2001年-世界发展银行全球_Kyrgyz_Republic___Fiscal_Sustainability_Study_122页_7mb

Kyrgyz Republic Fiscal Sustainability Study Summary

Core Content

This document presents a fiscal sustainability study of the Kyrgyz Republic, focusing on the country's macroeconomic developments, fiscal and debt sustainability, and the need for structural reforms. The study was conducted by the World Bank in December 2001 and highlights the challenges faced by Kyrgyzstan in the wake of the collapse of the Former Soviet Union (FSU) and subsequent economic shocks.

Main Findings

Macro-Economic Developments (1991-1998)

• The Kyrgyz Republic experienced a severe economic contraction following the collapse of the FSU, with output falling by 50% between 1991 and 1995.
• The fiscal consequences were disastrous, with a loss of tax revenues equivalent to 7.5% of GDP.
• By 1996, macroeconomic stability was restored, and the economy began to grow again, with GDP growth reaching 7% in 1996, 9.9% in 1997, and expected to continue at a similar pace in early 1998.

Fiscal Sustainability

• The fiscal deficit in 1998 was over 11% of GDP, far exceeding the required deficit of 4.6% under realistic macroeconomic targets.
• The deficit needs to be reduced by at least 5.5% of GDP to achieve sustainable fiscal policies.
• Fiscal adjustment is necessary to meet inflation targets and maintain stable debt-output ratios.

Debt Sustainability

• The Kyrgyz Republic has a high external debt burden, reaching US$1.5 billion by end-1998, or 96% of GDP.
• The debt-output ratio has quadrupled in the last five years, largely due to a series of external current account imbalances averaging 17% of GDP over the last four years.
• The large real exchange rate depreciation in 1998 and 1999 led to a significant capital loss on external debt and worsened the fiscal adjustment burden.
• The debt service burden is expected to increase substantially between 2000 and 2005, as grace periods for concessional loans end and non-concessional debt must be repaid.

Key Structural Issues

• The government has made significant fiscal adjustments, including sharp reductions in social expenditures and budgetary transfers to enterprises and agriculture.
• Despite these efforts, the fiscal deficit remains unsustainable, driven by:
  • Low revenue effort, especially from groups that benefited most from reforms.
  • High but inefficient infrastructure expenditures.
  • A growing debt burden that cannot be sustained in relation to fiscal revenues and exports.

Main Recommendations

1. Consolidate Macroeconomic Stability

• A significant fiscal adjustment is required to reduce the deficit to sustainable levels.
• The government must prioritize maintaining macroeconomic stability, especially in the context of high external debt-output ratios.
• The fiscal adjustment must be supported by a more effective and efficient use of resources, with a focus on reducing unnecessary expenditures and increasing tax revenues.

2. Consider Debt Relief

• Given the large debt burden and the need to preserve social expenditures, debt relief may be necessary.
• Debt relief can take various forms, including outright debt reduction or new financing on concessional terms.
• The burden of adjustment should be shared among all creditors, not just the International Financial Institutions (IFIs).
• The Kyrgyz Republic's debt structure, with a relatively small share of bilateral and commercial debt, makes traditional debt relief approaches challenging.

3. Implement Structural Reforms

• Structural reforms are essential to increase the efficiency of resource use and ensure that the most vulnerable groups are adequately protected.
• These reforms should focus on:
  • Rationalizing expenditures to ensure sustainability and maintain key services.
  • Improving the tax system to bring more groups into the tax net.
  • Enhancing the efficiency of public investment and reducing the tendency to over-adjust investment expenditure at the expense of current consumption.
  • Implementing anti-poverty programs with a focus on targeted social spending to reduce poverty while maintaining fiscal discipline.

Key Information

• Fiscal Adjustment: The actual deficit in 1998 was over 11% of GDP, requiring a reduction of at least 5.5% of GDP.
• Debt Burden: US$1.5 billion or 96% of GDP by end-1998, with a debt-output ratio that has quadrupled in five years.
• Exchange Rate and Inflation: The real exchange rate depreciated sharply in 1998, leading to increased inflation and a decline in export competitiveness.
• Growth Outlook: Even at a 6% annual growth rate, output will not return to 1991 levels until the middle of the next decade.
• Structural Reforms: Necessary to ensure that fiscal adjustment is both effective and sustainable, with a focus on efficiency, poverty reduction, and resource allocation.

Conclusion

The Kyrgyz Republic faces significant challenges in achieving fiscal sustainability due to its high external debt burden, low revenue effort, and inefficient public expenditures. A three-fold strategy is proposed: consolidating macroeconomic stability, considering debt relief, and implementing structural reforms to improve resource use and protect vulnerable groups. These measures are essential to ensure long-term economic growth and stability.