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: / Strategies / National Poverty Reduction Strategy (2003-2005)




Kyrgyzstan Review, 10 years ago




H. Chui Oblast

602. The Chui oblast occupies an area of 20.2 square kilometers or 10.1 percent of the territory of the Republic. It is inhabited by 16.1 percent of the total population. The oblast is the most economically developed of all regions. The largest industrial center, the capital of the Republic, Bishkek City and Tokmak City are located within the territory of the oblast. Favorable climatic conditions, presence of natural resources, developed industry and infrastructure have provided the conditions for a higher standard of living for the oblasts population as compared to other regions. The poverty level over the last two years has remained practically unchanged, and in 2001 is was 29.2 percent, which is 18.4 percent lower that the aggregate republican level. Per capita income in 2001 increased by 18.2 percent and totaled 11,775 soms, which is 18.2 percent higher that the average republican level.
 
603. Social Sphere and Social Mobilization
As of January 1, 2002 the oblast had 2.6 percent of families who received uniform monthly benefits, 0.8 percent of inhabitants, a major part of whom are invalids since childhood, receiving social allowances. Social passports have been issued to 90 percent of families qualifying for them by the social protection services and local self-governments. In the process of passportization, more than 8 thousand people have been identified and referred to be registered with the employment services, 715 adolescents have been sent for training in vocational educational establishments. Explanatory work is being conducted among the population about the policy on social support for the poor, invalids, on types and procedure of payment of state benefits.
Positive experience based on implementation of the pilot project, Poverty Alleviation, implemented within the framework of the program, Political and Administrative Governance at the Level of Local Governments, supported by the UNDP has been widely spread throughout the oblast. Since implementation of the project, 189 community-based organizations have been established that have been able to accumulate 21.7 million soms and used them for improvement of rural social infrastructure and creation of jobs. Using resources of the local budget, foreign loans and grants and various international agencies, with active participation of NGOs and the population, work is proceeding in rehabilitation and construction of water pipelines, sewerage networks and treatment facilities. Under the project, Provision of Infrastructure Services at the Level of Populated Area, it is planned to rehabilitate and construct water pipelines in 148 villages with a population of 550.2 thousand people in the cities of Kara-Balta and Kant.
There are 317 schools in the Chui oblast attended by 157.8 thousand schoolchildren; 4.4 thousand children attend 49 pre-school establishments. About 13 percent of schoolchildren from poor families use textbooks free of charge. Thanks to the financial support provided by aiyl-okmotu, sponsors, various foundations, including international ones, clothing, shoes and foodstuffs have been purchased for 2.8 orphans and children from poor families. Starting from September of 2002, schoolchildren of junior grades of remote schools in mountain areas will be provided with free hot breakfasts.
About 56 percent of schools have computer classrooms, but all of them are mainly equipped with outdated computers, half of which need repairing. During the 2001/2002 academic year, 225 computers of a new generation have been installed in 45 schools. Within the same period, new equipment have been established in 13 schools, and heating systems have been repaired and 28 titles of test books with the total circulation of 66,520 copies have been distributed among 31 schools under the project, Educational Sector Development, financed by the ADB. From contributions made by schoolchildrens parents (fees for education and rent for textbooks), as well as grants attracted from NGOs and international agencies, schools carry out repairs, procure equipment and textbooks. At the same time, the demand for textbooks is satisfied by only 80-90 percent. There is a shortage of teachers, especially in rural areas. Due to low salaries, many teachers, including those with high qualifications, are forced to change their job and go to other sectors of the economy. There are children who do not attend schools.
The Chui oblast has 31 medical establishments, 10 insurance medicine centers, 7 FGPs. The Chui oblast is one of the two oblasts that have successfully implemented the pilot project on introduction of state guarantees for providing citizens with medical and sanitary assistance. At the same time, co-financing by the population for medicines, meals and certain types of medical services has been introduced. A scheme of a single payer has been introduced to improve the efficiency of financing, which has allowed an almost twofold increase in daily expenses for each patient and improved the quality of medical assistance provided. Citizens, who have medical insurance, can buy prescribed medicines at a lower price due to the compensations provided by the Mandatory Medical Insurance Fund. In order to ensure accessibility to medical services by socially vulnerable citizens having medical insurance, 8.5 thousand applications have been filed to the Social Fund of the Kyrgyz Republic. 8.3 thousand of MMI policies have been issued to pensioners, school children, and citizens receiving social benefits. For the purpose of a full coverage of the oblasts population with the MMI network, some preparatory work has been started in the pilot Issyk-Ata rayon on dissemination of MMI policies for the individuals paying MMI contributions independently. Within the framework of the project, Health Care Reform2, health facilities are being refurbished in the Chui oblast (Issyk-Ata, Moskovskyi, Chui, Jaiyl, Alamedin, Panfilov, Kemin, Sokuluk rayons), medical and laboratory equipment is being procured.
Against this background of successful reforms in the health care system, there remain persistent unresolved problems connected with a low quality of medical treatment, especially for in-patient hospital care.
As of August 1, 2002, the employment services of the oblast registered 12.4 thousand citizens looking for a job, of which 80 percent have the official status of the unemployed. Since the beginning of 2002, jobs have been provided to 3,200 unemployed. The Employment Service Fund (ESF) has created 2,200 jobs. It dispatched for training 908 unemployed, of whom 75 percent were able to find permanent jobs, which is a good indicator of the employment services performance. Paid public work has been provided for 2,100 unemployed. Active work is being conducted by the Youth Labor Exchange and, in the first half of 2002, it provided for the employment of 203 young people.
In the first half of 2002, the ESF allocated micro-credits for the amount of 1 million soms to 111 unemployed, the KAFC extended loans to 27 applicants for the amount of 1.9 million soms. Given the hidden unemployment, which is estimated at a level of about 12 percent, the capacity of the employment service is obviously insufficient to improve the situation in the labor market. Internal migration to the Chui oblast from other regions also contributes to an increase in the number of unemployed. Creation of a sufficient number of jobs in the near future is possible only under the condition of dynamic development of SMEs, the private sector as a whole.
 
