| U.S. Government Assistance to and Cooperative Activities with Eurasia -FY 2004 Released by the Bureau of European and Eurasian Affairs January 2005 II. Country Assessments and Performance Measures - Kazakhstan U.S. STRATEGIC INTERESTS In FY 2004, the USG provided an estimated $114.49 million in assistance to Kazakhstan (including $540,000 in FY 2003 FREEDOM Support Act funds): In FY 2004, some 320 Kazakhstani citizens traveled to the United States on USG-funded training and exchange programs implemented by USAID and the U.S. Departments of Agriculture, Commerce and State, bringing the cumulative number of Kazakhstani participants to approximately 4,900. U.S. ASSISTANCE PRIORITIES Democratic Reform Programs: The USG is committed to assisting the small, but highly motivated, group of citizens and local non-governmental organizations (NGOs) that is working to advance democratic reform in Kazakhstan. The USG’s priorities for democracy assistance include strengthening and developing civil society, including human rights organizations and defenders, support and advocacy for independent media, legal education reform, and civic education. In addition, USG assistance supports free and fair elections by training a broad range of political parties across the country and by enhancing domestic election monitoring. USG-funded assistance programs this year also focused on engaging NGOs and media in the electoral process. USG assistance and vigorous public affairs efforts continued to help keep Kazakhstan off Tier 3 in the State Department's annual Global Trafficking in Persons Report. Economic and Social-Sector Reform Programs: In FY 2004, USG economic development programs in Kazakhstan continued to focus on the development of small and medium-sized enterprises (SME) through general business skill development, strengthening of financial markets, and an improved operating environment for SMEs. In the energy sector, in order to address anticipated energy shortages in the southern part of the country, the USG launched a program to assist the Government of Kazakhstan in the development of regional energy trading with neighboring states through the use of agreements and technical assistance to agencies responsible for developing a legal and regulatory framework for transboundary energy trading. In the health sector, assistance continued to focus on top priorities: strengthening the quality of and access to primary health care, combating the tuberculosis (TB) epidemic, and improving the response to HIV/AIDS. After a call for health sector reform by President Nazarbayev, the USG provided technical assistance in developing the State Program for Health Reform and Development. USG assistance also helped support the teaching of English and development of NGOs dealing with HIV/AIDS education and prevention, youth at risk, environmental awareness, gender equality, and small business/entrepreneurial development. Security, Regional Stability and Law Enforcement Programs: In FY 2004, USG-funded security assistance programs in Kazakhstan continued to be based on a bilateral plan of military cooperation. This plan focuses USG-funded assistance on three main objectives: military interoperability (for waging the Global War on Terror and cooperating in international peacekeeping); establishing a military capability in the Caspian Sea region; and general systemic military reforms. USG assistance also focused on reducing the proliferation threat posed by Soviet-era nuclear, chemical and biological expertise and infrastructure. With U.S. Defense Department nuclear dismantlement projects successfully completed, USG efforts now address biological and chemical threats through the dismantlement and securing of dual-use biological facilities and stockpiles. Additional USG priorities are conducting biological-weapons 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, and the smuggling of narcotics and trafficking in persons. The USG embarked on a new outreach program to engage traditional religious leaders in the region, in order to create more effective programming and to provide a view of U.S. foreign policy that is largely absent from public discourse and a better understanding of U.S. assistance within Central Asia. The USG is also addressing conflict mitigation by identifying vulnerable communities, working with them to build consensus around sources of tension, and then tempering those sources through community infrastructure and social projects. SECTORAL ASSESSSMENTS Democratic Reform In 2004, Kazakhstan’s progress towards democracy continued to be uneven. Parliamentary elections were held in September 2004. On the positive side, the Government registered the opposition party Democratic Choice of Kazakhstan (DCK), passed an elections law that was an improvement over prior legislation and vetoed a new media law that would have severely restricted electoral and other coverage. However, despite these improvements, an international election observer mission organized by the Organization for Security and