Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
KYRGYZSTAN
FY 1997 FY 1998 FY 1999
Actuals Estimate Request FREEDOM Support Act............... $20,800,000 $22,000,000 $29,000,000 Introduction
The national interests of the United States in Kyrgyzstan are economic prosperity and democracy. The U.S. seeks to accelerate Kyrgyzstan's progress toward a productive, efficient market economy, which will attract increased U.S. trade and investment to this new market. The U.S. has a stake in encouraging Kyrgyzstan to proceed with democratic reform, including respect for the rule of law, separation of powers, and individual rights. From a regional security viewpoint, Kyrgyzstan's location at the headwaters of major river systems in Central Asia means that it can dramatically affect critical and sensitive sectors such as agriculture and electricity generation in the downriver countries (e.g., Kazakhstan, Uzbekistan, and Turkmenistan. Any negative action on the part of Kyrgyzstan regarding this power source would impact its neighbors and disrupt regional stability, thereby hindering regional cooperation and posing a threat to American economic and political interests.
The Development Challenge
Though it inherited one of the least efficient and competitive industrial sectors in the Former Soviet Union (FSU), Kyrgyzstan was the first country of the Central Asian Republics (CARs) to actively undertake reform and has become a "laboratory" for demonstrating that democracies can work in Central Asia. While now enjoying overall macroeconomic stability (growth was nearly 7% in 1997), the country's standard of living has fallen and the social costs have been high. The challenge for U.S. assistance is to ensure that the country continues to serve as an example for the other CARs.
USAID's main goal in Kyrgyzstan is to promote a free market economy with an appropriate social safety net, while encouraging necessary legal and infrastructure improvements. The privatization program has been successful, with nearly three-fifths of the economy in private hands. USAID advisors have assisted in the ongoing efforts to privatize the electricity monopoly--a major and advanced undertaking in the privatization phase.
A sounder commercial law system is a key component of USAID's economic growth strategy, both to encourage foreign investment and because it has led to the Government of Kyrgyzstan (GOK) addressing a range of macroeconomic and structural reform problems impeding its accession to the World Trade Organization (WTO). With USAID assistance, Krygyzstan is poised to be the first CAR to become a member of the WTO. Laws governing foreign investment, procurement, taxation, customs, and bankruptcy, have passed and will contribute to an improved commercial climate and increased investor confidence. Work is now underway on a new civil code and other business-related legislation.
Kyrgyzstan, like its CAR neighbors, had almost no experience in establishing its own fiscal policy or financial markets. Now, a burgeoning stock market facilitates further privatization and secondary trading. International accounting standards have increased transparency and should help curb corruption. Work is continuing on laws on securities and investment funds. A U.S. advisor is helping to establish legal information systems and to put laws into practice.
Democratic reform and respect for the rule of law, though still fragile, took an important step forward, for example, with a successful USAID-assisted housing program which included property auctions, construction, and development of condominium associations, thus promoting private ownership of
housing and community-level participation. Strengthening of the nascent civil society also is being achieved through human capacity development programs benefiting the community of Non-Governmental Organizations (NGOs) and the legal and media professions.
Government-supplied social services, critical to maintaining public support for the reform process, are inadequate. USAID has completed a pilot project on health care financing and delivery, which will be replicated in other areas with World Bank assistance. Technical assistance will continue to be needed until the health reform model has been completed and replicated nationwide. The health partnership program, reproductive health, and infectious disease control programs have all contributed to a stronger and healthier society. These programs have transferred much-needed technology and tools required for decision-makers to develop and strengthen primary health care, while strengthening tertiary care through medical partnerships.
The relative poverty of the populace and the country's embrace of reform make Kyrgyzstan a strong candidate for continuing support.
Other Donors
The International Monetary Fund (IMF) and World Bank have extended a number of credits to address balance of payments issues and to encourage sectoral reform. Conditions for extension of these credits have been consonant with and reinforced USAID's strategy to reform the investment climate in Kyrgyzstan. Kyrgyzstan has an IMF three-year Extended Structural Adjustment Facility (ESAF) focussing on fiscal reform. USAID coordinates with the World Bank in the areas of budget reform and commercial law reform. The Asian Development Bank (ADB), the World Bank, and the European Bank for Reconstruction and Development (EBRD) are expanding their loan portfolios. Japan and European donors, including Germany and Switzerland, provide assistance in a number of development sectors.
