2002年-世界发展银行全球_Mongolia_-_Public_Expenditure_and_Financial_Management_Review___Bridging_the_Public_Expenditure_Management_Gap_259页_17mb

Mongolia Public Expenditure and Financial Management Review Summary

Core Content

This report, Mongolia Public Expenditure and Financial Management Review (PEFMR), published in June 2002, evaluates Mongolia's public expenditure and financial management practices, identifies key challenges, and provides recommendations for reform. The report is prepared by the World Bank and focuses on improving fiscal discipline, enhancing public sector efficiency, and aligning public policy with poverty reduction and long-term development goals.

Main Challenges and Issues

1. Public Finance Management Gap

• Mongolia experienced rapid macroeconomic adjustment during the early transition years, achieving positive GDP growth and reduced inflation.
• However, the country failed to implement structural and institutional reforms necessary to support a performance-oriented public sector and a competitive private sector.
• The public sector remained large and inefficient, with high employment and cash transfer costs, contributing to a growing fiscal deficit and increasing public debt.

2. High Public Expenditure and Fiscal Deficits

• Public employment and cash transfers accounted for over 40% of total expenditure by 2000.
• The deficit increased from 5.9% of GDP in 1995 to 12.2% in 1999.
• The debt-to-GDP ratio more than doubled from 41.1% to 93.9% over the same period.
• Interest payments rose from 0.4% to 1.9% of GDP, reflecting poor fiscal management.

3. Tax Policy and Its Impact

• Tax revenues increased from 24.8% of GDP in 1996 to 38% in 2001, higher than most other transition economies.
• High tax rates, especially on personal income (29%) and corporate income (40%), are disincentives for private investment and reduce labor force participation.
• The tax structure has shifted toward market-oriented reforms, including the introduction of VAT and a more progressive income tax system, but the overall tax system remains out of line with international norms.

4. State-Owned Enterprises (SOEs) and Quasi-Fiscal Activities

• SOEs were a significant source of revenue, but many were unprofitable, with almost half of all SOEs operating at a loss.
• SOEs concentrated revenue in two regions, and only five firms accounted for 93% of all tax payments.
• The government's support for SOEs led to inefficiencies and increased fiscal pressure.

5. Civil Service and Employment Issues

• The civil service is expensive and inefficient, with wages reaching 144% of per capita GDP by 2000.
• The ratio of wages between different levels of the civil service decreased from 3.1 in 1997 to 2.7 in 2001 due to frequent and poorly targeted wage increases.
• Political patronage and high turnover in election years have undermined the effectiveness and integrity of the civil service.
• The government faces pressure to double public sector wages by 2004, which could further strain the budget and reduce private sector competitiveness.

Key Recommendations

1. Strengthening Public Finances

• Reduce public spending before considering tax cuts to ensure fiscal sustainability.
• Improve tax administration and create incentives for better tax collection.
• Modernize the tax system to align with international standards and reduce distortionary effects.

2. Improving Public Sector Efficiency and Effectiveness

• Reform the civil service to improve performance, reduce costs, and enhance accountability.
• Implement a performance-oriented public sector (POPS) with clear incentives and accountability structures.
• Phase out inefficient SOEs and restructure the public sector to improve service delivery and reduce fiscal burdens.

3. Enhancing Budget Control and Execution

• Establish a Treasury Single Account (TSA) to improve financial management and control.
• Modernize financial information systems and ensure transparency in budget execution.
• Strengthen internal financial controls and ensure alignment between policy and financial management.

4. Intergovernmental Fiscal Relations

• Clarify expenditure responsibilities between central and local governments.
• Improve local revenue capabilities and create a fair transfer system to support local governance.
• Build capacity for effective decentralization to ensure better service delivery at the local level.

5. Improving Governance

• Enhance legal and parliamentary oversight to ensure accountability and transparency.
• Address corruption and improve the governance framework to support better public sector performance.
• Strengthen institutional capacity to support long-term fiscal and policy reforms.

Priority Pro-Poor Policy Actions

• Education and Health Sectors require increased investment and better resource allocation to meet MDG targets.
• Social assistance systems need to be reformed to ensure effective targeting and transparency.
• Environmental sector should be prioritized with adequate funding and efficient management.
• Public sector reforms must be part of comprehensive sector strategies, not just short-term cost-saving measures.

Reform Agenda

• Key Principles:

  • Reforms should increase fiscal discipline and comprehensiveness.
  • Policy changes must be evaluated for their short, medium, and long-term impacts, especially on the poor.
  • Resource allocation must be clearly defined for each governmental unit.

• Implementation Challenges:

  • The Public Sector Financial Management Law (PSFML) has been stalled due to resistance to budget decentralization.
  • The PSFML needs to be revised to address key issues and improve public sector performance.
  • A new version of the law was proposed in 2002, which has the potential to be a more effective reform tool.

Conclusion

Mongolia needs to address the growing fiscal and institutional challenges to ensure sustainable economic growth and poverty reduction. The report emphasizes the importance of a comprehensive, performance-oriented approach to public sector reform, with a focus on improving fiscal discipline, enhancing efficiency, and aligning policies with international standards. The proposed reforms, including the PSFML, are critical for achieving these goals and ensuring long-term stability.