2002年-世界发展银行全球_Georgia___Public_Expenditure_Review_206页_12mb

Summary of Georgia Public Expenditure Review (Report No. 22913-GE)

Core Content

This report, titled Georgia Public Expenditure Review, provides an in-depth analysis of Georgia's fiscal and expenditure management systems as of November 2002. It outlines the challenges and opportunities in improving the efficiency, equity, and sustainability of public spending, particularly in the context of poverty reduction and meeting the Millennium Development Goals (MDGs). The report is prepared by the World Bank and includes a detailed discussion of fiscal trends, revenue policy, budget management, and expenditure patterns in key sectors such as health and education.

Main Viewpoints

1. Economic Context and Public Expenditure Trends

• Economic Recovery: After the economic collapse post-independence, Georgia managed to restore and sustain economic growth and price stability since 1996.
• Income Levels: Per-capita income is still significantly lower than pre-independence levels, with only about 40% of the former level.
• Poverty and Risk: Despite low poverty incidence (23% in 2000), 60% of the population is at risk of falling into poverty.
• Public Expenditure Level: Georgia's public expenditure is among the lowest in the CIS region (18.5% of GDP in 2001), limiting the scope for further reductions without risking essential programs.

2. Fiscal Adjustment and Constraints

• Fiscal Adjustment: The stabilization program of the mid-1990s involved initial expenditure cuts and later increased domestic revenue mobilization.
• Resource Envelope Unpredictability: The resource envelope is highly unpredictable, leading to short-term budgeting and poor implementation of long-term strategies.
• Revenue Volatility: Domestic and foreign donor revenues are volatile, affecting the ability to plan and execute budgets effectively.
• Political and Governance Factors: Revenue unpredictability is driven by political considerations and governance issues rather than technical limitations.

3. Budget Management Issues

• Protected Items: These are specific expenditure categories that cannot be cut, such as wages, pensions, and some programs, and account for 85-90% of the central budget.
• Inflexible Budgeting: The presence of protected items reduces the flexibility of the budget, limiting the ability to reallocate resources.
• Weak Cash Flow Management: Revenue forecasts are often unrealistic, leading to arrears and an inflexible budget execution process.

Key Information

Fiscal Year and Currency

• Fiscal Year: January 1 to December 31.
• Currency: Georgian Lari (GEL), with 1 US$ = 2.2349 GEL.

Acronyms and Abbreviations

Key Sectors

Health Sector

• Health Outcomes: Deteriorated over the past decade.
• Public Expenditures: Low and inefficient, with a significant portion of out-of-pocket spending.
• Reform Issues: Improving efficiency, enhancing equity, and exploring innovative funding options.

Education Sector

• Enrollment Rates: Declining quality and access.
• Public Expenditures: Low and unevenly distributed across regions.
• Reform Issues: Raising allocated efficiency, improving equity, and enhancing the quality and relevance of education.

Social Protection

• Pensions: Inadequate and delayed, contributing to poverty.
• IDPs: Internally displaced persons face significant socio-economic challenges.
• Recommendations: Regular and increased pension payments, improved pension fund administration, and targeted assistance for IDPs.

Key Recommendations

Short-Term Actions

• Improve Cash Flow Management: Use within-year borrowing to smooth expenditures.
• Strengthen Treasury Functions: Integrate revenue accounts into the treasury and implement comprehensive commitment control.
• Enhance Predictability of Protected Items: Align them with priority programs and gradually phase them out as budget predictability improves.
• Develop Incentives for Budget Rationalization: Ensure that line ministries have incentives to cut costs and reallocate resources within their budgets.
• Introduce a Phase of Budget Strategy Formulation: Link public expenditure to sector objectives and programs within the budget cycle.

Medium-Term Actions

• Improve Revenue Forecasting: Increase the accuracy and reliability of revenue projections.
• Reform Revenue Policy and Administration: Address political and governance issues affecting tax collection.
• Strengthen Inter-Governmental Fiscal Relations: Improve the assignment of expenditure responsibilities and revenue sources between central and local governments.
• Enhance Local Governance: Improve local expenditure patterns and reduce disparities across regions.

Conclusion

The report highlights the critical need for improving Georgia's public expenditure management systems to effectively address poverty and meet MDGs. It emphasizes that without better predictability and strategic planning, the country's ability to allocate resources efficiently and equitably will remain limited. The suggested reforms aim to enhance fiscal credibility, improve revenue management, and promote more effective and sustainable use of public funds.