Brownbridge, MartinCanagarajah, Sudharshan2012-03-192012-03-192009-06-01https://hdl.handle.net/10986/4164The paper analyses how the global economic crisis will affect the economies of the low income Commonwealth of Independent States (CIS) and discusses the fiscal measures which can be taken to help mitigate the adverse impact of the crisis. It focuses on Tajikistan, the poorest member of the CIS but also highlights similarities with the economies of Armenia, the Kyrgyz Republic and Moldova. The main channels through which the global economic crisis will affect the low income CIS economies is through a sharp reduction in remittances from migrant workers in Russia and lower export earnings. The adjustment to this external shock will involve a reduction in imports, private consumption, domestic output and government revenue. Fiscal policy, constrained by very limited macroeconomic and fiscal space, faces acute challenges. Maintaining budget targets for fiscal deficits and domestic borrowing in the face of revenue shortfalls will lead to a tightening of the fiscal stance, exacerbating recessionary pressures and making it very difficult to protect priority social expenditures from cuts. To avoid these outcomes, external support from donors, preferably in the form of quick disbursing budget support, is required. If additional external budget support can be mobilized, the priorities for fiscal policy should be to protect spending on budgeted social sector programs and, if sufficient budget resources are available, to implement a program of labor intensive repair and maintenance of public infrastructure to provide employment for returning migrant workers. Tax cuts are unlikely to be an effective use of scarce budget resources, either to stimulate the economy or protect the incomes of the poor. Up scaling existing social assistance programs may be a feasible way to protect the poor in some low income CIS countries provided they are not as poorly targeted as in Tajikistan.CC BY 3.0 IGOACCESS TO EXTERNAL FINANCEADDITIONAL INCOMEADMINISTRATIVE CAPACITYADVISORY SERVICESAGGREGATE DEMANDBALANCE OF PAYMENTSBALANCE OF PAYMENTS CONSTRAINTBALANCE SHEETSBANK LENDINGBANKING SYSTEMBILLBORROWING REQUIREMENTBROAD MONEYBUFFERBUSINESS CYCLECAPACITY BUILDINGCAPACITY CONSTRAINTSCAPITAL ACCOUNTCAPITAL EXPENDITURECAPITAL FLOWSCAPITAL GOODSCAPITAL INVESTMENTSCENTRAL BANKCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMMERCIAL DEBTCOMMERCIAL FINANCECOMMUNITY ORGANIZATIONSCONSTRAINTS ON ACCESSCONSUMERCONSUMER DEMANDCONSUMER GOODSCONSUMERSCONSUMPTION SPENDINGCONTRIBUTIONSCREDIT GROWTHCREDITSCREDITWORTHINESSCRISIS MANAGEMENTCURRENT ACCOUNTCURRENT ACCOUNT BALANCECURRENT ACCOUNT BALANCESCURRENT ACCOUNT DEFICITCURRENT ACCOUNT DEFICITSCURRENT ACCOUNT TRANSACTIONCURRENT EXPENDITUREDEBT BURDENDEBT STOCKDEBT SUSTAINABILITYDEPOSITSDEPRECIATIONDEVALUATIONDEVELOPING COUNTRIESDISPOSABLE INCOMEDISPOSABLE INCOMESDOMESTIC BORROWINGDOMESTIC CURRENCYDOMESTIC DEBTDOMESTIC DEMANDDOMESTIC ECONOMYDOMESTIC FINANCIAL SYSTEMDONOR SUPPORTDUTCH DISEASEECONOMIC CRISISECONOMIC GROWTHECONOMIC MANAGEMENTEXCESS DEMANDEXCESS SUPPLYEXCHANGE RATEEXCHANGE RATE DEVALUATIONEXOGENOUS SHOCKSEXPANSIONARY FISCAL STANCEEXPENDITUREEXPENDITURESEXPORT EARNINGSEXPORTERSEXTERNAL BALANCEEXTERNAL CAPITALEXTERNAL DEBTEXTERNAL DEBTSEXTERNAL FINANCEEXTERNAL FINANCINGEXTERNAL POSITIONEXTERNAL SHOCKEXTERNAL SHOCKSEXTERNAL TERMS OF TRADEEXTREME POVERTYFAMILIESFINANCIAL CRISISFINANCIAL FRAGILITYFINANCIAL INSTITUTIONFINANCIAL SECTORFINANCIAL SYSTEMFISCAL BALANCEFISCAL BALANCESFISCAL CONSTRAINTSFISCAL DEFICITFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFISCAL POSITIONFISCAL POSITIONSFISCAL RESOURCESFISCAL SURPLUSESFISCAL SUSTAINABILITYFOREIGN CAPITALFOREIGN CURRENCYFOREIGN CURRENCY DEPOSITSFOREIGN EXCHANGEFOREIGN EXCHANGE EARNINGSFORM OF CREDITSGOVERNMENT DEBTGOVERNMENT EXPENDITUREGOVERNMENT EXPENDITURESGOVERNMENT REVENUEGOVERNMENT REVENUESGOVERNMENT SPENDINGGROWTH RATEHOUSEHOLDSHUMAN DEVELOPMENTIMPORTIMPORTSINCOME GROUPSINCOME TAXINFLATIONINSTITUTIONAL REFORMSINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL MARKETSINTERNATIONAL RESERVESINTERNATIONAL TRADEINVESTMENT DECISIONSLACK OF COMPETITIONLIQUIDITYLIVING STANDARDSLOANLOAN OBLIGATIONSLOW INCOMEMACROECONOMIC SHOCKSMACROECONOMIC STABILITYMARKET PRICESMIGRANT WORKERSMIGRATIONMONETARY FINANCINGMONETARY FUNDMONETARY POLICYMONEY SUPPLYNATIONAL INCOMEOIL PRICEOIL PRICESOPTIMAL ALLOCATIONPENSIONPENSION SYSTEMPOLICY RESPONSEPOLICY RESPONSESPOVERTY REDUCTIONPRICE FLEXIBILITYPRIMARY EDUCATIONPRIVATE CONSUMPTIONPRIVATE INVESTMENTPRIVATE SECTOR CREDITPUBLIC BORROWINGPUBLIC DEBTPUBLIC ENTERPRISESPUBLIC EXPENDITURESPUBLIC EXTERNAL DEBTPUBLIC FACILITIESPUBLIC GOODSPUBLIC POLICYPUBLIC SPENDINGPURCHASESPURCHASING POWERREAL CONSUMPTIONREAL EXCHANGE RATEREMITTANCEREMITTANCESRESERVERESERVE MONEYRESERVESREVENUE MOBILIZATIONRISK OF DEBTSAFETY NETSHORT TERM DEBTSHORTFALLSHORTFALLSSLOWDOWNSOCIAL ASSISTANCESOCIAL PROTECTIONSOCIAL SERVICESSTAKEHOLDERSSTOCKSSURPLUSESTAXTAX EXEMPTIONSTAX RATETAX RATESTEMPORARY EMPLOYMENTTOTAL DEPOSITSTRADE BALANCETRADE DEFICITTRADE SHOCKTRANSFER PAYMENTSTRANSITION COUNTRYTRANSITION ECONOMIESTRANSPORTUNCERTAINTYUNEMPLOYEDWAGEWORLD MARKETWorld Bank10.1596/1813-9450-4970