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Fourth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility and Request for Modification of Quantitative Performance Criteria—Informational Annex

Author(s):
International Monetary Fund
Published Date:
June 2007
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Annex I. Kyrgyz Republic—Relations with the Fund

(As of March 31, 2007)

I. Membership Status: Joined: 05/08/1992; Article VIII

II. General Resources AccountSDR MillionPercent of
Quota
Quota88.80100.00
Fund Holdings of Currency88.80100.00
Reserve Position0.000.01
III. SDR DepartmentSDR MillionPercent of
Allocation
Holdings17.87N/A
IV. Outstanding Purchases and LoansSDR MillionPercent of
Quota
PRGF Arrangements103.92117.03

V. Latest Financial Arrangements

ApprovalExpirationAmountAmount
ApprovedDrawn
TypeDateDate(SDR Million)(SDR Million)
PRGF03/15/200503/14/20088.885.07
PRGF12/06/200103/14/200573.4073.40
PRGF06/26/199807/25/200173.3844.69

VI. Projected Payments to Fund

(SDR million; based on existing use of resources and present holdings of SDRs)

Forthcoming
20072008200920102011
Principal11.6514.8014.7316.2415.31
Charges/Interest0.500.420.340.270.19
Total12.1515.2215.0716.5015.50

VII. Status of HIPC and MDRI Assistance

The Executive Board considered the preliminary HIPC document on October 13, 2006. However, following a cabinet change earlier this year, the authorities have decided not to avail themselves of HIPC and MDRI assistance.

VIII. Safeguards Assessments

Under the Fund’s safeguards assessment policy, the National Bank of the Kyrgyz Republic (NBKR) is subject to an assessment with respect to the PRGF arrangement, which was approved on March 15, 2005. An updated safeguards assessment of the NBKR was completed on October 14, 2005. The assessment found that the NBKR’s safeguards framework has been strengthened since the previous assessment completed in 2002. However, a number of areas were identified where further steps would solidify the progress achieved, which include improving oversight of the audit processes and the internal control systems by establishing an audit committee, strengthening the legal framework for NBKR’s autonomy, and enhancing the NBKR’s internal audit function.

IX. Exchange Rate Arrangements

The currency of the Kyrgyz Republic has been the som (100 tyiyn =1 som) since May 15, 1993. The Kyrgyz Republic’s exchange regime is classified as a managed float with no preannounced path for the exchange rate. The NBKR publishes daily the exchange rate of the som in terms of the U.S. dollar, which is determined in the interbank foreign exchange market. The Kyrgyz Republic maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions, except for exchange restrictions maintained for security reasons relating to the restriction of financial transactions and the freeze of accounts of certain individuals or organizations associated with terrorism pursuant to (i) relevant UN Security Council resolutions and (ii) the list of current terrorist organizations designated by the U.S. Secretary of State. The authorities are in the process of notifying these measures to the Fund pursuant to Executive Board decision No. 144-(52/51).

X. Article IV Consultations

The Kyrgyz Republic is on the 24-month consultation cycle. The last Article IV consultation discussions were held in August 2006 and were completed by the Executive Board in November 2006.

XI. FSAP Participation and ROSC Assessment

An FSAP update mission in October 2006 reviewed progress since the 2002 assessment, and the Board is scheduled to consider the Financial System Stability Assessment (FSSA) along with the 4th PRGF review. A fiscal ROSC mission was held in March 2001 and the ROSC Fiscal Transparency Module was published on March 13, 2002. A data ROSC mission was held in November 2002 and the ROSC Data Module was published on November 10, 2003. A new fiscal ROSC assessment mission is tentatively scheduled for early May 2007.

XII. Resident Representative

The seventh resident representative of the Fund in the Kyrgyz Republic, Mr. McHugh, took up his post in Bishkek in late September 2006.

Annex II. Kyrgyz Republic—Relations with the World Bank Group

(As of April 12, 2007)

1. The last CAS covering FY03-06 has been completed in July 1, 2006. Currently the WB Country team jointly with four development partners (ADB, DFID, SWISS, and UN Agencies) is on final stage of developing new joint Country Support Strategy (JCSS) covering the period of FY 07-10. The proposed JCSS is based on the government’s Country Development Strategy (equivalent of PRSP) which sought to capitalize on major reforms to date while maintaining a reform and growth course that will reduce poverty and enhance prospects for debt sustainability. The JCSS 2007-2010 Board discussion is planned for June 19, 2007.

