Country Overview

FY 2006 Assistance Overview

U.S. STRATEGIC INTERESTS & FOREIGN POLICY PRIORITIES

Kazakhstan is an important strategic partner in Central Asia and a key ally in the Global War on Terrorism. It has cooperated with the U.S. to confront the terrorist threat both in the region and further afield, including in Iraq where its military engineers have worked to restore stability since 2003. Since President Nazarbayev's 1991 decision to give up the nuclear arsenal inherited from the USSR, Kazakhstan and the U.S. have prevented the proliferation of weapons of mass destruction by securing nuclear, chemical, and biological weapons and facilities. As its oil production increases and its economy grows, Kazakhstan is becoming increasingly influential in the region and on the world stage. U.S. foreign policy priorities in Kazakhstan include continued security and stability in the country and the region, a stable economy with equitable conditions for U.S. investors, the efficient development of Kazakhstan's energy resources in a way that contributes to U.S. energy security, and further democratic political reform to provide its citizens the ability to participate more effectively in charting their country's future.

FOREIGN ASSISTANCE PRIORITIES

U.S. Government (USG) assistance programs are aligned with these policy priorities. In order to support the Government of Kazakhstan's (GOK) ability to ensure national security and confront the threat of terrorism, the U.S. and Kazakhstan have a five-year bilateral plan of military cooperation based on three main objectives: military interoperability; establishing a military capability in the Caspian Sea region; and, general systemic military reforms. USG assistance also supports Kazakhstan's efforts to secure nuclear and biological materials and to better detect biological agents, and to help strengthen Kazakhstan's borders and improve law enforcement. In the economic realm, USG priorities are to strengthen the competitiveness of small and medium enterprises and improve the policy, legal, and regulatory environment in which they operate. In order to support democratic reforms in Kazakhstan, U.S. priorities are to strengthen civil society, independent media, and political parties; promote the protection of human rights; combat trafficking in persons; and advance judicial and legal reforms. The U.S. also works closely with the Kazakhstani government to increase the quality, equity, and efficiency of the health system. In May 2006, the U.S. and Kazakhstan launched a new economic development program in which Kazakhstan will directly share the cost of U.S. assistance.

OPERATING ENVIRONMENT

President Nazarbayev's reelection in December 2005 with 91.2% of the vote was the most significant development in Kazakhstan during the fiscal year. With the elections proceeding peacefully (although they did not meet OSCE or international standards), and President Nazarbayev promising significant political reform during what he stated would be his last term, the stage appeared set for dramatic political change. However, progress proved to be slow. While President Nazarbayev established a Democratization Commission in March 2006, by December 2006, the group had issued no recommendations. Even so, U.S.-Kazakhstan relations have remained strong as witnessed by its continued cooperation on terrorism issues and expressed interest in promoting regional stability through investment in Afghanistan. During FY 2006, Kazakhstan made progress on accession to the World Trade Organization; by November 2006 it had signed bilateral agreements with 15 of the 39 working group member states. President Nazarbayev met with President Bush at the White House on September 29, 2006 giving added impetus to the strategic partnership. The September move of the U.S. Embassy from Almaty to Astana provided for closer cooperation with Kazakhstani government agencies and ministries.

COUNTRY PERFORMANCE MEASURES

Kazakhstani Democratic Reform

The "radar" or "spider web" graphs below illustrate Kazakhstan's democratic performance during FY 2005. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2005 performance levels, while the two dark lines indicate how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and, (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 10 (August 2006). Found online at: http://inside.usaid.gov/EE/po/mcp.html.

The graph above shows Kazakhstan's democratic reform scores in 2005* (the gray shaded area) as compared to the average of Romania's and Bulgaria's democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2006 scores not yet available.

The graph above shows Kazakhstan's democratic reform scores in 2005* (the gray shaded area) as compared to its democratic reform scores in 1999 (the bold line).

*Actual 2006 scores not yet available.

Kazakhstani Economic Reform

The "radar" or "spider web" graphs below illustrate Kazakhstan's economic performance during 2005. Ratings are based on a 1 to 5 scale, with 5 representing the greatest advancement. These charts provide a disaggregated look at each of the indices and are reported to Congress on a regular basis. The gray shaded area represents 2005 performance levels, while the two dark line indicates how each country compares in its progress vis-�-vis two standards: (1) the average of Romania's and Bulgaria's performance in each indicator as of 2002 (2002 was the year that Romania and Bulgaria - the "threshold countries" - were invited to join NATO and received favorable indications of future EU membership); and (2) where the country stood in each indicator in 1999. Together, these charts provide a broad picture of where remaining gaps are in a country's performance, and to what extent these gaps are being filled. For more information, including a detailed explanation of each indicator shown in the graph, see USAID/E&E/PO, "Monitoring Country Progress in Central and Eastern Europe & Eurasia," No. 10 (August 2006). Found online at: http://inside.usaid.gov/EE/po/mcp.html.

The graph above shows Kazakhstan's economic reform scores in 2005* (the gray shaded area) as compared to the average of Romania's and Bulgaria's economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

*Actual 2006 scores not yet available.

The graph above shows Kazakhstan's economic reform scores in 2005* (the gray shaded area) as compared to its economic reform scores in 1999 (the bold line).

*Actual 2006 scores not yet available.

