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Kyrgyzstan
FY 2001 Program Description and Activity Data Sheets
>> Regional Overview >> Kyrgyzstan Overview FY 2001 Program
Highest priority will be given to assistance which promotes economic growth, democratization and the prevention of conflict in the South. USAID will continue to expand its programs throughout the Fergana Valley as part of a long-term strategy to increase economic development and stability in the south.
USAID will initiate a land reform program to build on the recent passage of the land and registration laws. Efforts will include developing land registration systems, educating citizens about their legal rights, and amendments to the land laws. USAID will continue efforts to improve tax administration, the legal and commercial infrastructure, intergovernmental finance, bankruptcy laws, accounting practices, and the professional capabilities of judges and attorneys. Further progress will be made toward the creation of an independent regulatory agency for electricity; environmental resource and energy development initiatives will be covered in the Central Asia Regional program.
Ensuring that economic reform is accompanied by social and political reform is a continuing priority. Programs will continue to strengthen civil society, promote independent media, solidify the rule of law, furnish election assistance, and deepen respect for human rights. USAID will work toward the development of accountable local government by seeking to strengthen a legal authority, improve financial and administrative operations, deliver services efficiently, and strengthen the role of elected local councils. Increased attention will be paid to improving women's legal rights and their participation in the political process.
In the health sector the emphasis will be on infectious disease control and rolling out USAID’s very successful health care models. USAID will support cost-effective health reform through Family Group Practices. Infectious disease diagnosis and prevention and reproductive health care will be integrated into this primary health care unit.
A significant amount of FREEDOM Support Act (FSA) funding will be provided in FY 2000 and 2001 under the Administration’s Expanded Threat Reduction Initiative (ETRI) for programs designed to enhance border security and export control capabilities. ETRI will contribute to the nonproliferation of weaponsof mass destruction, and associated delivery systems, materials, technologies and expertise.
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ACTIVITY DATA SHEET
PROGRAM: Kyrgyzstan
TITLE AND NUMBER: Increased Soundness of Fiscal Policies and Fiscal Management Practices, 116-012
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,700,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $3,500,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY 1993 ESTIMATED COMPLETION DATE: FY 2001Summary: This objective is critical to combat the fiscal crisis in the country. As a result of the economic crisis in Russia, and the devaluation of the tenge in neighboring Kazakhstan, domestic and foreign investors in Kyrgyzstan are less confident. During 1999, the som fell in value by half and the interest rate on government securities stood at 50% at year-end. As a result of the currency depreciation, inflation rose to 18.4%. Moreover, the government faced growing concerns regarding its ability to service its large external debt. Although official statistics indicate GDP grew slightly last year, unofficial estimates indicate a decline. In order to survive the current crisis, the government needs to increase tax compliance, formulate budgets that are consistent with revenue projections, improve its forecasting ability, and reduce its external debt. USAID activities in this area support the U.S. Embassy’s Mission Performance Plan by supporting the transition to a free-market economy.
USAID is addressing the immediate and long-term needs by targeting three critical areas: 1) tax administration; 2) tax policy; and 3) budget reform. Tax administration addresses the government’s need to reduce its borrowing by increasing tax revenues.
The direct beneficiaries of sound fiscal management will be the national and local government agencies that need tax revenues and sound budget policies; government employees; and, finally, all entities with which the government is in arrears. All Kyrgyz citizens would be indirect beneficiaries. Sound fiscal policies and management practices contribute to both short- and long-term economic stability and make a significant contribution toward the growth potential of the economy.
Key Results: Three key results are necessary to achieve this objective. (1) Taxes are more fairly and broadly applied and enforced. (2) Government borrowing is less inflationary. (3) The expenditure allocation process is rationalized.
Performance and Prospects: Kyrgyzstan’s stabilization program has been tested by a combination of factors over the past year. The country conducts a large amount of trade with Russia and Kazakhstan; and, consequently, has been hit by the downturns in those countries. In addition, the sharp drop in the price of gold has reduced revenues from Kyrgyzstan’s main export earner. Inflation has risen from an annual rate of less than 15% at the end of 1997 to 32% in the middle of 1999, while the general government deficit remains close to 10% of GDP. The government has recently implemented fiscal and monetary measures to combat these problems. Excise taxes have been doubled on a number of goods, while governmental non-essential expenditures have been cut. Interest rates have been raised. Nevertheless, the government has been unable to cut expenditures sufficiently to offset declining tax revenues. New revenue-enhancing measures are urgently needed.
