The objective of the Program is to mitigate the adverse impacts of the Coronavirus disease (COVID-19) on the health, incomes, and economic opportunities of Kazakhstan population.
The CARES Program (Program) is supported by a Loan extended by AIIB under AIIB’s COVID-19 Crisis Recovery Facility (Facility) and co-financed with a policy-based loan extended by the Asian Development Bank (ADB) under its Countercyclical Support Facility COVID-19 Pandemic Response Option (CPRO). The Program would cover the Government of Kazakhstan (GoK)’s (i) immediate COVID-19 health policy response, (ii) social protection and employment recovery measures, and (iii) economic stimulus measures. Specifically, the Program includes: (i) cash payments to the unemployed (USD95-100 per month per person); (ii) measures to mitigate the impact of higher food prices, i.e. lowering the VAT rate, a nationwide food supply program to provide free food to 1.1 million people and price caps on essential foods to support vulnerable groups; (iii) increase of all social payments by 10 percent; (iv) new tax incentives, such as zero percent property tax rates (for retail, trade, catering, entertainment and hospitality businesses); zero land tax (for agricultural producers); zero income tax for individual entrepreneurs and for small and medium-sized enterprises (SMEs) in catering, lodging, transportation, consulting and tourism; six-month exemption from payroll taxes; deferral of payments of taxes and other compulsory budget payments for SMEs until June 1, 2020; suspended enforcement of the collection of overdue tax obligations; suspended accrual of penalties for overdue tax obligations until August 2020, and extended tax reporting deadlines until September 2020.
This Loan will be co-financed with the ADB as lead co-financier, and the Program’s environmental and social (ES) risks and impacts have been assessed in accordance with the provisions of ADB’s Safeguard Policy Statement (SPS) applicable to policy-based lending (PBL).
AIIB’s Environmental and Social Policy (ESP) was designed to apply to investment projects and has no provisions for its application to PBL operations. Therefore, as permitted by a decision of AIIB’s Board of Directors, the provisions of the SPS applicable to PBL will apply to this operation in lieu of AIIB’s ESP. This will ensure a harmonized approach to addressing the ES risks and impacts of the Program.
Under its SPS, ADB has categorized the Program as Category C for each of Environment, Involuntary Resettlement, and Indigenous Peoples, on the basis of an assessment of the countercyclical expenditures to be supported by the Program. These focus on expanding and strengthening social safety nets for the most vulnerable groups and are not expected to have any adverse ES impacts. The proposed Program has also been categorized by ADB as “effective gender mainstreaming at entry”, as it will expand the social assistance programs for the poor and vulnerable with clear linkages to women’s welfare. ES monitoring will be conducted based on guidelines and check lists determined by ADB.
Asian Infrastructure Investment Bank
Edwin Hin Lung Yuen
Senior Private Sector Operations Specialist
Client Relations Officer
Asian Development Bank
Joao Farinha Fernandes
Senior Financial Economist, Central and West Asia Department
Director General, State Borrowing Department, Ministry of Finance