Kazakhstan : Promoting Digital Technologies for Sustainable Development

Project Name

Promoting Digital Technologies for Sustainable Development

Project Number

53330-001

Country / Economy

• Kazakhstan

Project Status

Closed

Project Type / Modality of Assistance

• Technical Assistance

Source of Funding / Amount

TA 9946-KAZ: Promoting Digital Technologies for Sustainable Development

Source	Amount
Republic of Korea e-Asia and Knowledge Partnership Fund	US$ 500,000.00

Operational Priorities

• OP6: Strengthening governance and institutional capacity

Sector / Subsector

• Public sector management / Public administration

Gender

No gender elements

Description

The proposed Promoting Digital Technologies Sustainable Development in Kazakhstan knowledge and support technical assistance (TA) will complement the country's efforts to improve peoples' quality of life and promote sustainable economic development through the improved use of digital technologies. The proposed TA will support: (i) mapping of existing constraints and opportunities to adopting digital technologies; (ii) developing the capacity of local stakeholders; and (iii) conducting feasibility studies for possible future investment projects.

The proposed TA is aligned with key operational priorities of Strategy 2030 of the Asian Development Bank (ADB) by mainstreaming the use of high-level technologies in Developing Member Country (DMC). The TA is also fully aligned with the country partnership strategy for Kazakhstan 2017-2021, which highlights ADB's role in supporting the social impact of technology solutions in areas such as municipal services, e-commerce, agri-business, green economy, and finance.

The TA is included in the ADB country operations business plan (COBP) for Kazakhstan, 2020-2022. Its implementation is aligned with ADB's focus on supporting economic diversification through technological change and capacity development of DMC stakeholders.

Project Rationale and Linkage to Country/Regional Strategy

Kazakhstan is seeking to transform its economy and improve people's living standards by promoting the use of information and communication technology (ICT) as outlined in the State Program 'Digital Kazakhstan (footnote 1). The country's digitalization agenda is managed and monitored by the Ministry of Digital Development, Innovations and Aerospace Industry (MDDIAI) of the Republic of Kazakhstan. However, the information available for development partners and other external stakeholders on the progress of the country's digitalization process remains limited, scattered and often provided with substantial time lag, restricting their contribution to existing plans, or developing new initiatives incorporating high-level technologies.

'Digital Kazakhstan is an ambitious program launched in 2017 by the government to leverage ICT for accelerating economic growth and achieving higher living standards. The program covers the period from 2018 to 2022 with the central government allocating KZT 141 billion (approximately $400 million), while completing the majority of enlisted tasks and activities would require additional private and quasi-government funding, estimated at $500 million. 'Digital Kazakhstan , while highlighting opportunities generated by the adoption of digital technologies, provides few details on the incentives system and adaptation mechanisms needed to introduce new ICT solutions, and often downplays or omits the challenges Kazakhstan will face in adopting these technologies. ADB experience in assisting with the introduction of digital technologies in its DMCs shows that information asymmetry, externalities and spillover effects often tend to preclude stakeholders from championing digital technology solutions. As a result, emerging high-level technologies application opportunities are left unnoticed and unrealized.

The ability of citizens, government and businesses to meaningfully and sustainably exploit digital technologies depends strongly on having the requisite ICT skills and knowledge. 'Digital Kazakhstan is keen to foster entrepreneurship and develop an innovative ecosystem. One of the program priorities is the formation of the 'Astana Hub , launched in November 2018. The hub features incubation and acceleration facilities for high-level technology startups, co-working space and offices for tech firms. It aims to raise the country's rank in the 'Innovation Capability Index from 87th in 2018 to 63rd by 2022 and attract KZT 123 billion (approximately $360 million) in startup funding between 2019 and 2022. The ecosystem is in infancy stage and will strongly benefit from ADB's legal, institutional and technical support.

The application of digital ICT in Kazakhstan has a great potential of raising productivity and lowering costs, while promoting environmentally friendly development and creating good jobs. Key constraints are: (i) significant underinvestment by state and private sector in the development and adaptation of new technologies; and (ii) limited local capacity to effectively advance the technology upgrading agenda. ADB can thus play an important role in building the capacity of local players and promoting the adaptation of high-level technologies in the country.

Impact

To accelerate the pace of the country's economic development and improve peoples' quality of life through the use of digital technologies

Project Outcome

Description of Outcome

Innovative high- level technologies for sustainable development promoted

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

1. A mapping exercise to identify both constraints and opportunities for selected digital technology solutions for sustainable development conducted

2. Capacity of local stakeholders to apply high level technologies is improved

3. Feasibility of digital technology solutions in select areas for sustainable development analyzed

2. Capacity of local stakeholders to apply high level technologies is improved

3. Feasibility of digital technology solutions in select areas for sustainable development analyzed

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

Geographical Location

Nation-wide

Summary of Environmental and Social Aspects

Environmental Aspects

Involuntary Resettlement

Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design

During Project Implementation

Contact

Responsible ADB Officer

Genadiy Rau

Responsible ADB Department

Central and West Asia Department

Responsible ADB Division

Kazakhstan Resident Mission (KARM)

Executing Agencies

Ministry of Digital Development, Innovation and Aerospace Industry (MDDIAI)

Timetable

Concept Clearance

19 Nov 2019

Fact Finding

01 Oct 2019 to 15 Oct 2019

MRM

-

Approval

09 Jan 2020

Last Review Mission

-

Last PDS Update

07 Feb 2020

Funding

TA 9946-KAZ