The role of fiscal transparency in raising the efficiency of public expenditure
Belarus faces the challenge to maintain fiscal stability under increasingly difficult circumstances. Economic growth is expected to enter a period of stagnation, the ability to maintain a balanced budget is subject to substantial risks resulting from contingent liabilities, and the country’s most important source of external financing, Russia, is facing economic difficulties which might in turn affect its capability and/or willingness to provide additional funding. To respond to these challenges the Government of Belarus has embarked on a process of PFM reform to improve efficiency and transparency of the PFM system. PFM reform shall address three aspects: One aspect is the modernisation of the existing system of budgetary planning. As a result, the budget process will provide for greater use of a programme-based budgeting, the transition to medium-term budgeting, and performance evaluation of public spending. The second dimension includes efforts to create a better information system of financial reporting of budget-sponsored organisations, which will be integrated into the overall information system of the Ministry of Finance. The third objective of the PFM reform relates to introduction of a finance management information system (FMIS) which will form the technical and technological backbone of public finance management. The World Bank is supporting PFM reform in Belarus through technical assistance and potential lending operations.