them and only then consider to de-regulate the business environment. In Africa, Mr. Sall argued, the need is first to create competition in the market before privatising public entities. In Senegal, for example, the issue was not to privatise but to create conditions that allowed the market forces to operate and to provide the final consumer with a quality product at lower cost. For instance, during the privatisation of the telecommunications sector, it was believed that liberalisation would create competition in the sector and make it possible for the private operators to really take the opportunities created by privatisation.

Guinea was the first country that shifted overnight from a socialist system to a market-based system. Its approach was even more forceful than the one pursued in New Zealand. However, the results of these significant efforts are still to come. A representative from Guinea commented that the main problem a country faces when undertaking a transition from a socialist system to market-based system is to alter the behaviour of economic agents and to create a regulatory framework that is consistent with a liberal society.

It was pointed out that effective linking with the world economy could accelerate domestic economic growth. However, the creation of a policy environment conducive to such a linkage was viewed essential. In a globalised economy, there is also a strong incentive for countries to harmonise trade regimes at the national level. However, representatives from countries such as Senegal, Guinea, Tunisia and Honduras, expressed frustration that despite the implementation of structural adjustment programmes and the establishment of sound regulatory frameworks, FDI was not taking place in their respective countries. Studies by the World Bank have indicated that the determinants of FDI are multiple, including, the policy environment, the size of the domestic market, the strategic location of the country and the level of skills in the local population. World Bank studies have also revealed that international trade is increasingly taking place in high-value added products. Economies that are making investments in their human capital are also attracting FDI.

Hon. Ms. Richardson argued that countries have a high degree of control over their destiny. They can choose to be rich or they can choose to be poor. The three things that really matter in controlling their destiny is the quality of their governance, the quality of their policy setting and the credibility with which those policies are pursued. She stated that the government secures its credibility by the quality of its policy and the consistent application of that policy. The sustainability of reforms also depends on the quality of the institutions responsible for implementing the reforms. Reform will not succeed unless the government maintains its credibility.

In order to build ownership of economic reforms, the Government of Senegal created the "Groupe de Reflection pour la Competitivite et la Croissance". This committee encompasses various groups of society such as representatives of labour unions, banks, entrepreneurs, financial institutions and the Government. The objective of this group is to identify ways to improve the competitiveness of the Senegalese economy by removing barriers to growth and development. This group has proved very effective in the reform of the energy and telecommunications sectors. Dissemination of information about the various aspects of the reform process to all relevant stakeholders has also proved to be very important in Senegal. In this context, it is important to inform the public about the success of similar reforms elsewhere. Experience in Senegal has also revealed that the reform in the telecommunications sector have consolidated a thriving private sector which has created more new employment opportunities than the labour unions originally considered possible. Many studies conducted by the World Bank have indicated, that in the majority of case, the benefits of privatisation have exceeded costs.

Although there is no one model that can be applied in all countries, there are certain principles – de-regulation, privatisation, fostering competition and removing economic distortions - that should guide the reform process. The sequencing of these policies will certainly depend on the particular circumstances in the country concerned. However, an integrated approach to reform seems to be generally shared among governments. In this context, the will to change and maintaining credibility throughout the reform process is essential. Accountability and transparency are also important hallmarks of successful reform programmes.

Moderator: Mr. Stephen P. Marks, Columbia University

 Panellists: Dr. Jean Krasno, Yale University

The panel was designed to bring out the complexities of realising the internationally endorsed goals of governance and sustainable human development in light of the limitations on state capacity. Three processes were used to illustrate the dilemma facing policy-makers at the local, national and international levels: (i) processes of democratisation, (ii) setting environmental policy and (iii) creating a policy environment favourable to economic growth.

Among the more important roles of the state are:

• Advancing democratic convictions such as accountability and equality for all;
• Protecting the environment for future generations;
• Creating an economic environment favourable for sustainable growth and equity.

The concepts, institutions, and practices of democracy should serve as the political backbone of the state. Democracy tends to advance the practice of durable peace, a necessary prerequisite for politically stable and economically vigorous countries.

