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Kazakhstan
>> Regional Overview >> Kazakhstan Overview Activity Data Sheet
PROGRAM: Kazakhstan
TITLE & NUMBER: Improved Environment for the Growth of Small and Medium Enterprises, 115-0131
STATUS: New
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $9,600,000 FSA
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $10,000,000 FSA
INITIAL OBLIGATION: FY 2001 ESTIMATED COMPLETION DATE: FY 2005Summary: This SO includes funds previously reported on under SO 1.4. The growth of small and medium-sized enterprise represents the greatest opportunity for job creation, economic growth, improved quality of life and greater participation. The goal of this new objective is to stimulate growth of the small and medium enterprise (SME) sector by improving the business environment. USAID will pursue this goal by: 1) providing greater opportunities to gain skills and knowledge that enhance SME growth; 2) developing mechanisms to provide for the accumulation and distribution of capital needed to finance SMEs, and increase the opportunity of businesses to gain access to credit; and 3) providing assistance targeted at increasing laws and regulations that support SME growth.
Program Categories include support for micro, small and medium enterprise technical assistance; banking reform; education and support for rule of law.
Key Results: 1) increased opportunity to acquire business information, knowledge, and skills; 2) more responsive financial institutions, instruments, and markets; and 3) increased implementation of laws and regulations.
Performance and Prospects: The GOK continues to outpace the rest of the Central Asian Republics, in part due to its strong commitment to economic reform. Many critical reforms were adopted in 2000, and USAID achieved impressive results, exceeding those of prior years. For example, total assets in the banking industry increased by 46%; assets in the private pension system grew by 75%; there was a 350% increase in equities traded on the stock exchange; and of 600 small scale loans in one region 82% were made to women. Kazakhstan again proved itself to be the leading reformer in the region.
The impacts of USAID's training initiatives were numerous. In fact, 204% of USAID's accounting training benchmarks were achieved and USAID helped the Kazakhstan Association of Accountants and Auditors to complete certification as a chartered member of the International Federation of Accountants (a first in the NIS). In Atyrau specifically, over 100 local professionals now function more effectively as enterprise accountants, tax inspectors, and accounting educators as a result of USAID training.
USAID's support of Kazakhstan's private accumulation pension system has been critical to its continued rapid development, as assets grew by 75% during 2000. However, the pension system continues to require further development. The two main objectives for 2001 will be to establish an effective regulatory body and to assist in the privatization or liquidation of the State Accumulation Pension Fund.
In January 2000, the Kazakhstan Community Loan Fund (KCLF) received a license to open a branch office in Shymkent. Since then the office has disbursed 600 loans, with an average loan of the more then 600 loan recipients in Shymkent, 82% were female. CAAEF (Central Asian-American Enterprise Fund) continued to support micro-credit activities by providing $400,000 in support of Mercy Corps' micro-lending activity, while the Eurasia Foundation provided $150,000 in loan capital to KCLF.
In 2001, USAID will undertake a broad expansion into SME training and education initiatives. The upcoming Regional Economics and Business Education activity will provide increased opportunities for access to business and economic information. Currently, business and economics curricula in Kazakh universities are very poor compared to the West. Therefore, USAID will develop this activity to provide universities and SMEs with resource materials, training, and research opportunities. This activity will improve both the quantity and quality of business and economics education for college students and business professionals.
Our newly implemented SME training activity will also offer those involved in private enterprise basic business short courses, as well as, help to foster growth of business associations and advocacy groups. The SME training activity will also provide technical assistance to local SMEs through Private Voluntary Organizations (PVOs).
Also in 2001, USAID will help to develop new investment grade instruments and will facilitate the issuance of longer-maturity bonds, introduce credit enhancement techniques and improve bond indentures. In addition, USAID will assist in upgrading the legal and regulatory environment for the insurance industry and will provide technical, advisory, and training assistance to banks and non-bank financial institutions willing to start mortgage lending operations. USAID will also continue to identify and remove investment constraints that limit the growth of SMEs.
To support the rule of law, USAID will help reduce the burden of government regulations, improve the procedures for initiating, drafting, reviewing and enforcing regulations, and continue to support WTO accession. In the customs area, activities will focus on bringing about the further simplification of customs regulations, and closer coordination between tax and customs authorities. In support of customs reform we will work closely with the Foreign Commercial Service in the context of the working group of the American Chamber of Commerce.
USAID intends to obligate, in FY 2001, the following amounts per category: Micro, Small and Medium Enterprise Technical Assistance, $5,006,400 for technical assistance and training; Bank Reform, $1,290,000 for technical, advisory and training assistance; Education, $1,078,900 for training; and Rule of Law, $2,224,700 for technical assistance and training.
