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U.S. Department of State

Diplomacy in Action

FY 2007 U.S. Assistance to Eurasia


Bureau of European and Eurasian Affairs
FY 2007 U.S. Government Assistance to and Cooperative Activities with Eurasia
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Country Overview

U.S. FOREIGN POLICY AND FOREIGN ASSISTANCE OBJECTIVES & PRIORITIES

The Kyrgyz Republic has faced peaceful but persistent political turmoil in the last few years. It is in the U.S. Government’s (USG) interest to promote the Kyrgyz Republic’s stability and thwart the growth of extremism and terrorism by supporting the strengthening of systems that ensure human rights, promote democratic reform, create economic opportunity, and attack the corruption and organized crime that threaten its security. The primary U.S. policy objective is to fight terrorism. The Kyrgyz Republic is a valuable partner in this regard. Since 2001 it has hosted Manas Air Base, which provides logistical support to Operation Enduring Freedom in Afghanistan. A second U.S. policy objective is to strengthen good governance and democracy. Improving the economic and social situation in the country is a vital third objective. Reforms have allowed the Kyrgyz Government (GOK) to maintain low inflation and positive growth rates. But over 40% of the population still lives in poverty, especially those in rural areas. In addition, because of endemic corruption, scarce natural resources, and poor rule of law, the Kyrgyz Republic has difficulty attracting foreign investment. Finally, the U.S. must work to counter the suspicion and criticism of the USG – and the West generally – that appear in the Russian and Kyrgyz media.

OPERATING ENVIRONMENT

The Kyrgyz Republic faced continuing political turmoil in FY 2007, including several rounds of mostly peaceful street protests, as the president and the legislature proved unable to agree on the pace or direction of reform, in particular constitutional reform. As a result, three different versions of the constitution were adopted in FY 2007, important legislation languished, and overall the institutions of central government in the Kyrgyz Republic were badly weakened. Although civil society and the media conducted relatively open discussions of the issues, most observers deemed flawed the October 2007 referendum that adopted the current constitution. The new version increased the number of members of parliament from 75 to 90, introduced a party-list system for parliamentary elections, reversed earlier constitutional changes that had strengthened the parliament vis-à-vis the executive, and eliminated the direct election of heads of local government. Overall, the changes were expected to strengthen political parties, but not improve the balance between the executive and the legislative branches.

Due to Kyrgyz Republic’s progress in meeting most selection criteria, the Millennium Challenge Corporation approved a Threshold Program for the Kyrgyz Republic in August 2007, expected to begin implementation in early 2008. The Program will focus on judicial and law enforcement reform in an effort to enable the GOK to improve its fight against corruption.

The GOK and USG made progress in FY 2007 in the areas of economic policy, energy, agriculture, and micro-credit, with 7% GDP growth expected for the year. However, rampant corruption, a thriving black market, and poor decision-making by some GOK officials hindered a broader distribution of that growth, needed to lift more people out of poverty, reduce unemployment (especially among youth), and allow for sustainable increases in the number and viability of small and medium enterprises (SMEs) that operate free of government intrusion. In February 2007 the GOK made the decision not to join the World Bank’s Highly Indebted Poor Countries initiative, thus losing an opportunity to have nearly half of its $2 billion foreign debt forgiven and reducing its flexibility in addressing fiscal challenges.

The GOK and USG also had important accomplishments in the area of health and education reform in FY 2007, as described later in the report. However, a lack of resources and low pay for professionals in the health and education sectors continued to be significant barriers to progress, particularly with the out migration of specialists seeking better lives elsewhere.

Providing assistance in the turbulent Kyrgyz political environment was challenging. The frequent change of key GOK counterparts made it difficult to initiate reform programs and see them through to completion. Because of rapid change, the USG needed to be closely engaged with GOK officials in order to take advantage of opportunities to support reform when they presented themselves. Criticism of the United States and the West continued to pervade Russian-origin and increasingly Kyrgyz media. Many senior Kyrgyz officials, for example, continued to question USG democracy assistance, fearing that the design was to make the government become the victim of another “colored revolution.” Suspicion of USG motives undermines the U.S. image and interferes with the impact of assistance programs.

FY 2007 Country Program Performance

PEACE AND SECURITY

Security Sector Reform: Policing and Law Enforcement - The main USG objectives in law enforcement reform in FY 2007 were to improve the professionalism of the Kyrgyz Traffic Police and to increase the transparency of law enforcement ministries and personnel.

Kyrgyz citizens pointed to the Kyrgyz Traffic Police as one of the most visible sources of corruption. In FY 2006 the USG was to refurbish the Traffic Police buildings, and to provide them with vehicles and traffic safety and enforcement equipment. Though most of this work was completed in FY 2006, some were not completed until the following fiscal year. The Traffic Police in FY 2007 devised and prepared to launch internal control measures for identifying rogue police officers, including polygraph testing for new officers joining the force in FY 2008. The Traffic Police also reduced the number of static posts and adopted more contemporary traffic safety operations, instituting roving mobile patrols and a policy of enforcement based on accidents, violation and intersectional analysis.

This assistance has produced results. By the end of 2007 over 200 traffic police officers were disciplined, demoted or fired for behavior or actions in violation of the rule of conduct. A small portion of officers received punishment for corrupt activities. A public survey is scheduled for March-April 2008 to determine if there is a change in public perception of the traffic police. This will be used as a comparison for the public survey conducted last year and to determine if USG assistance activities have had any impact on corrupt behavior. In addition to the activities being conducted internally, the Traffic Police Director has allowed a USG law enforcement advisor to be present when surveillance or inspection of traffic police posts are conducted to identify corrupt officers. This level of transparency is encouraging, and the USG advisor’s spot-checks have been generally favorable. Another encouraging development is a renewed effort by the Traffic Police to lobby the parliament for a change in Kyrgyz law that would make all fines payable at a bank or central repository, thus preventing officers from taking any money while on duty.

Based on a recommendation by the FBI, the USG conducted an assessment of Kyrgyz biometrics capabilities and trained law enforcement personnel in critical finger and latent print collection and analysis. Finally, the USG provided an upgrade to the Kyrgyz Republic’s Automated Dactylographic Identification System. Kyrgyz law enforcement can now collect biometric information nationwide, transmit it domestically and internationally, and exchange biometrics with other countries through the Automated Fingerprint Identification System (AFIS). This gives the USG access to biometric information on suspected criminals and terrorists.

Security Sector Reform: Military and Defense - In FY 2007 US security assistance focused on increasing the basic capacity of the Kyrgyz military and encouraging defense reform. The USG provided individual clothing and equipment, infrastructure and computer equipment to the Kyrgyz Ministry of Defense (MOD). To increase the counterterrorism and counter-narcotics capability of the Kyrgyz Air Force, the USG provided one refurbished Mi-127 helicopter and refurbished another helicopter belonging to the Kyrgyz Air Force. Additionally, the USG provided helicopter spare parts, storage structures for the spare parts, and aviation fuel to support the operations and maintenance of the helicopters.
Following years of limited resources resulting in very limited flight training hours, the Kyrgyz Air Force (KGAF) focused its efforts In FY 2007 on retraining its pilots to fly safely in a high-altitude, mountainous areas. In the summer of FY 2007 the KGAF deployed one helicopter to the Osh area for the first time in many years to support operations against potential terrorist incursions, and other threat activity.

