Belarus Public Expenditure Review

Belarus Public Expenditure Review Enhancing Public Services in Times of Austerity

Volume 2

Report No. 74148-BY

Belarus Public Expenditure Review Enhancing Public Services in Times of Austerity Volume 2

February 21, 2013

CURRENCY AND EQUIVALENT UNITS

GOVERNMENT FISCAL YEAR

BoP BYR

Belarusian Ruble

NBRB

PER

Public Expenditure Review

ER PPP

Vice President

Philippe Le Houerou Qimiao Fan Yvonne Tsikata Benu Bidani Marina Bakanova

Contents

iii

BELARUS PUBLIC EXPENDITURE REVIEW

Figures

Other ECA Countries

iv

13

v

BELARUS PUBLIC EXPENDITURE REVIEW

Tables

Boxes

vi

Acknowledgements

vii

BELARUS PUBLIC EXPENDITURE REVIEW

Preface

viii

Executive Summary

Public

50

55

-13.2 10.0

50 45

5.0 30

MNE

BIH

40

21.3

BLR 2008

UKR

40

SRB

BLR 2010 ROU TUR MKD

MDA

16.5

35

20

BGR

KGZ 7.0

30 5.2

10 10.3 0.6

7.9

0

GEO

25 1.1

2011

CZE SVN

EST LTU

ALB

ARM

20 2008

SVK

HUN LVA HRV RUS POL

0

10,000

20,000

30,000

Source: Note:

ix

BELARUS PUBLIC EXPENDITURE REVIEW

Macro-Fiscal Policies—Addressing Macro-Structural Challenges

53 51 49 47 45 43 41 39 37 35

x

Contrac!on

49.1

49.5 5 49.0

46.0 47.4 45.9

2008

48.0

47.7

49.2

46.6

47.6

3

46.0

45.9

43.4

2007 1 2011

41.6

2010

38.7 -1 2009 Counter-cyclical Expansion

Pro-cyclical

2003 Sources:

Pro-cyclical Expansion

7 Counter-cyclical 50.6

2004

2005

2006

2007

2008

2009

2010

35.9 2011

-3 Contrac!on -7

-5

-3

-1

1

3

35

3,000

30

2,500

25

2,000

20 1,500 15 1,000 10 500

5 0

0 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 External

Source:

1

a.

b.

c.

d.

xi

BELARUS PUBLIC EXPENDITURE REVIEW

Strengthening Incentives of Sub-national Governments 2

in percent 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0

in percent

54

54 50

48

48

37

37

45

48

42 39

60 50

41 36

55

RUS

35

KAZ BLR

30

41

37

40

40

25 LVA

30 20

20 CZE

15 SRB

HUN

10 10 00 2004

2005

2006

2007

2008

2009

2010

UKR POL

LTU

BIH 5

BGR

ROU

MKD

0

2011

0

10

20

30

40

Source:

Belarus maintains high levels of interregional equity 3,500 3,000

472

2,500 237 2,000

1,251

1,500

213

1,000

606

698

671

582

Rayons

Ci!es

807

500

103

0

Source:

xii

2011 100 35.4

80

32.5

28.2 47.9

60 31.4

37.2

32.5 40

25.8

non-tax revenues.

13.3 16.1

20 0

Consolidated subna!onal

Non-tax

20.9

9.8

Oblast

Rayon

City

Property taxes

Source:

14

90 80 70 60 50 40 30 20 10 0

12 10 8 6 4 2 0 2007

2008

2009

2010

2011

58.2

52.5 54.8

60.6

48.2

48.6

14.1

16.6

20.1

17.5

Gomel

Average

Minsk

Vitebsk

70.4

29.4

17.8

28.0 13.5

3.0 Minsk City

Grodno

Mogilev

Brest

Source:

a.

xiii

BELARUS PUBLIC EXPENDITURE REVIEW

b.

Simplify and apply the transfer formula to create more a predictable and transparent system of

c.

d.

Enhancing Spending Efficiency for Better Health Results

xiv

member states.

in percent 7 6 1.2

1.1

1.1

1.1 1.2

5

1.1

1.1

1.1 1.0

4 3 4.9

4.9

5.0

5.0

2

4.5

4.1

4.5

4.2 3.5

1 0 2003

2004

2005

2006

2007

2008

2009

2010

9 8 7 6 5 4 3 2 1 0

SVN HRV

SRB MDA

MNE POL EST MKD ROU HUN LTU LVA RUS UKR BGR BLR ALB KAZ GEO TUR ARM

KGZ TJK

0

2011

CZE

SVK

10,000

20,000

30,000

Source:

3

2010 Source:

2000

13.1 BLR

NOR

DEU

SWE

FIN

GBR

RUS

5.2

8.0 CZE CIS ave. 3.5 AUT

SVK

UKR

NLD

0

SWE GBR IRL ESP NOR PRT DNK ITA AUT SVN NLD OECD ave.

GRC CHE EST FIN FRA SVK BEL CZE DEU CIS ave.

UKR RUS BLR

2

7.2

4

FRA OECD 3.1 ave.

MDA

6

EST

8

SVN

10

20 18 16 14 12 10 8 6 4 2 0

ESP

12

GRC

14

Nurses Source: OECD Health Data 2012, and WHO Health for All Database.

