Final Report Volume I

Evaluation of the Poverty
Reduction Scheme in
Central Asia
Lot No
4 -Sectorial and project
evaluations - CONTRACT FOR
SERVICES No. 2006/129514 Version 1
Final report
Volume I
Client: European Commission
ECORYS Nederland BV
Arto Valjas
Erik Klaassens
Emilio Valli
Chnara Mamatova
Nemat Makhmudov
Rotterdam, 20 June 2007
DK/DvdW/FE94075rp1

DK/DvdW/FE94075rp1
ECORYS Nederland BV
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ECORYS Macro & Sector Policies
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Table of contents - Volume I: Main Report
Executive summary..............................................................................................7
1 Introduction ......................................................................................................15
1.1 Background ................................................................................................15
1.2 Poverty and conflict potential in Central Asia ...........................................15
1.3 National strategies for poverty reduction....................................................16
1.4 EC Poverty Reduction Scheme...................................................................17
1.5 Poverty reduction under DCI......................................................................18
2 Evaluation Methodology ..................................................................................19
2.1 Evaluation criteria.......................................................................................19
2.2 Evaluation framework ................................................................................20
2.3 Evaluation process .....................................................................................20
3 Findings and conclusions..................................................................................25
3.1 Relevance....................................................................................................25
3.2 Effectiveness...............................................................................................35
3.3 Efficiency....................................................................................................41
3.4 Expected impact .........................................................................................43
3.5 Sustainability ..............................................................................................47
3.6 Cross cutting issues.....................................................................................49
3.7 Visibility ....................................................................................................50
4 Lessons learned and recommendations ..........................................................53
4.1 Programme level.........................................................................................53
4.2 Project level ...............................................................................................55
Annexes................................................................................................................59
Annex I Evaluation Framework.........................................................................61
Annex II Literature.............................................................................................67
Annex III List of persons and organisations.....................................................71
Annex IV Table of Acronyms ...........................................................................77
Annex V Terms of Reference..............................................................................79
DK/DvdW/FE94075rp1

Executive summary
Background and introduction
The specific objective of the evaluation is “To review the EC’s poverty reduction scheme
in the framework of the TACIS programme, from 2002 to date in Central Asia
(Kyrgyzstan and Tajikistan), and to give recommendations for the future programme
design and implementation in compliance with the new DCI instrument.”
The majority of the rural population in Central Asia is living in poverty. Poverty in the
context of this evaluation should be understood not only as material deprivation and lack
of economic opportunity, but also vulnerability and deprivation in terms of access to
health and education, power and influence, diminished social status and human dignity.
The target regions of the evaluation are the Ferghana valley, comprising the Batken
region in Kyrgyzstan and the adjacent Soghd region in Tajikistan, and the Khatlon region
in Tajikistan. The Ferghana valley has a specific geography and ethnic diversity, divided
by Kyrgyzstan, Tajikistan and Uzbekistan, and a potential for conflict and social unrest.
Kyrgyzstan and Tajikistan have prepared Poverty Reduction Strategy Papers (PRSPs).
Kyrgyzstan has been assessed as ‘potentially’ reaching most of its targets for the MDGs
by 2015. However, 40 percent of the population still lives below the official poverty line,
a figure which rises to 65 percent in rural areas. The Kyrgyz success in macro-economic
stability has been achieved through a reduction in state expenditures, including cuts in
education, the public health sector and social services. Tajikistan is one of the 20 poorest
countries in the world, with some 65 percent of its population living below the poverty
line. The Government of Tajikistan faces major obstacles in fulfilling the Millennium
Declaration and the UN has identified a funding gap of $2 billion over the period up to
2015.
There are a number of EC programmes active in Kyrgyzstan and Tajikistan but most of
the EC funds have been provided in the framework of the TACIS programme. The
TACIS Central Asia programme has been structured along three tracks, among them the
EC Poverty Reduction Scheme (or Track III). A total of 65.5 M€ has been allocated to the
Scheme for the period under evaluation. Other major providers of technical and financial
assistance include WB/IMF, ADB, EBRD, the Islamic Development Bank, the UN,
USAID and Japan.
Poverty reduction will remain as one of the priorities of EC assistance within the new
financial instrument DCI. The new DCI Central Asia Strategy and Indicative Programme
for 2007-2010 identifies three main areas of cooperation, among them “Poverty
Reduction and Increasing Living Standards”. Under this main area of cooperation, a focal
Evaluation of the Poverty Reduction Scheme in Central Asia 7

