COMMUNITY DRIVEN DEVELOPMENT in the KYRGYZ REPUBLIC

1. COMMUNITY DRIVEN DEVELOPMENTin the KYRGYZ REPUBLIC Evaluating the Potential for Scaling Up Ayşe Kudat, Müge Kökten Finkel and Nurbek Omuraliev

2. Objectives • Compare the processes and analyze the impacts of pilot CDD projects in the Kyrgyz Republic • Identify key conditions, institutional arrangements, capacity elements and processes of CDD scaling up • Discuss contextual elements/ catalysts that are conducive to success • Understand factors that constrain CDD scaling up

3. The research is part of CDD strategy in ECA • “Learn more and scale up where there is evidence it is working: (Irrigation, micro-credit, forestry, NRM); • Pilot and assess feasibility of CDD approaches in new areas: (health, municipal development, social protection) • Link CDD with other strong institutional priorities: ( Decentralization, Governance, Civic Engagement) • Influence the enabling environment (policy framework, sectoral strategies, Government attitude)” (A. Marc)

4. Types of Scaling Up Considered • quantitative where a program expands in size, geographical base or budget; • functional, involving increases in the types of activities and integration with other programs; • political, involving increases in political power and engagement with wider political processes; • organizational, involving increases in organizational strength. • There is potential for all types of scaling up in the Kyrgyz Republic

5. Fieldwork • Study focused on the assessment of system-wide and household-level impacts of two programs: UNDP’s Decentralization Program and DFID’s Sustainable Livelihoods In Livestock Producing Communities Program. • A quasi experimental design utilized control-treatment group comparisons for thirty in-depth community case studies and 450 household surveys, collected from 12 ‘treatment’ AOs (34 villages) where UNDP-DFID pilot programs are ongoing, and 6 ‘control’ AOs (12 villages) with no active donor supported CDD program.

6. Pilots use different approaches • UNDP Decentralization pilot operates in 15 Aiyl Okmotus in 6 oblasts. It started in 1998 by building on other UNDP programs. The pilot encourages the creation of village level CBOs and their associations at the AO level. These associations then create a Local Development Fund, jointly funded and managed by local governments and CBOs, in addition to a one-time contribution from the UNDP. The Fund finances activities of individual CBOs or collective projects of CBO associations. • The UNDP Decentralization Program goes beyond community level activities and strengthens democratization, local autonomy and decentralization. • It supports the development of a number of legislative reforms for political, administrative and fiscal decentralization in order to create an enabling environment for the CDD activities. Resulting policies and institutions, in turn, strongly endorse the institutional arrangements and processes developed by the UNDP pilot, and increase the pilot’s potential for scaling up.

7. UNDP’s support for local and regional governments is reflected in Government strategy • The program enlists the assistance of the Congress of Local Communities in expanding its scope and reach, increasing the linkages between communities and local governments. • UNDP model aims to create transparent and accountable local governments able to work with their citizens in a sustainable manner with locally owned and generated resources. • Fiscal decentralization and coordinated flow of external resources to aiyl governments are pre-conditions for the program to achieve its objectives. • DFID works more directly with villagers to improve livelihoods through capacity building and shared systems of information, decision-making and resource management.

8. DFID is in an experimental stage • DFID pilot began in 2001 in 6 Aiyl Okmotus in three regions, but plans to be operational in 14 AOs. It concentrates on improving the livelihoods of rural livestock communities and operates in individual villages through village working groups. • It bypasses local governments and instead initiates an independent representation of the village under the umbrella of ‘working groups’. • Most of the DFID funds are used for capacity building, with the expectation that resources from KAFC (Kyrgyz Agricultural Finance Corporation, established by the Bank) would provide credit to implement the income generating programs. • DFID program places less emphasis on the creation of formal CBOs and CBO-local government partnerships, and utilizes village level working groups for social mobilization in sustainable development projects.

9. The World Bank • WB has been instrumental in establishing many of the institutions that support CDD pilots of donors. • WB is set to launch the Village Investment Project, which will continue to partner with other donors to fund community level investments. • WB will play a key role in scaling up many of the ongoing CBD/CDD pilots

10. Socio/Cultural/Economic context contains elements supportive of CDD Socialist Experience—provided one context for CDD “Some participatory mechanisms had been set-up • Individual initiative, especially in the informal sphere, was widespread • Rhetoric was supporting participation • Participation was captured by the State and political elites (outside of the State) • People did not like imposed collective action, but if there was no other mean to resolve a problem they used their earlier experience and capacity to carry out participatory programs provided that they saw rapid individual benefits.” (A. Marc) Indigenous traditions of mutual help and community mobilization have provided a significant context for community action.

11. People are supportive of the CDD efforts • CDD pilot programs and micro-credit experiences empower the poor. • Capacity creation at the community level facilitates links between CBOs and local governments. • Indigenous traditions of mutual help and community mobilization mechanisms have been significant in expanding the scope of the CDD projects. • Information concerning the success of the pilots is spreading rapidly. • CDD projects have particularly empowered women by engaging them in various group activities. • CDD pilots have improved the targeting of private benefits, enhanced public goods and increased social safety for the poor and the vulnerable.

