fbpx 47110-002: Joint Government of Kazakhstan and the Asian Development Bank Knowledge and Experience Exchange Program, Phase 2 | Asian Development Bank

Kazakhstan: Joint Government of Kazakhstan and the Asian Development Bank Knowledge and Experience Exchange Program, Phase 2

Sovereign (Public) Project | 47110-002 Status: Closed

The value of innovative strategic knowledge solutions and global best practices are accepted as crucial factors for socioeconomic advancement. For Kazakhstan, this is underscored in the country's Kazakhstan-2030 and Kazakhstan-2050 strategies. The country partnership strategy (CPS), 2012-2016 of the Asian Development Bank (ADB) establishes demand-based knowledge products and services as important tools with which ADB can add value to Kazakhstan's development. These strategic documents highlight the need for Kazakhstan to effectively apply knowledge solutions and global best practices so as to become a more diversified, competitive, and inclusive economy and go beyond the middle income country stage.

Project Details

Project Officer
Genadiy Rau Central and West Asia Department Request for information
Country
  • Kazakhstan
Modality
  • Technical Assistance
Sector
  • Public sector management
 
Project Name Joint Government of Kazakhstan and the Asian Development Bank Knowledge and Experience Exchange Program, Phase 2
Project Number 47110-002
Country Kazakhstan
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8933-KAZ: Joint Government of Kazakhstan and the Asian Development Bank Knowledge and Experience Exchange Program, Phase 2
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Public sector management / Economic affairs management - Public administration

Gender Equity and Mainstreaming No gender elements
Description

The value of innovative strategic knowledge solutions and global best practices are accepted as crucial factors for socioeconomic advancement. For Kazakhstan, this is underscored in the country's Kazakhstan-2030 and Kazakhstan-2050 strategies. The country partnership strategy (CPS), 2012-2016 of the Asian Development Bank (ADB) establishes demand-based knowledge products and services as important tools with which ADB can add value to Kazakhstan's development. These strategic documents highlight the need for Kazakhstan to effectively apply knowledge solutions and global best practices so as to become a more diversified, competitive, and inclusive economy and go beyond the middle income country stage.

Against this background, and recognizing ADB's extensive experience in knowledge management across Asia and the Pacific, the Government of Kazakhstan (government) and ADB agreed to establish the joint Knowledge and Experience Exchange Program (KEEP) in 2013. The KEEP is designed to facilitate a range of strategic knowledge solutions and global best practices that will enable Kazakhstan to respond to current and future development opportunities and challenges in a well-informed and timely manner.

The KEEP is defined in a memorandum of understanding (MOU) between the government and ADB. The MOU provides the framework (outlining the objective and scope, areas of focus, implementation arrangements, and monitoring and evaluation measures) and commits the parties to share the cost of a range of knowledge and experience-sharing activities; the total budget of the KEEP is $3.0 million. The ADB's participation in the KEEP is through three technical assistance (TA) operations. ADB financing in each of these TA operations complements 50% of the government's cost share. Phase 2 with an approved budget of $1.0 million commenced in July 2015 after approval of the TA report by ADB Vice-President. The budget of a subsequent Phase 3 is equal to 1.5 million.

This policy and advisory TA finances Phase 2 of the KEEP in 2015-2018.

The expected outcome will be strengthened government capacity and awareness of best practices in selected areas.

As part of the KEEP, this TA supports macro, sector, and thematic subprojects that enable or promote knowledge solutions, capacity development, and exchange of best practices. Due to the dynamic nature of government demand for advisory and other knowledge products and services, the government and ADB agreed that selection of subprojects and the implementation approach will be flexible so as to respond to the knowledge requests quickly and effectively.

The criteria for selecting subprojects would be that the subproject (i) supports priority government policy reforms and is consistent with the country partnership strategy; (ii) is supporting the implementation of the government development strategy; (iii) is considered an emerging, urgent, and high-priority area where ADB can add the greatest value; (iv) shows evidence of strong government ownership; and (v) complements or synergizes the knowledge support of other development partners.

The main outputs of the TA will fall under the categories of (i) policy and advisory and (ii) capacity development, and include analytical reports that will serve as background materials for the government's policymaking and the capacity-building and learning events.

