Greening Public Budgets in Eastern Europe, Caucasus and Central Asia
Over the last two decades, the countries of Eastern Europe, Caucasus and Central Asia (EECCA) have undergone significant political and economic reforms. As part of this reform agenda, they have started modernising their public administrations and expenditure management practices, bringing them closer to international standards. However, the recent global financial and economic crisis revealed a multitude of remaining structural weaknesses in the public financial systems of these countries that badly affected their economic performance. While this crisis is a real challenge, it also provides an opportunity for the EECCA governments to speed up the implementation of public finance reforms (PFRs) in order to provide a healthier basis for further development.
This report aims to help EECCA environmental administrations to harness the potential benefits of on-going PFRs; particularly the shift to multi-year budgeting, stability of funding, and, ultimately, a more effective use of public money. More specifically, the extent to which the environmental sector is integrated into medium-term budgetary processes is analysed. On this basis, the opportunities for, and limits to, achieving financial sustainability of public environmental programmes are identified. The analysis is based on a regional survey of 10 EECCA countries that involved both ministries of environment and finance.
Foreword
Over the last two decades, the countries of Eastern Europe, Caucasus and Central Asia (EECCA) have undergone significant political and economic reforms that, for most, resulted in sustained economic growth. However, the recent global financial and economic crisis that began at the end of 2008 hit the region hard, and virtually all countries suffered a sharp contraction of their economies. Amongst other things, the crisis revealed a multitude of structural weaknesses in the public financial systems of the EECCA countries that badly affected their economic performance. While the crisis has seriously affected EECCA economies, it also provides an opportunity for the governments of these countries to speed up the implementation of public finance reforms, and, in this context, to exploit opportunities to green their budgets in order to provide a more environmentally sustainable basis for further development.