Overall, USAID’s performance in 1999 was satisfactory. The key indicator for this objective, the general deficit as a percentage of GDP, was estimated to be on target in 1999 at 3%. The government accomplished this by cutting expenditures on supplies by 8%. USAID also helped the Government of Kyrgyzstan to reorganize the State Tax Inspectorate along functional lines. The new structure will improve revenue collection, reduce opportunities for corruption, and institute an appeals process.
The tax compliance rate of 11% did not meet USAID’s 1999 target (16%). However, given the very poor condition of the Kyrgyz economy, and thus, the dropping tax revenues, the result was considered a limited success.
In an effort to rationalize expenditures, USAID successfully increased the number of government agencies adopting program budgeting from seven in 1998 to 11 in 1999. Program budgeting links spending to programs, and therefore provides the government with the ability to evaluate the performance of programs, and to link performance to future funding. USAID is building on this success during 2000 by evaluating and re-training key staff members in program budgeting. A budget classification system still needs to be put in place.
Recent changes within the government bode well for accelerated fiscal reform in 2000 and 2001. For example, the Chairman of the Central Bank has replaced the Minister of Finance. USAID was successful in implementing successful reforms in bank accounting and supervision under his tenure. Therefore, USAID expects to continue to make substantial progress in fiscal reform. In addition, the government has placed the Customs Inspectorate under the Ministry of Finance in order to consolidate revenue collection efforts. Next year will be a critical year in the government’s effort to increase tax collections, as it will be the first full year of operation under a reorganized administrative structure for the State Tax Inspectorate. Significant progress is expected.
Possible Adjustments to Plans: The government has requested assistance in public-sector accounting, which USAID plans to provide in 2000 and 2001. The conditions in Kyrgyzstan are favorable for the development of such a project. The Minister of Finance and his deputy were instrumental in the success of the bank accounting reform project, and have expressed the need for a project in public-sector accounting. Government accounting reform would complement work already being done under this objective, and enhance the management of government finance.
Other Donor Programs: During 1999, the International Monetary Fund (IMF) brought in an advisor to work on tax policy issues. The IMF and USAID have been instrumental in preventing legislation that would reduce tax revenues. The other donor in this area, the German Agency for Technical Cooperation, phased out its assistance in December 1999.
Principal Contractors, Grantees, and Implementing Agencies: USAID activities are implemented through KPMG/Barents, a U.S. contractor, and through the U.S. Department of the Treasury. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1995)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)
Government deficit as a percentage of GDP
12.5% 3% 3% 2.5% 2% Tax revenues as a percentage of GDP
13.6% 10.7% 18% 19% 20% Govt. of Kyrgyzstan maintains compliance with conditions of international financial institutions*
Yes
* * * * __
*During FY 1998, USAID programs were being consolidated when the new strategy was developed. Decisions were made about the relevance of the indicators for the program. Data will not be collected for this indicator subsequently.
ACTIVITY DATA SHEET
PROGRAM: Kyrgyzstan
TITLE AND NUMBER: Accelerated Development and Growth of Private Enterprises, 116-013
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $6,850,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUDNING SOURCE: $10,800,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY 1993 ESTIMATED COMPLETION DATE: FY 2004Summary: The private sector in Kyrgyzstan is in desperate need of continued assistance if it is to have any hope of contributing to an increase in the standard of living. In 1995, when USAID began this work, 40% of GDP was generated by private enterprise. This percentage has since increased steadily to 68% in 1999. Unfortunately, these efforts are confronted by the difficulty of attracting capital investment in an emerging market with a difficult economic climate. During 1999, growth continued to stagnate. Problems resulted from the low prices fetched for the country’s commodity exports, especially gold and cotton. There was a major decline late in the year in the value of the som. It plummeted in value by 50% in 1998 after two years of relative stability, and then again in early 1999 in response to the devaluation of the tenge in Kazakhstan. Finally, the country continues to experience severe difficulties servicing both its internal and external debts in 1999.
There have been a number of positive developments. More than half of all land is in private hands with 99-year land use leases. Under a constitutional amendment adopted in October 1998, these land users will automatically become landowners. Agriculture accounts for about half of the GDP. More than 80% of agricultural output is produced on private farms. These should benefit from the liberating effects of land ownership. Moreover, the President has just created a powerful new land agency, led by a strong reformer, to oversee land reform.