The emphasis of training assistance to Armed Forces in general was designed to expose Kyrgyz defense officials to other militaries and increase interoperability with Western defense structures. The fall conscript class was completely outfitted with uniforms and equipment. This assistance allows the MOD to focus its limited resources on improving the quality of life of individual soldiers. Over 70 officers, soldiers and civilian government officials who are involved in defense have benefited from the training programs.

Counter-Narcotics - The USG works with both the Kyrgyz and Tajik Drug Control Agencies (DCA) to increase their institutional integrity and professionalism while developing their capacity to investigate drug trafficking and drug interdiction. Anti-corruption efforts include the use of polygraph testing and the provision of small salary supplements to reduce the incentives for corruption. In recent months, the Kyrgyz DCA was bolstered by the addition of four mobile interdiction teams assigned to the South.

In FY 2007 the Kyrgyz DCA conducted effective joint operations that led to substantial drug seizures domestically and abroad. The Kyrgyz DCA cooperated with Russian Federal Drug Control Service, the Kazakhstan Ministry of Internal Affairs, the Tajik DCA, and the Baltic States Criminal Police Forces. Joint intelligence operations were also organized with the U.S. Drug Enforcement Agency and the German Federal Criminal Police Office. From 2006 to the present, the Kyrgyz DCA seized over 700 kilograms of drugs of all types, including over 135 kilograms of opium and heroin. DCA actions to combat complicity between Kyrgyz law enforcement officers and drug traffickers led to the arrests of several police officers from the Ministry of Internal Affairs, two customs officers, and one officer of the Kyrgyz National Security Service for drug trafficking. The Kyrgyz DCA seized weapons, including several machine guns, explosives, and five kilograms of explosives. The September 2007 launch of an elite, interagency mobile interdiction team to be based in the southern city of Osh will allow the DCA to conduct mobile interdiction operations and provide investigative capacity. The DCA initiated several changes and amendments to laws to decriminalize drug abuse and to carry out the fight against drug traffickers efficiently.

Transnational Crime - The objective of USG transnational crime programs in FY 2007 was to increase the institutional capacity of the Kyrgyz Government to combat international criminal activities such as financial crime and trafficking in persons (TIP). In FY 2007 the USG continued to give training and guidance in anti-money laundering to Kyrgyz Financial Intelligence Unit (FIU) staff, the Ministry of Interior, and the National Bank. The FIU was unable to process the large amount of information it receives. The USG helped the FIU establish procedures for collecting and investigating reports, identify the National Bank’s reporting and procedural needs, and design reporting forms.

The enforcement agencies have experience conducting financial investigations, but need considerable assistance. The USG began to work with the FIU to improve its intelligence analysis and with selected law enforcement agencies to broaden their investigative skills and create an information warehouse. As a result, the FIU developed cooperative agreements with other law enforcement agencies.

In FY 2007 the USG and its partners helped 194 TIP victims and provided information and advice to thousands more. With a focus on preventing trafficking and helping victims reintegrate into society, the USG worked through a network of local organizations across the country that provided shelter, counseling, and advice. The network also managed hotlines that responded to thousands of calls with questions about the risks of trafficking, especially in terms of job opportunities outside of the country. The GOK provided a toll-free three-digit number for the trafficking hotline, which averaged 1,500 calls per quarter. In addition to running the hotlines, the NGO network conducted a wide range of anti-TIP services, such as youth training, shelter support, and medical and social services. The network produced new educational materials, including a book documenting the stories of victims, which provided general information about trafficking and ways to avoid becoming a victim. The program has experienced some obstacles; the space for one victims' shelter that local authorities provided on an in-kind basis was subject to closure at the end of the year and the conservative nature of the southern part of the country prevents many victims from seeking shelter and support.

This network of local organizations continued to develop its managerial and technical skills. It is also seeking funding from local authorities, the private sector, and other donors to increase its financial sustainability. With USG support in this area phasing out in the next year, the NGO network is well-positioned to continue to provide needed services without US financial support.

To improve regional cooperation on trafficking issues, the USG successfully advocated for the establishment of a working group on labor migration under the Inter-Parliamentary Assembly of the Eurasian Economic Community. Civil society representatives are part of this group. In addition, with co-funding from the British Government, the USG also supported the opening of a labor migration center that provides legal advice and vocational training. The center also matches job-seekers with legitimate employers, thus helping to reduce incidences of labor trafficking. Due to its significant efforts to meet the minimum standards for eliminating trafficking, the Kyrgyz Republic continued to be a Tier 2 country on the State Department’s Annual Trafficking Report because, even though the GOK did not fully comply with the standards.

Combating Weapons of Mass Destruction - In the Kyrgyz Republic in 2007 the USG worked to increase the capabilities of Kyrgyz border security agencies to combat terrorism and to prevent weapons of mass destruction (WMD) from crossing the Kyrgyz Republic’s international borders.

All Kyrgyz border control agencies experience substantial turnover and have to train a large number of new personnel each year. To support the development of increased institutional training capacity, the USG provided assistance to partially refurbish the Kyrgyz Customs Academy. Because of facility improvements, the USG expects to see over time an improvement in the level of training of personnel staffing border control stations.

The USG is also working to improve the level of WMD-related technical training among Kyrgyz border personnel. There are numerous areas where the technical knowledge and experience of US border control institutions can be shared to accelerate development of the technical capabilities of the Kyrgyz Republic to combat the proliferation of WMD. In FY 2007 the USG provided training in strategic trade control commodity and product identification, targeting and risk management, international rail Interdiction, and technical forums, and government-industry outreach programs.

Another area where the USG is having an important impact is in the improvement of technical equipment, facilities, and infrastructure along the Kyrgyz Republic’s remote and mountainous border. Many border posts have only very basic inspection tools such as flashlights and hand-held wrenches, and many buildings do not have heat or water in wintertime. In 2007 the USG helped to construct and equip two mid-size border posts, selected due to increasing cargo traffic volume, as well as alloy analyzers for seven Kyrgyz Customs posts. The USG also provided additional communication equipment and repaired previously donated communication equipment. This equipment provides a WMD-detection and response capability that would not exist without USG assistance. The USG also provided radiation safety equipment and additional radiation detection equipment to Kyrgyz Government agencies that provide first responder support in the event of nuclear, chemical, or biological incidents.

GOVERNING JUSTLY AND DEMOCRATICALLY

2007 was a year of political turmoil for the Kyrgyz Republic. With three different constitutions adopted during the year and the sudden adoption of a draconian electoral code, it was difficult to advocate for democratic reforms. The GOK adopted no policy or legislative reforms in support of human rights in 2007, and only three percent of the legislation considered by the parliament was subject to a public hearing. However, 2007 was a year of exceptional progress in implementing fiscal decentralization reforms and increasing local government capacity.

Rule of Law and Human Rights - USG objectives in FY 2007 were to strengthen the independence, professionalism, and transparency of the judiciary, increase the professionalism of defense attorneys (advocates) and strengthening the institution of criminal defense, and increase human rights organizations’ ability to monitor and report on human rights abuses. During FY 2007 the USG trained over 600 Kyrgyz lawyers, parliamentarians, and judges in anti-corruption, money laundering, and protection of human rights.