Both historical analysis and current research indicate that democracy has been found as an effective mechanism to resolve internal conflict, reduce hostilities between democratic countries, leading to increased peaceful co-existence, and to promote human rights and the protection of citizens. Democracy is a set of practices and beliefs. Within any political system, described as democracy, the following criteria should be met: free and fair elections; government officials should be bound by set terms; inclusive suffrage; all eligible individuals should have the right to run for office; freedom of expression; freedom of association; right to alternative forms of information; security of the individual under fair and impartial law; civilian oversight of military and police activities; and elected officials should have the right to decide the policy agenda as well as the appropriate allocation of funds and resources.

There exists favourable circumstances which lend to supporting representative democracies. These conditions normally embody the following standards: those that hold power must be willing to share that power and reach compromise among their constituencies; both political leaders and the general public are educated; effective and accessible forms of communication and infrastructure exist; and ‘consociation’ is encouraged, resulting in less polarization and an intensified understanding of democracy.

These governing factors can best be promoted with the support of capable institutional structures. Institutions are not necessarily physical structures but also tend to rely on belief systems and human capital. Numerous problems and constraints can hinder the efficient development of representative democracies where societies sincerely comprehend the rights and the rules under which they live. Several of these obstacles are created by politicians themselves, for instance when they engage in corruption. But generic problems including poverty and employment or the need to resettle refugees can also reduce the lasting prospects of democracy. Additional impediments to more democratic forms of governance are the differences between local cultures and practices which often assert diverse demands.

No example more clearly illustrates the difficulties of establishing a democracy and representative institutions than Rwanda. Attempts at reconciliation are currently based upon humanising individuals at the local level. Rebuilding endeavours are so grand that the state must literally recreate itself, starting at the level of emotions. Hence, the capacity of the state varies from country to country as well as the state’s ability to embrace democracy. Consequently, democracy, viewed as a tier of "good governance", deserves recognition as a process, not an input to be managed.

Another tier of good governance that contributes to state capacity is that of environmental policy. Three stages of international environmental policy have been identified. First, it is vital to delineate common agreeable ideas by key stakeholders through agenda setting. Agenda setting should lead to the appropriate creation of international policy based upon mutual norms and regulations. The final stage reflects effective international and local policy responses. There are, however, underlying requirements that establish benchmarks for all areas of effective policy in the environmental arena. One yardstick is the concern of the both the public and government. Another important criteria is a hospitable contractual environment where concerned actors and related stakeholders can negotiate, make credible commitments and monitor each other’s behaviour at reasonable costs. Finally, actors must possess and employ the sufficient scientific, political, economic and administrative capacity to raise issues, plea and negotiate their solutions as well as make the adjustments necessary to implement these solutions.

UNDP and other international bodies have a critical role in augmenting state capacity to effectively enhance the three stages of international environmental policy and the underlying requirements. Clearly there is need for additional resources, enhanced flow of information and to monitor agreed upon compliance and provide necessary mediation.

A final issue related to state capacity and closely associated with both good governance and environmental protection is economic growth. The primary question revolving around economic growth is whether the state of the market should determine economic policy and what are its implications for government? The current consensus tends to assert state failure in the delivery of services. It further advocates the promotion of a new partnership between civil society organisations and the private sector in order to provide increased access to these services.

While the merger between civil society and the market should be encouraged, the role of the state should not be trivialised. The state must have the capacity to regulate and support the market in case of its collapse. And neither the market nor civil society have the ability to control or manage ‘open access’ resources such as air. Finally, the state should be responsible for the provision of merit goods and safety nets. The benefits of education and health should be made available to all citizens, regardless of income. Hence, if the role of the state is reduced, its capacity must remain strong including its institutions, to ensure that public management is not open to manipulation by the private sector.