Cooperation in Europe (OSCE) concluded that there were serious shortcomings in the elections, including opposition leaders being legally barred from running for office, the lack of balance on election commissions, pressure on voters, the manner in which electronic voting was introduced, and irregularities in voter tabulation and reporting, as evidenced by the parallel vote tabulation (PVT) conducted by the USAID-supported Republican Network of Independent Monitors (RNIM). Although media coverage during the parliamentary elections was biased in favor of pro-presidential parties, the OSCE reported that there were no cases of media outlets being shut down or journalists being prosecuted. A new draft media law is now under consideration. Media outlets critical of the President faced excessive libel judgments, and damage demands. In July, a district court ordered the opposition newspaper Assandi Times to pay $370,000 in libel damages for an article allegedly defaming the president. In October the government-affiliated Khabar joint stock company filed a defamation suit and demanded $7.58 million in damages from Ak Zhol co-chairman Atynbek Sarsenbaiuly for his comments referring to the company as a monopoly. In FY 2004, USG assistance supported political party, civil society, and independent media participation in the electoral process. The National Democratic Institute for International Affairs (NDI) and the International Republican Institute (IRI) conducted more than 58 training sessions for a broad range of political parties across the country. USG support for domestic election monitoring through a limited PVT was instrumental in providing the necessary facts and information to those challenging the Central Election Commission’s reported results. The USG funded a Youth League of Voters through the Youth Information Service of Kazakhstan; other assistance funds underwrote a "Youth in Elections" national debate tournament. USAID managed a $300,000 small grants fund in which 31 grants were awarded to 25 NGOs and six media outlets, with most grants focusing on voter information campaigns and voters’ rights; supported six independent stations to produce talk shows and debate programs around the elections; and sponsored a contest for election-related public service announcements (PSAs) that resulted in rebroadcast of six PSAs and seven radio jingles by 16 television and 17 radio stations. An USG-funded pro bono tax clinic at Turan University trained 20 students in practical skills and provided aid to 240 indigent clients. This year’s Jessup International Moot Court Competition drew a record-breaking 126 participants. The competition provides an opportunity for law students to practice and develop their written and oral advocacy skills and to learn about trial tactics and substantive areas of international law. The American Bar Association’s Central European and Eurasian Law Initiative (ABA/CEELI) also completed the first Judicial Reform Index, which will be a useful tool to advocate for rule of law reforms. A new human rights program trained 20 human rights defenders in international legal standards, enforcement mechanisms, networking and advocacy, and prison monitoring. In FY 2004, assistance was also provided to promote better observation of human rights by police departments and municipal government through a series of educational seminars for policeman and local government authorities. A similar, large-scale program provided funds to expand the operation of one of Kazakhstan’s premier human rights watch organizations, the Kazakhstan International Human Rights Bureau, to six more regional centers, giving this watchdog group effective national coverage. USG-supported lawyers provided a total of 387 consultations to civil society organizations over the past year. USG programs also provided $252,000 in institutional grants to NGOs focused on youth, elderly, professional associations, and disabled. A new civic advocacy component was added to USAID’s civil society program, enabling more resources to be devoted to advocacy campaigns, skills, and membership-based NGOs. USAID’s civic education program reached out to 4,170 new students in the ninth to eleventh grades in 139 schools this year. Another 1,000 students participated in extra-curricular activities such as student local government days, student action committees, and summer democracy camps. Over 1,500 teachers were trained on interactive teaching methodologies, and approximately 16,500 students participated in USG-funded debate clubs. With USG support, the Government of Kazakhstan passed a National Plan of Action on Trafficking in Persons (TIP) in February. As a result of a USG-funded national counter-trafficking conference in May, the Ministry of Justice began drafting a TIP law, which will enable the Kazakhstani Government to prosecute traffickers more easily. Over 6,000 callers have received advice from anti-trafficking hotlines supported by the USG. Other anti-trafficking in persons programs included programs to educate press