sector titled “Regional and local community development” corresponds to what has been
Track III of the TACIS Central Asia programme.
Methodology and process
The evaluation methodology was designed to meet the requirements and expectations of
the Terms of Reference. The evaluation was carried out based on the project cycle
management evaluation criteria. The focus was on relevance and effectiveness. In most
cases, impact assessment had to be limited to expected impact as projects were still on-
going or they had been completed very recently. Efficiency and potential sustainability
were addressed in terms of lessons learned.
The evaluation criteria and questions were detailed in an Evaluation Framework. The
Framework defined the performance indicators, sources of information and methods of
information collection. One of the main limitations was the limited availability and use of
indicators in the partner countries and within the Scheme, and the lack of baseline data.
The evaluation started with a comprehensive literature research covering the PRSPs and
other poverty related documents, TACIS and other EC and donor programme documents
as well as project specific documents and reports. Upon request by the EC, the review in
the Khatlon region was done by assessing the draft evaluation report titled "Enhancing
Individual Incomes and Improving Living Standards in the Khatlon Region, Tajikistan".
Based on the documentation review, six projects each in the Kyrgyz and Tajik part of the
Ferghana valley plus one regional project were selected for a thorough analysis, including
a site visit. In financial terms, this represented - depending on how the calculation was
done - between 60 and 90 % of the contracted funds by the time of the evaluation. The
site visits provided an opportunity to observe the performance of projects, to collect ‘on
the ground’ information and to carry out in-depth consultations. After the field visits, a
brainstorming workshop was held to refine conclusions and to develop recommendations.
Findings and conclusions on relevance
Overall, the Scheme’s relevance was found to be satisfactory. The Scheme was found to
be in line with the PRSPs and other national and international development strategies.
However, the objectives were not only related to poverty reduction but also to conflict
prevention and cross-border cooperation. As a result, the target groups were not always
the most vulnerable sections of the populations and geographic focus was on the
bordering districts rather than on the poorest districts of the target regions.
Major delays in contracting (less than half of the 2002-2006 budget had been contracted
by the beginning of 2007) affected negatively the relevance of projects as there were
changes in their external environment between their conception and the start of
implementation.
The Scheme was being implemented through a set of projects which, although in theory
complementary to each other, were implemented independently. Most projects were
based on a holistic, area based and participatory approach. The sectors covered included
agriculture, water supply and irrigation, micro-credit, vocational training and SME
Evaluation of the Poverty Reduction Scheme in Central Asia8

support (see comparison of results under “effectiveness” below). Projects were
implemented through direct agreements with UNDP, service contracts with consulting
firms or grant contracts with international and local NGOs.
Overall, the holistic approach of projects matched well with the needs on the ground.
Both “soft” and “hard” components were needed: mobilisation of communities and
capacity building combined with infrastructure works and supplies. Grant contracts and
direct agreements succeeded in this better than service contracts.
Complementarity with other EC programmes and other donors was not ideal. Instructions
for calls for proposals, ToRs and contracts were not explicit in this respect. In
implementation, contractors were given the responsibility to coordinate but they
sometimes rather focused on implementing their ToR than tried to seek synergies with
other projects. A major new ADB programme to coordinate with had recently emerged in
Kyrgyzstan.
While there seemed to be few contact points between the TACIS Poverty Reduction
Scheme and NGO programmes such as EIDHR, a marked potential for synergies existed
between the Scheme and the EC Food Security Programme (FSP). However, apart from
one TACIS project there seemed not to have been direct cooperation. The FSP was also
shifting its focus from agriculture to social sector. Its concentration on the reform of state
institutions could also be seen to contradict the self-help and community-based approach
under TACIS.
Findings and conclusions on effectiveness
Overall, the Scheme’s effectiveness was found to be satisfactory. To enhance
effectiveness, most rural based projects supported and worked through community based
organisations, including for the provision of access to safe drinking water. Drinking
water supply systems were a successful undertaking: targets were reached and even
exceeded.
Training of farmers provided more mixed results: initial indications on the forthcoming
harvest were positive but at the same time farmers complained that they could not apply
the knowledge gained without agricultural inputs.
Works in irrigation infrastructure were affected by a too short project duration. That in
turn was due to a variety of reasons: delays in contracting, longer than expected inception
periods, and adverse external factors such as weather conditions.
Credit was found to have been an important vehicle to promote commercial activities in
rural communities. However, it had not been combined effectively with training of
farmers or vocational training activities.
Support to urban enterprises was provided through training for entrepreneurs, business
incubators and centres. The effectiveness of these activities remained below expectations,
mainly because of delays in implementation, but also because of weak project design.

