Since independence in 1991. the Kyrgyz Republic has been in transition to private sector-led and market-oriented economy. Development of an outward-oriented trading environment is an integral part of the transition strategy as this country is highly dependent on international trade. Significant progress has been made in trade liberalization and trade-related policy reforms as evidenced by the Kyrgyz Republic's accession to the World Trade Organization (WTO) in 1998.
Progress in trade facilitation is equally significant and has effectively complemented trade policy reforms. Among all the agencies relevant to trade facilitation and border controls, the customs administration is commonly recognized as one of the most important because of its control functions, revenue collection, and prevention of smuggling and drug-trafficking.
The Customs Administration of the Kyrgyz Republic is relatively young and have suffered from weak institutional capacity, low efficiency, and poor governance. Recognizing these weaknesses, this country launched comprehensive modernization programs in 2002 to address this most critical bottleneck of trade facilitation.
Significant progress has been made since the inception of the reform programs, particularly in legal and institutional reforms, and strengthening of cooperation with the customs administrations of neighboring countries. However, the benefits of customs legal and institutional reforms and reginal customs cooperation initiatives cannot be fully realized, unless there is commensurate development and modernization of customs physical infrastructure to improve efficiency and transparency of customs services. This country do not have adequate information and communications technology (ICT) infrastructure to support automated customs services. The border post conditions are poor because of inadequate budget support.
The Project is directly relevant to ADB s strategic objectives. The current country partnership strategy supports the government development agenda, articulated in the country development strategy for 2008 2011, of which the main theme is to contribute to robust and sustainable economic growth and poverty reduction, and the attainment of Millennium Development Goals.
In line with the country development strategy, ADB supports four priority areas:
(i) promoting economic management consistent with strong and sustained pro-poor growth;
(ii) improving governance, promoting effective public administration, and reducing corruption;
(iii) building sustainable human and social capital; and
(iv) ensuring environmental sustainability and natural resources management.