secretaries of General Prosecutor’s Offices about coverage of TIP issues and programs to improve cooperation between NGOs and state organizations. USAID’s local government program trained over 680 local government officials on social partnerships, resulting in coordination meetings in at least five of 15 pilot cities. In all 15 pilot cities, broad-based coordinating councils assumed leading roles in implementation of strategic plans for their cities. Due to lack of progress on decentralization in Kazakhstan, the program has been closed. Economic and Social-Sector Reform Primarily due to its wealth of natural resources, Kazakhstan’s growth has remained steady in 2004 and is proving to be important to its Central Asian neighbors as they increasingly look to Kazakhstan as a leading market for their goods. GDP growth was 9.2 percent in 2003, and is expected to continue at this pace in 2004, with an estimated GDP growth of 9.5 percent. Kazakhstan’s main source of revenue continues to be the oil and gas sector. Oil exports are expected to continue to rise in coming years, although the Ministry of Economy and Budget predicts that the share of budget revenues will decrease as the economy diversifies. Kazakhstan's financial sector and overall economic position continued to strengthen, which was recognized by Standard & Poor's awarding Kazakhstan an investment grade (BBB) rating with a "Stable" outlook in May 2004. Financial sector growth remained robust last year, although there is some concern that rapid credit expansion is putting strains on the quality of banks' loan portfolios and supervisors' capacity to regulate. Kazakhstan’s growth in investment over the past several years is notable, as are its achievements in the areas of fiscal reform and financial sector development. However, further reforms and their institutionalization are needed to advance SME growth, economic diversification, the development of a robust middle class, and Kazakhstan’s full integration into the global economy. USG-funded economic development assistance focuses on SME development. In FY 2004, the 223 local firms that received business and trade advisory services on average increased their sales by twenty-two percent and productivity by sixteen percent. USAID trade advisors also facilitated 103 trade deals in Kazakhstan worth over $41.3 million. Support is also provided to strengthen the accounting profession and promote the adoption of international accounting standards (IAS) and practices through an IAS-based training, examination, and certification program. Last year, 838 more accountants successfully passed the exams required for the Certified Accounting Practitioner (CAP) designation, a Russian-language-based accounting certification program, which is the first and still only regional professional accountant certification program in the Russian language that meets international standards and is recognized by the IAS Committee Foundation and the American Institute of Certified Public Accountants. The U.S. Department of Commerce also supported SME development through its Special American Business Internship Training (SABIT) Program, which builds partnerships and provides technical assistance by training Eurasian business leaders in U.S. business practices. Thirty-seven managers and scientists completed SABIT internships with U.S. firms. USAID’s Ecolinks Program facilitated the engagement of the private environmental and clean energy technology and services sectors to address environmental challenges in Kazakhstan. The USG’s past work with the National Bank to strengthen bank supervision and banks’ capacity to assess credit risk contributed significantly to the strength of Kazakhstan’s financial sector. Banking deposits continued to grow in FY 2004, reaching 24.4 percent of GDP; and, in mid-2004, Standard & Poor gave Kazakhstan a "BBB-" rating, which is above S&P’s rating for Russia. The rating also reflects Kazakhstan’s strong fiscal position, which was further solidified with its passage of a progressive Budget Code in April 2004. The Budget Code was drafted and finalized with extensive USG assistance in cooperation with the World Bank. The Budget Code integrates all of the previous laws on budget and expenditure into one document and incorporates positive reforms in Medium Term Budget Planning, Program Budgeting, Financial Audit, and elements of Intergovernmental Finance. The Code also adds transparency and credibility to the management of the National Oil Fund. Overall, the new Budget Code brings greater accountability and transparency in the management of public finances in Kazakhstan. The USG also supported the growth of primary and secondary mortgage markets. In September 2004, residential and commercial mortgage lending surpassed $564 million, a $364 million increase from October 1, 2003. Mortgage rates have continued to decline from twenty-seven percent in 1999 to the average of thirteen percent this year. Moreover, with USG support, Kazakhstan established a mortgage guarantee fund (KMGF). KMGF