International Monetary Fund (IMF)

The IMF was established in 1946 as a cooperative inter-governmental monetary and financial institution in the aftermath of severe disruptions in international trade and payments due to WWII and the Great Depression. Its major purpose is to facilitate the balanced growth of international trade, promote exchange rate stability, assist in the maintenance of a multilateral payments system, and to provide financial resources to assist its members in correcting payments imbalances without resorting to trade and payments restrictions. In the pursuit of these objectives the IMF assesses countries’ macroeconomic developments and policies through regular annual consultation discussions. It also provides financial resources to member countries facing balance of payments difficulties. These resources are provided in support of the government’s economic and financial program aimed at restoring macroeconomic stability and alleviating structural rigidities.

IMF IN THE KYRGYZ RESPUBLIC

Since the break-up of the Soviet Union, the IMF has actively supported the ongoing transition to a market economy in all of the former Soviet Union (FSU) countries. The Kyrgyz Republic joined the IMF in 1992, and has since that time has received financial support under a number of different facilities. Assistance in the initial years was provided under the Systemic Transformation Facility (STF) to counter strong inflationary pressures, deterioration in the balance of payments, and the collapse of output. However, since July 1994 the Kyrgyz Republic has been implementing medium-term adjustment programs. The government’s efforts have been supported first, under the enhanced structural adjustment facility (ESAF), and more recently, under the poverty reduction and growth facility (PRGF).

Addressing the sharp increase in the incidence of poverty in recent years is one of the most important objectives of the government. The IMF supports the government’s efforts in this area, and has been an active partner in helping the government prepare its National Strategy for Poverty Reduction. In the period ahead, the IMF will continue to work closely with the authorities to help them implement their poverty reduction strategy. In this regard, the key areas in which the IMF will be cooperating with the government are in the development of policies that will ensure continued macroeconomic stability, lower the burden of external debt, and lead to a strengthening of the banking system.

Technical assistance is a key aspect of the IMF’s support of the government’s reform agenda. In the initial years after independence, long-term technical advisors made an important contribution to improving the quality of statistics, the tax system, and central banking. Their efforts were supplemented by a number of short-term technical assistance missions from headquarters in Washington. In recent years, the Fund’s technical assistance has been mostly directed to strengthening the banking system and improving the debt monitoring capabilities of the country. Thus, Fund technical assistance has complemented the focus of the economic programs agreed between the government and the Fund.

The Fund also actively supports capacity building in the Kyrgyz Republic through training courses for government officials organized either in Washington D.C. and Vienna, as well as in regional training courses. These courses are aimed at exposing participants to the best practice techniques in the areas of macroeconomic analysis, fiscal and financial analysis, and the compilation of statistics.

The IMF has maintained a presence in the Kyrgyz Republic since August 1992, at which time its Resident Representative office, located in the National Bank, was established. The role of the office is to foster good working relations between the Kyrgyz authorities and the IMF, to monitor and analyze economic and political developments in the Kyrgyz Republic, assist the authorities in implementing macroeconomic and structural reform measures consistent with IMF-supported programs, and to support the implementation of IMF technical assistance. The Resident Representative office also plays a key role in the Fund’s support of the government’s poverty reduction efforts. The Fund believes that all stakeholders must be heard from in formulating the poverty alleviation strategy. Thus, an important responsibility of the Resident Representative office is to maintain close contacts with civil society and seek to build broad support for sound macroeconomic policies and structural reform measures. The Resident Representative office is also engaged in maintaining close contacts with multilateral institutions and bilateral donors to facilitate coordination of policy advice and technical assistance.

For more information you can visit www.imf.org

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