and poverty-oriented sectors (recurrent and capital) is expected to reach 44.3 billion Birr by the end of 2009/10 from 14.0 billion birr in 2004/05, taking total projected allocations for the full PASDEP (2005/06 to 2009/10) period to an estimated 174.9 billion Birr. This figure amounts to 76.9% of total expenditure.  374 Ethiopia has also adopted a deliberate policy for decentralising its budgetary process by instituting a clear framework and administrative infrastructure for medium-term fiscal management, as well as an effective system of fiscal decentralisation. The country operates an open and participatory budgeting process that is both top-to-bottom and bottom-to-top; and through the MoFED, also carries out an annual foreign and public debt sustainability analysis in the context of the IMF Article IV Consultations. The CSAR concludes that the legal and regulatory framework is adequate for the promotion of public finance management. There are well-established rules and procedures for collection, budgeting, transfers, accounting, and auditing of public finance, at all tiers of government. Budget Deficit Management 375 The CSAR notes that government made commendable efforts made over the years towards achieving fiscal sustainability. Fiscal policy measures targeted reducing the budget deficit as a percentage of GDP and, at the same time, focused on expanding socio-economic service provision. Measures such as rationalising public expenditure, adjusting public sector salaries, limiting the number of zerotariff related items and import exemptions, broadening the tax base, introducing VAT and rental income tax are at different stages of implementation. Success in this regard was revealed by the overall fiscal deficit improvement to -2.9 percent of GDP in 2007/08, from -3.6 percent in 2006/07. Fiscal Decentralisation 376 Ethiopia initiated the fiscal decentralisation process well before the adoption of the Constitution, through the Transitional Government Proclamation 33/92 defining the nature of fiscal relations between the federal and regional governments. The aim of the proclamation was to enable both levels of governments to carry out their respective duties and responsibilities effectively, assist Regional governments develop their regions on their own initiatives, narrow the gap in growth and development rates between regions, and promote the common interest of regional governments. The supportive legal provisions for fiscal decentralisation are the Proclamation 7/92, affirming the rights of Federal and Regional Governments, and the 1995 Constitution of the Federal Democratic Republic of Ethiopia, ratifying the powers and responsibilities of all levels of governments. To facilitate the decentralisation process further, - 156 -