EDB as ACF Manager Begins to Prepare Its Conclusion on Kyrgyzstan's Application for Financial Credit

Almaty, 27 February 2012. Experts from the Eurasian Development Bank (EDB), which is the manager of the EurAsEC Anti-Crisis Fund (ACF), visited Bishkek between 20 and 23 February 2012 to begin to prepare the Manager’s Conclusion on Kyrgyzstan’s application for a $106.7m financial credit from the ACF. The experts met with the Government and the National Bank of the Kyrgyz Republic, as well as with representatives of international organisations, to discuss the current macroeconomic and fiscal situation in the country, the main figures of its 2012 state budget, and the mid-term development plans.

«The economic situation is being stabilised. We see a steady recovery of economic activity and lower inflation and imbalance of foreign trade. Mid-term development plans and strategies have been developed. However, we believe that it is very important that a more clear mechanism should be developed to fulfil mid-term plans and ensure their coordination and integrity. The projected expenditures for 2012 and the medium term, which are based on the Government’s rather optimistic plan to increase budget revenues, are also of concern. In particular, when making these plans, the Government needs to take into account that the global economic situation can worsen and this should be backed by certain reserves to mitigate possible shocks. In the coming weeks, the Manager will continue discussion with the Government in order to finally determine the size of the credit and the list of reforms it will support,» Sergey Shatalov, Deputy Chairman of the EDB Executive Board, said.

The consideration of Kyrgyzstan’s first application for a financial credit from the ACF, which was received in November 2010, was postponed because the process of Kyrgyzstan joining the EDB was not completed. To date, Kyrgyzstan has complied with all ACF Council’s recommendations made on 4 June 2011 with respect to the provision of the requested financial credit, including its joining the EDB. The ACF Council met on 28 November 2011 and recommended the Kyrgyz Ministry of Finance to determine the current needs of the state budget and submit a renewed application for the financial credit from the Fund. The renewed application for $106.7m to finance social and other current budget expenditures within the 2012 budget was received by the ACF Manager on 25 January 2012.

Additional Information

The EurAsEC Anti-Crisis Fund (ACF) amounting to $8.513bn was formed on 9 June 2009 by the governments of six countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The objectives of the ACF are to assist the member countries in overcoming the consequences of global financial crisis, ensure their economic and financial stability, and foster integration processes in the region. The ACF member countries signed the Management Agreement with the Eurasian Development Bank giving the EDB the role of the ACF Manager..