Kyrgyzstan

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Development Challenge The USAID Program Other Program Elements Other Donors Program Data Sheets Summary Tables USAID Search: Kyrgyzstan Previous Years' Activities 2002, 2001, 2000, 1999, 1998, 1997 Last updated: 30     (text taken from the FY 2003 Congressional Budget Justification) THE DEVELOPMENT CHALLENGE: Although small and landlocked with limited natural resources, Kyrgyzstan has been the most open, progressive and cooperative of the Central Asian republics. Kyrgyzstan is important to stability of the region and has remained a stalwart friend of the United States. The Kyrgyz Republic is a firm ally in the War on Terrorism and a significant coalition member. Its geographic location at the headwaters of major river systems in Central Asia enable it to affect critical and sensitive issues such as irrigated agriculture, electricity generation, and the environment in the downstream countries of Central Asia. Weak governance, continuing poverty, potential ethnic tensions, a porous southern border with Tajikistan and an essentially closed border with Uzbekistan are potential sources of conflict that could threaten regional stability and U.S. economic and political interests in Central Asia. Earlier armed incursions in the south of Kyrgyzstan by rebels from the Islamic Movement of Uzbekistan (IMU) and increased recruitment by the Hizb-u-Tahrir (both radical Islamic organizations) heighten the urgency to accelerate economic growth. USAID programs build on Kyrgyzstan's cooperativeness, relatively open civil society, and economic and health reforms to meet the challenges of continuing oligarchy, corruption, debt burden, lack of trade, broad poverty, and weak governance. Although it inherited one of the least competitive economies of the former Soviet Union, Kyrgyzstan was the first Central Asian Republic to undertake meaningful economic and social reform. Positive signs of macro-economic stabilization continue. GDP rose by 5% in 2001, and inflation dropped from 9.6% in 2000 to 7.7% in 2001. The value of the Kyrgyz som has remained almost unchanged since 2000. However, 60.5% of the population now lives below the poverty line, up from 55.3% in 1999. Limited access to trade routes, a heavy burden of external debt (US$1.5 billion, draining 50% of the national budget for monthly debt servicing expenses), a weak banking sector (four banks were closed in 2001 and one put in receivership), as well as corrupt courts overturning some bank closures, all threaten economic and political reform and limit growth. Poverty and limited opportunities particularly jeopardize stability in the south where isolation, difficult borders, lack of investment, and ethnic differences are problems. Civil society in Kyrgyzstan is the most developed in Central Asia, although in 2001 the country's Freedom House rating dropped from "partly free" to "not free," and its civil liberties rating declined from 5 to 6, (7 being the lowest degree of freedom). Nevertheless, Non-governmental organizations (NGOs), civic organizations and media, increasingly influence government policy and legislation. Parliament is an increasingly active and responsive legislative body and provides a check on government authoritarianism. Likewise, local governments are increasingly transparent and responsive. However, the presidential and parliamentary elections held in 2000 did not meet international standards, although local elections in over 460 villages and cities represent the first direct local elections in Central Asia. Kyrgyzstan leads the region in health care reform and in actively addressing new health issues, such as HIV/AIDS, in an open and direct manner. However, government-supplied social services, critical to maintaining public support for reform, are still inadequate. Widespread poverty and very limited prospects for economic growth will also continue to influence both health status and the operations of the new health care systems. While it has embarked on educational reform, Kyrgyzstan's educational system is in a poor state characterized by mis-investment and corruption. Kyrgyzstan's neighbors depend upon its management of water resources to meet their agricultural and domestic water supply needs; and Kyrgyzstan depends on these water resources for a large portion of its electricity requirements. Consequently, Kyrgyzstan, in cooperation with the other Central Asian republics, must manage its water resources in the most sustainable and responsible manner possible. THE USAID PROGRAM: FY 2002 Estimate: $34.99 million FY 2003 Request: $36.0 million To meet these challenges, the goal of USAID in Kyrgyzstan is to expand opportunities for citizens to participate, to increase their livelihoods and to improve their quality of life. The Program Data Sheets below cover the five objectives for which USAID is requesting FY 2003 funds for Kyrgyzstan: small enterprise development and trade, democratic culture and institutions, primary health care, energy and water resource management, and sound budgetary and tax systems. FY 2002 funds will be used to implement the program planned and described in the FY 2002 Congressional Budget Justification. USAID's FY 2002 funds will also serve cross cutting objectives in conflict mitigation, youth and education, gender, rule of law and anti-corruption. USAID will emphasize conflict mitigation through media, education, agro-enterprise growth and community development, especially in the southern portion of the country. In FY 2003, USAID's local government activities will be combined into the broader democracy objective to streamline management and acknowledge longer-term and cross-cutting issues, rather than as an end in itself. The specific activities to be funded by FY 2002 and FY 2003 appropriations are described in more detail in the following Program Data Sheets. USAID will use $3 million of the FY 2003 request to fund new activities in education, agro-enterprise and community investment while the remaining $24.35 million will fund ongoing efforts. Ongoing Programs for Which No FY 2002 or FY 2003 Funding is Requested: Following are objectives for which USAID is not requesting new funds, but is continuing to expend funds already appropriated. Number: Title: Last Notified: Planned Completion: 116-023 More effective, responsive, accountable local governance FY 2002 CBJ, p.494 FY 2002 116-014 Market environment FY 2002 CBJ, p. 513 FY 2002 115-041 Special Initiatives FY 2002 CBJ, p. 513 FY 2002 OTHER PROGRAM ELEMENTS: Partnerships, training and exchanges remain an important component of U.S. assistance. USAID's Global Training for Development Program trained over 1,500 Kyrgyzstani citizens in enterprise and finance, democratic reform, local governance, and primary health care in FY 2001. USAID supports a number of U.S. Kyrgy institutional partnerships that seek to build lasting relationships. The Farmer-to-Farmer Program, managed by USAID's Bureau for Humanitarian Response, is active in Kyrgyzstan. The Eurasia Foundation has an active small grants program in education, small business, local government and civil society. The Departments of Commerce, Defense, Energy, Agriculture, and State also manage programs complementary to USAID field activities in various sectors. OTHER DONORS: Kyrgyzstan's largest donors are the Asian Development Bank (roads, agriculture, education, health and corporate governance) and the World Bank (irrigation, health, and micro-credit). Other bilateral donors besides the U.S. include the Swiss and German governments, which support important land reform activities, and the Dutch Center for legal cooperation in judicial reform. The World Health Organization and the German, British, and Japanese governments also support health activities. The United Nations Development Program, the United Nations High Commission for Refugees (UNHCR), Organization for Security and Cooperation in Europe's Office for Democratic Institutions and Human Rights(OSCE/ODHIR), International NGO Training and Research Center, and the Soros Foundation all support NGOs with small grants. UNHCR, Soros and the EU co-fund civil society support centers, along with USAID. The Swiss and German Governments are working in the area of natural resources management. Program Data Sheets 116-0120  Increased Soundness of Tax and Budget Policies and Administration 116-0131  An Improved Environment for the Growth of Small and Medium Enterprises 116-0161  Improved Management of Critical Natural Resources, including Energy 116-0211  Strengthened Democratic Culture Among Citizens and Target Institutions 116-0320  Increased Utilization of Quality Primary Health Care in Select Populations 116-0420  Cross-cutting Programs Country Background Information Resources     CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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