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2. Fiscal Situation The views and opinions expressed here reflect the authors’ point of view and not necessarily those of CASE Network. The publication of these country reports has been funded by the Local Gov- ernment and Public Service Reform Initiative of the Open Society Foundations – Budapest. The judgments expressed herein do not necessarily reflect the views of LGI. Keywords: Fiscal policy, Belarus, Education financing, Health financing, Global economic crisis JEL codes: E62, H50, H51, H52, I18, I22 © CASE – Center for Social and Economic Research, Warsaw, 2011 Graphic Design: Agnieszka Natalia Bury EAN 9788371785450 Publisher: CASE-Center for Social and Economic Research on behalf of CASE Network 12 Sienkiewicza, 00-010 Warsaw, Poland tel.: (48 22) 622 66 27, fax: (48 22) 828 60 69 e-mail: [email protected] http://www.case-research.eu The CASE Network is a group of economic and social research centers in Po- land, Kyrgyzstan, Ukraine, Georgia, Moldova, and Belarus. Organizations in the network regularly conduct joint research and advisory projects. The research cov- ers a wide spectrum of economic and social issues, including economic effects of the European integration process, economic relations between the EU and CIS, monetary policy and euro-accession, innovation and competitiveness, and labour markets and social policy. The network aims to increase the range and quality of economic research and information available to policy-makers and civil society, and takes an active role in on-going debates on how to meet the economic chal- lenges facing the EU, post-transition countries and the global economy. The CASE network consists of: • CASE – Center for Social and Economic Research, Warsaw, est. 1991, www.case-research.eu • CASE – Center for Social and Economic Research – Kyrgyzstan, est. 1998, www.case.elcat.kg • Center for Social and Economic Research – CASE Ukraine, est. 1999, www.case-ukraine.kiev.ua • CASE –Transcaucasus Center for Social and Economic Research, est. 2000, www.case-transcaucasus.org.ge • Foundation for Social and Economic Research CASE Moldova, est. 2003, www.case.com.md • CASE Belarus – Center for Social and Economic Research Belarus, est. 2007. Dzmitry Kruk, Gleb Shymanovich Contents Executive Summary............................................................................................. 10 1. Introduction ..................................................................................................... 12 2. Fiscal situation ................................................................................................. 14 2.1. Pre-crisis fiscal developments .................................................................. 14 2.1.1. General economic environment................................................... 14 2.1.2. Public finance.............................................................................. 16 2.2. Fiscal performance during the crisis......................................................... 26 2.2.1. Macroeconomic developments during the crisis ......................... 26 2.2.2. Developments in revenue and expenditure flows......................... 29 2.2.3. Financial sustainability: mid-term forecast ................................ 38 3. Education ......................................................................................................... 41 3.1. Medium-term trends in the Belarusian educational system...................... 41 3.2. Policy reforms in the sector...................................................................... 46 3.3. Spending trends before and during the crisis............................................ 50 3.4. Efficiency of spending and mid-term perspective of the Belarusian educational system ............................................................................................ 56 4. Healthcare ........................................................................................................ 62 4.1. Sector indicators: current trends............................................................... 62 4.2. Structure of the sector and policy reforms................................................ 68 4.3. Spending trends ........................................................................................ 70 4.4. Efficiency of spending.............................................................................. 74 4.5. Sector development within the crisis........................................................ 77 4.6. Mid-term outlook...................................................................................... 80 5. Conclusions ...................................................................................................... 82 Sources and References....................................................................................... 90 CASE Network Reports No. 102 4 PUBLIC EXPENDITURES ON EDUCATION AND HEALTH IN BELARUS… List of Figures and Tables Figure 2.1. Structure of local government revenues.............................................. 18 Figure 2.2. Structure of local government tax revenues........................................ 18 Figure 2.3. General government revenues formed by taxes on goods and services .................................................................................................................. 20 Figure 2.4. General government revenues formed by taxes on profit and income 20 Figure 2.5 General government revenues formed by taxes on foreign trade........ 22 Figure 2.6 Non-tax general government revenues................................................. 22 Figure 2.7. Dynamics of the central government budget revenues and expenditures plan for 2009, EUR bn ........................................................................................... 37 Figure 2.8. Belarusian public debt......................................................................... 40 Figure 2.9. Belarusian public debt servicing........................................................... 40 Figure 3.1. Growth rates of real wages by sectors and the ratio of average salary in education vs. average salary in the economy ........................................................ 45 Fugure 4.1. Birth and death rates in Belarus, per 1000 ......................................... 63 Figure 4.2. Population of Belarus and its life expectancy ..................................... 63 Figure 4.3. Structure of the health system............................................................. 69 Figure 4.4. Financing of the health system............................................................ 71 Figure 4.5. Total expenditures on health ............................................................... 72 Figure 4.6. Expenditures on health in selected CEE and CIS countries, 2007...... 75 Figure 4.7. Age standardized mortality rates by causes per 100,000, 2008 .......... 76 Figure 4.8. Life expectancy in the CIS and CEE region, years............................. 77 Table 2.1. Main macroeconomic indicators 2003-2009 ........................................ 15 Table 2.2. Local and central government budgets: Main characteristics............... 17 Table 2.3. General government tax revenues, % of GDP...................................... 19 Table 2.4. General government expenditures by economic classification, % of GDP .............................................................................................................. 23 Table 2.5. General government expenditures by functional classification, % of GDP .............................................................................................................. 23 Table 2.6. Share of local budgets within different groups of public expenditures 24 Table 2.7. Public expenditures on healthcare and education issues ...................... 25 Table 2.8. General government revenues within the crisis period, % of GDP...... 30 Table 2.9. General government expenditures by functional classification within the crisis, % of GDP.................................................................................................... 34 5 CASE Network Reports No. 102 Dzmitry Kruk, Gleb Shymanovich Table 2.10. General government expenditures by economic classification, % of GDP .............................................................................................................. 35 Table 3.1. Selected indicators of the educational system in Belarus*................... 42 Table 3.2. Output and employment in education................................................... 46 Table 3.3. Social standards in education (as of 2010) ........................................... 50 Table 3.4. Spending trends in education................................................................ 52 Table 3.5. Real budget expenditures per capita, index (2006=100) ...................... 53 Table 3.6. The structure of educational expenditures in local budgets.................. 54 Table 4.1. Mortality rates, per 1000 ...................................................................... 64 Table 4.2. Morbidity rates, per 1000 ..................................................................... 65 Table 4.3. Main indicators of the health system infrastructure ............................. 66 Table 4.4. Health system personnel, per 10000..................................................... 67 Table 4.5. Expenditures on health, main characteristics........................................ 73 Table 4.6. Selected mortality rates and health personnel availability in CIS and CEE countries.......................................................................................................
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