eu funded projectimplemented by support to ifi coordination in the western balkans and turkey 26...
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EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
April 10, 2023
Social Sector Expenditure in the Western Balkans
RCC Conference What Kind of Social Agenda for the Western Balkans?
Mary O’Mahony
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey 2
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
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
Real GDP Growth and Fiscal Stance
3
Source: IMF Data (latest published Articles IV as of April 2011)
Severe impact of crisis; slow recovery; relatively low growth rates
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
“Austerity” Measures
4
Source: IMF Data (latest published Articles IV as of April 2011)
Sharp decline in revenues, marginal decline in expenditure. Marked decrease in capital expenditure. Current expenditure maintained or even increased
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
WB Expenditure by Economic Classification: Wage Bill
5
Some decreased in spending on wages and allowances in public sector but lots of variances
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
WB Expenditure by Economic Classification: Capital Expenditure
6
...in general capital expenditure reduced
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
WB Expenditure by Economic Classification: Social Transfers
7
At the same time, overall social transfers peaked in 2009 and are still above pre-crisis period.
Source: IMF Data (latest published Articles IV as of April 2011)
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
WB Expenditure by Functional Classification: Health Expenditure
8
Source: Functional Expenditure Data from the latest available EFPs/PEPs as of April2011)
Some decreases in expenditure (NB approximate data)
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
WB Expenditure by Functional Classification: Education Expenditure
9
Source: Functional Expenditure Data from the latest available EFPs/PEPs as of April2011)
In general education expenditure also decreased in 2009 and 2010
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
WB Expenditure by Functional Classification: Social Protection Expenditure
10
Source: Functional Expenditure Data from the latest available EFPs/PEPs as of April2011)
Social protection expenditure increased it share as % of GDP in 2009 due to additional unemployment pressures.
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
Comparison of WB and EUSocial Expenditure
11
in % GDP for 2008 EU 27 EU 16 WBGovernment Revenue 44.6% 44.9% 39.3%Government Expenditure 46.9% 46.8% 41.5%Fiscal Balance -2.3% -1.9% -2.3%Expenditure by Economic ClassificationWage Bill 10.3% 9.9% 9.3%Social Transfers 20.1% 21.6% 15.5%Expenditure by Functional ClassificationHealth 6.9% 6.9% 5.6%Education 5.2% 4.8% 4.4%Social Protection 18.2% 18.9% 13.0%
Source: For EU data EUROSTAT and for WB data IMF and EFPs/PEPs
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
Comparison of the WB Social Expenditure to the EU
12
Lots of variance by country
in % GDP for 2008 EU 27 EU 16 WB Albania BiH Croatia FYRoM Montenegro SerbiaGovernment Revenue 44.6% 44.9% 39.3% 26.8% 46.0% 39.8% 32.5% 48.6% 41.9%Government Expenditure 46.9% 46.8% 41.5% 32.3% 49.5% 40.7% 33.4% 48.8% 44.5%Fiscal Balance -2.3% -1.9% -2.3% -5.5% -3.5% -0.9% -0.9% -0.3% -2.6%Expenditure by Economic ClassificationWage Bill 10.3% 9.9% 9.3% 6.1% 12.0% 9.8% 5.2% 12.1% 10.7%Social Transfers 20.1% 21.6% 15.5% 8.6% 15.4% 16.3% 18.9% 15.9% 17.9%Expenditure by Functional ClassificationHealth 6.9% 6.9% 5.6% 2.5% 7.1% 5.6% 6.7% 5.8% 5.7%Education 5.2% 4.8% 4.4% 3.5% 5.5% 4.1% 4.8% 4.8% 3.8%Social Protection 18.2% 18.9% 13.0% 7.9% 14.9% 13.5% 10.6% 14.6% 16.4%
Source: For EU data EUROSTAT and for WB data IMF and EFPs/PEPs
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey 13
EFPs – Social Sector Priorities
o 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
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey 14
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
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey 15
Issues Arising
oStalled economic growthoNeed to generate socio-economic developmentoImprove labour skills, increase productivity, higher value added products and servicesoIncreased social needs, social inclusion issuesoPressure for reform of health, education & social protection systemsoAlignment to EU/international normsoFinancing sources for capital expenditure
EU Funded Project implemented by
Support to IFI Coordination
in the Western
Balkans and Turkey
April 10, 2023
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