“Alone we can go faster, but together we can go farther.”
–Old African Proverb
This blog has been co-authored by Yolanda Tayler and Rachel Lipson.
Whether constructing a new bridge or buying textbooks for a public school, governments around the world constantly purchase a wide variety of goods and services. In the countries of the Middle East and North Africa (MENA), these types of public contracts represent between 15 percent and 20 percent of GDP each year, an annual amount equal to tens of billions of US dollars.
Yet, when it comes to modernizing the systems that establish the rules for how these contracts are awarded (known as public procurement),countries in the region all too often go at it alone, and as a result, miss opportunities to share valuable knowledge and experiences with neighbors. Enhanced cooperation and collaboration could go a long way towards ensuring that they are getting the most value for all the money being spent.
On June 18 and 19 of this year, government-nominated representatives from MENA countries including Djibouti, Egypt, Jordan, Lebanon, Morocco, Palestinian Territories, Tunisia, and Yemen gathered at the Center for Mediterranean Integration (CMI) in Marseille, France to address the issue of these missed opportunities. The solution put forward by this group was to create a new platform for greater regional cooperation on reforms.
Their ultimate mission? To establish a network of experts in MENA who would work together on reforming and modernizing government contracting to ensure the principles of fairness, transparency, accountability, economy and efficiency are honored, thereby helping to improve the way public services are delivered to citizens.
Why Reform Public Procurement?
“[We need] transparency and integrity- our domain, public procurement, is often a domain that is plagued by problems in those same areas.”
–Director General, Central Tender Board, Lebanon
The creation of this network is especially timely given current developments in the region. MENA countries must find new ways to work together to modernize and improve how public services are delivered. It is one the critical ways of addressing citizen demands for more effective governance and more transparency in the delivery of public services. How public money is spent through public contracts is not only vital for obtaining the needed supplies, infrastructure and expertise to deliver public services, but also represents an opportunity to help encourage trade, foster a healthy private sector, support small businesses, increase jobs, and expand economic growth. According to a 2009 OECD Joint Learning Study, the value of these public contracts awarded in Morocco in 2005, for example, was almost MAD 100 billion (16% of GDP or equivalent to nearly US$ 12 billion). Public procurement alone accounted for 70 percent of all the work performed by the country’s construction firms, and 80 percent of the work performed by engineering firms. Though precise data is limited for many other MENA countries, the dominant presence of public contracts is likely very similar.
“We seem to be reinventing the wheel constantly – following the same processes in the public procurement sector that were started by other countries years ago. We don’t need to start from the beginning; we need to learn from the example of our brothers.”
–Chairman of the High Tender Board, Yemen
Although many of the rules and processes for awarding public contracts in the region are old, slow, and offer too many chances for potential manipulation, there are also positive examples of countries which benefit from having modernized rules and procedures. While a single solution can’t address the complexity of issues faced in all countries, there are universal principles that will help to ensure each has a well-functioning system based on transparency, efficiency, finding economies of scale, and capturing value for money. By sharing experiences with one another, countries can accelerate the modernization process by learning from the successes and failures of their neighbors.
The establishment of the MENA Network of Procurement Experts (the Network), supported by the World Bank, is an important next step in this direction. The high-level public officials in attendance at the Network’s inaugural workshop in Marseille, France were nominated by their governments and represent leading players in the public procurement arena in their countries. They drove the workshop agenda and were the sole decision-makers on the plan of action.
The representatives set up the structure for an organization that will be governed by a spirit of regional collaboration and cooperation. The founding members, aided by their elected interim Secretariat, will make up the Network’s Steering Committee.
Working side by side, members will use their shared knowledge and expertise to help solve the barriers that are blocking both cooperation and reforms.
As part of this plan of action, the founding members committed to two important regional initiatives, each of which will be led by representatives of member countries. They will also harness the advice and expertise of their partners and neighbors.
The first initiative will seek to improve the capacity of the various stakeholders involved in public contracting in MENA.
The second initiative will create a regional electronic portal to facilitate the exchange of experiences and best practices among practitioners. With this portal, stakeholders can quickly see what is happening in other countries, find and contact experts, and search databases for relevant decrees and legislation on public procurement across the region. In the future, it could become a virtual space for the publication of bids and procurement notices for the region, thereby increasing opportunities for small and medium-sized enterprises (e.g. local, family businesses), and enhancing overall transparency in MENA.
The establishment of the Network is a promising first step, but the road ahead won’t be easy. The task will require persistence, collaboration, and strong communication.
The past couple of years have dramatically changed the political landscape in the region and countries can no longer afford to ignore the lessons from each other’s experiences, or to keep their knowledge to themselves. By embracing opportunities for collaborative reform, and working together to strengthen capacity, promote growth, and create jobs, the MENA Network of Procurement Experts serves as an example of the power that comes from working together.
Workshop participants included representatives from Djibouti, Egypt, Jordan, Lebanon, Morocco, Palestinian Territories, Tunisia, and Yemen.
“We must do our best to perform for the citizens of our countries -- through better management of the governance process, accountability, and transparency. We need to trust our will and our ability to foster change. Let’s create that change together!”
–Delegation of Morocco
To learn more about Public Procurement Reform in the Middle East and North Africa, go here.