Effective coordination of the executing agency with stakeholders is important for a successful implementation of the TA. The related potential risks are (i) ineffective use of policy recommendations because of frequent turnover of officials, (ii) weak collaboration and support from all stakeholders, and (iii) unavailability of reliable and accurate data and information.

Project Rationale and Linkage to Country/Regional Strategy

Since 1991, Kazakhstan has transitioned rapidly from a low-income country into an upper-middle-income country and has rated highly on many socioeconomic indicators. Building on its impressive socioeconomic performance, the country aspires to join the ranks the top 30 most developed countries by 2050 entails new opportunities as well as challenges. Innovative strategic knowledge solutions and global best practices are called for to help the country (i) become a more inclusive and diversified economy, (ii) develop better institutional and policy mechanisms, (iii) integrate and cooperate better with other countries in the region and the world, and (iv) enhance the competitiveness and efficiency of the economy.

Despite impressive socioeconomic performance, Kazakhstan faces a number of development challenges. These include:

(i) narrow economic base, mainly concentrated on the extractive industries, calling for diversification;

(ii) poor infrastructure requiring significant improvement;

(iii) vulnerable financial sector requiring innovative approaches to reform;

(iv) gaps in institutional and policy development performance requiring reforms and capacity strengthening to enhance efficiency;

(v) expanding income disparity demanding growth to be more inclusive;

(vi) high barriers to entry that impede private sector development; and

(vii) current regional and global integration processes, calling for better-informed decision-making mechanisms.

While capital investments are important to address these and related development issues, innovative strategic knowledge solutions and global best practices are also required to ensure an effective achievement of planned outcomes. Recognizing importance of knowledge solutions for Kazakhstan's socioeconomic development, the government emphasized the country's demand for knowledge products and global best practices in its Kazakhstan-2050 strategy and the Five Institutional Reforms agenda. ADB and other development partners were requested by the government to facilitate knowledge and global best practices sharing in a concerted and timely manner.

Impact Achieving a more competitive and inclusive economy, developing human capital, and enhancing institutions and governance (Concept of the Republic of Kazakhstan's Entry into the Top 30 Developed Countries, 2014)
Project Outcome
Description of Outcome Government capacity and awareness of best practices in selected areas strengthened.
Progress Toward Outcome

As of 30 September 2018, six studies have been supported under KEEP Phase 2:

(i) Study on compliance audit that increased the government's awareness of international experience and best practices in the area of compliance audit;

(ii) Study on performance audit that increased the government's awareness of international experience and best practices in the area of performance audit;

(iii) Publication of a book on public audit and financial control that was distributed among the state authorities of the Republic of Kazakhstan and also sent to the supreme audit institutions of the CIS member countries;

(iv) Study on preliminary assessment of the draft national budget and elaboration of criteria for assessment of the country's economic development consisting of five components, including (a) Report on methodological documents of foreign countries on assessment of the draft national budget and elaborations of recommendations on development of standards for conducting the preliminary assessment by the Accounts Committee; (b) Report on issues of the mechanism of conducting the preliminary assessment of the draft national budget, including international best practices in this area; (c) Report on assessment and analysis of value and influence of adopted strategic and program documents on expenditure part of the budget and relevant economic sectors; (d) Report on analysis of the foreign governments' policy on a set of economic and fiscal conditions, medium term macroeconomic indicators for the draft budget planning in the planned period and its future influence on budget allocation; and (e) Report on analysis of growth and public expenditures reduction in the context of functional, economic classification of expenditures on the basis of multiplicative effect on GDP and with construction of econometric models, as well as measures taken by foreign countries to enhance budget expenditures' economic efficiency, taking into account public audit results.