In September 2007 the USG co-hosted with the German Government a one-day international conference for senior GOK officials followed by a series of training seminars to train every judge in the Kyrgyz Republic on key new justice sector legislation. This training introduced the mandates of the International Covenant on Civil and Political Rights to which the Kyrgyz Republic is a party, in particular the requirement that the Judiciary hold the power to issue an arrest warrant, rather than the Procuracy, as well as the concept of jury trials. As a result, the Kyrgyz Parliament drafted legislation not only separating the judiciary from the Ministry of Justice, but also establishing jury trials. The legislation is expected to be introduced to parliament in early FY 2008.

The USG provided an analysis of Kyrgyz anti-corruption legislation and co-sponsored a roundtable discussion with panelists from the National Agency for Preventing Corruption, the National Council for Fighting Corruption, and Kyrgyz Parliamentarians against Corruption. The USG also coordinated a comprehensive, four-day, hands-on anti-corruption workshop in Bishkek for 50 investigators from the Ministry of Internal Affairs (MVD) and prosecutors from the General Prosecutor’s Office. The workshop covered best practices in investigating and prosecuting public corruption cases, and how to successfully prosecute public corruption cases.

As a result of these efforts, Kyrgyz investigators doubled their efforts in investigating corruption within the government. Over 100 individuals participated in a two-week, hands-on workshop designed for investigators from the MVD, the Drug Control Agency (DCA), National Security Service (SNB) and prosecutors from the General Prosecutor’s Offices (GP) on investigating and prosecuting narcotics cases. The USG trained 20 senior government officials and 250 judges in the Kyrgyz Republic on newly passed legislation concerning protections of human rights, in line with the ICCPR. In the arena of combating money laundering and terrorist financing, USG assistance trained over 35 prosecutors. In addition, the U.S. trained 50 narcotics operatives from the DCA and the MVD drug unit in methods to combat narcotics trafficking. Finally, over 40 Kyrgyz prosecutors and judges received training in effective methods to combat public corruption.

Over 20 representatives, including advocates, the Ministry of Justice, parliamentarians, and the NGO community established a working group in 2006 tasked with drafting founding documents for a Unified National Bar Association. In FY 2007 the group developed drafts and sought expert comment on the drafts of the charter of the Unified Bar, regulations on qualification and disciplinary commissions, regulations on professional ethics of advocates, regulations on improving advocacy skills, and documents on continuing legal education and the statute governing the Advocacy Training Center. The Unified National Bar Association is expected to be fully operational in 2008.

The U.S. continued its awareness-raising campaign in secondary schools throughout the Kyrgyz Republic. It developed anti-corruption, legal ethics, and civics curricula, training instructors, delivering lectures, and produced a teachers' manual. The U.S. delivered anti-corruption courses to 990 secondary school students in ten Osh city schools, seven Bishkek, six Karakul city schools, and ten Jalalabat village schools. The USG trained over thirty student trainers as well developing and publishing teachers' manuals. The USG also organized year-end legal competitions, drawing participation from schools from all over the country, including, for the first time, eleven madrassa students. Forty instructors were trained to conduct fifty educational seminars, attended by 1032 residents, reaching out to all administrative districts of the seven Kyrgyz' provinces.

During FY 2007 the USG also worked to increase public awareness of rule of law and human rights issues through advocacy campaigns, discussions of draft legislation, and televised public service announcements. Through a national network of human rights defenders, the USG supported the effective implementation of existing legislation in individual cases. For example, for the first time, a criminal court case, (pursuant to a 2003 law that criminalized torture), was brought against two militiamen in Naryn. In two other cases, advocacy by local organizations resulted in the protection of a human rights activist who was attacked for monitoring a court case on torture, and the release of another imprisoned for attempting to report on an open meeting.

The U.S. also supported information campaigns on human rights related issues, which included five public service announcements (PSAs), two 20-minute analytical programs, and distribution of 8,000 brochures and posters on human rights issues. These campaigns covered a range of issues that were also pertinent to on-going reform efforts in the country, including the right to obtain and hold dual citizenship, the right to a jury trial, gender equality and equality before the law, and the transfer of the power to issue arrest warrants from the Prosecutor’s office to the Judiciary.

The USG supported civics lessons within secondary schools and religious schools, reaching 2,250 students in secular schools and 218 madrassa students. The USG also assisted Kyrgyz human rights organizations to establish contact with their counterparts in other Central Asian countries, increasing information exchange and further developing skills for monitoring and reporting on human rights abuses.

Civil Society - The objective of USG activities in the area of civil society was to increase the capacity and ability of civil society organizations to engage the government on behalf of their members’ interests and about public issues generally.To achieve this objective, the USG distributed information through a network of more than 300 NGOs on topics, including the creation, operation, and dissolution of NGOs in the Kyrgyz Republic, texts of draft laws, and analyses and comparative information on laws in other countries. To further assist organizations in complying with complex local requirements, the USG established a database of 35 lawyers and directly provided more than 47 consultations; the USG also provided technical input for a new law which is expected to curtail abusive audits and inspections of NGO activity.

The USG provided technical assistance to civil society organizations that actively engage with the government on a range of issues, including national television broadcasting and NGO vulnerability to unwarranted audits. As a result of civil society advocacy, the president vetoed two laws passed by the parliament on judicial self-governance and freedom of assembly that would not have fully addressed the issues in these areas; these laws were being redrafted at the end of the fiscal year. The USG also increased public awareness and greater involvement in the review of draft legislation and policy debates on changes in the electoral code, local government law, the criminal procedures code, and a law on freedom of assembly.

In FY 2007 the USG trained 49 university student activists from throughout the Kyrgyz Republic in analysis and public rhetoric, and also exposed them to critical policy discussions. This included two intensive week-long training seminars, weekly three-hour workshops, and biweekly roundtables with prominent personalities, all focusing on current policy debates. Due to the training, the students’ levels of confidence and enthusiasm improved and they believe they have the ability to influence the course of events in their country. In addition, graduates used the knowledge and skills acquired in the program to benefit their communities. For example, graduates conducted 29 workshops to transfer skills such as public speaking, writing, debate, and leadership to approximately 500 youth in the country. Several graduates planned and organized a nationwide essay contest with the theme, “forms of government,” a topic relevant to the debate in the Kyrgyz Republic over constitutional reform. The projects conducted by graduates extended the program’s reach beyond Bishkek to a much wider audience.

In FY 2007 the USG assisted NGOs active in a wide variety of areas, including labor migration, higher education, income generation, government transparency, and independent media support. For example, USG funding established a labor migration center, which assists potential labor migrants in finding secure and legal jobs abroad. As a result of U.S. assistance, the labor migration center has provided consultations to 129 people. Additionally, the other two centers established with USG assistance provided legal advice to 3,200 labor migrants. More than 400 migrants have found legitimate jobs through the centers.

Good Governance - Overall progress in implementing fiscal decentralization reforms and increasing local government capacity was overshadowed by a new constitution adopted in October 2007, which eliminated direct elections for mayors. This and several other constitutional changes may reverse some of the exemplary progress the Kyrgyz Republic had achieved in political decentralization and local government development. Despite these setbacks, USG assistance led to improvements in the quality of local governance. USG objectives for these activities in FY 2007 included strengthening the capacity of directly elected governing bodies to meet the needs of their constituents, increasing local government capacity, and increasing the parliament’s legislative capacity.

