World Bank2012-03-192012-03-192009-06-25https://hdl.handle.net/10986/3089In 2008, after many years of unsustainable fiscal policy and a distorted and overvalued foreign exchange regime, the Government of Seychelles embarked upon a bold economic reform program. This program aims to put the economy on a path toward macroeconomic stability, liberalize the economy and to allow the private sector to take over from the state as the driving force in the economy. Seychelles, a small open, middle-income island state with relatively low incidence of poverty and near full employment, faced acute economic difficulties in 2008 as a result of past economic management exacerbated by the rising global oil and food prices and the downturn in the global economy. This resulted in missed debt-service payments and the subsequent downgrading of its credit rating by standard and poor's. Faced with current debt service difficulties and a historically poor credit track record, the authorities responded quickly by adopting a comprehensive reform program supported by a second year stand by arrangement with the International Monetary Fund (IMF) and commencing negotiations with Paris club and other private and official creditors for debt restructuring. The government has embarked upon a comprehensive reform strategy aimed at restoring internal and external balances with the assistance of the international financial institutions and development partners. The reform program includes: (i) the complete liberalization of the exchange rate regime and float of the currency (which was introduced in November 2008); and (ii) tightened fiscal policy, including improved targeting of the comprehensive social safety net and a privatization program to deal with the many state-owned enterprises. The focus of the public expenditure review (PER) reflects the fact that revisiting the role and functions of government lie at the heart of the economic reforms that need to take place in the next two years. This chapter provides a survey of recent developments, medium-term macroeconomic developments and their fiscal policy implications. Chapter two examines public expenditure trends and budget management issues. Chapters three, four, and five examine civil service reform, health care, and education issues respectively.CC BY 3.0 IGOACCOUNTABILITYADMINISTRATIVE COSTSAGGREGATE FISCALANNUAL REVENUEBEST PRACTICEBUDGET CREDIBILITYBUDGET DEFICITSBUDGET DEPARTMENTBUDGET EXECUTIONBUDGET FRAMEWORKBUDGET MANAGEMENTBUDGET OUTCOMEBUDGET PRACTICESBUDGET PREPARATIONBUDGET PROCESSBUDGET SURPLUSBUDGET TRANSFERSBUSINESS COMMUNITYCAPITAL EXPENDITURESCAPITAL SPENDINGCASH BASISCENTRAL BUDGETCENTRAL GOVERNMENTCENTRAL GOVERNMENT SPENDINGCIVIL SERVICECIVIL SERVICE REFORMCIVIL SERVICE REFORMSCOMMODITIESCOMMODITY PRICESCOMMUNITY DEVELOPMENTCOMPETITIVE ENVIRONMENTCONTINGENCYCONTINGENT