FY 1999 Program
The Kyrgyzstan program will focus mainly on continuing the reform process in the economic, democracy, and social sectors. The Partnership for Freedom's new programs to encourage economic growth and develop links between Kyrgyzstan and America will have come on-line in FY 1998.
USAID will deepen its support for effective fiscal policies and management in part by helping the GOK create strong regulatory frameworks for the securities market and the banking sector. In addition, USAID's interventions will accelerate progress in establishing the regulatory framework necessary to build investor confidence by ensuring the property ownership and transfer and commercial transaction rights of market agents. Continued support will be provided for development of tax administration, the legal and commercial infrastructure, intergovernmental finance and land registration systems, bankruptcy laws; for the conversion of enterprises to international accounting standards; and for strengthening the professional capabilities of judges and attorneys. Further progress will be made toward an independent regulatory agency for electricity, and completing the privatization of the state energy holding company.
Ensuring that economic reform is accompanied by social and political reform is a key part of USAID strategy. Program focus will continue on strengthening civil society, promoting independent media, solidifying the rule of law, furnishing election assistance, and deepening respect for human rights. Accountable local government will be pursued through expanding a legal basis for such government, improving financial and administrative operations, broadening the local resource base, delivering services efficiently, and strengthening the role of elected local councils as instruments representative of grassroots democracy. Initiatives in the health sector will continue to expand local cost-effective models of health care nationwide in collaboration with other donors, especially the World Bank. Increasing the capabilities of the parliament and the community of NGOs will lead to a more participatory political process.
Under cross-cutting and special initiatives, m edical partnerships, cost-effective systems for health care and service delivery, infectious disease control, reproductive health interventions, and targeted services for vulnerable populations will continue to contribute to the sustainability of the social sector and to support a broader health reform agenda. The infectious disease program will emphasize cost-saving measures to prevent and treat tuberculosis. The reproductive health support will strengthen the primary health care service sites, especially the family group practices, to deliver reproductive health services. Medical partnerships will support transfer of technology in both tertiary and primary care. The NIS Training programs will continue expanding the human resources capacity of Kyrgyzstan, with increased local and third-country training in FY 1999. More than 700 officials have received short-term training in the U.S. and third countries.
KYRGYZSTAN
FY 1999 PROGRAM SUMMARY*
(in Thousands of Dollars)
Strategic ObjectivesEconomic Restructuring Democratic
TransitionSocial Stabilization Cross-cutting / Special Initiatives Total Privatization -- -- -- -- -- Fiscal Reform 1,500 -- -- -- 1,500 Private Enterprise 8,000 -- -- -- 8,000 Financial Reform 2,500 -- -- -- 2,500 Energy -- -- -- -- -- Environmental Management -- -- -- -- -- Citizens' Participation -- 2,050 -- -- 2,050 Legal Systems -- -- -- -- -- Local Government -- 2,000 -- -- 2,000 Crises -- -- -- -- -- Social Benefits -- -- 500 -- 500 Environmental Health -- -- -- -- -- Cross-cutting / Special Initiatives -- -- -- 12,450 12,450 TOTAL 12,000 4,050 500 12,450 29,000
*FREEDOM Support Act (FSA) Funds
USAID Mission Director: Patricia K. Buckles
ACTIVITY DATA SHEET
PROGRAM: KYRGYZSTAN
TITLE: Fiscal Reform, 110-S001.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,500,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2001
Purpose: Increased soundness of fiscal policies and fiscal management practices.
USAID Role and Achievements to Date: The people of Kyrgyzstan benefitted from USAID-funded analysis and policy advice, particularly in the fiscal area. Results include dramatically-reduced inflation (35% in 1996, down from an average of about 60% during 1994-95), currency stability, and a macroeconomic environment that is among the most stable in the former Soviet Union. USAID-funded advisors had the lead role in formulating the new tax code that was introduced in August 1996, which follows international standards. Among other things, the new law established an automatic withholding system and rationalized the basis for determining tax obligations. Current technical assistance focuses mainly on implementation and administration of the new tax code and further rationalization of budgets and international finance reform, key elements in the fiscal reform program to which the GOK recently committed.
Description: In FY 1999 USAID technical assistance in the fiscal area will concentrate on further rationalization of Kyrgyzstan's system of intergovernmental finance, with a view toward ensuring that various levels of government operate with greater economic efficiency in implementing their taxation and expenditure authority. USAID is encouraging development and utilization of a cost-efficient procurement system through training and advice, and is promoting the establishment of a monitoring agency to encourage greater transparency and competition.
