Description:
A Public Expenditure Review (PER) update
was conducted in 2006 which highlighted: (i) the large and
increasing weight of non-discretionary expenditures in the
total budget; (ii) the importance of improving coordination
among the various planning instruments; (iii) the need to
strengthen public finance management; (iv) the fiscal risks
that emerge from the energy sector; and (v) the need to
further progress with the pension reform. During 2006-07 the
Government implemented several of the 2006 PER update
recommendations. Building on the findings of the 2006 PER
update, in mid 2007 the Government and the World Bank
decided to prepare jointly an updated PER that would inform
the preparation of the second Growth and Poverty Reduction
Strategy Paper (GPRSP-2) and the Country Assistance Strategy
(CAS). The objectives of the PER were to: (i) examine recent
macro and fiscal developments (chapter one and two); (ii)
provide an update of the strengths and shortcomings of the
public finance management system, the recent reforms
implemented in this area and the new emerging challenges
(chapter three); (iii) conduct an analysis of the fiscal
decentralization issues, with particular emphasis on the
municipalities' resources, expenditures, budget
processes, capacity and systems, and accountability to the
citizens (chapter four); and (iv) examine public expenditure
issues in infrastructure, focusing on issues of adequacy,
allocation and efficiency of spending in electricity, water,
roads, air transportation, and ports (chapter five).