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The World Bank’s board of executive directors have discussed a new country assistance strategy (CAS) for the Kyrgyz Republic . The CAS is a document that details the bank’s work plan to assist client countries in achieving their development goals.  It describes all of the bank’s planned activities in the country operations, analytical work, and technical assistance. The new CAS for the Kyrgyz Republic covers the period 2003-06, and is designed to help the government implement its National Poverty Reduction Strategy (NPRS). The CAS envisages operations of US$171mn, a significant amount of which will be extended as grants. Upcoming bank projects in the country will include the Village Investment Project, the Financial Sector and Business Development Project, the Rural Education Project, the Small-Town Infrastructure Project, and the Natural Disaster Mitigation Project.

Priorities of the new CAS include assisting the government to promote private sector-led growth; improve access to social and other public services; and promote a better and more effective government.

“The new CAS reflects a maturing of the World Bank’s relations with the Kyrgyz Republic , with a stronger up-front effort on helping the government to design its own development actions, and then providing funding and technical support to make these activities happen,” says Dennis de Tray, World Bank country director for the Kyrgyz Republic .

Despite a relatively strong economic performance and pro-poor growth, with poorer people increasing their incomes faster than average, huge challenges remain for the country.  The level of poverty remains close to 50%, with poverty particularly entrenched in the rural and mountainous regions. Investment has been limited, and infrastructure and social service systems have been slowly deteriorating since independence.  In addition, governance constraints are among the most important issues limiting returns to structural reforms.

The CAS is organised around three central themes:

  • Promoting private sector-led growth. There are three key drivers of economic growth in the country:  agriculture and agro-processing, industry and energy, and small and micro enterprises. The World Bank Group will help the Kyrgyz Republic to implement reforms and attract investment in these areas through reducing bureaucratic barriers; moving to market pricing; rehabilitating key infrastructure; and increasing access to market information and financing. In  the financial sector, the World Bank Group will help to strengthen existing institutions and to create the framework conducive to attracting investments, capital formation and savings.

  • Stemming the deterioration in key infrastructure and social services. The bank’s  activity in this area will seek to support overall systemic changes to make provision of social and other public services more efficient, while empowering local communities to identify priorities, in keeping with the decentralised vision in the NPRS.

  • Addressing governance constraints to growth and poverty reduction while recognising that this is a long term challenge. Among the key priorities are increasing transparency and accountability, capacity building at the central and local levels, and supporting the continued development of the NPRS and the Medium Term Expenditure Framework (MTEF) as vehicles for government planning and budgeting.

The CAS was prepared in partnership with the government of the Kyrgyz Republic and in consultation with civil society organisations and the private sector. The goal was to seek a wide level of input into the Bank’s strategy of assistance to the country.

In addition to reviewing the CAS, the World Bank’s board of executive directors also approved two credits for the Kyrgyz Republic :  the US$20mn Governance Structural Adjustment Credit (GSAC) and the US$7.78mn Governance Technical Assistance Credit (GTAC).

The GSAC will support the government’s programme to strengthen the effectiveness of the State. It aims to improve the transparency and responsiveness of the public sector and to enhance the ability of stakeholders to hold it accountable, including improving the personal accountability of political officials and civil servants, and improving public access to official information. The GSAC also aims to increase efficiency within the public sector through strengthening public expenditure management and improving accountability in public procurement, among other things.

The GTAC will provide technical assistance to facilitate the design and implementation of reforms sought under the GSAC. In addition, consistent with the objectives of the GSAC, it will support modernisation of the Kyrgyz Treasury.

Since the Kyrgyz Republic joined the World Bank in 1992, commitments to the country total US$621mn.