Energy Sector Quasi-Fiscal Activities in the Countries of the Former Soviet Union

By Aleh Tsyvinski, Martin Petri, Günther Taube

March 1, 2002

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Aleh Tsyvinski, Martin Petri, and Günther Taube. Energy Sector Quasi-Fiscal Activities in the Countries of the Former Soviet Union, (USA: International Monetary Fund, 2002) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A decade into the transition, many of the successor states of the former Soviet Union (FSU) continue to use energy sector quasi-fiscal activities (QFAs), especially low energy prices and the toleration of payment arrears, to provide large implicit and untargeted subsidies. These activities disguise the overall size of the government, cause overconsumption and waste, and contribute to macroeconomic imbalances. This paper analyses such activities in FSU countries, with particular emphasis on two case studies (Azerbaijan and Ukraine). The paper's policy conclusions point to the need to increase energy prices, combined with a strengthening of safety nets to protect the poor, better enforcement of payment discipline, and more efforts to achieve fiscal transparency.

Subject: Arrears, Central banks, Commodities, Economic sectors, Electricity, Energy prices, Energy sector, External debt, Prices, Quasi-fiscal operations

Keywords: Arrears, Collection ratio, Electricity, Electricity company Azerenergy, Energy enterprise, Energy prices, Energy QFAs, Energy sector, Energy sector company, Enterprise restructuring, Extraction company, Fiscal policy, Former Soviet Union, Gas distribution enterprise, Implicit subsidies, Implicit taxation, Payment arrears, Quasi-fiscal activities, Quasi-fiscal operations, Transition countries, Western Europe, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/060
Stock No:

WPIEA0602002
ISBN:

9781451848069
ISSN:

1018-5941

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