(v) Study on accrual budgeting that is helping to build the government's capacity to prepare for reforms on introduction of accrual budgeting in Kazakhstan;

(vi) Study on development of agricultural services in Kazakhstan, as part of a large study on the topic of Diversification of Kazakhstan's Economy and New Sources of Economic Growth on the basis of Asian Countries' Experience: Services Sector, commenced under KEEP Phase 1. The study is envisaged to assist the government in designing and implementing national reforms in the services sector, including agricultural services;

(vii) Study on development of Public-Private Partnership (PPP) projects in the Health Sector in Kazakhstan to assess health sector and prepare the necessary financial models and model contracts for the development of decentralized primary health care public-private partnerships;

(viii) Study on development of Islamic Finance in Kazakhstan that would help in (i) identifying the Islamic financial services that Astana International Financial Center (AIFC) should provide in the period from 2018 to 2025; (ii) determining which entities may be established within AIFC to provide Islamic financial services (such as Islamic banks, Islamic asset management companies, Islamic investment funds, Takaful companies etc.,); and (iii) developing a framework and drafting the laws, rules and regulations required for establishment of Islamic financial entities and the provision of Islamic financial services at AIFC;

(ix) Study on Civil Service Reforms in Kazakhstan to develop context-relevant policy recommendations on civil service reforms based on studying experiences of other countries that successfully implemented civil service reforms, in particular countries with high-professional civil service system, as well as developing countries (that have similar civil service systems) that succeeded in reforming the civil service within a short period of time, with a special focus on successful reforms in centralization of administrative functions/services;

(x) Development of scientifically justified norms of workload and standards for the civil servants of the Agency of the Republic of Kazakhstan for Civil Service Affairs and Anti-Corruption, and local authorities of the Republic of Kazakhstan. The Phase I of the study will develop working methods and timing studies in North Kazakhstan, Karaganda and Almaty oblasts.

Implementation Progress
Description of Project Outputs

2. Capacity development for government officials

1. Analytical reports serving as background materials for the government''s policymaking

Status of Implementation Progress (Outputs, Activities, and Issues)

(i) Study on compliance audit was implemented as part of KEEP`s support to reforms on introduction of state audit. Under the study, assessment of draft documentation on compliance audit, which were developed by the Accounts Committee (beneficiary), was conducted, and a report on review of international experience in the area of compliance audit was prepared. All outputs of the study were submitted to the Accounts Committee, and the study has been finalized.

(ii) Study on performance audit was implemented as part of KEEP`s support to reforms on introduction of state audit. Under the study, assessment of draft documentation on performance audit, which were developed by the Accounts Committee (beneficiary), was conducted, and a report on review of international experience in the area of performance audit was prepared. All outputs of the study were submitted to the Accounts Committee, and the study has been finalized.

The training and examination of employees of Accounts Committee (AC), Ministry of National Economy (MNE), Ministry of Finance (MOF) and Regional Revision Commissions were delivered by resource persons from the Chartered Institute of Public Finance and Accountancy (CIPFA) and Ernst & Young Kazakhstan.

Training on Audit of Financial Statements based on the model of an international audit company was held on 30 October - 1 November 2017 in Astana, covering the following topics: (a) overview of methodology; (b) fraud risk assessment; (c) determination of materiality; (d) definition of material items; (e) documentation of working papers; (f) identification of significant processes; (g) selection of controls for testing; (h) development of audit procedures; (i) evaluation of audit risk; (j) analytical procedures; (k) practical exercise; (l) identified differences; (m) development of audit procedures; (n) identification of weaknesses in the internal control system; (o) IT system. On 14 November 2017, the AC submitted its Report on successful completion of the training for 32 employees of the AC, Revision Commissions, MNE and MOF. Trainees received certificates.

(iii) The book on Theory of Public Audit was published in 1,000 copies (500 copies in Kazakh language, 500 copies in Russian language). The book was distributed among the state authorities of the Republic of Kazakhstan and also sent to the supreme audit institutions of the CIS member countries. On 31 May 2018, the book was presented at the meeting of the Consultation and Expert Council on Public Audit and Financial Control facilitated by the Accounts Committee and attended by KARM CD Mr. Giovanni Capannelli, Members of the Parliament, representatives of the state authorities, public organizations, quasi-state sector, international audit companies, researchers and independent experts.

(iv) In the study on preliminary assessment of the draft national budget and elaboration of criteria for assessment of the country's economic development, the consultants have analyzed in detail international experience and good practices in preliminary assessment of draft budgets, performance audits of government budgets, programmes and policies, and evaluation of fiscal sustainability by Supreme Audit Institutions; the consultants have also evaluated the preliminary assessment of Kazakhstan s draft budget as well as studied the government finances and projections; on the basis of this extensive analysis, the consultants presented the key policy insights, takeaways and recommendations for Kazakhstan.