In cooperation with the Ministry of Finance, the USG and the World Bank provided financial and budget management training to all 498 local governments to help them meet new budget system requirements. Under the new two-level budget system, shared national taxes are allocated directly to local governments, which were also given the authority to keep locally generated revenues and more discretion in determining their own expenditures.

The USG helped more than 160 local authorities (all 25 Kyrgyz cities and 30% of all village governments) to be more responsive to their communities through effective management of the increased level of resources, improved public information and citizen participation, more transparent municipal property management, and implementation of local economic development plans. In coordination with other donors and with the Ministry of Finance, the USG supported implementation of fiscal decentralization policies and further refinement of local government authorities. The USG also established an information stand in the southern part of the Kyrgyz Republic, which provides information from local government for public review along with bulletins that provide citizens with information about the activities of local government, including new legislation.

As a result of US assistance, local governments conducted budget hearings on their draft 2008 budgets. Six municipalities improved their municipal property management practices, which led to a fivefold increase in revenues from municipal land. Through an integrated community development program in the south, the USG collaborated with clusters of rural villages to develop and implement local economic development plans. As a result, 45% of the more than 200 unemployed youth who participated in vocational training received jobs upon graduation. While the Kyrgyz Republic is still not in compliance with 17 of the 30 criteria of the European Charter of Local Self Government, improvements in fiscal decentralization led to an increase in the Kyrgyz Republic’s standing. Furthermore, under the USG-supported new two-level budget system, locally-generated revenues have increased by 22%, as described later in this report.

The U.S. also worked to improve the quality of the resources and electronic information system in the parliamentary library, leading to a noticeable increase in the use of the library by the parliamentary staff. However, the parliament's influence in the legislative process was overshadowed by that of the executive branch. While 64% of legislation considered in the last year was initiated by the parliament, this only accounted for 43% of the legislation passed. While there were certain improvements in the transparency of the legislative process through greater public participation in reviewing and providing commentaries on draft laws, this was sporadic rather than institutionalized as part of the legislative process. Only 3% of legislation considered by the parliament in the last year was subject to a public hearing.
Elections and Political Processes - The objectives of USG activities in FY 2007 were to increase public access to information about election rules and procedures, improve the capacity of the Central Election Commission (CEC) to conduct elections in compliance with relevant statutes, and train political parties to better articulate their platforms and develop deeper grass-roots support.

In order to increase access to information about election rules and procedures, the USG established an election resource center in Osh on a strong base of local media outlets and civil society organizations. The USG also increased civic participation and public debate through support to weekly television shows, public service announcements, brochures, round-tables and other events, and by distributing printed materials. These activities reached an increasing percentage of the population, including more than one million viewers for the more than forty talk shows on constitutional reform sponsored by the U.S.

In addition, the USG helped to establish a new domestic election-monitoring network, which was active in reporting on parliamentary by-elections, and also monitored the October 2007 constitutional referendum. The U.S. engaged the CEC to develop a permanent training center for staff, but plans did not proceed after the head of the CEC changed. During FY 2007 the USG officially transferred title for all election-related commodities and manuals for use to the CEC, with the understanding that the CEC will be directly responsible for acquiring such commodities for future elections.

The Kyrgyz Republic has more than 100 registered political parties, with new parties and coalitions being formed on a continual basis. The USG provided training for all major parties that expressed an interest in topics such as voter outreach, membership and volunteer recruitment, campaign planning, increasing women’s and youth participation, and communication. To assist parties to identify issues of public concern, the USG also supported the organization and publication of a national public opinion poll. As a result of these activities, several parties entered the results of the questionnaires into the party database to track supporters and undecided voters for follow-up contact. Some political parties were also able to recruit new supporters and volunteers through canvassing operations.

Media Freedom and Freedom of Information - The U.S. objectives in media freedom were to increase public access to objective news and information and increase the professionalism of journalists.

One of the main promises of the government (and a demand of the opposition during the demonstrations in fall 2006 and Spring 2007) was the transformation of the main government television station into a publicly-held organization. The passage of the law on public broadcasting was the first step in this process. This law also provided new guidelines for privatizing state newspapers and the formation of a working group to develop a draft law on the allocation of TV and radio frequencies. To help state newspapers comply with the new regulations, the USG conducted due diligence audits at more than ten newspapers and then provided support to draft legal documents and contracts.

Because most citizens receive their information via television, the USG emphasized assistance for local broadcasters. The USG launched a new satellite broadcast feed in March, which covers all of Central Asia. Eight local television stations are rebroadcasting the feed, significantly increasing access to objective news and informational from both the region and other sources. Partner television stations in Central Asia produce approximately half of the content, so the satellite feed provided both an impetus for improving local journalistic skills and a more effective means for distributing programming. The USG also provided support to independent media in the Fergana Valley, an area split among Uzbekistan, the Kyrgyz Republic and Tajikistan, including on-site consultations to media outlets and three grants to encourage the exchange of information within the region. The USG also supported an expansion of media broadcasts in the strategic Batken province in the southern part of the Kyrgyz Republic. During FY 2007 four independent television stations aired approximately 125 regional news stories in Southern Kyrgyz Republic in the Kyrgyz, Russian and Uzbek languages. As a result, 1.4 million residents accessed more objective news and information through the rebroadcast of the satellite feed. An estimated 185,000 additional households owned satellite dishes directly receiving the signal. Several newspapers published news from neighboring regions within the valley, while residents in the southern part of the Kyrgyz Republic had access to news and information in the three principal languages of the region.

ECONOMIC GROWTH

The Kyrgyz Republic’s macroeconomic performance in 2007 showed positive signs, with full-year GDP growth expected to exceed 4.5%, marking a second year of continued expansion. Nevertheless, growth remains fragile and sensitive, both to domestic political uncertainty and structural changes at the national and local levels. The Kyrgyz economy is also vulnerable to external instabilities such as global increases in grain and energy prices. The continued impact of national-level political uncertainties, which culminated with the October 2007 referendum on constitutional changes, once again limited the GOK’s ability to concentrate on a coherent economic reform agenda. This thwarted GOK efforts to increase private sector competitiveness, the key to economic growth in the Kyrgyz Republic. With a small population, many living in inaccessible rural regions, the internal Kyrgyz market is unable to support the robust growth on which social stability depends. Instead, this growth must be driven by the country's ability to compete and export. Although foreign trade and investment continued to grow, they were hampered by a high-risk operating environment. The Kyrgyz Republic, which placed 176th out of 178 countries on “Trading Across Borders” in the World Bank’s 2006 Doing Business Report, fell to 177th in 2007.

Commercial bank deposit growth in the Kyrgyz Republic was substantial in FY 2007, increasing by 45% with the value of loans outstanding expanding by over 80%, although average lending rates stayed high at over 22%. Kazakhstan banks increasingly dominated the financial sector and while corporate governance saw some improvement, it remains relatively weak. Public stock issues were limited; insurance was primarily available from foreign firms; leasing was limited. Credit to small and micro- businesses grew despite significant barriers to financial sector development, including weaknesses of the legal regime for land collateralization, lack of a national credit reporting system, and corruption in the courts, which undermined confidence in the sector.

