SIR DPL3

closed

This program document describes the third and final phase of three Social Sectors Institutional Reform Development Policy Loans (SIR DPL 3) Program in Bulgaria. The DPL series support the adoption and implementation of structural reform policies to: (i) increase employment and lay the foundations for long-term productivity growth by providing incentives for job creation and labor force participation as well as by improving quality of education; and (ii) promote fiscal sustainability through efficiency gains in the social sectors. Bulgaria's economic growth is forecast to decline substantially in 2009 and 2010 compared to 2008, and the Government is focusing on a dual strategy of: (i) maintaining a prudent fiscal stance to ensure the continued cushion of a sizable fiscal surplus; and (ii) continued structural reforms to increase competitiveness and raise productivity so as to emerge stronger from the economic downturn. The SIR DPL 3 contributes to address both short-term and medium-term aspects of the expected economic slowdown by supporting: (i) short-term measures to address the potential adverse employment effect from the economic downturn; (ii) the government's continued reforms to improve, in the short- and medium-term, the efficiency of resource use in health and education; and (iii) measures to raise employment and productivity growth over the medium-term through structural reforms to improve employment activation policies, raise quality of primary and secondary education and to reduce the regulatory burden for the enterprise sector.