12. Pilot CDD Programs Produced Positive Outcomes • Perceived and actual impacts of CDD pilot programs on poverty reduction and social capital formation are positive. • They have stimulated development investments in an increasing number of poor communities. (quantitative scaling up) • Capacity building efforts at the community level have been effective in stimulating small credit group activities as well as village based investments. (functional scaling up) • CBOs and their associations are establishing effective links to local governments, have undertaken joint projects, and are forming credit associations. (organizational scaling up) • CDD initiatives have contributed to significant changes in the legal framework and to decentralization. (political scaling up)

13. Pilot CDD Programs Produced Positive Outcomes • Incomes of all pilot communities have increased compared to non-pilots. • CDD pilots have introduced innovative techniques for farming, livestock breeding, and common resource management. • There has been a visible increase in the collective action capacities of the communities with CDD experience. Trust between community members themselves, and between citizens and local governments has also increased.

14. CDD pilots facilitated small scale infrastructure development

15. CDD pilots perceived as catalyst for mobilization

16. CDD activities improved livelihoods

17. Several Factors will Facilitate Scaling up • The Kyrgyz Republic has a relatively stable political environment. • The Government is committed to decentralization. • There is a positive agrarian economic environment to support both micro-credit and village based development initiatives. • Labor force is relatively well educated and can easily be trained in innovative methods of farming and livestock raising. • Indigenous self-help mechanisms facilitate group based initiatives. • Previous CB projects exposed many communities to working collectively. • Favorable institutional arrangements are evolving to scale-up CDD. CDD projects benefit from services provided by RAS and KAFC. CBO Associations and Local Development Funds are making micro and group credit available for the poor. The Congress of Local Communities plays an increasing coordination role between Local Governments (LG)and has enabled the expansion of the Decentralization program. • Donor coordination and experience sharing have been good, facilitated by the Bank.

18. Enabling Environment can be Improved • There is room to enhance capacities of LGs and CBOs. Funding is needed for community mobilization and community investments, especially because fiscal decentralization is new and high rural poverty rates prevail. • Social capital, new and traditional, is not fully recognized by formal credit institutions.Despite successful repayment histories, CBOs must produce time and money consuming paper work for each credit application. This, in turn, discourages participation in CBOs for projects benefiting their communities as a whole. • Licensing, regulatory and reporting requirements remain excessive. Continued government intervention in agriculture markets also poses problems, even though product prices are mostly liberalized and agribusiness reforms have started. • Land and housing markets are undeveloped.As a result, many poor individuals are not qualified for micro or group credit.

19. Recommended Specific Actions • Scale-up group credit (micro-credit) quantitatively, which will require institutional strengthening of the financial sector so that social capital can be used as part of collateral. • Provide incentives for group credit initiatives, such as lower collateral requirements and longer repayment periods, to allow groups to engage in sustainable and diverse economic activities. • Revise regulations to avoid over taxation and over bureaucratization of CBO activities. • Accelerate capacity building support for CBOs and associations of CBOs, combined with efforts directed at local governments. • Encourage the Government to expedite fiscal decentralization measures through a concerted donor effort. • Liberalize land markets further. • Facilitate the association (or federation) of CBOs to undertake village level investments and the association of local governments for regional investments. Decentralization efforts should empower both the regional and local governments.

20. Some Immediate Steps • Use existing programs as the basis for scaling up CDD, and incorporate DFID, UNDP/PAC and other pilots to support sustainable poverty reducing initiatives. • Work within the Presidential Decree of April 23, 2003, and make use of the enabling environment created by the Decree. • Collaborate with the Congress of Local Communities and others to support further fiscal decentralization. • Support local governments where citizens have already been mobilized in order to lower initial expenses and to benefit from existing positive CDD momentum. Start with communities where the efforts of UNDP/PAC, DFID, USAID, Swiss Helvetas, Camp, and other initiatives have promoted group activities, which includes over a third of the Ayil Okmotus in the country.

21. Some Immediate Steps • Support legislation to reduce over-regulation, over-taxation and excessive bureaucratization. • Utilize Rural Advisory Services, which are operational in many Aiyl Okmotus and have accumulated valuable experience in assisting sustainable development initiatives. • Support efforts of the Congress of Local Communities to strengthen the network of local governments and to develop the administrative and financial capacities of Aiyl Okmotus nation-wide. • Work with LGs that demonstrate enthusiasm for CDD activities; not all LGs may be interested in working jointly and in equal terms with their citizens in collective village level investments. • Make sure that communities do not fall through the cracks of the system if their hesitation and low willingness to participate in CDD activities are attributable to extreme isolation or poverty. • Create community based, participatory M&E systems. Utilize the network of LGs for nation-wide monitoring.

22. Model for Scaling-Up CDD

23. Implications for ECA • Build CDD from the bottom-up, collaborating with local government • Anchor CDD in the process of decentralization and municipal governance • Design systems where individual or family benefits clearly derive from common action • Maximize the use of community resources, social and physical