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PARTNERSHIP FOR ACTION ON GREEN ECONOMY
SCOPING STUDY ON INTEGRATION OF POVERTY AND SUSTAINABILITY INTO NATIONAL DEVELOPMENT PLANNING: THE KYRGYZ REPUBLIC 1
SCOPING STUDY ON INTEGRATION OF POVERTY AND SUSTAINABILITY INTO NATIONAL DEVELOPMENT PLANNING:
THE KYRGYZ REPUBLIC
Bishkek 2015
LIST OF ABBREVIATIONS
4
ADB
Asian Development Bank
BWA
Basin Water Administrations
BWC
Basin Water Councils
CCCCP
Coordination Committee on Climate Change Problems
CEE Bankwatch Network
Central and Eastern European network for monitoring the activities of international financial institutions.
CACILM
Central Asian Countries Initiative on Land Management
CDF
Comprehensive Development Framework
CIS
Commonwealth of Independent States
CPEIR
Climate Public Expenditure and Institutional Review
EEA
Experimental Ecosystem Accounting
EDB
Eurasian Development Bank (
EEC
Eurasian Economic Commission
EES
Eurasian Economic Union
EIA
Environmental Impact Assessment
ESD
Education for Sustainable Development
EU
European Union
FAO
Food and Agriculture Organization of the United Nations
GDP
Gross-Domestic Product
GHG
Greenhouse gas
GIZ
Gesellschaft fĂźr Internationale Zusammenarbeit
ICSD
Interstate Commission on Sustainable Development
ICWC
Interstate Commission for Water Coordination in Central Asia
IDEP
Interregional Department for Environmental Protection
IMF
International Monetary Fund
KGC
Kumtor Gold Company
LSA
Local State Administration
LRF
Land Redistribution Fund
LULUCF
land use, land-use change and forestry
MoAM
Ministry of Agriculture and Melioration
MTEF
Medium-Term Expenditure Framework
NAMA
Nationally Appropriate Mitigation Actions
NATO
North Atlantic Treaty Organization
NWC
National Water Council
NSC
National Statistics Committee of the Kyrgyz Republic
NSSHD
National Strategy of Sustainable Human Development
NSSD
National Strategy for Sustainable Development until 2017 in the Kyrgyz Republic
OECD
Organization for Economic Cooperation and Development
PEE
Pubic environmental expertise
PEI
Poverty -Environment Initiative
PEER
Public Environmental Expenditure Review
PTSD
Programme of the Government for Transition to Sustainable Development 5
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REDD
Reducing Emissions from Deforestation and Forest Degradation
SACRD
State Agency for Construction and Regional Development under the Government of the Kyrgyz Republic
SAGMR
State Agency for Geology and Mineral Resources under the Government of the Kyrgyz Republic
SEE
State Environment Expert Review
SEEA
System of Environmental-Economic Accounting
SR
State Registrar under the Government of the Kyrgyz Republic
SAEPF
State Agency for Environmental Protection and Forestry under the Government of the Kyrgyz Republic
SALSG
State Agency for Local Self Government and Inter-ethnic Conflicts
SEA
Strategic Environmental Assessment
SWA
State Water Administration
TPS
Thermal Power Stations
UES CA
United Energy System of Central Asia
UNECE
United Nations Economic Commission for Europe
UNDP
United Nations Development Programme
UNCCC
United Nations Framework Convention on Climate Change
UNCCD
United Nations Convention to Combat Desertification
UNEP
United Nations Environment Programme
UNICEF
United Nations Children’s Fund
UNFPA
United Nations Population Fund
WUA
Water User Association
BACKGROUND “Sustainable development is still chiefly conceived of as development that is environmentally rather than socially sustainable. “Social” concerns such as health and education, or inclusion and empowerment, are seen as residing in the MDG framework rather than being integral to the sustainable development agenda. Bringing together these interdependent agendas in the minds of policy-makers and practitioners as well in policy frameworks, development plans, expenditure frameworks, and implementation strategies is a central task in the post-Rio era. The outcome document calls for the development of sustainable development goals that “address and incorporate in a balanced way all three dimensions of sustainable development and their inter-linkages.”’ (UNDP 2012 synthesis of national reports for Rio+20). In September 2015 UN Member States approved the 2030 Development Agenda and a set of Sustain¬able Development Goals (SDGs). The SDGs holistically address the economic, social and environmental dimensions of sustainable development and are designed to be pursued in combination, rather than individually one at a time. Integrated development is therefore at the heart of the 2030 Development Agenda as reflected in the SDGs. Inclusive Green Economy (IGE) approaches and approaches that address the Poverty-Environment Nexus (PEN) can play a central role in advancing the SDGs. The objective of the seven scoping studies, one of which is presented in this document, is to assemble evidence on the extent to which integrated approaches and a
transition to more inclusive, greener economies have been adopted, and the key challenges, bottlenecks and constraints faced. The seven scoping studies document the many facets of integrated development approaches needed to facilitate transformative change in the study countries, and in countries facing similar challenges in advancing the evolving post-2015 SDG agenda. In order to add value to existing studies the scoping studies have a clear focus on the mechanisms in place throughout the planning process to develop and implement integrated approaches, the challenges faced and opportunities to accelerate towards an inclusive green economy. The seven scoping study countries are: Bangladesh, Ethiopia, Kenya, Kyrgyzstan, Peru, Rwanda and Viet Nam. The national scoping studies provide an up-to-date snapshot of where some countries stand on integrated planning, the key challenges they now face, and suggested actions to accelerate their transition to an IGE in support of SDG implementation. Findings from seven national scoping studies on integrated planning inform the global report which synthesizes a wide range of policy and programming experiences in the areas of inclusive green economy and the poverty-environment nexus. The global report seeks to further the understanding of the practicalities of embedding such integrated approaches across the planning cycle in countries at various stages of development and where support should be targeted to accelerate the 2030 sustainable development agenda and promote inclusive green growth.
