2015年-世界发展银行全球_Bangladesh_Public_Expenditure_Review_Update___An_Update_of_Fiscal_Trends_Based_on_the_2010_Public_Expenditure_Review_62页_9mb

Bangladesh Public Expenditure Review Update Summary

Core Content

This document is an update to the 2010 World Bank Public Expenditure Review (PER) for Bangladesh. It analyzes fiscal trends and public expenditure patterns in the context of Bangladesh's development objectives, focusing on the allocation of resources between recurrent and development expenditures, as well as the sustainability of the fiscal stance.

Main Points

Fiscal Trends

• Fiscal Deficit: Bangladesh has maintained a low fiscal deficit, averaging 3.1% of GDP over the past decade, and reaching 3% in FY14, which is below the South Asian average of 3.7%.
• Public Debt: Public debt has been declining as a share of GDP, from 42% in FY06 to 34% at the end of FY14, among the lowest in South Asia.
• Debt Sustainability: The latest Debt Sustainability Analysis (DSA) found that public debt is sustainable, even under large shocks such as financing new power plants or recapitalizing state-owned banks.

Fiscal Risks

• Contingent Liabilities: Risks exist from contingent liabilities related to state-owned banks, which could cost up to 2.5% of GDP.
• Pension Liabilities: Long-term risks are posed by pension liabilities, which are part of the broader fiscal vulnerability.
• External Shocks: Risks from international fuel prices and currency depreciation could be significant if they occur simultaneously and the government cannot cover them with sufficient debt.

Revenue Performance

• Revenue to GDP Ratio: Bangladesh has among the lowest revenue as a share of GDP in the world, at 11.2% in FY12, which later declined.
• Tax Revenue: Tax revenue makes up over 80% of total revenue and remains below expected levels for Bangladesh's level of development.
• Border Revenues: Customs, duties, and VAT on imports make up nearly 30% of total revenue in FY14, though reliance on these has decreased since FY10.
• Corporate Taxes: Bangladesh has the highest corporate tax rates in the region (up to 45%), but also the lowest "tax effort" (average 64% from 2004–12).
• Tax Administration: Tax collections are low, with less than 1% of the population paying regular taxes. Efforts to improve tax administration, including automation and simplification of the VAT regime, are underway.

Public Expenditure

• Public Expenditure to GDP: Bangladesh has among the lowest public expenditures globally, at around 14% of GDP in FY14.
• Recurrent vs. Development Expenditure: Recurrent expenditure accounts for about two-thirds of the budget, but there has been a shift toward development spending over the last five years.
• Growth Rates: Public expenditure grew by an annual average of 8% between FY10 and FY14. Development expenditure grew at 14% annually, while recurrent expenditure grew at 6%.
• Development Share: Development expenditure increased as a share of total public expenditure from 33% to 40%.
• Infrastructure: Low public expenditure has resulted in limited public services and poor infrastructure, with Bangladesh ranking 130th in overall infrastructure quality (WEF 2014–15), below countries like India, Pakistan, and Sri Lanka.

Recurrent Expenditure Breakdown

• Interest Payments: Interest costs dominate recurrent expenditure, accounting for around 25% of total recurrent expenditure in FY14.
• Interest Growth: Interest costs increased from 1.7% of GDP in FY11 to 2.1% in FY14, while non-interest spending growth slowed significantly.
• Sectoral Allocation: Education, defense, agriculture, and public order and safety absorb the majority of public resources. Social sectors (education, health, social welfare) account for nearly 40% of non-interest recurrent expenditure.
• Social Expenditure Growth: Social sector spending grew by 13% annually before FY11, but slowed to 2% after, with health and education spending increasing significantly in real terms.

Development Expenditure

• ADP Portfolio: The Annual Development Plan (ADP) is the main source of development expenditure, though non-ADP investments are becoming more important.
• Performance Issues: The ADP portfolio has contributed to cost and time overruns, with many projects having no expenditures or allocations falling short of costs.
• Sectoral Priorities: Development spending is broadly aligned with the government's development plan, with significant allocations to human development and increasing focus on transport.

Key Recommendations

• Strengthen Tax Administration: Improve tax compliance, reduce corruption, and simplify the tax system to increase tax effort.
• Diversify Revenue Sources: Reduce reliance on border revenues and enhance domestic tax collection.
• Enhance Budget Accuracy: Improve the accuracy of recurrent and development budgeting to better align with actual spending needs.
• Evaluate Subsidy Effectiveness: Assess the impact of agricultural subsidies, especially in light of global fuel price fluctuations.
• Improve Infrastructure Investment: Increase public investment in infrastructure to support economic growth and development goals.

Key Data and Statistics

• Exchange Rate (May 29, 2015): 1 US$ = 77.8 BDT.
• Fiscal Year: July 1 – June 30.
• Tax Revenue Elasticity: Tax revenue growth has been in line with nominal economic growth but remains below potential.
• Health Expenditure (2013): ~US$95 per capita, compared to ~US$215 in India, ~US$126 in Pakistan, and ~US$304 in Sri Lanka.
• Education Expenditure Growth (2006–2014): ~66% in real terms.
• Health Expenditure Growth (2006–2014): ~80% in real terms.
• Agriculture Expenditure Growth (2006–2014): More than tripled, largely due to subsidies.

Sectoral Classification

Conclusion

The report highlights that while Bangladesh has maintained a sustainable fiscal stance, there are significant challenges in revenue mobilization and public expenditure efficiency. The shift toward development spending is positive, but the dominance of interest payments in recurrent expenditure and the reliance on border revenues remain major concerns. The government needs to improve tax administration, diversify revenue sources, and ensure that development investments are effective and well-planned.