Quasi-fiscal deficits of public utility companies are common in all member countries of the Commonwealth of Independent States (CIS). They constitute a significant impediment to efficient resource allocation and endanger macroeconomic stability. This paper presents a simple framework for measuring and monitoring such deficits and highlights their macroeconomic relevance. It reviews the progress under IMF conditionality aimed at correcting these imbalances during 1993-2003. The paper suggests that the extensive conditionality under the IMF-supported programs has yielded only limited progress in reducing the energy sector's financial imbalances. In conclusion, different policy options are discussed in light of the lessons learned.
This paper presents an Ex Post Assessment of Long-Term Program Engagement for Armenia. The quality of program implementation was uneven at the early stages of IMF engagement, but it has improved in recent years. Implementation of some key structural reforms suffered delays, reflecting in part capacity constraints and at times insufficient ownership. Collaboration between the IMF and the World Bank has been good. The Bank has played a valuable role in facilitating the streamlining of conditionality under the Poverty Reduction and Growth Facility arrangement.
This paper examines Armenia’s 2004 Article IV Consultation, Sixth Review Under the Poverty Reduction and Growth Facility, and Request for Waiver of Performance Criteria. Armenia’s strong economic performance has been continuing in 2004. In January–September, the year-over-year rate of GDP growth was 10 percent, fueled by increases in agricultural production, housing construction, and services. Since mid-2003, banking sector performance has improved, and there has been a gradual return of confidence toward banks following the resolution of eight intervened banks.
Mr. Jonathan C Dunn, Mr. Andreas Billmeier, and Mr. Bert van Selm
Starting in 2005, nontax revenue in Georgia is expected to rise significantly, in the form of transit fees for oil transported through the Baku-Tbilisi-Ceyhan Oil Pipeline. Transit fees for gas transported through the South Caucasus Pipeline are expected to start in 2007. This paper discusses (1) how much additional revenue can be expected, (2) prospects for monetizing gas that could be received as in-kind transit fees, in the light of pervasive nonpayment in the domestic gas sector, (3) the impact of these inflows on external competitiveness, (4) how to put in place appropriate reporting on these additional revenues, and (5) whether these inflows justify the creation of a special natural resource fund.
This paper examines Armenia’s Fifth Review Under the Poverty Reduction and Growth Facility (PRGF) and Request for Extension of the Arrangement. Performance under the PRGF-supported program since mid-2003 has been satisfactory: the authorities met all quantitative targets and implemented most of the envisaged structural measures. Tax revenue collection was somewhat disappointing in 2003, although it has improved in early 2004. Future growth in Armenia will increasingly depend on the ability of the banking system to mobilize and allocate domestic savings.
This paper evaluates the Republic of Armenia’s Third Review Under the Poverty Reduction and Growth Facility (PRGF) and a Request for Waiver of Performance Criterion. The PRGF-supported program remains on track. All but one of the December 2002 quantitative performance criteria were met, and all structural measures envisaged for implementation up until February 2003 have been carried out or implemented as a prior action for the third review. The targets on tax revenue, stock of domestic arrears, fiscal deficit, and net international reserves were met with comfortable margins.