(v) As part of KEEP's support to reforms on introduction of accrual budgeting in Kazakhstan, a study on accrual budgeting was initiated in response to the Ministry of Finances (beneficiary) request for technical assistance to reforms on introduction of accrual budgeting in Kazakhstan. The main outputs of the study include a report on cross-country analysis, report on recommendations on application of accrual budgeting in Kazakhstan and report on a single methodology on application of accrual budgeting in Kazakhstan. Advisory support and training on accrual budgeting was provided to MOF and MNEs officials. Two reports on international analysis and recommendations on accrual budgeting have been submitted to MOF. MOF approved the reports.

(vi) Study on the topic of Diversification of Kazakhstan's Economy and New Sources of Economic Growth on the basis of Asian Countries' Experience: Services Sector comprises of several chapters. Implementation of four chapters was financed under the KEEP Phase 1 and was finalized. Fifth Component of the Study "Diversification of Kazakhstan's Economy and New Sources of Economic Growth on the basis of Asian Countries' Experience: Services Sector" on the topic of "Development of Services for the Agriculture Sector in Kazakhstan" was finalized, and Final Report _Development of Services for the Agricultural Sector in Kazakhstan_ was submitted to the Ministry of Agriculture and Ministry of National Economy following several rounds of consultations.

(vii) Study on development of Public-Private Partnership (PPP) projects in the Health Sector in Kazakhstan. The outputs of this study were the preliminary identification of priority PPP projects and assessment of the state of tender readiness of pilot Primary Health Care (PHC) projects. In April-May 2018, three international consultants were hired to assess health sector and prepare the necessary financial models and model contracts for the development of decentralized primary health care public-private partnerships. The consultants had 2 missions to Kazakhstan and met with relevant officials in the MOH, MNE, MOF and other stakeholders in Astana and Karaganda city health authorities, prepared and submitted inception report which is still under discussions. The 3rd mission of the team is planned for mid-October.

(viii) Study on development of Islamic Finance in Kazakhstan.

Astana International Financial Center (AIFC) requested to prepare a legal opinion on AIFC's jurisdiction concerning the development of Islamic finance in Kazakhstan. The final legal opinion was reviewed by ADB's Office of General Council and approved on 27 September 2017. The other outputs of this research are (i) identifying the Islamic financial services that AIFC should provide in the period from 2018 to 2025; (ii) determining which entities may be established within AIFC to provide Islamic financial services (such as Islamic banks, Islamic asset management companies, Islamic investment funds, Takaful companies etc.,); and (iii) developing a framework and drafting the laws, rules and regulations required for establishment of Islamic financial entities and the provision of Islamic financial services within AIFC. Work is in progress. On 23-26 April 2018, a training was successfully held for 50 participants employees of AIFC, MOF and the National Bank of the Republic of Kazakhstan, representatives of the CIS regulatory authorities and financial markets - under Islamic Financial Services Board (IFSB) program on _Facilitating the Implementation of the IFSB Standards_ in order to increase a capacity of regulatory authorities. In particular, the seminar included discussions on risk management in Islamic financial companies, requirements to capital, basic elements of regulatory supervision over Islamic financial companies pursuant to the international best practices. The participants had an opportunity to improve their knowledge on international standards of Islamic financial organizations' regulation. Upon completion of the seminar all 50 participants received certificates and a commemorative group photo was taken.

(ix) Support the Civil Service Reforms in Kazakhstan. The Agency for Civil Service Affairs and Anti-Corruption (Agency) requested the recommendations for civil service reform in Kazakhstan; experience of some of the best civil service systems in the world. The final report has been submitted to the Agency. The Agency has accepted two of the consultant's reports (Inception Report and Draft Final Report) and refused to accept the Final Report which comprises 30% of Payment Milestone. Agency confirmed that the consultant is eligible for the payment of 70% based on the consultant's deliverables. On 29 June 2018, ADB processed the payment of 70%, and afterwards the contract was closed. Consultant agreed with the arrangements.

