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Kazakhstan
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Small and Medium Sized Enterprise Program |
115-0131 |
12,221 |
9,100 |
8,827 |
| Energy and Water |
115-0161 | 1,961 |
900 |
872 |
| Strengthened Democratic Culture |
115-0211 | 5,318 |
5,795 |
5,621 |
| Conflict Prevention |
115-0240 |
398 |
|
|
| Health and Population |
115-0320 |
4,866 |
3,750 |
3,640 |
| Cross-Cutting Programs |
115-0420 |
3,349 |
1,950 |
1,500 |
| Transfers |
|
5,229 |
5,195 |
5,540 |
| Total (in thousands of dollars) |
33,342 |
26,690 |
26,000 |
|
The Development Challenge:
Thanks to the Government of Kazakhstan's (GOK) commitment to market reforms and the rise of the energy sector, Kazakhstan has achieved steady economic growth, with an estimated 9.2% GDP growth rate in 2003. The country made major advancements in banking reform and supervision, fiscal reform, small-scale privatization, pension reform, and attracting foreign investment to the energy sector. The country's output has increased 50% in the past four years. However, there is a growing danger of over-reliance on the oil sector. Kazakhstan faces major challenges of diversification and corruption that hamper the growth of a middle class. About 25% of the population lives below the poverty line, and there are huge disparities between urban and rural areas, and among regions. This underscores a need to further develop small and medium enterprises (SMEs), create a vibrant middle class, promote enhanced rule of law, greater transparency, and public accountability, and expand domestic and foreign investment outside extractive industries.
Compared with the rapid pace of economic reform, Kazakhstan is showing little inclination to embrace greater democracy. Recent developments in Ukraine and Georgia are likely to make work in this area even more difficult. September Parliamentary elections fell well short of international standards. Despite some positive developments, such as the President's refusal to sign a new restrictive media law and the fact that the September elections attracted more public attention than any previous election, the media, political institutions, civil society, and the judiciary are at nascent stages. Accountable and transparent government processes are not yet well established. Freedom House rated the country with a 6 on political rights and with a 5 on civil rights, both on a scale of 1 to 7 (with 7 being the lowest), and considers Kazakhstan to be not free. Corruption remains a significant issue. According to Transparency International, Kazakhstan ranks 124 out of 146 countries in terms of perceptions of the extent of corruption, with an extremely low score of 2.2 out of 10. Development of civic consciousness and advocacy throughout society will contribute to a strong grassroots effort to press for transparency and democratic reforms. Without a more pluralistic political power structure, this fledgling democracy will continue to struggle. One critical human rights issue where continuous USAID assistance has been successful is in keeping Kazakhstan off Tier 3 on the State Department's annual Global Trafficking in Persons Report.
With respect to social development, Kazakhstan has experienced unprecedented declines in life expectancy and health status. Men's life expectancy fell from 67.5 years in 1992 to 60.6 in 2001. Kazakhstan currently invests a meager portion of its gross domestic product (GDP) in its health system, less than 2% compared with World Health Organization (WHO) recommendations for 5% and the current Western European trend of 6% to 7%. A resurgence of infectious diseases is underway, which poses an immediate threat to the sustainability of the country's transition. Tuberculosis (TB) case notification rates are the highest in the world and threaten to grow higher as multi-drug resistant TB becomes more difficult and costly to cure. While by global standards HIV prevalence in Kazakhstan remains relatively low, an escalating trend from 100 HIV cases in 1996 to 4,500 cases today, and possible bridging of HIV/AIDS into the general population, are of great concern. Recently, the GOK designed a health care reform program, which calls for a doubling of the health budget (up to 4% of GDP). It focuses on primary health care and the provision of guaranteed medical services to vulnerable populations. This paves the way for greater involvement by USAID in creating the legal framework for health financing reforms; promoting evidence-based practices; improving medical and nursing education; addressing infant, child, and maternal health issues; and helping to produce valid, scientifically-sound data on the status of infectious diseases.
Kazakhstan's strategic location makes it a major player in the Global War on Terror, and its tremendous oil and gas resources make it key to economic development for Central Asia. U.S. investments in Kazakhstan's oil and gas sector have the potential of contributing to U.S energy security. Genuine economic and democratic reform also would directly advance U.S. national interests, as would a decline in growing infectious disease rates. Given these factors, the fact that GDP growth for Kazakhstan is one of the highest in the world should not distract attention from the need to address the undercurrent of issues that could eventually destabilize the country.