FY 2006 Country Program Performance

Governing Justly and Democratically

The December 2005 presidential elections were the key political development during the fiscal year, which the OSCE's Office for Democratic Institutions and Human Rights determined did not meet a number of OSCE commitments and other international standards. Even so, many observers expected that President Nazarbayev would use his renewed mandate to launch the significant political reforms that he had discussed publicly in 2005. However, the political uncertainty caused by the February 2006 murder of opposition leader Altynbek Sarsenbaiuly is believed by some to have slowed the momentum for reform. Nevertheless, President Nazarbayev did establish a national Democratization Commission in March 2006 (all but one representative of the political opposition refused to participate, which met periodically throughout the year but had not presented any formal proposals by the end of the reporting period. The government continued to harbor concerns regarding foreign assistance in support of democratic reform; in May 2006, the Prosecutor General declared that training for political parties violated the Kazakhstani Constitution. Despite intense diplomatic efforts, the issue remained unresolved by the end of the reporting period. In addition, the July 2006 amendments to the media law have had a negative impact on the media environment.

U.S. ASSISTANCE PRIORITIES

The U.S. Government (USG) supports democratic reforms in Kazakhstan; in FY 2006 assistance was designed to strengthen civil society, independent media, and political parties; promote the protection of human rights; and advance judicial and legal reforms. In light of the results of the December 2005 presidential elections, specifically the low level of political engagement among the population, USG assistance in future years will place greater emphasis on national advocacy campaigns related to democracy issues, increasing dialogue on public policy issues, greater access to objective information, and support for key institutional reforms such as decentralization of resources and local self-government.

DESCRIPTION OF PROGRAMS AND ACTIVITIES.

In FY 2006, assistance to civil society focused on improving the legal and regulatory framework for Kazakhstani non-governmental organizations (NGO), and on helping them develop the skills needed to recruit members and advocate for changes in policies and procedures, including support for greater human rights.

To strengthen independent media, the USG provided technical analyses on Kazakhstani government media policies, legal advice to journalists and media outlets in order to help them comply with changing regulations, training for print and broadcast journalists, and financial support for news productions. USG assistance to the judicial sector included support for a court recording project and judicial training, and technical commentary on legislation. USG provided additional assistance during the 2005 Presidential Elections for exit polling and domestic and international election observation. Press Office Media Programs included NATO tours to headquarters in Brussels to explain how NATO functions as a consensus-based organization.

USG program alumni participated in speaker programs on e-government, anti-terrorism, U.S. foreign policy in the Middle East, and anti-corruption, as well in conferences and seminars on building democratic societies and market economics in Eurasia, migration and human trafficking in Central Asia, and cultural diversity and religious tolerance. Alumni programs linked alumni of U.S. exchange programs with the nine American Corners in Kazakhstan and with internet access and training program sites to teach their communities skills and concepts learned during their exchanges. Small grants allowed alumni to implement projects drawing on what they had learned during their time in the U.S.

OUTPUTS

In the area of civil society, in FY 2006, 79 training events were conducted for 209 non-governmental organizations (NGOs), benefiting 2,500 participants; 31 NGOs received grants for institutional development; 113 participants were trained in civil leadership skills; and 27 advocacy campaigns were completed, involving approximately 60 NGOs. USG assistance supported development of a secondary school civic education textbook, which was used in 8% of schools nationwide, reaching 44,345 students. In addition, 870 teachers were trained in critical thinking and 55 law professors learned modern instructional methodologies. USG assistance also supported the production and broadcast of a highly popular television program on corruption in education and public debates on education reform at eight pedagogical universities.

To help Kazakhstan cultivate a more independent media, USG assistance provided training to 130 print and electronic media professionals; professional advice on handling Kazakhstani government legal challenges to journalists, media organizations, and institutions; distributed monthly press freedom monitoring reports to more than 300recipients; and awarded grants to seven private media organizations to help produce quality programs. Eleven journalists participated in the NATO tours. A Muslim journalist spent three weeks in the U.S. on an Edward R. Murrow program devoted to the rights and responsibilities of a free press.

USG assistance in the judicial sector helped over 100 Kazakhstani judges participate in training events and study tours, while a nationwide judicial mentorship program for new judges was introduced. A USG-assisted project enabled Kazakhstani judges to learn how the jury trial system was successfully implemented in other countries.

In the area of human rights, USG assistance supported the launch of three human rights advocacy campaigns on access to justice, freedom of speech, and access to information.

During the 2005 presidential elections, USG assistance supported the deployment of 2,500 domestic and 30 international election observers throughout the country.

Seventeen USG small grants to local organizations provided education, training, and assistance to 1,500 women on civil rights and pension reform, 1,000 young Kazakh-speaking journalists, 100 rural artisans on principals of a market economy, 125 Kazakh-speaking teachers on how to teach democratic principles in school, and 400 Shanyrak residents to help them legalize their properties and defend their civil rights. Thirty ten-minute episodes on civil rights are being broadcast currently in the city of Lissakovsk to an estimated 10,000 persons per airing. A series of 16 two-minute animations on children's rights is being broadcast to an audience of 200,000 in southern Kazakhstan. Four hundred manuals in Kazakh and Russian on Management and Economics Simulation Exercises were published.

Also in FY 2006, 95 alumni of USG programs participated in speaker programs, and 24 participated in conferences and seminars. Alumni grant projects reached a total of 600 persons in Kazakhstan and 500 persons at international conferences heard presentations by alumni. The alumni newsletter was mailed to 60 alumni in small towns and villages. Information about U.S. Embassy events, professional development, grant opportunities, and success stories was mailed weekly to more than 2,100 alumni.

PROGRAM PERFORMANCE/IMPACT

In FY 2006, USG assistance helped to strengthen Kazakhstani civil society, independent media, and political parties. The USG program, which supported broad-based civil society development, ended in 2006, leaving behind a legacy organization that will continue to provide similar types of assistance. This organization, the Association of Civil Society Support Centers, is successfully cultivating a diverse funding base, including direct funding from the GOK. This is one example of increasing cooperation between the government and NGOs on issues of interest to civil society.