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CONCEPTUAL FRAMEWORK Conceptually, Integrated Development Approaches are defined as approaches that simultaneously advance multiple benefits across the three dimensions of sustainable development (social, environmental, and economic). They ensure that poverty eradication and environmental sustainability go hand-in-hand (UNDP & UNEP, 2013). They require effective governance, policy coordination and coherence across government departments and stakeholders to fully understand and manage the many interactions between economic growth, poverty eradication, and the environment, and ensure policies and plans are designed and implemented in ways that do not progress on one dimension at the expensive of another. The concept of Green Economy is understood variously as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. It is low carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment should be driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services (UNEP 2012). It is believed to be a system of economic activities related to the production, distribution and consumption of goods and services that result in improved human well-being over the long term, while not exposing future generations to significant environmental risks or ecological scarcities. (UNEP, 2009). It is defined as an economy that results in improved human well-being and reduced inequalities, 8
while not exposing future generations to significant environmental risks and ecological scarcities. It seeks to bring long-term societal benefits to short-term activities aimed at mitigating environmental risks. A green economy is an enabling component of the overarching goal of sustainable development (UNCTAD, 2011). Mainstreaming integrated approaches into national planning cycle In practice, to realize sustainable development, integrated development approaches need to be mainstreamed into each stage of the national planning cycle. The national planning process is defined in this study to be comprised of all the activities and decisions undertaken at national, sub-national and sector level by diverse stakeholders to both develop and implement policies, strategies, plans and projects. It is underpinned by legislation and includes the following generic components over a revolving planning cycle: stakeholder engagement and coordination to set visions and goals; integrated assessments to understand the environmental, social and economic impacts (positive and negative) of different policy options across different sectors and segments of the population and the linkages (synergies and tradeoffs) of policy options; policy design and formulation based on integrated assessments and stakeholder consultations; implementation of policies, plans and strategies (e.g. through investments, provision of incentives or disincentives, regulations and social interventions); and, monitoring and evaluation to measure the
FIGURE 1.Overview of the national development planning process in the Kyrgyz Republic
Adoption of policy decisions at the level of the government of the Kyrgyz Republic
Draft policy formulation
Agenda setting and policy goals definition
Analysis of policy
Approval of the Parliament Decree by the President of the Kyrgyz Republic
Endorsement of the Goverment Decree by the Рarliament of the Kyrgyz Republic
Monitoring and Assessment
Policy Implementation and control
Policy сorrection and termination
Source: Nogoibaeva, Ch. (2014). Policy Making in the Executive Branch of the Government of the Kyrgyz Republic. Bishkek: University of Central Asia.
effect of the inventions against targets and recommend corrective actions if needed. The planning development and implementation process is country specific. A representation of the planning cycle is presented in Figure 1 and is used as the framework for discussing possible entry points for integrated approaches at the distinct stages in the cycle. The planning cycle mirrors the policy cycle as it is commonly portrayed. It should also be borne in mind that feedback loops and iterations are common to the planning and policy cycle as depicted. The Government of Kyrgyzstan has recognised the importance of integrated development strategies, and has taken important initiatives to ensure a systematic integration across sectors and at different levels of Government. Political leadership of the Kyrgyz Republic has
identified the country’s development priorities in line with the Rio+20 agenda and proposed a ‘green’ and low carbon development model for the country. Institutional and policy frameworks for integrated development in Kyrgyzstan have already been established. A high-level institutional mechanism, the National Council on Sustainable Development under the President of the Kyrgyz Republic, was launched in 2012. Since then it has provided national-level advisory support to the process of implementing sustainable development agenda in the Kyrgyz Republic. The Council integrates the key elements of sustainable development: economic growth, environmental sustainability and social inclusion and combines efforts of all branches of government, private sector and civil society to discuss the future development of the country. Chaired by the Kyrgyzstan’s 9
President Almazbek Atambaev, the council is known for its efficiency in addressing problems and issues of increased complexity. All cross-sectoral activities, projects and problems within the implementation of the National Strategy are handled by the National Council. Other issues include electro-energy tariff policies, investment projects or investment climate, etc. Two key strategic national policy documents have been initiated by the Council: •
the National Strategy for Sustainable Development until 2017;
•
the five-year Plan for the Transition to Sustainable Development (2013-2017).
