Discussion with the authorities were held during March 2-13 by a staff team comprising Messrs. Schiller (head) and Onoprishvili (FAD Expert).
Latest estimates suggest that quasi-fiscal activities are around 10 percent of GDP.
The number of government ministries has been reduced from 17 to 12. The number of public agencies and state committees has been reduced from 42 to 29.
Privatization proceeds are split as follows: local governments: 15 percent; the Fund for Small- and Medium-Size Enterprise Development: 3 percent; the Privatization Fund: 7 percent; and central government: 75 percent.
Although some policies of the former Soviet Union still prevail, the role of government in the economy has been considerably reduced since independence in 1991, largely through mass privatization and price deregulation. Practically all small-scale and the bulk of all medium-scale enterprises have been privatized. In February 2001, the government submitted to parliament a state property privatization concept paper for the years 2001-03. This concept paper envisages a substantial withdrawal of government from economic activity and outlines the objectives and the methods of future privatization. It envisages the privatization of Kyrgyz Telecom, Kyrgyz Energo, Kyrgyz Gas and the Kyrgyz Airline.
The government fully owns or has majority stakes in 4 large monopolies: Kyrgyz Telecom, Kyrgyz Energo, Kyrgyz Gas, and the Kyrgyz Airlines.
Attempts have recently been made by some parliamentarians to reduce the independence of the NBKR.
The restructuring of the debt accrued by the government to NBKR has been governed by the Law on The Restructuring of the Kyrgyz Government Debt to the Kyrgyz Republic National Bank adopted on June 8, 1998.
A joint statement of the NBKR and the MOF at the beginning of the year outlines the broad thrust of monetary policy during the year.
The NBKR is expected to pay interest (of half of LIBOR) on the government’s foreign exchange deposits.
It is also planned to establish the Kyrgyz Industrial Bank, which will be partially owned by the government.
Tax forgiveness of joint stock companies with government participation is not uncommon.
See the recent UNDP study, Corruption in Kyrgyzstan, Bishkek, 2000.
The Parliament consist of two chambers: The Assembly of People’s Representatives and the Legislative Assembly.
Justice is administered by the Constitutional Court, the Supreme Court, the Higher Arbitration Court, and a system of local courts.
Allocations for the reserve funds cannot exceed one percent of total budgetary allocations.
Over 1000 amendments have been made since 1996.
Refunding VAT was stopped in September 2000 because the refund mechanism that had just come into effect in May had apparently resulted in large-scale frauds. Some amendments were introduced in the Tax Code in November 2000 to render the refund procedure less prone to fraud. VAT refunding has resumed in 2001.
A stocktaking exercise of all ongoing investment projects has recently been undertaken in order to prioritize these projects and developing regulations to improve the prioritization of new projects.
Such offsets have been eliminated at the central government level but still exist at the local government level. In 2001, such offsets have been estimated at 2 percent of revenues.
Only about one third of university revenues, for example, are accounted for by budgetary financing. The bulk of the financing is provided through tuition fees.
For example, the customs administration.
The Chamber of Accounts was established in 1996 (Law of the Chamber of Accounts). There was also a Government Commission on Financial Control, which was merged with the Chamber of Accounts in 2000.
The Law on Statistics (1994).
The MOF is considering to establish a MOF web site. This web site should be used for this purpose.
Including loans to enterprises, student loans, housing loans.
The booklet “Kyrgyzstan 2001: Investment in the New Millennium,” published by the State Committee of the Kyrgyz Republic on Foreign Investments and Economic Development in December 2000, is a step in the right direction.