In the area of civic education assistance, the Kazakhstani government has stated its intent to incorporate the civic education program developed with USG support into the curriculum nationwide. Although incorporation is on hold while the GOK finalizes and completes its education reform process, there are indications that the government will uphold its commitment to use the textbook and accompanying teaching methods nationwide.

In the area of media, USG assistance supported media specialist events and provided technical commentary on media legislation as it was developed. When the GOK adopted media-restrictive amendments, specialists provided technical guidance to regional media outlets on the impact of these changes. During the presidential election period, USG-supported residencies and consultations that gave regional TV stations the tools to organize the first live newscast, talk-show, and analytical programs with interactive polling.

USG assistance to the Kazakhstani judicial sector resulted in the country's first video court recording project, which will improve transparency within the justice system. Court recording also seems to have had a positive effect on judicial efficiency, as recorded cases are three times less likely to be appealed than cases that were not recorded. An alumna of the Regional Scholar Exchange Program, as a result of her legal research, has opened a consulting center in Almaty to support the rehabilitation of former prisoners, serving an average of ten persons per week.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers can better understand whether or not assistance programs are having the intended impact.

Please find below two important indicators in the area of Governing Justly and Democratically. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.

Performance Indicator: Civil Society Index. Assesses the growth of nongovernmental organizations (NGOs), their organizational capacity and financial sustainability, and the legal and political environment in which they function; the development of free trade unions; and interest group participation in the policy process. (7-point scale: 1 indicates a very advanced NGO sector, 7 indicates a weak NGO sector) The data upon which this ranking is based comes from the previous calendar year. Source: Freedom House, Nations in Transit. Found online at http://www.freedomhouse.org/research/nattransit.htm. 

Performance Indicator: Score for Independent Media on Freedom House's Nations in Transit Report. The Independent Media component addresses the legal framework for, and present state of, press freedom, including libel laws, harassment of journalists, editorial independence, the emergence of a financially-viable private press, and Internet access for private citizens. Measurement is on a 7-point scale, with 1 being the best, 7 being the worst. The data upon which this ranking is based comes from the previous calendar year. Found online at http://www.freedomhouse.org/research/nattransit.htm. 

Economic Growth

During FY 2006, Kazakhstan continued to experience robust economic growth due to rising oil production and high world prices. With a GDP of $56.1 billion in current prices, the economy is expected to grow by 8.2% in FY 2006. The National Fund, established in 2001 to receive oil revenue, currently holds about $12.1 billion in assets and serves both stabilization and saving functions. Kazakhstan continues to play a leading role in Central Asia in economic reforms, with a solid banking system, growing mortgage markets (with $2.74 billion in total lending), and approximately $6.48 billion in pension accumulations as of October 2006. However, challenges remain in addressing problems related to the country's competitiveness and economic diversification, its over-reliance on the oil sector, widespread corruption, concentration of political power, and the need for increased rule of law and good governance. All of these challenges hamper the growth of a middle class and, consequently, economic prosperity. The incidence of poverty has fallen significantly in recent years, reaching 9.8% in 2005 according to official statistics; however, poverty rates between rural and urban areas still differ significantly.

U.S. ASSISTANCE PRIORITIES

USG assistance programs focused on strengthening the competitiveness of small and medium enterprises and improving the policy, legal, and regulatory environment in which they operate. Economic policy reform assistance was intended to increase transparency in public finance and promote public accountability, which are critical to helping Kazakhstan avoid the "resource curse" which afflicts many countries endowed with valuable natural resources. USG assistance also supported Kazakhstan's move toward World Trade Organization (WTO) accession. With Kazakhstan's oil wealth, USG economic growth programs are set to phase-out in 2009. In the critical time remaining, the USG strategy is helping Kazakhstan manage its oil, narrow regional disparities and broaden access to economic opportunities, and solidify Kazakhstan's role as an economic reform leader in the region. The GOK committed $15.5 million over the next four years to partner with the USG to pursue these goals through the Program for Economic Development (PED).

DESCRIPTION OF PROGRAMS AND ACTIVITIES

In FY 2006, USG programs worked to improve the development and implementation of laws and regulations; strengthen development of financial institutions, instruments, and markets; and increase opportunities to acquire business information, knowledge, and skills. To improve laws and regulations, USG provided training and technical assistance to help the GOK formulate and implement economic policies, increase transparency of government budgeting, improve how policies are evaluated, strengthen public sector audits, and improve taxation policies and compliance. USG assistance addressed regulatory burdens on business operations in order to improve conditions for trade and transit by advancing local and national level public-private dialogue, In the financial sector, USG assistance to banks and microfinance institutions was designed to increase access to credit for small and medium enterprises. To increase access to business information, knowledge, and skills, USG provided support for accounting certification, and for the improvement of business and economics education at the high-school and university levels. USG also provided assistance to stimulate regional energy market development, improve regional water management, and increase incomes for rural farmers through water user association development.

The USG Special American Business Internship Training (SABIT) program supported legal and regulatory reform, promoted the development of small and medium enterprises, and complemented efforts to establish greater transparency in government and society. The Good Governance Program worked to increase market access and ensure a level playing field for U.S. companies in emerging markets by promoting transparency, accountability, fairness, and protection of intellectual property rights. After a one year hiatus, USG assistance again supported a representative in Astana to provide market information, practical advice, leads, and referrals to U.S. and Eurasian companies.

The Foreign Agricultural Service (FAS) implemented the Cochran Fellowship Program to provide training in the U.S. on trade and business development for senior and mid-level agricultural specialists and administrators. FAS also administers the Faculty Exchange Program to bring qualified agricultural educators to the U.S. to increase their knowledge of, and ability to teach, agricultural economics, marketing, and agribusiness.