The National Strategy for Sustainable Development (NSSD) is a new model of national level development planning. It is the first high level policy document that integrates as a core principle the inter-linkages between the issues of social, environmental and economic importance. The NSSD was adopted by the President of the Kyrgyz Republic to establish a strong sustainable social protection system which would provide high quality services and ensure guaranteed equal opportunities to all citizens. It aims at strengthening country’s institutional bases ensuring equal rights and opportunities for women and men in the course of its sustainable development. Central to the NSSD is its commitment to “addressing issues related to human development and poverty alleviation as a key area of the country’s sustainable development policy. In this view, the poverty reduction policy will be closely linked to measures for economic growth and environmental protection”1. The process of national adoption of sustainable devel1 Chapter 4 of the NSSD 10
opment agenda itself in Kyrgyzstan is a useful example of a consultative process with multi - stakeholder involvement at all stages of decision making. Figure 2 is a visual representation of the process. Integrated policy document was generated with participation from regional state administration, ministries and departments, non-governmental organizations, business community and coordination group on monitoring and evaluation with inclusion of policy recommendations into the draft and, subsequently, final policy document. The Programme of the Government for Transition to Sustainable Development (PTSD) 2013-2017 is a five year plan adopted by the Parliament of the Kyrgyz Republic and endorsed by the Parliament of the country. The PTSD is the major document that puts the NSSD into an implementation plan where relevant policy measures are closely linked to sustainable development components. The Program of Transition informs the Government annual work plans. The Department for Strategic Planning under the Ministry of Economy of the Kyrgyz Republic prepares annual plans deriving activities from the PTSD based on the dates and deadlines indicated in the latter. Activities stemming from the PTSD are screened for relevance and modifications are proposed to remove outdated components. Modifications are also proposed in the light of new developments not considered in the original Program of Transition. To illustrate, Kyrgyzstan’s accession to the Eurasian Union has been newly incorporated into the PTSD. Due to the fact that the PTSD is an implementation instrument for the nation-wide programmes with the Government as the responsible institute, the process involves all ministries and departments, government committees and agencies. The NSSD puts special emphasis on national strategic sectors of economy such
FIGURE 2. Decision making processes involved in transition to Sustainable Development in the Kyrgyz Republic.
Regions
Ministries and departments
Ministries and departments
NGO
NGO
NGO
COORDINATION GROUP IN MoE
Concept of Program
Recomendations
Draft of the Program Donors
Donors
VlP-conference with Parlament
Business community
Parliament
Government
Approved draft of Program
Source: A slide from presentation “Mainstreaming sustainable development in the national development strategies: The Kyrgyz Republic” in New York, USA (October 9-11, 2013) by a Deputy Minister of Economy of the Kyrgyz Republic, Sanzhar Mukanbetov.
as agriculture, social development, health, energy, tourism, education, construction, environment, mining, etc., therefore, all relevant ministries and departments participate in the process of achieving the goals set in the National Strategy. This process is regulated by the Ministry of Economy. Its Department for Strategic Development collects monthly reports and consolidates them on a quarterly basis into a report on the implementation of the Government’s plans. Department of Monitoring
and Expertise under the Ministry of Economy of the Kyrgyz Republic receives reports from the Department of Strategic Planning and compiles the final annual report, “Results of socio-economic development under the “Implementation of the Program Documents of the Government” document. At the moment one full annual report exists (for 2014). Many national ministries established specific departments designed for strategic program development to 11
effectively facilitate interlinking social, environmental and economic issues in their implementation of the national strategy. As mentioned above, the Ministry of Economy established its own Department for Strategic Planning to support the process of implementing the sustainable development program in the country. Other participating organizations include political parties, donor agencies, and international organizations. Donor agencies and international organizations tend to align their projects and programmes to the priorities set out in the National Strategy for Sustainable Development. They also facilitate adoption of internationally recognized and approved methodology and instruments. International and local non-governmental organizations provide expertise and training as well as research to support the process. As an example, the local non-governmental organization called ‘Biom’ carried out a review of public environmental expenditure at the request of Ministry of Finance in 2012 and 2013 with the support from the UNDP to analyze whether allocated resources are reaching environmental priorities and if economic resources are effectively used. To illustrate a successful example of international organizations’ positive contribution to the attainment the country’s sustainable development agenda one must return to the discussion of the UNDP – UNEP Poverty and Environment Initiative (PEI) Programme. The outcomes of this program include the new national legal framework for strategic planning oriented to sustainable development, development and introduction of the methodological instrument called Guidance for Strategic Planning towards Sustainable Development at the national and sub-national levels. The process of introduction of Green Growth Indicators has also taken place with the support from the PEI Programme. On a 12
regional level the PEI provided methodological and consultative support in the development of the Strategies of Sustainable Development 2014-2017 of Naryn oblast and Suusamyr local self- government to integrate poverty-environment links and both strategies have been approved by the Naryn oblast state administration and Suusamyr Local Council. Significant for the success of the the PEI Programme in Kyrgyzstan has been the establishment of a coordinating mechanism to monitor the progress toward achievement PEI Programme. The PEI Program Board included the heads of key government institutions; the PEI Inter-Agency Working Group is composed of all ministry and agency representatives involved in the PEI programme implementation; and a PEI Expert Group composed of seven sectoral key experts (environment and climate change, mining industry and tourism, healthcare and social protection, agriculture and energy, budget processes and statistics) as well as a number of other experts. The Ministry of Economy is the coordinating government body and the Minister acts as Chairman of the Programme Board.
