The International Monetary Fund (IMF) has published a Fiscal Transparency Evaluation for Uzbekistan along with a separate report on progress made since the evaluation was conducted in June 2018. The evaluation assesses Uzbekistan’s fiscal transparency practices against the standards set out in the IMF’s Fiscal Transparency Code and was carried out by the IMF’s Fiscal Affairs Department, in collaboration with the Statistics Department, at the request of the Government of the Republic of Uzbekistan.
Assessed against the standards of the Fiscal Transparency Code, the June 2018 evaluation found that Uzbekistan met at least the basic standard of practice on 16 of the 36 principles assessed.
Uzbekistan has taken steps to enhance transparency since the evaluation was conducted. An updated assessment of practices, conducted in March 2019, showed that in only nine months, improvements had been made against eight of the Code’s principles, with seven of these advancing from the “not met” level of practice. As a result, Uzbekistan is now assessed to meet at least the basic standard of practice on 23 of the Code’s 36 principles.
The June 2018 evaluation highlighted several gaps in Uzbekistan’s fiscal transparency practices. It found that fiscal reports did not provide a comprehensive picture of government fiscal activity, and their presentation was not fully aligned with international standards. The budget could be made more comprehensiveness and forward-looking, and its scrutiny by the legislature could be enhanced. And, there was limited discussion or analysis of several of the most important sources of risks to public finances and limited central oversight of the state‑owned enterprise sector.
The evaluation made several recommendations to improve fiscal transparency practices in Uzbekistan, including:
· Expanding fiscal reports to provide a more complete picture of general government activity and to fully align them with international standards;
· Disclosing balance sheet information and estimates of revenues foregone from tax expenditures;
· Improving budget comprehensiveness by including the off-budget fiscal activities of budgetary organizations, several non-reported extra-budgetary funds, and externally financed expenditures;
· Presenting medium-term fiscal forecasts and fiscal objectives in the budget and subjecting it to greater parliamentary scrutiny;
· Publishing a summary report on fiscal risks and strengthening monitoring and oversight of public corporations.
Uzbekistan has already addressed several of the IMF’s recommendations to improve fiscal transparency. Key advancements include the publication of medium-term macro-fiscal projections, analysis, and discussion of fiscal risks, and inclusion of a statement of fiscal objectives and medium-term policy intentions in the 2019 budget documentation. In addition, the government has published a citizen’s guide to the budget to help foster greater public participation in the budget process.
Implementation of the remaining reforms recommended in the fiscal transparency evaluation will result in further improvements in fiscal transparency in Uzbekistan in the coming years.