OUTPUTS

In FY 2006, the USG designed a study tour for members of Parliament and the GOK to learn how Norway established and manages a national revenue fund for its oil revenues in a transparent and accountable manner. The USG also transferred its methodology for identifying and reducing regulatory barriers to over 30 local organizations representing both the private sector and local governments.

The USG-funded EBRD bank officer training program expanded to a new partner bank, Alliance Bank, and trained 59 new loan officers in cash-flow lending, including for agricultural lending, and disbursed a total of 1,116 loans totaling $9.3 million. Under the Central Asia Microfinance Alliance program, the Association of Microfinance Organizations in Kazakhstan (AMFOK) contributed to legislation affecting microfinance institutions and leveraged $94,500 from the World Bank to support rural microfinance institutions.

The Enterprise Development Project's (EDP) provided SME firm-level assistance, including certification, business association strengthening, and training in accounting and regional trade promotion. In its fourth and final year, EDP assisted 322 small businesses to increase their sales and productivity by 35% and 30%, respectively. With corporate contributions from ExxonMobil's Global Women and Girls Initiative, the USG-supported Astana Economic Development Center (EDC) extended 1,197 loans totaling over $1 million, and trained 2,622 business managers and entrepreneurs (68% women) in key business management subjects. EDP's Accounting Certification program helped 804 Kazakhstanis pass the three examinations required to become CAP certified. In the area of university education, 28 universities integrated the CAP curriculum in their accounting courses, providing over 6,000 students with modern accounting instruction. The Business & Economics Education (B&EE) program, with the Ministry of Education and Science' support, piloted implementation of the Credit Hour System (CHS) at two universities, giving students' more choice in course selection, and implemented two pilot university Career Centers, helping establish stronger links to the private sector. Junior Achievement Kazakhstan had three programs approved by the Ministry of Education and Science, adapted five more programs to the local environment, trained 629 teachers, and achieved over $215,000 in private sector contributions to support secondary school business and economics education.

In the final year of the Meteor Burst (MB) Communications Project, ten additional platforms were established, bringing the total to 20 (about 10% of the national network), to serve as demonstration models for transmitting data for improved water management. Through development of compatible software, Kazakhstan also began transmitting MB data in accordance with the World Meteorological Organization standards. Work with five new water user associations in Southern Kazakhstan helped to improve water and agricultural practices, incomes, and crop productivity among more than 2,000 farmers.

The SABIT exchange programs provided 11 Kazakhstanis the opportunity to learn more about specific industries and technologies in the U.S. The regional Good Governance coordinator helped design laws regarding minority shareholder rights and corporate governance rules for joint stock companies with state-owned shares. The program is continuing to work to create an Ethics and Corporate Governance Center that will train managers and help companies develop and implement good business practices.

Under the Cochran Fellowship program, three Kazakhstani dairy farm managers received short-term training in the U.S. on increasing farm productivity. The participants later organized an event at their farms to highlight the use of U.S. technology. The FEP sent an economics teacher from the Agrarian University to the U.S. for five months of training. The program also brought two U.S. agricultural economics teachers to Kazakhstan to assist with curriculum development.

Peace Corps volunteers and staff trained more than 800 staff members (80% of whom were women) of 125 governmental and non-governmental organizations in financial management, strategic planning, staff development, and information technology. Volunteers then worked with the organizations to develop strategic plans to build financial stability, including the introduction of fee-for-services components of their organizations, the utilization of volunteers to deliver services, and the development of better financial systems. Peace Corps staff also held a "Best Practices Workshop" in Astana in which five successful projects were presented to NGO leaders and GOU officials.

PROGRAM PERFORMANCE/IMPACT

In FY 2006, USG assistance helped the GOK's Ministry of Economy and Budget Planning improve its organizational performance and strengthen its analytical capacity to formulate revenue and expenditure estimates. Specifically, the GOK approved the 2006 annual work plan for USG economic growth assistance, contributed $2.5 million to support the activities, and participated in evaluating competition for two new USG awards. In the area of economic policy reform, USG assistance programs helped the GOK and the National Bank (NDK) take the steps necessary to manage inflation and government expenditures, including: tightening monetary policy; the country's reserve requirement was broadened; the NBK's deposit interest rate was raised by 25 basis points; and the NBK stepped up issuance of central bank bills. As a result, commercial average lending interest rates have risen by about 1% since early 2006 to just over 15%. The NBK has also allowed the exchange rate to appreciate significantly, which helped keep inflation from rising further, although further monetary policy tightening is needed to keep inflation in check.

USG assistance continued to play an integral role in helping the GOK bring its trade and customs regulations into compliance with WTO requirements. The new Law on Private Entrepreneurship established clear limits on government regulation of business and requires regulatory impact analysis for new laws that affect businesses. In addition, amendments to the Administrative Violations Code adopted in January 2006 have reduced burdens on small businesses. The positive impact of reductions of investment constraints is estimated at approximately $43 million.Regional trade promotion services facilitated 54 business trade deals for a total value of over $12 million. USG work with the GOK's Ministry of Justice and the Customs Committee helped remove Kazakhstan from the U.S. Trade Representative's Special 301 watch list. Work with Kazakhstan's Parliament helped to amend the Budget Code.

As a result of USG assistance, improved planning models of the Naryn-Syrdarya cascade operation helped Kazakhstan to upgrade its water regime requirements for the Syrdarya delta and Aral Sea. During FY 2006, the Meteor Burst (MB) data communication system began to play a pivotal role in regional water management, allowing users to plan water resources use, issue warnings on avalanches and flooding, and forecast agriculture crop productivity and hydropower production.

