2013年-世界发展银行全球_Moldova_Public_Expenditure_Review___Capital_Expenditures_-_Making_Public_Investment_Work_for_Competitiveness_and_Inclusive_Growth_in_Moldova_96页_2mb

Summary of Moldova Public Expenditure Review: Capital Expenditures

Core Content

This report, Public Expenditure Review: Capital Expenditures - Making Public Investment Work for Competitiveness and Inclusive Growth in Moldova, published in June 2013, evaluates the current state of public capital expenditure in Moldova and proposes reforms to enhance efficiency and effectiveness in public investment management. It is part of the World Bank's broader fiscal analysis and supports the Country Partnership Strategy's first pillar, which is improving economic competitiveness.

The report highlights the importance of capital expenditures in promoting economic growth and competitiveness, especially in the context of Moldova's fiscal consolidation and the need to make room for more efficient public investment. It emphasizes that while the country has made progress in reducing its fiscal deficit, the allocation and execution of capital budgets remain inefficient, with significant underperformance in some sectors.

Main Views

Macroeconomic Context

• Moldova has experienced moderate GDP growth averaging around 3% over the past five years, with considerable volatility due to external and weather-related shocks.
• The country has been reducing the state's footprint in the economy through a three-year IMF-supported program, which has led to a reduction in the general government fiscal deficit from 6.3% of GDP in 2009 to 2.1% in 2012.
• Despite this, capital expenditures have increased from 5% to 6.3% of GDP, showing a commitment to infrastructure development.
• However, fiscal pressures persist, and the need for sustainable growth hinges on increasing investment, productivity, and exports, which are constrained by an aging population, emigration, and limited domestic resources.

Capital Expenditure Trends

• Domestic capital investment has declined significantly, from 3.5% of GDP in 2006 to 0.7% in 2012.
• Externally-funded capital expenditures have increased, mainly in the form of investment projects.
• Capital transfers, especially to the Road Fund and farmers, now account for a third of the capital budget.
• The capital budget execution improved from 33% under-execution in 2009 to a 4% gap in 2012, but still faces significant implementation challenges in the transport and utilities sectors.

Key Issues in Public Investment Management

• Project Preparation: Many projects lack strategic alignment and adequate appraisal, leading to inefficiencies and poor resource allocation.
• Budgeting: Projects are not sufficiently prioritized, and funding for ongoing projects is often inadequate, resulting in delays and budget cuts.
• Implementation and Monitoring: Monitoring systems are not well developed, and project implementation is slow, especially at the local level.

Key Recommendations

General Reforms

• Raise the Quality of Project Preparation:

  • Develop an integrated strategic planning framework to ensure consistency between sector plans and realistic resource estimates.
  • Implement a rigorous preliminary screening process to ensure fiscal and strategic consistency.
  • Introduce a common appraisal methodology, with a threshold of MDL 30 million for full feasibility studies involving cost-benefit analysis.
  • Conduct independent reviews of appraisal findings to reduce optimism bias.

• Improve Budgeting to Prioritize Resource Allocation and Ensure Funding Continuity:

  • Grant local governments more responsibility for allocating local capital expenditures, but with careful consideration of their capacity.
  • Prioritize the completion of ongoing projects during the budget preparation process.
  • Develop a medium-term budget framework (MTBF) to ensure continuity of funding and better project selection.
  • Strengthen the Ministry of Finance's gate-keeping role in the budget process to ensure quality and due process in project inclusion.

• Strengthen Project Implementation and Monitoring:

  • Implement active monitoring of both financial and non-financial project performance.
  • Enhance reporting with up-to-date information to improve cost management and identify implementation problems early.
  • Develop asset management systems to better identify infrastructure needs and optimize maintenance expenditure.
  • Introduce ex post evaluation systems to learn from past projects and improve future implementation.

Sector-Specific Recommendations

Transport

• Clearly prioritize investment projects based on objective criteria in the Transport and Logistics Strategy (to be adopted in 2013).
• Implement a new maintenance regime for roads to improve efficiency.
• Strengthen local government capacity for planning, programming, and executing road maintenance and rehabilitation.
• Increase local resources and establish clear rules for local road maintenance and rehabilitation allocations.
• Consider external funding for priority local roads linking schools and health centers with surrounding areas.

Agriculture

• Better target investment subsidies to promote inclusive growth.
• Improve the targeting of agricultural support to ensure it benefits a broader range of beneficiaries.
• Use the Moldova BOOST module to analyze and improve the efficiency of agricultural investment programs.

Utilities and Housing

• Improve public investment management to enhance the efficiency of water and sanitation projects.
• Focus on strategic guidance (e.g., developing master plans), appraisal (feasibility studies and environmental impact assessments), and implementation.
• Strengthen procurement and administrative skills of local governments and utility companies to better absorb donor funds.

Education

• Shift focus from network optimization to quality improvements.
• Address the decline in investment while increasing capital repairs, particularly in the primary and secondary education sectors.

Health

• Optimize the health network to improve quality and efficiency.
• Address the lack of domestic resources by leveraging external funding and improving the targeting of investments.

Conclusion

The report concludes that improving public investment management is critical for Moldova to achieve more efficient and effective capital expenditures. While the government has initiated reforms, the agenda remains large and complex. The proposed reforms should be sequenced to align with implementation capacity and expected benefits, starting with prioritizing large projects and addressing critical implementation issues. Long-term reforms should focus on developing asset management systems and ex post evaluation mechanisms to ensure sustainable and inclusive growth.