[{"bbox": [96, 153, 1136, 257], "category": "Text", "text": "MIP Priority Areas (Education Budget Support programme adopted in 2021 under Specific Objective 2: Water Resource Management Budget Support programme to be adopted in 2024 under Specific Objective 3: Support to PFM embedded in a Budget Support programme makes sense as PFM is an overall criterion in Budget Support disbursements."}, {"bbox": [85, 317, 324, 348], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [85, 382, 235, 410], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [96, 428, 1136, 641], "category": "Text", "text": "The Kyrgyz Republic is a land-locked, lower-middle income country with one of the lowest gross domestic products among Central Asian countries (USD 1,180 per capita, World Bank Atlas Method 2021). The country has the most liberal and open political system in Central Asia, although during the last two decades it experienced periods of political and social instability. Civil society is considered one of the most vibrant in the region, but trends for shrinking civil space are on the rise, as underscored by the draft Law on Foreign Representatives, which places significant restrictions on civil society organisations. Political developments require continued monitoring, and if restrictions materialise, adaptations to cooperation programmes and implementation modalities might be required."}, {"bbox": [96, 666, 1136, 986], "category": "Text", "text": "In 2021-2022, the country showed strong signs of recovery from COVID-19. Real GDP grew by 3.6% in 2021 and expanded further by 7% in 2022, demonstrating resilience to the first shock waves from the Russian invasion of Ukraine. However, the future outlook includes heightened uncertainty, which has to be adequately reflected in the economic policy planning. Growth is expected to recede to around 4% in 2023. High inflation (15.4% in 2022 and 10.7% in April 2023, year-on-year) continues to erode households' incomes. The economy is poorly diversified and heavily dependent on gold production (about 10% of GDP and 35% of exports), remittances (15% of GDP in 2022), and foreign aid (7-8% of GDP). Public debt stood at around 53% of GDP in mid-2023; however, even though the bulk of it carries concessional rates, it is exposed to exchange rate risks as around 88% of it is denominated in foreign currencies. The country's fiscal position recorded a modest deficit of 1.1% of GDP in 2022. However, high recurrent spending continues to constraint the fiscal space available for the needed capital investments and social expenditures. Sustained efforts will be needed to bring down the fiscal deficit without jeopardising growth."}, {"bbox": [96, 1011, 1136, 1172], "category": "Text", "text": "The geography and topography of the Kyrgyz Republic make it one of the most vulnerable countries to climate change in Central Asia. Temperature changes in the Kyrgyz Republic have outpaced global averages.¹ Increasing melting of the glaciers, changing rainfall patterns, and increasing droughts will likely reduce the reliability and availability of water for domestic consumption, irrigation, hydropower and thermoelectric cooling. Water management is the top adaptation priority included in the Nationally Determined Contribution revised in 2021. These risks call for a more organised approach to managing water resources."}, {"bbox": [96, 1197, 1136, 1490], "category": "Text", "text": "The country has developed and is implementing the following strategic documents related to climate change in the water sector. In this sense, the action will directly and indirectly support: the Nationally Determined Contribution updated in 2021 with mitigation and adaptation measures affecting water resources management; the National Development Strategy of the Kyrgyz Republic for 2018-2040; the Climate Investment Program of the Kyrgyz Republic and Program for the Development of a Green Economy in the Kyrgyz Republic for 2019-2023; the National Adaptation Plan in the Kyrgyz Republic. The further development and promotion of the climate agenda will be accompanied by active actions by the Cabinet of Ministers of the Kyrgyz Republic, as set out among others in the National Adaptation Plan when it is completed. The importance of climate action and the need to improve the national climate policy has received institutional confirmation in the creation of the State Committee on Ecology and Climate of the Kyrgyz Republic, which is an authorized state body for environmental safety and climate sustainability, and whose chairman is a member of the Cabinet of Ministers of the Kyrgyz Republic."}, {"bbox": [96, 1514, 1136, 1569], "category": "Text", "text": "The Integrated Water Resources Management Budget Support programme will foster an enabling environment for reaching Global Gateway objectives under our bilateral and regional cooperation. This Action is aligned with the"}, {"bbox": [85, 1597, 1145, 1647], "category": "Footnote", "text": "¹ Mean temperature is a base index representing the average air temperature over different timescales (e.g., seasonal or annual). This index is well covered by data for past, present and future periods from both observations and model simulations."}, {"bbox": [1037, 1682, 1145, 1707], "category": "Page-footer", "text": "Page 4 of 34"}]