LIABILITIESCOST-RECOVERYCREDIT RATINGCREDITORSDEBT CRISISDEBT INTERESTDEBT RELIEFDEBT SERVICEDEBT SERVICE PAYMENTSDEBT SERVICINGDOMESTIC DEBTDOMESTIC INTEREST RATESDOMESTIC REVENUEECONOMIC CLASSIFICATIONECONOMIC DEVELOPMENTSECONOMIC DOWNTURNECONOMIC GROWTHECONOMIC MANAGEMENTEDUCATION SERVICESEDUCATION SPENDINGEFFICIENCY GAINSEFFICIENCY IMPROVEMENTSEXCHANGE RATEEXCHANGE RESERVESEXPENDITURE MANAGEMENTEXTERNAL DEBTEXTERNAL IMBALANCESEXTERNAL SHOCKSFINANCIAL INSTITUTIONSFINANCIAL SECTORFINANCIAL SECTORSFINANCIAL SUPPORTFINANCIAL TRANSFERSFISCAL ADJUSTMENTFISCAL BALANCEFISCAL CONSOLIDATIONFISCAL COSTFISCAL COSTSFISCAL DISCIPLINEFISCAL FRAMEWORKFISCAL IMBALANCESFISCAL IMPACTFISCAL IMPLICATIONSFISCAL OUTTURNFISCAL POLICYFISCAL REFORMSFISCAL SAVINGSFISCAL SCENARIOSFISCAL SIDEFISCAL SUSTAINABILITYFISCAL TARGETFISCAL TARGETSFOREIGN CURRENCYFOREIGN EXCHANGEFOREIGN RESERVESFULL EMPLOYMENTGOVERNMENT BUDGETGOVERNMENT CONSUMPTIONGOVERNMENT EMPLOYMENTGOVERNMENT EXPENDITURESGOVERNMENT FINANCEGOVERNMENT FINANCE STATISTICSGOVERNMENT REVENUESHEALTH CAREHEALTH EXPENDITURESHEALTH INSURANCEHEALTH INSURANCE FUNDSHEALTH OUTCOMESHEALTH SECTORHEALTH SERVICESHEALTH SPENDINGHIGHER INFLATIONIMPORT DUTIESINFLATIONINTEREST INCOMEINTEREST PAYMENTSINTEREST RATEINVESTMENT CLIMATEINVESTMENT CLIMATE ASSESSMENTLABOR MARKETSLEVEL OF EDUCATIONLIQUIDITYMACROECONOMIC ENVIRONMENTMACROECONOMIC FORECASTSMACROECONOMIC INDICATORSMACROECONOMIC MODELMACROECONOMIC SITUATIONMACROECONOMIC STABILITYMACROECONOMIC STABILIZATIONMEDIUM-TERM EXPENDITUREMEDIUM-TERM OUTLOOKMONETARY POLICYNATIONAL DEVELOPMENTNATIONAL INCOMENATIONAL SAVINGSNATIONAL STATISTICSNET LENDINGPAYROLL TAXESPOOR CREDITPOVERTY PROFILEPOVERTY REDUCTIONPRIMARY EDUCATIONPRIVATE ENTERPRISESPRIVATE GOODSPRIVATE INSURANCEPRIVATE SECTORPRODUCTIVITYPROGRAMSPUBLIC ADMINISTRATIONPUBLIC DEBTPUBLIC EDUCATIONPUBLIC EMPLOYMENTPUBLIC ENTERPRISEPUBLIC ENTERPRISE REFORMPUBLIC ENTERPRISESPUBLIC ENTITIESPUBLIC EXPENDITUREPUBLIC EXPENDITURE REVIEWPUBLIC EXPENDITURESPUBLIC FINANCEPUBLIC FINANCESPUBLIC FINANCIAL MANAGEMENTPUBLIC HEALTHPUBLIC HEALTH SERVICESPUBLIC HOSPITALSPUBLIC PROVISIONPUBLIC SECTORPUBLIC SECTOR EMPLOYMENTPUBLIC SECTOR REFORMPUBLIC SECTOR SERVICE DELIVERYPUBLIC SECTOR SPECIALISTPUBLIC SERVICEPUBLIC SPENDINGPUBLIC TRANSPORTPUBLIC TRANSPORTATIONPUBLIC UTILITIESRECESSIONREFORM EFFORTSREFORM PROCESSREFORM PROGRAMREFORM STRATEGYRESPONSIBILITIESSAFETY NETSALARIESSALES TAXSECONDARY SCHOOLSECTOR BUDGETSENIORSERVICE EMPLOYMENTSERVICE PROVIDERSERVICE PROVISIONSICK LEAVESOCIAL PROGRAMSSOCIAL SECURITYSOCIAL SECURITY BENEFITSSOCIAL SECURITY CONTRIBUTIONSSOCIAL SECURITY REFORMSOCIAL SECURITY SYSTEMSOCIAL WELFARESTATE ENTERPRISESSTRUCTURAL REFORMSTAX ADMINISTRATIONTAX BASETAX COLLECTIONTAX COLLECTIONSTAX POLICYTAX RATESTAX REVENUETAX REVENUESTOTAL EXPENDITURETRANSPARENCYUNEMPLOYMENTWAGEWAGESWorld Bank10.1596/3089