Alumni of USG supported exchange programs: established the Association of Independent Medical Experts, which is working to maintain the quality of medical services; were responsible for the $5 million purchase of a turbulent viscosity reducing additive from a U.S. manufacturer for the oil pipeline program; promoted U.S. construction technology in Central Asia and created several new partnership companies and over 250 new positions as a result of management changes supporting the idea of financial independence among his company's subdivisions; and worked with U.S. universities to establish an extension service for Kazakhstani farmers to provide information on agribusiness marketing.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers can better understand whether or not assistance programs are having the intended impact.

Please find below two important indicators in the area of Economic Growth. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.

Performance Indicator: Economic Reform Index, Drawing from Freedom House, Nations in Transit 2006 as modified by, "Monitoring Country Progress in Eastern Europe and Eurasia" USAID/E&E/PO, #10 March 2006. (1-lowest, 5-highest; data based on previous calendar year). The data upon which this ranking is based comes from the previous calendar year. Found online at http://www.usaid.gov/locations/europe_eurasia/country_progress/index.html. 

Performance Indicator: Large Scale Privatization Index, EBRD Transition Report 2006. Found online at: http://ppc.usaid.gov/esds/sources.cfm. 

Investing in People

The health care reform program announced by the Ministry of Health in 2005 (which drew on U.S. models) presented a unique opportunity for joint USG-Kazak programs to increase efficiency, transparency, and the quality of the entire health care system. In FY 2006, total spending on health care rose by 22% to 226.7 billion KZT ($1.79 billion), representing 2.8% of the gross domestic product. Likewise, Kazakhstan continues to increase its investment in education. Total national and local spending on education rose 27% in 2006, to 326.5 billion tenge ($2.57 billion), or 4% of GDP.

U.S. ASSISTANCE PRIORITIES

USG health care assistance focused on three key areas: improving the quality of and equal access to Kazakhstan's health care; controlling infectious diseases, including HIV/AIDS, tuberculosis (TB), and Avian Influenza; and improving the quality of the country's maternal, child, and reproductive health services. USG education assistance and exchange programs promoted initiatives to improve the qualifications of Kazakhstani educators, offered educational opportunities abroad for a wide range of Kazakhstani scholars, and exposed individuals from government, civil society, the media, and the private sector to a range of policy issues in the U.S., which fostered mutual understanding and provided the tools to address the challenges Kazakhstan faces.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

USG health sector assistance promoted improving the quality of and equal access to Kazakhstan's health care, with particular attention to the country's primary health care system. USG-supported specialists helped Kazakhstan promote health finance reform and evidence-based medicine. USG assistance also focused on controlling infectious diseases, including HIV/AIDS, tuberculosis (TB), and Avian Influenza. USG-supported specialists trained Kazakhstani medical workers to track HIV prevalence and behavior, trained laboratory staff in diagnosis and case management of HIV and TB, and helped both government and medical institutions to collect and analyze data. Another USG activity worked to reform HIV/AIDS policy, inform vulnerable populations on prevention, and improve the quality of HIV/AIDS services. USG TB-control activities focused on improved surveillance, political support for TB control, maintenance of adequate drug supplies, and increased public awareness. USG provided technical assistance on Avian Influenza preparedness, strengthened farm surveillance activities, and trained clinicians to recognize AI symptoms. USG assistance also aimed to improve the quality of the country's maternal, child, and reproductive health services.

Peace Corps volunteers were assigned to more than 70 schools (universities, pedagogical institutes and village secondary schools) to teach English to students, thereby increasing their chances of finding gainful employment. Volunteers also implemented teacher training workshops for village teachers.

OUTPUTS

USG assistance supported several initiatives to improve Kazakhstan's health care system, including implementation of the National Health Reform Program developed with USG assistance. A program that concluded in 2006 established a model for incorporating social workers at health facilities that was replicated by the GOK in three additional cities, as well as a regional training center on prevention of mother-to-child transmission of HIV/AIDS with related programs in four cities.

In FY 2006, USG support was integral in helping Kazakhstan take further measures to control infectious diseases. Experts from the U.S. Center for Disease Control and Prevention (CDC) investigated an outbreak of HIV among children in Shymkent resulting from unsafe use of blood and unsafe medical practices. Experts helped identify 78 cases of HIV and developed an action plan for the GOK. Six educational modules on topics such as HIV/TB co-infection, HIV stigma, and mother-to-child transmission of HIV/AIDS were finalized and integrated into the curricula of two Kazakhstani medical academies.

To reinforce prevention efforts, the USG supported a youth center in Almaty, providing 2,766 youth at risk of HIV and drug use with educational programs and alternative activities such as English, karate, and music classes. USG assistance provided over 29,000 at-risk youth with information on HIV/AIDS, the linkage to drug use, abstinence, condom use, and availability of related health and social services.

USG assistance trained 92 primary health care specialists and 46 physicians in an internationally-recognized TB control strategy and on laboratory diagnostics, ultimately establishing a team of Kazakhstani trainers. Another USG-sponsored program helped provide treatment for 110 registered multi-drug resistant TB patients. The Regional World Health Organization (WHO) TB Advisor developed and issued an informational brochure on TB in prisons and multi-drug resistant TB and provided technical assistance on a new national TB decree. Throughout the country, CDC helped TB institutes develop a database for almost 160,000 TB cases.