In FY 2002, USAID will continue to work with the Government and the private sector to create healthier markets in which micro, small, and medium enterprises (SMEs) can thrive and compete. USAID will continue to focus on growing business and trade, including removing investment constraints, increasing access to capital, and expanding business knowledge and skills. USAID will help to strengthen the banking sector to ensure that banks will better serve SMEs. Advisors will continue to develop new financial instruments and markets to create greater opportunities for capital accumulation and lending. Finally, USAID will continue to train and equip entrepreneurs and government officials with knowledge on basis business practices, economic principles and managerial skills required to operate a business.
Beneficiaries: USAID's customer focus is new job creation, economic growth, greater participation, and improved quality of life for the citizens of Kazakhstan. As such, the ultimate beneficiaries are entrepreneurs who can increase profitability, and those individuals who secure new employment. Further, by building a constituency for reform, creating employment, and expanding economic opportunities, such a program can mitigate political and economic crises in some of the key parts of the region, such as the Caspian Littoral.
Possible Adjustments to Plans: None anticipated.
Other Donor Programs: The World Bank has now assumed the primary role of supporting the Government's Legal Reform Program in commercial law drafting and judicial reform. The World Bank, European Bank for Reconstruction and Development (EBRD), United Nation Development Program (UNDP), Soros, European Union-Technical Assistance for the Commonwealth of Independent States (EU/TACIS), and the German and Israeli governments promote the development of SMEs. A World Bank project on enterprise support is now being developed, and the European Union (EU) is developing a new industrial restructuring activity.
Principal Contractors, Grantees, or Agencies: Pragma Corporation is implementing the SME training activity. The Services Group has begun implementing the Removal of Investment Constraints activity. Booz-Allen & Hamilton is responsible for delivering WTO and customs assistance. Barents Group is implementing the banking supervision activity. The Academy for Educational Development provides training for counterparts, and the Eurasia Foundation provides small grants. Central Asian - American Enterprise Fund (CAAEF) and PVOs such as Citizens' Democracy Corps (CDC), International Executive Service Corps (IESC), and Agricultural Cooperative Development Institute/Volunteers in Overseas Cooperative Assistance (ACDI/VOCA) provide financial and technical assistance, respectively. The Kazakhstan-Arizona Partnership helped build private sector advocacy capability.
FY 2002 Performance Table
Selected Performance Measures: Improved Environment for the Growth of Small and Medium Enterprises, 115-0131
Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY01 (Plan) FY02 (Plan) Indicator 1: Business Environment Index N/A N/A N/A 36.3% 37.8% 39.3% Indicator 2: Business Education Environment Index N/A N/A N/A No Baseline Established 22% 41% Indicator 3: Viable Financial Markets Index N/A N/A N/A 20.5% 36.2% 51.9% Indicator 4: Percent of legal and regulatory benchmarks achieved N/A N/A N/A 85.5% 88.4% 91.3% Indicator Information:
Indicator Level (S)or(IR) Unit of Measure Source Indicator Description Indicator 1: SO Percent Annual independent survey of the overall business environment. A seven question survey that measures improvement in the Small and Medium Enterprise (SME) environment. Indicator 2: IR Percent Quarterly and annual reports from Pragma Corp. and Carana Corp. Total number of business education benchmarks achieved as a percent of total number of business education benchmarks. Indicator 3: IR Percent Quarterly and annual reports from the KPMG/Barents and Pragma Corp, host-government archives, and international donor assessments. Total number of financial markets benchmarks achieved as a percent of total number of financial markets benchmarks. Indicator 4: IR Percent USAID/E&E-funded survey and host-government archives. Quarterly and annual reports from implementing partners. Total number of legal and regulatory benchmarks achieved as a percent of total number of legal and regulatory benchmarks. U.S. Financing
(In thousands of dollars)
Improved Environment for the Growth of Small and Medium Enterprises, 115-0131
Obligations Expenditures Unliquidated Through September 30, 1999 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 2,447 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD ESF 0 SEED 9,600 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 0 SEED 12,047 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 10,000 FSA 0 FSA 22,047 FSA 0 DFA 0 DFA 0 DFA Private Enterprise Growth
Obligations Expenditures Unliquidated Through September 30, 1999 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 1,221 ESF 1,221 ESF 0 ESF 0 SEED 0 SEED 0 SEED 68,426 FSA 59,388 FSA 9,038 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 8,945 FSA 4,411 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 1,221 ESF 1,221 ESF 0 ESF 0 SEED 0 SEED 0 SEED 77,371 FSA 63,799 FSA 13,572 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 1,221 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 77,371 FSA 0 DFA 0 DFA 0 DFA Financial Sector, 115-014
Obligations Expenditures Unliquidated Through September 30, 1999 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 210 ESF 210 ESF 0 ESF 0 SEED 0 SEED 0 SEED 51,086 FSA 48,271 FSA 2,815 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 1,487 FSA 2,665 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 210 ESF 210 ESF 0 ESF 0 SEED 0 SEED 0 SEED 52,573 FSA 50,936 FSA 1,637 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 210 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 52,573 FSA 0 DFA 0 DFA 0 DFA
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Last Updated on: May 29, 2002 |