Note: Data reported for 2010 or the latest year available. The latest year available for Belarus is 2009

xv

BELARUS PUBLIC EXPENDITURE REVIEW

a.

b.

c.

d.

e.

xvi

indicators.

needs to be accompanied by greater accountability for results

Enhancing Spending Efficiency for Better Education Results

xvii

BELARUS PUBLIC EXPENDITURE REVIEW

AZE

LVA

BLR

LTU

SVN

KAZ

UKR

HUN

CZE

POL

MDA

UZB

BGR

SVK

MKD

ROU

TJK

KGZ

18 16 14 12 10 8 6 4 2 0

MDA KGZ SVN LVA EST POL LTU TUR HUN CZE UKR MKD BLR MNE SVK BGR KSV HRV KAZ RUS TJK SRB ROU ALB GEO ARM

9 8 7 6 5 4 3 2 1 0

2004 Source:

45 40 35 30 25 20 15 10 5 0

10,000 8,000 6,000 4,000 2,000 0 2

4

6

8

10

12

Source:

4

a.

xviii

0

2,000

4,000

6,000

8,000

10,000

b.

c.

5

xix

BELARUS PUBLIC EXPENDITURE REVIEW

Time Frame Stabilizing Macro-Fiscal Policy

6

xx

Expected Impact

Chapter 1.

Fiscal Reforms: Addressing MacroStructural Challenges

Uncertain Environment

1

BELARUS PUBLIC EXPENDITURE REVIEW

7

2004

2005

11.4

2006

2007

2008

2009

2010

10.2

0.2

7.7

13.3

10.1

3.8

11

-11.1

-3.8

-8.2

10

14.4

8

2.2

12.3

12.1

0.7

2011 108.7

2.2

2.0

0.2

0.3

0.4

1.8

2.1

1.8

1.3

0

-0.7

1.4

0.4

1.4

-0.7

-1.8

8.3

8.8

13.7

22.3

2.8 7.1

External

3.2 23.1

Source:

2

2.3 30.2

37

2,780

3,470

17.8

8

15

160

10

140

11.4 9.4

5

10.0

7.0

8.6

10.2 120

7.7 5.5

0.2

100

0 80 -5 60 -10

40

-15

20

-20 2003

2004

2005

2006

2007

2008

2009

2010

2011

0 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12

Source:

3

BELARUS PUBLIC EXPENDITURE REVIEW

9

53 51 49 47 45 43 41 39 37 35

4 50.6 49.1

2.8

3

48.0

47.7

49.0

46.0 47.4 45.9

49.5 49.2

46.6

2

1.4

47.6

46.0

45.9

0.0

0 41.6

38.7

-1 -2

2003

2004

2005

2006

2007

2008

2009

2010

35.9 2011

0.4 -0.7

-0.7 -1.8

-1.7

-3 2003

2004

2005

Sources:

Doing Business 2013

4

1.4

1

43.4

2006

2007

2008

2009

2010

2011

10

Pro-cyclical Expansion

7 Counter-cyclical

5.3

2011

Contrac!on

2008 1.3

2010

5

2009 0.0 3 2.4

2008

2007 1 2011

0.6

2007

1.0

2006

2010

-1 2009

2005 0

1.1

Pro-cyclical

1

-3 Contrac!on -7

2

3

4

5

Sources:

6

Counter-cyclical Expansion

-5

-3

-1

1

3

Note:

11

10

11

5

BELARUS PUBLIC EXPENDITURE REVIEW

12

Debt Repayment 35

3,000

30

2,500

25

2,000

20 1,500 15 1,000 10 500

5 0

0 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 External

Source:

12

6

55 50

BLR 2008

UKR

45 40

SRB

BLR 2010 ROU TUR MKD

MDA 35 30 GEO

25

CZE SVN

EST LTU

BGR

KGZ

SVK

HUN LVA HRV RUS POL

MNE

BIH

ALB

ARM

20 0

10,000

20,000

Belarus Bosnia & Herzegovina Slovenia Ukraine Hungary Serbia Czech Republic Estonia Croa!a Poland Moldova Russia Slovakia Romania Latvia Bulgaria 0

5

Center

South

30,000

10

15

20

25

30

35

40

Source:

Box 1.

World

6

Europe

60

5

50

4

40

3

30

2

20

1

10 0

0 <25

25–40

40–55

>55

<25

25–40

40–55

>55

North

Western Europe 2007

EU12 EU cand. E. prtn.

AngloSaxon

Japan Emerging peers

2010

Source: Note:

policy outcomes.

Sources:

Golden growth: restoring the luster of the European economic model

Fiscal Policy and Economic

.

7

BELARUS PUBLIC EXPENDITURE REVIEW

50

50

-13.2 10.0

40

40 5.0

30

30

21.3 16.5

20

20 7.0 5.2

10 10.3

7.9

0.6 0

2011

Source:

13

8

8.2

1.5

2.4 5.1 3.9

1.8

5.2 5.3 1.5 4.6 3.5

1.1

10

1.1 2.1 0.9

12.5

11.8

2008

2011

1.1 0

2008

13

-13.2 12.7

8.7

10 9 8 7 6 5 4 3 2 1 0 9.4

2004

2004 2005

5.9

2005 2006

2006

10.1

8 8.5 7.3

2007

2007

8.4

6 5.0

4

2

0 2008

2008 2009

5.1

2009

2010

2010

2011

9.4 8.8

8.0

5.7 4.8 4.6

2011

Ukraine Slovakia Croa!a Russia Turkey Kyrgyz Rep. Albania Macedonia Hungary Slovenia Montenegro Serbia Bulgaria Lithuania Armenia Estonia Czech Rep. Latvia Moldova Belarus Romania Kazakhstan Poland Bosnia & Herz.

