| Project Detail |
Project Name Fiscal Governance and Financial Sector Reforms Program (Subprogram 1)
Project Number 55039-001
Country / Economy Kazakhstan
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
1.The proposed effort to design and process a Kazakhstan Fiscal Governance and Financial Sector Reforms Program (the Program) aims to help the Government of Kazakhstan (government) address one of its core development challenges: heightened macroeconomic and financial vulnerability to external shocks. This medium-term development objective requires specific reform and institutional developments in fiscal management and in financial sector development. Under preparation since mid-2021 with an initially wider list of reform pillars (five) and proposals and the agreement to subsequently prioritize the subset of reform items with more agreement and progress, this approach was disrupted by the January 2022 political crisis in Kazakhstan and the political transition that ensued. The geopolitical and new economic realities set in motion by the Russian invasion of Ukraine in February 2022 also added further disruptions in the countrys economic policy agenda during early-2022. At the request of Government, active discussions on the program resumed in May 2022, and momentum was regained with the new approval by the President of reform strategic directions along the then-already agreed two reform pillars of the program (and to which past preparatory dialogue had contributed).
2.The scope of the proposed two-subprogram programmatic assistance is fully consistent with the governments strategic priorities, with the forthcoming Asian Development Bank (ADB) country partnership strategy for Kazakhstan, and with the ADB Strategy 2030, namely three of its operational priorities. The proposed programmatic approach provides inherent and much-needed flexibility in medium-term reform directions while recognizing current achievements and formalizing medium-term reform commitments that are a primer for Kazakhstan.
Project Rationale and Linkage to Country/Regional Strategy 3.In 2020, during the processing of the $1.0 billion emergency financing assistance funded through the coronavirus disease (COVID-19) pandemic response option (CPRO), and partly in recognition of the chronic nature of Kazakhstans vulnerability to external shocks, the need for a policy-based engagement between Kazakhstan and ADB for structural reforms was discussed and agreed upon, in order to contribute to strengthening economic recovery prospects and to addressing the roots of Kazakhstans macroeconomic and fiscal vulnerabilities to external shocks. Consultations with the government on reform priorities and proposals commenced in 2021, benefiting from ongoing ADB technical assistance (TA) projects to ongoing reforms, inputs from different development partners, ADBs past analytical work, and the analysis and direct inputs from the ADB mission. Despite the 2022 disruptions to this policy dialogue, efforts have resumed, and significant progress made from 2023 onwards. |
