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KAZAKHSTAN
>> Regional Overview >> Kazakhstan Overview
Development Challenge FY2001 Program /
Activity & Budget InformationSummary Tables
Program Summary
Previous Years' Activities
2000, 1999, 1998, 199708
Introduction
Kazakhstan continues to enjoy a special bilateral relationship with the United States because of its strategic importance, U.S. investment, and environmental initiatives. It is the largest recipient of U.S. assistance in Central Asia. Throughout 1999, Kazakhstan worked closely with the United States on a range of non-proliferation initiatives under the Cooperative Threat Reduction program. During 1999, Kazakhstan moved toward compliance with the Kyoto Accords on Global Climate Change. Kazakhstan was the first USAID-assisted country to support the U.S. Government position on this important environmental issue. In November 1999, Kazakhstan joined the United States in signing the Caspian Pipeline Accord. In December 1999, Kazakhstan signed the 2000 Bilateral Defense Cooperation Agreement. Through 1999, however, U.S.-Kazakhstan relations were strained by serious concerns about continuing corruption, flawed elections, illegal arm sales, and local hassling of investors.
The Development Challenge
Kazakhstan still faces many challenges, following years of Soviet domination. Its business and industrial sectors are limited; and its economy is unbalanced. Kazakhstan relies too heavily on inefficient agricultural and mineral extraction systems that exacerbate already fragile environmental situations. With a per capita income of $1,300, most citizens of Kazakhstan have yet to see the benefits of macro-economic reform and the resurgence of world prices for the country’s significant oil, gas, and gold deposits. The social safety net has been weakened with declines in health status, benefits for senior citizens, and education opportunities. Dramatic increases in infectious diseases such as drug-resistant tuberculosis pose global threats.
National leadership remains committed to an open economy, financial reforms, civil society, health reform, and sound environmental policy. In the economic arena, Kazakhstan has put in place sound monetary and fiscal policies, and an innovative private pension system. The government has actively encouraged international trade and foreign investment. The national currency, the tenge, remains fully convertible.
The majority of power generation facilities and coal mines have been privatized, and the government has announced its intention to privatize the electric distribution companies. The government has established an independent regulatory entity for the power sector. In 1999, the government passed a series of environmentally-sound, oil and gas regulations that meet international standards. Two-thirds of all oil pumped in Kazakhstan comes from joint venture operations with international petroleum firms. Kazakhstan receives assistance with energy and environmental challenges through USAID’s Central Asia Regional program.
At the same time, the government has taken some steps to protect its vulnerable populations through reforms in the areas of health, housing and pension. Kazakhstan is beginning to improve efficiency, access to services, and the quality of health care. Building upon USAID’s pioneering work in health reform in Kyrgyzstan, pilot programs in family group practice and new payment systems have demonstrated that cost-effective, quality services are possible, and that health reform models can also work in Kazakhstan. The President has endorsed a plan to replicate nationwide the USAID health care reform model and a large World Bank (IBRD) loan is being developed based on the USAID approach. The introduction of new treatment protocols for tuberculosis is a major step toward containing this virulent disease that has reemerged in the post-Soviet period.
Government performance in democratic reform has been disappointing. Authority for all significant policy decisions remains centralized in the presidency. The leadership did not permit a fairly contested election for the presidency in early 1999. Instead, two opposition candidates, including a strong potential contender, were disqualified, leaving the outcome certain. In addition, government crackdowns on the media increased self-censorship, and reporting favored the incumbent. Freedom of assembly was at times restricted, and there were credible reports of numerous irregularities at the polls. In the October 1999 parliamentary elections there were some improvements. Candidate fees were significantly reduced, and political parties were allowed to register and campaign. The media – which also broadcast statements from and information about a wide range of candidates -- covered candidate debates. However, the leader of a main opposition party, the leading contender disqualified from the presidential election, was again barred from running for office. There were also reports of widespread abuses of the ballot counting process.
Nevertheless, it would be a mistake to judge democracy assistance as a wasted effort in Kazakhstan. With the assistance of USAID grantees, electoral improvements were adopted before the parliamentary elections. Non-partisan domestic monitors, trained and organized through USAID assistance, collected much of the evidence that exposed problems throughout the electoral system. USAID training of independent media contributed to the noticeably improved coverage of the parliamentary elections. Draft legislation calling for the election, rather than appointment, of village and city mayors was recently submitted to parliament. In the area of civil society, where USAID has made by far its greatest investment in democracy, there have been great strides. There are now over 700 non-governmental organizations (NGOs) operating in Kazakhstan. A significant number of the organizations are learning how to advocate their causes to the government. An NGO/Parliamentarian Working Group is drafting new NGO legislation.
Partnerships, training and exchanges remained an important component of US assistance. USAID trained over 600 reform-minded government leaders and professionals, of whom 45% were women, in areas directly related to democracy and a free-market economy. USAID supports a number of partnerships that seek to build long-lasting relationships between U.S. and Kazakhstani institutions.
Other Donors
The IBRD provides technical assistance for economic restructuring, and loans in areas of oil development, urban transport, social protection, public administration and finance, and enterprise development. New IBRD projects will address land registration, financial sector adjustment, private sector support, irrigation and drainage, water supply, agricultural privatization, fiscal reform and health. Late in 1999, Kazakhstan agreed in principle on the terms of a new International Monetary Fund agreement. To qualify for the new Extended Fund Facility, Kazakhstan had to reduce its budget deficit. USAD assistance was critical in helping the Government of Kazakhstan to increase fiscal revenue and bring national expenditures in line with government budgets through training and technical assistance aimed at more effective fiscal management. USAID’s work with the Government of Kazakhstan has helped to strengthen tax administration in Kazakhstan, and reduce opportunities within the system for corruption. The Government of Kazakhstan’s, computerized, automated tax system – developed with USAID assistance – is being expanded to the regional and state levels with a $17 million loan from the IBRD. The European Union, the European Bank for Reconstruction and Development, the Asian Development Bank, and major bilateral donors such as Germany, Britain, Japan, France, and Korea provide additional aid for programs, many of them pioneered by USAID.
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: January 13, 2003 |
