The study reviews the macroeconomic
developments in the Kyrgyz Republic following the collapse
of the Soviet Union, when adjustments were required since
output fell by fifty percent between 1991-95, resulting in
adverse fiscal consequences, which triggered losses in tax
revenues, along with the implicit end of energy subsidies.
Part I examines the fiscal, and debt sustainability,
proposing a three-fold strategy : efforts for an urgent
renewal, are needed to consolidate macroeconomic stability,
fundamentally, a significant fiscal adjustment is required;
debt relief should be considered, given the large burden,
and the need to preserve social expenditures; and, decisive
structural reforms are necessary to underpin fiscal
adjustment, and increase the efficiency of resource uses.
Part II examine these structural issues, particularly the
tax system, and the role of the state in infrastructure, and
utilities, focusing on accelerating the transformation of
public infrastructure, and utility companies, and, improve
taxation. The report analyzes this transformation,
emphasizing a transparent, and targeted system in the
provision of basic services to the poor, through reform
policies, and the inclusion of the private sector, critical
to reflect cost-effectiveness, and adapt to the requirements
of a market economy.