News Brief: IMF Concludes First Review of Tajikistan's Third Annual PRGF Program

April 12, 2001

The Executive Board of the International Monetary Fund (IMF) today concluded the first review for Tajikistan under the third annual arrangement of the Poverty Reduction and Growth Facility (PRGF). Following today's review, Tajikistan will be able to draw an amount equivalent to SDR 6.0 million (about US$8 million) from the program.

Tajikistan's three-year program, originally supported under ESAF, was first approved on June 24, 1998 (see Press Release No. 98/25), in an amount equivalent to SDR 96 million (about US$122 million), which was increased in December 1998 to an amount equivalent to SDR 100.3 million (about US$127 million), of which an amount equivalent to SDR 66.28 million (about US$84 million) has been disbursed.

In commenting on the Executive Board's discussion, Eduardo Aninat, Deputy Managing Director, said:

"Strong GDP growth was recorded in 2000, but inflation spiked during the latter part of the year. While significant policy slippages had caused the Fund-supported program to go off track, the authorities were able to effect the necessary corrective measures to bring the program back on track. Looking ahead, emphasis will need to be placed on achieving greater efficiency and equity of tax administration to strengthen fiscal institutions, and revenue collections. In addition, expenditure restraint will have to continue to avoid Tajikistan from accumulating further arrears. In this connection, a fully operational treasury to strengthen expenditure control, and to promote accountability, would be important.

"Progress has been achieved with structural reforms, but effective and extensive structural reforms in the areas of agriculture, the general business environment, and governance will be crucial to the success of the stabilization and growth efforts moving forward.

"Tajikistan's external debt problems and the uncertain prospects for achieving debt sustainability in the near term remain substantial. To attract international support in tackling the external debt problem, Tajikistan should rely on consistent implementation of an ambitious stabilization and structural reform program combined with fiscal consolidation, the use of privatization proceeds to reduce debt, and renegotiation of non-concessional bilateral loans.

"The completion of the Interim Poverty Reduction Strategy Paper (I-PRSP) and the progress to date on the full PRSP are welcome. The authorities are encouraged to ensure that the proposals in the PRSP are realistic and consistent with the medium-term fiscal framework, as well as with efforts to achieve a sustainable external debt burden," Mr. Aninat said.


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