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| >> Regional Overview >> Kazakhstan Overview | |||||||||||||||||||||||||||||||||||||||
(text taken from the FY 2003 Congressional Budget Justification) 
THE DEVELOPMENT CHALLENGE: Due to its oil and gas resources, and size and strategic location, Kazakhstan continues to have a special partnership with the U.S. Although it does not border Afghanistan, Kazakhstan's leading economic and political position in the region gives it an important role in the War on Terrorism. With a per capita GDP of $1,421, Kazakhstan is the wealthiest of the Central Asian republics. It has made the most significant economic progress since independence, well surpassing many other former Soviet countries in macro-economic reform. However, the nation's historical legacies of authoritarianism and corruption, wasteful services and energy practices, and disdain for civic action and an independent media are still very evident. The already large income and social disparities continue to grow, with over 30% of the population living under the poverty line, according to official government statistics. The informal economy is estimated to account for 20 to 28% of GDP. The official unemployment rate is near 4%, but the real figure may be as high as 30%. Kazakhstan's macroeconomy continues to show many positive signs: with 2001 GDP growth of 10.2%, solid fiscal management, privatization of state-owned enterprises, an innovative Oil Fund, growing pension funds and bond and mortgage markets, as well as other reforms. However, the economy remains dominated by oligarchic interests and lacks a vigorous small business sector. Avoiding adverse macro-economic consequences from concentration on the oil sector is a major economic policy concern. Continued government attempts to control and stifle independent media and political groups indicate a reluctance to embrace basic civil liberties. According to Freedom House, Kazakhstan remains "not free." However, vocal public action against some of the more severe government proposals did result in some moderation. Although recent political shifts have led to the removal of some key reformers from the government, a new political movement that includes many of these same reformers may also signal an increase in public debate on issues such as corruption, media, electoral reform and decentralization. Kazakhstan's energy and water resources are often wasted through mismanagement and lack of maintenance; the public is largely ignorant of the concept of or the need for efficiency. The World Bank estimates that 91% of the population has access to an improved water source, but poor sanitation and the lack of safe sources of potable water especially in areas surrounding the Aral Sea, exacerbate health problems. HIV/AIDS in particular is rising dramatically among high-risk groups, including drug users. Over 5% of the intravenous drug-using population is infected, making Kazakhstan the site of a concentrated HIV epidemic. The popularity of new community-level primary care centers demonstrates a public desire for better quality and improved efficiency in the health care system. It is estimated that Kazakhstan's rate of infant mortality is 59.17 deaths per every 1,000 live births. Tuberculosis mortality rates dropped 12.4% in the last reporting period, and inoculations against Hepatitis B have brought its incidence to zero among young children. By comparison, the incidence of these diseases beyond childhood is still well above international norms. THE USAID PROGRAM:
To meet these challenges, the goal of USAID assistance to Kazakhstan is to expand opportunities for participation in civil society and economic life, and for improved quality of life for all citizens. The Program Data Sheets provided below cover the five objectives for which USAID is requesting funds for Kazakhstan: small enterprise and trade, primary health care, democratic culture and institutions, energy and water resource management, and sound budgetary and tax systems. To ensure demonstrable results in such a vast country, USAID is concentrating on selected localities and subregions. FY 2002 funds will be used to implement the program planned and described in the FY 2002 Congressional Budget Justification. Important cross-cutting objectives are conflict mitigation (through media, education, and community development), youth and education, gender, and anti-corruption and rule of law. Recognizing longer-term objectives, the cross-cutting nature of decentralization and the need to streamline management, in FY 2003, USAID's local government activities will be combined with the broader democratic objective. Local government initiatives continue as a means of strengthening democratic culture, social services, and small enterprise, rather than as an end in itself. The specific activities to be funded by FY 2002 and FY 2003 appropriations are described in more detail in the following Program Data Sheets. USAID will use $3 million of the FY 2003 request to fund new activities in media and public advocacy, youth and education and community development, while the remaining $29.35 million will fund ongoing efforts. Ongoing Program for Which No FY 2002 or FY 2003 Funding is Requested: USAID is not requesting new funds, but is continuing to expend funds already appropriated for the following objective:
OTHER PROGRAM ELEMENTS: Through its Global Training for Development Program, USAID annually trains about 700 Kazakhstani citizens in enterprise and finance, democratic reform, and primary health care. In addition, USAID supports institutional partnerships that build lasting relationships in energy, health and governance between the U.S. and Kazakhstan. USAID uses several centrally-managed programs, including the agreement with the Centers for Disease Control, Monitoring and Evaluation to Assess and Use Results (MEASURE)/Evaluation, and the Ecolinks environmental partnership program. The Farmer-to-Farmer program complements other USAID agricultural enterprise activities in Kazakhstan. The Eurasia Foundation has an active small grants program in education, small business, local government and civil society. The Departments of Commerce, Defense, Energy, Agriculture, and State also manage programs complementary to USAID field activities in various sectors. OTHER DONORS: European Bank for Reconstruction and Development (EBRD), European Union - Technical Assistance for the Commonwealth of Independent States (EU-TACIS), the Asian Development Bank (ADB), and the World Bank (WB) are active in Kazakhstan. They provide resources to promote and support the development of SMEs; build public infrastrastructures; and modernize Kazakhstan's tax and treasury systems. The Soros Foundation/Open Society Institute (Soros/OSI), German Government, United Nations Development Program (UNDP) and Israeli Government complement the multi-lateral programs in SME development. UNDP, Soros/OSI, EU-TACIS, and the Organization for Security and Cooperation in Europesupport initiatives in democracy and governance. The Government of Kazakhstan has cancelled the World Bank Health Loan. Without these funds, future activities of Britain's Department for International Development (DFID) in family medicine training are in question. The UN agencies - UNAIDS, United Nations Childrens Fund (UNICEF) and the World Health Organization - have important health programs and are collaborating actively with (and are funded by) USAID. ADB is becoming more involved in the health sector, including a major regional project on iodine deficiency and anemia. WB, Swiss Government, ADB, and the Canadian International Development Agency support activities to improve natural resources management. Program Data Sheets
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