title: SOCIAL-ECONOMIC SIGNIFICANCE AND ESSENCE OF MEDIUM-
text: 789
  financial resources to carry out its economic, social, political and environmental
  functions.
  Approaches to developing a sector MTEF vary. The process is usually
  coordinated by the finance/planning department but requires significant inputs from
  line departments. As with the usual annual budget cycle it generally involves a
  combination of ‘top down’ approaches – with the finance department setting agreed
  expenditure ceilings consistent with macroeconomic stability – and ‘bottom up’ ones
  in which line departments cost what they need and try to justify why they should get
  a greater share of the available cake. The final outcome is arrived at through a
  process of iteration. For the purposes of an MTEF it is not necessary to cost every
  line item required for every sub component of every activity of every programme.
  This would be unwieldy and of little use to policy makers. If the MTEF relates to all
  sectors and forms the basis of broad structural adjustment
  type support one might
  expect health just to be covered as one item (although primary health care might be
  separated out). If the MTEF is supporting the development of sector support one
  would expect much greater detail. The basis would have to be agreed at the country
  level. Options might include using broad budget heads e.g. medical education and
  training or other approaches such as primary, secondary and tertiary care. Detailed
  line budgeting need only be included in the annual budgets, which would need to be
  consistent with the MTEF.
  In short, the annual budget contains the detail for the coming year; the MTEF
  shows broad directions for a longer period with the
  degree of detail determined
  through discussions between key stakeholders (notably finance/planning, the line
  department and donors). This places greater onus on line departments to cost the
  services or functions they are responsible for. In practice, the financing of health
  services is extremely fragmented and there is little data on the unit costs of providing
  services. At the outset resources may be allocated in a very skewed way, with a heavy
  emphasis on salary costs and on tertiary hospitals. It may be sufficient to include a
  scenario which starts shifting resources in the right direction, such as more non-salary
  790
  costs, especially maintenance, and primary health care especially immunization. At
  later stages it should be possible to introduce more
  sophisticated or fine tuned
  approaches for service standards (including staffing requirements by type of facility),
  costing these and aggregating them. In simple terms at the outset the aim might be to
  move in the right direction without necessarily knowing what the destination should
  be – the destination is determined during the process.
  A number of factors make it difficult for low income countries to implement
  MTEFs.
  Macroeconomic instability – rapid inflation can render forward planning
  impossible.
  Lack of quality (and timely) financial information – data on donor flows is
  generally poor which is a major problem in aid dependent countries. In countries with
  multiple funding channels accurate data is difficult to obtain. National Health
  Accounts (or simpler rapid resource mapping approaches) can help address this.
  Weak financial systems – systems may not be in place to inform budget
  holders on whether budget ceilings are being adhered to.
  Capacity and institutional weaknesses – there may be weaknesses within
  line ministries to develop and present priority programmes effectively. Ministry of
  finance staff
  may also lack the capacity, or objectivity, to approve the most cost
  effective programmes.
  Lack of budgetary discipline – budgets are not treated seriously with a
  large number of supplementary allocations made during the year.
  Overambition – ministries of health, like many other ministries, often
  attempt to achieve too much with too little, spreading
  their resources too thinly
  resulting in poor performance across the board. Realistic costings may mean that it is
  not possible to provide adequate financing even for existing services. Yet there are
  major incentives to develop new programmes – in part because many donors are
  willing to fund capital and not recurrent costs.
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  Lack of realism – projections are often made on the basis of overestimates
  of revenue sources. Given this wide range of challenges, in some situations more
  limited approaches might be more appropriate. The constraints may need to be
  addressed before a full scale MTEF can be implemented.
  Analyzing the foundations of the budget process in the Republic of Uzbekistan,
  regulatory and legal basis and stages, as well as the study
  of the existing budget
  system, the structure of the State budget and its forecasting methods, showed that
  there
  are some shortcomings that limit the possibilities of consistent and effective use of
  budget funds in the practice of budget planning.
  Estimated planning practically avoids the problem of determining the results of
  financing. In other words, costs themselves act as results. Budget planning is limited
  to one year, and it does not provide an opportunity to direct the budget policy to
  achieve priority tasks and goals of socio-economic development that deviate from the
  scope of the current year. As a result, the national and
  sectoral programs that are
  adopted with a view to implementation in the medium and long-term future are often
  not linked to budget possibilities.