Countries and Regions

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p. 4 of 4 BACK | NEXT I. Development Situation II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Lending Levels

Country Strategy and Program Update 2003-2004: Kazakhstan

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IV. Country Performance and Lending Levels

A. Lending Level Proposed

26. Section I described the uncertainties that made it difficult to reasonably project the size of ADB's annual lending program in Kazakhstan. At the same time, the Government has massive requirements for implementing its development plans. A close dialogue with the Government-during preparation of the CSP, for example-is needed to resolve the uncertainties. The annual loan indicative planning figure for Kazakhstan is proposed to be kept at $120 million for 2003-2004, the same level proposed in the CSPU (2002-2004). As the CSP is being prepared, no lending program has been proposed for 2005, although a PPTA has been included in the 2004 program for a possible loan in 2005.

27. The proposed lending program for 2003-2004 consists of four public sector projects with a total loan amount of $285 million. Of these, two projects with a loan amount of $185 million will directly benefit the poor, and account for more than 60% of the total proposed lending volume for 2003-2004. The assistance program may have to be adjusted during CSP preparation. The assistance pipeline for lending products for 2003-2004 is in Appendix 1, Table A1.10.

28. Following its graduation to Group C under the ADB's Graduation Policy,¹² the country's project cost-sharing limit will decline to 50% by 2004, from 80% before graduation. The reduced limit has placed ADB at a considerable disadvantage compared to other multilateral development banks in responding to the development needs of Kazakhstan.

B. Nonlending Program

29. The TA program for 2003-2004 covers eight projects totaling $4.2 million. Delivery of the planned TA program will require resources beyond the annual TA resource envelope. All efforts will be made to mobilize these resources. The assistance pipeline for nonlending products and services for 2003-2004 is in Appendix 1, Table A1.11.

30. The nonlending support includes a range of economic, thematic, and sector work. A comprehensive poverty assessment was recently completed. ADB helped the Government prepare its poverty reduction strategy and a study on the so-called company towns. The governance assessment is at an advanced stage. Private sector and environment assessments are under way. A follow-up to the capacity-building TA for environment management is planned for 2004. Further assistance for the environment sector will be programmed based on the findings of the environment assessment. As a part of the CSP exercise, a detailed study of the Government's development plans and growth processes is under way. ADB is developing a macroeconomic model for making projections about the Kazakh economy. Major sector work will be devoted to developing sector strategies and road maps for the agriculture and rural development, education, and transport sectors. Limited public expenditure reviews for selected local governments are also planned.

C. Summary of Changes to Lending and Nonlending Program

31. The main changes to the loan program shown in the CSPU (2002-2004) follow:

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