Trade and Investment - Trade and investment are vital to maintaining economic growth in the Kyrgyz Republic, which is located between two fast-growing neighbors: China and Kazakhstan. It is at present the only Central Asian member of the World Trade Organization (WTO). USG support provides both the GOK and the private sector with enhanced ability and opportunities to capitalize on the advantages of expanded regional and global economic integration, enhancing competitiveness and increasing investment. USG assistance objectives in FY 2007 were to liberalize trade and reduce barriers to trade, transport, transit, custom clearance and border crossing with mechanisms consistent with international standards.

The USG began new efforts in this area in the last months of FY 2007. These included reviewing prior GOK efforts to develop a trade strategy, (a Minister of Economic Development and Trade request) and providing recommendations for further development. The USG also conducted a WTO compliance review of the resolution on establishing rent fees for foreign users of urban and non-agricultural land, and prepared a status review on the introduction of the customs risk management scheme for the Investment Council under the president. Efforts also included compiling a roadmap of outstanding WTO compliance issues from the recently completed Kyrgyz Trade Policy Review Report by the WTO Secretariat, and initiating collaboration on trade facilitation issues.

Finally, the USG funded business internships that brought 15 individuals to the United States for training in hospital administration, airport development, road construction, fruit and vegetable processing, and mining. One alumna applied the information she received during her internship to prepare legislation on the technical regulation of telecommunications in the Kyrgyz Republic. Another alumnus used his new knowledge about environmental technologies to help draft two new laws, one on industrial safety standards in high-risk occupations, and another on a labor code for the Kyrgyz Republic.

Macroeconomic Foundation for Growth - USG objectives in this area were to encourage sound GOK economic policies and strengthen GOK institutional capacity to promote broad-based growth. The U.S. continued to work with the State Tax Inspectorate to develop the regulations and instructions needed to increase automated return processing and audit capability, enhancing efficiency and reducing the scope for arbitrary administrative behavior. The USG made recommendations to alternative drafts of the new tax code as they were developed and conducted public education on needed tax code changes. Progress, however, was stymied by the lack of political consensus on which set of amendments to adopt. This delayed both the implementation of the planned tax administration pilot and the larger-scale roll-out (using other donor financing).

The U.S. worked with the Ministry of Finance (MOF) to strengthen the its institutional capacity to use the new budget preparation information system effectively at all stages of the budget process. The USG trained 800 staff from the central MOF and its territorial departments and from local governments on using the budget preparation information system for planning local revenues and expenditures, planning inter-budgetary transfers, and for budget execution. This significantly improved the MOF’s systems and staff skills to collect and maintain the data needed for analysis and policy formulation. As a result of intensive technical assistance from the USG and other donors on the introduction of the new two-level budget system, locally-generated revenue collection increased by 22% in the first six months of 2007. The USG continued to strengthen the analytical capacity of parliamentary staff through analysis of the GOK’s proposed 2008 budget, independent revenue projections, the Heavily Indebted Poor Countries initiative, the Medium-Term Budget Framework, and 2006 Budget execution.

Financial Sector - The USG assistance objectives for the financial sector were to strengthen the National Bank of the Kyrgyz Republic’s (NBKR) supervision capacity, promote legal and policy changes important to continued development of the financial sector, and support further implementation of international accounting standards.

Specific activities included supporting on-site inspections of three banks, drafting a new version of the Uniform Bank Rating System based on the Capital Adequacy, Asset Quality, Management Quality, Earnings Quality and Liquidity approach, and a review of the Uniform Bank Performance Report to provide guidance on the format and improve the content. In addition, the U.S. supported a comprehensive review of the bank supervision manual used by the Supervision Department of the NBKR and 16 regulatory documents intended to improve the NBKR’s compliance with the Basle Core Principles. USG training to strengthen the NBKR’s implementation of risk-based supervision included working with the staff of commercial banks on risk-based management and the implementation of international accounting standards. A key measure of the broad impact of these activities was the strong new credit growth of commercial banks, which increased by over 83% from September 2006 through August 2007.

U.S. efforts to implement international accounting standards in the Kyrgyz Republic were also successful. As of October 1, 2007, over 940 accountants in the Kyrgyz Republic had qualified for these internationally recognized certifications, with132 of these qualifying in FY 2007.

Private Sector Competitiveness - The objectives of USG assistance to foster private sector competitiveness were workforce development and to create an enabling environment for business, including regulatory and administrative simplification.

Although the GOK was interested in improving the business environment, government support was stronger at the local level than at the national level, which was tied up by political instability. The most significant national-level reform was the adoption of the USG-supported law, "Procedures for Conducting Inspections of Businesses," with provisions that limit inspections, specify information disclosure requirements, prohibit the application of conflicting laws and regulations against businesses, and require a remedy period before sanctions can be applied. The USG also helped to challenge an illegal resolution, which if passed would have resulted in the renting of Bishkek city land plots that are normally provided for free. Defeating this resolution saved local residential cooperatives over $2.3 million annually. The USG also was instrumental in developing the decree “On Certain Measures to Streamline Permits and the Regulatory System in the Kyrgyz Republic,” signed by the president in July 2007. This decree called for a Regulatory Impact Assessment and for the adoption of a law on optimization of business-related legislation. The law is expected to be adopted in 2008.

At the local level, the USG helped thirteen municipalities simplify their regulations and administrative procedures related to investment. With USG help eleven of these municipalities established legal zoning rules, improving transparency. As a result, investment in participating municipalities has been increasing by an average 21.7% starting from the introduction of new zoning rules, which is 2.2 times higher than in the cities without zoning regulations.

To support entrepreneurship and an educated workforce, the USG worked to incorporate business and economics in the curricula of secondary schools. Three hundred and forty-two teachers at 194 schools received training to implement the program in FY 2007, which helps young people acquire practical skills in economics and entrepreneurship, thus improving their job prospects. Approximately 37,440 students learned basic market economics and put their entrepreneurship training into practice by establishing and managing businesses. The GOK’s support was strong; the Ministry of Education and Science distributed an official letter recommending that all local Departments of Education collaborate on teacher trainings in the regions. The USG distributed 750 books, teacher guides and other teaching materials that had been translated into the Kyrgyz language, and distributed 2000 of these materials. A group of experts, including a representative from the Ministry of Education and Science, revised these materials based on teachers’ feedback.

Infrastructure - The Kyrgyz Republic faces the questions of how to manage current electricity generation and distribution assets and how fast power generation and distribution assets can be rehabilitated and/or built. In addition, as the country’s main source of energy is hydropower generation, the issue of water management and relationships with downstream countries that rely on Kyrgyz water for irrigation is critical. There is, however, a lack of will on the part of the Kyrgyz Republic’s downstream neighbor, Uzbekistan, to negotiate effective long-term water/energy agreements. Still, the Kyrgyz Republic has the opportunity to participate in a growing regional energy market that could provide significant funds to the sector and to other areas of the economy.

The objective of USG assistance in the area of infrastructure is to improve the aged Kyrgyz electricity infrastructure, which is close to failure. At the end of FY 2007 the USG was assisting the GOK in drafting a National Energy Law and developing a plan for energy sector investment. The USG helped the GOK to establish a High Level Working Group, headed by the Deputy Minister of Energy, to enhance legal and regulatory reforms in the sector. At year end, the group was revising the National Energy Law to make the sector attractive for private investors, which included a larger role for an independent regulator.

