Kyrgyz Republic : Sustainable Fiscal Management and Governance Improvement Program (Subprogram 1)

Sovereign Project | 57193-001

The proposed Sustainable Fiscal Management and Governance Improvement Program supports the Kyrgyz Republic to improve governance and climate and gender-responsive public financial management (PFM), strengthen governance of state-owned enterprises (SOEs), strengthen tax policy and administration, and adopt anticorruption measures. The program is aligned with the National Development Strategy of the Kyrgyz Republic for 2018-2040 (NDS 2040), which aims to ensure economic well-being, social welfare, and sound governance; and with ADB's Country Partnership Strategy for the Kyrgyz Republic, 2023-2027 through its support for PFM reforms, improved infrastructure and service delivery, and strengthened capacity and standards.

Project Details

  • Project Officer
    Rahemtulla, Hanif A.
    Sectors Group
    Request for information
  • Country/Economy
    Kyrgyz Republic
  • Sector
    • Public sector management
Project Name Sustainable Fiscal Management and Governance Improvement Program (Subprogram 1)
Project Number 57193-001
Country / Economy Kyrgyz Republic
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant: Sustainable Fiscal Management and Governance Improvement Program, Subprogram 1
Asian Development Fund US$ 7.00 million
Loan: Sustainable and Green Public Sector Management and Improved Governance Program, Subprogram 1
Concessional ordinary capital resources lending US$ 43.00 million
Operational Priorities OP2: Accelerating progress in gender equality
OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
OP6: Strengthening governance and institutional capacity
Sector / Subsector

Public sector management / Public administration - Public expenditure and fiscal management - Reforms of state owned enterprises

Gender Effective gender mainstreaming
Description

The proposed Sustainable Fiscal Management and Governance Improvement Program supports the Kyrgyz Republic to improve governance and climate and gender-responsive public financial management (PFM), strengthen governance of state-owned enterprises (SOEs), strengthen tax policy and administration, and adopt anticorruption measures. The program is aligned with the National Development Strategy of the Kyrgyz Republic for 2018-2040 (NDS 2040), which aims to ensure economic well-being, social welfare, and sound governance; and with ADB's Country Partnership Strategy for the Kyrgyz Republic, 2023-2027 through its support for PFM reforms, improved infrastructure and service delivery, and strengthened capacity and standards. The program aligns with the following operational priorities (OPs) of ADB's Strategy 2030: OP2 (accelerating progress in gender equality); OP3 (tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability); OP6 (strengthening governance and institutional capacity); and OP7 (fostering regional cooperation and integration). Based on the Joint MDB Methodological Approach for Assessment of Paris Agreement Alignment, the Program is aligned with the goals of the Paris Agreement.

The expected outcome is climate responsive, transparent, and fiscally sound governance and public investment management. To support this outcome, the government will strengthen PFM; improve corporate governance of SOEs; enhance the transparency and accountability of tax policy and administration; and implement anticorruption measures.

Project Rationale and Linkage to Country/Regional Strategy

The government has limited capacity to respond to macroeconomic shocks, finance climate mitigation and resilient investments, and weak governance and transparency undermine investor confidence. Achieving sustainable economic growth necessitates reinforcing institutions, ensuring sound governance, and establishing climate-sensitive, effective, and transparent PFM systems. Since 1991, the country has encountered political instability accompanied by economic and social fragility. The extreme poverty rate was about 1% during 2014-2019, while the overall national poverty rate decreased by 10 percentage points to 20%. The pandemic caused a sharp reversal, pushing the poverty rate up to 25% in 2020 and a significant increase to 33% (2.2 million people) in 2021. This surge was primarily due to an unprecedented rise in extreme poverty, equivalent to 5% of the population, which was seven times higher than in 2020. Tackling this escalating

poverty by enhancing economic prospects stands as a paramount objective for the Kyrgyz Republic. The government is committed to reduce greenhouse gas emissions and adapt to climate change aligned with national priorities and the Sustainable Development Goals (SDGs).

Impact
Outcome
Outputs
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 Rahemtulla, Hanif A.
Responsible ADB Department Sectors Group
Responsible ADB Division Public Sector Management and Governance Sector Office (SG-PSMG)
Executing Agencies
Ministry of Finance
Timetable
Concept Clearance 22 Nov 2023
Fact Finding 01 Mar 2024 to 08 Mar 2024
MRM -
Approval -
Last Review Mission -
Last PDS Update 07 Dec 2023

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

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Procurement Plan

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