IMF Continues Dialogue with Parliamentarians

IMF and WTO meet with parliamentarians from Central Asia and the Caucasus

Legislators exchange views on economic issues facing their region

Fiscal management and energy subsidies among topics discussed at workshop

The IMF’s Middle East and Central Asia Department and Joint Vienna Institute (JVI), in cooperation with the World Trade Organization (WTO), held a two-day workshop aimed at exposing parliamentarians to the role of the IMF and WTO in the region and explaining the economic policies recommended by the IMF. Held in Vienna, Austria on July 27–28, it provided a forum for parliamentarians to exchange views on their experiences in economic policymaking, including emerging challenges and issues. The JVI is supported by six international organizations and the Austrian Authorities (Oesterreichische Nationalbank and the Ministry of Finance) and provides policy-oriented training to public sector officials from countries in Central, Eastern and Southeastern Europe, the Caucasus and Central Asia.

Members of Parliament (MPs) from 7 countries—Armenia, Georgia, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan attended the two-day workshop. Most of the MPs currently sit on budget/finance committees.

The workshop sessions included presentations by IMF and JVI staff on the role of the IMF and the region’s economic outlook. WTO staff delivered presentations on various trade-related topics, including the trade and development and the WTO’s trade facilitation agreement.

Fiscal Management

One of the topics generating a lot of discussion at the workshop was fiscal management and how fiscal policy can balance the goals of macroeconomic stability and growth; income redistribution and provision of social safety nets; and the provision of other public goods, like healthcare and education. Procyclical spending, where government spending tends to increase during periods of economic growth, means governments often forego setting up “stabilization funds” or paying down existing debt. Excessive government debt can also hinder governments’ ability to help stabilize economies during periods of slow economic growth. Public debt across the region ranges from 8 percent of GDP in Uzbekistan to 53 percent of GDP in the Kyrgyz Republic.

Efficient fiscal management should attempt to avoid procyclical spending. A more prudent approach when the economy is flourishing would be to set money aside or pay down debt, so that governments are better able to...