Quasi-Fiscal Deficits and Energy Conditionality in Selected CIS Countries

By Tapio Saavalainen, Joy Mylène ten Berge

February 1, 2006

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Tapio Saavalainen, and Joy Mylène ten Berge. Quasi-Fiscal Deficits and Energy Conditionality in Selected CIS Countries, (USA: International Monetary Fund, 2006) accessed November 21, 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

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

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/043
Stock No:

WPIEA2006043
ISBN:

9781451863031
ISSN:

1018-5941

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