Findings and conclusions on efficiency
Overall, the Scheme’s efficiency was found to be good. However, there were big
differences in efficiency between different implementation modalities and between
projects. In general, resource utilisation in grant contracts and direct agreements was
more efficient than in service contracts. International technical assistance was expensive
in view of the beneficiaries’ needs and combining technical assistance with supplies
and/or works proved difficult.
In general, project outputs were produced with planned means. However, it was
cumbersome to make modifications in the resource utilisation through formal contract
addenda. This caused delays in implementation and was not always possible or accepted.
The inflexible nature of EC contracts, together with strict interpretation of EC
procurement rules (in particular the rules of origin) affected negatively efficiency.
The EC delegation’s monitoring role was strong in contractual and financial issues but
less obvious in substance matters. Due to expiring contracting deadlines, timing of calls
for proposals was not always ideal, e.g. calls for proposals for infrastructure projects were
launched against winter and the commencement of works had to wait until spring.
On the contractor side, project management in general was efficient although in some
projects only after initial problems had been resolved. By that time, almost half of the
implementation period had passed. Planned objectives and results had to be adjusted. In a
number of projects, efficiency of project implementation was enhanced through active
participation and financial and/or in-kind contributions of beneficiaries.
Findings and conclusions on expected impact
Overall, the Scheme’s expected impact was found to be not satisfactory. There were a
number of factors causing this such as the too short period of implementation, lack of
attention to potential synergies between projects and an emphasis on achieving outputs
rather than impact. A patchy geographic approach (projects operating in selected villages
across the region but not covering a complete district or sub-district) was also to be
blamed as scattered projects did not manage to create a “lighthouse” effect (selected
villages providing a model for neighbouring communities) without additional project
work in the surrounding communities.
Measuring of impact was difficult as indicators, although mentioned in programming
documents, had not been used systematically at programme and project levels. Although
some projects included an activity on baseline data collection or diagnostic surveys in
their initial work plans, these were not followed up in terms of repeat or ex-post surveys.
Where data was collected, this was mostly in terms of needs and output related, and not
on the income, health, education etc. status of the target population.
Some indications of progress towards reduced poverty were found, mainly in the data
collected by the national statistics offices, including poverty indexes and on MDGs. At
the community level, so-called “poverty pyramids”, which classified families in poverty
groups, demonstrated positive trends in income and wealth generation. Discussions with
the groups transpired that remittances from migrant workers contributed to this shift more
than donor projects.

In order for the Scheme to have an impact on vulnerability, the most vulnerable should
have been included into self-help groups or other community based organisations.
Participation to such groups however depended on people’s own initiative and there were
no specific strategies to increase the involvement. Only in a few cases projects managed
to reach the most vulnerable. Impact on employment was also limited: when assistance
resulted in some form of employment, this was often temporary, or only partial.
A positive impact was noted on the capacities of community based organisations but an
impact on the local administration was less evident. Investments in drinking water
systems, combined with training of beneficiaries in hygiene and sanitation, had a clearly
positive impact on the health status of the targeted populations.
Findings and conclusions on potential sustainability
Overall, the Scheme’s sustainability was found to be not satisfactory. In several cases,
beneficiaries’ participation in project formulation had been weak, and/or without an effect
on “pre-designed” project activities. This lowered the potential sustainability as
beneficiaries did not feel ownership of projects. The ownership was found to be better
within the local communities than in the local administration.
Too short project duration affected the possibilities to apply participatory planning and
implementation methods. Short duration also reduced the time available for training and
other capacity building activities. In some cases, it forced projects to concentrate on
delivering hardware at the expense of human resources development and capacity
building. Sustainability of projects implemented through grant contracts and direct
agreements benefited from the contractors’ continued presence in the target regions.
In a number of projects, community based groups were formed and trained. In cases
where these groups were formed for a specific purpose, such as to obtain collective credit,
and the members of the group did not share long-term goals, the groups disintegrated
after the specific purpose was no longer valid. The benefits of training were lost.
Continuation of project benefits often depended on the prospects of rural organisations to
survive. Specific purpose institutions such as water users’ associations and revolving
funds had better potential for financial sustainability than general purpose institutions
which offered more abstract services and could not be self-financed through service or
membership fees. New EC projects could not be expected to finance them either. With
regard to appropriateness of technology, three framework contracts in Kyrgyzstan relied
too heavily on internet for informing rural farmers and traders.
Recommendations at the programme level
As the selection of the target regions was security motivated, conflict prevention
aspects should be mainstreamed in the on-going TACIS scheme and in the future DCI
local level scheme. The schemes could be considered rather as “poverty reduction
and conflict prevention” than only “poverty reduction” schemes;
Alternative implementation approaches could still be considered instead of the “set-
of-projects” approach applied until now. One Programme Management Unit in the