Georgia Kosovo Tajikistan Azerbaijan

10 9.6

Albania Latvia Lithuania Azerbaijan Romania Tajikistan Poland Armenia Kazakhstan Kyrgyz Rep. Bulgaria Estonia Hungary Slovakia Moldova Bosnia & Herz.

Georgia Macedonia Ukraine Slovenia Czech Rep. Serbia Croa!a Montenegro Kosovo Russia Belarus

12

16 14 12 10 8 6 4 2 0

Source: 2011

2011

2008

10 9 8 7 6 5 4 3 2 1 0

Source: 2008

9

BELARUS PUBLIC EXPENDITURE REVIEW

2.0

R2=0.2918

14 SVK

12

1.8

10

1.6

POL

8

UKR

1.4

MDA

SRB BGR TUR CZE

EST LTU RUS

HRV

HUN ROU LVA BLR SVN

6 1.2

AZE

4

1.0

2

0.8

0 2004

2005

2006

2007

2008

2009

2010

2011

ARM

0

5

10

15

Source:

Comparison Health Economic Belarus

4.6

Social

3.5

5.3

11.8

4.3

4.0

4.4

11.2

4.2

2.7

4.2

8.4

4.4

Source:

10

60

60

50

50

40

40

21.2 11.9

30

30

6.7 1.9

8.2 4.6 3.0

5.1 2.9 1.5

20

18.0

20

3.2 8.8 3.4

10.0 3.1 8.9 4.1

2008

2010

11.2

14.8

10

10 10.0

9.3

2008

2010

0

0

1.9 0.9

Excises

Source:

11

BELARUS PUBLIC EXPENDITURE REVIEW

58 56 54 52 50 48 46 44 42 40

55 54

54 50 48

48

48 45

2003

2004

2005

2006

2007

2008

2009

2010

Source:

period.

71.5 71.0 70.5 70.0 69.5 69.0 68.5 68.0 67.5 67.0 66.5

71.1

12

14.6

3,000

14.4 2,500

14.0 70.3 70.1

2,000

68.8 1,500 68.9

12.8 12.5

1,000 12.3

68.1 500 0

1985

Source:

14.6 70.7

1990

1995

2000

2005

2010

2011

2003

2004

2005

2006

2007

2008

2009

2010

2011

Other ECA Countries

Country

Public health system 48

72

Belarus

59

74

Russia 72 74 80

and health sectors are confronted with a number of structural challenges that will have to be addressed

72 82 Source: sector in 2010.

Further improving sector outcomes

13

Source:

14

14

Georgia

Austria

Slovenia

Latvia

Azerbaijan

40,000

Belarus

30,000

Lithuania

0

Hungary

20

Kazakhstan

40

Poland

60 20,000

Ukraine

80

Czech Rep.

100 10,000

Bulgaria

120 0

Moldova

50,000

Uzbekistan

70

Slovakia

74

Macedonia

76

Romania

80

Kyrgyz Rep.

86

Tajikistan

Belarus

40,000

Russia

Ukraine

30,000

Kazakhstan

Azerbaijan

Hungary

Czech Rep.

20,000

Lithuania

Poland

Romania

Slovakia

10,000

Latvia

Serbia

78

Estonia

0

Kyrgyz Rep.

Uzbekistan

Armenia

BELARUS PUBLIC EXPENDITURE REVIEW

84 85

82 80

BLR 75

70

72 65 BLR

60 50,000

Source:

14

Overcoming Inefficiencies in Public Spending

18 16 14 12 10 8 6 4 2 0

3,000 2,500 2,000 1,500 1,000 500 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source:

world.

15

BELARUS PUBLIC EXPENDITURE REVIEW

a.

b.

c.

d.

levels.

16

e.

17

BELARUS PUBLIC EXPENDITURE REVIEW

Chapter 2.

18

Intergovernmental Fiscal Relations: Strengthening Incentives of Subnational Governments

Oblasts and the City of Minsk

Primary level All 7

130

118

12

41,003

Source:

15

16 17

18

17

18

19

BELARUS PUBLIC EXPENDITURE REVIEW

President

Council of Ministers

Central Government

Line Ministries

Oblast Tier

Base Tier

Primary Tier

Execu!ve Commi" ees of Oblasts and City of Minsk

Councils of Depu!es of Oblasts and City of Minsk

Execu!ve Commi" ees of Rayons and Oblast Subordinate Towns

Councils of Depu!es of Rayons and Oblast Subordinate Towns

Execu!ve Commi" ees of Rural Districts and Ray-on Subordinate Towns

Councils of Depu!es of Rural Districts and Ray-on Subordinate Towns

Local Government Source:

20

Local Self-Government

Ci!zens

5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0

54

54 50

48

48

39

37

37

45

42

60

40 KAZ BLR

30

41

37

RUS

35

50 41

36

55

48

40

25 LVA 20

30

CZE

15

20

SRB

HUN

10 5

00 2004

2005

2006

2007

2008

2009

2010

BGR

BIH

10

UKR POL

LTU

ROU

MKD

0

2011

0

10

20

30

40

Source:

19

20

20 3.7

3.6

3.6

3.5

4.9

4.4

4.3

4.5

2.4

2.4

2.4

2.3

3.8

4.0

3.4

3.4

3.6

2.1

3.3

3.7

3.4

3.8

2007

2008

2009

2010

15

4.0

10

5

2.8 2.1

0 2011

Source:

20

21

BELARUS PUBLIC EXPENDITURE REVIEW

Level of Government Central

Primary

Source:

22

Regional (Oblastâ&#x20AC;&#x2122;)

Base (Rayons and

Primary

2007 Total

2008

2009

2010

2011

CG

SNG

CG

SNG

CG

SNG

CG

SNG

CG

SNG

53.3

46.7

55.3

44.7

54.2

45.8

47.4

52.6

44.7

55.3

1.0 100.0

0.0

34.7 14.2 20.3 100.0

14.3

13.4

14.0

33.3

84.1

0.0

0.3

71.0

40.0 37.8

4.0

0.7 78.4

22.0

78.0

43.1 74.4

74.8

40.8

42.2

24.1

22.0

47.4

34.7

78.0

74.0

81.1 18.0

82.0 31.4

Source: Note:

Sub-oblast Level

Oblast Total expenditures

20

Rayons 32

20

47

3.2 3.3

15

40

28 28

43

13

47

8

2.1

2.8

2.5

2.9

5.2

4.0

4.3

3.7

6.4

5.5

5.6

5.7

5.3

2007

2008

2009

2010

2011

10

23 Source: Note:

3.0 2.1

2.6

17

2.8

5.0 5

0

27

Personnel

Source:

23

BELARUS PUBLIC EXPENDITURE REVIEW

21

Belarus has maintained high levels of interregional 5,000 4,000 3,000 2,000 1,000 0 Brest

22

21 22

24

Source:

Vitebsk

Gomel

Grodno

Minsk

Mogilev

Minsk city

Total

2,214

314

Health Care

and Culture

Other

0

87

243

1,321

2,218

0.18

0.34

0.32 110

311 1,071

0.12

234 740

3,101

1,142

178

170

0.27

0.14

Source:

3,500 3,000

472

5,000

2,500

4,000

237 2,000

1,251

1,500

213

1,000

606

698

671

582

Rayons

Ci!es

807

500

R2=0.4351

6,000

3,000 103 2,000 1,000

0

0 0

50,000

100,000

150,000

200,000

Source:

25

BELARUS PUBLIC EXPENDITURE REVIEW

23

2011 20

15

100 80

5.20

6.36

4.37

5.83

35.4

32.5

28.2 47.9

5.77 60

10

5

5.31

4.87

4.51

32.5

4.64 5.30

40 20

2.68 1.54 1.46

2.57 1.52 1.52

2.83 1.16 1.54

2.70 1.10 1.58

2.62 0.86 0.93

2007

2008

2009

2010

2011

0

24,25 26

23

24

26

25.8 13.3

0

Source: Note:

31.4

37.2

16.1

Consolidated subna!onal

20.9

9.8

Oblast

Rayon

City

Consolidated

Sub-oblast

100

Rayons

Sub-rayon

Other

0

100

0

100

100

100

0

0

100

0

0

100

100

100

100

100

0

0

0

0

100

0

0

100 100

100

100 100

0

0

100

100

100

100

100

0

0

100

100

0

0

0

0

0

0

100 Source:

70.6

2011

29.4

72.6

2010

27.4

67.8

2009

32.2

59.7

40.3

2009

58.9

41.1

70.8

29.2

2008

2007

70.0

30.0

2007

20

40

60

80

100

67.6

2010

2008

0

32.4

2011

54.8

45.2

56.9 0

20

43.1 40

60

80

100

Source:

27

BELARUS PUBLIC EXPENDITURE REVIEW

Box 2.

revenues

Source:

Per capita revenue from own and shared revenues Revenue CIT PIT Property 27

Other taxes Small business tax 0 Source:

27

28

0.2

0.4

0.6

7,000

0.32

2.39

0.45

6,802

0.61 Coef. of varia!on 0.22

0.73

0.42

0.47

6,000 5,000 4,000 3,000 2,000

2,040

1,807 1,288 633

1,000 322

162 21 Property tax

6

0 PIT

CIT

385 4 Small business tax

167 PIT

CIT

154 38 Property tax

386 83 Small business tax

Source:

76 79

4 12 14

1 11

3

Source:

29

BELARUS PUBLIC EXPENDITURE REVIEW

28

29

6,000

0.44

0.33

0.06 5,370

Coef. of varia!on

0.31

0.24

0.19

5,453

Coef. of varia!on

0.25

0.19

0.12

5,441

5,000 4,609

4,563 4,000 3,000

3,243

2,998 2,486

3,153 2,352

2,000

2,218

2,080

1,768

1,664 1,000

1,175

900

762

557 0 Locally derived revenues Source:

28

30

Plus VAT

Plus other grants

Locally derived revenues

Plus VAT

Plus other grants

Locally derived revenues

Plus VAT

Plus other grants

Figure 43 Capital Grants Finance a Growing Share of

4

3

Increasing capital grants have helped to maintain SNG

2

1

0 2007

2008

2009

2010

2011

Source:

30

30

31

BELARUS PUBLIC EXPENDITURE REVIEW

2009-2010

2011

2012

Source:

14 12 10 8 6 4 2 0 2007 Source:

32

2008

2009

2010

2011

Figure 45 Many SNGs Exceed Debt Rules 90 80 70 60 50 40 30 20 10 0

60 50 58.2

52.5 54.8 48.2

70.4

60.6

40 30

48.6

57

20 31 29.4

17.8 14.1

16.6

20.1

17.5

28.0

13

13.5

3.0 Minsk City

25

10

3

1

<2.5

<3.0

0 Gomel

Average

Minsk

Vitebsk

Grodno

Mogilev

<0.3

Brest

<0.5

<0.8

<1.5

Source:

0.0

0.04

1.1

1.0

0.0

0.1

34.2 1.8

indirect debt in seventeen rayons and sub-oblast

1.3

Source:

-0.017

Guaranteed

Total

-0.143***

-0.184** 33.421**

Brest -33.112 -101.831*** 384.887** 130 0.444

0.427

Source: Note: expenditures.

33

BELARUS PUBLIC EXPENDITURE REVIEW

a.

b.

34

First,

c.

d.

35

BELARUS PUBLIC EXPENDITURE REVIEW

Chapter 3.

Health Financing: Enhancing Spending Efficiency for Better Health Results

Structure

36

31

32

33

President Other Line Ministries

Council of Ministers

Execu!ve Commi" ees of Rayons and Towns

Execu!ve Commi" ees of Oblasts

Ministry of Health

Health Care Department

Financial Department

High- tech and specialized hospitals

Inpa!ent and outpa!ent health care facili!es

Central polyclinics and hospitals of oblasts (in charge of central hospitals, emergency care hospitals, FAPs and other outpa!ent facili!es)

Central polyclinics of towns and rayons (in charge of central hospitals, emergency care sta!ons, FAPs and other outpa!ent facili!es)

Central hospitals of rayons (including emergency unit, outpa!ent unit, FAPs, etc)

Private health facili!es

Financial Department management

HEALTH SECTOR

funding flows

Source: 2012.

31 32 33

37

BELARUS PUBLIC EXPENDITURE REVIEW

34

Private Funding

State Budget

Out of Pocket Expenditures

Sources of Financing

Source:

34

38

Financing Agents

Providers

Households 20.3%

General Hospitals 32.4%

Ministry of Health 12.6%

Specialized Hospitals 14.4%

Other Line Ministries 2.8%

Total Health Financing 5.2% GDP

Ambulatory Centers and Polyclinics 30.9%

Regional Governments 61.3%

Rehabilita!on/Long Term Care Ins!tu!ons 1%

Firms 2.3%

Providers/Managers of Public Health Programs 2.2%

Insurance 0.2%

Retailers and Other Suppliers of Medicines 14.7%

35

36

39

BELARUS PUBLIC EXPENDITURE REVIEW

Maternal Mortality Rate, 2009

Under 5 Mortality Rate, 2010

Life Expectancy at Birth 2009

Male 71

Adult Mortality, 2009*

Female

Male

33

70

432

38

70

327

Age TB Incidence HIV Prevalence GNI per Standardized 2010 Per 2009 Per Capita PPP Adult 100,000 Pop. 100,000 Pop. Current US$ Mortality Rate**

Female 11,310 243

183 43 Russian

Belarus Belarus 1990

70

427

221

134

110 101

32

13

74

148

34

12

74

144

28

71

41

73

4

6

30

20

37

17

34

10

27

18

8

7

20

13

64

220

76

324

74 66

131

75

282

77

284

Estonia

2

Poland 4 4

41 7,080

128

103

134

401

182

338

117

446

70

172

14,560

103

378

73

107

n/a

80

48***

4,640

22

107 88 134

73

234

77

80 80

74

80

138

83

74

3

312

77

70

81 17,820

14

274

72

3,440

43

72 72

2,310

37 28

17,340 20,830

23

70

20,480 24,280

47

88

42,200

Source: Note: * ** *** Year 2000.

90

15

80

10 5

70 BLR 60

0

50

-5

40 0

20

40

60

80

100

-10 1990

1996

Natality rate Source:

40

1998

2000

2002

2004

2006

2008

2010

Number of deaths

Percentage 16 14 12 10

3,404

2.77

3,331

2.71

6

2.4

4

2.27

2

2,784

0

2.12

SVN POL ALB HRV CZE HUN SVK MKD ARM EST BGR TJK LVA LTU ROU BLR MDA GEO KGZ UKR RUS AZE UZB KAZ TKM

8

Source:

2,413 2,404 1,848 Source:

73

2 6 37

0

1 18

Source:

37

41

BELARUS PUBLIC EXPENDITURE REVIEW

50

25 GEO

40

20

GEO

UKR 30

15

AZE

20

RUS BYR

10

BGR

10

TJK

MDA ARM

AZE UKR ARM

SRB

5

RUS

EU15

EU15

0 10

20

30

40

50

60

70

0

80

10

20

TJK

MDA

SRB

BYR

0 0

BGR 30

40

50

60

70

Source:

2010, in percent 35

2.5

16 14

30 2.0

12

25 20

1.5

15

1.0

10 8

10

6 4

0.5 5

2

0

0 Poor

2

3

4

Rich

0 Poor

2 >10

Source:

42

3

4

Rich

80

0 0.2

2010

0.4 0.6 0.8

80

70

60

50

40

30

20

10

0

UKR ALB MKD AZE MNG KGZ KAZ BIH TJK ROU RUS BLR HUN MNE SRB ARM BGR POL UZB LTU SVK CZE MDA SVN HRV LVA GEO EST TUR

EST GEO POL SVN CZE LVA MKD MNE BGR HRV TUR KAZ RUS MNG UZB BLR BIH LTU SVK SRB ARM ALB TJK HUN UKR ROU MDA KGZ AZE

10

8 38

6

4

2

0 1 39

Source:

payments.40

90 80 70 60 50 40 30 20 10 0

Source:

2010

38

40

43

BELARUS PUBLIC EXPENDITURE REVIEW

41

42

7 6 1.2

1.1

1.1

1.1 1.2

5

1.1

1.1

1.1 1.0

4 3 4.9

4.9

5.0

5.0

2

4.5

4.1

4.5

4.2 3.5

1 0 2003 Source:

41 42

44

2004

2005

2006

2007

2008

2009

2010

2011

9 8 7 6 5 4 3 2 1 0

SVK

CZE SVN

SRB

HRV

MDA

KGZ TJK

0

MNE POL EST MKD ROU HUN LTU UKR LVA RUS BGR BLR ALB KAZ GEO TUR ARM

10,000

20,000

30,000

Figure 57 A Large Share of Public Funding Is Channeled Through SNGs

55,4

22

Recurrent spending absorbs the largest share of

22,6

Source:

100

100 14

16

19

17

15

13

13

30

30

80

22.0

16.2

8.4

7.1

6.2

5.5

5.0

34.5

33.0

33.9

34.0

31.7

80 32

28

60

29

32

33

48

48

49

54

2007

2008

2009

2010

31.5 60

40

33.1

40 51

52

20

54 20

0

0 2005

2006

2011

59.9

60.0

60.0

63.3

52.2

57.2

44.9

City of Minsk

Region of Brest

Region of Minsk

Region of Mogilev

Region of Grodno

Region of Gomel

Region of Vitebsk

Non-personnel recurrent

Personnel

Source: Note:

45

0

Source:

43

46 2

2010 2000 Nurses

FRA OECD 3.1 ave.

MDA

SVK

FIN

BLR

NOR

SWE

DEU

GBR

5.2

CZE CIS ave. 3.5 AUT RUS

4

UKR

6

8.0

7.2

13.1

20 18 16 14 12 10 8 6 4 2 0

NLD

8

EST

10

SVN

12

GRC

14

ESP

SWE GBR IRL ESP NOR PRT DNK ITA AUT SVN NLD OECD ave.

GRC CHE EST FIN FRA SVK BEL CZE DEU CIS ave.

UKR RUS BLR

BELARUS PUBLIC EXPENDITURE REVIEW

43

.

1.0 1.5

0.4 0.5 1.0

36.3

33.2 2.2 4.5

2.1 2.5 3.8

8.3

14.0 13.0 21.3

24.2 15.2

15.1 Polyclinics

Source:

16

29

30 25

14

11

10 8

7

21 16

15

6

10

12

12 20

4 5

0

TUR DNK SWE NLD PRT IRL SVN AUT ITA ESP EST GRC OECD ave.

CZE SVK GBR BEL DEU CHE MDA BLR FIN CIS ave.

KAZ UKR RUS

2

SPA NLD ITA IRE GBR OECD ave.

SVN KAZ SWE EST DNK BEL MDA FIN CZE GRC CIS ave.

SVK UKR DEU AUT BLR

0

Source:

This extensive reliance on hospitals as providers of 100 90 80 70 60 50 40 30 20 10 0

4.7 13.3

8.1

5.4

17.5

10.7 10.6

89.3 69.5

63.5

General Hospitals

Specialized Hospitals

Polyclinics

Source:

47

BELARUS PUBLIC EXPENDITURE REVIEW

in percent 25

80

18

70

16

60

14

50

12

40

10

30

8

20

6

10

4

0

2

70.8 20

66.5

62.8

56.6 49.2

44.7

15

21

10 5 0

Source:

48

10 Region of Mogilev

10

Region of Brest

12

Region of Grodno

12

Region of Gomel

14

Region of Minsk

Region of Vitebsk

Gomel oblast

Mogilev oblast

Brest oblast

Minsk city

Grodno oblast

Minsk oblast

Vitebsk oblast

44

care expenditures.45

Spending Pressure

Time Horizon

Source:

44

Economics Department, WP No. 447.

49

BELARUS PUBLIC EXPENDITURE REVIEW

The Belarus health system faces the challenge of further improving health outcomes and maintaining high

a.

b.

50

46

c. progressively more autonomous.

d.

indicators. e.

47

country.

47

51

BELARUS PUBLIC EXPENDITURE REVIEW

• Prices may be based on average

•

•

•

needs to be accompanied by greater accountability for results

52

53

BELARUS PUBLIC EXPENDITURE REVIEW

Chapter 4.