will make housing more affordable by lowering down payments, lengthening terms, and reducing interest. The secondary mortgage market has rapidly grown to $160 million from $35 million one year ago. This financial instrument has helped private pension funds diversify their portfolios and enabled the issuing banks to expand their mortgage portfolio. On July 29, 2004, with USG technical assistance, the seven largest private banks in the country formally established the first credit bureau in Eurasia. The establishment of the credit bureau followed only 23 days after the President signed Kazakhstan’s Credit Bureau Law on July 6. The new credit bureau will strengthen the primary mortgage, auto, retail, and credit card markets, and improve risk management and fraud detection capabilities. USG-funded programs seek to improve the legal and regulatory environment for SMEs and to support Kazakhstan’s integration into the global economy by working with the public and private sector to help reduce regulatory and administrative barriers to investment and business growth, as well as to help remove barriers to trade, which includes assistance on Kazakhstan’s accession to the World Trade Organization (WTO). This past year, the USG supported the establishment and formalization of 27 Consultative Councils at the national level and in the border oblasts. These councils, comprised of private business and government representatives, were instrumental in identifying and developing recommendations for the reduction of cross-border trade barriers; creating a pilot project on joint border control between Sharbakty, Kazakhstan and Kulunda, Russia; establishing post terminals at all customs points in Kazakhstan that accept credit card payment of customs duties and taxes; placing information kiosks at 10 customs points in Uralsk Oblast; and the institution of streamlined customs clearance procedures in Aktobe. Among the USG’s priorities in market reform is Kazakhstan’s adoption of an open trade regime consistent with World Trade Organization (WTO) principles. In 2004, the USG continued to assist the Government of Kazakhstan to prepare for WTO accession by assisting in bringing Kazakhstan’s legislative framework and regulatory practices into compliance with WTO requirements. In 2004, Kazakhstan held two working party meetings with the WTO. The accession process maintains the momentum that it received in 2003 when Kazakhstan declared an expedited accession to the WTO its priority. Before its accession, Kazakhstan has to enact the WTO implementing legislation in accordance with the Legislative Action Plan, and complete the outstanding bilateral market access negotiations. In FY 2004, 148 Peace Corps volunteers (PCVs) served throughout Kazakhstan. A total of 90 PCVs taught English in town and village schools, providing classroom instruction and training in more participatory, communicative, and student-centered teaching methodologies. Other PCVs implemented an NGO program to promote the development of civil society by working with host organizations, counterparts, and local volunteers at the grassroots level throughout Kazakhstan to improve communities' capacity to address HIV/AIDS education and prevention; youth at risk; environmental awareness; gender equality; and small business/entrepreneurial development. As a result of rapid economic growth, Kazakhstan is anticipating energy shortages in the southern part of the country that could have major impacts on development in several sectors. The USG is assisting the Government of Kazakhstan in the development of regional energy trading with neighboring states through the use of agreements and technical assistance to agencies responsible for developing a legal and regulatory framework for transboundary energy trading. In 2004, the USG initiated efforts to obtain financial support from the Government of Kazakhstan for USG’s economic development activities. The Government of Kazakhstan supported the concept of partnership with a co-financing and co-ownership scheme. The joint program was named the Program for Economic Development (PED) and assumes cost sharing with a gradual increase in the Kazakhstani Government’s contribution to fifty percent in 2009. Despite efforts to secure budget allocation for PED for 2005, the financing of PED was not included in the 2005 budget. However, both sides are closely coordinating on the steps necessary to formalize the agreement and secure funding in 2006. Overall, important progress has already been made in the area of economic development in Kazakhstan, but continued efforts are needed to further reinforce and institutionalize the reforms underway. Moreover, Kazakhstan has evolved as the regional leader and, with moderate USG assistance, can solidify its role as a model for economic reform, thus contributing to the growth and stability of the Central Asian region as a whole. The doubling of the national health budget announced in the State Program for Health Reform and Development signals a strong government commitment