2012年-世界发展银行全球_Georgia_-_Public_Expenditure_Review___Managing_Expenditure_Pressures_for_Sustainability_and_Growth_128页_2mb

Summary of Georgia Public Expenditure Review: Managing Expenditure Pressures for Sustainability and Growth

Core Content

This Public Expenditure Review (PER) focuses on the fiscal challenges and policy options for managing expenditure pressures in Georgia, with the aim of supporting sustainability and growth. The report was prepared by the World Bank in November 2012, and it outlines a comprehensive set of recommendations for the government to address the medium-term macro-fiscal challenges.

Main Viewpoints

• Fiscal Consolidation Progress: Georgia has achieved commendable fiscal consolidation, reducing the overall fiscal deficit from 9.2% of GDP in 2009 to 3.6% in 2011. However, medium-term challenges remain, particularly in managing the current account deficit, which was at 11.8% of GDP in 2011.

• Global Economic Uncertainty: The country remains vulnerable to global economic shocks, especially due to the evolving euro-zone crisis and the potential for a sharper downturn. The report suggests that deepening fiscal consolidation is necessary to maintain debt sustainability and national savings.

• Growth and Sustainability Tension: While economic growth has rebounded, national savings are insufficient to finance necessary investment and exports. Georgia has not yet achieved the goal of making tradables the engine of economic growth.

• Expenditure Composition: The report emphasizes the need to balance social and capital expenditures. It estimates that fiscal consolidation will require reducing overall expenditures by 3 percentage points of GDP by 2015 to maintain sustainability.

Key Information

Social Protection Expenditures

• Pension System: The pension system is a major component of social spending, with old-age pensions accounting for most of the social expenditures. The aging population and reliance on the basic pension benefit are significant expenditure pressures.

• Social Assistance: The Targeted Social Assistance (TSA) program is essential for addressing poverty. However, coverage and targeting could be improved to enhance equity and effectiveness. The report suggests prioritizing TSA over universal programs in any additional social spending increases.

• Health Expenditures: Out-of-pocket health payments are a major burden on households, with high pharmaceutical costs and low utilization rates in the health system. The report recommends reducing out-of-pocket spending by promoting the use of generic drugs, improving the supply of medical care, and expanding state-funded health insurance for the poorest segments of the population.

Capital Budgeting Systems

• Need for Reform: The report highlights the need to improve the content and presentation of Georgia's capital budget. It suggests introducing a systematic preliminary assessment and project identification process, as well as developing uniform methodological guidance for appraisal techniques.

• Strategic Guidance: Strengthening strategic guidance and developing a comprehensive capital budgeting system will help manage the growing pipeline of infrastructure needs more effectively.

Road Sector Expenditures

• Infrastructure Priorities: The road network is a key area of investment, with a focus on rehabilitation and maintenance of secondary and local roads. The Main International East-West Highway is also a priority for continued improvement.

• Efficiency and Sustainability: The report recommends increasing routine and periodic maintenance expenditures and phasing out new construction to reduce the backlog of poor-quality roads. It also suggests institutional arrangements to improve the efficiency of road expenditures.

• Long-Term Impact: These measures are expected to improve the long-term efficiency and sustainability of the road investment program, with a projected cost of 0.7% of GDP in 2015.

Conclusion

The PER outlines several policy options to manage expenditure pressures, including:

• Macro-Fiscal Measures: Further reducing the fiscal deficit, improving fiscal buffers, and maintaining fiscal discipline.

• Expenditure Composition: Balancing social and capital expenditures, and increasing selectivity in capital spending.

• Pension Reforms: Limiting the medium-term growth of basic pensions to the rate of inflation and developing voluntary retirement savings mechanisms.

• Social Assistance Improvements: Enhancing the coverage and targeting of TSA to improve equity and reduce pressure on the program.

• Health System Reforms: Reducing out-of-pocket payments, improving pharmaceutical supply, and expanding state-funded health insurance.

• Capital Budgeting Reforms: Enhancing transparency, accountability, and efficiency in public investment programming.

• Road Sector Adjustments: Increasing maintenance expenditures, rebalancing investments, and improving institutional arrangements for efficiency and sustainability.

These measures are estimated to curtail expenditure pressures by 2.8% of GDP by 2015, preventing overall expenditures from rising to 31.8% of GDP instead of the current projection of 29%. The report also highlights the importance of cautious and pragmatic management of public expenditure in the context of upcoming elections in 2012 and 2013.

Policy Options Summary

The PER serves as a guide for the Georgian government to manage expenditure pressures in a way that supports long-term sustainability and economic growth.