2. Until the new JCSS is approved, the World Bank Group’s operational objective for the next four months is to continue supporting the ongoing government’s efforts to improve governance, energy sector performance, the business environment, the banking sector, public expenditure management, intergovernmental finance, the pension system, social protection, health, water and sanitation, and agriculture, and to enhance the portfolio performance. It will continue assisting the government with economic sector work and capacity building.

3. International Development Association (IDA). Since the Kyrgyz Republic joined the World Bank in September 1992, it has received commitments of $776.3 million for 38 IDA-funded projects, out of which $607.1 million have already been disbursed. Out of 19 operations totaling $481 million completed so far, seven structural adjustment credits provided quick disbursing support for the government’s economic reform programs in privatization, enterprise restructuring, agricultural policy, financial sector, public sector resource management, pension reform and energy reform. Twelve investment operations supported reform and rehabilitation of the telecommunications sector, social safety nets, health, rural finance, private enterprises and livestock development.

4. The active Bank portfolio in the Kyrgyz Republic comprises 19 operations with total commitments of $254.3 million, of which $138.2 million (54 percent) remains to be disbursed. Four new projects: Avian Influenza Control, Water Management Improvement, Second Village Investment Project, and Reducing Technical Barriers for Entrepreneurship and Trade have been approved by Board and became effective in FY07. In addition to the country portfolio, the Kyrgyz Republic also benefits from the regional HIV/AIDS project.

5. There are currently five projects under preparation: (i) The repeater On-Farm Irrigation (second phase of On-Farm Irrigation project), (ii) Strengthening the National Statistical System, (iii) Bishkek-Osh Infrastructure, (iv) Agricultural Investment and Know How (ASSP- 2), and (v) Tien Shan Biodiversity Project (second phase of regional Biodiversity project). The second On-Farm Irrigation project is planned to go the Board this fiscal year, meanwhile other projects undergoing various stages of preparation process

6. International Finance Corporation (IFC). The IFC strategy in Kyrgyz Republic is focused on institution and capacity building through investment and technical assistance to promote private sector development, especially small and medium-size enterprises (SMEs), and support the transformation into a market-based economy. IFC’s investments grew steadily to $57 million, since 1996. The committed IFC portfolio as of April 1, 2007 stands at $15 million, with $14 million disbursed (77% in financial markets, 9% in general manufacturing and 14% in agribusiness).

7. The largest investment in the existing portfolio was the Kumtor Gold Mine, with further investments in a packaging plant “Altyn-Ajydar”, pasta plant “Akun”, four financial sector projects Demirbank, KICB, FINCA and Bai-Tushum. Under the framework of MSEF joint project with EBRD, IFC has provided credit lines to local banks as AKB Kyrgyzstan, Ineximbank and Kazcommertsbank.

8. IFC has completed 14 technical assistance projects in the areas of: (i) institutional and capacity building in the financial sectors including leasing, microfinance, (ii) creating favorable business environment for SMEs, (iii) improvement of investment climate, and (iv) developing capacity building for tourism. In 2005, IFC launched two technical assistance projects to improve legal, regulatory and tax framework for housing finance and leasing. It started the second stage of IFC Central Asian Primary Market Development Project in 2007, and will continue the second phase of IFC Central Asian Regional Leasing project. It will also start a regional technical assistance project to improve corporate governance in enterprises of Central Asia including Kyrgyzstan.

Multilateral Investment Guarantee Agency (MIGA). MIGA has supported private sector development in the Kyrgyz Republic by extending guarantees to foreign direct investments in four projects in the manufacturing, services, and mining sectors. MIGA’s current portfolio in the Kyrgyz Republic consists of two projects, financed by Austrian and Italian investors, in support of the country’s services sector. The combined gross exposure from these projects is US$14.8 million. Two claims have been filed relating to projects guaranteed by MIGA. One of them is the Kyrgyz Airlines project in which the Government of the Kyrgyz Republic cancelled the airline’s license to operate, alleging that the investor breached material obligations under the license agreement. The case is in arbitration in London. The second dispute relates to the Manas Management Company project which handles the catering and cargo operations of the Manas International Airport in Bishkek. MIGA is seeking to settle the dispute through mediation, and is in close contact with both the Kyrgyz authorities and the investors for this purpose.. Recently, a draft settlement agreement was discussed in detail by the two parties at a mediation facilitated by the Agency. At present, the Government is reviewing some terms relating to the settlement and the investors are awaiting outcome. Due to the recent changes in the Government the process is taking much longer than anticipated. The total amount of foreign direct investment facilitated by MIGA guarantees is over $360 million. At present, there are no projects involving the Kyrgyz Republic in MIGA’s FY07 pipeline.