The direct beneficiaries of these activities will be the nation’s private sector, as well as government entities that affect the private sector through laws and regulations. The indirect beneficiaries will be all citizens, as well as Kyrgyzstan’s major trading partners. USAID activities in this area support the U.S. Embassy’s Mission Performance Plan to assist the Government of Kyrgyzstan in the transition to a free-market economy.
Key Results: Three key results are necessary to achieve this objective: (1) an improved operating environment for private sector growth; (2) improved human resources for a market economy; and (3) increased availability and accessibility of capital and technological resources for the private sector.
Performance and Prospects: USAID advisors assisted Kyrgyzstan in becoming the first Central Asian country to acquire full World Trade Organization (WTO) accession. USAID assisted in analyzing the investment climate and existing, commercial laws; then drafting additional laws and regulatory regimes. Post-WTO accession assistance continues, as efforts are focused on streamlining the structure of the WTO oversight body; thereby, ensuring that the government meets all reporting and notification requirements. Commercial laws passed with USAID assistance include the Foreign Investment Law, the Procurement Law, and the Bankruptcy Law; all of which helped strengthen the investment climate. The FINCA micro-credit program has been very successful and has achieved complete financial sustainability. Since program inception, nearly $12 million in loans have been disbursed to 78,000 clients.
In the area of legal and institutional reform, advisors have been working in key fields including trade and investment, bankruptcy, collateral law, and the Civil Code. An important product has been the publication of a Practical Guide to the Civil Code, Part 1. This three-volume work, the first of its kind in the former Soviet Union, explains the operation of the Civil Code in non-academic terms, through real-life transactions. General business law has also been a focus, targeting constraints to business, including inadequate implementation of laws in such areas as contracts and property rights. Many of these efforts are needed to maintain the momentum created by the privatization process and to expand opportunities for U.S. trade and investment in Kyrgyzstan.
In 2001, support for private enterprise reform will focus increasingly on institutional development, reforms, and reductions of constraints to business. This will help in developing a local business environment that is more open and transparent and therefore less susceptible to corrupt practices. USAID is encouraging development and utilization of a competitive and cost-efficient procurement system and is promoting the establishment of a monitoring agency to encourage greater transparency and competition. Finally, as part of the "Southern Strategy," USAID continues to assist small and medium enterprises in the Fergana Valley in sectors such as food processing, construction, banking and credit unions, and textiles.
USAID advisors are helping to address the issue of private land ownership. Private ownership of land was provided for in a constitutional referendum adopted on October 17, 1998. USAID advisors helped the government draft a package of implementing legislation, including a Land Code and Mortgage Law. Thus, USAID has been instrumental in assisting the government in making, in less than a year, more progress on modern land legislation than has been made anywhere else in Eurasia.
In orderto reduce constraints to business, USAID initiated a Regulatory Reform project in 2000. USAID is preparing to end accounting reform assistance to the private sector. USAID funding of the successful Foundation for International Community Assistance (FINCA) micro-credit program will end. The program will become a commercial enterprise. The International Finance Corporation has expressed interest in investing in such a venture. USAID anticipates new activities in economic and business education in 2000 and 2001.
Possible Adjustments to Plans: No strategic changes identified at this time.
Other Donor Programs: Efforts to improve the business environment have been developed in close coordination with other donors, especially the World Bank, European Bank for Reconstruction and Development, and the Asian Development Bank. USAID is actively cooperating with projects of Dutch, German and Swiss technical assistance, as well as the European Union/Technical Assistance for Commonwealth of Independent States.
Principal Contractors, Grantees, and Implementing Agencies: USAID activities are implemented through private U.S. firms such as Booz Allen & Hamilton, Associates in Rural Development/Checchi and Carana Corporation, along with private voluntary organizations such as International Executive Service Corps, FINCA, and Agricultural Cooperative Development International/Volunteers in Overseas Cooperative Assistance. The Central Asian-American Enterprise Fund makes capital available to the Kyrgyz private sector with a business loan program. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1995)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Share of GDP generated by private Enterprises
40% * * * *
Number of new firms transferred to new accounting standards (cumulative)
0 800 400 600 1000 Govt. of Kyrgyzstan maintains adherence to conditionality of international financial institutions*
Yes
* * * * *During FY 1998, USAID programs were being consolidated and a new strategy was being developed. Decisions were made about the relevance of the indicators for the program . Data for these indicators will not be collected subsequently.
