Linkages between Planning and
Budgeting in Thailand
By
Ms. Orachorn Kerdpibule
Macroeconomic Strategy and Planning Office
Office Of National Economic and
Social Development Board (NESDB), Thailand
June 18,2012
Scope of Presentation
•
•
•
•
Basic information
Planning at the General Government
Level
Budgeting at the central and local level
Lessons learned and conclusions
Basic information
Historically,
Thailand as unitary form of government with highly
centralized planning and budgeting processes with
centralized agencies delivering economic and social
services throughout the country.
Before the 2007 Constitution:
• The 1997 Constitution changed the centralized form
of government by “autonomy to the locality”1 through
the 1999 Decentralization Act which transfer some
functions from the central government to Local
Administrative Organizations (LAOs) and assigning of
general government revenues to LAOs
•
1(1997
Constitution Chapter IX Section 282)
Basic information
Present (after the 2007 Constitution)
• In 2003 a Royal Decree on Good Governance was
promulgated setting out the different planning
requirements by the central government and local
administrative organizations in order to make
agencies more responsive to local needs and be
more accountable to citizens.
• In 2008 a Royal Decree on Integrated Administration
of Provinces and Provincial Clusters was promulgated
which required provinces to prepare provincial
development plans and for government agencies to
align their interventions to support these provincial
development plans.
Status: planning and budgeting
Main responsibilities for planning and budgeting at the
central government level: four key economic agencies;
• National Economic and Social Development Board
(NESDB) setting medium and long term national plans; the fiveyear National Economic and Social Development Plan (NDP).
• Bureau of Budget (BOB) for budget formulation, execution
and monitoring process including annual budget strategy.
• Ministry of Finance (MOF) by Fiscal Policy Office (FPO) in
collaboration with revenue collection agencies to provide revenue
projections and proposes the fiscal framework.
• Bank of Thailand (BOT) participates in the pre-budget
formulation discussions with the BOB, MOF, NESDB where
respective agencies present their projections on macro-fiscal
aggregates within their power.
Planning at the General Government Level
Central government

The five-year National Economic and Social Development Plan
(NDP) (currently in the 11th Plan covering FY 2012-2016) sets the
overall framework for national development the next five years.

The Government Policy Statement sets out the key policy
objectives of the elected government over a 4 year period,
preparation of which is the responsibility of the Cabinet Office.
The linkage between the Government Policy Statement and the
five-year National Plan is not legally mandated. Rather, creating
this linkage is entirely dependent on the policy agenda of a new
elected government, which may have different policy priorities
than those listed in the NDP.
Planning at the General Government Level
Central government (cont.)
• The Government Administrative Plan (GAP) is the statement of
medium term policies including objectives, the agency or entities
responsible for each mission and the related estimated income and
expenditure estimates, the proposed results monitoring and
evaluation measures.
• In principle, the GAP is by design a government tool to direct public
administration over the four year term of government, while the NDP
can be viewed as a tool for policy coordination among different
parties including private sector and civil society.
• The Prime Minister Office’s regulation determines the constitution of
committees to review and update the country’s development status
and to collect data and information necessary to prepare the GAP.
• Country’s development update committee chaired by NESDB
comprising of BOB, CGD, FPO, BOT, the Secretariat of Cabinet Office
and National Security Council. Information collection committee
chaired by Cabinet Secretary, Council of State, NESDB, OPDC.
Planning at the General Government Level
Local Administrative Organizations(LAOs)
Local Administrative Organizations is required to prepare both a threeyear development plan and a long term strategic development vision.
• The long term strategic development plan is required to be consistent
with the five-year National Development Plan, the Government
Administrative Plan, Provincial/ District Development Strategy and the
Community Development Plan. The LAOs development plan is expected
to present the respective LAO’s vision, mission and development goals,
as an implementation tool. No matter the size or capacity of the LAO,
such planning documents are legally mandated.
• The three-year development plan is a progressive plan, which essentially
presents strategies, programs and projects to be implemented in each
of the following three years, which includes; (i) LAO’s general social and
economic background; (ii) Qualitative and quantitative assessment of
the previous year performance; (iii) Prioritized strategies and
developmental guidelines in the next 3 years; (iv) Lists of
programs/projects in accordance with strategies and guidelines; (v)
performance monitoring and evaluation
Figure 1: Schematic Representation of Planning Processes in Thailand
Local level
Government Policy
statement
National Economic and Social
Development Plan (5 years)
Government Administrative Plan (4
years)
Ministries and departments
(Functional based)
Government Policy
Provinces and provincial clusters
(Area based)
(function based)
Integrated provincial
strategic plan (Area
based)
Policy from ministries
and departments
(Functional based)
Province and provincial cluster
development plan
Government Operation Plan (4
years)
Annual Budget Allocation
Strategy
Integrated district
strategic plan (Area
based)
Annual province and provincial
Operation Plan
Annual Government
Operation Plan
Annual budget request
Local strategic development plan
Annual budget
3 year local development plan
Annual budget
Prepared by Frederico Gil Sander, Nattaporn Triratanasirikul, Robert Boothe, and Shabih Ali Mohib (World Bank)
Budgeting at the Central and Local Level
Central Government
• Bureau of the Budget (BOB) translate all of the
different plans into the annual budget and executes this
responsibility through a framework of Strategic Performance Based
Budgeting (SPBB – adopted since 2003),which SPBB in Thailand is to
improve the link between the budget and the various development
plans and operational plans prepared by agencies.
•
The budgeting process is systematic with a clear
budget calendar. The budget process has the following stages:
budget revision, budget planning, budget formulation and budget
adoption, and requires one year of preparation
Budgeting at the Central and Local Level
Central Government (Cont.)
• The budget planning process involves core
economic agencies agreeing on key macroeconomic
assumptions, aggregate revenue projection, public debt forecast
and annual budget expenditure with three years of forward
projections.
•
BOB and NESDB also prepare an annual budget allocation
strategy which sets out the strategic targets, KPI’s at the
macro level and a budget allocation guideline. These KPI’s are
included in each of the agencies’ annual operating plan and
reviewed at the end of the year.
Budgeting at the Central and Local Level
Local Administrative Organizations (LAOs)
• The local budgeting system is undergoing a transition, from
line item incremental budgeting to a more programmatic focused
one, which are currently classified by economic classification,
current and capital expenditures.
• Current expenditure consists of (i) salary and wages for permanent
staffs, (ii) wages for temporary staffs, (iii) compensation/ services
and supplies, (iv) utilities, (v) grants and (vi) others.
• Capital expenditure comprises durable goods, land and installations
• Central budget allocation (representing approximately 30 percent
of total expenditures) is maintained by the Office of Chief
Administrator for discretionary use. General grants and other
sources of funds that are incorporated into budget expenditure are
also classified by economic classification.
Lessons learned and conclusions
Thailand has well established planning mechanisms across
government, the process of reconciling the various
development plans with the Government Administrative Plan
(and the cascading operating plans) could be significantly
improved.
2. Multiple plans overload the budget allocation processes as
the overall budget is split or fragmented into many different
‘sources’, impairing the ability of the Government to find and
fund large integrated projects and sometimes resulting in
overlapping or similar projects each being funded
simultaneously.
3. The absence of a formal annual budget strategy and noncommunication of indicative ceilings from BOB to agencies
early in the budget preparation cycle leads agencies to
practice unconstrained budgeting.
1.
Thank you
orachorn@nesdb.go.th