to health reforms and provides a unique opportunity to introduce strategic reforms and take pilots national. During the past year, we helped to create a legal framework for the national rollout of related financial reforms, due to begin in 2005. For the first time since the beginning of DOTS implementation in 1998, the registered TB incidence rate has decreased by 2.8 percent. However, the rate of multi-drug resistant TB is alarmingly high. USAID’s TB program addresses this challenging aspect of TB control in an Almaty pilot. During the past year, USAID support to the U.S. Centers for Disease Control and Prevention (CDC) led to completion of the first round of routine sentinel HIV surveillance in Kazakhstan. Data from four sites confirms a concentrated but growing epidemic. HIV prevalence among injecting drug users ranged from 2.2 percent (Karaganda) to 6.4 percent (Pavlodar); and among prostitutes from 1.5 percent (Shimkent, Uralsk) to twelve percent (in Pavlodar). USAID and CDC will continue to strengthen and develop these sites, as well as assist the Ministry of Health to use them as the basis for a national program. A new program to address HIV/AIDS launched at the end of FY 2004 will provide technical assistance to Kazakhstan in implementation of its $22.4 million grant from the Global Fund to Fight AIDS, Tuberculosis and Malaria. Security, Regional Stability, and Law Enforcement Equipment provided by the Export Control and Related Border Security (EXBS) Assistance Program has had a positive impact on the prevention of smuggling of illicit materials and trafficking in persons, but the sheer immensity of the border area makes EXBS’ task daunting. In FY 2004, EXBS provided spare parts, maintenance, and support for three small patrol vessels for the Border Guard Maritime Service. EXBS also provided communication equipment and patrol vehicles for radar stations on the land border of the Caspian Sea, and ten large x-ray units for the major ports of entry and airports. A training module was created at the Customs Training Academy in Almaty for radiation portal monitors soon to be installed at major commercial ports of entry into Kazakhstan. In order to maximize results from the EXBS Program, the Ministry of Defense and the U.S. Embassy's Security Assistance Office developed a five-year plan of specific reform objectives and goals as a tool to focus and coordinate USG assistance to the Kazakhstani Armed Forces. The plan will focus bilateral defense activities on strengthening Kazakhstan’s defensive capabilities to ensure its national security, further regional stability, and strengthen Kazakhstan’s interoperability with U.S. and NATO forces in fighting the Global War on Terror and conducting other cooperative activities. The International Military Education & Training (IMET) and Foreign Military Financing (FMF) programs promote interoperability and are having a significant impact on Kazakhstan's Ministry of Defense. 48 Kazakhstani military personnel attended training in the U.S. in FY 2004 under the auspices of the IMET program, including Kazakhstan's second graduate from the U.S. Army War College. Kazakhstani IMET graduates are working with U.S. forces in Iraq, and serve in positions of prominence throughout the Ministry of Defense, particularly in the Airmobile Forces and in Kazakhstan's Peacekeeping Battalion. An FMF-funded barracks renovation project was completed in FY 2004. The military unit that is now housed in these barracks gives Kazakhstan a military capability in the Caspian Sea region that did not previously exist. Additionally, in FY 2004 Kazakhstan's peacekeeping battalion received five high-mobility multipurpose wheeled vehicle (HMMWV or "Humvee") ambulances through the FMF program. FY 2004 FMF funds will be applied to the purchase of two UH-II "Huey II" helicopters that will provide airmobile capability in the Caspian region. The Kazakhstani government's decision to support to the U.S.-led Coalition in Iraq with an engineer unit (now on its third rotation) is a sign of Kazakhstan's growing confidence in its military relationship with the United States. Shortly following its independence, Kazakhstan made an early and active commitment to achieve nuclear-weapons-free status and become a leader in the field of nonproliferation. Even after divesting itself of its nuclear arsenal, Kazakhstan remains a top priority country within the region for USG-funded nonproliferation assistance, due to its remaining Soviet-era infrastructure and WMD-related expertise. U.S. Defense Department programs continue to engage scientists, provide biological-weapons detection and response workshops, and help consolidate and secure dangerous pathogen collections. The State Department's Bio-Chem Redirect Program continues to assist institutes and scientists to shift from biological weapons work toward commercially viable and sustainable activities. In addition, the USG engages senior Kazakhstani weapons scientists through the multilateral International Science and Technology Center (ISTC), fostering peaceful commercial scientific research in areas important to both the United States and Kazakhstan. In FY 2004, the Department of State's Diplomatic Security Service held several courses in conjunction with the Anti-Terrorist Assistance (ATA) program, providing training to 93 participants. Courses included the ILEA Budapest course on the "Role of Police in Combating Terrorism," where seven Kazakhs took part alongside Kyrgyz, Tajik, and Uzbek counterparts; "WMD Mass Casualty Emergency Medical Intervention;" "WMD Equipment Delivery;" "Advanced Crisis Response Team;" "Hostage Negotiation;" "Capstone Exercise;" and "Consultation-Protective Operations Management," a regional event hosted by the Kazakhstani Presidential Security Service with participation of Uzbek, Tajik, and Kyrgyz counterparts. Through the State Department Bureau of International Narcotics and Law Enforcement (INL), the USG’s newly established programs in Kazakhstan continue to develop. During 2004, INL provided training to approximately 600 Kazakhstani law enforcement officials and 220 law students who attended courses as auditors. INL also initiated a northern border control project with the Border Guards, a project with the Ministry of the Interior to begin establishing interior narcotics checkpoints, and a major anti-money laundering program to help GOK trace and confiscate the proceeds from the narcotics trade and other illegal activities, as well as track potential terrorist financing activities. The Ministry of Justice agreed to expand INL’s small 2004 TIP program into a major training program during 2005 and 2006. INL also provided equipment to the Finance Police Academy, the Criminal Statistics Division of the Office of the Procuracy, the Ministry of the Interior, and to the Border Guards. In FY 2004, the USG continued to work in 21 communities in South Kazakhstan, Zjambul, and Almaty oblasts to mitigate sources of tension, whether inter-ethnic in nature, the result of limited natural resources, or based on social disparities. Community investment councils representing a cross-section of society were formed in each community to tackle potential flashpoints for conflict. More than 39 infrastructure and social projects were carried out during FY 2004, including the refurbishment of schools and health clinics; potable water infrastructure projects; and the repair of irrigation canals and pumps, electricity transformers, and gas lines. Communities, on average, contributed thirteen percent of overall project costs, demonstrating the ability to mobilize funds and implement projects on their own. In an effort to foster greater involvement by the region’s Islamic and other religious communities in the design and implementation of USG programs, USAID began hosting tours of its project sites for Islamic leaders and journalists in FY 2004. Several participants noted an increased sense of appreciation for USG assistance and even volunteered to spread information about some of the projects through local media organizations. COUNTRY PERFORMANCE MEASURES Economic & Democratic Reforms, 1991-2004 Data are drawn from EBRD, Transition Report (November 2004) & Freedom House, Nations in Transit 2004 & Freedom in the World 2004. Ratings are based on a 1-to-5 scale with 5 representing the most advanced. Latest-year observation refers to 2004 economic reform data and 2003 democratic reform data; i.e., 2004 data for democratic reforms are not yet available. Economic Structure and Human Development, 1990-2004
World Bank, World Development Indicators 2004 (2004); UNICEF, Social Monitor 2004 (2004); EBRD, Transition Report (November 2004); and UNDP, Human Development Report (2004). SECTORAL PERFORMANCE MEASURES DEMOCRATIC REFORM Performance Indicator: USAID NGO Sustainability Index (1- highest; 7 - lowest)
(*This is not the final, official NGOSI score, but rather a performance measure tracked solely by the missions.) FY 2004 Results: Although the overall NGO Sustainability Index scored 4.0 points out of 7.0, which is a two percent decline over 2003, some improvements were noted by NGOs in legal environment and infrastructural development due to a strengthening of the Association of Civil Society Support Centers and technical and legal support to civil society organizations. A "one-window" registration process was introduced to register NGOs, eliminating the need for secondary registration with various government agencies. In addition to existing oblast-level departments of the Ministry of Justice for registration, district level offices opened, facilitating rural access to registration authorities. Despite a number of tax amendments that can negatively affect NGOs, continuing corruption in the "one-window" system, and a lack of transparency in the Government Fund, NGOs continued to develop their institutional capacity and be involved in advocacy campaigns. Performance Indicator: Independent Media Rating, Drawing from Freedom House, Nations in Transit 2004 as modified by, "Monitoring Country Progress in Eastern Europe and Eurasia" USAID/E&E/PO, #9 January 6, 2005. (1-lowest, 5-highest; data based on previous calendar year)