World Bank contacts:

Roland Clarke (rclarke@worldbank.org), Sr. Country Economist. Phone No. (202) 458-8156 Dinara Djoldosheva (ddjoldosheva@worldbank.org), Sr. Country Officer. Phone No. (996312)610650

Annex III. Kyrgyz Republic—Relations with the Asian Development Bank (ADB)

(As of March 31, 2007)

1. The Kyrgyz Republic became a member of ADB in 1994 and began receiving assistance in the same year. The country has received 26 loans and 3 grants for a total amount of $634 million. Seven out of the 26 loans are program loans totaling $199.5 million provided to support policy reforms to facilitate the transition to a market economy. The remaining 19 are project loans and three project grants totaling $434.5 million provided to support various investment activities. At present, eight loans with approved loan amount of $183.3 million are ongoing and one loan in amount of $15 million is awaiting effectiveness. These loans have an un-disbursed balance of $106 million as of March 31, 2007. All these loans were provided on concessional terms from the Bank’s special fund resources—Asian Development Fund (ADF). In addition, ADB had provided 65 technical assistance (TA) projects amounting to $38 million as of today. Of these, 18 are project preparatory TAs amounting to $11.7 million and the remaining 47 TAs for $26.2 million are advisory TAs for capacity building, policy advice, institutional strengthening and training. The Kyrgyz Republic has also received six JFPR Grants amounting to $6 million.

2. The transport and communications sectors accounted for the largest share of ADB assistance, followed by the multisector, and law, economics and public policy. The current Country Strategy and Program Update (CSPU) for 2006–2008 (approved in November 2005), confirms ADB priorities of (i) investing in agriculture, which is key to pro-poor growth; (ii) reforming the financial sector to stimulate domestic savings and investment; (iii) improving trade and road linkages with regional markets; and (iv) selectively supporting human development, particularly basic education and early childhood development.

3. ADB’s annual lending began with $40 million in 1994 and reached the peak level of $89.2 million by 1997. Thereafter, lending levels fell slightly and hovered between $65 million and $75 million through 2001. ADB’s average annual lending level during 2002 and 2003 was $15.25 million. This was much lower than the lending levels in the past, largely due to the government’s policy of restrained borrowings as part of its debt management strategy which envisaged a reduction in the size of the largely externally funded PIP from about 6 percent of GDP in 2001 to about 3.1 percent of GDP by 2006. The level of assistance for the block of two year 2005–06 was $60.8 million. The allocation for the block of two years 2007–08 is determined at $55 million. This program will be reviewed, based on the availability of ADF funds and the rules governing grants, to make it consistent with the Government’s debt reduction strategy and the limits on the PIP.

4. The performance of ADB’s portfolio is generally satisfactory, although one loan is rated at risk. The scarcity of budgetary resources, and ceilings on the externally funded PIP constituted the biggest risks to the country portfolio. ADB and the World Bank have thus sought the removal of quarterly disbursement ceilings, which delay project implementation. In August 2005, IMF agreed to be more flexible in determining annual targets for the PIP, which is expected to improve portfolio performance.

5. The allocation of ADF resources to the country is based on the government’s attainment of performance targets (triggers) in five areas: (a) making steady progress in macroeconomic management and structural reforms in the financial sector, and customs administration; (b) making progress in prioritizing on-going PIP projects; (c) adhering to the national debt reduction strategy; (d) finalizing the Country Development Strategy 2007-2010 (formerly called the NPRS); and (e) implementing a package of legal and judicial reforms for improving the investment climate for the private sector. Since 2005, up to 50 percent of ADF assistance to the country come in the form of grants.

6. The Kyrgyz Republic is one of the pilot countries selected for harmonization and alignment of donor procedures at the Rome Conference on harmonization held in February 2002. ADB coordinates its activities closely with the EBRD, IMF, IsDB, World Bank, the UN System, and bilateral donors at all levels of development cooperation. There have been significant strides forward in aid coordination since the last CG meeting held in Bishkek in November 2002, when both the Government and the donors agreed to focus on improving significantly coordination efforts. Since then efforts are being made to share sectoral and operational information and better coordinate lending and technical assistance activities. Since 2003, ADB and World Bank, which together account for over 75 percent of the PIP, conducts a joint portfolio review.

