From Shanghai to Warsaw on a Knowledge-Sharing Journey

An old Chinese proverb says that “learning is a treasure that will follow its owner everywhere.” Learning from each other, or knowledge-sharing, is a sought after valuable asset in today’s world, which brings people and economies together, no matter the physical, social, or economic distance between them.  Such is the case of Shanghai and Warsaw – two partners brought together through a knowledge exchange event hosted by Warsaw City earlier this week.

At first glance, the two cities do not seem to have a lot in common. With Shanghai’s GDP almost six times larger than Warsaw’s, and its population over 12 times bigger, there seems to be little common ground for discussing the various challenges the cities are facing.  On the other hand, both cities are important regional players – Warsaw in the European context and Shanghai in Asia.

Just a few weeks after Country Director for Central Europe and the Baltic Countries Mamta Murthi  spoke in a panel in Krynica urging Poland to become more global in sharing its experience, Warsaw City hosted a full-day knowledge exchange event with representatives of the Shanghai municipality, facilitated by World Bank experts from the Bank’s Poland and China offices. The event aimed to share good practice examples for medium-term budget planning and executing, and debt and liquidity management.

These all-day discussions centered around key aspects of public finance management at the local level. The Warsaw City authorities shared their experience on budgetary planning and forecasting, with a special focus on performance-based budgeting and multiyear fiscal forecasting. Poland’s reporting and monitoring requirements for local governments are very strict, with the Public Finance Act in 2009 mandating that local governments prepare standard reports on current budget and debt outcomes, as well as formulate medium-term fiscal forecasts with a 3-year horizon minimum. These forecasts, which are submitted on a quarterly basis, are wide in scope and include input from Local treasurers, local Chambers of Accounts, and the national Ministry of Finance.

While rigorous, most stakeholders involved nonetheless agree that this is a useful tool for budgetary and financial planning, assessing creditworthiness, and for controlling compliance with legislation.

The Chinese delegation also got to know the nitty-gritty of the Polish public debt regulations at the national level, and their impact on debt management at the local level. They were particularly interested in the newly-introduced individual indebtedness limit for each local government in Poland. This indicator measures self-government’s debt repayment capacity rather than is a pure ratio of debt to revenue or GDP, which is still the most common approach.

“We are surely the most advanced local government in Poland.  We have been engaged in knowledge sharing with other local governments in our country and we are happy to see that our achievements in sound public finance management can be of interest to such a large and important city as Shanghai,” said Treasurer of the Warsaw City and the host of the event Mirosław Czekaj.

In both Poland and China, the World Bank Group has been developing platforms for facilitating knowledge and sharing experience. For example, Poland becoming a Global Development Partner is a cross-cutting theme of the latest Country Partnership Strategy for Poland, while Advancing Mutually Beneficial Relations with the World is one of the goals of the Country Partnership Strategy for China.  Creating platforms where practitioners can exchange views and ideas is one of the most powerful tools for facilitating knowledge-sharing among partners, and also remains at the heart of the Bank’s mission to create knowledge platforms for sharing experiences and new ideas.