1

Procedures for implementing the programs of technical cooperation

in the Republic of Kazakhstan

Ministry of economic development and trade of

the Republic of Kazakhstan

2

Donors currently implementing technical cooperation programs in Kazakhstan

Donor countries:

European union

Japan Germany Korea Turkey USA China India Netherlands Malaysia Singapore and

etc.

International organizations:

WB ADB EBRD IDB UNDP USAID OECD IMF and etc.

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Donor countries/Internationalorganizations

GrantsNon-tied/tiedTotal sum of

finalized/currently being implementedprojects

Directions ofcooperation

Total sum from the

moment ofcooperation

European Union (TACIS, OECD)

Non-tied grants – € 266.3 mlnTied grants - €3.8 mln Trade, education and healthcare

€270.1 mln

Japan (JICA) Non-tied grants -$119.2 mlnEducation, healthcare, transport,

communications $119.2 mln

Germany (GIZ) Non-tied grants - €33.1 mln Business, healthcare, education €33.1 mln

Korea (KOICA)Non-tied grants - $17.1mln healthcare, culture, education, agriculture,

energy sector $17.1 mln

Turkey (TIKA) Non-tied grants- $9.5 mln education, healthcare $ 9.5 mln

WB (JERP) Tied grants - $8 mlnagriculture, environment, energy sector,

financial sector $8 mln  

ADB Tied grants – $12.7 mlntransport,, rural water supply, private sector

development, energy sector, trade $12.7 mln

EBRD Tied grants – €823.1 mln

private sector development, investment climate

enhancement  €823.1 mln

IDB Tied grants – $ 0.6 mln education, healthcare, transport, trade   $ 0.6 mln

UN (UNDP)Non-tied grants – $41.3 mlnTied grants - $1.5 mln

Economic administration, public administration, democracy, ecology   $42.8 mln

USAID (PED)Tied grants – 29 mln Small business development, energy sector,

trade $ 29 mln  

Total volume of financing within the framework of cooperation programs

4

Legal framework for grants

Budget code (part 10 Grants) has a provision which envisages that grants are given to public organizations, and issues of non-tied grants are implemented in the order, defined by the Government Decree;

Rules of engaging, utilizing, monitoring and evaluating the effectiveness of non-tied grants, confirmed by the Government Decree № 740 as of 19 July 2005;

Rules of presenting applications for the engagement of tied grants, confirmed by the Government Decree № 665 as of 7 may 2009

List of applications for the engagement of tied grants in the relevant financial year, confirmed by the Government Decree

Rules of defining the order, dates of submission, report forms and requirements for presented information about the stage and results of utilizing tied grants, confirmed by the joint order of the Minister of economics and budget planning of the Republic of Kazakhstan № 166 as of 6 August 2009 and the Minister of finance of the Republic of Kazakhstan № 351 as of 25 August 2009. Registered in the Ministry of justice of the Republic of Kazakhstan as of 21 September 2009 under № 5797

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Legal framework for grants (continued)

Tax and Customs codes envisage exemption of grants from some obligatory payments to the budget;

– List of grant givers, confirmed by the

Government Decree № 1753 as of 28 December 2001;

– Simplified order of customs clearance of assistance provided within the framework of grants, confirmed by order № 717 of the Minister of State Incomes as of 7 June 2001;

– Rules of furnishing documents for the exemption from customs duties and dues, confirmed by the Government Decree № 675 as of 9 July 2003;

International agreements between Kazakhstan and donors ratified by the Republic in the established order regulating other rules;

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Subjects of tied and non-tied grants:

Donors: Donor countries International organizations

Beneficiaries: Private (non-governmental organization) Public bodies and organizations

Authorized bodies of the parties

7Other functions

Coordination of external assistance

from International

Financial Organizations

(IFO) and donor

countries and their activity

in Kazakhstan

•Coordination of the work of Coordinating Council on the issues of grants and loans;•Coordination of the activities of Governor and Alternative governor for IBRD,EBRD, ADB;•Coordination of the activities of the National coordinator of CAREC programs (Central Asian Regional Economic Cooperation), «TACC» EU (Technical assistance to CIS countries);•Coordination of realization of joint Programs of economic development of the Government of the USA (EDP); UNDP;•Coordination of the activities of the Council on interaction with the OECD (Organization for economic cooperation and development).

Coordination of the activities of public bodies on

the issues of attracting external

assistance

Elaboration of normative legal acts

•Coordination of the work pursuant to the Rules of engaging, utilizing, monitoring and effectiveness evaluation of utilizing non-tied grants.;•Coordination of the work of public bodies pursuant to the Budget code of Kazakhstan (articles. 166-170) and Rules of applying for the engagement of tied grants

•Elaboration of the orders of the Head of the state, Government Decrees, Orders of the Prime-minister on the issues of engaging grants and technical assistance (annually).