Poverty-Environment Initiative (PEI) of the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP). PEI is a global UN effort that supports country-led efforts to mainstream poverty-environment linkages into national development planning. PEI provides financial and technical assistance to government partners to set up institutional and capacity- strengthening programmes and carry out activities to address the particular poverty-environment context.
LESSONS LEARNT 2 Since 2012 the Government of the Kyrgyz Republic has made a considerable advancement in laying the foundations for a transition to integrated planning for sustainable development establishing enabling policy and regulatory framework and moving beyond high level national visions and strategies to the development of mechanisms to execute integrated planning. However, these processes are very recent and need to be supported, tested and refined over the coming years. Experience in the Kyrgyz Republic has already shown important lessons to be learnt and used to inform future planning and implementation. One is that implementing agencies and policy developers must be able to consider the PTSD as alterable and flexible to accommodate new relevancies and developments. Flexibility of the program will increase its relevance and viability. This process must be inherently analytical and include projections and plans in unexpected circumstances. What happened when the president set the goal of 7% economic growth? We could have achieved it had we not had problems with the Kumtor Gold Mine, i.e., an accident on the site and a decrease in the amounts of extraction. Economic problems and devaluation in Russia and Kazakhstan imported to our country. Challenges like these must always be well analyzed. Goals must be ambitious, and their correction must be timely and justified and based upon a consistent analysis Lyubov Ten, Advisor to Minister of Economy, Interview excerpt, September 2015 2 This and the following paragraph about lessons learnt is based upon personal interview with an Advisor to the Minister of Economy of the Kyrgyz Republic in September 2015
Evidently, there is a demand for a well-organized and supported monitoring and evaluation system. Clearly formulated achievement indicators and the monitoring procedures to control the implementation processes are still largely lacking effectiveness due to the ill-functioning data collection and provision mechanisms. Systematic improvement in the system of monitoring and evaluation of integrated planning and practice is an urgent need. At the moment, the system works such that considerable time gap between the point of time when data is collected, provided to relevant institutions and decision made on the basis of these data prevents effective and timely decision making, policy correction or termination. After two years of implementing the Programme of Transition to Sustainable Development in the Kyrgyz Republic, a set of well-formulated, concrete and clear formats and procedures for monitoring and evaluation are required both to inform decisions and also to raise awareness, participation and ownership of the process by population. Web-based system of information will surely enhance this process. Enforcement of integrated tools to monitor and evaluate sustainable development implementation such as Environment Expenditure Reviews will help identify sources of funding and government expenditures for environment and/or climate purposes. It may also include analysis of the gap between needs and expenditures and institutional assessment. A more active utilization of economic analysis (studies to raise awareness and inform specific polices and investment that demonstrate contribution of environment and natural resources to economic growth and poverty reduction, costs of environmental degrada13
tion, cost benefit analysis of investments in rural roads, etc.) is also proposed for a better integration of social and environmental issues into national planning and as cross-cutting issues. At the moment this problems is being tackled by introducing a new conceptual and methodological apparatus within the Green Growth Declaration endorsed by the Organization for Economic Cooperation and Development (OECD) which guides monitoring and evaluation of sustainable development in the Kyrgyz Republic. Within OECD’s programme of cooperation with countries of Eastern Europe, Caucasus and Central Asia (EAP Task Force) and the Regional Environmental Center of Central Asia Kyrgyzstan received support to prepare the ground for a regular application of Green Growth Indicators. As part of its Green Growth Strategy, the OECD has developed a conceptual framework to monitor economic growth and development, while combating climate change and preventing the inefficient use of natural resources and environmental degradation. Kyrgyzstan has become a pilot country in the Central Asian region where the ‘green’ growth indicators are being tested. In partnership with main counterparts including the Ministry of Economy of the Kyrgyz Republic, National Statistics Committee of the Kyrgyz Republic, UNDPUNEP “Poverty and Environment” Initiative the project activities were launched in May 2012. In February 2015 the Government of the Kyrgyz Republic issued a decree to adopt matrix of indicators to measure the progress towards sustainable development.
