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Housing and Municipal Services. This is one of the sectors in which price relations have been the most distorted. In the short term, the government needs to speed up the restitution process, raise rents on remaining government-owned apartments, and introduce a differentiated rent structure. The government should study the impact of the housing voucher system and investigate the experience of a social safety net in other countries. It should study requirements for a housing finance system, consider the introduction of tax credits, and clarify the revenue sharing formula for personal income taxes.

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Branch ministries should expedite identification of the enterprises to be privatized and submit the privatization plans (developed at the enterprise level) for these enterprises as quickly as possible. After an initial round of privatization of a sample of enterprises, a more extensive privatization of large enterprises should be undertaken immediately. Reform of the financial sector should be accelerated in view of the urgent need to channel external resources to the real sector and stem the decline in production.

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