FY 2004 Results: Independent media continues to operate in a complex political and economic environment. In 2004 the Government made two attempts to enact new media legislation. However, President Nazarbayev vetoed the oppressive draft media law of 2003, approved by both chambers of Parliament, in April 2004. USAID’s main media development partners in Kazakhstan, Internews Network and Adil Soz, had widely criticized the oppressive draft law that would give the Minister of Information broad authority to interfere in media operations and lobbied against it in Parliament and through media outlets. Another progressive draft by the former Minister of Information was disrupted due to his resignation in September. With USAID assistance, 14 independent regional television stations broadcast news and analytical programming on social, economic, and political issues through two weekly USAID-supported information programs, Aina (Mirror) and Open Asia. The local NGO Adil Soz compiled data and issued monthly reports on freedom of speech abuses in Kazakhstan, providing direct assistance to harassed journalists and media outlets and advocating for positive legislative changes. ECONOMIC AND SOCIAL-SECTOR REFORM Performance Indicator: Economic Reform Index, Drawing from Freedom House, Nations in Transit 2004 as modified by, "Monitoring Country Progress in Eastern Europe and Eurasia" USAID/E&E/PO, #9 January 6, 2005. (1-lowest, 5-highest; data based on previous calendar year)
FY 2004 Results: Kazakhstan’s financial sector and overall economic position continued to strengthen, which was recognized by Standard & Poor’s awarding Kazakhstan an investment grade rating in May 2004. USAID ended its full time assistance to the National Bank in December 2003. At the close of the activity, risk management systems were improved in the commercial banks; and coverage of deposit insurance expanded to cover over ninety percent of individual deposits and seventy percent of all deposits. At the end of FY 2004, individual deposits reached $3.07 billion this year, which means an increase of 29.6 percent over the last year. The project also contributed to the establishment of the new Financial Supervision Agency responsible for regulating financial markets. Performance Indicator: TB Incidence (new cases per 100,000 people). Source: UNICEF. This indicator has an 18-month lag time; therefore, FY 2003 and FY 2004 actual data is not yet available.
FY 2004 Results: USAID has assisted the Government of Kazakhstan with national implementation of DOTS since 1998. Political will for the needed reform is demonstrated by the Government’s procurement of all needed TB drugs. Several USG-supported initiatives on TB control have shown the benefits of long-term assistance in this crucial area. The efforts of USAID and the MOH resulted in a 41.6 percent decrease in deaths from TB over five years. The CDC estimates that DOTS saved more than 20,000 lives from 1998 to 2003. For the first time, the registered incidence of TB has decreased by 2.8 percent. During the past year, USAID trained 1,168 TB and primary health care specialists on DOTS, while CDC trained 29 laboratory specialists. USAID, together with the National TB Center’s (NTC) monitoring specialists, conducted regular monitoring visits throughout the republic and used standard monitoring checklists that were previously developed by USAID and the NTC. Established in 2001, a USAID pilot in Karaganda on TB in prisons has demonstrated results of improved coordination between the health and penal system. Rates of detection of contagious prisoners more than doubled, increasing from 4.6 percent in 2001 to 10.8 percent in 2003. One cause of poor treatment results among ex-prisoners, who are often released in large numbers during amnesties, is the lack of their enrollment in the civilian TB program to continue treatment. The Karaganda pilot focused on this issue with significant results: the percentage of ex-prisoners registered in the civilian TB program increased from 8.4 percent in 2001 to 64.5 percent in 2003. Results from a USAID 2003 assessment of the quality of TB drugs manufactured in Kazakhstan contributed further to the TB control. Multi-drug resistant (MDR) TB is a priority in Kazakhstan, where the number of such registered cases has increased dramatically, from 1,051 in 2002 to 1,500 in 2003. In fact, Kazakhstan has been identified as having the highest level of MDR TB in the world among newly diagnosed cases. A USG-supported pilot site in Almaty City helps the Government of Kazakhstan to develop protocols of case MDR TB management. SECURITY, REGIONAL STABILITY, AND LAW ENFORCEMENT Performance Indicators:
Incidents of acceptance/use of U.S./European (NATO) doctrine at training institutions or acceptance of Western training:
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Area: 1,688,800 sq. miles, slightly less than four times the size of Texas 
