Publication: Kyrgyz Republic Public Expenditure Review Policy Notes : Strategic Setting
Loading...
Date
2014-05
ISSN
Published
2014-05
Author(s)
Editor(s)
Abstract
The current approach to fiscal policy is delivering suboptimal outcomes for the citizens of the Kyrgyz Republic. The past five years have been difficult for the Kyrgyz Republic, with one shock following another. Government spending ballooned to 39 percent of GDP in 2012 one of the highest ratios among developing countries globally, as the authorities tried to mitigate the shocks. However, despite increases in spending, the quality of health services remains poor; above 80 percent of 15 year-olds are classified as illiterate; wages in the public sector are low; and only 6 percent of social assistance reaches the poorest members of society. In addition, risks are mounting in the pension system, few instruments exist to support the vulnerable and the physical capital stock is depreciating, especially in the energy sector. This Public Expenditure Review (PER) focuses on the effectiveness, level, and composition of public spending in number of sectors. The objective of this synthesis note is to better understand the overall environment for fiscal policy as well as the nature and composition of public revenues and expenditures. The sectoral policy notes review the challenges and options in specific sectors, namely, education, health, pensions, social protection, and energy as well as cross-cutting themes such as the wage-bill and public investment management and intergovernmental relations. While more detailed sector-specific recommendations are contained in the sectoral policy notes, more general recommendations on fiscal policy will also contribute to sustainable fiscal consolidation.
Link to Data Set
Citation
“World Bank. 2014. Kyrgyz Republic Public Expenditure Review Policy Notes : Strategic Setting. © http://hdl.handle.net/10986/19310 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Croatia - Restructuring Public Finance to Sustain Growth and Improve Public Services : A Public Finance Review(Washington, DC, 2008-02)The year 2000 was a turning point in Croatian history, marked by closing the chapter of the war and the first phase of transition. With that, the country turned its attention to the "second transition,"the principle goal of which is to place Croatia on a path to the European Union (EU). While opening the economy to global markets through World Trade Organization (WTO) and CEFTA memberships and reestablishing cooperation with its Southeast European neighbors, the signing of the Stabilization and Association Agreement (SAA) marked the first firm milestone on Croatia's path to EU. In October 2005, Croatia opened EU accession negotiations, with the screening phase concluded a year after. Benefiting from successful economic transformation and the EU accession negotiations, growth has remained solid, and is roughly on par with the average for the European transition countries. Inflation has been modest despite higher prices for imported oil, and has been kept in check partly due to exchange rate appreciation. In fact, the central bank has intervened to prevent stronger appreciation in the face of robust capital inflows. However, the oil and commodity price increases and the aggregate demand pressures have contributed to a widening of the current account deficit in 2005-2007, despite somewhat tighter fiscal policy. Building on this foundation, the Government has an unparalleled opportunity to place Croatia on a sustainable growth path to achieve better living standards for all and to integrate into EU. To seize this opportunity, Croatia needs to sustain macroeconomic stability and continue creating a better climate for investment. In this context, key priorities for the public sector will include: reducing the size of the state and the fiscal deficit, and thereby helping to increase private sector productivity and competitiveness; and improving public sector efficiency and effectiveness. This report will suggest ways in which these twin priorities may best be addressed.Publication Croatia - Restructuring Public Finance to Sustain Growth and Improve Public Services : A Public Finance Review(2008-02)The year 2000 was a turning point in Croatian history, marked by closing the chapter of the war and the first phase of transition. With that, the country turned its attention to the "second transition,"the principle goal of which is to place Croatia on a path to the European Union (EU). While opening the economy to global markets through World Trade Organization (WTO) and CEFTA memberships and reestablishing cooperation with its Southeast European neighbors, the signing of the Stabilization and Association Agreement (SAA) marked the first firm milestone on Croatia's path to EU. In October 2005, Croatia opened EU accession negotiations, with the screening phase concluded a year after. Benefiting from successful economic transformation and the EU accession negotiations, growth has remained solid, and is roughly on par with the average for the European transition countries. Inflation has been modest despite higher prices for imported oil, and has been kept in check partly due to exchange rate appreciation. In fact, the central bank has intervened to prevent stronger appreciation in the face of robust capital inflows. However, the oil and commodity price increases and the aggregate demand pressures have contributed to a widening of the current account deficit in 2005-2007, despite somewhat tighter fiscal policy. Building on this foundation, the Government has an unparalleled opportunity to place Croatia on a sustainable growth path to achieve better living standards for all and to integrate into EU. To seize this opportunity, Croatia needs to sustain macroeconomic stability and continue creating a better climate for investment. In