Regions and Countries

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p. 5 of 20 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Pverty Assessment C. Assessment of Socio-Environmental Performance D. Governance E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Kazakhstan : I. Country Performance Assessment

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D. Governance

15. Kazakhstan has made progress in improving governance since independence. The Government has taken action to improve accountability by dismantling the state orders system, reducing trade barriers, initiating financial and corporate reforms, and restructuring the taxation system. The Government has also taken measures to improve the budgetary process to make it efficient, participatory and transparent. Extrabudgetary funds have been merged with the budget since 1999 and greater responsibility for public resources management has been given to local governments. The Government has made efforts to fight corruption. A study² undertaken by the European Bank for Reconstruction and Development (EBRD) and the World Bank in 1999 showed that corruption in Kazakhstan was less serious than in most of other FSU republics. Through privatization of SOEs, the Government is withdrawing from resource allocation in the productive sectors and encouraging an expanding role from the private sector. The ongoing civil service reform will redefine the role of the Government, downsize and retrain civil servants to handle new responsibilities, and encourage the participation of NGOs in the development process.

16. However, there are a number of governance issues that cause concern. These issues are (i) low predictability in the policy and institutional environment as a result of frequent changes in the central Government; (ii) inefficient policy and regulation frameworks for private sector development, particularly in taxation, licensing and customs; (iii) limited institutional capacities of Government agencies; and (iv) weak corporate governance. The Government is aware of these weaknesses and some responsive actions have been taken. A new tax code will be adopted in 2000 to improve the transparency and effectiveness of the taxation system. The Government plans to further simplify the regulations and procedures of registration and licensing to encourage private sector businesses. The Government is also strengthening its capacity for policy formulation and implementation through staff training and external assistance. Nevertheless, greater efforts are needed to further improve governance so as to provide better public services.

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