By Anat Arkin | 11 November 2014
We do the things that allow governments to do things better, George Atalla, the new leader of EY’s government and public sector practice tells PFI
War and political upheaval on multiple fronts could yet push the world economy back into the recession from which it has just emerged. But George Atalla, recently appointed leader of government and public sector at consultants EY, takes a cautiously upbeat view of the global economy’s prospects. ‘I’m certainly optimistic about the long term. I don’t think there is any other choice,’ he says. ‘But I think there are some challenges that need to be tackled more aggressively perhaps than they have been in the past.’
Top of the list of these challenges are the rising costs of healthcare, pensions and other entitlements. But Atalla sees growing inequality as an equally serious problem.
‘Recessions have a way of affecting those who are disadvantaged perhaps even more than those who are not disadvantaged,’ he says, citing high rates of youth unemployment as one of the most persistent and damaging consequences of the financial crisis of 2007/08. Older people have also been badly hit by fallout from the crisis, he says. Low interest rates may have stimulated investment and helped to accelerate economic growth, but they have left many retirees struggling to survive on interest from their savings.
Atalla believes that entrepreneurship could be a big part of the solution to the problems facing both young people and the over-60s. EY has worked with governments of G20 countries to identify and remove obstacles to young people starting their own businesses, including red tape and lack of access to funding. The firm has also looked at self-employment for people who are now retiring or have recently done so, seeing their contribution as critical to increasing productivity and economic growth. EY’s proposals for unleashing the potential of this demographic include offering appropriate training and support, improving access to credit and making self-employment more attractive – for example, by including start-up support in phased retirement schemes.
These measures are needed most urgently in advanced economies with rapidly ageing populations. But Atalla’s interests and experience – like those of EY – are not confined to the G20 developed economies. In his career to date he has worked with governments in more than 30 countries on everything from economic policy to tax modernisation – and anything else that, as he puts it, ‘either makes money for government or draws resources away from government’.
A fluent English, Arabic and French speaker, Atalla is originally from Lebanon, where he studied civil engineering at the American University of Beirut. He did his graduate studies in the US and holds MScs in transportation from Northwestern University and industrial engineering from the Georgia Institute of Technology and an MBA from George Washington University.
Although Atalla started as a transportation engineer, early in his career he began working on the economic feasibility of engineering projects. ‘That led to my involvement with the organisational, transformational side of the business and was also my introduction to working more closely with governments,’ he says.
Before joining EY, Atalla worked for 17 years at Booz & Company, most recently as a partner and vice president heading the firm’s government and public sector practice across the Middle East and Africa. Home for Atalla is Washington, but his new role is likely to see him spending much of his time away from the US capital. EY’s government and public sector practice is one the firm’s largest, employing about 7,000 people in more than 100 countries. Its activities include setting economic development agendas and helping government deliver more effective services. ‘So we do the things that government does but we also do the things that allow governments to do things better, which entails for, example, introducing new technologies or improving the quality of services,’ Atalla says.
The practice is also heavily involved in public financial management. While the economies of the countries it works with vary in size, structure and maturity, Atalla argues that the PFM issues they face are essentially the same. He points to the budgetary pressures facing governments across the world as they are asked to deliver more services but without additional resources.
‘There is also increased demand for transparency all around the world,’ he says. ‘Whether you are in a mature economy or an emerging economy, people want to know how their money is spent.’
That said, he argues that different issues take priority in different parts of the world. So while governments in mature economies are preoccupied with the need to balance budgets and deliver the high-quality services their citizens increasingly expect, Atalla believes that transparency is the number one issue in emerging markets. He sees a key role for International Public Sector Accounting Standards in addressing this issue, with standardised rules making it easier for external auditors to look at a government’s budget accounts and draw the right conclusions from them.
Less obviously, introducing these standards can in itself lead to greater transparency. ‘Each time you roll out a new standard, you are putting in a disciplined process for how information is collected, compiled and disseminated,’ says Atalla, who argues that these processes are often as important as the data that come out of them. ‘If I publish data and you don’t know how I got it or how I collected it, then it will not have the same value.’
Transparency, in turn, can have a potentially positive and far-reaching impact on the economy as a whole. ‘Robust and transparent public finance systems will increase the public’s confidence in government, and contribute to the establishment of an effective investment climate, which eventually leads to higher economic growth,’ says Atalla.
But he points out that as with any new way of doing business, the introduction of IPSAS carries costs – not only those associated with bringing in new technology but the additional costs of running two systems in parallel until the new one has bedded in and of training people to use it. Those costs and the difficulties that governments and public bodies have when it comes to implementing the new standards vary, a reflection of differences in their size, technological maturity and the capability of their people. So, as with much else that EY’s government and public sector practice does, helping clients implement IPSAS involves taking best practice from one country and deploying it elsewhere – while remaining sensitive to local conditions and local needs.
Atalla’s role is to make sure that the practice has the capabilities to perform this balancing act. ‘The idea is for us to act very globally but at a very local level,’ he says. ‘That really is the main part of my role – to ensure that we have that ability to bring in global resources and expertise but apply them locally wherever there is a need for them.’
This article appears in the Winter 2014 issue of Public Finance International magazine
