2004年-世界发展银行全球_The_Democratic_Republic_of_Timor-Leste___Public_Expenditure_Review_122页_10mb

Public Expenditure Review of the Democratic Republic of Timor-Leste

Core Content

This report, Report No. 27886-TP, is a Public Expenditure Review (PER) conducted by the World Bank for the Democratic Republic of Timor-Leste in July 19, 2004. It outlines the findings and recommendations for improving public expenditure management in the context of a new nation facing significant development challenges.

Main Objectives

The PER aimed to:

• Enhance the poverty reduction impact of the expenditure program by focusing on service delivery and accountability.
• Increase transparency and accountability by improving the availability and dissemination of expenditure-related information.
• Serve as an analytical foundation for the design of the Transition Support Program (TSP) and the National Development Plan (NDP).

Key Viewpoints

A. Fiscal Year and Context

• The fiscal year runs from July to June.
• The country is in the early stages of nation-building, with limited human resources, embryonic institutions, stagnant economy, and high poverty and unemployment.
• The NDP, developed through a participatory process, emphasizes equitable and sustainable economic growth and poverty reduction.
• The first post-independence budget cycle (FY2004) allowed the government to translate its development vision into a national expenditure plan.

B. Sustainable Pro-Poor Expenditure Policy

• The government has sought to align expenditures with NDP priorities, especially basic education and health.
• However, NDP priorities have had to be adjusted due to slower-than-expected mobilization of Timor Sea revenues and declining external assistance.
• The financing gap from FY2006 to FY2007 is estimated at US$30 million due to revised revenue and expenditure estimates.
• The current allocation to education and health is significantly lower than NDP targets, while police and defense spending is higher than expected.
• General public services have also exceeded initial projections, while economic services are underfunded.

C. Accountability and Effectiveness in Public Spending

• The core financial management system is comparable to other low-income countries but agency-level systems are rudimentary.
• The viability of the system is threatened by the departure of key expatriate personnel.
• The budget process is comprehensive, with forward estimates and GFS classifications.
• Parliamentary oversight could be strengthened with a two-stage budget process.
• An independent audit authority under the judiciary is recommended to complete the core financial management system.

D. Risks and Challenges

• Risks include:
  • Rising administrative overheads.
  • Additional charges from reduced external financing.
  • Pressure to increase staffing levels beyond 17,200.
  • Local administration reforms potentially leading to institutional expansion.
  • Further transfers of equipment and installations as UNMISET winds down.
  • Inadequate budgeting for police operating expenditures.

E. Recommendations

• Improve procurement planning and administration to align with appropriations and enhance service delivery.
• Implement early procurement planning and monitor progress at the agency level.
• Use Expenditure Authorization Notices to front-load expenditures in critical sectors.
• Standardize specifications to avoid delays in procurement.
• Clarify procurement procedures with the approval of the Public Procurement Decree Law.
• Promote competition to contain prices, especially in fuel supply.
• Consider contracting out low-level services to support private sector growth and reduce public sector overheads.
• Improve cost recovery mechanisms and benchmarking between contractors and service providers.
• Develop a government-wide integrated financial management system.
• Address the skills gap created by the withdrawal of technical assistance.
• Invest in training national personnel to replace expatriate staff.
• Implement a savings strategy for Timor Sea royalties to support near-term financing.
• Strengthen governance and institutional capacity as part of the next Transition Support Strategy.

Key Information

• Key Recommendations are provided in boxes, including:

  • Box 1.1: General expenditure review recommendations.
  • Box 2.1: Fiscal policies for managing Timor Sea windfalls.
  • Box 2.2: Controlling power sector subsidies.
  • Box 2.3: Recent expenditure control measures.
  • Box 2.4: Key expenditure policy recommendations.
  • Box 3.1: Capacity building for financial management.
  • Box 3.2: Safeguarding Timor Sea revenues and savings.
  • Box 3.3: Key recommendations for public spending.
  • Box 4.1: Recommendations for civil service reform.
  • Box 5.1: Use of block grants in Uganda.
  • Box 5.2: Education expenditure recommendations.
  • Box 6.1: Improving access beyond the core network.
  • Box 6.2: Road expenditure recommendations.
  • Box 7.1: Health expenditure recommendations.

• Key figures and tables are used to support analysis, including:

  • Figure 2.1: Combined sources expenditure trends.
  • Figure 2.2: Expenditure and revenue as a percentage of GDP.
  • Figure 6.1: Relation between road density and GDP per capita.
  • Table 2.1: Consolidated Fund financing based on FY2005 budget.
  • Table 5.1: Educational attainment of adults.
  • Table 7.1: Millennium Development Goals (MDGs).
  • Table 7.2: Health status indicators in Timor-Leste.
  • Table 7.6: Consolidated Fund expenditure on health by economic classification.

Strategic Directions

• The next cross-sectoral PER is planned for FY2007 to support the successor to the National Development Plan.
• The integration of sector expenditure reviews into sector policy and planning is advocated.
• Public expenditure analysis is promoted as a tool for policy and decision-making.

Conclusion

The PER highlights the need for sustainable fiscal policy, improved accountability and effectiveness, and civil service reform in Timor-Leste. It emphasizes the importance of aligning resources with development priorities, managing public spending efficiently, and building strong institutions to support long-term economic and social development.