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Ministers of 34 countries have signed the Green Growth Declaration in the Council’ meeting of the Organization for Economic Cooperation and Development (OECD) at the level of ministers in June 2009, where they stated that they will «strengthen their efforts for implementation of the Green Growth Strategies in the frames of actions implemented by them in order to overcome the crisis, so and beyond, recognizing that ‘green’ and «growth» may be continuously linked. They delegated to OECD to develop the Green Growth Strategy consolidating into a single comprehensive framework the economic, environmental, social and technological aspects of the development, and aspects of international development assistance for development goals as well. In the Green Growth Strategy also there is a recognition that focus on GDP as action of economic progress, as a rule, do not take into account the contribution of natural assets into welfare, health and well - being. Thus, the aim of the strategy should be a set of Green Growth Indicators that will measure progress, including the quality and composition of the growth and how it has an impact on the well - being and welfare of the people. Source: OECD, Direction on the Green Growth. Summary for decision - makers. May, 2011.
A group of national experts was established to perform technical work and a steering group of high level officials supervises the work. National experts conducted a detailed analysis of national and sector statistics in line with the OECD five blocks of green growth indicators, including Carbon and Energy Efficiency, Natural assets, Environmental Quality of life, Economic Opportunities and Policy Responses and Socio-Economic Context and Characteristics of Growth. The analysis reviewed existing national indicators; developed indicators-analogues to replace some of the OECD-recommended indicators and included national indicators which are not reflected in the OECD indicators. The analysis concluded that ‘while not the entire set of OECD green growth indicators can be applied in the Kyrgyz Republic, the country is able to measure more than half of these indicators’. Green Growth Indicators were already reviewed in the dynamic for five years during 2008-2012 and included in the annual digest entitled ‘Environment in the Kyrgyz Republic’ published by the National Statistics Committee3. In 2013 three documents were developed to regulate monitoring and evaluation of sustainable development in the Kyrgyz Republic: 1. Roadmap to monitoring and evaluation of Sustainable Development in the Kyrgyz Republic; 2. Guidelines to National Indicators of ‘Green’ Growth; 3. Matrix of National Indicators of ‘green’ Growth.
3 11 March, 2015, UNDP-UNEP Poverty-Environment Initiative/Kyrgyz Republic Towards Green Growth in the Kyrgyz Republic News story
The Matrix of National Indicators of Green Growth consists of 65 indicators set to monitor and evaluate the progress of sustainable development in the country. The indicators seek to establish a resource efficient economy; maintain the natural resources; improve people’s quality of life; and implement appropriate policy measures to understand the economic opportunities. 65 indicators in Kyrgyzstan are grouped into five key blocks: Block 1. Carbon and Energy Efficiency (17 indicators) Block 2. Natural assets (15 indicators) Block 3. Environmental quality of life (12 indicators) Block 4. Economic opportunities and policy responses (12 indicators) Block 5. Socio-economic context and characteristics of growth (9 indicators). Source: National Statistical Committee of the Kyrgyz Republic (2014). ‘Green’ growth indicators in the system of National Statistical Committee. Bishkek: NSC
The Ministry of Economy of the Kyrgyz Republic is a responsible state institution authorized to promote and endorse all three documents at the national level. This ministry is also responsible for monitoring and evaluation of the Matrix of Green Growth Indicators. The National Statistics Committee of the Kyrgyz Republic oversees the process of collection, analysis, storage and distribution of the National Indicators Matrix of the Green Growth (47 indicators out of 65). Data collection is carried out on the annual basis in accordance with the 15
approved programme. Specific Statistics forms are the basis of data collection 4. In terms of the process, the Roadmap to Monitoring and Evaluation of Sustainable Development in the Kyrgyz Republic sets out the process whereby the annual monitoring of ‘green’ growth indicators will be carried out. The communication of the main state institutions and other participating state bodies are presented in the Figure 3 below. It describes the order in which monitoring of Green Growth Indicators is to be carried out is following: 1. Designated ministries and departments conduct data collection, processing and calculation. 2. Designated ministries and departments send an official letter with all the data vis-à-vis their allocated indicators to the authorized state body for inclusion into the consolidated Table on the monitoring of indicators of ‘green’ growth in the Kyrgyz Republic. 3. The authorized state body includes the data received from the ministries and departments into the consolidated Table on the monitoring of indicators of ‘green’ growth in the Kyrgyz Republic. 4. The authorized body publishes at its website the consolidated table on the monitoring of indicators of ‘green’ growth in the Kyrgyz Republic 5.