To address the threat of Avian Influenza and other public health challenges, Kazakhstani epidemiologists enrolled in CDC's regional applied epidemiology training program. Students participated in outbreak investigations, including the March 2006 outbreak of Avian Influenza among wild birds in Mangystau and pediatric HIV in South Kazakhstan. Furthermore, over 80 primary health care providers from Kazakhstan and other Central Asian countries received training at the Social Training Center in Demeu, with its unique program in modern social work theory and practice.

In the area of maternal and child health, the USG supported clinical training for 36 doctors in Astana to improve prenatal, postpartum, labor and delivery, and newborn care. USG also supported the GOK in the implementation and replication of the WHO's effective prenatal care strategies. Originally initiated with three pilot facilities, there are now 15 facilities in the country that implement prenatal care according to WHO standards. Specialists also provided clinical training and mentoring, performance monitoring and quality improvement systems to ten of these sites.

A total of 179 students, professionals, and scholars took part in USG-sponsored education and exchange programs in FY06.

Peace Corps volunteers provided English instruction to 6,700 secondary students in village schools and 2,483 university students. English instruction included critical thinking skills, listening, writing and conversational English. More than 600 village teachers participated in English workshops, summer camps and trainings to broaden and improve teaching methodologies utilized in the classroom.

PROGRAM PERFORMANCE/IMPACT

The GOK continues to rely on USG assistance with implementation of the National Health Reform Program. In FY 2006, total outpatient visits in primary health care practices in eight pilot sites (covering 39% of the total population) increased from 53.6% in FY 2005 to 56.5%. A continuous quality-improvement process was introduced in six pilot facilities, improving data on arterial hypertension, a leading cause of morbidity and mortality. In the third quarter of FY 2006, arterial hypertension incidence in pilot sites increased more than six times in comparison with the same period in 2005 - from 36.5 to 235.9 per 100,000 population - reflecting improvements in data reporting.

USG assisted the GOK to respond to global disease threats. Technical assistance led to improved management of dual HIV-TB infection. In one policy level outcome, the draft National TB Decree includes the USG protocol on management of co-infection. To tackle epidemics effectively, valid data on incidence is crucial. Efforts to determine the true number of multi-drug resistant TB cases in Almaty needing treatment led to dramatic revisions in reporting and recording of patients, uncovering corrupt practices that had suppressed official numbers. With leveraged funds from the World Bank, USG assistance will support the national roll-out of HIV sentinel surveillance models from the initial four pilot sites to ten additional regions, and Almaty and Astana cities.

USG's project to address mother-to-child transmission of HIV/AIDS demonstrated the potential impact of related interventions. The project led to the reduction of HIV transmission from 10 to 5.3% in Pavlodar city and from 11% to 4% in Temirtau city. In response to the only documented outbreaks of Avian Influenza in the region, USG designed two projects to assist with national preparedness, focusing on the veterinary aspects of preparedness, including farm surveillance activities on the oblast level, communication strategies, and clinical preparedness in the event of human cases.

In FY 2006, the Kazakhstani Prime Minister endorsed Kazakhstan's transition to the WHO-recommended live birth criteria. USG support for pilot activities demonstrated the potential benefit of the shift to newborn health and survival, which also better aligns the country with international standards. USG specialists participated on a related working group to assist with the process needed to achieve national registration of newborns according to the new criteria by January 2008.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers better understand whether specific assistance programs are making their intended impact and, if necessary, how to adjust these programs to improve the impact.

Please find below two important indicators in the area of Investing in People. In the charts, the "Baseline" refers to a starting point from which to measure progress or regression over time. The embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," or January 1 - December 31.

Performance Indicator: Tuberculosis Incidence per 100,000- Number of newly diagnosed tuberculosis cases, all forms during the given calendar year. Source: World Health Organization, European Health For All Database, found online at: http://data.euro.who.int/hfadb/.

Performance Indicator: Clinically Diagnosed AIDS Incidence per 100,000 - Source: World Health Organization, European Health For All Database, found online at: http://data.euro.who.int/hfadb/.

Peace and Security

Kazakhstan's commitment to military reform, regional stability, non-proliferation, and partnership in the Global War on Terrorism remained strong over the course of Fiscal Year 2006. As a result, security cooperation with the Kazakhstani government was one of the most active areas of the bilateral relationship. Total state spending on defense continued to rise, increasing 30% in 2006 to 102.3 billion tenge ($805.3 million) or 1.3% of GDP. Kazakhstani security engineers played an important role in Iraq, where they destroyed almost 4 million pieces of unexploded ordnance since 2003. The GOK is working to expand its current peacekeeping battalion to brigade size in order to expand Kazakhstan's ability to participate in peacekeeping operations around the world. While Kazakhstan's record on non-proliferation remained strong, cooperation in certain areas, such as the biological threat reduction program, was delayed due to the government's inability to provide the required tax and customs exemptions. Kazakhstan remained a source, transit, and destination country for people trafficked for the purposes of forced labor and sexual exploitation. Kazakhstani men, women, and children are trafficked to the U.A.E., Turkey, Israel, South Korea, Greece, Russia, and Western Europe.

U.S. ASSISTANCE PRIORITIES

In FY 2006, USG-funded military assistance programs in Kazakhstan continued to be based on a five-year bilateral plan of military cooperation focused on three main objectives: military interoperability (for waging the Global War on Terrorism and cooperating in international peacekeeping); establishing a military capability in the Caspian Sea region; and general systemic military reforms. With strong U.S. support, Kazakhstan gained approval from NATO on an Individual Partnership Action Plan (IPAP) that reflects and adds to the objectives of the bilateral five-year plan. New objectives include greater political-military reform and including NATO allies in a synchronized assistance effort. USG assistance continued to focus on reducing the proliferation threat posed by Soviet-era nuclear, chemical and biological expertise and infrastructure. Additional USG priorities in the biological sphere were biological agent detection response workshops and funding research by former weapons scientists to combat the very activities they engaged in during Soviet times. Other programs helped strengthen Kazakhstan's maritime and land borders against WMD proliferation, international terrorist activities, the smuggling of narcotics, and trafficking in persons. USG assistance addressed law enforcement issues in four major areas: money-laundering and financial corruption; counter-narcotics; trafficking in persons; and border control/security.

