2012年-世界发展银行全球_Bulgaria___Public_Expenditures_for_Growth_and_Competitiveness_57页_1mb

Summary of "BULGARIA: PUBLIC EXPENDITURES FOR GROWTH AND COMPETITIVENESS"

Core Content

This report by the World Bank analyzes Bulgaria's public expenditures and their role in supporting sustainable economic growth and competitiveness. It outlines the country's economic performance, fiscal adjustment, and reform priorities in the context of its path towards joining the Exchange Rate Mechanism II (ERMII) and the euro area.

Main Points

1. Economic Performance and Fiscal Adjustment

• Bulgaria's economy performed relatively well during the global crisis and is recovering, driven by net exports.
• Large macroeconomic imbalances from 2005–08 were corrected by 2010.
• In 2010, Bulgaria achieved significant fiscal consolidation, reducing its deficit and exiting excessive budget financing procedures.
• The economy is moving towards a more export-driven model, although investment and consumption recovery is slower.
• Export performance has improved, with total exports of goods and services increasing by 274% from €7.6 billion in 2000 to €20.7 billion in 2010.
• Services exports, which account for nearly 14% of GDP, have provided a buffer against external shocks.

2. Risks and Challenges

• The legacy of non-government external debt (91% of GDP) implies a period of deleveraging.
• A high share of tax revenue comes from consumption taxes and VAT on imports, which may decrease with higher exports.
• Bulgaria needs to continue fiscal consolidation to reduce the deficit below 3% of GDP in 2011 and achieve a balanced budget by 2014.
• The country faces challenges in improving productivity and competitiveness, especially due to its aging and shrinking population.

3. Growth Strategy and Reform Agenda

• Bulgaria's growth strategy, aligned with the Europe 2020 Strategy, aims to join ERMII, converge to EU income levels, and transition to an export-led growth model.
• The strategy emphasizes upgrading institutions, infrastructure, and labor force skills, and improving the business environment.
• Public sector efficiency and effectiveness are central to achieving these goals.

4. Key Reform Areas

• Wage Bill and Public Employment:

  • Bulgaria has one of the highest public employment rates among EU10 countries (30 per 1,000 population).
  • The public sector is overstaffed and overpaid, and reforms are needed to streamline operations and improve efficiency.
  • Performance-related pay (PRP) should be used for dismissal or promotion rather than salary increases.
  • Maintaining flexibility in wage setting is important to retain skilled staff and avoid negative impacts on competitiveness.

• Public Investment Management (PIM):

  • PIM is critical for upgrading infrastructure and supporting export-led growth.
  • Current PIM practices in Bulgaria are lagging behind EU10 best practices.
  • Reforms are needed to improve project appraisal, selection, and monitoring.
  • The government plans to significantly increase the absorption of EU structural and cohesion funds, which will require better PIM to ensure value for money.

Key Information

• Currency Unit: Lev (BGN)
• Tax Revenue Sources: Consumption taxes, VAT, and excises (mainly on imports)
• Export Composition: Mostly labor-intensive and unskilled-labor products; only 41% of exports to the EU are linked to market networks.
• Public Expenditure Share: The public sector manages about 40% of GDP.
• Main Expenditure Categories:
  • Wage bill: 19%
  • Capital expenditures: 14%
  • Operations and maintenance: 17%
• EU Funds: Expected to finance a large part of the infrastructure upgrade, with plans to triple EU fund disbursements by 2013.
• Fiscal Goals: Deficit below 3% of GDP by 2011, balanced budget by 2014.
• ERMII Target: Joining the ERMII and eventually the euro area.
• GDP Growth: Bulgaria's per capita income at PPS is about 44% of the EU27 average.

Conclusion

To enhance competitiveness and achieve sustainable growth, Bulgaria must reform its public sector wage bill and public investment management. These reforms are essential for improving service delivery, the business environment, and infrastructure. The report highlights the importance of strategic planning, better project appraisal, and transparency in public spending. It also stresses the need for flexibility in wage setting and the importance of maintaining fiscal discipline while supporting long-term economic convergence.