1. COUNTRY DEVELOPMENT STRATEGY
for
Presentation by Akylbek Japarov
Minister of Finance of the Kyrgyz Republic

2. CDS DEVELOPMENT PROCESS
Order of the President of the Kyrgyz Republic
Working group
Ministries and Agencies
Regional
representatives
Jogorku
Kenesh
Experts
Civil society
Private sector
Development partners

3. NPRS RESULTS and ACHIEVEMENTS
STRUCTURAL INDICATORS
QUANTITATIVE INDICATORS
Efforts to align policy measures of strategy with budget sources
Average annual economic growth level - 5%
Initiation of process on development of sectoral strategies and sector budgets based on programmatic approach
Decrease in poverty level from 52% to 44%
Mobilization of local communities in seeking resources to improve quality of life
Increase of pension and social package sizes
Donors community / Government Constructive partnership

4. Why the implementation of NPRS was not fully successful?
Comprehensiveness of the document
Wide range of priorities
Lack of financing (Financing gap) decreased
the effectiveness of program implementation in general
Inconsistency between goals, policy measures and financing
the activities to achieve these goals
Monitoring System shortcomings
Complexity of measuring the impact of various policy
measures on development process (qualitative changes)
and aligning with necessary funding amount
Lack of political will

5. NPRS CDS CONCEPTUAL DIFFERENCES Manufacturing Social economy economy
Production of commodity goods
Выпуск товаров потребления
Production of commodity goods
Production of capital goods
Production of capital goods

6. RELEVANCE OF CDS Completion of NPRS 2003-2005
A need to develop a new effective country development strategy, based on own capacity
Coordination and consistency of policy

7. CDS SPECIFIC FEATURES and DISTINCTIONS
1. MARKET ORIENTED
2. IMPROVED PRIORITIZATION
3. IMPORTANT ROLE OF REGIONS (Oblasts ) IN DEVELOPMENT
4. FOCUS ON LOCAL CAPACITY
5. ALIGNMENT OF CDS GOALS WITH OTHER INITIATIVES

8. VISION AND GOAL
IMPROVING QUALITY OF LIFE OF CITIZENS OF THE KYRGYZ REPUBLIC THROUGH EFFECTIVE ECONOMIC GROWTH NOT LESS THAN 8% PER YEAR

9. IMPROVING DEVELOPMENT ENVIRONMENT
Social and political stability
Macroeconomic policy
Strategy on public debt management
Investment policy and investment climate
Development of financial sector
Fiscal reform
Support and stimulation of export
Policy on achieving gender equality

10. STRATEGIC DIRECTION INCREASE OF ECONOMIC CAPACITY (9 priorities)
FIGHTING CORRUPTION (5 priorities)
HUMAN AND SOCIAL DEVELOPMENT (5 priorities)
ENSURING ENVIRONMENTAL
SUSTAINABILITY (2 priorities)

11. CRITERIA FOR SELECTION OF PRIORITIES
Level of value added cost to GDP
Tax revenue increase
Job creation
Multiplicative effect
Competitiveness

12. FIRST DIRECTION ENERGY MINING AGRICULTURE AND AGRO-PROCESSING
SMALL AND MEDIUM ENTERPRISE DEVELOPMENT
CONSTRUCTION
TOURISM DEVELOPMENT
TRANSPORT INFRASTRUCTURE
COMMUNICATION AND INFORMATIZATION
DEVELOPMENT OF INNOVATIVE TECHNOLOGIES

13. SECOND DIRECTION POLITICAL REFORM DEREGULATION OF ECONOMY
STATE GOVERNANCE REFORM
BUILDING CAPACITY
JUDICIARY REFORM

14. THIRD DIRECTION EDUCATION THAT MEETS THE NEEDS OF SOCIETY
ACCESSIBLE AND HIGH QUALITY HEALTH CARE
LABOR MARKET AND OPTIMIZATION OF MIGRATION PROCESSES
INCREASE OF POPULATION PARTICIPATION IN CULTURAL LIFE

15. FORTH DIRECTION ENSURING ENVIRONMENTAL SAFETY
ENSURING COMPLEX SECURITY TO POPULATION AND TERRITORIES FROM NATURAL DISASTERS AND CATASTROPHES

16. ROLE OF REGIONS
ATTACHING SIGNIFICANCE TO DEVELOPMENT OF REGIONS – INVOLVEMENT AND SUPPORT OF NATIONAL PRIORITIES THROUGH IMPLEMENTATION OF SPECIFIC PROGRAMMES AND PROJECTS

17. PRIORITIES ON DEVELOPMENT OF REGIONS
Batken oblast
agriculture, processing industry
Jalalabad oblast
energy, processing industry, tourism, agriculture
Issyk-Kul oblast
tourism, reconstruction of highway around Issyk-Kul, construction and gold mining
Naryn oblast
tourism, mining, agriculture
Osh oblast
Talas oblast
gold mining, agriculture, processing industry
Chui oblast
processing industry, gold mining, agriculture
Bishkek city
“business tourism”, processing industry, service sphere

18. MONITORING AND EVALUATION
Draft matrix of monitoring indicators have been developed (interim and final)
Draft M&E system was discussed with official Government structures
Preparation of software system to launch monitoring is being completed
Issue on institutionalization of monitoring system has been solved (Ministry of Economic Development and Trade)
Reviews and evaluation of capacity of regional structures for establishment of monitoring centers at the oblast level have been carried out

19. NEXT STEPS Test information monitoring system
Train users and suppliers of information
Launch CDS monitoring system

20. Favourable factors revealed in the course of development of indicators
Political support at national and regional levels
International donor organizations’ interest in project results
Government structures’ interest
NGOs’ readiness to interact

21. NEED FOR RESOURCES $ 4.2 billion Option 1 – “Baseline” State
Civil sector
$ 4.2 billion
Private sector
$ 1.2 billion
Development partners
$ 0.5 billion

22. RESOURCE STRUCTURE
Option 1 – “Baseline”

23. NEED FOR RESOURCES (requirement) Option 2 – “Strategic – CDS reforms”
State
$ 2.5 billion
Civil sector
$ 6.3 billion
Private sector
$ 3.3 billion
Development partners
$ 0.5 billion

24. Option 2 – “Strategic – CDS reforms”
RESOURCE STRUCTURE
Option 2 – “Strategic – CDS reforms”

25. DEVELOPMENT MACRO INDICATORS
2005
2010
option-1
2010 г.
option-2
Real GDP growth
-0,2%
5,9%
9,0%
GDP per capita
479$
728$
872$
Unemployment level
(total)
9,7%
5,1%
4,0%
Average wage
62,6$
100$
160$
Poverty level
43,1%
32,5%
29,8%

26. GDP

27. GROSS CAPITAL FORMATION
2.4 times
1,5 times

28. Price of reforms in the framework of CDS
3.289 billion dollars – by strategic scenario
1.276 billion dollars – by baseline scenario
2.1 billion
USD

29. Political will
Holistic economic policy
Consistency of reforms
Participation of all government branches

30. K. Bakiev’ Address to the nation:
Quote from President
K. Bakiev’ Address to the nation:
“Now it is very important for us together, with general will, to aim on solution of the main issues. We must understand that we can’t rely on foreign aid that someone will come and make our country rich. We lived with such hope for a long period of time, however we gained many debts. We must work ourselves.”

31. THANK YOU FOR ATTENTION!
Presentation by Akylbek Japarov
Minister of Finance of the Kyrgyz Republic