decline by 1 percent to 5 percent of GDP across the remittance-dependent countries in the CCA. The international community has responded quickly by increasing its support to CCA energy importers ( Table 3 ). Multilateral and bilateral donors have stepped up budget grants to CCA governments. The IMF has entered into new or augmented programs with all four CCA energy importers—these programs accommodate an easing of fiscal policy and are focused on protecting key social and development expenditure. Thus, assistance from the international community has substituted for
Bank; Dabla-Norris, E., J. Brumby, A. Kyobe, Z. Mills, and C. Papageorgiou (2011); and IMF staff estimates. 1/ Or latest available. Figure 6.4. Changes in Govenance (Percentile rank) Sources: Worldwide Governance Indicators (government effectiveness, regulatory quality, rule of law and control of corruption); and IMF staff calculations. Sustainable and Accountable Delivery of Core Government Functions Achieving the status of dynamic emerging market economies will require CCA governments to focus on core government functions , such as
inflation objective, and allowing greater ER flexibility call for: Presentation and acceptance of the case for modernization of monetary frameworks: – Stressing that ER rigidity may helpful to stabilize high inflation but not to adjust to shocks nor to address dollarization issues. – Emphasizing that if CCA governments wish to develop and enhance their private sectors and nontraditional exports—a cornerstone of strategies to confront the current shocks and diversify and strengthen growth—they must become accustomed to uncertainties and risk. Building an “in
debt, available at CCA in the government’s in the debt agency (CCA). government’s debt agency (CCA). A nnex 2: I da A nd G overnment S upplemental F inancing F or G overnance R eform Transparency and Governance Capacity Building Project (PRCTG) supplemental financing (IDA funding: US$15 Million, Government funding US$ 5.6 Million) Rationale The Government of the Republic of Congo has committed itself to the implementation of a comprehensive Reform Plan, linked to the
distress could lead to costly public interventions, potentially affecting fiscal sustainability. Indeed, several CCA governments stepped in to prevent bank failures in recent years, and the resulting fiscal costs were very high—exceeding 20 percent of GDP in a few cases. This departmental paper assesses the key financial sector risks in CCA countries and proposes policies to prevent costly bank failures, including based on past experience in the region. It is organized as follows: the next chapter presents key macro-financial risks in the CCA region. Chapter 3
large deterioration in the terms of trade is negatively affecting domestic demand, and the fiscal stimulus envisaged will only partly cushion the extent of the downturn, most notably in Kazakhstan, where the impact of the global financial crisis is particularly severe. Figure 19 . CCA: Government Fiscal Balance (In percent of GDP) Sources: Data provided by country authorities; and IMF staff estimates and projections. Hydrocarbon importers are benefiting from lower import prices, but this is not necessarily translating into better economic outcomes. The
countries, demand pressures also appear to be contributing ( Box 4.2 ). In the absence of effective social safety nets, CCA governments are taking (or considering) administrative measures to counter price increases and protect the poor. These include actions to limit rises in the price of key staple foods and fuels (Uzbekistan); reduced customs duties on wheat flour (Kyrgyz Republic); exemptions in value-added tax rates (Azerbaijan, Tajikistan); or activation of strategic reserves, including for grain. In Kazakhstan, memoranda were signed with producers and processors to