4 National Statistical Committee of the Kyrgyz Republic (2014). ‘Green’ growth indicators in the system of National Statistical Committee. Bishkek: NSC 5 Roadmap to monitoring and evaluation of Sustainable Development in the Kyrgyz Republic 16
FIGURE 3. National system of data collection to monitor ‘green’ growth in the Kyrgyz Republic Government of the Kyrgyz Republic
Authorized state institution Civil society
Block 1. Carbon and Energy Efficiency (9 indicators)
MoAM (8) SACRD (1)
Block 2. Natural assets (5 indicators)
SAGMR (3) SR (1), MoAM (1)
Block4. Economic opportunities and policy responses (4 indicators) SAEPF (4)
Territorial divisions of the participating ministries and divisions
National indicators (47 indicators) Block 1. Carbon and Energy Efficiency (8 indicators) Block 2. Natural assets (10 indicators) Block 3. Environmental quality of life (12 indicators) Block 4. Economic opportunities and policy responses (8 indicators) Block 5. Socio-economic context and characteristics of growth (9 indicators).
NSC (47)
Source: Roadmap to monitoring and evaluation of Sustainable Development in the Kyrgyz Republic
The third, related lesson learnt is the need to work effectively with information and ensure timely provision of information to the decision-making institutions. At the moment, the system is lacking in which monitoring data and other relevant information is accessible and available to support and timely inform policy decision-making. As a result there is a profound time gap between the achieved results, decision-making and policy correction.
Speaking more generally about the needs to support the implementation of sustainable development programme in Kyrgyzstan, there are a number of other factors that need to be considered6. First, here is a marked financial need. The cost of implementation of the Programme of Transition to Sustainable Development is 16.3 billion USD. Figure 4 illustrates the financial gaps and related numbers. Available sources of funding can cover 51% of the required amount. These finances come from the national budget, Public Investment Programme (PIP), local budgets and confirmed investment programmes. The latter, for example, include Chinese investment programmes in energy and transport sectors. There are 78 national projects which are not covered by the available budget and require financing. In monetary terms this amounts to 49% of the total estimated budget. These projects include construction of a railroad connecting North and South of Kyrgyzstan7, agricultural irrigation projects, construction of techno-parks, energy projects and automobile roads. To be able to bridge the financial gap of 49% the country needs investments that will bring in technologies which are coherent with the principles of green development. Investments into green technologies for agricultural sector development are especially important (mitigating land degradation, increasing land productivity, seed conservation and production, etc.). Local business sector is also an important source of funding that needs to be stimulated.
6 Based upon personal interview with an Advisor to the Minister of Economy of the Kyrgyz Republic in September 2015 7 The cost of the railroad is more than 3 billion Kyrgyz som.
FIGURE 4. Estimated budget required to fund transition to sustainable development in the Kyrgyz Republic and financial gap Budget need 16 316,2 (million) $ USD Donor funding and private investments: 3 074,1; (35,4%)
Financial Gap 7 616,7: (47,0%)
Secured funding: 8 677,9 (53,0%)
State budget: 4 424,8 (51,0%)
PIP and grants; 1 179,0 (13,6%)
Source: mineconom.gov.kg/Docs/HR/strategplan.ppt
In terms of budgeting processes, programme-based budgeting procedures are being thought of as a major instrument for achievement of the goals and objectives of sustainable development as set out in the NSDS. The main idea is to move away from ineffective budget-line rational and decision making to program-based budgeting. Recommendations for modifying approaches to budgeting focus on the logical and consistent consideration of inter-linkages between the programme goals, resources and desired results. Such approach is believed to be important for creating opportunities for the state apparatus to address cross-sectoral problems and move toward sustainable development through consolidation of different budgets and attracting off-budget sources. 17
Ideally, programme-based budgeting goals and objectives of national policies for sustainable development are turned into budgetary programmes and transformed into achievement measures in a medium-term time frame. The below Figure 17 illustrates the process of integrating sustainable development components into programme budgets. It begins with the National Sustainable Development Goals as stipulated in the National Sustainable Development Strategy of the Kyrgyz Republic, 2013 – 2017 which defines two parallel processes: allocation of resources by sectors and by ministries and programme-based budget planning. In terms of programme-based budget planning, it is recommended that an algorithm of developing a programme budget is used. Each step is consistent with the Instruction on Programme-based budget procedures for the central institutions of state administration (ministries and departments) and with the Methodological Recommendations for Strategic Sustainable Development Planning. Budget planning will consist of the following stages: 1. Conceptual note (explaining the programme-based justification of the budget) 2. Defining the budgetary programme (indicating the specific ministerial activity consolidated into a ministerial programme) 3. Estimation of expenses 4. Development of indicators for monitoring and evaluation of budget efficiency.
