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Donor Activity in Central Asian Countries since 1991

This article discusses the distribution of international donor assistance for development in five Central Asian countries from 1991 to 2018. Assistance to Central Asia was distributed unevenly, each state in the region has a different amount and type of financing.


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Since the independence of Central Asian (CA) countries, the international donors have expanded their involvement in the region through the provision of Official Development Assistance (ODA).[1] Reaching around US $24.9 billion of development assistance in the period from 1991-2018, international donors have made an important contribution to economic, social and humanitarian sectors of the region. Yet, the distribution of aid varies depending on the country.

This article reviews ODA[2] allocation across and within the CA region by taking into consideration countries’ variation of both total and on types of financing (grants and loans) development assistance. By analyzing data on ODA, the article also defines the largest donors and areas of their activities in each CA country. Due to limited information on the Query Wizard for International Development Statistics Organization for Economic Co-operation and Development (QWIDS OECD)[3] database, we covered data on ODA value by sectors of donor’s activities only for the period from 2002-2018.

QWIDS OECD is employed to identify ODA variation in CA countries from 1991 to 2018. This database contains information on ODA provided by official agencies of the members of the Development Assistance Committee (DAC), by multilateral institutions and non-DAC countries.

The DAC engages with development actors beyond the Committee’s membership to improve the relevance and impact of its work. The DAC has currently 30 members, and 20 other non-DAC reporting countries.[4]

Please note that the ODA list of reporting donors does not include People’s Republic of China (PRC) which is the main creditor for some countries of Central Asia.[5]

For the purposes of this article ‘Central Asia’ refers to the five post-Soviet states of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.  

Overview of ODA to CA countries

Total ODA consists of disbursements of loans made on concessional terms (net of repayments of principal) and grants to promote economic development and welfare in countries and territories in the DAC list of ODA recipients. It includes loans with a grant element of at least 25 percent (calculated at a rate of discount of 10 percent).[6] In addition to financial flows, technical co-operation is included in aid. Grants, loans and credits for military purposes and transactions that have primarily commercial objectives are excluded. Transfer payments to private individuals (e.g. pensions, reparations or insurance payouts) are generally not counted.[7]

ODA to CA countries is spread unevenly in the period from 1991-2018. As indicated in the chart #1, the largest recipient of ODA in the region is Kyrgyzstan, which received around US $8.1 bn. since independence. Tajikistan is the second largest recipient of ODA – $5.9 bn., followed closely by Uzbekistan – $5.8 bn. The next to the last recipient is Kazakhstan with $4.2 bn. of development assistance. Finally, the least recipient of ODA in the region becomes Turkmenistan receiving around $803.45 million.

As shown in the chart, in four out of five CA countries – Kyrgyzstan, Kazakhstan, Tajikistan and Turkmenistan – grants take up a higher proportion of ODA than loans. For example, in Kyrgyzstan, of the US $8.1 bn. in development assistance received by Kyrgyz Republic, from 1992 to 2018, 81% came in the form of grants, while loans represented 19%. Uzbekistan is the only country in the region where loans take up a higher proportion of development assistance than grants – of the $5.8 bn., 53% came in form of loans, while grants constituted 47% of the total aid.  

Kazakhstan

As seen from the chart #3, main ODA providers for Kazakhstan, for the period 1991-2018, are United States, Turkey, Japan and Germany.

United States provided ODA in amount of US $1.2bn., becoming the largest aid provider for Kazakhstan since independence. US government assistance to Kazakhstan focuses on improving the functioning of the judiciary, promoting an increased public role for civil society and mass media, maintaining Kazakhstan’s open investment and trade environment, assisting the government in providing effective social services, and supporting Kazakhstan’s efforts to increase its production of low-cost clean energy.[8]

Kordai wind power station. Source: inform.kz

As shown in the chart below, Kazakhstan actively supports its energy sector contributing around US $398.4 m. The US agency for International Development (USAID) actively supports Kazakhstan through strengthening the green energy policies, improving energy efficiency and increasing renewable energy supply.[10]