(x) Development of scientifically justified norms of workload and standards for the number of civil servants of the Agency of the Republic of Kazakhstan for Civil Service Affairs and Anti-Corruption and local authorities of the Republic of Kazakhstan. Phase I of the study is focused on development of working methods and timing studies in North Kazakhstan, Karaganda and Almaty oblasts. Work is in progress.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design

The KEEP, incl. this TA, was conceptualized during consultations with the government on ADB's Country Partnership Strategy for Kazakhstan. The KEEP framework (outlining the objective and scope, areas of focus, implementation arrangements, and monitoring and evaluation measures) is defined in a memorandum of understanding, which was jointly developed and then signed by the government and ADB.

The government's willingness to cost-share the KEEP with a 50% reimbursement arrangement demonstrates its strong ownership as well as requires from ADB delivery of high quality knowledge products and services in a timely manner.

During Project Implementation

The Ministry of National Economy, through the Department for Budget Investments and PPP Development, is the executing agency, which is responsible for supervising and monitoring PATA activities. Implementing agencies are ministries or agencies responsible for initiating specific subprojects.

The KEEP Coordinating Committee (KCC), comprising of representatives of the Ministry of National Economy and ADB, is set up to oversee TA implementation and provide guidance and direction to stakeholders. The KCC has periodic meetings to update and adjust the list of subprojects and core outputs.

The KCC Secretariat supports the KCC's work by ensuring smooth functioning of the Committee and supervising and coordinating day-to-day TA activities, including monitoring TA implementation, resolving issues, arranging meetings, and liaising with concerned government agencies.

Business Opportunities
Consulting Services The TA will use an estimated 24 person-months of national and 18 person-months of international consulting inputs to support research, workshops, and other agreed subproject activities. The nature of the needed expertise and inputs will be determined case by case for each activity or subproject determined and approved jointly by the MNE and ADB. The inputs of consultants as well as short-term resource persons will serve to introduce international best practices; provide in-depth local knowledge; and advice on policy options, challenges, and the implications of various courses of action. The selection method for consultants will be chosen during implementation depending on what is best suited to the respective terms of reference (TOR). If the TA requires the services of a consulting firm, the firm will be recruited in accordance with ADB'`s Guidelines on the Use of Consultants. All consultants and experts will be engaged based on their expertise and proven experience in the subproject areas.
Procurement No major procurement is expected.
Responsible ADB Officer Genadiy Rau
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Kazakhstan Resident Mission
Executing Agencies
Department for Budget Investments and PPP Development under the Ministry of National Economy
010000, Astana, Kazakhstan, 8, Orynbor Street, Kazakhstan
Timetable
Concept Clearance 27 Apr 2015
Fact Finding -
MRM -
Approval 24 Jul 2015
Last Review Mission -
Last PDS Update 28 Sep 2018

TA 8933-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Jul 2015 19 Aug 2015 19 Aug 2015 31 Mar 2018 31 Dec 2018 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 24 Jul 2015 999,998.88

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Labour Norm Setting Individual - Consulting Closed 22 Jun 2018 28 Jun 2018
Public-Private Partnership Specialist Individual - Consulting Closed 14 Feb 2018 18 Feb 2018
Legal Expert Individual - Consulting Closed 14 Feb 2018 18 Feb 2018
Financial Modelling Expert Individual - Consulting Closed 14 Feb 2018 18 Feb 2018
KEEP, Phase 2, Support to Introduction of Public Audit in Kazakhstan Individual - Consulting Closed 13 Sep 2017 19 Sep 2017
KEEP, Phase 2, Support to Introduction of Public Audit in Kazakhstan Individual - Consulting Closed 29 Aug 2017 11 Sep 2017
KEEP, Phase 2 | Consultation services on translation and publication of the book in the field of public audit and financial control Individual - Consulting Closed 07 Aug 2017 13 Aug 2017
Joint Government of Kazakhstan and the Asian Development Bank Knowledge and Experience Exchange Program, Phase 2 Individual - Consulting Closed 07 Jul 2017 13 Jul 2017
Joint Government of Kazakhstan and the Asian Development Bank Knowledge and Experience Exchange Program, Phase 2 Individual - Consulting Closed 07 Jul 2017 13 Jul 2017

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.