52.†††††††††††† CDF provides a document of strategic importance that allows donors to clearly see the major directions of the countryís development and to determine the benchmarks for rendering assistance.† Actual implementation of these plans in Kyrgyzstan is being carried out as the first stage of CDF implementation on the basis of partnership and mutual responsibility.† The donor community has fully supported the CDF document, having confirmed this in numerous memoranda, statements and addresses.† Donors have indicated that investments and grant assistance will be provided to poor and developing countries, Kyrgyzstan included, but only within the framework of such a strategy, primarily aimed at poverty reduction.† This approach allows the Republic to concentrate external and internal resources only for implementation of the CDF/NPRS objectives.
†††††††††††††††† Such indications by leading international organizations and statements by their senior officials and representatives, in particular, have been made at many conferences within the poverty reduction process, involving other countries that are developing the National Poverty Reduction Strategy and multilateral and bilateral donor organizations:
∑†††††††† In the statement made by the management of the International Monetary Fund, World Bank and other leading international financial organizations on October 5, 2001 in connection with the deterioration of the world economic situation after the events of September 11, 2001 in the USA.
∑†††††††† At the Second Forum of European and Central Asian countries on poverty reduction strategies (Budapest, November, 2001).
∑†††††††† At the International Conference on Poverty Reduction Strategies (Washington, January of 2002).
∑†††††††† During meetings of representatives of the governments of various countries and international organizations for the purposes of decision-making on poverty reduction, debt security and promotion of economic growth in the CIS countries with a low level of income (London, February of 2002).
∑†††††††† At the International Conference on Development Financing (Monterrey, March of 2002), and so forth.
†††††††††††††† These meetings have become key events for countries participating in the poverty reduction process.† Mutual understanding has been reached on the importance of a comprehensive solution for problems related to poverty reduction, ensuring sustainable human development and economic growth.† Senior officials and representatives of international organizations and donor countries have noted that it is necessary:
∑†††††††† for developing and poor countries themselves to lead the process of preparation and implementation of the NPRS.† The NPRS should be approved at the national level.† Donors should listen to the countriesí opinions, but not to adhere to their own interests.† It is necessary to reform the policy of rendering donor assistance to poor countries aiming it at development of their own potential through development of human capital and infrastructure;
∑†††††††† to assist countries in the application of a comprehensive approach including the balance of all aspects of the countriesí development, ensuring synergy in implementation, agreeing to the pace and quality of conducted reforms.† Participation in the NPRS process on the principles of partnership implies equal responsibility of donors and poor countries for the outcome.† To display flexibility, but not to use standard decisions. To achieve concrete results and to take maximum efforts for the poor countries to succeed;
∑†††††††† for all previous donorsí programs provided to poor countries to be streamlined within a comprehensive approach.† Donors should transfer from a project-based approach of rendering assistance to poor countries to a program-based one. †More time should be allocated to practical implementation of conducted reforms.† Donors should promote increase in employment of the population, open up their markets to promote goods from poor countries;
∑†††††††† to ensure sufficient resources for implementation of the NPRS by increasing grant assistance to the countries with large external debts.† Special attention should be paid to rendering assistance to post-conflict countries;
∑†††††††† to ensure broad participation of civil society in implementation and control over the NPRS;
∑†††††††† to establish an effective system of monitoring and evaluation; and
∑†††††††† to regularly review the process of the NPRS for its continuous improvement and adaptation to changing conditions.
53.†††††††††††† The Kyrgyz Republic supports donorsí intentions and is ready to further strengthen cooperation in the interests of poverty reduction.† The NPRS for Kyrgyzstan is a firm mechanism of coordination and effective use of external assistance. The NPRS is a real opportunity for the Republic, on the basis of mobilization and comprehensive strengthening of its own potential, to shift to a qualitatively new level of conducting the reforms aimed at poverty reduction.†† It is worth noting that many of the new aspects of cooperation announced by the donors have already been put in practice in terms of assistance provided to the Kyrgyz Republic.