In summary, the linchpin of good governance is democracy. Democratisation processes attempt to legitimatise and be accountable to the concerns of citizens as well as promote equality. Accountability can be best met through transparent procedures such as decentralisation of information, establishing citizen watchdog groups and enacting set terms for elected officials. State capacity must also protect the environment to enable future generations to enjoy and sustain their livelihoods with inherited resources. Moreover, good governance should promote a favourable economy based on open and competitive markets. And finally, good governance must uphold the tenets of sustainable human development as a basis for protecting the vulnerable and promoting equality.

This panel was co-sponsored by the United Nations Development Fund for Women (UNIFEM), the UNDP Gender in Development Programme (GIDP), United Nations Division for the Advancement of Women (DAW) and the United Nations Population Fund (UNFPA).

Moderators: Rosina Wiltshire, Deputy Director, GIDP/UNDP

Panellists: Anita Anand, Women’s Feature Service, India

Discussant: Hon. Pregs Govender, MP, Republic of South Africa.

 The panel analysed the challenges and obstacles that the women’s movement is facing in its struggle for a stronger role for women in leadership positions in politics and the making and maintenance of peace. In this analysis a rich body of experience could be drawn from the contributions of the panellists from India, Barbados, Senegal and Poland as well as the various contributions made by participants in the panel.

 The challenges identified by the panel can be synthesised in the following points:

• To gain new and to maintain the already existing access to the significant power areas of the national state and the global arena respectively. The importance was stressed not to underestimate the influence and the power that the state still has even in the age of globalisation. The significance of states for the society had not decreased in the course of globalisation, but the accountability of the state actors had shifted from their national constituencies to actors in the global arena. The challenge for women’s movements thus would be to "get the state back on their side". Structural adjustment programmes have had implications for women in terms of less provision of social services and infrastructure, making women’s participation in development activities more difficult, and leading to increased poverty among women and children.

• To achieve peace and social stability as a precondition for gender equality in our future societies. It was regrettable that currently women in conditions of war and internal violence were predominantly perceived as victims and that therefore the supporting and stabilising role that women in conflict situations play was underestimated.

 The strategies that were proposed to meet the above challenges included:

• Removal of barriers that inhibit a stronger participation of women in the public sphere as well as the direct promotion of women into leadership positions. The example given by one of the panellists concerning the integration of women quota into the constitution of India was followed by a discussion of the legal limit of this measure. However, the consensus seemed to develop that affirmative action was needed to ensure a stronger representation of women in leadership positions.
• As was suggested, these legal changes at the macro-level would have to be accompanied by empowerment measures at the grassroots level. Stronger influence of women on policy formulation at the national level will require enhanced emphasis on capacity building, education and training of women.
• In this context, the need was expressed by several floor discussants as well as from the podium to develop mechanisms which allowed the transformation of agendas developed at meetings like the UN Women’s Conference in Beijing into viable policies on the national level. Here, especially, the social sector and the design of national social funds lack a sufficient representation of women. Women from the NGO sector would have to gain responsibilities in cooperation with the government in policy formulation and implementation. This would also include a stronger use of methods of participatory research. UNIFEM, for example, brought together six women selected from different parts of India to form a ‘think tank’. This team worked for nine months to analyse women’s issues from the grassroots to the national level. Following intensive consultations, a follow-up Plan of Action for the next five years has been devised in India. The role of women in decision-making in many Eastern European countries has decreased with the transition from a socialistic to a market-based system. 
• It was suggested to engage in a more intensive dialogue with the whole society. This would involve the mobilisation of the media as well as the stronger integration of the intellectual and academic circles in different societies. This could also include alliance-building within the civil society sector, building bridges to the peace movement, the environmental movement and from the local to the global level.

An issue which cuts across the above mentioned points and which was discussed somewhat controversially were the dangers or benefits of mainstreaming. A consensus could be reached on the necessity to develop alternative values to those pushed forward by the male dominated world. However, it remained controversial if the preferred strategy should be to transform the state institutions on the basis of this alternative set of values or if more benefits could be gained, at least partly, by mainstreaming the women’s movement and by working within the existing institutional framework.