ACTIVITY DATA SHEET
PROGRAM: Kyrgyzstan
TITLE AND NUMBER: A More Competitive and Market-Responsive Private Financial Sector, 116-014
STATUS: Continuing
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $450,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $700,000 FSA
INITIAL OBLIGATION: FY 1993 ESTIMATED COMPLETION DATE: FY 2001Summary: In Kyrgyzstan, USAID seeks to create a more competitive and market-responsive private financial sector by reforming the banking sector and by developing a vibrant securities market. This program initially concentrated on strengthening the bank regulatory authority’s ability to supervise commercial banks. USAID had made reasonable progress in providing technical assistance for bank supervision when the Finnish Government took on this area in 1997. USAID then was able to concentrate its efforts on assisting commercial banks in converting to international accounting standards. The Finnish banking supervision program proved limited and momentum in moving bank supervision forward was lost. Thus, USAID has responded recently to a Government of Kyrgyzstan request to restart assistance in developing a professional bank supervision capacity.
USAID has been involved in capital market development in Kyrgyzstan since mid-1994. This support has been comprehensive and includes creating an independent National Securities Commission (NSC), establishing the Kyrgyzstan Stock Exchange (KSE), restructuring investment funds, and providing training to broker-dealers. Direct beneficiaries of this work are the professionals involved in financial market development: private bankers, stock brokers, and registered private enterprises. Indirect beneficiaries include contributors to pension funds and the general public. They benefit by more secure banks in which to deposit their savings and from the higher standards of living that will eventually result, due to increased investment emanating from those savings and pension contributions.
Key Results: Two results are necessary to achieve this objective. (1) Government regulatory agencies supervise, administer, and enforce legislation. (2) More forms of financial intermediation are institutionalized and effectively supply the private sector on a competitive basis.
Performance and Prospects: Kyrgyzstan’s banking system is fragile and under-capitalized, with 18 banks combining a total share capital of less than $14 million. Five banks, including the largest, were placed under conservatorship or liquidation in the first half of 1999, and two more banks have since been placed under conservatorship. Several had financial links to the state gas company, Kyrgyzgazmunaizat, which was affected by a large-scale fraud in early 1999. The weak supervision capabilities of the central bank were revealed by the failure to recognize and respond to this problem. USAID has recently started to address these problems as part of an effort to tighten financial regulatory guidelines and enhance monitoring capacity in the banking sector. In response to a request from the Chairman of the Central Bank, USAID recently placed a supervision specialist on site.
With USAID’s technical assistance, all of Kyrgyzstan’s 18 commercial banks are now operating using international accounting standards. The virtually complete adoption of such standards by the banks is a critical component of transparency and represents a significant step forward in reform.
In 1999, significant progress was achieved in improving the prospects for sustainability of the stock market. Off-exchange trading was prohibited, leading to increased trading volume. The basic framework for an effective securities market has been developed, although the Kyrgyz Stock Exchange requires increased corporate listings and the development of a cost-efficient over-the-counter (OTC) system. USAID assistance to the stock market will terminate in early 2000.
USAID's primary function will be technical assistance to improve bank supervision. This will include some assistance to the banking sector that focuses on transparency issues, and training accountants from the central bank and commercial banks to better understand international accounting standards. In addition, the banks will be provided with technical assistance for the development of better information systems.
Possible Adjustments to Plans: It is expected that the bank accounting reform activities will end in 2000. Work on bank supervision will have a longer time horizon.
Other Donor Programs: USAID assistance is coordinated closely with the World Bank, as well as with other donors, particularly the European Union. The International Monetary Fund is currently supporting an advisor in bank supervision (off-site), thereby complementing USAID’s assistance.
Principal Contractors, Grantees, and Implementing Agencies: USAID financial assistance activities are implemented through two private U.S. firms, Pragma and International Business & Technical Consultants, Inc. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1995)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Bank deposits as a percentage of GDP
4% 6.6% 9.0% 15% 20% Number of companies listed on the stock exchange
10 45 60 100 150 Number of financial services available*
Percentage of banks meeting capital adequacy requirements*
Types of financial institutions*
Types of firms operating in securities market*
*During FY 1998, USAID programs were being consolidated and a new strategy was being developed. Decisions were made about the relevance of the indicators for the program. Subsequently, data were not collected on these indicators.
