Countries and Regions

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p. 6 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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E. Implementation Assessment

1. The Portfolio

17. ADB started its operations in Kazakhstan shortly after the country became a member in 1994. As of 30 June 2000, ADB had approved 10 loans for seven projects totaling $415 million (of which $355 million was from ordinary capital resources and $60 million from concessional Asian Development Fund). By the end of 1999, ADB has disbursed a total of $331.6 million. In addition, 29 technical assistance (TA) grants amounting to $16 million have been approved. Four loans have been closed and 19 TA projects have been completed. The major part of ADB’s lending was so far aimed at fostering economic growth. Despite the economic difficulties, fiscal constraints, and institutional weaknesses in Kazakhstan, ADB’s portfolio is generally performing well and all approved loan and TA projects were rated satisfactory in terms of implementation progress and achievement of development objectives.

18. As in the other Central Asian developing member countries (DMCs), ADB has a relatively young portfolio of loan projects in Kazakhstan. Consequently, their development impact is yet to be fully realized. A large portion (63 percent) of ADB lending assistance has been provided as policy-based loans. A Special Assistance Loan approved in 1994 supported the macroeconomic stabilization and structural reform program. An Agriculture Sector Program Loan approved in 1995 supported agriculture reforms and facilitated the transition to a competitive market-based agriculture sector. ADB extended assistance in 1997 to support a pension reform program that has transformed the pension system from a pay-as-you-go basis to a fully-funded, defined contribution system. ADB’s TA projects have had significant development impact in improving the legal and regulatory frameworks in various sectors, strengthening institutional capacities, promoting regional cooperation, and creating an environment for private sector-led growth. Detailed portfolio performance indicators are given in Appendix 2.

2. Issues in Project Implementation

19. The country’s absorptive capacity is limited by (i) the difficult fiscal situation and the resultant scarcity of local counterpart funds; (ii) a weak administrative structure with limited policy formulation and implementation capacities; (iii) inadequate experience with policies, procedures, and practices of external aid agencies; and (iv) communication and language barriers. ADB has been dealing with these issues by conducting policy dialogue with the Government and strengthening its institutional capacities through loan and TA projects. The Kazakhstan Resident Mission, which became operational in 1998, has facilitated the dialogue with the Government and contributed to smoother project implementation. However, it is likely that the country’s absorptive capacity will remain limited and the Government will continue to experience fiscal constraints in the near term, which could have an impact on project implementation. While the Government’s budgetary situation needs to be monitored closely, ADB will enhance its dialogue with the Government and provide further training of government officials to build capacity for project implementation.

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