region(s) could be in charge of all activities, whether projects or other kind of
support. Alternatively, an EC financial contribution to an existing rural development
scheme, such as ARIS in Kyrgyzstan, could be considered;
In order to address the multiple causes of poverty in the target regions, the DCI
scheme should continue to support income generation and productive infrastructure
as well as social services and social infrastructure. To honour the EC long-
time:commitment, the geographical coverage should remain the same as under
TACIS;
Under the DCI, pure technical assistance without supplies and works should be used
only in exceptional cases where its appropriateness is assessed positively in advance.
Otherwise, “soft” components such as policy advice and training should be combined
with “hard” components such as agricultural inputs and infrastructure works (and
micro-credit if the EC rules allowed it);
The DCI local level scheme should involve public administration in its activities and
strengthen their capacities as service providers. In particular, the DCI scheme should
support state reforms through local pilot projects as well as community-based
alternative and/complementary services, in line with the policy work done at the
national level and promoted by the EC (see next recommendation);
Synergies should be sought between the DCI local level scheme and the DCI budget
support programme. The responsible EC staff, consultants and authorities of one
programme should be associated in the planning and implementation of the other
programme;
As indicators, the new DCI Indicative Programme for 2007-2010 rightly refers to
national statistics on poverty levels, PRSP implementation reports and MDGs in the
targets regions. A core set of such indicators, on which data is collected by national
entities, should be used at the programme level;
While the Poverty Reduction Scheme’s visibility in the rural areas was good, the EU
visibility in general should be improved. In addition to the provision of visibility
materials, proactive communication at all levels should be used;
Under the DCI, more time should be allowed for implementation of holistic, area
based and participatory rural development projects. Otherwise, alternative approaches
should be considered (see next recommendations).
Recommendations at the project level
If the duration of projects cannot be extended, implementation approaches should be
adapted to the time and resources available. Targeted projects should be considered,
or participatory rural appraisals should be done during project formulation (before
presenting an application). Changes in the external environment between the
formulation and start-up phase should be taken into account during the inception
period, if needed leading to a revised work plan for implementation;
In order to enhance impact, full coverage of a sub-district or a district should be
preferred instead of targeting selected villages across the region(s);
Instructions for calls for proposals should be worded very carefully. The application
form should require applicants to elaborate on links and synergies with other projects
and donors, and this section should form part of the evaluation criteria. Coordination
with other projects and donors should be a contractual obligation;

In Kyrgyzstan, activities should be coordinated especially with the new ADB
Southern Agriculture Area Development Project. In Kyrgyzstan and Tajikistan,
activities in the social sector should be coordinated in particular with UNICEF;
Exit strategies should be developed early enough, preferably already in the design
stage. Existing partner country organisations and networks, if necessary supported by
donors, should the basis which to build on;
Combined participatory planning methods and expert knowledge should be applied in
needs assessments, as the setting for farming and business has completely changed
since the soviet era and too hastily conducted PRAs could result in wrong choices
based on the beneficiaries’ knowledge of available solutions;
The timing of calls for proposals for infrastructure projects should take into account
the agricultural season and the period when works can be carried out;
Systematic collection of a limited quantity of easily accessible information should be
a requisite for each community based project. Project level indicators should be based
on a core set of programme level indicators and followed up through surveys;
As the poorest and the most vulnerable were not always present in self-help groups,
training etc, specific strategies should be designed and implemented in order to
increase their involvement;
In order to create sustainable long-term employment and to be more specific and
targeted in vocational training, future employment creation activities should be based
on a realistic assessment of employment opportunities in the regions;
Support to community based groups should focus on groups which already exist or
which share a clearly identified long-term goal so that they will not disintegrate after
the short-term goal has been achieved and training has been delivered;
Percentage of women in all activities should be raised (mainstreaming) and there
should be more activities that specifically target women and female-led households.

1 Introduction
1.1 Background
This draft final Evaluation Report on the Poverty Reduction Scheme in Central Asia has
been prepared by a team from ECORYS Nederland B.V. under framework contract
EuropeAid/116548/C/SV. The Report consists of two volumes: this main body of text
(Volume I) and individual project evaluation reports (Volume II).
The draft Evaluation Report is the second major output of the evaluation. The first output
was the Inception Report submitted in March 2007. The latter explained the Contractor’s
understanding of the ToR (see Annex V), outlined the evaluation methodology and
organisation of the work, identified the criteria and sample of projects to be evaluated,
defined itinerary and draft outline of the final report. The major elements of the
evaluation methodology are presented again in Chapter 2 of this Report.
The specific objective of the evaluation is “To review the EC’s poverty reduction scheme
in the framework of the TACIS programme, from 2002 to date in Central Asia
(Kyrgyzstan and Tajikistan), and to give recommendations for the future programme
design and implementation in compliance with the new DCI instrument.”
The beneficiaries of the evaluation will be the EC Task Managers responsible for the
design and implementation of projects under the present and future Central Asia Poverty
Reduction Schemes as well as the EC Officials working at Headquarters in charge of
preparing the future Central Asia Strategy Papers and Indicative Programmes under DCI.
In Kyrgyzstan and Tajikistan, the authorities, economic operators and the civil society at
the national, regional and local level should also benefit from the evaluation exercise.
1.2 Poverty and conflict potential in Central Asia
The majority of the rural population in Central Asia is living in poverty. Poverty in the
context of this evaluation should be understood not only as material deprivation and lack
of economic opportunity, but also vulnerability and deprivation in terms of access to
health and education, power and influence, social status and human dignity. It is also
important to recognise poverty as a dynamic concept, where a multitude of causes drive
people in and out of poverty.
The target regions of the evaluation are the Ferghana Valley, comprising the Batken
region in Kyrgyzstan and the adjacent Soghd region in Tajikistan (there are also Uzbek