The USAID Program:
USAID's six objectives include: the growth of small and medium enterprises (SMEs); promotion of democratic culture; improvement in the primary health care system and prevention of infectious diseases; better use of the region's transboundary water and energy resources; conflict mitigation; and support for cross-cutting programs related to gender, youth, corruption, and rule of law. In the economic sector, USAID priorities are SME growth, strengthening SME competitiveness, promoting diversification, rule of law, greater transparency, and public accountability, and improving the business environment. All of these elements are critical to development of a vibrant middle class and to ensure wider distribution of the benefits of economic growth. A new feature of USAID's assistance to Kazakhstan is a partnership for economic development, under which the GOK will share in the costs of USAID's economic portfolio and play a greater role in its design and execution. Kazakhstan's economic growth brings with it great expectations of higher living standards, which, if unfulfilled, could fuel discontent and instability. Therefore, irreversibility of economic reforms largely depends on democratic changes, active participation of civil society, and Government spending on the social sector. Recent parliamentary elections demonstrated that the Government's political will for democratic reform remains lacking, but public pressure for such reforms is increasing. USAID's strategic approach to supporting democracy in Kazakhstan focuses on strengthening and developing civil society, supporting and advocating for independent media, and providing training for political parties and civic education. In the health sector, USAID supports health reform and promotes primary health care and evidence-based medicine as well as the reduction of infectious disease rates. USAID and ExxonMobil began a global development alliance (GDA) in January 2004 to improve the health and quality of care provided to young children in Astana through implementation of the WHO-recommended Integrated Management of Childhood Illnesses strategy. The Mission also began a Development Credit Authority (DCA) in FY 2004 to promote energy efficiency. The Water for the Poor and Clean Energy Presidential Initiatives are supported with country level funding.
Other Program Elements:
Several centrally-managed USAID programs assist the Mission to achieve its goals. The Monitoring and Evaluation to Assess and Use Results Program allows USAID to tap into cost-effective and efficient data collection to support monitoring and evaluation efforts in the health and nutrition sectors. The Farmer-to-Farmer Program, funded by P.L. 480, complements USAID agricultural enterprise development work. The Eurasia Foundation's small grants program, managed by USAID in Washington, supports small business development, encourages civic advocacy, and increases local government responsiveness to citizens' needs. The U.S. Centers for Disease Control and Prevention (CDC) will be an implementing partner for the Defense Threat Reduction Agency's biological threat agent surveillance network under the Threat Agent Detection and Response Program. USAID's Office of Foreign Disaster Assistance manages a regional earthquake preparedness activity that targets Almaty, Kazakhstan. The Department of State's Bureau for International Narcotics and Law Enforcement Affairs and Bureau of Democracy, Human Rights, and Labor continue to collaborate closely with USAID in areas of mutual interest. The Departments of Commerce, Defense, Energy, Agriculture, and State manage programs complementary to USAID field activities in various sectors.
Other Donors:
The United States is the largest bilateral donor, but a number of other donors are active, all of whose assistance is coordinated with that of USAID. The European Bank for Reconstruction and Development (EBRD), International Bank for Reconstruction and Development (IBRD), European Union (EU), Islamic Development Bank (IDB), U.N. Development Program (UNDP), and the Germans provide assistance for the development of SMEs. Promotion of international trade (EBRD, IBRD, UNDP, IDB, Germany, and Japan); construction of public infrastructure to advance economic growth (the Asian Development Bank, EBRD, and Germany); and modernization of the tax, treasury, and banking systems (EU, EBRD, the World Bank, GTZ, and Japan) attract many donors. The EU and the Germans are providing assistance in the agricultural sector; and the UNDP, WB, EBRD, Swiss, Canadians, British, and Danish are assisting with energy and water sector reforms. The Open Society Institute, EU, and the Organization for Security and Cooperation in Europe support initiatives related to democracy and governance while the U.N. organizations, World Bank, International Federation of Red Cross and Red Crescent Societies, German Development Bank, and Japanese International Cooperation Agency are engaged in the health sector. MASHAV, the Israeli foreign assistance agency, provides training and implements demonstration projects related to natural resource and business development.
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