Another key area of USG assistance was in transmission planning. The USG provided technical assistance and software to the national transmission system operator to develop a modern transmission-planning model. High voltage networks were modeled, with an average of 75% of the country’s system already included in the software program at the end of FY 2007.

The USG provided direct support for cross-border energy trading by sponsoring discussions between Kazakhstan Market Operator on Electricity Capacity (KOREM) specialists and Kyrgyz and Tajik operators. The visit resulted in an agreement to allow Kyrgyz and Tajik participation on the KOREM power exchange platform and to provide training for Kyrgyz market operators in KOREM operations.

Agriculture - The objectives of the USG in agriculture were to improve agricultural productivity and competitiveness. Agriculture and agribusiness are vital to the Kyrgyz economy. the Kyrgyz Republic faces many obstacles to improving agricultural productivity and competitiveness, including weak market linkages, outdated infrastructure, limited access to financing, restrictive policies, and inadequate knowledge and tools. Although agriculture is almost free of government quotas, which allows competitive farmers to meet market demands, food processing continues to be significantly underdeveloped. Corruption remains a problem at national and local levels. Credit is increasingly available, but farmer and agribusiness demand for affordable credit with appropriate terms outstripped availability.

The USG began a partnership in FY 2007 with a local micro-credit agency that used a USG-funded Development Credit Authority to cover guarantees in order to increase its agricultural group loans. As of September 2007, the micro-credit agency’s total Development Credit Authority loan portfolio exceeded one million dollars, representing over 1,760 borrowers.

USG assistance allowed several participating farmers in FY 2007 to intensify production of high-value vegetable crops, resulting in a decrease in the number of hectares devoted to cotton as farmers moved into high value, alternate crops.

The USG also funded fellowships to improve expertise in the agricultural sector. Sixteen fellows traveled to universities in the United States in FY 2007 to complete their training on seed processing, marketing, quality assurance, testing and certification, and standard banking practices for financing agribusiness in the United States. One individual who had attended training in agricultural credit in the United States planned to establish a new credit union in the Kyrgyz Republic using U.S. standards and principles. A participant in the 2007 seed marketing program continued to correspond with seed farms in the United States and was planning to purchase samples from them. He also conducted several workshops for members of his cooperative, sharing what he learned about seed marketing, and the U.S. approach to organizing and managing cooperatives.

USG assistance improved the management of the state-owned Land Redistribution Fund, which contains 25% of all non-privatized arable land in the country. USG support included a study of the current use of the Land Fund and an analysis of four possible options for its future use. USG support for lease auctions allowed Land Fund parcels in three pilot villages to be allocated transparently and competitively which resulted in a two- to sixfold increase in revenues for the local governments thanks to improved auction procedures and land lease price information. The USG also helped to draft Model Regulation for the management of the Land Fund, which was approved by the GOK and by the parliament in the summer of 2007. The USG continued a broad-based information campaign on land rights through the local media and helped to resolve 16,888 land-related problems through a network of 120 rural activists residing in all parts of the country.

The USG continued to support Water User Associations (WUAs) so that farmers can operate, manage, and make the investment decisions needed to maintain and improve the on-farm irrigation and drainage systems. As a result of better water management and more efficient irrigation practices, WUAs increased land productivity, thus increasing crop yields and farmers’ incomes.

In FY 2007, five new WUAs were established and 2800 participants received training in WUA management, governance, business and water management. Seventeen WUAs had increased capacity to prepare and implement water distribution schedules, prepare and manage annual budgets, collect fees from members to cover operating costs, and organize irrigation system rehabilitation and maintenance.

WUAs increased their investment in irrigation and drainage infrastructure. During 2006 WUAs collected a total of $106,220 from members in irrigation service fees, representing 82% of their planned budgets. WUA budgets for 2007 increased from $129,000 in 2006 to $167,000. Water management and delivery improved for fifteen WUAs covering an area of more than 17,000 hectares. This resulted in reduced conflict over water delivery and scheduling and has increased incomes for about 100,000 beneficiaries. The 12 WUAs are now sustainable without USG assistance, and each WUA has been trained in outreach so they can help other farmers establish WUAs.

Forty-one U.S. volunteers provided training and technical assistance to local farmers in FY 2007. The volunteers’ assistance allowed 130 members of a potato growers association to increase net income by 43%. Within the horticulture sector, more than 2,000 farmers benefited from volunteers’ assistance, which resulted in sales increases of more than $500,000 and income increases of more than $250,000.

Volunteers helped create the Kyrgyz Agribusiness Association (KAA), which the USG continued to support in FY 2007. KAA members in FY 2007 opened ten new retail farm stores serving 22,000 additional farmers, bringing the total to 28 retail farm stores in the country (21 in the south and 7 in the north). As a result, the distance traveled by farmers to buy quality inputs in 2007 was reduced to 3.2 miles for KAA farmer customers; non-customers had to travel 9.5 miles. The KAA increased Kyrgyz farmers’ demand for high quality agricultural inputs. Despite higher world prices, Kyrgyz farmers in 2007 purchased 87,000 metric tons of mineral fertilizer, compared with 55,000 metric tons in 2006. Sales to Kyrgyz farmers of both hybrid and improved varieties of imported certified seed increased by 48% in 2007. Certified seed produced domestically increased by 24% in 2007. The KAA more than doubled its customer base in 2007 from 140,000 farmers in 2006 to 330,000 farmers in 2007. These high quality agricultural inputs helped increase average incomes for KAA’s farmer customers in 2007 by 48%, whereas for non-KAA customers the increase was only 23%.

Economic Opportunity - The objectives of USG economic opportunity activities in FY 2007 were to expand credit opportunities for small businesses and improve the policy environment for small and micro enterprise. The U.S. helped the Association of Microfinance Institutions of the Kyrgyz Republic (AMFI) to advocate successfully for changes in the legislation governing microfinance and leasing services. These services will enable microfinance institutions to expand their loan portfolios. In addition, AMFI improved the quality of the training it provided to the microfinance sector, and it increased its membership from 10 to 19 institutions. In FY 2007 the outstanding loan portfolio of AMFI’s member MFIs grew from $41 million to $69 million. In FY 2007 the GOK approved AMFI as a coordinator of the Kyrgyz Republic microfinance strategy.

In addition, the USG helped form an Agriculture Finance working group with representatives from 40 financial, GOK, and donor institutions. The working group will identify policy and administrative barriers to agricultural lending. The group successfully lobbied for changes in the draft Tax Code, eliminating the contradiction between the leasing concept in the Tax Code and the Leasing Law and resolving the VAT accrual and calculation issue.

In FY 2007 the USG also completed its support to local banks under the joint bank downscaling program with EBRD. Seven commercial banks successfully adopted the SME lending methodology and introduced and greatly expanded their SME loan portfolios. In September 2007 the total outstanding loan portfolio under the program amounted to $121 million with 35,000 loans, compared to $54 million with 26,000 loans in 2006. All of the banks committed to expanding SME lending beyond the program’s end.