7. Kyrgyz Resident Mission participated actively in the harmonization working group and contributed to the development of the National Action Plan for Harmonization which was approved by the Government in February 2005. The areas identified for harmonization in the immediate future are: (a) procedures for procurement of goods and services; (b) financial management and monitoring of projects; and (c) project implementation units. World Bank and ADB procurement documentation has been harmonized in these areas.

8. Starting from September 2005, ADB together with other major bilateral and multilateral agencies (DFID, SDC/seco, UN, and WB) providing assistance to the Kyrgyz Republic is developing a Joint Country Support Strategy (JCSS) for the period 2007–10 to improve donor harmonization and alignment, and ensure more consolidated donor assistance to the country. The priority areas for JCSS are identified as its main pillars: (i) promoting private sector and economic growth, (ii) good governance and reducing corruption, and (iii) improving health, education and other social services.

Annex IV. Kyrgyz Republic—Relations with the European Bank for Reconstruction and Development (EBRD)

(As of March 31, 2007)

1. The EBRD facilitates the transition to a market-based economy through its direct support for private sector investment and key infrastructure, and targeted technical assistance. Under the Early Transition Countries’ Initiative (ETCI) introduced in 2005, the Bank is able to more innovative respond to the Kyrgyz economic requirements. Therefore, the Bank is considering smaller, “more difficult” projects. The ETCI also foresees technical cooperation (TC) to support investment development.

2. According to the Strategy for the Kyrgyz Republic approved in November 2004, the Bank’s priorities are to: (a) foster the private sector; (b) strengthen the financial sector; (c) provide support for essential infrastructure; and (d) strengthen the policy dialogue to improve the investment climate and support reform efforts. A new Strategy should be approved in the first 3-4 months of 2007; although the main activities are expected to remain the key focus.

3. As of April 2007, the Bank had approved 42 projects (including restructurings) bring around EUR 800 million of investment. The Bank has provided more then EUR 300 million of this amount.

4. During the past three years, the Bank expanded its activities in the financial sector to include:

  • The Kyrgyz Micro and Small Enterprises Financing Facility (MSEFF). As of 28 February 2007, USD 184,995,454 (cumulative) had been disbursed in 76,915 loans to small and medium-size enterprises. Up to date MSEFF has helped to create or sustain 113 953 jobs. The Bank works with seven participating commercial banks and also with non banking institutions - Bai-Tushum, Aiyl Bank and FINCA.
  • In 2006, the Bank signed a USD 1 million Guarantee in favour of Bai-Tushum to a local bank in Kyrgyz Republic which will provide local currency funds for on-lending to MSEs and solidarity groups.
  • Equity investments in Ineximbank, Demir Bank, and KICB.
  • Expansion of Trade Facilitation Program (TFP). Five banks are participants in the TFP.
  • In 2004, the Bank signed a co-financing facility of USD 4 million to KICB. This new ETC product is provided to meet financing needs of emerging medium-sized private companies. The first sub loan agreement has been signed on December 26, 2005 for EUR 450,000.

Other major investments by the Bank during its operations in KR include:

  • USD 20 million loan and USD 10 million sub debt, since converted into USD 17 m equity participation in Centerra Gold (the Bank’s senior loan have been fully repaid).
  • Loan to Hyatt-Regency Hotel, USD 6.3 million in 1997.
  • Loan to Interglass plant, USD 6 million in 2004.
  • Loan to Limatex (cotton-processing plant in Djalal-Abad), USD 1 million in 2005.
  • Loan to Raduga Invest (resort on Issyk-Kul lake), USD 6 million in 2005.
  • Loan to Karven Four Seasons (resort on Issyk-Kul lake), USD 3.8 million in 2006.

Although the Bank is currently unable to provide loans with sovereign guarantee the Bank continues to monitor public sector projects:

  • Modernization of the telecommunications network (USD 7.9 million).
  • Two projects to upgrade electricity transmission networks in Issyk-Kul and Talas regions (USD 63 million combined).

The Bank is working with the Government to consider non-sovereign financing of infrastructure—roads, telecoms and other infrastructure.

