2004年-世界发展银行全球_El_Salvador___Public_Expenditure_Review_218页_15mb

El Salvador Public Expenditure Review Summary

Core Content

This report provides a comprehensive analysis of El Salvador's public expenditure management, fiscal sustainability, and key social sectors such as education, health, water and sanitation, rural roads, and rural electrification. It outlines the challenges the country faces in terms of public debt, resource allocation, and institutional efficiency, and offers recommendations to improve fiscal performance and social outcomes.

Main Acronyms and Abbreviations

Fiscal Challenges and Objectives

El Salvador faces two major fiscal challenges:

1. Reducing Public Debt: The country has experienced a rapid increase in public debt since 2000, with non-financial public sector debt reaching just over 40% of GDP by 2003. This has been driven by reconstruction efforts following the 2001 earthquakes and increasing transition costs from the 1996 pension reform.
2. Financing Priority Investments: To support growth and meet social needs, the government must allocate resources to key sectors, which collectively represent over 40% of the central government's budget.

The report suggests a path to reduce public debt to about 35% of GDP over five years, which would require a gradual increase in annual revenues of about 4.0% by 2009. The increase in revenue could be achieved through improved tax collection and higher tax rates, especially on excise taxes for beverages and tobacco.

Macroeconomic Environment

• Economic Growth: El Salvador experienced significant economic growth and poverty reduction after the civil war (1992). However, growth slowed in the late 1990s and early 2000s due to terms of trade shocks, the 2001 earthquakes, and international economic conditions.
• Fiscal Performance: Fiscal performance has been generally prudent since the 1990s, but deficits increased during 2000-2003 due to reconstruction and pension reform costs.
• Tax Revenues: Tax revenues have increased over the years, mainly due to a new fuel tax introduced in 2002 to support road maintenance. However, non-tax revenues have declined, with the VAT and income tax forming the main sources of government revenue.

Public Expenditure Management

The report emphasizes the importance of a modern public expenditure management system for achieving sustainable and poverty-reducing growth. It outlines the following key aspects:

• Institutional Framework: El Salvador has implemented a public sector modernization program since 1994, which has improved efficiency in key areas, including reducing the wage bill by about 1 percentage point of GDP.
• Budget Formulation and Execution: The budget process has improved, but execution volatility and deviations from approved budgets remain an issue. There is a need for greater transparency and reliability in budget formulation and execution.
• Financial Reporting: External oversight mechanisms, such as the Court of Accounts, are in place but require further strengthening to ensure accountability and efficiency.

Key Social Sectors

Education

• Expenditure Trends: Public education expenditure increased from 2.2% to 3.1% of GDP between 1996 and 2003.
• Outcomes: There have been improvements in enrollment rates, but challenges remain in educational efficiency, particularly in rural and lower-income areas.
• Recommendations: Enhance budget transparency, improve teacher wages, and expand access to education in underserved regions.

Health

• Expenditure Trends: Health spending increased from 1.4% to 1.5% of GDP, with a focus on public hospitals and primary health care.
• Outcomes: Health indicators have improved, but access to services is uneven across income and geographic groups.
• Recommendations: Strengthen financial management, increase efficiency in service delivery, and expand coverage to the poor.

Water and Sanitation

• Expenditure Trends: Public investment in water and sanitation increased significantly, especially after the 2001 earthquakes.
• Outcomes: Coverage has improved, but water quality and access remain issues, particularly in rural areas.
• Recommendations: Address water losses, improve infrastructure, and increase efficiency in service delivery.

Rural Roads

• Expenditure Trends: Investment in rural roads has been a priority, with a focus on improving access to markets.
• Outcomes: Infrastructure improvements have enhanced access, but there are still gaps in rural road networks.
• Recommendations: Continue investment in rural roads, improve financial planning, and ensure efficient use of resources.

Rural Electrification

• Expenditure Trends: Rural electrification has seen significant investment, particularly through the FISDL and FINET programs.
• Outcomes: Coverage has expanded, but electricity quality and reliability remain challenges.
• Recommendations: Improve electricity distribution, reduce losses, and enhance service quality.

Conclusion and Recommendations

The report concludes that El Salvador must focus on reducing public debt, improving fiscal sustainability, and enhancing the efficiency of public expenditure. Key recommendations include:

• Strengthening revenue collection mechanisms.
• Reforms to the pension system to reduce transition costs and improve fiscal sustainability.
• Enhancing transparency and reliability in the budget process.
• Increasing investment in social sectors to support long-term growth and poverty reduction.
• Improving the efficiency of public services in education, health, water, and sanitation.

Overall, the review underscores the need for a coordinated and sustainable approach to public expenditure management to ensure economic stability and improved social outcomes.