Turkey’s contribution to Kazakhstan has amounted to US $668 m. by the end of 2018. Turkish Cooperation and Coordination Agency’s (TIKA) ODA efforts has been based on capacity-building of agricultural and livestock activities, improvement of physical infrastructure, social development for raising living standards, vocational training programs and employment-promotion activities, conservation of common cultural and historical heritages, and cultural programs. TIKA’s aid also includes technical and restoration assistance.[11]

Japan is the 3rd largest ODA provider for Kazakhstan allocating around US $626 m. Political cooperation between Kazakhstan and Japan started in 1997 when Japan established a strategy of Eurasian diplomacy. These initiatives were more specifically directed to energy cooperation after the Koizumi administration. In 2002, Koizumi dispatched a Silk Road energy mission to four countries, including Kazakhstan. These initiatives continued under the “Central Asia plus Japan” dialogue Action Plan adopted in June 2006, which has sought cooperation between Japan and Kazakhstan in the promotion of nuclear security and atomic energy safety.[12]

Central Asia plus Japan dialogue. Source: Ministry of Foreign Affairs of Japan

From 1991-2018, Germany provided a total of US $417 m. in development assistance to Kazakhstan. For its part, Kazakhstan participates in a wide range of regional German development cooperation projects. Since the early 1990s, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) has been supporting the Kazakh Government in the fields of sustainable economic development, education and vocational training, good governance, the environment and climate, health, energy efficiency as well as disaster prevention.[14] 

Kyrgyzstan

As seen from the chart #5, for the period 1991-2018, Turkey, International Development Association (IDA), Asian Development Bank (ADB) and Russia are the largest ODA providers for Kyrgyzstan, providing together around 52.08% of the total ODA received from international donors.

Russia started allocating funds for development projects after the Kyrgyz Republic joined the Eurasian Economic Union (EEU). In 2015, Russia approved the creation of a Russian-Kyrgyz development fund worth US $1 bn. The aim of the fund is to promote economic cooperation between the two countries, modernize the Kyrgyz economy and adapt it to the norms of the EEU.[15]  

Eurasian Economic Union members. Source: akchabar.kg

According to QWIDS OECD database, development assistance provided by ADB to Kyrgyz Republic, over the period 1991-2018, is estimated at around US $1 bn. The sector receiving the most financing is a road transport. ADB rehabilitated the portions of the Bishkek-Osh road (the main road connecting the north and the south of the country) and upgraded the Bishkek-Torugart road, which serves as the main route linking Kyrgyz Republic with People’s Republic of China.

Bishkek-Torugart road. Source: adb.org

Other priority sectors for ADB are education, government and civil society, water supply and sanitation. The energy sector is also a priority for ADB, since the Kyrgyz Republic has a great potential to expand its hydropower capacity. The 1,200-megawatt Toktogul hydroelectric power plant, which is critical to both national and regional power supplies, was rehabilitated, thanks to an ADB project.[18]

Toktogul hydroelectric power station. Source: ozodi.org

IDA is among the main ODA providers to Kyrgyz Republic allocating around US $1.033 bn. in the form of grants and credits. The strategic focus of the IDA has been in supporting the country’s efforts to improve governance and investing in key economic sectors, such as transport, agriculture and energy.[20]

Turkish Cooperation and Coordination Agency

Over the period 1991-2018, Kyrgyzstan has become one of the leading aid recipients of TIKA (Turkish Cooperation and Coordination Agency). A Turkish aid agency provided a total of US $1.156 bn. carrying out more than 760 projects. The main sectors, on which Turkish development assistance concentrates, are education and health sectors, as well as those related to infrastructure and humanitarian aid.[21]

From 1991 to 2018, United States provided a total of $892.34 m. of development assistance to Kyrgyzstan. US development assistance aims to help the country consolidate progress towards accountable and inclusive governance. Improving productivity in key sectors like agriculture and having a better business environment are also a priority. Another objective of the US is working in various fields such as education, trade, food security and global health, human rights and conflict management[23].

