2007-2009 Medium-Term Expenditure Framework

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2007-2009 Medium-Term Expenditure Framework 2007–2009 MEDIUM–TERM PUBLIC EXPENDITURE FRAMEWORK TABLE OF CONTENTS INTRODUCTION ................................................................................... 6 Objective and Tasks ..................................................................................................... 6 Medium-Term Public Expenditure Planning Attitudes ................................................. 7 Organizational Bases for Elaboration of the MTEF 2007-2009 ................................... 7 Reforms Aimed at Improvement of Medium-Term Expenditure Planning ..................... 8 PART A. FISCAL POLICY ........................................................... 10 CHAPTER 1. STRATEGIC AND MEDIUM-TERM PRIORITIES AND THEIR IMPLEMENTATION ................................................................. 11 STRATEGIC AND MEDIUM-TERM PRIORITIES ..................................................... 11 OBJECTIVES OF MEDIUM-TERM EXPENDITURE FRAMEWORK ........................ 11 FISCAL PRINCIPLES AND INDICATORS ................................................................. 11 Long-Term Fiscal Principles ..................................................................................... 11 Short-Term and Medium-Term Fiscal Indicators ....................................................... 12 CHAPTER 2. MACRO-ECONOMIC FRAMEWORK OF MTEF 2007-2009 13 REAL SECTOR ............................................................................................................ 13 Gross Domestic Product by Sectors of Economy ........................................................ 13 Gross Domestic Product by Expenditure Components ............................................... 15 Consumer Prices ....................................................................................................... 15 EXTERNAL SECTOR .................................................................................................. 15 Export ....................................................................................................................... 16 Import ....................................................................................................................... 16 Factor Revenues and Transfers ................................................................................. 16 Current Account ........................................................................................................ 16 CHAPTER 3. 2007-2009 STATE BUDGETS REVENUE POLICY AND FORECASTING ................................................................................... 17 MAIN CHARACTERISTICS OF REVENUE POLICY OF STATE BUDGETS 2007- 2009 .............................................................................................................................. 17 2007-2009 STATE BUDGETS REVENUE FORECASTS ............................................. 17 CHAPTER 4. BUDGET FRAMEWORK .................................................. 22 STATE BUDGET DEFICIT .......................................................................................... 22 PUBLIC DEBT ............................................................................................................. 24 External Public Debt ................................................................................................. 24 Internal Public Debt .................................................................................................. 25 FORECASTED CHANGES IN RESOURCE AND EXPENDITURE PACKAGE OF THE STATE BUDGETS FOR 2007-2009 .............................................................................. 27 FORECAST OF STATE BUDGET EXPENDITURES FOR 2007-2009, BY SECTORS 29 FORECAST OF STATE BUDGETS EXPENDITURES FOR 2007-2009, BY MAIN ARTICLES OF ECONOMIC CLASSIFICATION ........................................................ 34 FISCAL RISKS OF MTEF 2007-2009 ........................................................................... 36 Sources of Risks ......................................................................................................... 36 Possible Outcomes and Adjustment Trends ................................................................ 37 1 2007–2009 MEDIUM–TERM PUBLIC EXPENDITURE FRAMEWORK Compensation Opportunities ..................................................................................... 37 PART B. STRATEGY OF EXPENDITURE POLICY ............... 38 CHAPTER 5. EXPENDITURE PRIORITIES OF STATE BUDGETS 2007- 2009 ..................................................................................................... 39 CHAPTER 6. PUBLIC ADMINISTRATION SYSTEM .............................. 41 6.1 SITUATIONAL OVERVIEW ................................................................................. 41 6.2 OBJECTIVES, PRIORITIES, AND EXPENDITURE DRIVERS OVER MTEF PERIOD ........................................................................................................................ 43 6.2.1 Objectives ......................................................................................................... 43 6.2.2 Priorities .......................................................................................................... 43 6.2.3 Expenditure drivers ........................................................................................... 43 6.3 EXISTING EXPENDITURE COMMITMENTS...................................................... 44 CHAPTER 7. EDUCATION AND SCIENCE ............................................ 47 7.1 EDUCATION .......................................................................................................... 47 7.1.1 SITUATIONAL OVERVIEW AND MAIN PROBLEMS ..................................... 47 7.1.2 OBJECTIVES, PRIORITIES, AND EXPENDITURE DRIVERS OVER MTEF PERIOD ........................................................................................................................ 53 Objectives .................................................................................................................. 53 Priorities ................................................................................................................... 58 Expenditure Drivers .................................................................................................. 60 7.1.3 EXPENDITURE COMMITMENTS OVER THE MTEF PERIOD ........................ 62 Elementary, Basic, and Secondary General Education .............................................. 64 Special General Education ........................................................................................ 66 Extracurricular Training ........................................................................................... 67 Initial Vocational (Technical) Education ................................................................... 67 Secondary Vocational Education ............................................................................... 67 Higher and Post-Graduate Vocational Education ...................................................... 68 Additional Education ................................................................................................. 68 7.2 SCIENCE ................................................................................................................ 72 7.2.1 SITUATIONAL OVERVIEW AND MAIN PROBLEMS ..................................... 72 7.2.2 OBJECTIVES, PRIORITIES, AND EXPENDITURE DRIVERS OVER MTEF PERIOD ........................................................................................................................ 73 Objectives .................................................................................................................. 73 Priorities ................................................................................................................... 73 Expenditure Drivers .................................................................................................. 74 7.2.3 SUMMARIZED FINANCIAL NEEDS FOR 2007-2009 ....................................... 74 CHAPTER 8. HEALTH CARE ............................................................... 78 8.1 SITUATIONAL OVERVIEW AND MAIN PROBLEMS IN HEALTH CARE SECTOR ....................................................................................................................... 78 8.2 OBJECTIVES, PRIORITIES, AND EXPENDITURE DRIVERS OVER MTEF PERIOD ........................................................................................................................ 82 8.2.1 Objectives ......................................................................................................... 82 8.2.2 Priorities .......................................................................................................... 82 8.2.3 Expenditure Drivers .......................................................................................... 84 8.3 EXPENDITURE COMMITMENTS OVER MTEF PERIOD ................................... 84 2 2007–2009 MEDIUM–TERM PUBLIC EXPENDITURE FRAMEWORK CHAPTER 9. SOCIAL INSURANCE AND SOCIAL SECURITY ............... 93 9.1 SITUATIONAL OVERVIEW ................................................................................. 93 9.2 OBJECTIVES, PRIORITIES, AND EXPENDITURE DRIVERS OVER MTEF PERIOD ...................................................................................................................... 105 9.2.1 Objectives ....................................................................................................... 105 9.2.2 Priorities .......................................................................................................
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