The Last Year – Implications for Development

The View of the DonorsJason Lane

Head of DFID in the Kyrgyz Republic

What Happened in March 2005?

• A (Tulip) Revolution• A Coup • A Putsch• March Events• Political ChangeOr, as I heard recently:• Well, the President ran away but nothing

has really changed

Was the revolution a good thing?

• PositivesA statement of national identity Part of a genuine process of democratisation (elections)• NeutralFreedom of expression and independent mediaHuman Rights (Refugees - UN reflections)• NegativesReduced sense of securityNo clear vision and policy-making inertiaExpectations unfulfilled e.g. on corruption Inter-Ethnic Relations Worsen

Before the Revolution

• Relatively good reputation with the donors – reformist and with a reasonably developed civil society

• Low-income country. Poverty Reduction Strategy in place and progress on poverty reduction (55 – 41% over 4 years), but mixed progress on Millennium Development Goals

• OECD-DAC pilot country on harmonisation. Mainly technical assistance programmes. Macro-economic stability.

Before the Revolution

November 2004 – Landmark Consultative Group Meeting• Donor advice to President and Government focuses on

high-level corruption, governance and the implementation gap

February 2005 – Parliamentary Elections• OSCE / ODHIR report on the Parliamentary elections -

judged to be flawed in terms of the build up (access to the media; registration process), some incidences, but improving and generally free and fair on the day

• CIS – Positive Report

The Revolution

• March 24 - Sudden and unexpected with events unfolding on television

• Unofficial meetings – night of revolution

• Property under attack

• UN evacuation (relocation) – 1 day after

• Official meetings – 2 days after

• Donor Council meeting and with MOEF

After the Revolution - April

Meeting with interim President and Donors speak with one voice, confirming our support and asking the government to:

• Honour commitments made to donors • Ensure macro-economic and political

stability• Security of person and property• Encourage Social CohesionAnd some more specific advice

After the Revolution - July

• Presidential elections – positive reports,

Key current issues:

• Security and Law and order

• Corruption – Claimed increases in tax and customs revenue, but reports of increased rent extraction down the chain

• Need for greater clarity of vision for economic, political and governance reform

The Year - The Expectation Gap

• The donors are supportive but want quick progress, particularly where the previous government had failed

• The government wanted funds to be able to deliver in the first year: BUT

• The first year became taken up by implications of internal divisions, and redistribution of power and money

• Macro-economic stability but no serious commitment to reform or reducing corruption

Continued…

• There have been significant delays with the second National Poverty Reduction Strategy – due, in part, to lack of capacity, but mainly due to lack of will, commitment and clear high-level vision and direction

• The government has expressed quick interest in new (easier) forms of money – Millennium Challenge Account, HIPC – but appear not prepared to commit to the necessary reforms

How has the International Community Responded?

• Coordination; Joint Messages; Focus on key issues• Harmonisation (?) Alignment (?)• Had difficulty deciding how to best support stability and

security• Have found ourselves being increasingly (more

obviously) drawn into politics and the speculation and rumour surrounding this

• Recognition of the need for greater knowledge of the political economy and drivers of change to inform our work

• The Joint Country Support Strategy

The Government - Donor Relationship - Comparison

• There is a similar level of access, but lower quality of dialogue and a reduced response to written letters

• Apparent decrease in the overall capacity of the government and a narrower international perspective

• The President appears to be more comfortable talking about ‘soviet-style’ planning, and seeking regional (neighbor) investment – less connection with donors

• Aspirations for national ownership more apparent but a constructive debate on national vision, economic and social reform and how the donors can help the government implement this is lacking

• Implementation gap remains

Donor Investments

Projects and programmes have continued, in a more complex environment and there have been some successes

• Public Financial Management• Health Sector Reforms• ARIS – Village Investment Programme• IMF programme – on trackHowever, there has been little progress where we have

supported major structural reforms (energy, mining sector, civil service reform) and signs of increased political interference in the activities of commercial entities

The way forward

• No progress for 12 months on NPRS II and recent statements indicating a change of title and a change of substance

• Where does this leave the donors and how should we proceed and align?

• The Joint Country Support Strategy • In this context we see this meeting as an

exciting opportunity to seek, and feedback, your views on these issues