5. The Bank also implements grant-funded TC to support its investment portfolio, including the financial sector (including MSFF consultants among others), natural resources/environment, agribusiness and infrastructure. Recent TCs include:

  • In telecoms, to advise on key reforms, including inter-capacity access arrangements;
  • Training for judges in commercial law;
  • Investor protection reform initiative;
  • Roll out of the Business Advisory Service and Turn Around Management programs, providing consulting services to viable businesses.

6. Finally, the Bank maintains an active dialogue with the government. For example, the Bank was instrumental in founding the International Business Council, which is devoted to working with the government on improving the investment climate. The Bank is planning to help fund a new Investors Council under the President to address business concerns. The Bank also has provided guidance on legal reforms, such as the newly revised Law on Pledge.

Annex V. Kyrgyz Republic—Technical Assistance Provided by the Fund

February 2003-December 2006

Dept.Subject/Identified NeedTimingCounterpart
FADImproving the Effectiveness of the Large Taxpayer UnitFebruary 24–March 7, 2003Ministry of finance
Treasury Management Information SystemJuly 21–29, 2003Ministry of finance
VAT on agricultureNovember 3–11, 2003Ministry of finance
Priorities for Tax Administration ReformJuly 22–August 5, 2004Ministry of finance
Supporting Tax Administration Reform and installing new Expert AdvisorJanuary 16–28, 2006Prime minister’s office
MFDReview of the Capital Adequacy and Dividend Arrangements for the National Bank of the Kyrgyz RepublicAugust 18–28, 2003National Bank of the Kyrgyz Republic
Review of Debt Restructuring Operation and 2003 Financial ReportingOctober 28-November 10, 2003National Bank of the Kyrgyz Republic
Monetary Operations, Banking System Development, and Central Bank AutonomySeptember 13–23,2004National Bank of the Kyrgyz Republic
Review of NBKR Debt Restructuring Arrangements, Options for Deepening Financial Markets and Amendments to the NBKR LawDecember 7–18, 2004National Bank of the Kyrgyz Republic
Payments SystemJanuary 25–February 7, 2005, April 12–25, 2005, and October 18–27, 2005, February 20–March 5, 2006National Bank of the Kyrgyz Republic
Bank Supervision and RegulationFebruary 23–March 8, 2005, May 18–28, 2005, July 17–28, 2005, October 02–13, 2005, January 15–26, 2006, February 12–23, 2006,

March 20–30, 2006
National Bank of the Kyrgyz Republic
FSAP updateSeptember 4–15, 2005National Bank of the Kyrgyz Republic
AML/CFTApril 19–25, 2006National Bank of the Kyrgyz Republic
Government Securities/Money MarketsAugust 25–30, 2006National Bank of the Kyrgyz Republic
LEGUpdate of the AML/CFT Legislation (jointly with MFD)February 5–11, 2004National Bank of the Kyrgyz Republic
Review of Bank LegislationMarch 1–4, 2004

April 26–May 6, 2004
National Bank of the Kyrgyz Republic
Review of Tax LegislationJuly 27–August 5, 2004Ministry of finance
Assisting in drafting Tax CodeDecember 4–10, 2005Prime minister’s office
STASDDS SubscriptionJanuary 28–February 5, 2004National Statistical Committee
Balance of Payments StatisticsMarch 15–29, 2004National Bank of the Kyrgyz Republic
Monetary and Financial StatisticsApril 27–May 11, 2004National Bank of the Kyrgyz Republic
List of Resident Advisors
MFDBanking Supervision/Restructuring

Advisor
Mr. SvartsmanJanuary 2004–

January 2005
MFDPublic Debt Policy and ManagementMr. AzarbayejaniDecember 2002–December 2004
MCMDebt Management and Development of

Government Securities Management
Mr. RieckeAugust 2006–

August 2009

Annex VI. Kyrgyz Republic—Statistical Issues

General framework

1. Data provision is adequate for surveillance. The three institutions responsible for collecting, compiling and disseminating macroeconomic statistics—the National Statistics Committee (NSC), the ministry of economy and finance (MOF), and the National Bank of Kyrgyz Republic (NBKR)—have legal and institutional environments that support statistical quality, and their respective staff are well versed in current methodologies. Unlike staff resources, however, computer and financial resources are generally not commensurate with current needs and therefore constrain statistical development, especially for the NSC.

