Kazakhstan

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Introduction Development Challenge Other Donors FY 2002 Program Activity Data Sheets Summary Tables Program Summary Strategic Objective Summary USAID Search: Kazakhstan Previous Years' Activities 2001, 2000, 1999, 1998, 1997 Last updated: 03     Introduction Kazakhstan is the ninth largest country in the world and has rich reserves of coal, oil and natural gas as well as gold, copper and chromium. Its location makes it key to the geopolitics of Central Asia. Kazakhstan continues to enjoy a special bilateral relationship with the United States because of its nuclear disarmament, U.S. investment, and environmental initiatives. It is the largest recipient of U.S. assistance in Central Asia. Kazakhstan's leadership remains authoritarian, but has demonstrated commitment to an open economy, financial and health reforms and environmental policy. While civil society and local activism are beginning to influence the government, social inequities and corruption are prevalent. Development Challenge Overall, the challenge is to expand and deepen broader-based economic growth, participation of all of the citizenry in economic and political life, and transparency and accountability of government at national and local levels. Kazakhstan's leadership has made demonstrable commitment to economic reform. Good monetary and fiscal policy has resulted in fully convertible currency and a growing economy. In 2000, fiscal management improved, inflation declined, tax revenues increased significantly and the Government was able to carry out its spending plans. In 2000, real GDP growth was 9.6%, compared to 2.7 % in 1999. The percentage increase in Consumer Price Index last year was 9.8%, compared to 17.8% in 1999. Also in 2000, the Government's fiscal deficit as a share of GDP was 0.7% compared to 3.6% in 1999. In the private sector, the pension system showed outstanding results, as assets grew by 75% in 2000. The first corporate bonds were issued with USAID assistance. The corporate fixed income market in Kazakhstan has now become a viable and functioning market, with $126 million in new issues. In addition, there was a 350% increase in equities traded on the Kazakhstan Stock Exchange. Despite substantial gains in the economic sector, Kazakhstan continues to cope with endemic corruption, limited access to modern business information and lack of a thriving business sector that can compete both domestically and internationally. USAID initiatives in public sector budgeting, standard accounting, and SME development address these problems. The government allows certain freedoms but not others. There have been considerable gains in the growth of civil society and in citizen's participation in their communities and in the legislative process. Local government officials, especially local council members, are eager to work with USAID to promote greater transparency and participation in local governance. USAID trains local officials and non-governmental organizations (NGO) through a nationwide network of NGO support centers. These centers provide logistical and technical assistance, as well basic training in project development, organizational management, and advocacy. Other growing networks include NGOs which promotes volunteerism, one which re-trains teachers in interactive methods to promote critical thinking, and another which coordinates advocacy campaigns to promote democratic reforms. The latter, a loose coalition of community groups, lobbied the legislature against a poorly conceived law on local self-government and won some improvements to the restrictive Information Law. While these victories are primarily defensive, the emergence of advocacy groups, and the willingness of parliamentarians to engage with them, is encouraging. The lack of a viable political opposition, the frequent abuse of governmental powers, and the marginalization of independent media are serious problems. USAID does not work directly with the government on electoral reform, rule of law and anti-corruption activities, because of a lack of commitment to change. Awareness raising is pursued through partnerships with NGOs, such as the local Transparency International chapter. The business community is using the new local Transparency International chapter as a network to raise issues of government harassment and graft. The media continue to come under pressure from the government, as authorities deploy direct legal and indirect financial means to concentrate control over, or outright ownership of, major media. Some editors and journalists have lost jobs and civil cases have been brought against others. Several independent newspapers have suffered intermittent operations and closures as a result of this pressure. USAID helps preserve the political space that still exists for the press and electronic media and will also help produce higher-quality programming in order to meet local production requirements as well as civic obligations. Like many countries in the Central Asia region, health care in Kazakhstan deteriorated after the break up of the Soviet Union. Health services were severely under-funded and scarce resources were used on costly curative rather than preventive services. Infectious disease rates began to rise. The government has taken an interest in reforming its health system and health care has been an important and successful area of assistance and partnership. USAID helped to pilot family group practices and privatize the state-owned pharmaceutical distribution and retail system. USAID has contributed significantly to women's health by making modern methods of contraception an alternative to abortion. The USAID-financed 1999 Demographic and Health Survey (DHS) showed a substantial decline in the general abortion rate from 1995 as use of voluntary family planning increased. The face of basic health care has begun to be transformed, as USAID introduced the family group practice structure, which provides an affordable alternative to Soviet institutional