this context, key priorities for the public sector will include: reducing the size of the state and the fiscal deficit, and thereby helping to increase private sector productivity and competitiveness; and improving public sector efficiency and effectiveness. This report will suggest ways in which these twin priorities may best be addressed.Publication Oil Rules : Kazakhstan's Policy Options in a Downturn(Washington, DC, 2013)This report assesses the role of fiscal rules for countercyclical economic management in Kazakhstan and simulates the behavior of different types of fiscal rules. The work represents technical assistance to the ministry of economy and budget planning and has been financed by the joint economic research program between the government of Kazakhstan and the World Bank. Kazakhstan adopted a fixed fiscal rule in 2010 and introduced changes to it in 2012. By keeping the annual amount transferred from the fund to the budget constant, Kazakhstan's rule is more stringent than pure application of the permanent rule will imply. This report's five chapters outline the advantages of Kazakhstan's current fiscal rule and its performance against other types of rules. Chapter one reviews the performance of the Kazakh economy and the policy stance of the authorities over the last 10 years. Chapter two argues that fiscal rules should be simple and transparent; presenting evidence that Kazakhstan's current fiscal rule meets these two criteria. Chapter three presents the results of simulations of different global economic scenarios and the expected impacts on key variables in Kazakhstan, considering scenarios as elected in close consultation with the Kazakh authorities. Chapter four uses the results of these simulations to test the performance of different types of fiscal rules. Chapter five responds to a government request to review the literature on the use of fiscal and monetary policy for countercyclical economic management.Publication Republic of Armenia - Fiscal Consolidation and Recovery : Synthesis Report(World Bank, 2011-11-01)Armenia's structural reforms since 1999 have led to a strong economic record, including low fiscal deficits and declining public debt over the pre-crisis decade. Between 2001 and 2008 Gross Domestic Product (GDP) grew at an average annual rate of 12 percent and poverty fell from over 50 percent to about 28 percent of the population. Over this period of rapid growth, prudent fiscal management contained fiscal deficits between 0 and 2.5 percent of GDP and helped to reduce public debt from 49 percent to 16 percent of GDP. This fiscal headroom allowed the Government to respond to the crisis with an appropriately large fiscal stimulus. When GDP contracted by more than 14 percent in 2009 and total revenues fell sharply, nominal public spending was increased by 13 percent to shore up the domestic economy and protect the poor and vulnerable. Despite the severity of the crisis, the Government maintained a sound macroeconomic framework while continuing to undertake social protection expenditures to mitigate the impact of the crisis on the most vulnerable people. This was done by securing sizable external financing. The fiscal deficit rose to 7.8 percent of GDP in 2009 and the public debt to GDP ratio rose from 16 percent in 2008 to 40.2 percent. Efforts at fiscal consolidation reduced the fiscal deficit to 5.6 percent of GDP in 2010, but public debt is projected to reach 42 percent of GDP in 2011.The report is in two volumes: a synthesis volume and a background volume. The synthesis volume summarizes the macroeconomic context of Armenia (chapter one), analyzes the recent debt dynamics and its implication for fiscal consolidation (chapter two, then assess the revenue potential the Government can tap (chapter three) while ensuring key growth-sustaining and poverty-reducing expenditures are maintained (chapter four). The background volume provides more details on the assessment of the tax potential of the mining sector (chapter one), and thoroughly analyzes the efficiency of spending on the public sector wage bill (chapter two), health (chapter three) and education (chapter four).Publication Mongolia Economic Retrospective 2008-2010(World Bank, 2010)Mongolia was one of the East Asian economies hardest hit by the global downturn, as copper prices collapsed and external demand fell. With the recovery in economic activity currently well underway, but the policy challenges highlighted by the crisis yet to be fully addressed, this economic retrospective examines the key economic, financial, and policy developments from mid 2008 to April 2010. Collapsing mineral prices and a steep drop in external demand due to the global downturn of 2008 and 2009 were the external shocks which were transmitted to Mongolia's economy. This shock exposed underlying weaknesses in the economic structure and policy environment. More generally, now is the time to put in place a strong policy framework to manage the upcoming mining boom and avoid the mistakes of the past. The looming mining boom brings the risks of "Dutch disease" effects and a return to the profligate populism of the past. Measures to address these risks include the recently adopted fiscal stability law that will help the country move away from the fiscal boom and bust cycles of the past; improvements to the budget process and the planning and management of public investments in order to more efficiently absorb the large projected increases in revenues; and appropriate policy frameworks to support future infrastructure investment. Implementing a targeted poverty benefit should also ensure the poor are protected from mining boom and busts in a fiscally sustainable manner. Finally, continued reforms in the mining sector will enhance incentives for new exploration and environmentally and socially sustainable development.