Education Financing: Enhancing Spending Efficiency for Better Education Results

secondary,48

48

54

in Belarus, 2010 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000

1,000 962 800 600 443

400

384 200 168

500 0

106 0 Pre-school

GSE

VTE

SS

HE

Source:

49

President Line Ministries

Council of Ministers

Execu!ve Commi" ees of Rayons and Oblast Subordinate Towns

Execu!ve Commi" ees of Oblasts

Ministry of Educa!on

•Universi!es, post-graduate educa!on ins!tu!ons •Secondary specialized schools

•Universi!es, post-graduate educa!on ins!tu!ons •Secondary specialized schools

•Voca!onal schools •Secondary specialized schools

•Private educa!on ins!tu!ons (mostly universi!es)

Educa!on Department

Financial Department

Educa!on Department

•Preschool •General secondary schools

Financial Department management

EDUCATION SECTOR

funding flows

Source: Note:

55

BELARUS PUBLIC EXPENDITURE REVIEW

50

•

51

•

Gross enrollment in general secondary schools increased 52

•

56

Between 2000

Higher

Year

Secondary specialized

2000

school

General secondary (upper secondary)

General basic (lower secondary)

General primary

38.2

7.0

0.4

100

30.0

0.0

0.0

100

21.4

0.0

0.0

100

23.4

3.4

0.0

100

27.4

Rural

14.7 2010

28.4

17.2

2000

32.2

3.1 2010

33.7

2000 Poor 2010

0.0

33.7

18.2

10.4

11.4

2000

34.3

2010 2000

47.1

17.7

48.3

28.0 2.0

17.0

23.3 31.1

2010

Total

0.0

0.2

100

0.1

0.0

100

0.4

100

0.0

0.0

100

0.0

0.0

100

0.0

0.0

100

10.3

1.7

0.0

0.0

100

10.2

0.0

0.0

0.0

100

21.8

24.0

4.3

0.1

100

4.2

0.0

0.1

100

0.1

0.0

100

Source:

â&#x20AC;˘ in Europe.53 54

â&#x20AC;˘

55

57

BELARUS PUBLIC EXPENDITURE REVIEW

7

30

6

25

5

20

4 15 3

0

0

Source:

Source:

•

• Quality and relevance.

56

needs.

• Mismatch in the demand and supply of skills.

57,58

secondary level.

58

West.

Europe

5

BIH ALB GEO TJK BGR KAZ TUR KGZ KSV AZE RUS BLR MNE EST MDA HUN ARM POL UKR ROU SRB HRV SVK LTU

1

UKR UZB MDA ALB SVK ARM MNG KAZ TUR RUS BIH BLR ROU HRV MKD CZE BGR SRB MNE HUN GEO SVN LTU POL EST LVA

10

2

Belarus 0–10

10–20

20–30

30–40

40–50

50–60

60–70

70–80

80–90

Source: Note:

59

• 60 61

62

59

BELARUS PUBLIC EXPENDITURE REVIEW

9 8 7 6 5 4 3 2 1 0

30 25 20 15 10 5

KAZ MDA KSV TJK KGZ EST TUR LTU LVA MKD POL UKR SVN BLR ARM ALB BGR CZE HUN GEO SVK MNE HRV RUS ROU SRB

MDA KGZ SVN LVA EST POL LTU TUR HUN CZE UKR MKD BLR MNE SVK BGR KSV HRV KAZ RUS TJK SRB ROU ALB GEO ARM

0

Source:

14

25

12

20

10

15

8

10

6

5

4

0

2

-5

0

-10

23.5 15.5 12.7 7.8 5.6

4.3

-8.9 2005

2006

2007

2008

2009

2010

2011

Source:

Source:

100 90 80 70 60 50 40 30 20 10 0

100 90 80 70 60 50 40 30 20 10 0 2005

Source:

60

2006

2007

2008

2009

2010

2011 Source:

2005

2006

2007

2008

2009

2010

2011

2005

2006

2007

2008

2009

2010

2011

63

100 90 80 70 60 50 40 30 20 10 0

Pre-school GSE VTE SS Higher and postgraduate Other 2005

2006

2007

2008

2009

2010

2011

0

20

40

60

80

100

Source: Note:

61

BELARUS PUBLIC EXPENDITURE REVIEW

90

120

85

100

80

80

75

60

70

40

65

20

60

0 2005

2006

2007

2008

2009

2010

2011

Russia

Belarus

Ukraine

Poland

Hungary

Estonia

Czech Rep.

Source:

64

1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 0 Source: Note:

65

62

200

400

600

800

1,000

For example,

Box 4.

• • • • • • • • • • •

63

BELARUS PUBLIC EXPENDITURE REVIEW

12,000 10,000 8,000 6,000 4,000 2,000 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Rural Source:

130

110

90

70

50 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

200 175 180 160 135 140 129 124 126 120 110 111 100 87 89 80 68 59 57 54 60 43 46 38 49 40 29 20 0 1992 1993 1995 1997 1999 2001 2003 2005 2007 2009

Source:

66

64

100 90 80 70 60 50 40 30 20 10 0 -1.5

88

84

59 51

52 37

0 -1.0

-0.5

0

0.5

1.0

Brest oblast Source: Note:

2004

AZE

LVA

BLR

LTU

KAZ

SVN

UKR

HUN

CZE

POL

TJK

LVA

POL

HUN

LTA

AZE

BLR

SVK

UKR

ROU

MDA

KAZ

MKD

UZB

SVN

BGR

CZE

RUS

TJK

ARM

KGZ

0

MDA

5

UZB

10

BGR

15

SVK

20

MKD

25

KGZ

18 16 14 12 10 8 6 4 2 0

ROU

30

2004

Source:

100 90 80 70 60 50 40 30 20 10 0

12 22.6

10 60.4 8 6

77.4

4

65 39.6

2 0

Students Rural

35

Teachers

Schools

STR

Urban

Rural

Brest oblast Belarus

Source:

65

0

70

66 EST

POL

HRV

UKR

HUN

GEO

BLR

SVN

SVK

MDA

RUS

15

LVA

25

BGR

30

LTU

40

ROU

West.