Host Country and Other Donors: Ongoing efforts in the fiscal arena are coordinated with those of other donors, including the World Bank and EU.
Beneficiaries: This effort will benefit tax-paying citizens of Kyrgyzstan at all income levels by ensuring greater transparency and a more rational revenue collection and budgeting and expenditure process. Aspiring entrepreneurs will benefit as more comprehensible and transparent tax systems are adopted. More efficient revenue collection and rational budgeting/expenditure procedures also will help strengthen the credibility of the government and help ensure the sustainability of targeted social programs aimed at the most vulnerable sections of society.
Principal Contractors, Grantees, or Agencies: USAID activities are implemented through U.S. commercial contractors (Barents Group and IBTCI) as well as through the U.S. Department of the Treasury.
Major Results Indicators: Baseline Target Govt. deficit as % of GDP 12.5% (1995) 3.0% (1999) GOK maintains compliance with International Finance Institution ( IFI) conditions Yes (1995) Yes (1999) Tax revenues as % of GDP 13.6% (1995) 18.5% (1999) Adoption of modern tax legislation No (1995) Yes (1999)
ACTIVITY DATA SHEET
PROGRAM: KYRGYZSTAN
TITLE: Private Enterprise, 110-S001.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $8,000,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2001
Purpose: Improved, more sustainable private business operations.
USAID Role and Achievements to Date: USAID advisors are assisting Kyrgyzstan in developing a legal framework for trade and investment that will facilitate Kyrgyzstan's accession to the World Trade Organization (WTO). USAID has assisted in analyzing the investment climate, commercial laws, and drafting of additional laws and regulatory regimes required for WTO accession. Commercial laws passed with USAID assistance include: the Foreign Investment Law, the Procurement Law, and the Bankruptcy Law. All help facilitate business and investment.
In the area of legal and regulatory reform, advisors are working in key fields including trade and investment, bankruptcy, collateral law, and rewriting the civil code. A major training effort in all of these areas is underway. General business law has also been a major 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 Krygyzstan.
Description: The Kyrgyz Republic has made the strongest commitment of any country in Central Asia to the privatization of state-owned assets. The USAID-supported mass privatization program was completed in September 1996. Now the focus is on privatizing "blue chip" state enterprises and developing Kyrgyzstan's capital markets. In FY 1999, support for private enterprise reform will focus mainly on further commercial law development and related areas such as support for accounting reform at the enterprise level. Among other objectives, the activities will assist Kyrgyzstan in developing a business environment that is more open and transparent and therefore less susceptible to corrupt practices. Assistance should ensure the completion of WTO accession in FY 1999. Through training and advice 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.
Host Country and Other Donors: Ongoing efforts to strengthen private business operations are developed in close conjunction with those of other donors, especially the World Bank, IMF, EBRD, the Asian Development Bank, and EU.
Beneficiaries: Specific beneficiaries include the hundreds of thousands of citizens of Kyrgyzstan who own shares in newly-privatized government enterprises and stand to gain if these new firms increase in value or pay dividends. Aspiring entrepreneurs will benefit from a more comprehensible and transparent legal environment. The entire population will gain from a market-based economic system which creates employment, increases incomes, lowers prices, and expands individual choice.
Principal Contractors, Grantees, or Agencies: USAID activities are implemented through several private U.S. firms as well as U.S. private voluntary organizations such as the International Executive Service Corps, Foundation for International Community Assistance, and Volunteers in Overseas Cooperative Assistance. The Central Asian American Enterprise Fund (CAAEF) is an important player because of its role in making scarce investment and equity capital available to Kyrgyzstan's emerging private sector.
Major Results Indicators: Baseline Target Number of economic sectors showing 0 (1995) 11 (1999) increase in private market share Number of new laws and policies 0 (1995) 30 (1999) drafted with USAID assistance GOK maintains adherence to IFI Yes (1995) Yes (1999) conditionality
ACTIVITY DATA SHEET
PROGRAM: KYRGYZSTAN
TITLE: Financial Reform, 110-S001.4
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $2,500,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2001
Purpose: A competitive, private financial sector more responsive to a market-oriented economy.