2. The NSC maintains a comprehensive and regularly updated web site with data that largely incorporate international methodological recommendations and adequate coverage and timeliness (www.stat.kg). In February 2004, following improvements in compilation and dissemination of the reserves template and external debt data, the Kyrgyz Republic subscribed to the SDDS.

3. A data ROSC mission in November 2002 assessed the data dissemination practices against the GDDS and undertook an in-depth assessment of the quality of national accounts, prices, government finance, monetary, and balance of payments statistics. The mission concluded that the quality of the macroeconomic statistics had improved significantly in the last few years. The authorities had established a good track record of implementing recommendations of past technical assistance and had demonstrated commitment to pursue plans and programs to further improve their statistics. The mission recommended that a program of regular intersectoral consistency checks be introduced to reduce the sometimes significant, unexplained discrepancies between the government finance, monetary, and balance of payments datasets. The authorities’ response to the data ROSC (posted on the IMF website (www.imf.org/external/np/rosc) includes an update on the status of implementation of the ROSC mission’s recommendations.

National accounts

4. In general, dissemination of national accounts statistics is timely. Technical assistance has been received from the IMF, EUROSTAT, OECD, the World Bank, and bilateral donors. While significant progress has been made in improving the national accounts estimation process, problems persist regarding the quality of the source data, due mainly to excessively tight collection deadlines associated with the release schedule. Efforts are needed to improve the quality of the source data for quarterly GDP estimates. Moreover, subannual national accounts are still prepared on a cumulative basis rather than by discrete time periods. Difficulties also remain in properly estimating the degree of underreporting, especially in the private sector. To improve the coverage and reliability of primary data, work has been undertaken to introduce sampling procedures. Improved sampling procedures have been adopted for household surveys and new report forms are being introduced for the enterprise survey. The NSC has established a division of sample surveys, which would assist in improving the sampling techniques.

Prices, wages, and employment

5. The concepts and definitions used in the consumer price index (CPI), which has been published since January 1995, are broadly consistent with international standards. The price index covers all urban resident households of all sizes and income levels, but excludes rural households, which comprise the majority of the population. The ROSC mission recommended that the authorities expand the coverage of the CPI to include rural households.

6. The producer price index (PPI), which has been published since October 1996, is compiled broadly in accordance with international standards, although its coverage needs to be improved. The coverage of the PPI was broadened in May 1997 and is expected to be further expanded in the coming years.

7. Progress has been made in computing unit value indices for imports and exports. Work continues with regard to computation of these indices using a standard index presentation and the development of an export price index. However, problems in customs administration have led to incomplete coverage of trade and the lack of an appropriate valuation system. Moreover, the data processed by customs have suffered due to the use of an outdated computer software system.

8. Problems exist in the compilation of the average wage, especially with respect to the valuation of payments in kind and the coverage of the private sector. Monthly and annual data are not comparable because of different coverage and classifications. These problems extend to employment data as well. The coverage of unemployment includes an estimate of unregistered unemployed.

Fiscal accounts

9. The scope of central government statistics falls short of international standards because it excludes data for the Social Fund and the externally financed Public Investment Program (these data are published separately). Other limitations involve the exclusion of financial transactions with domestic banks and the discrepancies between the deficit and financing data. While revenue and expenditure data generally accord with the GFSM 1986, there are misclassifications in both categories (for example, some nontax revenues are classified as taxes, and certain expenditure items are misclassified in the budget and treasury accounts). Monthly GFS data for IFS publication have been reported up to October 2006. Annual GFS data however, were not reported for the GFS Yearbook., The latest data for the GFS Yearbook were for 2001, covering budgetary central government and local government operations.

10. The provision of data on public external debt service has improved. Data on actual debt service, guaranteed debt service, outstanding debt and revised debt projections, are provided on a monthly basis. The quality (including timeliness) of external debt data is adequate. The External Debt Division of the MOF is now solely responsible for monitoring external debt, and this division has benefited from on-site training provided by a Swiss-financed long-term consultant and the computerization of its database.

Monetary sector

11. The 2002 data ROSC mission found that: (a) the residency criterion was not uniformly applied, as the currency denomination was used to classify some transactions with foreign and domestic units; (b) deposits with banks in liquidation were included in broad money; and (c) source data did not provide sufficient information for a more detailed sectoral breakdown (e.g., subsectorization of nonbank institutions as recommended in the Monetary and Financial Statistics Manual (MFSM)).