INVESTING IN PEOPLE

Health - In FY 2007 the USG worked to improve diagnosis and treatment of tuberculosis (TB), reduce transmission of HIV/AIDS, support a more efficient health care system, and increase access to modern contraception. The U.S. provided expert advice and training to almost 1,500 people on health topics in FY 2007, and assisted the National TB Center to prepare a successful application to the Global Drug Facility for TB drugs. The Global Fund to fight AIDS, TB, and Malaria approved a $10 million dollar GOK application for the TB component in Round 6. In addition, the USG assisted the GOK to prepare its $28 million application to the GFATM Round 7 for HIV.

HIV/AIDS - Although the GOK has shown commitment to fighting HIV/AIDS, all funding for HIV programs is still donor-dependent. Towards the end of the fiscal year, the MOH reorganized coordination mechanisms, as required to receive Global Fund to fight AIDS, TB and Malaria funding. Some of these measures will increase multisectoral support by involving the Prime Minister’s office in coordination. Other ministries involved in policy development include the Ministry of Justice, which is helping address problems of HIV/TB co-infection.

The Osh region experienced a pediatric HIV outbreak in 2007; the preliminary report estimated at least 100 cases. USG-trained epidemiologists conducted the initial outbreak investigation, which reported unsafe medical practices and excessive use of blood transfusions as likely causes. At the end of the fiscal year, the MOH was continuing an epidemiological investigation of the HIV outbreak with USG technical assistance. The MOH has implemented the recommendations resulting from the Osh investigation, changed its practices, and is interested in learning the investigation methodology for future use. HIV prevention was integrated into training on effective perinatal care in 15 maternities and primary health care facilities. The training also included universal precautions to prevent infections and the use of new interventions to reduce post-partum hemorrhage and the subsequent need for blood products.

In concert with the World Bank, the United States funded a national HIV sentinel surveillance conference. USG partners trained 75 MOH staff as trainers in sentinel surveillance and 18 lab specialists from all regional AIDS centers in laboratory quality control. Partners assisted with national proficiency testing for HIV laboratories. Seventy to 100% of laboratories in the country passed the test and received an internationally recognized certification.

USG-funded education and training on HIV and drug use prevention reached more than 45,000 at-risk youth. Almost 500 peer educators and outreach workers were trained by USG-funded partners to conduct educational activities for youth. More than 2,600 sex workers, including those who use drugs, participated in drug demand reduction activities; 25 people received training as trainers in sex worker outreach. Almost 30 medical and non-medical staff received training as trainers in the penal system, and 380 prisoners were educated on drug demand reduction and health promotion.

Tuberculosis - The USG’s objective for TB assistance in FY 2007 was to improve the diagnosis and treatment of TB. With high TB case notification and multi-drug resistant TB case rates, the disease remained a major public health challenge in FY 2007. With the incidence of 110.9/100,000 people in 2006, prevalence of 234.0/100,000 people and around 6,000 new cases registered each year, the Kyrgyz Republic remains one of the vulnerable spots for TB in the Central Asian region. The implementation of Directly Observed Treatment Short course (DOTS) allowed the Kyrgyz Republic to slow the increase in TB cases and resulted in a 4.3% decrease in incidence in 2007. However, rates of drug resistant TB and TB cases among prisoners continued to increase dramatically.

The USG assisted the GOK to draft a TB referral regulation linking primary health care and penitentiary systems. The USG successfully completed a pilot logistics management information system project in the Talas region, which will improve the provision of drugs and supplies to health care providers in the region. A draft regulation on the national implementation of the logistics management information system awaited GOK approval at the end of the fiscal year. The USG also supported the MOH in piloting a project in the Chiu region to integrate the DOTS into primary health care and to improve coordination between district TB and primary health care services. The USG provided assistance in integrating DOTS into medical education to build the country’s capacity to control TB; continuous medical education modules for primary health care doctors and nurses were updated to incorporate interpersonal communication skills training. The USG developed training materials on drug-sensitivity testing, trained 91 lab specialists in diagnostics, and implemented a pilot laboratory quality assurance program in the Chui region.

The USG-supported TB electronic surveillance and case management system was implemented nationwide with minimal USG assistance; 13 specialists were trained to use the software. This system is an essential component of the national TB control program that provides decision-makers with key information to create and implement policy.

A small grants program was implemented to engage communities and civil society in TB control, resulting in 10 workshops targeting railway staff and education institutions, the development and distribution of informational materials, and four drama performances on TB attended by 10,000 schoolchildren, their parents, and teachers. The USG also helped the MOH develop its national TB behavior-change strategy.

Health Sector Reform - USG assistance helped to solidify a national pooling and budget formation process, with a goal of improving equity in access to health for all Kyrgyz citizens. USG assistance refined provider payment and health information systems. Household surveys demonstrated in 2007 that out-of-pocket payments for health services did not change in pilot sites, while they increased in non-pilots. Reductions in out-of-pocket payments were shown to benefit the poor and vulnerable. Sixty-seven percent of the population of the Kyrgyz Republic benefited from health finance reforms.

In FY 2007 the USG sponsored continuing medical education courses were completed by 794 Kyrgyz primary health care doctors, 857 nurses, and 361 medical assistants. USG assistance promoted evidence-based medicine and the development of new clinical practice guidelines through the Evidence-Based Medicine Unit and professional associations. A priority was improving arterial hypertension service delivery. A composite measure of screening for hypertension, provider diagnostic practices, patient education, and the percentage of surveyed patients with their blood pressure under control increased from 51% in 2006 to 80% in 2007.

In collaboration with the MOH, local governments, communities, and other donors, the USG helped form community-based health organizations called Village Health Committees, enabling communities throughout the Kyrgyz Republic to increase control over the determinants of their health. The USG supported the development of 275 village health committees in Issyk-Kul and Jalalabat Oblasts.

An epidemiology training program trained three epidemiologists and supported program graduates to investigate five outbreaks of infectious diseases, including two outbreaks of anthrax and one of HIV among children in Osh.

Family Planning and Reproductive Health - While the MOH has demonstrated a commitment to improving reproductive health by institutionalizing family planning initiatives into the scope of work for its primary health care reform plan, the Kyrgyz health budget did not include funds to procure contraceptives. The GOK stated clearly that it does not have financial resources to guarantee contraceptive security.

The USG continued to make strides in increasing access to quality family planning services for Kyrgyz women. Through the US-funded health reform program, partners introduced and strengthened post-partum and post-abortion family planning services in fifteen maternity wards and corresponding primary health care practices in Bishkek City and in the Issyk-Kul, Naryn, and Jalalabat regions. USG partners and local authorities provided health education and community outreach on family planning and safe motherhood. Access to family planning information and services through midwives and outreach workers was expanded in seven rural districts where gynecological care from a physician was not available. Family planning was also incorporated into the Kyrgyz national family medicine curriculum.

Contraceptive commodities were donated through collaboration with UN agencies to support the national family planning program. USG partners distributed 1,446,000 condoms donated by the USG to Batken oblast and provided supervision in family planning to 110 health care workers. By more than tripling the target for the number of service delivery sites providing family planning counseling or services, the USG was able to improve access to family planning services.

Education - The objective of USG assistance in the area of education during FY 2007 was to expand access to quality primary and secondary education. While primary and secondary education are guaranteed by the state in the Kyrgyz Republic, there are both economic and education quality arguments for enhancing the role of non-governmental players in education. The USG worked to establish appropriate roles for public and private sector actors including inviting parents and grandparents to volunteer in their children's classrooms, developing community education committees in program schools, and developing publications to support communities and schools interested in building school/community relations.