enclaves in the area but these are not covered by this Evaluation), and the Khatlon region
in Tajikistan, one of the poorest regions in the country.
Although not the poorest region of Kyrgyzstan, the Batken region has a very specific
geography and ethnic diversity, bordering Tajikistan and Uzbekistan, and is more prone
than any other Kyrgyz region to social unrest. The Sughd region, on the Tajik side of the
border, is the second poorest region of Tajikistan after Khatlon.
A justification for the EC’s Pilot Poverty Reduction Scheme, and especially the selection
of the Ferhana Valley as a target area, has been (and continues to be under the new DCI)
the need to reduce or contain potential conflict in the region. The direct link between
poverty and conflict is subject to much debate (both academic and political), but there is
an international consensus that improved economic conditions contribute to a diffusion of
potential causes of conflict.
The sources of latent or open conflict in the area are presumed to include political,
security, economic and social factors at international/regional, national, and local level.
At the local level, the poor in the urban and especially in rural areas experience the
consequences of these conflicts on a daily basis: they are related to land and water
disputes, discrimination in employment, poor business environment, and corruption.
An important shift during the period of transition from planned economies to market
economies has been the loss of productive capacity and the informalisation of the
economy, posing an additional challenge to all development partners. To design
programmes and projects that are effectively targeting poor sections of Kyrgyz and Tajik
populations requires a good understanding of the historic and present economic, political
and social situations, both at macro and micro levels.
1.3 National strategies for poverty reduction
Poverty reduction is a major priority for the Central Asian countries and for the
international donor community, including the EC. The countries concerned by this
evaluation, Kyrgyzstan and Tajikistan, have prepared Poverty Reduction Strategy Papers
(PRSPs) with the assistance of donors. Main providers of technical and financial
assistance include WB/IMF, ADB, EBRD, the Islamic Development Bank and the UN as
well as several bilateral aid agencies.
Kyrgyzstan has been assessed as ‘potentially’ reaching most of its targets for the
Millennium Development Goals (MDGs) by 2015. However, 40 percent of the population
still lives below the official poverty line, a figure which rises to 65 percent in rural areas.
Large and continually growing inequality has been a worrying trend of the last decade,
with rural-urban internal migration exacerbating the cycle of poverty. Infant mortality
rates are 1.8 times greater in the poorest 20 percent of households than in the wealthiest
20 percent and child mortality is almost twice as great.
The Government of Kyrgyzstan is in principle committed to pro-poor economic growth
and has achieved significant success in terms of macro-economic stability in recent years.

However, this success has been achieved through a reduction in state expenditures,
including cuts in education, the public health sector and social services, which have been
detrimental to sustainable long-term growth and combating poverty.
Today, school enrolment rates are believed to be falling and gender inequality is
entrenched in the country's culture. These two issues are now seen as the greatest
obstacles towards achieving the MDGs.
The Government of Tajikistan has dedicated itself to meeting the challenge posed by the
2000 Millennium Declaration but faces major obstacles in fulfilling the obligations.
Tajikistan is one of the poorest countries in the world outside Africa. Poverty reduction
has been identified by the Government as the number one priority. A needs assessment,
conducted in 2005 by government working groups in collaboration with the United
Nations, identified a funding gap over the period up to 2015 in the order of $2 billion and
donors have been encouraged to double their existing aid commitments.
Although both countries have prepared PRSPs, the policy options defined in these
documents are generic in nature and cannot effectively guide the countries’ strategic
planning and budgetary processes, particularly in Tajikistan.
1.4 EC Poverty Reduction Scheme
Over the past decade, the EC assistance to Central Asia has reached nearly one billion
Euro. EC programmes active in Kyrgyzstan and Tajikistan include DIPECHO-ECHO, the
Rehabilitation and Food Security programmes as well as NGO programmes such as the
EIDHR. However, most of the EC funds have been provided in the framework of the
TACIS programme.
The TACIS Central Asia programme has been structured along three tracks:
1. Regional cooperation component with the objective of promoting good
neighbourly relations in the areas with strategic interest for the EU, such as
Justice and Home Affairs, energy and transport networks, and environment;
2. Regional support programme implemented at national level, to strengthen the
links between assistance and political dialogue in the framework of the PCAs.
Special emphasis is given to trade-related assistance and civil service
development and;
3. Poverty reduction scheme implemented in pilot regions, focussing on poverty
alleviation, community and rural development and on the most vulnerable
groups.
In relation to Track III, the EC has recognized that poverty reduction in these targeted
regions requires long-term cooperation based on the Millennium Development Goals
(MDGs) and a community mobilisation approach in line with the EC principle of
“Linking Relief, Rehabilitation and Development” (LRRD). Moreover, due to the
specific context of the selected regions, poverty reduction objectives will have to be
combined with regional cooperation objectives. The EC Poverty Reduction Scheme in
Central Asia is not an ordinary poverty reduction scheme: it has also wider political and
security dimensions.

