WASHINGTON, July 7, 2016 – The World Bank’s Board of Executive Directors today approved a US$24 million Programmatic Governance and Competitiveness Development Policy Operation (DPO) for the Kyrgyz Republic. The operation – the first in a series of two consecutive budget support operations – comprises a highly concessional credit of US$13.2 million and a grant of US$10.8 million from the International Development Association.
The objective of the proposed DPO series is to support the Kyrgyz Government in promoting sustained economic growth through reforms aimed at improving public sector governance and strengthening private sector competitiveness.
This objective will be achieved through policy reforms aimed at strengthening public sector integrity, improving the quality of public services, supporting the implementation of the public procurement law, and improving transparency and accountability of the energy sector. Additionally, the project will improve the business environment, support trade facilitation, and promote better connectivity in a way that will enable Kyrgyz businesses to grow and create jobs. The proposed reforms are at the core of the Government's Public Sector Reform Roadmap and Private Sector Development Strategy.
“Successful implementation of policy actions supported by this DPO will lead to fair and transparent government procedures and institutions, which, in turn, will result in a better, client oriented provision of public services, especially to citizens with the lowest income,” said Jean-Michel Happi, Country Manager for the Kyrgyz Republic. “Jointly with improvement in the business and regulatory climate, this will facilitate the much needed growth of the private sector, where the bottom forty percent of the population engages in labor activities. The proposed operation will bring positive impact on economic growth and the sustainability of the Kyrgyz economy over medium to long run and will contribute to achieving shared prosperity and inclusive growth.”
The Governance and Competitiveness Development Policy DPO program supports the two main themes of the 2013-2017 National Sustainable Development Strategy of the Kyrgyz Republic and builds on the previous programmatic DPO series. “The proposed DPO deepens reforms supported the previous work in the areas of public personnel integrity, public procurement management, energy sector governance, and business environment improvements,” said Jana Kunicová, Senior Public Sector Specialist at the World Bank and task team leader for the Governance and Competitiveness Development Policy Operation.
The World Bank’s development policy financing aims to help the countries achieve sustainable growth and poverty reduction through non-earmarked general budget support. This support typically is given to programs of policy and institutional actions and helps to achieve shared growth and poverty reduction.
The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity. About 45 percent of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 55 percent is in highly concessional credits with no interest, and only a 0.75 percent service charge. Credits are repayable in 38 years, including a 6-year grace period, while grants require no repayment. The World Bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to over US$1 billion.