Tajikistan

According to QWIDS OECD database, in the period  from 1991-2018, US aid totaled $928 m., making United States the largest ODA provider for Tajikistan.

USAID’s assistance focused on increasing food security and nutrition, improving health and education outcomes, and strengthening critical democratic institutions in a volatile region.

To strengthen democratic governance and improve citizen well-being, USAID works to boost government accountability and oversight of basic service delivery. It helps improve access to clean drinking water and gives migrant workers critical information about their rights and the risks of human trafficking. USAID also improves access to information by providing learning and networking opportunities for civil society and independent media outlets.[25]

Asian Development Bank (ADB) has partnered with Tajikistan since 1998, and approved over US $927 m. in development assistance. With ADB support, over 700 kilometers of Tajikistan’s roads have been improved, creating international trade links and bringing social services to the country’s people. By supporting development of a “single window” facility and improving key customs posts along borders, ADB has helped Tajikistan boost regional cooperation and trade. Projects supported by ADB have helped improve three hydropower plants, install or upgrade over 600 kilometers of power transmission and distribution lines, and modernize major electricity substations.

Construction of roads in Tajikistan with ADB support. Source: adb.org

ADB is also working with the Government of Tajikistan to implement energy sector reforms, improve financial management, and reduce system losses. ADB has nurtured a stable microfinance industry in Tajikistan, with increased public funding for critical social expenditure and policy reforms to improve the investment climate, tax administration, public finance management, and social protection. ADB helps Tajikistan to develop a range of knowledge products on creating productive employment through public– private partnerships and vocational training, promoting economic diversification, enhancing climate resilience, and ensuring food security.[27]

The International Development Association has worked with Tajikistan since 1993 in order to maintain sound economic management and policy; promote private sector–led growth; rehabilitate critical infrastructure, especially in energy; create productive jobs, including for returning migrants in the agriculture and other sectors; and support human development and social inclusion by reforming social services and rehabilitating infrastructure in public health and education.

IDA helps Tajikistan to improve rural economy. Source: akipress.com

The IDA is helping Tajikistan to mitigate the long-term risks of climatic and natural disasters and, given the existing connectivity bottlenecks, gain access to: regional markets through transport corridors and export of surplus electricity generation; and global information and knowledge through infrastructure improvements (including telecommunications), thus diversifying economic opportunities.[29] 

The European Union (EU) institutions operate in three priority sectors in Tajikistan: health, education and rural development. EU projects target poverty reduction in rural and isolated communities, through inclusive on- and off-farm wealth creation and income employment generating opportunities. They encourage sustainable use and management of natural resources and ecosystems and improve resilience to extreme climatic conditions. Tajikistan benefits from EU regional programmes on higher education, regional water and energy dialogue, cooperation on climate change and disaster risk reduction, rule of law, and support to boosting private sector development as well as regional trade.[30]

Turkmenistan

United States is the largest ODA provider for Turkmenistan allocating around US $210 m. since 1991.

USAID works to strengthen and diversify the Turkmen economy, build citizen-responsive institutions, increase good governance, empower youth, and expand access to health care services. Through increased private sector engagement, USAID helps local businesses and entrepreneurs improve their competitiveness, increase revenue and boost job creation. To boost citizens’ trust in their government and bolster transparency, USAID promotes e-governance technologies that improve service delivery, advocates for increased access to information, and helps civil society navigate the government’s complex legal and administrative systems.[31]

Through increased private sector engagement, USAID helps local businesses and entrepreneurs improve their competitiveness, increase revenue and boost job creation. Source: USAID.gov

United Arab Emirates is the third largest bilateral partner in development cooperation with Turkmenistan. Both countries pay great attention to development of construction and transport spheres. Humanitarian sphere, which has big opportunities for intensification of fruitful cooperation in science and education, culture and art, is also an integral component of relations between Turkmenistan and UAE.[32] 