54.†††††††††††† After the events of September 11, 2001 the international community focused special attention on Afghanistan and other countries of Central Asia that are its direct neighbors.† These events also attracted the attention of the international community to the problem of international terrorism and Islamic fundamentalists, whose practitioners have committed aggressive acts against the Kyrgyz Republic in 1999 and 2000.† A serious blow has been struck against fundamentalism, which has significantly strengthened the Republicís security.† Kyrgyzstan has taken an active part in fighting against international terrorism and is among the countries forming the Anti-Terrorist Coalition.† This has improved the international status of Kyrgyzstan and its partnership relations with many countries.† The international airport ďManasĒ has become an important military base in Central Asia.
††††††††††††††† Major financial institutions of the donorsí community are taking purposeful efforts to increase the volumes of financial and technical assistance allocated to the countries of the Central Asian region in order to stabilize the economic and social situation.† Kyrgyzstan is among the countries of the region that will be provided with the assistance aimed at growth of economy, promotion of direct investments for improving living standards of the population and poverty alleviation.† A majority of donors and countries highly appreciate democratic reforms of the Kyrgyz Republic and believe that development of economy and strengthening of democratic institutions is a secure means of protection from extremism.† It is worth noting that the international community is also striving to develop regional cooperation in Central Asia and many donors consider that the Kyrgyz Republic plays an important role in the given cooperation.
†††††††††††††††† The IMF, World Bank, EBRD, ADB and many other donors have appealed to the international community to increase grant-based support to poor countries situated in the area of Afghanistan events (Statement of October 5, 2001).† In addition, the IMF and the World Bank have addressed donors to restructure existing credit lines, transferring them on a grant basis in poor countries that have large external debts.†
56.†††††††††††† Many donors were supportive of a decision made by the Paris Club in March of 2002 on restructuring of external debts of Kyrgyzstan by the club members.† As a result, the credits under bilateral agreements signed before August 31, 2001 have been restructured between Kyrgyzstan and members of the Paris Club under the ďHelsinki conditionsĒ.
57.†††††††††††† The European Union Commission (EUC) has increased its assistance to Kyrgyzstan almost twofold.† In terms of the Memorandum of Understanding for 2002, the EUC extends grants to Kyrgyzstan for the program of food security in the country.† The funds are allocated to support the balance of payments of the Republic, to finance food imports, to promote a number of reforms undertaken in the agricultural sector, as well as to support the social sector.† The program promotes poverty reduction in the country.†† Approaches to rendering assistance to the country through the TACIS Program have been changed.† The European Commission changed to a program-based approach from a project-based approach, having focused its assistance not on addressing certain problems, but on priority directions of development.† In future, TACIS intends to invest its funds in institutional and legislative reforms, development of small and medium-size business, infrastructure and trade, as well as the financial sector.† It is necessary to note that, starting with the TACIS budget for 2003, the assistance provided envisages implementation of projects of a Central Asian regional importance.† This approach will take three directions: promotion of institutional, legal and administrative reforms; assistance in overcoming social consequences of the transition period; development of infrastructure networks.
58.†††††††††††† The UN Development Program has also switched from a project-based to a program-based approach and this has resulted in some organizational changes in the UNDP representative office in Kyrgyzstan.† The UNDP provides significant assistance on a grant basis for promotion of and improvement in effectiveness of public sector governance.† It works on governance, decentralization and development of local communities.† An important direction in the UNDPís activities in Kyrgyzstan is support for social mobilization of the population, promotion of individual, small and medium-scale entrepreneurship, microfinancing for citizens, as well as creation of conditions for development of the poorest rural settlements.† Certain work has been started to support the development of information and communication technologies, to attract direct investments and develop investment projects.† Great assistance is being provided for the development of a monitoring and evaluation system for measures connected with poverty reduction within the CDF/NPRS, as well as on studying acute problems of sustainable human development in Kyrgyzstan.† Large contributions in human development and human right defending are being made by other UN organizations: UNESCO, UNICEF, UNIDO, UNFPA, UN AIDS Organization, UN Higher Commissioner on Refugees, UN Program on Drug Control and some others.