Users also downloaded
Showing related downloaded files
Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication Europe and Central Asia Economic Update, Fall 2024: Better Education for Stronger Growth(Washington, DC: World Bank, 2024-10-17)Economic growth in Europe and Central Asia (ECA) is likely to moderate from 3.5 percent in 2023 to 3.3 percent this year. This is significantly weaker than the 4.1 percent average growth in 2000-19. Growth this year is driven by expansionary fiscal policies and strong private consumption. External demand is less favorable because of weak economic expansion in major trading partners, like the European Union. Growth is likely to slow further in 2025, mostly because of the easing of expansion in the Russian Federation and Turkiye. This Europe and Central Asia Economic Update calls for a major overhaul of education systems across the region, particularly higher education, to unleash the talent needed to reinvigorate growth and boost convergence with high-income countries. Universities in the region suffer from poor management, outdated curricula, and inadequate funding and infrastructure. A mismatch between graduates' skills and the skills employers are seeking leads to wasted potential and contributes to the region's brain drain. Reversing the decline in the quality of education will require prioritizing improvements in teacher training, updated curricula, and investment in educational infrastructure. In higher education, reforms are needed to consolidate university systems, integrate them with research centers, and provide reskilling opportunities for adult workers.Publication Supporting Youth at Risk(World Bank, Washington, DC, 2008)The World Bank has produced this policy Toolkit in response to a growing demand from our government clients and partners for advice on how to create and implement effective policies for at-risk youth. The author has highlighted 22 policies (six core policies, nine promising policies, and seven general policies) that have been effective in addressing the following five key risk areas for young people around the world: (i) youth unemployment, underemployment, and lack of formal sector employment; (ii) early school leaving; (iii) risky sexual behavior leading to early childbearing and HIV/AIDS; (iv) crime and violence; and (v) substance abuse. The objective of this Toolkit is to serve as a practical guide for policy makers in middle-income countries as well as professionals working within the area of youth development on how to develop and implement an effective policy portfolio to foster healthy and positive youth development.Publication World Development Report 2021(Washington, DC: World Bank, 2021-03-24)Today’s unprecedented growth of data and their ubiquity in our lives are signs that the data revolution is transforming the world. And yet much of the value of data remains untapped. Data collected for one purpose have the potential to generate economic and social value in applications far beyond those originally anticipated. But many barriers stand in the way, ranging from misaligned incentives and incompatible data systems to a fundamental lack of trust. World Development Report 2021: Data for Better Lives explores the tremendous potential of the changing data landscape to improve the lives of poor people, while also acknowledging its potential to open back doors that can harm individuals, businesses, and societies. To address this tension between the helpful and harmful potential of data, this Report calls for a new social contract that enables the use and reuse of data to create economic and social value, ensures equitable access to that value, and fosters trust that data will not be misused in harmful ways. This Report begins by assessing how better use and reuse of data can enhance the design of public policies, programs, and service delivery, as well as improve market efficiency and job creation through private sector growth. Because better data governance is key to realizing this value, the Report then looks at how infrastructure policy, data regulation, economic policies, and institutional capabilities enable the sharing of data for their economic and social benefits, while safeguarding against harmful outcomes. The Report concludes by pulling together the pieces and offering an aspirational vision of an integrated national data system that would deliver on the promise of producing high-quality data and making them accessible in a way that promotes their safe use and reuse. By examining these opportunities and challenges, the Report shows how data can benefit the lives of all people, but particularly poor people in low- and middle-income countries.