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Kyrgyzstan spends more than half of IMF and ADB loans on salaries

The Ministry of Finance of Kyrgyzstan reported on spending of the money allocated by donors. It turned out that most of the funds have been spent on payment of salaries.

What the donor money was spent on

Kyrgyzstan received $ 291.1 million from donors to support the budget. At least $ 241.9 million of the sum were allocated by the International Monetary Fund and $ 50 million (half — a loan, half — a grant) — by the Asian Development Bank.

At least $ 170.8 million, or 13,527.6 billion soms of the received money were spent.

This is the first tranche of the IMF and ADB funds. The second tranche of the International Monetary Fund is on the accounts intact so far.

More than half — 6,974.5 billion soms of the donor money were spent on payment of salaries. Only 106.3 million soms, or less than one percent, were spent on the purchase of medical goods.

At the same time, the Ministry of Finance expects additional $ 116.2 million from international organizations. Moreover, most of the funds — $ 100 million — will be a loan, and the republic will receive only $ 16.2 million on a non-repayable basis.

As a result, Kyrgyzstan will receive $ 408.1 million from donors. But the problem is that 90 percent of the money will be credit that will increase the external debt of the republic. Kyrgyzstanis will have to repay them in form of taxes.

Expenses for combating COVID-19

Donors allocated money not only to patch holes in the state treasury. There were also funds that were intended for combatting coronavirus infection only.

However, these expenses are more than modest. To date, Kyrgyzstan has received only $ 4.8 million of the expected $ 56.1 million. The money allocated by the World Bank was spent on the purchase of medical equipment for $ 2.1 million, ambulances for $ 700,000, protective equipment for $ 1 million and medicines — for $ 1.1 million.

The funds of the Asian and Islamic Development Banks will begin to be used from July 15, 2020. Supply of medical equipment at the expense of the money of the World Bank is expected in the near future. In addition, there are tenders for the purchase of medicines, medical devices and protective equipment.

Advantage of the allocation of funds for fight against coronavirus is that specific expenses are envisaged within the projects. All the money will be used to improve and expand domestic hospitals. This is especially relevant now, when the country does not have enough beds to hospitalize people with symptoms of COVID-19 or community-acquired pneumonia.

How budget funds were spent

«Internal procedures of international financial institutions and domestic procedures in the Kyrgyz Republic for getting the donor assistance took time. Therefore, the main expenses for the fight against coronavirus since February 2020 have been financed from the republican budget,» the Finance Ministry noted.

Budget expenditures associated with coronavirus are as of today estimated at 3.8 billion soms, including 1.8 billion soms that have already been spent.

Most of the money was transferred to the Compulsory Medical Insurance Fund and the State Material Reserves Fund.

Another 2 billion soms are planned to be allocated by the end of July. This money will be spent on the purchase of PCR tests, protective equipment, payment of compensations to doctors and law enforcement officials, and the purchase of products for those in need.