The Scheme has had an annual budget of 10 M€ from 2002 to 2004, 18 M€ in 2005 and
17.5 M€ in 2006, totalling 65.5 M€ for the period under evaluation.
1.5 Poverty reduction under DCI
Poverty reduction will remain as one of the priorities of EC assistance to Central Asia
also within the new financial instrument DCI. For the sake of simplification and good
governance, the more than 30 different legal instruments used in the past (among them
TACIS) are since 2004 being transformed into a limited number of thematic and general
instruments. DCI will be the main vehicle to support developing countries in their efforts
to progress towards the MDGs.
The main objective of DCI will be the eradication of poverty in the context of sustainable
development as well as the promotion of democracy, good governance and respect for
human rights and for the rule of law. The new coverage of DCI has made it necessary to
include in it a “political content” reflecting the specific situation in Central Asia.
The programming process under DCI will remain similar to the one under TACIS and a
Strategy and Indicative Programme 2007-2010 have been prepared and approved. The IP
identifies three main areas of cooperation, among them “Poverty Reduction and
Increasing Living Standards”. Under this main area of cooperation, a focal sector titled
“Regional and local community development” corresponds to what has been under
TACIS the track 3 of the Central Asia programme.
The main objective of the evaluation is to provide lessons learned and recommendations
from the past TACIS Poverty Reduction Scheme for the design and implementation of a
new poverty reduction scheme under the DCI.

2 Evaluation Methodology
2.1 Evaluation criteria
The methodology used for this evaluation was proposed in the Inception Report which
was approved by the EC on 7 March 2007. The methodology, including the selection of
sample projects, was further elaborated during the initial stages of the field mission.
The methodology was designed to meet the requirements and expectations set out in the
Terms of Reference. It was considered credible and appropriate for identifying the results
attributable to the EC’s Poverty Reduction Scheme in Central Asia, given the range of
information available, the limited time and the resource constraints.
The evaluation was carried out taking into consideration the project cycle management
evaluation criteria as defined in the PCM Guidelines of the EC. In particular, the
Evaluation Team analysed how well the scheme was doing or had done according to the
following five criteria:
Relevance: an assessment was made on whether the Scheme and the individual
projects made sense in the context of their environment: the consistency of their
objectives with the beneficiaries’ requirements, country needs, global priorities and
partners’ and donors’ policies;
Effectiveness: an assessment was made of the contribution of the results to the
achievement of the Scheme’s objectives: to what extent the objectives were (or were
likely to be) achieved, and to what extent this achievement was the result of the
Scheme and the individual projects;
Efficiency: An assessment was made of the Scheme’s results compared to the costs
incurred (“value-for-money”);
Expected impact: to the extent possible, an assessment was made of what had
happened in terms of poverty reduction as a consequence of the Scheme: long-term
effects of the Scheme in the targeted areas, and when possible on its wider
environment; and
Potential sustainability: an assessment was made of the likelihood of benefits
produced by the Scheme to continue to flow after external funding had ended.
Poverty reduction is a long-term undertaking and poverty is multi-dimensional: it not
only involves material deprivation and lack of economic opportunity, but also
vulnerability and deprivation with respect to health and education, power and influence,
social status and human dignity. With such a wide scope and in order to be credible, the
measuring of the Scheme’s potential impact was limited to the pilot regions. This had
also been the scope of the Scheme’s objectives and indicators, as formulated in the EC
programming documents.