health care. Families can go to a single clinic or physician for their entire basic health care needs, rather than a series of specialty-based hospitals and clinics. The recent DHS reported that 37% of Kazakhstani women now report a family group practice as their usual source of health care. USAID support for infectious disease control has brought positive results. Mortality from tuberculosis (TB) decreased by 20% in 1999. However, the incidence of TB is still 141 per 100,000 in Kazakhstan, compared to 6 per 100,000 in the U.S. In the past, decisions on the use of natural resources led to serious environmental disasters that have impeded economic growth. USAID efforts address several environmental problems including water management, energy conservation, oil and gas regulation and global climate change. USAID provides training and technical assistance to improve the management capacity of natural resources officials; improve policy and regulatory frameworks; and build public commitment. Partnerships, training and exchanges remain an important component of U.S. assistance. Through its Global Training for Development program, USAID trained over 1,000 reform-minded government leaders, professionals, and citizen activists, of whom 54% were women, in areas directly related to democracy and a free-market economy in 2000. The USAID mission takes advantage of several centrally-managed programs in the Global Bureau, including the inter-agency agreement with the Center for Disease Control and a variety of mechanisms for reproductive health. The Farmer-to-Farmer program financed through P.L. 480 and managed by the Office of Private and Voluntary Cooperation in the Bureau for Humanitarian Response is active in Kazakhstan. In addition, USAID supports a number of institutional partnerships that seek to build lasting relationships between the United States and Kazakhstan. Other Donors The World Bank has now assumed the primary role of supporting the government's program in commercial law drafting and judicial reform. The World Bank, European Bank for Reconstruction and Development, United Nations Development Program (UNDP), Soros, European Union (EU), and the German and Israeli governments promote the development of SMEs. A World Bank project on enterprise support is now being developed, and the EU is developing a new industrial restructuring activity. In the public sector, The World Bank supported the computerization effort of the State Tax Committee and is continuing with a major treasury modernization project that involves technical advisors, training and equipment. The UNDP, the Organization for Security and Cooperation in Europe, EU and the Soros Foundation are supporting initiatives in the democracy sector. The World Bank is providing a major loan for health sector reform. The World Bank, Asian Development Bank and the Swiss and Canadian Governments are supporting activities to improve natural resources management. FY 2002 Program Given the relatively substantial level of U.S. assistance, the relative growth of the economy and progress on economic restructuring, USAID will continue with deep support for a broad range of partners and efforts. Assistance will focus on improving modern economics and business education, training for private enterprises, tax and budgetary reforms, and new financial instruments such as social insurance, mortgages, and grain receipts. By supporting micro-credit activities, USAID will help increase access to capital and will provide women with greater opportunity to own businesses and increase their standard of living. USAID will also promote trade and investment, concentrating on legal and regulatory reforms at both the national and local levels, as well as assist continued improvement to tax administration and budgeting. USAID support will focus on advocacy and sustainability of a broad range of citizens' organizations, expanding civic education and information dissemination, and building capacity of parliamentarians and local government officials, with particular emphasis on finance, ethics, and anti-corruption. USAID will continue to help expand a new health reform model, as well as improved methods to control infectious diseases, especially TB and HIV/AIDS. A special effort will be made to increase the knowledge of health care providers and patients, particularly about preventive health care, infectious diseases and reproductive health. USAID will also assist with several critical environmental problems including oil and gas regulation, energy conservation, global climate change, and water management. USAID will support training to natural resources officials to improve management and decision-making and support demonstration models that reinforce training. Demonstration models will introduce safer, more practical ways to operate and clean up oil fields in the Caspian Sea. In the northern Aral Sea, models will be developed to improve the livelihoods of those who were left to deal with the consequences of the Aral Sea disaster. USAID will also help the Central Asian Economic Community to reach consensus among other existing regional water and energy organizations on transboundary resource issues. The Regional Initiative in Atyrau will be fully developed. As oil revenues increase, USAID will seek increased government cost-sharing. Activity Data Sheets 115-012  Increased Soundness of Tax and Budget Policies and Administration 115-0131  Improved Environment for the Growth of Small and Medium Enterprises 115-015  Energy 115-0161  Improved Management of Critical Natural Resources, including Energy 115-0211  Strengthened Democratic Culture among Citizens and Target Institutions 115-023  More Effective, Responsive, and Accountable Local Governance 115-031  Human Suffering Reduced 115-032  Increased Utilization of Quality Primary Health Care for Select Populations 115-042  Cross-Cutting Programs Country Background Information Resources     CIA Factbook   Library of Congress National Geographic Country Maps

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