Inflation has more recently been constrained and the budget kept reasonably in balance. This brought the IMF back for consultations, but despite initial progress in discussions, GOB adherence to agreements has been generally unsatisfactory. In the name of stability, the GOB recently has experimented with a dual exchange rate and has attempted to support an overvalued official exchange rate resulting in a critical loss of reserves. The IMF canceled the first review of a Standby Agreement over lack of performance on exchange rate policy, external payments and structural reform, and in February 1996 the IMF indefinitely postponed granting a loan. These economic difficulties will postpone adjustment and conceivably spill over into the social field.
Privatization also lags.
Regulatory hindrances such as ceilings administered on profit margins for wholesale and retail trade, along with structural impediments, limit economic development. In the fall of 1996 price controls were reintroduced on basic goods and services. Progress in democratization as indicated by independent judiciaries and media also mirrors the Soviet system and lags its Eastern European and NIS neighbors. May 1995 parliamentary elections were judged less than free and fair and low voter turnout invalidated results in most districts. Observers noted lack of press freedoms, campaign restrictions and a flawed election law.