世界银行-改善吉尔吉斯斯坦共和国的财政风险管理，2022年9月（英）-35页_589kb

Key Objectives

The report evaluates the Kyrgyz Republic's current fiscal risk management practices, focusing on the 2021 Information on Fiscal Risks (IFR) document, and provides recommendations to enhance risk identification, analysis, and mitigation. It aims to support institutionalization of fiscal risk management to improve fiscal sustainability.

Key Findings

The Kyrgyz Republic's fiscal system faces high risks due to:

• Poor performance and debt in state-owned enterprises (SOEs), particularly in the energy sector, with large contingent liabilities.
• Macroeconomic vulnerabilities stemming from heavy reliance on remittances, gold exports, and external shocks, leading to revenue volatility and expenditure pressures.
• Public debt risks, including currency mismatch and limited mitigation strategies.
• Inefficiencies in lending and on-lending operations, with data fragmentation and lack of transparency.
• Weak institutional frameworks, inadequate data, and limited analytical capacity hindering effective risk management.

Recommendations

• Strengthen the legal framework for fiscal risk assessment, including a government decree to formalize processes and data exchange.
• Institutionalize the Fiscal Risk Working Group (FRWG) and assign clear roles to units like the MoF's Fiscal Risk Unit (FRU), SPMF, and NEHC for improved coordination.
• Enhance data collection, analysis, and reporting systems for SOEs, PPPs, and LGs.
• Improve and regularly update the IFR to include comprehensive risk assessments, prioritize major risks like energy sector contingent liabilities, and make it annexed to budget legislation.
• Conduct scenario analyses for macroeconomic risks, develop credit risk methodologies for SOEs and PPPs, and build staff capacity using tools like PFRAM.
• Increase transparency in on-lending and SOE reporting, and address public debt risks through strategic borrowing and risk mitigation measures.