Among serious problems is the fact that frequently strategic planning is only faintly harmonized with budgetary planning. In the process of policy development feasibility analysis is not practiced and does not provide for application of tools that address policy implications such as budgetary, fiscal, taxation, normative regulations, etc. It becomes logical to recommend that the Ministry of Finance must participate in the coordination of sustainable development integration, because it is the key ministry which coordinates formation of program budgets in the country. This appears to be a more effective way to ensure that the budget circular for medium-term program-based budgeting will contain the key elements required for program-based budget which incorporate sustainable development concerns. There is an urgent demand to ensure that strategic and budgetary processes are inherent to each other. 89 Failure to incorporate budgetary estimations into planning may result in significant gaps in funding for strategic programs and hamper national efforts to ensure that poverty eradication, environmental protection go hand in hand with economic growth. As it has been pointed out, it is true that some of the strategic goals receive more funding and prioritization than others. This puts at risk social and environmental concerns because they are typically taken precedence by sectors which are traditionally seen as more strategically important, i.e., such as economy and investment climate. Capacity, quantitative and qualitative, for strengthened budgeting processes is a serious concern. There is a low level of knowledge 8 Based on the Budget Circular of the Ministry of Finance of the Kyrgyz Republic (www.minfin.kg) 9 Ministry of Economy of the Kyrgyz Republic, UNDP-UNEP Initiative PEI, Integrating Sustainable Development into Program Budgeting Initiative (Recommendations)
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FIGURE 5. Budgeting process for results-based sustainable development in the Kyrgyz Republic8,9 NATIONAL SUSTAINABLE DEVELOPMENT GOALS (as stipulated in the National Sustainable Development Strategy of the Kyrgyz Republic, 2013 - 2017)
Ministries define goals and objectives in concert with the Program Sector-based distribution of resources (e.g., agriculture, healthcare, education and social sphere) and institution-based distribution of resources as coordinated with the sustainable development goals on the basis of assignment of budget control numbers.
Ministries develop programs based or tne defined goals
Performance indicators are developed allowing for evaluation of the implementation outcomes and the latter's consistency with the budgetary measures
Preparation and implementation or of program-based budgets allowing for concerting institutional missions, goals ard programs with sector-based priorities with sustainable development focus and resuts-based approach
Increased effectiveness in Government expenditures for achievement of National Sustainable Development goals Source: www.minfin.kg
and skills within government institutions to carry-out program-based budgeting. Capacity to implement cost and benefit analysis of budgetary processes on environment and poverty reduction is nearly non-existent. Notably, only few people (1-2 individuals) within ministries actually develop budgets for their programs and their responsibilities also include annual budget development. Incorporation of the components of sustainable development into program-based budgets makes high
demands to the budgeting capacities of the staff as well as to managerial skills of the ministries. Ministries will need to be able and ready to formulate priorities in fashions allowing for developing budgets that incorporate social, economic and environmental aspects of development. Knowledge and skills in linking cross-sectorally programs with sustainable development will also be required.
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CROSS-SECTORAL EFFICIENCY Well-established operable institutional mechanism to address issues of cross-sector/interdepartmental cooperation required for successful sustainable development implementatin is largely lacking. Little attention is paid to the interdepartmental segment of government services although there are specific population categories in need of such services. Such situation contributes to low public trust to executive power bodies. The country’s public trust score was -5.8 in 201210. Better facilitatation of cross-sectoral working processes it is required that hierarchy and cross-cutting logic is ensured among the national programme-based documents. They will need to contain clear objectives and targets. Of great importance are coherent and precise definitions of principles and procedures to guide the development of inclusive sector-based strategic documents. Available analysis included in this report points to the need for multiplying the number of high level authorities (also known as champions) committed to working on the integrated agenda. Champions must be sought from key institutions such as Ministry of Finance. At the same time work needs to be done to increase the status of state organizations such as SAEPF and the SALSG because they are central to the poverty-environment integration. Modifications in the organization of work of the National Council for Sustainable Development towards creating, under its auspices, of thematic cross-sectoral 10 NSSD 20
groups led by high rank coordinators also will strengthen institutional support for sustainable development policies on the national level. National Council for Sustainable Development of the Kyrgyz Republic represents a good example of cross-sector cooperation. Its composition typically includes, besides the President and the Speaker of the Parliament, Prime Minister, Vice Prime Minister and member of Parliament, representatives from institutions such as Supreme Court, Defence Council s, Prosecutor General office, National Bank of the Kyrgyz Republic, Ministry of Finance, Ministry of Economy, Department of Analysis and Monitoring in the President’s Apparatus, Business and Investment Council, business associations and non-governmental organizations.