•Conduct of seminars, round tables, conferences, meetings, negotiations with the donor society and public bodies of Kazakhstan on the issues of external assistance cooperation

Division of external assistance coordination under the Ministry of economic development and trade

Functions of the Division

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The process of the transfer of grants by donors и their receipt by Kazakhstani beneficiaries:

Agreements between Kazakhstan and donors on the directions of cooperation;

The process of the transfer of grants by donors;

The process of engagement of grants by Kazakhstani beneficiaries.

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Types of assistance given within the framework of grants:

Supply of material and technical valuables;

(supply of equipment, materials and goods)

Consulting services;(showing consulting assistance by sending

specialists, conducting researches, development of documents and recommendations, etc.)

Teaching.(courses, seminars, lections and trainings, etc.)

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The order of engagement of tied grants

Executive bodies provide their applications formed in accordance with the Rules № 665 as of 7 May 2009 until 1 February to the authorized body;

By the results of the selection process and approval of applications by donors, authorized body presents the applications to the Republican budget commission for consideration to include them in the list of priority projects for the engagement of tied grants in the coming financial year;

The Government confirms the list of priority projects for the engagement of tied grants in the coming financial year;

The relevant costs of projects included in the list are envisaged in the project of the republican budget for the planned year

Grant agreements are concluded after confirmation of the republican and local budgets

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The order of engagement of non-tied grants

Annually, until 1 May, the authorized body sends donors’ proposals to provide grants;

Until 1 February, executive bodies present their applications, formed in accordance with the Rules № 665 as of 7 May 2009, to the authorized body;

The authorized body by the results of the conduct of the selection of applications no later than 1 December confirms the list of priority projects for the engagement of non-tied grants in the coming financial year

Confirmed list of priority projects is sent by the authorized body to donors in 10 days;

In case of approval of a project from the list by a donor, the authorized body informs the executive body about the conclusion of grant agreement.

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The order of grant utilization

Grants are utilized in accordance with grant agreements;

Supplied material and technical valuables are put on the balance of the beneficiary;

Realization of projects, envisaging the engagement of specialists (consultants), necessitates elaboration of technical tasks;

Executive agencies ensure purposeful and effective utilization of grants.

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The procedure for monitoring and evaluating effectiveness of

utilization of grants:Executive agencies on a quarterly basis, no later that the 10 day of a month following the reporting period, provide the authorized body with information about the progress of projects;

Monitoring of utilization of grants provided in the form of training is implemented once in half a year.

The authorized body annually, no later than 10 February, submits to the Government of RK information about utilization of grants by public organizations of RK.

The final effectiveness evaluation of grant utilization is conducted by the authorized body, and its results can be used by the authorized body to consider subsequent applications of executive bodies for the engagement of grants.

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Based on the experience gained in the course of cooperation to engage

and utilize grants there is now a necessity to:

• Create definite premises for the provision of effective utilization of grants by way of defining minimum obligatory norms for the conclusion of grant agreements, elaboration of technical tasks;

• Create definite mechanisms for abolishing agents (contractors) of donors presenting assistance of poor quality, and increasing the responsibility of public bodies for the effective utilization of grants;

• Conduct regular monitoring and realization of effectiveness evaluation of grant utilization.

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For the provision of mutually beneficial cooperation with donor countries and IFOs it is expedient to

activate the following directions of external assistance coordination and their activities in

Kazakhstan:

• - creation of the system of partnership on the basis of consensus;

• - strengthening public bodies in the coordination of programs and projects of international financial institutions;

• - concentration of the efforts of donor countries and IFOs on strengthening the socio-economic potential, not democratic processes in Kazakhstan;

• - defending positions of Kazakhstan on consideration of issues regarding emission of allocation of external means for loans, grants and technical assistance;

• - giving important role to sectoral ministries and national institutes in the preparation of the relevant projects;

• - provision of the connection of external resources with the national budget;

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• - development of the system of measures, stimulating the development and utilization of Kazakhstan’s own cadre potential in the preparation and realization of projects;

• - hosting purposeful trainings about the activities of donor countries and IFOs for public bodies with the aim of giving competence and skills in the economic, administrative and legal issues;

• -active participation of public bodies with the effective partnership of IFOs and donor countries;

• - realization of equipment procurement by IFO programs on the territory of Kazakhstan;

• - strengthening mutual accountability before the public and each other.

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Thank you for attention!