2010年-世界发展银行全球_Achieving_Fiscal_Sustainability_in_Swaziland___Reestablishing_Control_over_the_Wage_Bill_34页_496kb

Summary of "Achieving Fiscal Sustainability in Swaziland: Reestablishing Control over the Wage Bill"

Core Content

This policy note outlines the challenges and potential reforms needed to achieve fiscal sustainability in Swaziland, focusing primarily on the wage bill, which has become a major contributor to the unsustainable fiscal deficit. The wage bill has grown significantly, reaching 17.8 percent of GDP in 2010/11, surpassing the domestic revenue base and contributing to macroeconomic instability.

The government is under pressure to reduce the wage bill due to the collapse of SACU revenues and the need to maintain the peg of the Lilangeni to the South African Rand. The wage bill is driven more by the expansion of the civil service workforce than by salary increases, with the Ministry of Education experiencing the fastest growth in personnel.

Main Points

• Fiscal Deficit: Swaziland's fiscal deficit reached 15% of GDP in 2010/11, a sharp increase from 7.6% in the previous year.
• Wage Bill Size: The wage bill is exceptionally large, even compared to OECD countries, and is greater than domestic revenue (14.6% of GDP).
• Civil Service Expansion: The civil service has grown by 6% over three years, with the Ministry of Education, Ministry of Defense, Police, and Correctional Services showing the most significant increases.
• Fiscal Sustainability: The government must address the wage bill to ensure macroeconomic stability, as it is a key driver of the deficit.
• Public Sector Crowding Out Private Sector: The large public sector workforce and wage bill may be limiting the growth of the private sector, which is essential for long-term economic sustainability.

Key Issues

1. Fiscal Sustainability: The civil service wage bill is unsustainable under current macroeconomic conditions, threatening macroeconomic stability.
2. Control Over Expenditure: The current wage increase mechanism lacks flexibility and creates conflicts of interest for government negotiators.
3. Allocative Efficiency: There may be inefficiencies in the distribution of personnel between departments, with recent hires favoring the security cluster over the social cluster.
4. Productive Efficiency: High wage bill affects the balance of expenditure, making it difficult to support development policies effectively.
5. Social Stability: A large public sector may lead to social instability if not restructured, as it is the largest employer in the country.

Reform Options

Structural Reforms

• Broaden Position Creation Mechanism: Include the army in the process of creating or suppressing positions to manage all public servants within a resource envelope.
• Decouple Top Tier Wage Increases: Allow for independent decision-making on top-tier wages to reduce conflicts of interest.
• Split Salary Increases: Separate the wage increase into a cost-of-living adjustment (lower than inflation) and a discretionary component based on performance.
• Expand Notch System: Increase the number of notches within grade levels to allow for more frequent and selective promotions.
• Reassess Pension Fund Contributions: Consider reducing the 15% contribution to the pension fund based on new population data and financial health assessments.
• Reconsider Allowances: Evaluate and selectively reduce allowances, especially those leading to high current expenditures.
• Lower Pension Age: Implement a differentiated pension age for certain categories of civil servants, particularly the army.

Immediate Measures

• Enhance EVERS Program: Improve the EVERS (Enhanced Voluntary Early Retirement Scheme) by assessing demand, compensating for non-cash benefits, and ensuring a clear communication plan.
• Combine with Involuntary Departures: Pair EVERS with an involuntary departure program to encourage more participation.
• Transfer Civil Servants: Transfer civil servants to new autonomous agencies with EVERS as an unconditional guarantee, not an automatic right.
• Eliminate Lump Sum Payments: Remove lump sum pension payments under EVERS to reduce cash outflows.

Scenarios for Wage Bill Reduction

Five scenarios were modeled to assess the impact of different reform measures:

1. Scenario 1 (No Notable Reform): Maintains current hiring and wage trends, leading to a modest reduction in the overall wage bill by 2017.
2. Scenario 2 (Broad Undifferentiated Reforms): Freezes new hires, limits wage increases to half of inflation, and suspends pension fund contributions.
3. Scenario 3 (Differentiated Reforms): Introduces differentiated wage increases and new hires for the education sector, while reducing security cluster positions.
4. Scenario 4 (One-Off Reductions): Adds a one-off wage reduction to Scenario 3.
5. Scenario 5 (Exceptional Departures): Includes an additional large-scale departure of civil servants in 2013, along with wage reductions.

These scenarios aim to bring the wage bill down to a level consistent with macroeconomic policy goals, though the overall wage bill is still expected to remain high even after reforms.

Conclusion

The wage bill is a critical factor in Swaziland's fiscal sustainability. A combination of immediate and medium-term reforms is necessary to bring it under control, with the emphasis on restructuring the civil service, improving performance-based promotions, and managing the transition to a more private-sector-oriented labor market. The government must act decisively to ensure macroeconomic stability and long-term economic growth.