DESCRIPTION OF PROGRAMS AND ACTIVITIES

USG military assistance efforts were carried out primarily through the International Military Education & Training (IMET) and Foreign Military Financing (FMF) programs. The IMET program provides training opportunities in the U.S. for Kazakhstani military personnel, as well as support for language instruction in Kazakhstan. FMF funds are used to upgrade and maintain Kazakhstani military equipment.

USG assistance helped to dismantle biological weapons production facilities at Stepnogorsk. The U.S. also focused on the threat posed by unsecured especially-dangerous pathogens, completing construction of the first of several epidemiological monitoring stations and improving medical diagnostics and disease surveillance capabilities. The USG also helped Kazakhstan develop a capability to detect and interdict weapons of mass destruction transiting the Caspian Sea. USG programs continued to pursue the safe transport and long-term storage of spent fuel from the BN-350 reactor, as well as the conversion of the Alatau research reactor from highly-enriched uranium to low-enriched uranium.

The Export Control and Related Border Security (EXBS) program provided a variety of training activities, seminars and equipment designed to help Kazakhstan strengthen all elements of its export control system.

USG-funded programs provided anti-money laundering training for Kazakhstani officials, helped establish and equip a center to combat trafficking in persons within the Ministry of Internal Affairs' (MVD) Legal Institute, and in collaboration with the International Organization for Migration (IOM) provided equipment and training to GOK border personnel to improve interdiction capability. The USG collaborated with the GOK to establish a regional border guard training facility. Finally, the USG teamed with the United Nations and the GOK to establish seven additional checkpoints on major south-north traffic arteries to interdict narcotics shipments.

USG-funded efforts to combat trafficking in persons included assistance to the GOK to establish a framework for the effective prosecution of traffickers; prevention of trafficking through information campaigns, hot-lines and awareness-raising activities; protection of those who have been victims of trafficking through support for shelters, counseling and other support services; seminars on prevention; and small grants to local organizations.

In FY 2006, the USG hosted several courses in conjunction with the Anti-Terrorism Assistance (ATA) program. The courses were conducted in the United States and Kazakhstan, and covered topics such as explosive incident countermeasures, terrorist crime scene investigation, and integrating counter-terrorism strategies.

OUTPUTS

The International Military Education & Training (IMET) and Foreign Military Financing (FMF) programs had a positive impact on Kazakhstan's Ministry of Defense. Thirty-four Kazakhstani military personnel attended training in the U.S. in FY 2006 under the auspices of the IMET program. IMET graduates are serving in positions of prominence throughout the Ministry of Defense, particularly in the Airmobile Forces and in Kazakhstan's Peacekeeping Battalion. IMET funds were also used to purchase English language labs and instructional material for Kazakhstan's new Defense Institute of Foreign Languages. In addition to IMET, three Kazakhstani military personnel attended training in the U.S. under the Regional Counter-terrorism Fellowship Program, two are currently training at West Point, and another 13 are attending training as part of the FMF program. FMF funds are being used to support Kazakhstan's HMMWV and UH-II "Huey II" programs. The FMF HMMWV program involves training and spare parts for 27 HMMWVs that were delivered to the KAZBAT Peacekeeping Battalion in FY 2005. FY 2006 and future year FMF funds are being directed to the UH-II program to provide Kazakhstan with an airmobile capability in the Caspian region.

The EXBS program and the U.S. Coast Guard presented three 42-foot fast response boats worth nearly $2 million to the Maritime Division of Kazakhstan's Border Service. In July, sixteen Kazakhstani customs and border guard officials participated in U.S. Customs and Border Protection's International Border Interdiction Program in McAllen, Texas. EXBS worked with the U.S. National Nuclear Security Administration to conduct nuclear and dual-use commodity identification workshops; a seminar on end-use/end-user analysis for export licenses; and a workshop on export controls and internal compliance for nuclear industries.

One hundred eighty three medical specialists were trained during eight CDC Threat Agent Detection and Response (TADR) Clinical training courses.

USG trained a number of Kazakhstani law enforcement officers, procurators, and judges, specifically, 15 law enforcement officers were trained at ILEA Budapest, 14 officers received counter-narcotics training, 40 individuals received training on trafficking in persons, 123 individuals received training on anti-money laundering techniques, and 91 individuals received training on effective border control.
Through courses, seminars, conferences, and roundtable discussions organized, the

The USG collaborated with the Procurator General's Office to conduct four seminars throughout the country on improvement of the collection and analysis of crime data. The U.S. Department of State and the U.S. Federal Bureau of Investigation (FBI) collaborated to send 15 Kazakhstani law enforcement officials to an eight-week training class at the International Law Enforcement Academy (ILEA) in Budapest.

To promote information sharing and cross-border collaboration on trafficking issues, USG supported the creation of a Central Asia regional NGO anti-trafficking network that included 13 NGOs in Kazakhstan. One new NGO shelter, in Almaty, was created in 2006. Through other shelters nationwide, 64 trafficking victims (58 women, 6 men) received services. The USG also supported the creation of a labor migrant consultation/vocational training resource center.

