Presentation of Mr. Ch. Imashov, Minister of Finance

327 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
327
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • - Previous year = 100
  • Revenues total
    Expenditures total
    Deficit / proficit
  • Presentation of Mr. Ch. Imashov, Minister of Finance

    1. 1. Financing economic recovery and ensuring fiscal sustainability in the Kyrgyz Republic Ch. Imashev, Minister of Finance of the Kyrgyz Republic 1
    2. 2. Presentation outline I. Current situation II. Tasks related to economic recovery and ensuring fiscal sustainability 2
    3. 3. I. Current situation 3
    4. 4. Consequences of this year’s events • Civil conflict in the southern regions: • Thousands of casualties • Tens of thousands left homeless • Hundreds of thousands of refugees, and internally displaced • Natural disasters affect parts of Osh, Jalal-Abad regions • Withdrawal from Kyrgyzstan’s largest private bank bring losses to Social Fund, and others • Trade constraints create serious losses for: • Farmers • Textile and trading companies • Falling GDP, loss of development progress 4
    5. 5. Economic projections for 2010 GDP growth -5.4% Inflation (December 2010 on December 2009) 11% Budget revenues USD 1.14 billion Budget expenditures USD 1.76 billion Budget deficit USD 619 million 5
    6. 6. GDP: actual and forecasts for 2010 6
    7. 7. Budget in the first half of 2010 • National budget is in critical state, due to: • Drastic increase in expenditures after conflict • Falling revenues • Past quasi-fiscal arrears Budget deficit for 2010: • Will exceed USD 619 million (13.5 % of GDP) • USD 345 million unsecured—financing gap 7
    8. 8. Fiscal trends, 2003-2010 (cash flow basis) Revenues Expenditures Deficit 8
    9. 9. Tasks expected in 2011 • Economic reconstruction will have started • Completion expected by end-2012 • Budget revenues to grow, but by less than social commitments (time frame is too short) • 2011 budget deficit could exceed USD 433 million (8.6% of GDP) 9
    10. 10. Why timely donors’ assistance is crucial: • If financing for this deficit (USD 433 million) is inadequate (will not be received), budget expenditures will be dramatically reduced on: – Public investment programme (energy infrastructure, roads, bridges, schools, hospitals, etc.): USD 211 million – Operational expenses (maintenance, procurement of goods and services, utilities, etc.): USD 222 million • The state would be able to pay only salaries – This would substantially restrict the country’s future development 10
    11. 11. Public debt scenarios 2010 2011 2012 Optimistic scenario loan 30/70 grant 58.1% 57.8% 56.4% Intermediate scenario loan 50/50 grant 61.0% 63.8% 62.3% Pessimistic scenario loan 70/30 grant 70.3% 78.1% 71.8% 11 Public debt as share of GDP. Sources: Kyrgyz authorities,
    12. 12. Emergency measures already adopted • 2010 state budget spending already reduced: • 3.4% in nominal terms, almost 10% in real terms • Most discretionary expenditures have been cut • International commitments, entitlements not touched • USD 27 million in additional budget revenues found • Emergency measures reflect needs for long-term fiscal sustainability 12
    13. 13. Nevertheless… • The scope of damage and consequences of tragic events is enormous • Domestic resources are limited • Economic recovery, reconstruction, and ensuring fiscal sustainability—only possible with support from our development partners 13
    14. 14. II. Economic recovery, reconstruction, and fiscal sustainability tasks 14
    15. 15. 1. Challenges to fiscal sustainability • Current situation: • Budget revenues are falling, expenditures are growing • 2010 deficit expected to be USD 350 million higher than forecast at the start of the year • Within two years we have to pay USD 145 million of principal and interest on external debt 15
    16. 16. 2. Ensuring energy security Total amount required Of which : USD 170 million Procurement of coal, gas and fuel oil USD 50 million Repair and reconstruction of equipment and electricity transmission lines USD 70 million Repair of heating stations in Bishkek and Osh USD 50 million 16
