Ministry of Finance, WB, IFC to manage Uzbekistan’s public debt
BAKU, Azerbaijan, Jan. 17
By Fakhri Vakilov - Trend:
Uzbekistan’s Ministry of Finance, with the assistance of the World Bank (WB) and the International Finance Corporation (IFC), has developed a medium-term strategy for public debt management, which will be approved annually by the government, taking into account changes in internal macroeconomic and external factors, Trend reports citing the Uzbek media.
In accordance with the requirements established by the International Monetary Fund, to ensure macroeconomic stability in Uzbekistan, the maximum amount of government debt in relation to gross domestic product should not exceed 50 percent.
When attracting external borrowing, legal entities that have 50 percent or more of the state share in the authorized capital are required to notify the Ministry of Finance about this starting from January 1, 2020.
Principles will be developed, until December 1, 2020, for the selection, review and monitoring of the effectiveness of projects financed by external borrowing.
The Guarantee Fund will be created under the Treasury of the Ministry of Finance on February 1, 2020. For the formation of the funds of the fund, payments will be paid in the amount of not less than 0.5 percent of the size of the balance of the borrowing amount.
The document identifies the priority tasks of effective public debt management:
- Guaranteed provision of timely and complete public debt servicing;
- maintaining the size of public debt at a safe level, its diversification and reducing the risks of increasing costs for its maintenance;
- projects financed from the state budget, included in development programs, should be developed based on socio-economic importance and aimed at developing social infrastructure, as well as self-sustaining;
- legal entities and banks, in the authorized capital of which the state share is 50 percent or more, should be privatized in stages.
The Law "On the State Budget for 2020" sets the volume of new agreements concluded by the government or guaranteed by the state budget in the amount of $4 billion. The amount of budgetary funds repaying external debt should not exceed $1.5 billion.
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