- A recent Independent Evaluation Group (IEG)country program evaluation (CPE) reviewed the World Bank’s experience in Kazakhstan during FY04–14, including the first three years (FY12–14) of this CPS. It recommended, among others,that the Bankshould (a) strengthen the enabling environment for its policy advice by linking key JERP outputs to specific, large-scale investments; (b) employ monitoring and evaluation tools to track the effectiveness of the program, the JERP in particular; (c) disclose publicly its main policy recommendations to broaden general understanding of the policies it promotes and strengthen reform ownership within the Government and civil society; (d) engage local partners more proactively, making their participation an integral part and good practice feature of joint preparation of agreed analytical products; (e) consider reintroducing standard pieces of country diagnostics, such as public expenditure reviews and poverty assessments; and (f) be more selective and strategic in efforts to promote economic diversification as well as in its own sectoral engagement, based on its comparative advantage and the depth ofdialogue and strategic convergence with the Government’s programs.
- With the JERP having evolved since FY15–16 into a wholly client-funded RAS program, some of these recommendations may be difficult tocarry out in full.For example, the World Bank can encourage but not require that its policy recommendations be disclosed publicly in some but not all circumstances. In fact, experience has shown that there is value in its ability to provide candid advice on a confidential basis. Likewise, while there are examples of knowledge products being linked to subsequent World Bank-financed investments—the proposed Social Health Insurance Project being the most recent—the creation of such links needs to be client-driven.The authorities are also interested in the World Bank Group’sglobal advice and experienceto enhance the involvement of local partners. Nonetheless, the CPE’s recommendations willinform the CLR andhelp framethe preparation of the upcoming SCD and the next CPF.
- Meanwhile, as noted earlier, the main lesson emerging from the last CPPR and the recent update remains relevant—that government and Bank processes and procedures at all stages of the project cycle, in particular upstream, need to be better aligned.Apart from the implementation of the CPPR action plan (see Box 2), greater coordination with other IFIs will be pursued to resolve systemic cross-cuttingissues affecting the implementation of the program (for example, preparation by Government of additional feasibility studies and detailed designs).The same general lesson also appliesto knowledge activities, andRAS program in particular. For example, arrangements for shaping the RAS agenda a priori, including linkages to Kazakhstan’s macroeconomic and structural reform challenges, needto be improved; and procedures for approving RAS budgets, terms of referenceneed to be simplified andspeeded up. Going forward, greater selectivity, that is, fewer but larger, more comprehensive activities with longer multiyear engagements may be a more appropriate RAS program strategy that would amplify its potential impact. The World Bank will regularly follow up on the impact of its policy recommendations on actual policy changes, including through the analysis of standard satisfaction survey results of the RAS recipients. This issue will be explored in greater depth during the upcoming CLR as background for the SCD and next CPF. Finally, the main lessons cited in the ICRs for seven operations that have closed since FY13are project- and/or sector-specific, with no particularsystemic relevance to the overall portfolio or ongoing CPS implementation.
I. ADJUSTMENTS TO PROGRAM
- Overall, World BankGroup activities in Kazakhstan enjoy strong government ownership, exemplified, among others, by the authorities’ request for significantly increased analytical and lending support following the 2014 shocks to the economy—and illustrated most recently by the first of two planned DPLs approved last November.The DPL series responds to the Government’s request for financing, underpinned by a strong set of policy measures that are expected to support the World Bank’s twin goals of ending extreme poverty and boosting shared prosperity. It aims to strengthen the sustainability of the macroeconomic framework while protecting the vulnerable, which would support the goal of poverty reduction. Policies to enhance the competitiveness of the non-oil economy would support job creation, thus boosting shared prosperity and growth of the middle class. The frequency, level, and quality of periodic policy advisory ‘brainstorming’ sessions—over 20 since 2003 and all co-chaired by the prime minister—andtheir contribution to the Government’s structural reform agenda are also evidenceof the authorities’ commitment to the World Bank Grouprelationship, which will mark 25 years in 2017.
- Against this background, the program’s three main areas of engagementremain highly relevant and thus no change in content is required.On the other hand, two significant adjustments to the choice and mix of instruments became necessary to enable the World Bank torespond appropriately to the country’s significantlychanged macroeconomic stance and outlook. The first was the transition from reliance on knowledge products as the main instrument in FY12–13 toward a more balanced mix of analytics, lending,and TA that characterizedBank activities in FY14–16, and is planned for FY17. The second is the large increase in planned World Bank lending—from the US$2 billion over the six years (FY12–17) originally envisaged to the US$4.2 billion now anticipated. Large investments in the transport sector reflects the fact that the country is vast and landlocked with natural resources unevenly distributed. The investments in the transport sector have also a strong regional dimension, contributing to improved regional connectivity in Central Asia.In additionto transport corridor development, the World Bank is well positioned to support the sustainability of road maintenance and national road safety policies. At the same time, through the ongoing and planned operations, the World Bank Group is aiming to deliveron job creation, SME development, connectivity, and regional development. Finally, as mentioned before, the JERP has evolved into a RAS program. Annex 4 lists the JERP/RAS activities delivered and planned for FY17 and Annex 5 summarizes Bank commitments from FY12–16 totaling aboutUS$3.5 billion as well as proposed lending during FY17 totaling about US$0.7 billion.
- Several objectives and indicators (outputs and outcomes) have been revised or updated to reflect implementation experience andchanged circumstances. These are reflected in the updated CPS Results Matrix (Annex 1)and a matrix of changes to the original CPS Results Matrix (Annex 2). These revisions or updates are self-explanatory and remain entirely consistent with the CPS framework.
 Kazakhstan: Country Program Evaluation (CPE), FY04–14, Overview, pp xx–xxii.
 Agricultural Competitiveness, 2nd Agricultural Post-Privatization, North-South Electricity Transmission, Forest Protection and Reforestation, Nura River Clean-Up, Moinak Electricity Transmission, and Alma Electricity Transmission.
 Report No. 99451-KZ: First Macroeconomic Management and Competitiveness Programmatic Development Policy Loan, October 9, 2015.