OBJECTIVE
 

The objective of the proposed Program is to mitigate the adverse impacts of the Coronavirus disease (COVID-19) on the health, income, and economic opportunities of Kazakhstan population.

 
DESCRIPTION
 

The CARES Program (Program) is proposed to be 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) overall stimulus measures. Specifically, the Program includes: (i) cash payments to the unemployed (USD95 per month per person); (ii) mitigations to higher food price impacts such as, a lower VAT rate, nationwide food supply program to provide free food to 1.1 million people, price caps for essential foods and and procurement of 41.6 thousand tons of essential foods to support vulnerable groups; (iii) Increase of all social payments (pensions, benefits, etc.) by 10 percent; (iv) new tax incentives such as, zero percent property tax rates (for retail, trade, catering, entertainment and hospitality sectors), land tax (for agricultural producers), income tax for individual entrepreneurs and for SMEs in catering, lodging, transportation, consulting and tourism sectors, six-month exemption from payroll taxes.

 
ENVIRONMENTAL AND SOCIAL INFORMATION
 

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 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 environmental or social impacts. The proposed Program has also been categorized by ADB as “effective gender mainstreaming at entry”, as it strengthens the government’s response to the COVID-19 outbreak by addressing gender and social inclusion needs. ES monitoring will be conducted based on guidelines and check lists determined by ADB.