European Union (EU) is among the main ODA providers for Turkmenistan allocating around US $104 m. EU bilateral development cooperation is based on consolidating the general and professional education systems, on capacity-building of the Turkmen public administration, improvement of public finance management, supporting the development of the private sector and agricultural and rural policies. Regional cooperation projects concentrate on education, rule of law, water and environment, border management and the fight against drug trafficking.[33] 

EU helps training border guards, customs and migration officers. Source: europa.eu

Since Turkmenistan’s independence, the United Nations (UN) agencies provided a total of US $69 m. of development assistance to Turkmenistan. UN Development Program in Turkmenistan is promoting human development and supporting the national development agenda. UNDP collaborates with the Government of Turkmenistan and other development organizations on a broad spectrum of issues relating to democratic governance, environment and energy, and human development. In all these areas, UNDP helps to strengthen national capacity and pilot innovative solutions.[35]

Uzbekistan

As seen from the chart #11, Japan is the largest ODA provider to Uzbekistan allocating around of US $1.619 bn. in the period from 1991-2018.

Uzbekistan-Japan Center for Human Development

Various assistance schemes are used by Japan such as credit projects, grant assistance and technical cooperation, which are implemented by the Japan International Cooperation Agency (JICA). JICA[36] provides cooperation for power generation and railroad projects, human resource development in local businesses through the Uzbekistan-Japan Center for Human Development, improvement in the legal infrastructure for business activities, and agriculture and health care.[37]

Japan’s ODA in recent years to Uzbekistan is implemented on the basis of the official program “Country Assistance Policy to Uzbekistan”, which was announced in 2012. The program focused on support of economic growth and prevention of inequality as well as modernization and improvement of economic infrastructure. It also provides support for institutional building to facilitate the transition to a market economy along with promoting the economy and industry. Another sphere of program priority include restructuring the social sector, i.e. agriculture, rural development and healthcare.[39]

According to QWIDS OECD database, Uzbekistan received US $784 m. from International Development Association (IDA). In 2011 the IDA approved the Bank’s Country Partnership Strategy for the Republic of Uzbekistan for the period 2012-2015. The strategy provides the financing of projects on the base of concessional loans and directed to the following areas: modernization and reconstruction of the energy system, reconstruction and rehabilitation of irrigation and drainage networks, improvement of the infrastructure of utilities, and the development of networks and equipment of medical institutions. In addition, the IDA provides its own grant funds for some individual projects.[40]

Reconstruction of irrigation systems in Uzbekistan. Source: trend.az

From 1991-2018, Uzbekistan received a total of US $756 m. in development assistance from Asian Development Bank (ADB). In energy, ADB has supported construction of two combined cycle gas turbine (CCGT) electricity generation units at the Talimarjan power plant.

Talimarjan power plant. Source: carecprogram.org

In transport, ADB is financing road and railway projects along the Central Asian Regional Economic Cooperation (CAREC) Corridor 2 and Corridor 6. ADB’s assistance has helped provide safer and more reliable water supply services to nearly 3 million people in Uzbekistan. Under the Water Supply and Sanitation Services Investment Program, over 4,800 new households were connected to water supply and 170,000 people received access to quality sewerage services. In agriculture, over 3.2 million people in five major regions benefited from irrigation infrastructure that helps ensure sustainable water supply for farmlands. ADB also supported crop diversification and enhanced private sector participation in horticulture value chains.[43] 

United States is the fourth largest ODA provider to Uzbekistan allocating around US $563 m. of development assistance. US Agency for International Development (USAID) is working to support the country’s policy reform agenda, strengthen democratic values, increase regional trade and combat transnational health threats. USAID helps to build trust between government and civil society by facilitating dialogue on critical topics like human trafficking and labor migration, and by helping to implement judicial reform.

