2011年-世界发展银行全球_Madagascar_Economic_Update_January_2011___Fiscal_Policy_-_Managing_the_Present_with_a_Look_at_the_Future_9页_679kb

Madagascar Economic Update: Fiscal Policy - Managing the Present with a Look at the Future

Core Content

This document provides an analysis of Madagascar's fiscal policy in 2010, highlighting its current status, underlying reasons for its low level, and implications for future economic development. It emphasizes the importance of fiscal policy in supporting growth, infrastructure, and social services, while also addressing the challenges faced by the government in maintaining fiscal stability amid political and economic uncertainty.

Main Points

Fiscal Stability in 2010

• The public deficit in 2010 was estimated at 2% of GDP, a significant improvement from 2.8% in 2009.
• This stability was achieved through a severe reduction in public spending, particularly in public investment, which accounted for only 3% of GDP in 2010.
• Public expenditures declined by 12% in real terms compared to 2009 and one-third compared to 2008, reflecting a sharp contraction in government activities.
• Current expenditures (e.g., wages, basic services) remained relatively stable, with execution rates close to 97%, while investment outlays were executed at only 56%.

Low Government Size and Its Implications

• The total public expenditure to GDP ratio was 12% in 2010, one of the lowest globally.

• This low level is attributed to three main factors:

  1. Low fiscal pressure: Tax revenues averaged 10.8% of GDP, significantly below the regional average of 20%.
  2. Low non-tax revenues: These averaged 0.4% of GDP, far below the global average of 9%.
  3. Limited access to private capital markets: Madagascar lacks creditworthiness and visibility, making it difficult to attract financing from both domestic and international sources.

• The public investment share is even lower, at 1.5% of total economic activities, indicating a weak contribution to physical and human capital development.

Structural Challenges

• The marginalization of the government is not only a result of the recent political crisis but also a long-standing trend.
• Aid dependency has increased over the years, with public spending heavily reliant on external funding, especially from non-traditional sources.
• However, aid has been volatile and underutilized, due to weak administrative capacity and lack of coordination, undermining long-term planning and effectiveness.

Key Information

Fiscal Policy Adjustments

• The government maintained a consistent fiscal policy in 2010, aligning expenditures with revenues.
• The budgetary dual approach prioritized current expenditures (wages, basic services) over investment, using external aid to compensate for lower domestic revenues.
• The Presidency was the only ministry that increased its investment spending, accounting for 45% of total public investment in 2010.

Public Investment Performance

• Infrastructure investment in 2010 was 49 billion Ariary (about US$25 million), nine times lower than in 2008.
• Social sectors (health, education, etc.) saw a threefold decline in investment spending.
• Two-thirds of ministries executed less than US$1 million in public investment, indicating a lack of strategic focus and inefficient allocation.

Implications for Economic Development

• A small government size limits the government's ability to provide basic services, develop infrastructure, and protect property rights, which are essential for economic growth.
• The key challenge is to increase the size and quality of public spending, especially investment, to align with international standards and national development needs.

Proposed Principles for Future Fiscal Policy

1. Fiscal Sustainability: Any increase in public expenditure should be supported by adequate financing, not precede it. This includes improving domestic tax collection and exploring non-tax revenue sources.
2. Quality of Expenditures: Emphasis should be placed on allocative efficiency and project evaluation, ensuring that public funds are used in the most effective and impactful way.
3. Public-Private Synergies: Encourage collaboration between the public and private sectors, especially in infrastructure, education, and health, by creating a favorable legal and institutional environment and offering incentives for private participation.

Conclusion

The document underscores the importance of fiscal policy in driving economic growth and development in Madagascar, while also highlighting the structural limitations that have constrained the government's ability to fulfill its role effectively. It calls for a strategic and sustainable approach to increase public spending, particularly investment, and improve tax administration, non-tax revenue collection, and public-private collaboration.