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Publication(Washington, DC, 2002-05-16) World BankSince the establishment of Lithuania's independence, the country achieved substantial progress in transforming its local governments into independent units of Government: structural reforms to prod intergovernmental relations were made in 1994 and 1997, and will continue in 2002. Nevertheless, several issues remain, requiring particular attention from the Government. First, revenue and expenditure assignment between levels of government, and the degree of central regulation over local finance, needs to be reviewed. Local governments face fiscal constraints, for revenues are centrally collected, and distributed at centrally determined rates. And, although local governments have nominal authority over their expenditures, major items (salaries and welfare payments) are subject to Government control, resulting in local governments being faced with running arrears, or borrowing from the Government or private lenders. Although high per capita jurisdictions are required to share revenues with poorer counterparts, it is not clear that distribution mechanisms actually allocate revenues as needed. Upcoming reforms are likely to change this, but a greater change in the revenue distribution criteria, would be by funding delegated functions, but distributing according to sector-specific indicators of need, as well as budgeting financial availability. Second, financing capital investment may be improved by a greater fiscal autonomy to local governments, and mostly, by improving the quality of financial information, with reforms that include the separation of current, and capital accounts, and the adoption of accrual accounting for expenditures.
Publication(Washington, DC, 2001-11-30) World BankThis report reviews growth trends in Armenia for the period 1994-2000, outlines major weaknesses of existing development patterns, and suggests a package of policy recommendations designed to accelerate enterprise restructuring, attract investment, and encourage the creation of new businesses in the medium term (three to five years). Such steps are needed to systain (and preferably to increase) the current growth rates, to stop emigration among the young and skilled, and to reduce poverty. The government needs to focus much more clearly on generating the environment for private sector led growth by removing bottlenecks in policies, infrastructure, and institutions that prevent new private businesses from flourishing. International aid donors can help by supporting the removal of administrative barriers for investments, the rehabilitation of infrastructure, and the creation of "restructuring agencies" that will enable firms in key sectors to overcome or avoid common constraints to business growth in Armenia. Successful restructuring by such firms should have a demonstration effect on the country's economy and help consolidate public support for moving forward the program of reform begun a decade ago.
Publication(Washington, DC, 2001-06) World BankThe study reviews recent labor market developments in Poland, examining the factors behind the rise in unemployment, and, proposing actions that should contribute to increased job creation rates. Its main purpose is to inform - based on research findings - on the policy dialogue regarding the current labor market situation in the country. Those main findings indicate that the rise in unemployment results primarily from an acceleration of job destruction, that begun with the wave of enterprise restructuring in the aftermath of the Russia crisis, and has persisted in part, because of an imbalance in the fiscal-monetary policy mix. It also finds that the recent rise in unemployment has highlighted important barriers in the transition from old, to new jobs. These barriers include a binding minimum wage, high taxes on labor income, limitations in the labor code, and a relatively easy access to early retirement, and other social benefits. Additionally, the problems with the ongoing restructuring of the Polish labor market have been compounded by an increase in new labor market entrants, primarily recent school graduates joining the labor force, and, of particular concern are the new labor market entrants with only basic vocational education or less, namely in rural areas, given that educational attainment is a determining factor on employment status. The policy agenda needs to gradually address unemployment issues, through better fiscal-monetary policy mix, through greater flexibility in the wage structure, and, through tax reductions on labor income, and changes in the labor code. Moreover, investments in worker's education and training needs to be improved, realigning the incentives under labor market programs, and lowering the costs of starting, and running businesses.
Publication(Washington, DC, 2000-06) World BankThe study reviews the macroeconomic developments in the Kyrgyz Republic following the collapse of the Soviet Union, when adjustments were required since output fell by fifty percent between 1991-95, resulting in adverse fiscal consequences, which triggered losses in tax revenues, along with the implicit end of energy subsidies. Part I examines the fiscal, and debt sustainability, proposing a three-fold strategy : efforts for an urgent renewal, are needed to consolidate macroeconomic stability, fundamentally, a significant fiscal adjustment is required; debt relief should be considered, given the large burden, and the need to preserve social expenditures; and, decisive structural reforms are necessary to underpin fiscal adjustment, and increase the efficiency of resource uses. Part II examine these structural issues, particularly the tax system, and the role of the state in infrastructure, and utilities, focusing on accelerating the transformation of public infrastructure, and utility companies, and, improve taxation. The report analyzes this transformation, emphasizing a transparent, and targeted system in the provision of basic services to the poor, through reform policies, and the inclusion of the private sector, critical to reflect cost-effectiveness, and adapt to the requirements of a market economy.