To invigorate the economy, USAID is reinforcing Uzbekistan’s effort to join the World Trade Organization and is helping to improve the business climate, create jobs that curb migration and diversify export markets. USAID helps curb the spread of Drug-resistance Tuberculosis (DR-TB) by improving care and treatment services and by working closely with high-risk populations.[44]

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Conclusion

CA countries have benefited greatly from substantial donor contributions, multilateral organizations and individual donor countries. For the period 1991-2018, the main individual country contributors to five CA countries are the following: United States, Turkey, Japan and Germany. Multilateral institutions, including the Asian Development Bank, International Development Association and the EU become the largest multilateral contributors in the region for that period.

International donor assistance focuses on various areas of CA country’s economies and societies. Most support is provided to assist with initiatives aimed at good governance and democracy. In case of Uzbekistan and Kazakhstan, an important part of the donor assistance is directed towards improving the energy sector. In Kyrgyzstan and Turkmenistan, government and civil society is a main sector on which the largest part of development assistance concentrates. In Tajikistan, since its independence, a total of US $677 million of development assistance went to transport and storage sector.


This material has been prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project project. The opinions expressed in the article do not reflect the position of the editorial board or donor.


[1] Naoki Nihei, “International Assistance to Central Asian Countries”, https://www.povertist.com/development-assistance-to-central-asia/

[2] OECD, “Official Development Assistance”, http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/official-development-assistance.htm

[3] OECD-QWIDS, “What Type of Aid data are you looking for?”, https://stats.oecd.org/qwids/

[4] OECD, “Development Finance of Countries Beyond the DAC”, https://www.oecd.org/dac/stats/non-dac-reporting.htm

[5]Kaktus, “Infographica: Glavnyi Grantoed Kyrgyzstana-samo Gosudarstvo”, https://kaktus.media/doc/354341_infografika:_glavnyy_grantoed_kyrgyzstana_samo_gosydarstvo.html

[6]World Bank, “Databank/World Development Indicators”, https://databank.worldbank.org/reports.aspx?source=2&series=DT.ODA.ALLD.CD&country=#

[7] OECD, “DAC glossary of key terms and concepts”, http://www.oecd.org/dac/dac-glossary.htm

[8] US Department of State, “US Relations with Kazakhstan”, https://www.state.gov/u-s-relations-with-kazakhstan/

[9] Kordai wind power station (source: inform.kz)

[10] Alex Galante, “How the US benefits from Foreign aid to Kazakhstan”, the Borgen Project, https://borgenproject.org/us-benefits-foreign-aid-kazakhstan/

[11] Hakan Fidan and Rahman Nurdun, “Turkey’s role in the global development assistance community: the case of TIKA (Turkish International Cooperation and Development Agency)”, https://doi.org/10.1080/14613190801895888

[12] Togzhan Kassenova, Masako Toki, “Japan and Kazakhstan: Nuclear Energy Cooperation”, https://www.nti.org/analysis/articles/japan-kazakhstan-energy-cooperation/

[13] Central Asia plus Japan dialogue (source: Ministry of Foreign Affairs of Japan)

[14] Federal Foreign Office, “Germany and Kazakhstan: Bilateral Relations”,  https://www.auswaertiges-amt.de/en/aussenpolitik/laenderinformationen/kasachstan-node/kazakhstan/218898

[15] Bidding for Development Aid, “Donor Activity in the Kyrgyz Republic”, BID with Development Aid, https://events.developmentaid.org/attachment/ce1d8bd8-d82a-445a-a907-60db0b82f951/Kyrgyzstan%20Report%202018%20-%20Donor%20Assistance%20to%20the%20Kyrgyz%20Republic.pdf

[16] Eurasian Economic Union members (source: akchabar.kg)

[17] Bishkek-Torugart road (source: adb.org)

[18] Bidding for Development Aid, “Donor Activity in the Kyrgyz Republic”, BID with Development Aid, https://events.developmentaid.org/attachment/ce1d8bd8-d82a-445a-a907-60db0b82f951/Kyrgyzstan%20Report%202018%20-%20Donor%20Assistance%20to%20the%20Kyrgyz%20Republic.pdf