ACTIVITY DATA SHEET
PROGRAM: Kyrgyzstan
TITLE AND NUMBER: Increased Citizens' Participation in Political and Economic Decision-making, 116-021
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,500,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $3,000,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY1993 ESTIMATED COMPLETION DATE: FY 2004Summary: Kyrgyzstan is an emerging democracy and the only country in the region where there is considerable support for reform. Citizens are increasingly becoming more informed and are participating in political and economic decision-making at all levels. However, the process for democratization has yet to become institutionalized. For example, elections do not yet fully meet international standards, NGOs and independent media are still not sustainable, and NGO-government partnerships are nascent. Formal public parliamentary hearings are held on an ad hoc basis. The purpose of USAID’s effort is to address these issues of institutionalization and long-term sustainability of democratic reforms and in this, the activities support the U.S. Embassy's Mission Performance Plan. The direct beneficiaries of the activities in this area are the members and leaders of the NGOs and independent media. Indirectly, all citizens will benefit from a strengthened civil society which permits free and open participation in elections.
Open, competitive elections are integral to the long-term sustainability of citizen participation. USAID is devoting attention to the upcoming 1999-2000 elections cycle. USAID assistance aims to increase citizen participation in the electoral process and to help the government comply with its commitments to international electoral standards. Additional priorities are the creation of a legal infrastructure to expand existing government accountability, and the fortification of NGO and media development to promote well-informed citizen participation. Assistance to the NGO community aims to increase its professional and management capabilities, to encourage advocacy and lobbying, to influence legal and regulatory processes, to effect social change, and to provide needed social services.
USAID’s program includes a strong emphasis on building social partnerships between civil society, government, and the business sector to further foster citizen participation in decision-making. USAID is working to make public hearings a part of the formal legislative process and to cultivate government receptivity toward citizen participation.
Key Results: Three key results are necessary to promote civic participation: 1) NGO roles in civil society must be augmented; 2) information on domestic economic policies and politics must become readily available; and 3) the government must become more responsive and accountable to citizens and citizens’ organizations.
Performance and Prospects: Progress has exceeded expectations. However, the Ministry of Justice is not allowing several political parties to participate in the upcoming parliamentary elections. This matter is currently before the courts. In addition, there are reports that some media outlets are under government pressure to cease programming related to the election campaign. The upcoming election campaign and the elections themselves will be a true test of Kyrgyzstan’s commitment to democratic processes.
Despite these issues, the Government of Kyrgyzstan adopted a new electoral code that, for the most part, meets international standards for elections as outlined in the Organizations for Security and Cooperation in Europe (OSCE) Copenhagen Document. USAID assistance played an integral role in helping the government draft the legislation and include ideas from the NGO and media communities. NGOs continue to grow and expand their advocacy activities. For example, the Coalition for Democracy, an USAID-supported leading democracy-related coalition of NGOs, expanded its activities this election cycle and established branch offices in each of the oblasts in Kyrgyzstan. The Parliament is increasingly viewing NGO and citizen input as an important part of the legislative process. Several active journalist associations in Kyrgyzstan have also participated in reviewing draft legislation and submitting commentary to Parliament. With USAID assistance, a new legislative drafting center now provides the Parliament greatly needed drafting services. With respect to media, broadcast journalists increasingly engage in more politically sensitive reporting. Until recently, only print journalists produced hard-hitting political news.
In FY 2001, USAID is anticipating additional programming in the area of women’s legal rights issues, women’s participation in political processes, and youth social activism at the local level.
Possible Adjustments to Plans: No strategic changes identified at this time.
Other Donor Programs: Civil society development is a multi-donor effort in Kyrgyzstan. The United Nations High Commission for Refugees (UNHCR), OSCE, United Nations Development Program (UNDP) and Soros all support local NGOs with small grants. The UNHCR is co-funding NGO resource centers along with USAID. In the area of independent media, the UNDP, OSCE and Soros support journalist associations and conferences. In the political processes area, UNDP is implementing an "automization" of elections. USAID and the European Union coordinate with parliamentary assistance.
