The International Monetary Authority stresses the necessity of improving public financial institutions in the countries of the Middle East and Central Asia

by **claud39** Mon Jan 06, 2020 7:40 pm

The International Monetary Authority stresses the necessity of improving public financial institutions in the countries of the Middle East and Central Asia

06/2020

The International Monetary Fund stressed the need to improve public financial institutions in the countries of the Middle East and Central Asia, as the countries of the Middle East and Central Asia entered into a conflict with issues of high deficits and debt, with total fiscal balances in the region turned from a surplus of about 10% of GDP in The year 2008 has consistently negative balances in recent years.

The Fund said that there are several factors that contributed to this risky outcome, including low growth, oil price shocks, and the escalation of spending needs, which includes countries that have experienced uprisings in the Arab region. However, the fiscal challenges facing a number of countries in the region also arose in light of the ineffective and ineffective public financial institutions.

The last issue of the Regional Economic Prospects report examines what the link is between these institutions and fiscal results. In this regard, Dr. Jihad Azour, Director of the Middle East and Central Asia Department, said:

When created and implemented efficiently, public financial institutions help to strengthen fiscal discipline, build resilience to shocks, reduce spending volatility, and achieve a significant improvement in fiscal health - all of which lead over time to reducing economic vulnerabilities in the countries concerned. There are several metrics to assess the effectiveness of public financial institutions, such as how much information is available to the public on budget and whether governments have mechanisms in place to set and implement medium-term budget goals.
In this context, there are some bright spots in the area.

For example, the oil importing countries in the MENA region, Afghanistan and Pakistan (MENAP), the Caucasus countries and Central Asia (CCA) have made remarkable progress in improving budget transparency in recent years, although their overall scores are still relatively low. However, due to a number of factors, countries in the two regions are not at a favorable level compared to their counterparts.

Here are some results:

The Fund showed that budget transparency in MENAP oil exporting countries is much lower than in other oil exporting countries. Indeed, Algeria, Iraq and Qatar did not register any improvement between 2012 and 2017, while other oil exporting countries - with the exception of Venezuela - achieved an average improvement of 5%. However, there are some encouraging cases:

The strengthening of public financial institutions would enable the oil-exporting countries of the MENAP region to protect their economies against the volatility of global oil prices, would assist oil-importing countries in their efforts to reduce levels of public debt, and would put the Caucasus and Central Asia countries in a better position to reduce exposure For future shocks.

To illustrate only one possible outcome: Estimates indicate that the rate of accumulation of public debt can fall below current levels by more than 4% of GDP in the medium term if countries adopt best practices regarding several key characteristics of effective public financial institutions.

Countries with low scores on the transparency scale should take measures to make budget processes open and provide more data on expectations and risks, he said. Tunisia and Uzbekistan, with technical assistance from the Fund, have made important strides along this path by implementing a system to assess fiscal transparency - an effort that could serve as a model for other countries considering reforms. Setting medium-term budget targets and strategies can strengthen fiscal discipline and help reduce the frequency of debt accumulation.

It also requires strengthening public financial management systems and procurement procedures. Kuwait provides an encouraging model in this regard with its new law aimed at encouraging competition and transparency in the field of procurement.

Its full implementation will lead to the development of modern approaches to evaluation of tenders and encourage increased participation by SMEs. It also requires strengthening public financial management systems and procurement procedures. Kuwait provides an encouraging model in this regard with its new law aimed at encouraging competition and transparency in the field of procurement.

Its full implementation will lead to the development of modern approaches to evaluation of tenders and encourage increased participation by SMEs. It also requires strengthening public financial management systems and procurement procedures. Kuwait provides an encouraging model in this regard with its new law aimed at encouraging competition and transparency in the field of procurement. Its full implementation will lead to the development of modern approaches to evaluation of tenders and encourage increased participation by SMEs.

http://www.uabonline.org/en/news/arabicnews/15751604160616021583157516041583160816041610161015/71528/0