STRATEGIC ECO-SYSTEMS In terms of development of strategic eco-system for alleviation of poverty and environmental degradation, development of agriculture is undoubtedly a priority. To date agricultural production is the main source of livelihoods for the rural population of the country. Agriculture is one of Kyrgyzstan’s most important economic sectors, contributing to approximately 22% of the gross domestic product and employing about 35% of the country’s workforce. Its steady decline from about 50 % in 1996 to twenty percent of share in the national economy (Figure 5.) puts at risk livelihood security. Core issues include access to resources such as land and agricultural investments with a specific need to address gender equality when it comes to the issue. Food production costs are also at stake because of the high costs of seeds, fertilizers and agricultural inputs. These problems require action to address policy and institutional frameworks which to dates are classified as weak, inadequate management capacity and lack of resources. Contribution to agricultural land and water resources degradation are widespread use of monoculture without crop rotation, unsustainable irrigation management, and inadequate pasture management. Today, 88% of land in Kyrgyzstan is classified as degraded and subjected to desertification. Soil salinization has affected 75 % of arable land11. 60 %
of agricultural land (arable and pastures) are subjected to water and wind erosion. Fertility of arable lands is reduced every year. Degradation of soils causes the large economic damage to Kyrgyzstan reducing the yields of agricultural crops by 20-60%.
11 The prospects of green economy in the Kyrgyz Republic. Retrieved from: http://www.biom.kg/wp-content/uploads/2013/07/rio20-national-position-eng.pdf
12 From interview with an advisor to the Minister of Economy of the Kyrgyz Republic
Insufficient research and extension services, inadequate access to markets and credits and a lack of market-based incentive framework for land husbandry are also among fundamental challenges. All of these are exacerbated by vulnerability to climate change and natural disasters. Thus, priority activities in this area are to build awareness and knowledge about harmful practices, strengthen policy, legislative and institutional frameworks, build adequate capacity among relevant agencies and improve land, water and natural resources management through project investments within the framework of local programs of social and economic development and national strategies for poverty reduction and integrate measures to build resilience to climate change and natural disasters. Recent success stories illustrate that local business sector actively participates in agricultural production, packaging and transporting of agricultural products for export to Russia12. Stimulating local business incentives while encouraging adherence to green technologies is,
21
FIGURE 6. Share of agriculture in GDP, Kyrgyz Republic
only now being developed and processed in the Parliament of the Kyrgyz Republic. Lack of legislative basis negatively affects institutions which cannot effectively operate without regulating instruments, procedures and rules. Work is required to ensure that the new legislative basis is supported with relevant procedures, rules and methodologies and by existing and new institutions.
60 50 45 40
37
39
38
37
37
38
37
33
32
33
31
20
37
21
19
19
20
2011
30
2012
40
2010
41
2009
41
44
2008
50
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
1991
10
Agriculture, value added (% of GDP) Source: World Development Indicators, World Bank
undoubtedly, priority. Creating favorable conditions of direct foreign investments into business projects within green development frameworks is another related priority that will facilitate sustainable growth and local capital accumulation.
INSTITUTIONAL CAPACITY Legislation endorsing and clarifying the major principles, elements and procedures of strategic planning are incipient at the moment and require support. While the new law on strategic development has been adopted all the accompanying procedures and methodologies are 22
There is a real need to build these new human capacities in the system of state administration especially in the light of emergent changes in the new Parliament of the country . It is of high priority to work with the new members of Parliament and Committees to ensure that sustainable development vector is maintained, developed and not replaced or sidelined. Certain activities are already carried out in this regard. PEI Program plans to conduct informational work. The Ministry of Economy, for instance, conducts education activities for the State Personnel Department. This work needs to be supported and up-scaled. Especially remarkable is personal involvement of the (now Prime Minister) Minister of Economy, Temir Sariev, who acted as a Chairman of the Programme Board and is recognized as a Champion for poverty - environment mainstreaming by the PEI Programme. Mr. Sariev contributed to the President’s decision to establish the National Council on Sustainable Development in December 2012 and initiated changing the title of the National Council on Sustainable Development. Initially, the title was to be the National Council on Economic Sustainable Development, focusing on the economic side of the development only and completely neglecting the environmental and social aspects of sustainable development.
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The Poverty-Environment Initiative is a global UN programme that helps countries to integrate poverty-environment linkages into national and sub-national development planning, from policymaking to budgeting, implementation and monitoring. With both financial and technical support, UNDP and UNEP assist government decision-makers and a wide range of other stakeholders to manage the environment in a way that improves livelihoods and leads to sustainable growth.
In the Kyrgyz Republic Poverty-Environment Initiative aims to enhance the contribution of the environment to human well-being, pro-poor economic growth and achievement of the Millennium Development Goals. The intended outcome of the initiative in Kyrgyzstan is the integration of poverty-environment nexus into national, sub-national, sectoral and UN, UNDP development policy processes and document to improve environmental sustainability and ensure pro-poor economic growth.
The Initiative is currently funded by the Governments of Norway, Spain, Sweden, the United Kingdom and the European Union.