USAID Role and Achievements to Date: Two important achievements were the formation of a National Securities Commission and the establishment of Kyrgyzstan's first stock exchange in Bishkek in 1995. More than 40 companies are now listed on the board of the stock exchange, which should be self-sustaining by the end of FY 1998. A Central Depository was created with USAID assistance that will increase investor confidence and promote foreign investment. New corporate accounting standards have been introduced. Significant strides have been made as part of USAID's effort to tighten financial regulatory guidelines and enhance monitoring capacity in the banking sector, resulting in a number of insolvent banks losing their licenses. Further, a reduction in directed credits and an overall tight monetary policy over the last two years reflect the success of the Central Bank in asserting its independence. In addition, with USAID technical assistance, nine of Kyrgyzstan's 18 commercial banks are now operating using international accounting standards. All enterprises in the Republic will use these standards beginning January 1, 1998.
Description: USAID's main role is to continue to provide technical assistance and training to the financial sector. This will include further work to convert the remainder of the commercial banks to international accounting standards. The basic framework for an effective securities market needs to be further developed and set on a sustainable footing. The Kyrgyz Stock Exchange requires increased corporate listings and to develop a cost-efficient over-the-counter (OTC) system.
Host Country and Other Donors: USAID is the major foreign donor working in the financial sector, and the only one involved in the securities area. Work is coordinated closely with the World Bank as well as with other donors such as EU.
Beneficiaries: Immediate beneficiaries include professionals involved in securities market development, such as private bankers, stock brokers, investors, and government officials. New entrepreneurs as well as a broad range of Kyrgyz citizens should benefit by expanding capital markets which channel scarce financial resources more productively.
Principal Contractors, Grantees, or Agencies: USAID activities are implemented through three private U.S. firms in cooperation with the local counterparts at the Central Bank, the Ministry of Finance, the Bishkek Stock Exchange, and the National Securities Commission.
Major Results Indicators: Baseline Target Bank deposits as % of GDP 5.0% (1995) 10.0% (1999) No. of financial services available 5 (1995) 28 (1999) % of banks meeting capital 42% (1995) 90% (1999) adequacy requirements % of firms using new accounting 0 (1995) 50% (1999) standards Types of financial institutions 3 (1995) 8 (1999) Types of security markets institutions 4 (1995) 8 (1999) No. of companies listed on stock exchange 10 (1995) 75 (1999)
ACTIVITY DATA SHEET
PROGRAM: KYRGYZSTAN
TITLE: Citizens' Participation, 110-S002.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $2,050,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2004
Purpose: Increased citizens' participation in political and economic decision-making.
USAID Role and Achievements to Date: Over 450 NGOs have been established. USAID is helping them work with the public, the mass media, and lawmakers to build a constituency that can advocate for reforms. A notable achievement by NGOs was their success in pressuring parliament to hold open hearings to debate proposed legislation affecting farmers. USAID has assisted the National Association of Local Self-Government, in the forms of funding for seminars, publications, and in planning for future decentralization. Help has been provided in election organization and procedures as well as in the presentation of the first public broadcast of political candidate debates. USAID advisors were instrumental in achieving the incorporation of international recommendations into the new Kyrgyz Draft Election Code, which will be submitted to parliament in 1998.
Description: Kyrgyzstan is the most progressive of the five Central Asian Republics in the area of government accountability. Creation of a legal infrastructure to further expand such accountability, as well as to encourage NGO and media development and citizen participation, is one of USAID's principal efforts in Krygyzstan. Assistance to the local NGO community aims especially at increasing its professional and management capabilities, allowing it to advocate policy agendas, influence legal and regulatory processes, effect social change, and provide needed social services. Under a competitive small grants program, a number of local organizations are receiving direct program support. Private television and radio stations are receiving training to improve programming quality and enhance their financial viability.
Host Country and Other Donors: The United States is the major foreign donor working in the area of democratization in Kyrgyzstan. USAID closely coordinates its programs with those supported by other U.S. Government agencies, including the U.S. Information Agency.
Beneficiaries: Beneficiaries include activists of NGOs, personnel of independent television and radio stations, lawyers, judges, members of parliament, and the public at large.
Principal Contractors, Grantees, or Agencies: Several USAID-funded American NGOs, including the American Bar Association/CEELI, the National Democratic Institute (NDI), Internews, and the International Foundation for Election Systems (IFES), have played important roles in promoting democracy in Kyrgyzstan. Aid to Artisans, the International Center for Not-for-Profit Law, and the Citizens Network for Foreign Affairs, which together form the Counterpart Consortium, also participate in local NGO development.
