Bishkek, November 3, 2004 — Representatives of the Kyrgyz Government, Kyrgyz civil society and private sector, international development agencies and bilateral donors met here today to discuss progress in fighting poverty through the pursuit of inclusive growth and good governance in the Kyrgyz Republic.

The Consultative Group Meeting for the Kyrgyz Republic (CG) was organized by the Kyrgyz Government with the help of the World Bank and other donors, and was co-chaired by Nikolai Tanaev, Prime Minister of the Kyrgyz Republic, and Dennis de Tray, World Bank Regional Director for Central Asia. The President of the Kyrgyz Republic Askar Akaev participated in the Meeting, and the event was attended by representatives of 11 countries and 14 international organizations1. Unlike past meetings, the 2004 CG meeting was focused on stock-taking and dialogue on the way forward, not on donors pledging money to the country.

“I am sure that today’s meeting will give a new impetus for our future cooperation” – said President of the Kyrgyz Republic Akaev. “Kyrgyz Republic is a unique country where simultaneously key donor initiatives are piloted on the Millennium Development Goals, Comprehensive Development Framework, and poverty reduction strategy. This gives us a real, excellent chance – by using all the available means and support of the donor community – to make a decisive breakthrough in reform implementation”.

In his opening address to the participants, Shigeo Katsu, Vice President of the World Bank for Europe and Central Asia Region, noted good progress on the implementation of the National Poverty Reduction Strategy (NPRS) and pointed to three key challenges: good governance and anti-corruption, improvement of the private sector environment, and the improvement of public services and basic infrastructure to the Kyrgyz people. He mentioned that sustained good reform performance, including in these areas, would facilitate the deliberations at the Paris Club, which will meet to discuss the Kyrgyz Republic in less than six months. “Any hesitation over addressing this agenda will undermine the progress the country has made to date,” said Katsu. He also emphasized the importance of addressing corruption issues head on, and of implementing commitment for reforms. Katsu further reminded donors that the spotlight now was squarely on them to better harmonize and align their support to the Kyrgyz Republic.

The Government presented its progress on the three year National Poverty Reduction Strategy and next steps in poverty reduction. According to the Government, the paramount achievement is that economic growth was directed at improving the welfare of the people. As a result, poverty reduction rates reached 3.6% as compared to the CDF target of 2.6%. Further reinforcement of reforms will result from aggressive economic and social structural reforms. Administrative reforms aimed to provide institutional support for poverty reduction will give an additional impetus towards further development. Governance decentralization and deregulation processes will become the real catalyst of development. Donors noted good progress on implementation of the Kyrgyz NPRS. They recommended that the second NPRS be more focused, with clearer priorities and stronger links to the Medium-Term Budgetary Framework. Donors noted the importance of demonstrating real changes on the ground, as opposed to action plans or legislative changes, and renewed their commitment to working closely with the Government in furthering the reform agenda. They welcomed the intent of the Government to continue full engagement of non-government partners in design and implementation of future actions.

In his presentation on good governance and the fight against corruption, Prime Minister Tanaev outlined key steps that are being taken by the Government to reduce corruption. “Improvement of the governance system and Government performance is the national resource which will provide for successful promotion of ongoing reforms”– said Tanaev. “In its anti-corruption efforts, the Government of the Kyrgyz Republic will take measures to ensure transparency of performance of Government agencies. It is crucial that officials be trained in anti-corruption legislation and professional ethics of civil servants.” Donors welcomed the Government’s openness to discussing how to reduce corruption and recognized that the fight against corruption will require long-term political commitment and tough choices. The CG Meeting participants stressed that it is time to move from words to action. They agreed that future priorities in good governance and anti-corruption should include actual completion of the earlier launched public administration and civil service reform, improvement of the private sector environment, legal and judiciary reform, and better management of public finances.

The third priority area discussed during the CG was harmonization and alignment of external development assistance. As a pilot country on harmonization, the Kyrgyz Republic reiterated its strong commitment to the global harmonization agenda. Although there has been good progress towards harmonizing donor procedures, information sharing, and coordination over the last two years, improving the effectiveness of aid delivery through harmonization remains a key challenge. Participants underlined the importance of the Government playing a leading role in coordinating external aid. Both Government and donors committed to move towards a nationally led sector wide approach in the health sector as a first step towards greater aid coordination.

One key theme running through the meeting was the need to effectively implement existing programs and legislation aimed at reforms, and in so doing accelerate the process of poverty reduction. “In the end, however good the Kyrgyz poverty reduction strategy may be, unless it is fully implemented and scheduled reforms translated into results on the ground, we all – Government and donors – will not have met our commitment to the Kyrgyz people” – said Dennis de Tray.

Participants in the CG noted that the event provided for a good opportunity for fruitful discussions, and that the meeting helped to clarify the key priorities for the Kyrgyz Republic to maintain progress on pro-poor reform. Participants committed themselves to a set of concrete actions: Government will focus on implementing the remaining reform agenda so necessary to translate the NPRS into reality; it committed itself further to take on a major role in coordinating the support of the donor community. Donors pledged to further intensify their growing cooperation, and to translate the harmonization and alignment intentions into concrete joint programs on the ground to improve aid effectiveness.

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1 The Meeting was attended by representatives of Federal Republic of Germany, French Republic, Islamic Republic of Iran, Japan, Kingdom of Spain, Kingdom of Sweden, Republic of Turkey, Russian Federation, Swiss Confederation, United Kingdom of Great Britain and Northern Ireland, United States of America, Aga Khan Development Network, Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), European Commission, International Monetary Fund (IMF), International Office for Migration (IOM), Islamic Development Bank (IDB), Organization for Security and Cooperation in Europe (OSCE), United Nations Children’s Fund (UNICEF), United Nations Development Program (UNDP), United Nations Office on Drugs and Crime (UNODC), World Bank Group (International Development Association and International Finance Corporation), World Health Organization (WHO)