/REUTERS, Almaty, Oljas Auezov, June 18, 03/ - International monetary fund (IMF) praised Kazakhstan authorities for goods macroeconomic indexes, but recommended to reexamine tax-budget and monetary-credit policy, and also come back to active structural reforms.

"Board of directors (of IMF) praised Kazakhstan government for the significant progress in macroeconomics, which was reflected in quick and diversified growth of GDP, significant increasing of international reserves and assets of the National fund, and also reduction of volumes of external and internal state debt", - says the fund's message, which was prepared according to results of consultations with Kazakhstan authorities in the end of May and published on Wednesday.

Authorities of Kazakhstan, whose GDP during last several years was growing in the average by 11% every year, achieved stabilization of inflation rates on the level of 6.0-7.0% a year, spent excessive revenues from export of raw stuff to stabilizing-savings National fund and containing expenses of the budget.

STRUGGLE AGAINST POVERTY HAVING SACRIFICED TO EXCHANGE RATE

However IMF, which once supported the idea of National fund's foundation, thinks that the government could save less and spend more.

"Speaking about prospects, the board of directors considers that the main task of Kazakhstan authorities is to continue efficient controlling fast-growing production of oil and incomes from it. The board of directors as a whole has agreed that despite the priority of funds savings for the future generations, solution of the poverty problem requires immediate usage of these funds. The board of directors considers, that (authorities of Kazakhstan) should reexamine balance between these directions (accumulation of funds and struggle against poverty). "

On the reason that increase of the budget's expenses because of buying of big volumes of foreign currency by the National Bank can result in acceleration of consumer prices growth, IMF has called the country's central bank to limit interventions at the currency market and strengthen tenge to dollar in real expression. The rate of tenge to dollar has been growing since the beginning of 2003 but the National Bank permitted only its nominal strengthening till present.

"The board of directors thinks that it will be difficult (for the National Bank) to achieve the planned decreasing of inflation rates without amore serious strengthening of tenge relative to dollar ", - the message says.

STRUCTURAL REFORMS AND TRANSPARENCY

IMF has noted that Kazakhstan has reached significant success due to early reforms of "the first wave", however after 2000 significantly slowed down rates of reforming of economy and the system of state management.

"The weak judicial system, the taken roots clan interests, "capture" of key sectors of economy, alongside with lack of transparency have resulted in creation of unequal conditions and a bad investment climate outside oil and financial sectors, especially for small and medium domestic and foreign investors ".

"The board of directors has expressed worry concerning the rather slow progress in the field of structural reforms in latest years after the impressing start. Directors called to improve the investment climate for diversification of economy and increasing of productivity, in particular in the branches, which were not connected with oil. The key directions should be reforms of state management and judicial system, and in a wider context - struggle against corruption and creation of more favorable climate for small and medium business ".

"The board of directors called authorities (of Kazakhstan) to reveal full and opportune information about oil bonuses, tax payments and other revenues from oil sector".

In response to the recent recommendation of IMF to give report about origin and usage of funds of the secret fund, which functioned in 1996-2002, Kazakhstan government said that could not understand what fund was spoken about.

[2003-06-18]