Major Results Indicators: Baseline Target No. of NGOs engaged in advocacy 0 (1992) 50 (1999) No. of draft laws and policies 0 (1994) 15 (1999) with NGO input Average length in minutes of daily 10 (1994) 15 (1999) independent news broadcasts
ACTIVITY DATA SHEET
PROGRAM: KYRGYZSTAN
TITLE: More effective, responsible, and accountable local government 110-S002.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $2,000,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1998; ESTIMATED COMPLETION DATE: FY 2002
Purpose: More effective, responsible, and accountable local government.
To assist Kyrgyzstan democratic and market reform efforts through promoting more effective, responsible, and accountable local government. This will be achieved by increasing citizen participation in local government, increasing the capacity at the local level to address citizen needs, and developing a more favorable national policy and enabling framework for reform at the local level.
USAID Role and Achievements to Date: As Kyrgyzstan struggles with liberalization and decentralization of government structures on the path from autocracy to democracy, USAID is promoting these principles by demonstrating the benefits of effective delivery of services through local governments responsible and accountable to their citizenry. The Central Government has increasingly moved responsibility for social programs (notably housing, health and education) and for management of physical assets to local levels. Unfortunately, the authority over fiscal resources, as well as development of qualified personnel at the local level, has not proceeded at the same pace. Although their powers are limited, local councils, composed of residents directly elected from districts in competitive elections, have been created and represent a promising step toward representative democracy and accountability.
The Municipal Finance and Management Project (MFM) and the Housing Sector Reform Project (HSRP) both addressed local government issues in Kyrgyzstan and were completed by the end of FY 1997. Under the MFM project, assistance was provided, on a demonstration pilot basis, to the city of Karakul. As a result, the city upgraded overall management, improved systems and procedures for budget implementation, introduced expenditure controls, converted to an automated information management system, increased transparency and accountability of municipal operations, and established citizen information services. Communication and coordination between oblast, city, and tax collection officials was strengthened, which facilitated revenue forecasting and cash management.
Under the HSRP project, USAID worked closely with several town and city administrations, developing procedures for conducting public auctions of land use rights, and helping residents of apartment buildings form condominium associations in order to assume responsibility for managing and maintaining formerly state-owned property. Preliminary assistance was also provided to the Government's Office of Local Self-Government and the National Association of Local Self-Government (NALSG).
In addition, ongoing work with the NGO sector and in health care reform has impacted substantially on the role and functioning of local government.
Description: USAID has demonstrated by its sector-specific work in the areas of housing and health the need to work at the local level for maximum effectiveness. Work in intergovernmental finance has been initiated. The Central Government has moved rather decisively toward administrative decentralization. Charters for all 455 villages have been adopted, and town charters are in the process of being adopted. Ownership of many properties and facilities is being transferred to local governments. However, the GOK has hesitated to take bold steps toward fiscal decentralization. More also remains to be done to improve local government administration. The time is opportune to tackle issues generic to financing and administering municipal social services and benefits, in addition to working on issues specific to the health sector as addressed by Strategic Objective 3.2.
A new SO 2.3 program is being developed in FY 1998 to capitalize on the successes of earlier programs impacting on local government and to address local government issues on a comprehensive and consolidated basis. Emphasis will be placed on the development of local capacity to competently and transparently carry out additional responsibilities. A sustainable, responsive and accountable local government system is expected to be established in Kyrgyzstan over the period of the activity.
The program strategy will build on the significant earlier breakthroughs made in shifting control of major capital assets, such as land and housing, to city authorities and residents, thereby offering real possibilities for personal empowerment and democratization. It will also set in place training programs for local officials to enhance their skills at problem-solving and increase their receptivity to innovation and change, which will lead to more effective management of local government.
Assistance will broaden residents' participation and self-sufficiency by working with individual owners' associations, thus extending and deepening the reforms achieved when housing management was shifted to residents. Priority will be given to quickly setting in place a comprehensive in-service training program. Human capacity development is an essential first step to making needed changes and adopting new techniques at the local level. The emphasis will be on reaching a broad audience with training in needed skill areas, particularly leadership and financial management.
The training will be followed up with "extension service"-type consultancies in receptive municipalities, enabling the trained officials to apply their skills and adopt new practices. "Best practices" demonstrations of particular municipal management systems (in such areas as budget and finance, and competitive public procurement from the private sector) will be undertaken in receptive localities to showcase the application of reform in the real world. In addition, members of the directly-elected city councils will receive training on their role, and on the functions of city councils in democratic local governance.