Principal Contractors, Grantees, Implementing Agencies: Several USAID-funded U.S., private voluntary organizations such as the American Bar Association/Central and East Europe Law Institute, Internews, the National Democratic Institute, and the International Foundation for Electoral Systems are playing a role in promoting democracy in Kyrgyzstan. Counterpart International Aid to Artisans, and the International Center for Not-for-profit Law, together form the Counterpart Consortium, also participate in local NGO development. The U.S. NGO, Initiative for Social Action and Renewal in Eurasia, will also participate in the development of local environmental NGOs. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Number of NGOs involved in advocacy (media/gov) 70/74(1996) 57/42 75/50 100/55 125/70 Average daily minutes of local news programming 1 (1994) 20 22 24 26 Number of Parliamentary hearings and committee meetings addressing legislative/policy issues
2 (1996)
5 45 45 45
ACTIVITY DATA SHEET
PROGRAM: Kyrgyzstan
TITLE AND NUMBER: More Effective, Responsive, and Accountable Local Government, 116-023
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,000,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $2,500,000 FSA
STATUS: Continuing
INITIAL OBLIGATIONS: FY 1998 ESTIMATED COMPLETION DATE: FY 2004Summary: Kyrgyzstan inherited an inefficient and highly centralized, Soviet-style governmental structure. The nation can no longer maintain its infrastructure or administer social services adequately now that these are no longer subsidized the Union of Soviet Socialist Republics. On the other hand, modest democratic reforms have taken root in "self-governing cities," in which the President appoints a mayor from among the popularly elected council members. This system increases accountability since these mayors are local leaders with a local reputation to maintain. A promising development this past year is that the Congress of Local Communities, a government-sponsored NGO, is an advocate for decentralization and for the professionalization of local government.
Local government reform has the potential to improve the quality of everyday life for citizens, to increase local control over local issues, and to involve the population more actively in public affairs. Local government assistance can serve as a platform for USAID or other agencies’ objectives. Improved water supply, greater civil society, and economic development are areas which would benefit from more effective and responsive local governments. The direct beneficiaries of the activities in local municipal reform are the citizens of the municipalities who will receive improved services from their local government.
Assistance under this objective is critical for laying the groundwork for reform by strengthening the institutional capacity of selected municipal governments, and by cultivating advocates for local government reform within the sector. The demonstration effect of the models inspire other local governments to adopt improved practices, as well as encourage the national government to devolve greater authority to self-governing bodies.
Key Results: The three results are to 1) increase citizen participation, 2) to strengthen local governments’ capacity, and 3) to increase the autonomy of local government from national and oblast authority.
Performance and Prospects: During this first year many activities were begun under the Local Government Initiative. The highlights in 1999 included: the first public budget hearing ever, held in Naryn; the rapid formation of democratically organized housing associations throughout the country; and the appointment and training of procurement agents nationwide. Successful model practices included a model procurement in Bishkek and competition among the best housing associations for grants that built in competitive procurement practices. Well-received, on-going activities include support to local organizers to form democratically controlled housing associations to perform functions previously performed by government agencies, leadership skills, financial management and procurement training for officials and council members, and the automation of financial management systems in the rayon of Chuy-Tokmok. A change in contractors slowed implementation in the fall of 1999. However, the new firm retained most of the local staff and, after a culling process, the most promising activities are being pursued further.
An enormous agenda remains in the area of local government empowerment. Villages, towns, and cities are severely constrained by the Finance Ministry's control over their budgets. The tax law allows local authorities to collect a number of local taxes and fees, but these sources provide only a fraction of the required local revenues. Despite the reforms being implemented by national agencies, much remains to be done, including involving the Ministry of Finance, which remains an opponent of fiscal decentralization. USAID will continue to address these issues through policy dialogue with the national government.
The 2000 work plans will build on current activities, as well as expand the development and implementation of model "good practices" in up to four local governments.
Possible Adjustments to Plans: No change in strategic plans identified at this time.
Other Donor Programs: A number of other donors including the World Bank, UNDP, and the European Union also support activities with a local government dimension that build around the principles of promoting sustainable human development in the country through decentralized management and a professional civil service.
Principle Contractors, Grantees, and Implementing Agencies: Urban Institute and the International City/County Management Association through its Resource Cities Program. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1998)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Adoption of practices promoting citizen input and involvement (cumulative) 0 0 0 3 4 Adoption of practices improving delivery of services and management of resources (cumulative) 0 0 1 3 4 Increasing the powers of local government (cumulative)
0
0 1 2 2
ACTIVITY DATA SHEET
PROGRAM: Kyrgyzstan
TITLE AND NUMBER: Improved Sustainability of Health and Social Benefits and Services, 116-032
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,400,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $4,000,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY 1993 ESTIMATED COMPLETION DATE: FY 2004Summary: Improved social services are critical to the welfare of the population and to engaging public support for overall reforms. The health care delivery system which Kyrgyzstan inherited from the soviet era can be characterized as an inverted pyramid. Primary care is at the bottom, with too few resources, while specialized hospital care at the top receives too much. One of the major problems is the inefficient allocation of existing resources and nonexistent infrastructure for primary health care.