With USG funding, the first national toll-free trafficking hotline to complement local hot-lines run by Kazakhstani NGOs was established, along with the production of public information materials including public service announcements, documentary and educational films, informational booklets, and research on trafficking in persons. In addition, the USG supported trafficking awareness training 22,615 people, of whom 50% were youth, 20% were vulnerable populations, 20% were specialists providing services to victims, and 10% were general population including government officials. Two thousand two hundred and fifty posters, brochures, reference guides, and other publications on trafficking in persons were distributed to law enforcement and migration officials around the country.

USG programs on trafficking helped 40 regional journalists learn the basis of reporting on trafficking. As a result of small grants to local organizations, 200 orphans received education on how to avoid becoming a victim, and 690 government and non-governmental organizations both inside and outside Kazakhstan subscribed and contributed articles to bulletins. USG also trained 48 police officers, 50 prosecutors, 29 judges, and 37 secondary school teachers on the meaning and application of amendments to anti-trafficking legislation adopted by the GOK; 200 police officers and 300 secondary school teachers received professional training in how to combat TIP, and 500 at-risk individual received information on how to avoid and escape from TIP. USG assistance also provided training to 41 law enforcement officers in three courses conducted during the fiscal year under the anti-terrorism assistance program.

PROGRAM PERFORMANCE/IMPACT

In Fy 2006, USG security assistance contributed to a strong and growing military relationship between Kazakhstan and the United States, evidenced by the Kazakhstani government's continued support for U.S.-led coalition operations in Iraq. The sixth rotation of Kazakhstani explosive ordinance disposal specialists is currently serving in Iraq. Kazakhstan continues to provide no-cost overflights and divert landings for Operation Enduring Freedom and Operation Iraqi Freedom. USG assistance also contributed substantially to Kazakhstan's ability to agree on an IPAP with NATO.

As a result of USG supported proliferation prevention efforts, Kazakhstan initiated development of a maritime interdiction concept of operations. USG assistance in controlling nuclear and biological materials contributed to the ability of the Kazakhstani authorities to safeguard all weapons of mass destruction materials over the course of the fiscal year.

Nine members of the parliamentary working group drafting Kazakhstan's anti-money laundering law participated in a USG-sponsored delegation to Denmark to look at that country's experience in creating a financial intelligence unit. The experience had a direct impact on the draft AML law establishing a Financial Intelligence Unit in Kazakhstan. U.S. assistance also led to the inclusion of an updated AML curriculum in the Financial Police Academy.

As a result of EXBS's support for the U.S. Department of Energy's Second Line of Defense program, Kazakhstan in May signed an agreement to implement the program of portal radiation monitors at ports of entry around the country.

The USG continued to work with the GOK to promote increased action to prevent trafficking, protect victims and prosecute those responsible. Under a new program begun in 2006, the USG encouraged the GOK to assume increased financial responsibility for information campaigns and other activities that raise awareness of the risks of trafficking, and for providing services to victims of labor or sexual trafficking. At the local level, there were cases where the Kazakhstani government provided free basic services and funding to NGOs working on trafficking issues. There is also anecdotal evidence of increased governmental and NGO cooperation on trafficking issues at the local level, especially in terms of referrals when potential victims are identified.

As a result of training programs for law enforcement officers and officials, the overall level of awareness about trafficking crimes and understanding of how to apply the appropriate sections of revised legislation increased. Judges, police, and procurators at the headquarters level appear to have an improved understanding of the methods and degrees of cooperation necessary in combating trafficking.

The tone of trafficking coverage in newspapers and television has changed gradually over the past two years with a notable shift from blaming victims to showing concern and calling for government investigation and prosecution of trafficking cases. In addition, NGOs who participated in USG- supported training contributed to amendments to Kazakhstan's civil and criminal codes, which were adopted in March 2006.

MEASURES OF PROGRAM EFFECTIVENESS

In order to determine how U.S. Government assistance affects a country, U.S. embassies set targets for improvement called "performance indicators." Data for these indicators are collected by research institutes, embassies and international organizations. By examining data over time, U.S. policymakers can better understand whether or not assistance programs are having the intended impact.

Please find below an important indicator in the area of Peace and Security. In the chart, the "Baseline" refers to a starting point from which to measure progress or regression over time. The Embassy and its partner organizations then agree on a "Target" figure that they hope to achieve as a result of U.S. assistance programs. The "Rank" figure is the resulting measurement. "FY" stands for "fiscal year," the period of the U.S. budget that runs from October 1 - September 30 of the following year. "CY" stands for "calendar year," covering events from January 1 - December 31 of the subject year or last calendar year.

Performance Indicator: Global Trafficking in Persons Report country rankings. Tier 1 countries are those whose governments fully comply with the minimum standards of the Trafficking Victims Protection Act of 2000. Tier 2 countries are those whose governments do not fully comply with the Act's minimum standards but are making significant efforts to bring themselves into compliance with those standards. Tier 3 countries are those countries whose governments do not fully comply with the minimum standards and are not making significant efforts to do so. The data upon which this ranking is based comes from the previous calendar year. Source: U.S. State Department Global Trafficking in Persons Annual Report. Found online at //2009-2017.state.gov/j/tip/rls/tiprpt/. 

Performance Indicator: Corruption Perceptions Index - Measures how experts view the state of corruption in a country. Because Transparency International uses a country ranking chart, we have used their raw score to better evaluate change in Armenia. The CPI score relates to perceptions of the degree of corruption as seen by business people and country analysts and ranges between 10 (highly clean) and 0 (highly corrupt). The data upon which this ranking is based comes from the previous calendar year. Source: Transparency International. Found online at: http://www.globalcorruptionreport.org/index.html. 

FY 2006 Funds Budgeted for U.S. Government Assistance to Kazakhstan [PDF format]