A corollary objective of the program will be the expansion of local self-government by empowering it to undertake more responsibilities, which will require greater local authority and resources. This empowerment will reduce the dependence of municipalities on central government and increase their reliance on support from their communities.
Host Country and Other Donors: USAID will work closely with various Kyrgyz entities involved in local government issues, including the Office of Local Government in the Presidential Apparat, the Academy for Management, and the municipal association NGO, as well as the parliament and local (and national) level officials, both appointed and elected. A number of other donors also support activities with a local government dimension, including the World Bank, the Asian Development Bank, and EU.
Beneficiaries: Elected officials, and government employees at the oblast and municipal levels, will benefit professionally. The citizens of Kyrgyzstan will benefit from improvements in local government services made possible by successful decentralization.
Principle Contractors, Grantees, or Agencies: To be determined. USAID plans to "buy in" to existing assistance mechanisms or to procure services competitively, depending on which will provide the best benefit to the U.S. Government, cost and other factors considered.
Major Results Indicators:*
*This is a new strategic objective in FY 1998. Indicators and targets are now being developed.
ACTIVITY DATA SHEET
PROGRAM: KYRGYZSTAN
TITLE: Improve the sustainability of social benefits and services 110-S003.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $500,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2001
Purpose: Improved sustainability of selected social benefits and services.
USAID Role and Achievements to Date: USAID's most significant achievement in restructuring the health sector in Kyrgyzstan has been the pilot project in Issyk-kul Oblast. Considerable progress has been made. Eighty-one new family group practices have been established within the past year in the pilot oblast, resulting in a shift from costly hospital-based care to less-expensive outpatient treatment. Eighty-five percent of the people of Issyk-kul have now exercised their right to select the family group practice of their choice. All management information systems have been developed and implemented, allowing the physicians 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, was developed and will be launched in January 1998. A plan to rationalize health resources was also introduced, resulting in the closure of one inefficient hospital. USAID has also provided technical assistance to integrate women's reproductive health, childhood health services, and infectious diseases such as tuberculosis into family group practice, to maximize the efficiency of care and improve quality. Given the success of the pilot effort, USAID was asked to support the expansion of the regional health experiment into additional oblasts. The Ministry of Health, in coordination with World Bank loan assistance, began to roll out the USAID health reform model in two additional oblasts. 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. The health insurance fund has implemented nationwide the hospital payment system developed in the Issyk-Kul demonstration.
The now-completed housing sector program worked with local and national government counterparts, developing a system for transferring authority for housing maintenance to those with the highest stake, i.e. residents and owners.
Description: USAID, a key player in assisting the social sector reforms in Kyrgyzstan since 1993, will work to deepen the reform agenda. Completion of the pilot program in Issyk-kul oblast is planned. When fully operational, the program will provide a viable health reform model for replication by the World Bank in two other oblasts. USAID will complement World Bank efforts by providing health reform assistance in another two oblasts. In addition, USAID will concentrate on national health reform policy development based on lessons learned in Issyk-kul. The combined USAID and World Bank efforts will ensure that some 90 percent of Kyrgyzstan's population is covered by a health care delivery system consistent with a market-oriented economy in a democratic society. Finally, USAID programs directed toward NGOs have an important local social services dimension and will help ensure more effective delivery as well as bring about change in targeted communities.
Work on this Strategic Objective will be coordinated with the objective for local self-government and with assistance provided by other donors.
Host Country and Other Donors: GOK ministries, local government officials and employees, the World Bank, UNDP, UNICEF, UNFPA, WHO and EU are all involved in activities with a local social services dimension. As noted, the World Bank is an important partner in a number of activities related to social sector reform.
Beneficiaries: Immediate beneficiaries include physicians in family group practices and their clients. Ultimately, at least 90 percent of the citizens of Kyrgyzstan benefit, especially the vulnerable, e.g.,
elderly pensioners, women, and children.
Principal Contractors, Grantees, or Agencies: Abt Associates, Inc. is working in the health reform arena. The International City and County Managers Association (ICMA) works in the housing sector.
Major Results Indicators: Baseline Target Number of independent primary care 0 (1994) 90 (2001) practices % health care providers being 0 (1994) 100% (2001) reimbursed on incentive-based methods Demonstration sites developed/rolled-out 0 (1994) 6 (2001)
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