Europe

CHN CHL PRK JPN ISR IDN ARG TUR BRA GBR IRL AUS USA FRA DEU ESP HUN PRT BEL CZE MEX FIN CHE DNK AUT ITA POL SVN SVK EST ISL GRC RUS BLR

BELARUS PUBLIC EXPENDITURE REVIEW

35 500

400

20 300

10 200

5 100

0

Source:

Notes:

67

68

69

70

10,000

45 40 35 30 25 20 15 10 5 0

8,000 6,000 4,000 2,000 0 2

4

6

8

10

12

45 40 35 30 25 20 15 10 5 0

0

2

4

6

8

10

12

30 6,114 th.BYR 25

6,165 th.BYR

20

0

2,000

4,000

6,000

8,000

10,000

15 500

600

700

800

900

1,000

Source:

71

71

67

BELARUS PUBLIC EXPENDITURE REVIEW

Box 5.

72

Country

Latvia

Base year

2010

a.

73

computers. b.

c.

72 73

68

Estonia

Bulgaria

Romania

Input-based system

student increases

need most

student

areas

same amount per student

• • • •

spent Source:

69

BELARUS PUBLIC EXPENDITURE REVIEW

Box 6 Pilot on Per-Student Financing in Belarus

Impact monitoring:

accountants.

70

List of References

270.

71

BELARUS PUBLIC EXPENDITURE REVIEW

business-2013

72

Annexes ANNEX 1.

Billions BYR Revenue Personal income tax

2005

2006

2007

2008

23,420 1,882 2,377

2,480 3,141

3,081 3,837

4,183

2009

2010

2011

12,083 Excises Property tax 23,821

37,240 7,481 2,041 7,003 387 10,137

1,473

2,347 742

203 Revenue Expenditure

2,471 1,111 13,710 437

423

11,422 18,377 1,300

1,720 Revenue Expenditure

2,073

48,147 71,348 1,038 242

132 137,442

2005

2006

3.7

3.1 4.0

Revenue Personal income tax

Excises Property tax

2.1 1.8

2007 37.8 3.2

3.1

2008

3.2 4.7 8.8 3.0

2009 34.0 3.1 3.4 8.8 1.2

2010

3.3 3.4 10.0 2.7 1.1

2011 28.8 3.1

8.2 8.1 2.3 7.7 0.4

8.2 2.3 7.2 0.4 8.4

38.3 7.7 2.1 7.2 0.4 10.4

7.1 1.8

1.8 0.8 11.7

1.7 0.7 8.4

1.1 7.3

73

BELARUS PUBLIC EXPENDITURE REVIEW

8.3 0.3 Revenue Expenditure

Revenue Expenditure

11.4 10.4 1.0

11.7 10.7 1.0

47.4 47.0 0.41

48.3 47.0 1.31 0.30

11.8 10.7 1.1

10.1 2.0

8.1 0.3

8.4

11.4 10.1 1.3

11.8 10.7 1.1

12.1 11.3 0.8

10.0

42.0 43.8

38.7

1.44 0.10

ANNEX 2. Grant Formula Adopted by the Ministry of Finance

• • • • •

in locality

74

0.7

2.8 2.1 137,442,

Source:

0.1

• •

•

• •

75

BELARUS PUBLIC EXPENDITURE REVIEW

ANNEX 3.

Incidence and Intensity of Catastrophic Health Payments Threshold share of total household expenditure 5% 10% 15% 25%

40%

8.0 0.083**

2.1 0.173**

0.7

0.2

0.0 0^

11.1

2.4 -0.144***

0.7 -0.233***

0.0

0.0 0^

5%

10%

15%

25%

40%

27.0

0.8 -0.072 7.1 -0.200

-0.102 3.1 -0.238

0.8

0.1 -0.302

Source:

Shares of Total Expenditure Spent on Health Services

2 3 4

Share of capita

Share of expenditures on taxes and social insurance

8.3 13.2 17.3 22.8

14.2

OOP expenditures for health care

13.4 17.3 20.3

21.2 42.1

0.3011*** 0.3407***

2 3 4

13.8

8.7 12.8 14.8 24.1

22.3

0.2737*** 0.23011*** Source:

76

Indicator

health payments

health payments

Change

Percentage change

43.1 3 732.4 12.4

13.0

2.4 0.4

0.42

0.03

Source: *Note:

ANNEX 4.

Source:

77

KGZ AZE KAZ ALB MNE BGR ROU SRB RUS TUR LTU CZE HRV SVK SVN LVA HUN POL EST MEX CHL AUT ISR LUX GRC ITA FRA ESP DEU GBR BEL PRT USA SWE IRL ISL CHE DNK NOR NZL NLD AUT JPN CAN FIN KOR PAN PER QAT IDN ARG TUN BRA JOR COL TTO THA URY ARE LIE TWN MAC SGP HKG CHN

BELARUS PUBLIC EXPENDITURE REVIEW

ANNEX 5.

90 80 70 60 50 40 30 20 10 0

Source: Note:

ECA

78 OECD, non-ECA Others