COUNTRY DEVELOPMENT STRATEGY for 200 7 -20 10

1. COUNTRY DEVELOPMENT STRATEGY for 2007-2010 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 Development partners Experts Civil society Private sector

3. NPRS RESULTS and ACHIEVEMENTS

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. CONCEPTUAL DIFFERENCES Manufacturing economy Social economy NPRS CDS 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

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 Option 1 – “Baseline” State $ 2.5billion Civil sector $ 4.2billion Development partners $ 0.5 billion Private sector $ 1.2 billion

22. RESOURCE STRUCTURE Option 1 – “Baseline”

23. NEED FOR RESOURCES (requirement) Option2 – “Strategic – CDS reforms” State $ 2.5billion Civil sector $ 6.3 billion Development partners $ 0.5 billion Private sector $ 3.3 billion

24. RESOURCESTRUCTURE Option2 – “Strategic – CDS reforms”

25. DEVELOPMENT MACRO INDICATORS

26. GDP

27. GROSS CAPITAL FORMATION 2.4times 1,5 times

28. 2.1 billion USD Price of reforms in the framework of CDS 3.289billion dollars – 2007-2010 by strategic scenario 1.276billion dollars – 2007-2010 by baseline scenario

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

30. 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