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IdentifierCreatedClassificationOrigin
08ASTANA1327 2008-07-23 11:32:00 UNCLASSIFIED Embassy Astana
Cable title:  

KAZAKHSTAN - DISCUSSIONS WITH GOK ON CO-FINANCING HEALTH

Tags:   EAID SOCI PGOV PREL KZ 
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VZCZCXRO4101
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1327 2051132
ZNR UUUUU ZZH
R 231132Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2814
INFO RUEHAST/USOFFICE ALMATY 0594
RUCNCIS/CIS COLLECTIVE 0573
					  UNCLAS ASTANA 001327 

STATE FOR OGAC, SCA/CEN (O'MARA)

SIPDIS

E.O. 12958: N/A
TAGS: EAID SOCI PGOV PREL KZ

SUBJECT: KAZAKHSTAN - DISCUSSIONS WITH GOK ON CO-FINANCING HEALTH
SECTOR REFORM

Summary
-------



1. (U) Summary: The DCM and USAID held a productive meeting with
Minister of Health Dernovoi on July 15 to discuss a new joint
strategy in the health sector, the "Partnership for Health
Development" (PHD). The proposal would combine USG assistance funds
with matching funds from the GOK to support reform in the health
sector. The PHD is modeled on the successful Partnership for
Economic Development (PED), which involves co-funding from the GOK
to support economic reform and development objectives. While the
Ministry of Health strongly supports this idea, there are issues to
be worked out, including specifying the GOK funding mechanism. End
Summary.

Minister of Health Supports Partnership Model


--------------------------

-



2. (U) On July 15, the Deputy Chief of Mission and the Director for
USAID's Health Program for Central Asia met with Minister of Health
Dernovoi to discuss future cooperation in the health sector. The
meeting was timely, as both the Ministry of Health and USAID are
currently devising new strategic plans for Kazakhstan's health
sector during the next five years. Minister Dernovoi has secured
commitments of higher funding levels from the government budget,
together with funding from the World Bank for the reforms envisaged.
Minister Dernovoi and the Embassy are seeking resources for USAID's
participation in this effort. Funding from the GOK to support the
PHD would provide the technical assistance required by the new
health strategy.



3. (U) Based on the successful model on the Program for Economic
Development (PED) between the USG and GOK, USAID and the Ministry of
Health (MOH) are now working on a Program for Health Development
(PHD), which would involve co-financing of assistance programs
between the USG and the GOK. Under the proposed compact, USAID
would contribute an estimated $2.5 million per year over the next
five years for health sector reform (including for TB and HIV/AIDS
prevention and treatment), and the GOK would match these funds.



4. (U) Minister Dernovoi noted that the co-financing model is very
attractive and promising. However, this proposal requires
high-level support from the Cabinet of Ministers and Ministry of
Foreign Affairs (MFA). Dernovoi suggested that the USG draft a
letter to Prime Minister Masimov outlining our ideas and plans for
future collaboration in the health sector using the PED model. He
also instructed his staff to have follow-on meetings with USAID
officials to work out all the details.

Financing Issues To Be Worked Out


--------------------------





5. (U) A subsequent working level meeting was held with Ministry of
Health officials to discuss the details of the proposed PHD. One
issue is whether the GOK can use funds from a World Bank loan for
the health sector to finance their share of the PHD, or whether they
need to use funds directly from their state budget. We are
exploring whether periodic audits will be required if funds are
transferred to USAID from MOH as part of the GOK's loan agreement
with the World Bank. Another issue is who would sign such a joint
compact on behalf of the USG and on behalf of the GOK. (Comment:
We think it would be logical for the U.S. Ambassador to sign such a
document as the interagency representative of all USG agencies at
post which receive USG assistance funds in the health sector. End
Comment.) On the Kazakhstani side, the Ministry of Health and the
Ministry of Foreign Affairs would presumably sign the compact.

Comment


--------------------------





6. (U) We see the proposed PHD, modeled on the successful PED, as a
positive way to support implementation of health sector reform,
which is a high priority in our Mission Strategic Plan.
Furthermore, as a mid-level developing country, Kazakhstan can
devote more of its own budgetary resources to match USG assistance
dollars. USAID will continue meeting with the Ministry of Health to
finalize the details of this proposed partnership. End Comment.

ORDWAY