Since 2008 the “Minas Gerais Partnership Series” has consolidated the state’s fiscal adjustment efforts by significantly improving operating balances, increasing investments, and reducing debt, while at the same time enhancing public service delivery and tackling poverty. The successful Management Shock (Choque de Gestão) and subsequent reform phases were underpinned by fiscal discipline and paralleled by an innovative management reform program based on results and rigorous prioritization of actions. In 2012, in a challenging economic context, the state government needed additional fiscal support to continue this reform effort.
Decisively committed to the ongoing program reform, the state government reshuffled its debt portfolio through coordinated financing from the World Bank, the French Development Agency, Agence Française de Développement, and Credit Suisse. The Third Minas Gerais Development Partnership project was designed to assist the government’s efforts to deepen its innovative management model and strengthen its budget management and sectoral policy management in the areas of social inclusion, environmental management, and metropolitan governance. It included an innovative component on citizen participation.
The project supported improvements in the efficiency of the public sector as a means to improving service delivery and inclusion. It supported improvements in the following key outcome areas:
- Strengthened the Results-Based Management (RBM) organizational structure, systems and processes, with decentralized monitoring, promoted further institutionalization of strategic management and built capacity throughout the administrative apparatus, ultimately improving the execution capacity. Improvements in the execution rates of priority projects reached 88.8 percent of priority projects compared to a baseline of 61 percent.
- Improved predictability and control of budget execution through the introduction of a financial management system and procurement portal.
- Increased number of municipalities (100 percent) receiving state transfers to finance services and benefits to the most vulnerable and at risk local populations.
- Increased number of social deprivation maps (more than 140) based on the United Nations Development Program (UNDP) methodology, with a view to portraying the multidimensional aspects of poverty that go beyond economic variables and include health, education, living conditions, and to provide a fundamental tool for planning and designing adequate government programs to address the needs of the most vulnerable.
- Integrated processes on environmental licensing ensured better collaboration and more efficient environmental regulatory system.
- Strengthened governance of the metropolitan region of Belo Horizonte, enabling the coordination of state and municipal public policies and aiming at improving the quality of life of the region’s population. Reduced average time for land parceling procedures. Established new metropolitan agency for intersectoral and intergovernmental level coordinating functions.
The Bank’s support included a US$450 million loan.
Agence Française de Développement, provided a €300 million loan. Credit Suisse provided a US$1.3 billion loan to compose the refinancing package for the state.
The Bank team maintains its support for the state’s innovative management reform program of building solutions for development issues regarding the evolution of the RBM model.
The staff of the state government were able to make more informed decision based on the RBM system, as secretariats improved their coordination and communication. Improvements in public sector management benefit all citizens through more cost-efficient and transparent administration, through higher quality public service delivery, and through more inclusive and participative governance.