    17. 17. 3. Ensuring food security USD 50 million needed USD 35 million to create state reserve USD 15 million for the mechanization of agriculture to improve sector’s productivity 17
    18. 18. 4. Support to the most vulnerable social groups-USD 50mln • Social support to internally displaced persons will require USD 20 million • Social support to persons living in difficult climatic conditions will additionally require USD 30 million 18
    19. 19. 5. Ensuring public order and security Total Of which : USD 50 million Salary increases USD 17 million Uniforms and equipment USD 25 million Procurement of technical facilities USD 8 million 19
    20. 20. 6. Infrastructure construction, reconstruction Total : of which : USD 230 million Repair of public and commercial buildings and objects USD 61 million Construction of ring road in Osh and intra-urban highways in Osh and Jalal- Abad USD 120 million Modernization of Manas, Osh airports, improvement of runway in Osh airport USD 20 million 20
    21. 21. 7. Support for economic growth • Confidence building and stabilization of commercial banking system (AUB) will require USD 76 million • Creation and capitalization of the Development Bank will require USD 200 million • Small-scale strategic investment projects • Access clean development mechanism (CDM) funding, other sources of carbon finance • Small hydro, solar, wind power • Energy efficiency 21
    22. 22. 8. Capitalization of economy for “catch-up growth” State budget External assistance National economy Agricultural Bank State Savings Bank $100 million $100 million Transition economy has high potential to grow 22
    23. 23. 9. Reconstruction of Osh and Jalal-Abad regions – 285 mln Humanitarian aid USD 80 million Housing construction USD 100 million Restoration of engineering infrastructure USD 30 million Procurement and installation of temporary mobile shelters USD 20 million Procurement of medical equipment, medicines and special machinery USD 10 million Support for damaged businesses USD 45 million 23
    24. 24. 10. Recovery from natural disasters in Osh and Jalal-Abad regions • The repair of infrastructure and housing damaged by natural disasters in Osh and Jalal- Abad regions requires USD 30 million 24
    25. 25. III. Overall financing needs: USD 1.24 billion, Except Kambar-Ata and Kemin – Datka projects 25
    26. 26. Current budget Development Humanitarian Elections 8.7 Fuel procurement 50 Food, seed purchases 35 Lost budget revenues 62 Repair of electricity transmission lines 70 Agricultural equipment purchases 15 Social protection 30 Heating plant repairs 50 Procurement of mobile shelters 20 Public order and security 12 Road construction, repair 120 Humitarian assistance 80 Reconstruction of public buildings 21 Airport modernization (Osh, Manas) 20 Support for internally displaced persons 20 Response to natural disasters 30 Creation of Development Bank 200 Cover losses of Pension Fund, and others 76 Infrastructure reconstruction 40 Financing of Southern Directorate 100 Reconstruction of privately owned buildings 40 Procurement of equipment 10 Capitalization of economy 100 TOTAL 350 TOTAL 690 TOTAL Aggregate table of financial needs— USD 1.24 billion Note: All figures are in million USD 200
    27. 27. To finance only urgent measures in 2010 and some of the measures planned for 2011-2012, the Government of the Kyrgyz Republic needs external financial support in the amount of USD 1.24 billion 27
    28. 28. Types of financial assistance expected Kyrgyz Republic Humanitarian assistance Grants and concessional budget financing Wide access to credit for business Debt restructuring, debt swaps
    29. 29. Ensuring of effectiveness of assistance • Transparency in distribution • Accountability to the public • Participatory of local community • Monitoring of implementation (audit, surveillance, financing mechanisms of control) • Evaluation of results
    30. 30. Our medium term Goals • to move to the trajectory of sustainable economic growth, • to improve the standard of living of our citizens • to build faire state
    31. 31. Thank you for your attention! 31

    ×