世界银行-恢复增长：在财政约束下重建充满活力的新冠疫情后世纪经济体（英）-2021.10-60页_5mb

Summary of "Recovering Growth: Rebuilding Dynamic Post-COVID-19 Economies Amid Fiscal Constraints"

Core Content

This report, published by the World Bank in 2021, focuses on the challenges and opportunities for economic recovery in Latin America and the Caribbean (LAC) following the COVID-19 pandemic. It emphasizes the need for fiscal discipline, efficient public spending, and strategic reforms to achieve dynamic, inclusive, and sustainable growth in the face of limited financial resources.

Main Challenges

• Ongoing Pandemic Impact: Despite some progress in vaccination, the virus continues to pose a threat to economic recovery. Recurrences can lead to reduced economic activity, both due to government-imposed social distancing measures and voluntary behavior.
• Inflation Risks: Tightening global liquidity to control inflation could raise borrowing costs and dampen demand.
• Private Sector Debt Overhang: A significant portion of firms in LAC are in arrears, which may lead to reduced investment and the creation of zombie firms. This also complicates the transparency of the financial sector.
• Rising Fiscal Deficits and Public Debt: Government deficits and public debt have increased dramatically, reducing fiscal space for growth and equity initiatives. Public debt to GDP ratios have risen by 15 percentage points over two years, reaching 75.38 percent on average.
• Structural Weaknesses: The region has experienced a "lost decade" of low growth, and the recovery from the pandemic is not robust enough to overcome these long-standing issues. The report highlights persistent deficiencies in infrastructure, education, energy policy, firm capabilities, and innovation.

Key Growth Strategies

1. Revenue Mobilization

• Value Added Tax (VAT): Can be increased without significant negative growth impacts in LAC countries with tax rates between 7.5% and 14%. However, it is regressive and may worsen inequality.
• Income Taxes: More progressive but have a larger negative impact on output in LAC compared to other regions.
• Property Taxes: Currently low in LAC (below 0.6% of GDP) but could be a more progressive source of revenue.
• Excise Taxes on Harmful Products: Can generate both health benefits and revenue. Increasing these taxes has been estimated to raise tax-to-GDP ratios by 0.7% on average, with progressive impacts when health outcomes are considered.
• Carbon Taxes: Could be used to lower emissions while generating revenue, though their effectiveness and equity impacts are still unclear for the region.
• Tax Enforcement: Improving tax compliance could yield significant savings. Regional evasion rates for VAT and corporate income taxes are 29.4% and 49.2%, respectively.

2. Spending Efficiency

• Procurement Waste: Estimated to be 26% over project costs, with savings of 16-22% possible through improved practices.
• Wage Bill Inefficiencies: Consume 29% of general government spending and cost 1.2% of GDP.
• Targeted Transfers: Inefficiencies in transfers (such as subsidies and social programs) are estimated at 1.7% of GDP.
• General Spending Waste: Amounts to 4.4% of GDP, which is higher than current health spending and comparable to education spending.

3. Reallocating Spending to High-Impact Areas

• Health System Strengthening: Improving efficiency and expanding services can significantly enhance public health outcomes and longevity.
• Education Reform: Addressing inefficiencies and improving access and quality, especially at the primary and secondary levels, is crucial. Universities should shift funding toward Short Course Programs (SCP) to align with global standards and address skill shortages.
• Innovation and R&D: LAC underinvests in R&D (0.6% of GDP), which is below the 1.2% of middle-income and 1.4% of upper-middle-income countries. Strengthening managerial capabilities and product/process innovation is essential for long-term growth.
• Smart Public Investment in Infrastructure: Traditional infrastructure spending has declined significantly, and PPPs have not offset this. The report advocates for performance-based contracts (PBC) and digital infrastructure to improve efficiency and connectivity.
• Sustainable Energy Transition: Energy subsidies are inefficient and poorly targeted. Moving toward conservation and renewable energy, such as green hydrogen, could provide a sustainable path forward.

Key Findings

• The region's recovery from the pandemic has been weaker than expected, with growth rates projected to remain low in 2022 and 2023.
• LAC has not yet fully recovered to 2019 levels of income, and the Human Development Index (HDI) has experienced its largest drop in decades.
• The report highlights the importance of addressing long-standing structural issues, including poor public spending efficiency, inadequate education systems, and weak innovation capabilities, to achieve sustainable growth.

Growth Outlook for LAC (2019–2023)

Conclusion

To recover from the pandemic and build a more dynamic, inclusive, and sustainable economy, LAC must focus on improving fiscal efficiency, realigning spending priorities, and addressing structural weaknesses. This includes better tax collection, more efficient public spending, and strategic investments in health, education, innovation, and sustainable energy. The report underscores the urgency of these reforms to ensure long-term growth and social well-being.