[19] Toktogul hydroelectric power station (source: ozodi.org)

[20] Bidding for Development Aid, “Donor Activity in the Kyrgyz Republic”, BID with Development Aid, https://events.developmentaid.org/attachment/ce1d8bd8-d82a-445a-a907-60db0b82f951/Kyrgyzstan%20Report%202018%20-%20Donor%20Assistance%20to%20the%20Kyrgyz%20Republic.pdf

[21] TRT, “Turkey funded over 760 aid projects in Kyrgyzstan”, https://www.trtworld.com/turkey/turkey-funded-over-760-aid-projects-in-kyrgyzstan-19943

[22] Turkish Cooperation and Coordination Agency (source: donors.kg)

[23]  Bidding for Development Aid, “Donor Activity in the Kyrgyz Republic”, BID with Development Aid, https://events.developmentaid.org/attachment/ce1d8bd8-d82a-445a-a907-60db0b82f951/Kyrgyzstan%20Report%202018%20-%20Donor%20Assistance%20to%20the%20Kyrgyz%20Republic.pdf

[24] United States Agency for International Development (source: US embassy in Tajikistan)

[25]USAID, “Tajikistan: Country Profile”, USAID.gov, https://www.usaid.gov/sites/default/files/documents/1861/2019_02_04_Tajikistan_Country_Profile_-_Master_Copy_FINAL.pdf

[26] Construction of roads in Tajikistan with ADB support (source adb.org)

[27] Asian Development Bank, “Asian Development Bank: Member Fact Sheet”, ADB,  https://www.adb.org/sites/default/files/publication/27801/taj-2018.pdf

[28] IDA helps Tajikistan to improve rural economy (source: akipress.com)

[29] The World Bank, “Improving People’s Lives in Tajikistan”, World Bank, https://www.worldbank.org/en/results/2016/04/13/improving-peoples-lives-in-tajikistan

[30] European Commission, “International Cooperation and Development: Tajikistan”, European Commission, https://ec.europa.eu/international-partnerships/where-we-work/tajikistan_en

[31]USAID, “Turkmenistan: Country Profile”, USAID.gov, https://www.usaid.gov/sites/default/files/documents/1861/Turkmenistan_Country_Profile_-_2019.pdf

[32] Turkmenistan Today, “Turkmenistan-UAE: Constructive Cooperation”, Turkmenistan Today, http://tdh.gov.tm/news/en/articles.aspx&article19852&cat30

[33] European Union External Action, “EU-Turkmenistan Relations”, EEAS homepage, https://eeas.europa.eu/topics/trade/4077/eu-turkmenistan-relations_en

[34] European Union representative office in Turkmenistan

[35] UNDP, “Turkmenistan: Overview”, https://www.tm.undp.org/content/turkmenistan/en/home/ourwork/overview.html

[36] For more information on JICA assistance, please look through this file https://www.uz.emb-japan.go.jp/files/000224521.pdf

[37] Ibid.

[38] Uzbekistan-Japan Center for Human Development (source: gazeta.uz)

[39] Japan International Cooperation Agency, “Uzbekistan”, https://www.jica.go.jp/uzbekistan/english/

[40] Ministry of Foreign Affairs of the Republic of Uzbekistan, “Cooperation of the Republic of Uzbekistan with the World Bank”, https://mfa.uz/en/cooperation/international/1225/

[41] Reconstruction of irrigation systems in Uzbekistan (source: trend.az)

[42] Talimarjan power plant (source: carecprogram.org)

[43] Asian Development Bank, “Member Fact Sheet: Uzbekistan”, https://www.adb.org/sites/default/files/publication/27811/uzb-2018.pdf

[44] USAID, “Uzbekistan: Country Profile”, USAID.gov. https://www.usaid.gov/sites/default/files/documents/1861/Uzbekistan_Country_Profile_-_2019.pdf

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