In FY 2007 USG partners trained 1,399 teachers in learner-centered, interactive teaching methods. Thirteen new schools joined the program at the request of local education officials and schools. To make this effort sustainable, the USG funded the training of instructors based at the Kyrgyz Academy of Education and regional affiliates. These trainers will later deliver primary and secondary teacher training. The U.S. also provided training in instructional design to help teacher trainers design new teacher training courses. Progress on the teacher training quality index, which measures how effectively teachers use the training they have received in the classroom, continued to improve steadily. The USG and Ministry of Education published guidelines for evaluating textbook quality that included gender sensitivity among the criteria for consideration in rating textbooks. The USG also continued support for a per capita school-financing pilot in Tokmok city, as well as developed a management manual for school directors and accountants to guide them in the new more participatory system.

The USG continued support for the National Scholarship Test, with more than 34,000 students competing for 5,700 state-funded scholarships for higher education. The testing program continues to serve as an effective anti-corruption measure because it allows for scholarships to be awarded transparently, based on merit. Previously, many scholarships were handed out to families of influence or as a result of bribes. The USG also funded collaboration with eight universities in an effort to make them more accountable to their students, the business community, and the broader public. The main component of the program was the pilot testing of a rating system to gauge critical stakeholders’ attitudes regarding the universities and their programs. As a result of this pilot, two universities have fully adopted the rating methodology, and are using it as a tool for internal quality management. The USG continued to promote academic integrity by awarding small grants to teachers’ unions and student groups in Bishkek, Osh and Jalalabad to help them continue to work towards minimizing corruption in higher education.

In July 2007 the USG organized the annual Central Asian Teachers of English Conference (CATEC) in Bishkek. Over 200 English teachers from 10 countries compared teaching techniques and improved their professional qualifications. The embassy also awarded full four year scholarships to eight students beginning their studies at the American University – Central Asia. The scholarships were given to students in financial need who had exhibited leadership potential. One of the criteria of the scholarships was that the student could not have previously been on a U.S. Government-sponsored exchange program.

HUMANITARIAN ASSISTANCE

The goal of the humanitarian program is to improve the welfare of vulnerable groups in the Kyrgyz Republic. In FY 2007 the USG provided grants to private voluntary organizations to distribute $32.6m worth of food, clothing, medicines, medical supplies, and other basic supplies to needy people throughout the Kyrgyz Republic. The USG delivered five airlifts of pharmaceuticals to partner hospitals in Osh Oblast and Bishkek. In addition, the USG delivered 141 containers of humanitarian supplies (food, clothing, footwear, wheelchairs, bedding, etc.) that local non-governmental organizations delivered to ensure they benefited the neediest populations. The 141 containers also included 26 containers of medical equipment and supplies valued at $7.5 million, which were donated to three Bishkek hospitals that provide services to Kyrgyz citizens from all regions of the country. Medical professionals in recipient institutions received training to ensure the donated drugs and equipment were properly used.

Additionally, the USG provided orphans, single mothers, disabled, and others who are destitute with clothing, footwear and food. It also constructed orphanages and houses for the elderly. In FY 2007 U.S. renovated the facilities of the Boarding School for Deaf Children to more hygienic and healthier living conditions for the 345 children with hearing disabilities who live at the school.

FY 2007 Measures of Country Performance

The following data are based on the Monitoring Country Progress in Europe and Eurasia system developed by the United States Agency for International Development (USAID) to measure and track progress in the region. The system uses four different indices to monitor progress, drawing on readily available standardized country-level data on economic reform, economic structure and performance, democratic reform, and human capital. The primary data sources are the European Bank for Reconstruction and Development (EBRD), the World Bank, the United Nations Children’s Fund (UNICEF), and Freedom House. The data for each of the four indices are converted and standardized to a 1-to-5 scale, with a “5” representing the best performance of the Eastern Europe and Eurasia region, and a “1 the least advancement of the region.

The Kyrgyz Republic’s Democratic Reform* Scores in 2006 compared to Romania and Bulgaria in 2002

Date: 01/01/2008 Description: The graph to the left shows the Kyrgyz Republics democratic reform scores in 2006* (the grey shaded area) as compared to the average of Romanias and Bulgarias democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows the Kyrgyz Republic’s democratic reform scores in 2006* (the grey 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 2007 scores not yet available


The Kyrgyz Republic’s Democratic Reform Scores in 2006 compared to its Reform Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows the Kyrgyz Republics democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows the Kyrgyz Republic’s democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

*Actual 2007 scores not yet available

*Democratic reforms include the electoral process (the extent to which elections are free, fair and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform) and the scope of corruption as well as anti-corruption income.

The Kyrgyz Republic’s 1st Stage Economic Reform* 2007 Scores Compared to Bulgaria and Romania in 2002

Date: 01/01/2008 Description: The graph to the left shows the Kyrgyz Republics stage one economic reform scores in 2007* (the grey shaded area) as compared to the average of Romanias and Bulgarias economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows the Kyrgyz Republic’s stage one economic reform scores in 2007* (the grey 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.


The Kyrgyz Republic’s 1st Stage Economic Reform Scores Compared to its Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows the Kyrgyz Republics stage one economic reform scores in 2007* (the grey shaded area) as compared to its economic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows the Kyrgyz Republic’s stage one economic reform scores in 2007* (the grey shaded area) as compared to its economic reform scores in 1999 (the bold line).

The Kyrgyz Republic’s 2nd Stage Economic Reform 2007 Scores Compared to Bulgaria and Romania in 2002

Date: 01/01/2008 Description: The graph to the left shows the Kyrgyz Republics stage two economic reform scores in 2007* (the grey shaded area) as compared to the average of Romanias and Bulgarias economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. State Dept PhotoThe graph to the left shows the Kyrgyz Republic’s stage two economic reform scores in 2007* (the grey 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.

The Kyrgyz Republic’s 2nd Stage Economic Reform 2007 Scores Compared to its Scores in 1999

Date: 01/01/2008 Description: The graph to the left shows the Kyrgyz Republics stage two economic reform scores in 2007* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). State Dept PhotoThe graph to the left shows the Kyrgyz Republic’s stage two economic reform scores in 2007* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line).

* Economic reforms include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and “second stage” reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

The Kyrgyz Republic’s Progress on the USAID Country Progress Indices between 1998 and 2007

Date: 01/01/2008 Description: The Kyrgyz Republics Progress on the USAID Country Progress Indices between 1998 and 2007. State Dept Photo

(1) Economic reforms index include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and second stage reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

(2) The Economic structure and performance index tracks indicators such as the size of the private sector as % of GDP, export share of GDP, and the size of the small and medium enterprise sector as % of GDP, economic growth, inflation, debt, and foreign direct investment.

(3) The Democratic reforms index include the electoral process (the extent to which elections are free, fair, and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform), and the scope of corruption as well as anti-corruption efforts.

(4) USAID tracks progress on the Human capital index by analyzing trends in health (life expectancy, under five mortality rates, and public expenditures on health), education (secondary school enrollment rates and public expenditures on education) and per capita income.



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