Among the five main evaluation criteria, the focus was on relevance and effectiveness.
The Evaluation Team assessed the relevance of the Scheme vis-à-vis the priorities of the
PRSPs and other national and donor policies. The Team appraised the Scheme’s
complementarity with other poverty reduction instruments targeting the pilot regions,
whether financed by the EC or other donors. The Team considered whether the results
achieved and had effectively contributed to the Scheme’s original objectives.
With regard to the expected impact, whenever possible an attempt was made to assess the
long-term effects, positive or negative, intended or unintended. In most cases, the impact
assessment had to be limited to estimating potential impacts as the projects were either
still on-going or they had been completed very recently. Efficiency and potential
sustainability were also addressed but rather in terms of lessons learned than as a
systematic performance audit (in particular, the Evaluation Team did not analyse project
finances).
2.2 Evaluation framework
The main evaluation criteria, including the evaluation sub-questions, were detailed in an
Evaluation Framework. The Evaluation Framework systemised the methodology,
identifying the issues to be addressed and sub-questions that provided elaboration. The
Framework defined the judgement criteria and performance indicators (variables to be
considered), sources of information and methods of information collection for each of the
evaluation issues and sub-questions.
The Terms of Reference and the Evaluation Framework both contained retrospective
issues that addressed historical performance, as well as forward-looking issues that were
to be used to inform future decisions. Forward-looking issues did not relate to the
achievement of results and, therefore, were not assigned indicators.
The Evaluation Framework is presented in Annex I. Compared with the Evaluation
Framework which was presented in the Inception Report, this slightly revised version
accommodates comments received on the original Framework during the early stages of
the field mission.
In terms of methodology, one of the main limitations experienced by the Evaluation
Team was the limited availability and use of indicators in the partner countries and within
the Scheme, and the lack of baseline data (see chapter 3.4 Expected Impact).
2.3 Evaluation process
The Evaluation Team started the inception phase on 19 February 2007 by identifying and
reviewing available country, programme and project level data in their home offices. The
Team reviewed the Kyrgyz and Tajik PRSPs, related progress reports, poverty reduction
related documents and reports, in particular those of the EC. The initial review covered
the relevant EC Strategy Papers, TACIS Indicative and Annual Programmes, the Food

Security Programme Strategy Papers and Annual Programmes, as well as documentation
related to other EC programmes such as ECHO and EIDHR.
Moving from the country and programme level documentation to the project level, the
Evaluation Team analysed the relevant Project Fiches, ToRs, monitoring and other
reports of individual projects financed from the EC Central Asia Poverty Reduction
Scheme. The Team also reviewed the EC draft evaluation report titled "Enhancing
Individual Incomes and Improving Living Standards in the Khatlon Region, Tajikistan".
The projects covered by that evaluation had been financed from the same Scheme and the
two evaluations aimed to complement each other.
The documentation review continued after the submission of the Inception Report and
throughout the implementation period of the Evaluation. A list of literature is presented in
Annex II.
The Evaluation Team had a briefing in Brussels on 21-22 March, followed by meetings in
the EC Delegation in Almaty on 23 March. The field mission in Kyrgyzstan started on 26
March with a briefing in Bishkek, and continued with interviews with the responsible EC
Task Managers and a number of other stakeholders at the national level. A list of persons
met and organisations is presented in Annex III.
Based on the documentation review, a sample of projects had been selected in the
Inception Report for a more in-depth assessment including a site visit. Further progress,
final, ad hoc etc. reports were requested for these projects before, during and after the
field mission.
The criteria of the Evaluation Team in selecting the sample projects was:
Modality and size of projects: balance between service contracts and action grants;
Geographical coverage in the target regions of Batken and Sughd.
After the briefings, the initial selection of sample projects was slightly modified. Six
projects each in Kyrgyzstan and Tajikistan plus one regional project were selected,
making a total of 13 projects (see Table 2.1 and 2.2).
The Poverty Reduction Scheme had an annual budget of 10 M€ from 2002 to 2004, 18
M€ in 2005 and 17.5 M€ in 2006, totalling 65.5 M€ for the period under evaluation. By
the time of the Evaluation, 2002 and 2003 projects had been contracted, though several
2004 projects, notably NGO action grants in Kyrgyzstan, were yet to be contracted. 5 M€
had been allocated to projects in the Kyrgyz and Tajik parts of the Ferghana valley in
2002, 4 M€ in 2003, 4 M€ in 2004 and 7.5 M€ in 2005. 4.5 M€ had been allocated to
projects in the Kyrgyz part of the Ferghana valley in 2006.
The 2006 9.5 M€ allocation in Tajikistan was for both the Sughd region in the Ferghana
valley and the Khatlon region in the south.
Service contracts, direct agreements and grant contracts for the sample projects amounted
to approximately 8.2 M€. In financial terms, the sample represented over 91 percent of
the total amount allocated in 2002 and 2003 to projects in the Kyrgyz and Tajik parts of