12. An STA mission on monetary and financial statistics visited Bishkek during April 27–May 11, 2004 to (a) follow up on the implementation of the ROSC recommendations; (b) expand the institutional coverage of the broad money survey; and (c) assist the NBKR in implementing the methodology in the MFSM. It found that the NBKR had made substantial progress in implementing ROSC recommendations pertaining to monetary statistics. To address the outstanding issues, the mission further recommended that the NBKR (a) improve the basic source data to allow for proper classification of the transactions with foreign and domestic units; (b) fully implement the MFSM’s methodology concerning accrual accounting; (c) exclude deposits with banks in liquidation from monetary aggregates and classify them as restricted deposits; and (d) set up a working group to follow up on consistency between monetary and balance of payments statistics. The mission also recommended expanding the current broad money survey to include the accounts of credit unions and microfinance companies.

13. Monthly monetary data for IFS publication are reported on a regular and timely basis. Since December 2002, monetary data have been reported electronically to STA. In 2005, the NBKR began reporting its monetary data to STA using Standardized Report Forms, which are designed in accordance with the MFSM’s methodology.

External sector

14. Data on the balance of payments and international investment position are compiled and disseminated on a quarterly basis. The 2002 data ROSC mission noted that the compilation of balance of payments statistics broadly follows the Balance of Payments Manual, Fifth Edition (BPM5). The NBKR has good arrangements with other agencies to ensure timely data flow. However, because of legal issues related to secrecy provisions, high value transactions cannot be verified with respondents, limiting the ability to cross-check the accuracy of data. Although the data collection program has been expanded in the recent past, coverage deficiencies remain with respect to trade, services, and foreign direct investment. The NBKR enterprise surveys lack an up-to-date register and have inadequate coverage of enterprises, particularly those in free economic zones. There is also a need to improve compilation procedures for achieving temporal consistency of data, and investigating and reconciling discrepancies.

15. The NSC conducts a quarterly sample survey for the estimation of shuttle trade, and uses customs records on the number of people crossing the border with CIS countries to derive the sample. The State Customs Inspectorate has introduced the customs receipt order for shuttle traders that simplifies and improves recording of imports of goods by shuttle traders. However, the high value limits applied for free import of goods by individuals have fostered a large shuttle trade, which has complicated estimation of this activity.

16. An STA mission on balance of payments statistics was in Bishkek during March1 5–29, 2004 to address compilation issues, and to assess training needs. The mission noted that while progress has been made in several areas, further improvements were needed in the international transactions reporting system; data sampling methods; and data validation and coverage, particularly on trade, services, private sector external debt, and foreign direct investment. The mission developed a questionnaire for collecting data on foreign direct investments and provided guidelines on the collection of data on external debt.

Kyrgyz Republic: Table of Common Indicators Required for Surveillance

(As of April 10,2007)

Date of latest observationDate receivedFrequency of Data6Frequency of Reporting6Frequency of publication6Memo Items:
Data Quality—Methodological soundness7Data Quality—Accuracy and reliability8
Exchange Rates3/30/074/02/07DDW
International Reserve Assets and Reserve Liabilities of the Monetary Authorities12/28/073/30/07MMM
Reserve/Base Money3/30/074/02/07DDMLO, O, LO, LOLO, L O LO, LO
Broad Money2/28/073/22/07MMM
Central Bank Balance Sheet3/30/074/02/07DDM
Consolidated Balance Sheet of the Banking System2/28/073/22/07MMM
Interest Rates23/23/074/02/07WWW
Consumer Price Index2/28/073/09/07MMMO, LO, O, OLO, LO, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 - General Government42/28/073/22/07MMYO, LNO, LO, OLO, O, O, LO, LO
Revenue, Expenditure, Balance and Composition of Financing3- Central Government2/28/073/22/07MMM
Stocks of Central Government and Central Government-Guaranteed Debt59/30/0611/11/06MMY
External Current Account Balance12/31/061/28/07QQQLO, LO, LO, LOO, LO, LO, LO, LO
Exports and Imports of Goods and Services12/31/061/26/07QQQ
GDP/GNP2/28/073/09/07MMMO, O, LO, OLO, LO, LO, O, O
Gross External Debt9/30/0612/30/06MMY

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign and domestic financing only.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC (published on November 2003, and based on the findings of the mission that took place during November 2002) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign and domestic financing only.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC (published on November 2003, and based on the findings of the mission that took place during November 2002) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.

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