IMF expands antipoverty work in the former Soviet Union

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After the breakup of the Soviet Union just over a decade ago, the seven lowest-income members of the Commonwealth of Independent States (CIS)-Armenia, Azerbaijan, Georgia, the Kyrgyz Republic,Moldova, Tajikistan, and Uzbekistan-were confronted with the dual challenge of building new states and market economies.

Most of these countries have made significant progress toward these goals during the past decade. But the complexity of the transition challenges has caused living standards to fall sharply and, in some cases, has made it very difficult to implement market-oriented reforms effectively.

The IMF-together with the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, bilateral donors, and neighboring countries- recently launched the CIS-7 Initiative intended specifically to help reduce poverty and promote economic growth in these seven countries.With nearly 20 million people living in extreme poverty within their borders, these countries clearly still have some way to go in overcoming the economic and social disruptions that have occurred in tandem with the transition from centrally planned to market economies.

While each country obviously faces its own specific adjustment problems, the IMF and the other international financial institutions sponsoring the CIS-7 Initiative identified some common development challenges. In the area of political reforms, government capacity must be strengthened to resist corruption and deliver public services more effectively and accountably. All of these countries need more adequate health and education services for their people and must take action to fight the devastating human toll taken by diseases such as HIV/AIDS, tuberculosis, and malaria. Improved macroeconomic stability is key for...