59.†††††††††††† The Asian Development Bank has reformed the structure of its central office to provide more effective assistance to poor countries.† A Memorandum of Understanding has been signed between the Government of the Kyrgyz Republic and the Asian Development Bank on the strategy of assistance to the Kyrgyz Republic for another three-year period that will be mainly aimed at addressing urgent social problems such as poverty and unemployment.† ADB assigns the highest priority in rendering assistance to reduction of poverty.† In 2002, ADB is implementing programs on improvement of regional cooperation and trade, assisting in modernization of the customs system of the Republic, development of an effective and viable regional mechanism of electric power distribution in order to facilitate electricity transmission from the regions with excessive energy output to the regions with a deficit.† By 2006, the ADB expects to implement projects on early childhood development in the area of education reform.† It will implement the project on financing the construction of roads connecting the Kyrgyz Republic with neighboring countries, such as the Chinese Peopleís Republic, Tajikistan and Uzbekistan.† The Program ďFinancial Mediation and Mobilization of ResourcesĒ will provide assistance in reforming the banking sector, financial restructuring of viable enterprises, and development of the stock market and insurance market.† Regional projects will be implemented for the effective distribution of electricity in poor regions, as well as development of agriculture.† ADB intends to provide technical assistance in the sphere of external assistance coordination, as well as institutional development of the Republic.
60.†††††††††††† For more effective work with Central Asian countries, the World Bank has moved the department responsible for this region from Washington to Almaty (Kazakhstan). The Program of the World Bank in the Kyrgyz Republic is aimed at providing assistance for poverty reduction and protection of vulnerable layers of the population.† Within this assistance, the World Bank supports efforts to attain sustainable economic growth, in particular in rural areas, to provide many regions of the country with clean water, promote development of local communities and financing for the rural population, assist in the development of the legal and regulating base for development of the private sector, as well as improvement of public sector governance and institutional capacity building.† During April 8-9 of 2002, the President of the World Bank Mr. James Wolfensohn paid an official visit to Kyrgyzstan.† The President of the Bank mentioned the high level of economic and social reforms being conducted in the Republic, successful implementation of projects financed by the World Bank in the health care sector, agricultural sector and other areas.† He praised highly the level and quality of preparation of the Comprehensive Development Framework of the Kyrgyz Republic till 2010 and the interim National Strategy for Poverty Reduction.† Mr. Wolfensohn assured the nation that in future Kyrgyzstan can count on assistance and support from the World Bank Group.†
61.†††††††††††† The UK Department for International Development (DFID) has significantly increased its effort in Kyrgyzstan, having increased the volume of financing almost 2.5 times as compared to 1997.† The annual volume of DFID financing under the program of bilateral cooperation totals 2.5 million pounds sterling.† The DFID works in partnership with the Government of the Kyrgyz Republic at the national, oblast and rayon levels, as well as with international organizations and the civil society.† The assistance of the DFID is focused on agriculture, health care, social sectors and the environment.† The DFID implements projects on public sector governance and public utilities reforms.† Substantial grant-based assistance is extended to provide the population of rural areas with clean water, to raise employment of the population and income for rural inhabitants.† For the purpose of strengthening the system of monitoring and evaluation, DFID has provided technical assistance to the National Statistical Committee of the Republic.† In addition, active assistance has been provided for preparation of the CDF and related documents by conducting conferences, seminars, and involvement of foreign and local experts, publication of brochures.† Practically all projects implemented by the DFID are aimed at reduction of poverty in the country.
62.†††††††††††† The European Bank for Reconstruction and Development (EBRD) implements large investment projects in agriculture, energy, and telecommunications.† An important step was taken by the EBRD this year when it decided to open a credit line for US$15 million as direct investments in the private sectors, not requiring any guarantees from the Government of the Kyrgyz Republic.
63.†††††††††††† The Islamic Development Bank (IDB) has also expressed an intention to provide assistance to Kyrgyzstan in the form of direct investment in development of the private sector and entrepreneurship.† In July of 2001, a three-year program of cooperation was approved during the visit of the IDB mission to the Kyrgyz Republic.† Assistance will be provided to industry, energy and health care sectors, as well as to reconstruction of road surfaces.
64.†††††††††††† Large assistance is provided to Kyrgyzstan by the Swiss International Cooperation Office to conduct the International Year of Mountains in Kyrgyzstan, to implement projects on water management, development of small and medium enterprises, energy and social sectors.
