Regions and Countries

	Table of Contents
p. 7 of 20 BACK | NEXT I. Country Performance 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 - Kyrgyz Republic

---

II. Country Operational Strategy

A. The COS

20. ADB’s country operational strategy (COS) for the Kyrgyz Republic was finalized in December 1996 to replace an earlier interim operational strategy. The primary objectives of the COS are to (i) support the Government’s reform activities and strengthen its development management through encouraging institutional change; strengthening institutional capacity, and improving the provision of public services; (ii) encourage the creation of a new structure for output and capacity by the private sector through investment and job creation; and (iii) enhance the long-term potential of the country by investing in physical infrastructure and human development as well as selective interventions to protect and rehabilitate the environment.

B. Progress in Implementation

21. Implementation of the COS has been carefully designed to maximize the impact of ADB’s limited resources and to complement the extensive assistance programs of other funding agencies. Thus, ADB activities during 2001-2003 will concentrate on four strategic areas: (i) improvement in the provision of public services, particularly those provided by local governments; (ii) agriculture, including rural finance; (iii) human development; and (iv) infrastructure, especially rehabilitation projects to preserve the economic utility of the past investment in the roads sector. In the initial years, ADB operations in the Kyrgyz Republic were focused principally on restoring economic growth. By 1998, there were signs of sustainable economic recovery. At the same time poverty and unemployment and a general deterioration of the quality of life for a majority of the people were becoming increasingly apparent. The assistance programs prepared since 1998 took into consideration the need for ADB operations to address these growing social concerns. This was particularly true of this year’s country programming exercise, which was conducted in February 2000. Poverty reduction was declared by the Government to be of paramount importance in its development priorities identified under the Comprehensive Development Framework (see para. 44). This was a welcome step particularly because of the ADB’s own overarching emphasis on poverty reduction. Reflecting this common approach, the Government and the ADB reached agreement on a lending program for 2000-2003 in which at least one project each year is classified as a poverty/core poverty intervention and at least 40 percent of the lending each year is aimed at poverty reduction. In fact the proportion of such loans to total lending will increase to about 73 percent by 2003.

22. A Community-Based Infrastructure Services Sector Project (2000) will benefit about 730 rural communities with some 65 percent of the beneficiaries living below the poverty line. The project will improve water supply and sanitation and will support other essentially required investments in the targeted communities. The Early Child Development (ECD) project (2001) will assist the Government in developing an affordable package of community-based ECD services for the rural poor (see para. 33). In keeping with its priorities to support poverty alleviation in the less developed regions, projects like the Rural Development/Poverty Reduction (2002) and the Second Agriculture Area Development (2003) projects have been introduced into the program and will likely be located in the poorer and more remote oblasts. The Third Education Project (2003) is expected to see a continuation of ongoing ADB support for basic education and is likely to be designed as a poverty intervention with a focus on areas with a higher incidence of poverty.

C. Poverty Partnership Agreement

23. In keeping with the overarching importance accorded to poverty reduction, ADB has made significant changes in the operational program to ensure that a greater number of projects directly target poverty and is assisting the Government in drawing up a National Strategy for Poverty Reduction. At the request of the Government, a joint mission of the IMF, the World Bank and ADB visited the Kyrgyz Republic in February 2000 to launch the preparation of a National Strategy for Poverty Reduction (NSPR). The Government views the NSPR to be the center-piece of its CDF and sought the assistance of the above-mentioned institutions and other donors such as the UNDP in formulating the NSPR. To assist in the formulation of the NSPR, ADB is providing advisory technical assistance to support the studies agreed upon. The TA will help the Government to better understand the profile of the poor, and identify the obstacles and bottlenecks for effective poverty reduction. It will also support the Government in consultative and participatory processes, to ensure that the vision of poverty reduction addresses the demands of civil society and is shared by the country’s population. The formulation of the NSPR is underway and is expected to be completed in the first quarter of 2001. It is expected that ADB will enter into a Partnership Agreement with the Government in accordance with ADB's poverty reduction mandate once the NSPR is finalized. The IMF and the WB will build their programs around the first three-year framework of the NSPR.

Back E. Implementation Assessment	Next III. Sector Strategies