Kyrgyzstan

This chapter outlines a vision for a social protection system in Kyrgyzstan. It considers systematisation along a number of dimensions, including institutional, financial and programme-level, as well as the existence of an information architecture underpinning this system. The breadth of social protection programmes and high expenditure levels provide great potential for gains through systematisation but to fully capitalise on these requires rebalancing between different pillars of social protection provision and an increase in expenditure. Such reforms would complete the transition of the social protection provision from its Soviet legacy but the political economy of these measures would be highly challenging.

Kyrgyzstan has taken huge strides since gaining independence in 1991. Having embarked upon a rapid transition to a market economy, it has been equally bold in developing the political and social institutions of a modern democratic state. Although progress has not always been smooth, recent elections have demonstrated the growing stability of Kygyzstan’s political system, while its economy has shown great resilience in recent years.

Kyrgyzstan made a rapid transition to a market economy following independence from the Soviet Union. However, social protection provision has been much slower to adapt to the post-Communist context, due in part to the social insurance system that it inherited. Although pension receipt is almost universal among the elderly and thus serves as a critical buffer against poverty for them and their families, the cost of maintaining this system has imposed severe constraints on the development of social assistance, social services and labour market policies in place.

Preferred scenarios for reform of water supply and sanitation tariffs are often site-specific. For Cholpon-Ata city, two scenarios for reform of water supply and sanitation tariffs are assessed, and impacts of each scenario are synthesised in this chapter. Supporting and accompanying measures are proposed to facilitate implementation – these provide input to the draft Action Plan. Some of the measures are quite universal and could be applied also in other settlements.

Three scenarios for reform of surface water abstraction and water-body use charges are assessed, and impacts of each scenario are synthesised in this chapter. Supporting and accompanying measures are proposed to facilitate implementation – these provide input to the draft Action Plan.

Two scenarios for reform of land tax rate in the Lake Issyk-Kul area are assessed, and impacts of each scenario are synthesised in this chapter. Supporting and accompanying measures are proposed to facilitate implementation – these provide input to the draft Action Plan.

As part of the ongoing National Policy Dialogue (NPD) on water policy conducted in co-operation with the EU Water Initiative (EUWI), Kyrgyzstan has committed to enhance the use of economic instruments for water resources management to improve the management of surface and groundwater resources, including the quality of the resource. The reform would be very timely as by strengthening incentives for improving water use efficiency economic instruments could help to better balance growing demand for water (not least due to demand from export-led agriculture and tourism as key drivers of economic growth in Kyrgyzstan) with the available fresh water resources (the annual run-off will likely drop after 2050 due to negative impact of climate change) thus ensuring greater levels of security of water supply (presently, many farmers experience water shortages over the vegetation period). Also the reform could help to make the water sector more financially autonomous and less dependent on state support.

This chapter briefly presents the main guiding principles applied in this study as well as the methodology for assessing individual economic instruments and reform options (scenarios for reform) and for presenting the results of the assessment. For each reform option (scenario) expected environmental, social, economic and fiscal impacts are assessed and a synthesis of its policy implications is presented, while recommendations are formulated in the form of a draft Action Plan.

Three scenarios for reform of pollution fees are assessed, and impacts of each scenario are synthesised in this chapter.

Most point-source water pollutants are currently tackled by a range of pollution fees. However, this instrument is not effective for managing diffuse pollution, when individual polluters cannot be identified or monitored. Examples of pollutants that most contribute to diffuse pollution of water resources in Kyrgyzstan include pesticides, mineral fertilisers and machinery lubricants with mineral oil. These are all prone to leaching and have contaminated both surface and groundwater without much control to date.

This chapter briefly presents the main objectives of the study and the list of economic instruments it focuses on.

This project was undertaken by the OECD with the financial support of the European Union and the governments of Norway and Switzerland. Their contribution is gratefully acknowledged.

This chapter summarises recommended scenarios in the form of a draft Action Plan. For each instrument, the scenarios are seen as a continuum (an opportunity for gradual development) and as options that can be implemented either in sequence or in combination. The chapter stresses that implementation of the Action Plan provides a range of opportunities for Kyrgyzstan: it will help mobilise additional financial resources for water resource management through increased fiscal and tariff revenues, confer a greater degree of financial autonomy to operators of WSS and the state irrigation systems, and reduce the amount of public subsidies needed for operating and maintaining water infrastructure. The latter will free up significant public funding to support capital investment in water infrastructure, and to strengthen social support mechanisms targeting vulnerable social groups thus addressing possible social impacts of proposed reforms.

Five scenarios for reform of irrigation tariffs are assessed, and impacts of each scenario are synthesised in this chapter. Supporting and accompanying measures are proposed to facilitate implementation – these provide input to the draft Action Plan.