In 1994, USAID initiated health care reform assistance to restructure the health-care system. The government has been a leader in health reform, introducing an integrated package of reforms at a rapid pace, especially in the pilot activity in Issyk-Kul. The success of USAID’s assistance helped to leverage a World Bank loan to replicate the reforms more broadly. With combined USAID and World Bank efforts, approximately 90% of Kyrgyzstan’s population will have access to primary health care services by the year 2002. The newly created Family Group Practices (FGPs) will be the first points of contact for the population at the local level. All citizens of Kyrgyzstan are beneficiaries of this reform.
Key Results: This activity contributes to the improved sustainability of selected social services through achievement of two results: 1) cost-effective health care services will be demonstrated in selected oblasts, and 2) cost-effective health sector reforms adopted nationally. To date, 329 FGPs are operational nationally. 87% of the people have openly enrolled and are exercising their choice for their FGP in the pilot sites. The health care system is already more cost-effective, and 60% of the service providers in the pilot oblast are being reimbursed by market-oriented payment systems. The Issyk-Kul model has now been adopted in five additional Oblasts. NGOs have become an important vehicle for these reforms and will help ensure that more effective delivery and change is taking place in target communities.
Performance and Prospects: This activity has progressed well with a high proportion of the targeted populations (85%) now exercising their right to select the family group practice of their choice in areas where enrollment campaigns have been conducted. All management information systems have been developed and implemented, allowing the providers to respond to new incentive payment systems. A new provider payment system, which encourages primary care physicians to treat more and refer less often to specialty hospitals, is being implemented. USAID has also provided technical assistance to integrate women’s reproductive health, childhood health services, and infectious diseases such as tuberculosis into (FGPs). All FGPs will provide family planning services by 2001.
USAID policy and legal assistance led to the establishment of a national framework for health care, which incorporates health insurance into a broader social insurance context. Information on health reform has been widely disseminated to the public through television and radio spots and newspaper and magazine articles. The health insurance fund has implemented nationwide the hospital payment system which was developed in the Issyk-Kul demonstration. By FY 2004, it is expected that health reforms in Kyrgyzstan will be completely institutionalized at the policy and program levels.
Possible Adjustments to Plans: Integration of vertical health programs (i.e., infectious diseases, and reproductive health) into the Family Group Practice health delivery structure will become institutionalized.
Other Donor Programs: Various other donors are involved in this crucial area, including the World Bank, the Asian Development Bank, World Health Organization, United Nations Development Program, UNICEF, UNAIDS, United Nations Population Fund, and the European Union.
Principal Contractors, Grantees, and Implementing Agencies: Abt Associates is currently the principal contractor implementing the health reform assistance activity. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Number of independent primary care practices (Family Group Practices – FGPs) (cumulative) (pilot/nationwide) 32 (1996) 81/344 81/344 350 400 Percent of health care providers reimbursed by market-oriented payment (pilot/nationwide) 40%(1997) 60%/17% 65%/22% 70% 80% Percentage of the population enrolled in FGPs
0 (1995)
87% 85% 90% 95%
EXPLANATION FOR SPECIAL INITIATIVES and CROSS-CUTTING OBJECTIVES
Title: Special Initiatives, 116-041
Planned FY 2000 Obligation and Funding Source: $9,660,000 FSA
Proposed FY 2001 Obligation and Funding Source: $8,540,000 FSASummary: This objective includes all of the 632 allocations and transfers to other USG entities. The majority of funding in this objective goes to the State Department for public diplomacy, humanitarian transport, international narcotics and law enforcement programs. Other recipients include the Deaprtments of Commerce and Customs.
USAID activities under this objective meet criteria outlined in Agency guidance for special objectives or interests. That is, they are of limited scope and/or duration and respond to particular windows of opportunity. For USAID/Kyrgyzstan, these activities generally support health care inprovement.
Title: Cross-cutting Objectives, 116-042
Planned FY 2000 Obligation and Funding Source: $2,900,000 FSA
Proposed FY 2001 Obligation and Funding Source: $4,500,000 FSA
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Last Updated on: February 01, 2001 |