65.†††††††††††† The Government of Germany has practically doubled the volume of its assistance to Kyrgyzstan.† It will provide assistance for development of processing industry in the Batken oblast, for development of the private sector, small and medium-scale entrepreneurship, construction of electricity transmission lines, agriculture, industry, biosphere territories, for health care support particularly for the protection of maternal and infant care, and tuberculosis control, as well as urban infrastructure development.† Significant consultative assistance is provided on a grant-basis through the GTZ representative office.
66.†††††††††††† The Government of Japan has provided grant assistance to Kyrgyzstan to purchase agricultural machinery for farmers, to reconstruct roads and the ďManasĒ airport, to develop the social sector.† At present, programs on development of information systems, programming and electronic engineering are being carried out in a number of universities.† In future, the Government of Japan intends to provide assistance for establishment of the National Center of Information Technologies in Kyrgyzstan.† Large technical assistance is being provided.† In particular, during the current year proposals on development of industry and industrial policy have been prepared with the support of the Japanese International Cooperation Agency (JICA).
67.†††††††††††† The governments of the Scandinavian countries (Sweden, Finland, Norway and Denmark) also intend to assist Kyrgyzstan as a country that meets the criteria adopted by these countries for providing assistance to poor countries.† Scandinavian countries are especially interested in promoting development of the social sector, issues that are very pressing for Kyrgyzstan.
68.†††††††††††† USAID has initiated a project on agribusiness development that will be implemented in the Osh oblast over two years. †Implementation of the project will promote strengthening of agricultural entrepreneurship in the south of the Republic.† As well, USAID is supporting a number of projects related to development of entrepreneurship and attraction of foreign investment to the Republic.
69.†††††††††††† Large humanitarian, technical and advisory assistance is provided by international organizations and foundations Ė† WHO, ILO, Aga-Khan Foundation, Ebert Foundation, Adenauer Foundation, Soros Foundation, Peace Corps and Mercy Corps, Save the Children Fund (Netherlands and Great Britain), TICA, FINCA, Helvetas, foreign universities and other foreign non-governmental organizations and volunteers.
70.†††††††††††† The Asian Development Bank, World Bank, UK Department for International Development, UNDP, TACIS† and a number of other donors provide significant experts support to ministries and departments.† A group of such experts conducted the important work of defining the scope of poverty in the Republic.†† Important work has been carried out in this context by missions of the IMF, World Bank, ADB, UNDP, and DFID from April to August of this year.† During their work, the missions specified a new methodology to determine the indicators of poverty and extreme poverty levels, discussed the issues of social protection of the population (given the increased tariffs for energy sources), concepts of the pension system and educational system reforms, development of the agricultural sector, as well as other issues related to the implementation of the CDF and preparation of the full version of the NPRS.
71.†††††††††††† Many prominent international private companies, such as the IBM, IDS SCHEER (Germany) have supported the CDF/NPRS process in Kyrgyzstan.† In particular, IBM has supported the idea of comprehensive development of the country on a basis of building an information society and has given its in principal agreement to participating in the building of the state electronic information network in Kyrgyzstan.† To develop the system for CDF/NPRS monitoring on the principles of e-government, the company has provided, on a gratis basis, equipment based on technology developed by the IBM Corporation in the areas of hardware and software platforms, as well as communications systems.
The company IDS SCHEER ha indicated its full support to approaches by Kyrgyzstan on development of the NPRS and a desire to help the country to work out effective management approaches to support the processes.† The company has provided its software products that define the principles of development and implementation on a unified methodological basis, using modern methods of business process design.†† In prospect, this will allow the creation of a platform for an effective management system at all levels of development and implementation of the programs for the comprehensive development of the country at the international, national, sectoral and regional levels, as well as on the level of specific activity.† This software will enable the transformation of public sector governance to the principles of e-government.
72.†††††††††††† An agreement by donors to conduct another Consultative Group meeting in Kyrgyzstan for the first time, indicates the great support that they have for the CDF/NPRS process, efforts exerted by Kyrgyzstan on poverty reduction, active conducting of reforms, ensuring economic growth and effective public sector governance.† Kyrgyzstan welcomes the shift to a higher level of cooperation with all the donors based on principles of equal partnership and participation.