Transcript Mary O'Mahony - Regional Cooperation Council

Social Sector Expenditure in the
Western Balkans
RCC Conference What Kind of Social Agenda
for the Western Balkans?
Mary O’Mahony
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Balkans and
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Objectives of Presentation
o Scene setter for presentations to follow
o Compare expenditure trends among different WB
countries
o Compare social expenditure levels in the WB to those of
the EU countries
o Outline the social sector priorities identified by
governments in recent Economic and Fiscal Programmes
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Real GDP Growth and Fiscal Stance
Severe impact of crisis; slow recovery; relatively low growth rates
Source: IMF Data (latest published Articles IV as of April 2011)
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Balkans and
Turkey
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“Austerity” Measures
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Western
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in % GDP
in % GDP
Sharp decline in revenues, marginal decline in expenditure. Marked decrease
in capital expenditure. Current expenditure maintained or even increased
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project
implemented by
4
WB Expenditure by Economic Classification:
Wage Bill
Some decreased in spending on wages and allowances in public sector but
lots of variances
13%
in % GDP
11%
9%
7%
5%
2007
Support to IFI
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Western
Balkans and
Turkey
2008
2009
2010
Albania
Bosnia and Herzegovina
Croatia
FYR Macedonia
Montenegro
Serbia
2011
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project
implemented by
5
WB Expenditure by Economic Classification:
Capital Expenditure
...in general capital expenditure reduced
11%
9%
in % GDP
7%
5%
3%
1%
2007
Support to IFI
Coordination
in the
Western
Balkans and
Turkey
2008
2009
2010
Albania
Bosnia and Herzegovina
Croatia
FYR Macedonia
Montenegro
Serbia
2011
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project
implemented by
6
WB Expenditure by Economic Classification:
Social Transfers
At the same time, overall social transfers peaked in 2009 and are still above
pre-crisis period.
20%
18%
in % GDP
16%
14%
12%
10%
8%
2007
Support to IFI
Coordination
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Western
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Turkey
2008
2009
2010
Albania
Bosnia and Herzegovina
Croatia
FYR Macedonia
Montenegro
Serbia
2011
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project
implemented by
7
WB Expenditure by Functional Classification:
Health Expenditure
Some decreases in expenditure (NB approximate data)
8%
7%
in % GDP
6%
5%
4%
3%
2%
2008
Support to IFI
Coordination
in the
Western
Balkans and
Turkey
2009
2010
2011
Albania
Bosnia and Herzegovina
Croatia
FYR Macedonia
Montenegro
Serbia
Source: Functional Expenditure Data from the latest available EFPs/PEPs as of April2011)
EU Funded Project
implemented by
8
WB Expenditure by Functional Classification:
Education Expenditure
In general education expenditure also decreased in 2009 and 2010
6%
5%
in % GDP
4%
3%
2%
2008
Support to IFI
Coordination
in the
Western
Balkans and
Turkey
2009
2010
2011
Albania
Bosnia and Herzegovina
Croatia
FYR Macedonia
Montenegro
Serbia
Source: Functional Expenditure Data from the latest available EFPs/PEPs as of April2011)
EU Funded Project
implemented by
9
WB Expenditure by Functional Classification:
Social Protection Expenditure
Social protection expenditure increased it share as % of GDP in 2009 due to
additional unemployment pressures.
17%
in % GDP
15%
13%
11%
9%
7%
2008
Support to IFI
Coordination
in the
Western
Balkans and
Turkey
2009
2010
2011
Albania
Bosnia and Herzegovina
Croatia
FYR Macedonia
Montenegro
Serbia
Source: Functional Expenditure Data from the latest available EFPs/PEPs as of April2011)
EU Funded Project
implemented by
10
Comparison of WB and EU
Social Expenditure
in % GDP for 2008
Government Revenue
Government Expenditure
Fiscal Balance
Expenditure by Economic Classification
Wage Bill
Social Transfers
Expenditure by Functional Classification
Health
Education
Social Protection
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Western
Balkans and
Turkey
EU 27
44.6%
46.9%
-2.3%
EU 16
44.9%
46.8%
-1.9%
WB
39.3%
41.5%
-2.3%
10.3% 9.9% 9.3%
20.1% 21.6% 15.5%
6.9% 6.9% 5.6%
5.2% 4.8% 4.4%
18.2% 18.9% 13.0%
Source: For EU data EUROSTAT and for WB data IMF and EFPs/PEPs
EU Funded Project
implemented by
11
Comparison of the WB
Social Expenditure to the EU
Lots of variance by country
in % GDP for 2008
Government Revenue
Government Expenditure
Fiscal Balance
Expenditure by Economic Classification
Wage Bill
Social Transfers
Expenditure by Functional Classification
Health
Education
Social Protection
EU 27
44.6%
46.9%
-2.3%
EU 16
44.9%
46.8%
-1.9%
WB
39.3%
41.5%
-2.3%
Albania
26.8%
32.3%
-5.5%
BiH
46.0%
49.5%
-3.5%
Croatia
39.8%
40.7%
-0.9%
FYRoM Montenegro Serbia
32.5%
48.6%
41.9%
33.4%
48.8%
44.5%
-0.9%
-0.3%
-2.6%
10.3% 9.9% 9.3% 6.1% 12.0% 9.8% 5.2%
20.1% 21.6% 15.5% 8.6% 15.4% 16.3% 18.9%
12.1%
15.9%
10.7%
17.9%
6.9% 6.9% 5.6% 2.5% 7.1% 5.6% 6.7%
5.2% 4.8% 4.4% 3.5% 5.5% 4.1% 4.8%
18.2% 18.9% 13.0% 7.9% 14.9% 13.5% 10.6%
5.8%
4.8%
14.6%
5.7%
3.8%
16.4%
Source: For EU data EUROSTAT and for WB data IMF and EFPs/PEPs
Support to IFI
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Turkey
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EFPs – Social Sector Priorities
Importance of social sector highlighted but little detail
on specific reforms or investments
o Albania: Training programmes for unemployed, health
and education are priority sectors for capital
expenditure
o Bosnia and Herzegovina: Reform of social transfers
(agreements with IMF and World Bank), labour market
reform and human capital development
o Croatia: Capital investment in health care, social
welfare, science & education. Administrative reforms
of social welfare system
o
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EFPs – Social Sector Priorities
o FYR Macedonia: Capital investments in education, child
care and social protection. Simplification of social
benefits system and focus on labour market reform
o Montenegro: Reforms in labour market, education,
social protection and health sector. Use of PPPs to
facilitate capital investments
o Serbia: Reduction of share of social protection as % of
GDP, reform of social protection system, education
reform (rationalisation of school network) health care
reform
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Turkey
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Issues Arising
o Stalled economic growth
o Need to generate socio-economic development
o Improve labour skills, increase productivity, higher
value added products and services
o Increased social needs, social inclusion issues
o Pressure for reform of health, education & social
protection systems
o Alignment to EU/international norms
o Financing sources for capital expenditure
Support to IFI
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Western
Balkans and
Turkey
EU Funded Project
implemented by
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WWW.WBIF.EU
Thank you for your
attention!
Support to IFI
Coordination
in the
Western
Balkans and
Turkey
EU Funded Project
implemented by
17 July 2015