Kyrgyz Republic: Promoting Economic Diversification Program (Subprogram 2)

Sovereign Project | 52225-003

The program continues to support the implementation of reforms in the National Development Strategy of the Kyrgyz Republic for 2018 2040 (NDS 2040) and its overarching objective of gradually diversifying the Kyrgyz economy away from an over-reliance on gold production and exports (about 6% 10% of gross domestic product each year) and remittance-led consumption (about 30% of GDP). The program is a continuation of past reform support efforts from the Asian Development Bank (ADB) to the Government of Kyrgyz Republic on trade and investment competitiveness, small and medium-sized enterprise (SME) development, infrastructure development (including through public-private partnerships), and industry-based skills development.

Project Details

  • Project Officer
    Tora, Laisiasa Natakubu
    Central and West Asia Department
    Request for information
  • Approval Date
    23 September 2021
  • Country
    Kyrgyz Republic
  • Sector
    • Public sector management
Project Name Promoting Economic Diversification Program (Subprogram 2)
Project Number 52225-003
Country Kyrgyz Republic
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0800-KGZ: Promoting Economic Diversification Program (Subprogram 2)
Asian Development Fund US$ 10.70 million
Loan 4114-KGZ: Promoting Economic Diversification Program (Subprogram 2)
Concessional ordinary capital resources lending US$ 69.30 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Public sector management / Economic affairs management - Public expenditure and fiscal management - Social protection initiatives

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The program continues to support the implementation of reforms in the National Development Strategy of the Kyrgyz Republic for 2018 2040 (NDS 2040) and its overarching objective of gradually diversifying the Kyrgyz economy away from an over-reliance on gold production and exports (about 6% 10% of gross domestic product each year) and remittance-led consumption (about 30% of GDP). The program is a continuation of past reform support efforts from the Asian Development Bank (ADB) to the Government of Kyrgyz Republic on trade and investment competitiveness, small and medium-sized enterprise (SME) development, infrastructure development (including through public-private partnerships), and industry-based skills development. While the Kyrgyz Republic is still recovering from the coronavirus disease (COVID-19) pandemic outbreak that began in March 2020 and the severe economic and employment contraction and fiscal difficulties that was already underway, this program helps the government stay on the reform course, by (i) insulating the originally planned and needed medium-term reform efforts from the current crisis effects, (ii) while adding urgent reforms to improve the fiscal management (and buffers) and social protection mechanisms that have now been agreed to be crucial enablers of the original medium-term reform agenda.
Project Rationale and Linkage to Country/Regional Strategy In addition to being developed on the basis of the NDS 2040, the proposed program is aligned with ADB's Strategy 2030, including operational priorities on addressing remaining poverty and reducing inequalities, accelerating progress in gender equality and strengthening governance and institutional capacity, and with ADB's Country Partnership Strategy for 2018 2022. The program has been prepared with ADB technical assistance (TA) and support from the IMF on the policy dialogue with Government on debt sustainability and on the preparation of fiscal management reforms. The transition to a dynamic, globally oriented, market-based economy requires consideration for a number of issues that the coronavirus pandemic has illustrated as key: (i) importance of social safety nets to help cushion the impact of the pandemic and structural adjustment costs on the populace, (ii) fiscal buffers to allow an immediate crises response and to create fiscal room to safeguard public expenditures related to the reform effort, and (iii) constituency building through policy measures to safeguard public expenditure on social protection while addressing low coverage and inadequacy of existing social protection transfers. ADB's programmatic assistance helps incorporate this emerging consensus.
Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Tora, Laisiasa Natakubu
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance
Hon. Sultan Mederov
Public Debt Department Room 500
58 Erkindik Boulevard
Bishkek 720040, Kyrgzy Republic
Timetable
Concept Clearance 02 Nov 2018
Fact Finding 21 Sep 2020 to 25 Sep 2020
MRM 06 Apr 2021
Approval 23 Sep 2021
Last Review Mission -
Last PDS Update 23 Sep 2021

Grant 0800-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Sep 2021 04 Oct 2021 - 31 Dec 2021 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.70 Cumulative Contract Awards
ADB 10.70 18 Nov 2021 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 18 Nov 2021 0.00 0.00 0%

Loan 4114-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Sep 2021 04 Oct 2021 - 31 Dec 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 69.30 Cumulative Contract Awards
ADB 69.30 18 Nov 2021 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 18 Nov 2021 0.00 0.00 0%

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