Quasi-Fiscal Deficits and Energy Conditionality in Selected CIS Countries
February 1, 2006
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Summary
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.
Subject: Banking, Commodities, Economic sectors, Electricity, Energy sector, External debt, Privatization, Tariffs, Taxes
Keywords: aluminum smelter, Central Asia, CIS country, conditionality, country authorities, Electricity, Energy, energy enterprise, Energy sector, enterprise restructuring, Europe, General government cash deficit, governance, government decree, nonviable enterprise, Privatization, quasi-fiscal deficit, state capture, state debt, Tariffs, trading company, transition, WP
Pages:
37
Volume:
2006
DOI:
Issue:
043
Series:
Working Paper No. 2006/043
Stock No:
WPIEA2006043
ISBN:
9781451863031
ISSN:
1018-5941