604. Real Sector
The share of the Chui oblast in total GDP is 19.4 percent. In 2001 the oblast produced 63 percent of the total agricultural output of the Republic and 32 percent of industrial output. Refinery of the alloys mined by the Kumtor Gold Company by the Kara-Balta Mining Industrial Complex, accounts for almost 70 percent of the industrial output of the oblast. The oblast produces a broad spectrum of industrial products, including electronics, construction materials, garments, shoes and various foodstuffs.
In recent years, positive changes have been noticeable in the industrial sector. With the support of the EBRD the only sheet glass producing factory in the Central Asian region have been rehabilitated and put into operation, a factory for production of cotton threads has been constructed. A factory for leather processing has been constructed; a loan from the Chinese Government has been allocated under Kyrgyz government guarantee to complete the construction of a paper factory.
At the same time, many of the oblast enterprises still face problems connected with a low level of corporate governance, marketing and management. Due to high actual interest rates on long-term loans, enterprises are unable to borrow from the financial markets. A rather unfavorable investment climate impedes the inflow of investment in the volumes required for production upgrading and introduction of new technologies. A majority of manufactured products are not competitive in both quality and price. The depth of processing of a majority of agricultural products remains low, in particular with regard to vegetables, fruit, meat, milk, wool, leather and cotton.
Promising directions for development of industry in the Chui oblast are food and light industries, non-ferrous metallurgy, and machine building and construction materials. Growth of the industrial sector (without gold refinery) for 2003-2005 it projected at the level of 3-5 percent. Development of the light and food industries will be based on the use of cheap local raw materials. It is envisaged to produce high-grade grain spirits, which will allow an increase in the volume of production and improve the quality of liquor products, to export spirits. Production of electricity will be increased due to the reconstruction of the Kemin HPP, modernization of the Alamedin cascade of small HPPs and construction of new small HPPs. Development of the gold deposit Taldy-Bulak Levoberezhnyi, the loam deposit in the Kemin rayon and that of gypsum in the Chui rayon will allow an increase in the output of the mining industry and the sector of construction materials. The Glass Factory and the Paper Factory will increase their production to the full capacity.
The Chui oblast has 32 percent of irrigated land, therefore the agricultural sector is well developed here and the oblast is one of the major producers of sugar beet, grain crops, vegetables and fruit. Favorable climate conditions and availability of irrigated water promote the development of plant growing. A significant degree of attention in livestock breeding is focused on cattle farming (the share of the oblast makes up 20 percent of the total republican cattle stock), in this connection production and processing of meat, milk, leather is more developed there. Further growth of agricultural output of the Chui oblast will be promoted through implementation of the projects, Rural Area Development and Rural Financial Institutions, supported by the ADB, as well as the projects, Agricultural Service Support, Rural Finance-2, Rehabilitation of Irrigation Networks, and On-Farm Irrigation, financed by the World Bank. Within the framework of implementation of these projects 41 credit unions and 54 associations of water users have been formed.
It is assumed that the problems related to provision of necessary services to farming enterprises and peasants farms, supply of machinery, seeds, fertilizers, conducting of marketing and sales of products will be resolved based on cooperation and establishment of associations. The types and volumes of provided financial services in rural areas are increasing. The KAFC has allocated loans for the amount of 93.1 million soms within only the first half of 2002; the amount for the whole 2001 totaled 98.2 million soms. In the medium term, the annual growth of agricultural output is projected at the level of at least 5 percent.
The oblast pays much attention to development of SMEs, individual entrepreneurship, and tourism. The major sphere of SMEs is represented by services, processing of agricultural products, commerce, and production of garments, foodstuffs. Successful development of SMEs is based on the efforts taken to simplify registration procedures, to reduce the number of inspections by regulatory bodies, to reduce a tax burden, to introduce a uniform tax on gross income. Financial support of SMEs is provided from various sources, including the credit lines of the Government of Germany (23 projects have been approved for DM5.25 million) and the World Bank (the project Private Initiatives Support, 14 projects have been approved for the total amount of US$1.66 million). Development of tourism in the oblast is based on picturesque mountain gorges of particular beauty and numerous historical monuments preserved to the present day. Close location of mountain peaks attracts mountain climbers, and numerous mountain skiing camps are in operation on mountain slopes during the winter season. At the same time the tourism sector needs investments in order to improve infrastructure, provide training for specialists and improve the quality of the services provided.
The program, Comprehensive Development Framework of the Chui Oblast, has been developed and is under implementation in order to solve existing problems and successfully attain the tasks set up for sustainable economic growth and poverty reduction. This program envisages a series of measures aimed at fulfillment of the most important objectives, including the following:
  • Increase access to clean drinking water and improve its quality.
  • Increase access to educational and healthcare services by further reforming, improve the management structure and financing system, provide a better supply of textbooks, refurbish school buildings.
  • Create favorable conditions to attract direct investment into the mining sector, develop SMEs and tourism, processing of agricultural products and rehabilitation and construction of small HPPs.
  • Further land reform.