the Ferghana valley, and over 63 percent of the total amount allocated in 2002-2004.
Although these figures are not entirely accurate (e.g. all the allocated amounts were not
contracted), they confirm that the project sample is representative.
In addition, seven NGO projects in Khatlon, Tajikistan were reviewed through the draft
evaluation report mentioned above. An addendum to the evaluation contract was
approved by the EC in order to change the local experts and to allow more time for
meetings after the site visits.
Table 2.1 Projects included in the project sample in Kyrgyzstan
Contract
year
Contract
nr.
Title Amount Nature Decision
2005 85399
Addressing Social
Consequences of Transition in
the Ferghana Valley – UNDP
2239098 Action Grant TACIS 2002
2006 124274
Creation of a regional web-
portal and development of a
communication strategy
188300 Services TACIS 2003
2006 124292
Development of a farming and
agribusiness oriented training
and capacity building
programme
2006 125379
Setting up of a single
administrative information
window in Batken oblast
2006 125083
Rehabilitation of drinking water
supplies, irrigation and
melioration systems in Osh
Province
100000 Action Grant TACIS 2003
2006 131392
Inter-regional Trade
Facilitation
Kyrgyz component of the regional project:
2004 85395
ASCoT - Addressing Social
Consequences of Transition
in the Ferghana Valley
543035
(830535)
Services TACIS 2002

Table 2.2Projects included in the project sample in Tajikistan
Contract
year
Contract
nr
Title Amount Nature Decision No
2006 111726 Agricultural Policy Programme 1049580 Services TACIS 2003
2005 85400
Addressing Social
(Tajikistan) – UNDP
750000 Action Grants TACIS 2002
2006 121649
Improvement of the
production, processing and
sale of medicinal, spicy and
perfumery herbs and plants
2006 121755
Establishment of social
reintegration centres for
vulnerable women in Soghd
region.
2006 121786
Social inclusion through
Income generation in Soghd
province
2006 121849
Inclusive agricultural
development in Sughd:
Supporting Socially
Responsible Growth of the
Farm Economy in Isfara and
Kanibadam
499,675 Action Grants TACIS 2004
Tajik component of the regional project:
2004 85395
ASCoT - Addressing Social
287500
(830535)
Services TACIS 2002
Site visits were carried out for the selected projects. They provided the Evaluation Team
with an opportunity to observe the performance of the projects, to collect ‘on the ground’
information about their results and to carry out in-depth consultations with the
stakeholders. An interview guide was prepared in advance in order to structure the
interviews and to ensure that similar questions were posed by different members of the
Evaluation Team. For several interviews, the Team had to split and work in pairs: the
Team Leader or the Expert in Poverty Reduction was present in each interview.
Questions were normally open-ended in order to gather perceptions, observations, options
and knowledge of respondents. Whenever feasible, respondents were also asked forward-
looking questions that could be useful for developing recommendations for the future.

The Evaluators used a simple scoring mechanism to the sample projects to arrive at an
overall assessment of the main evaluation criteria: A = very good; B = good; C =
problems; and D = serious deficiencies.
The following seven NGO-projects in Khatlon were reviewed through the draft
evaluation report mentioned in the previous chapter. They were not subject to a site visit.
Table 2.3 NGO projects in Khatlon
Contract
year
Contract
nr
Title Nature Decision No
2005 91027
Businesses to Enhance Tajikistan''s Economic
Resources for Vulnerable Groups in SW
Khatlon (BETER)
Action Grants TACIS 2002
2005 102755
Improving living standards in Khatlon region
through control of brucellosis in animals and
humans
2005 102825
Enhancing Individual Incomes and Improving
Living Standards in the Khatlon region of
Tajikistan
2005 90981
Improving living standards of vulnerable
population in Baljuvon and Khovaling Districts
in Khatlon
2005 91026
Improving Livelihoods through Community
Action in Khatlon (ILCA)
2005 91390
Improving income and living standards in
Baljuvan District/ Tajikistan
2005 91391
Enhancing individual incomes and improving
living standards in Easter Khatlon
After the field visits and additional meetings, the Evaluation Team held an internal
brainstorming workshop to refine the preliminary findings and to develop conclusions
and recommendations. The selected projects were discussed one by one based on a draft
project evaluation report prepared for each sample project. The final versions of these
project specific evaluation reports are presented separately in Volume II of this evaluation
report. After the brainstorming, the Evaluation Team had a debriefing in Bishkek.

3 Findings and conclusions
3.1 Relevance
Introduction
An assessment was made on whether the Scheme and the individual projects made sense
in the context of their environment. The Evaluation Team considered the consistency of
the Scheme’s and the individual projects’ objectives with the beneficiaries’ requirements,
country needs, global priorities and partners’ and donors’ policies. Complementarity
issues were also looked at, both within the context of EC assistance to the target regions
and within the wider context of donor coordination. Relevance of the different
implementation modalities was considered and conclusions were drawn in view of the
new financial instrument DCI.
The Evaluation applied a scoring to each of the sample projects. The methodology was
presented in Chapter 2. The individual project evaluation reports, including the value of
scores for each sample project, are presented in Volume II of the evaluation report. For
relevance, 5 projects scored a B, 4 projects scored a C and 3 projects scored a D, making
the average score a C.
The average score would have been higher had there not been three framework contracts
included in the sample (they scored a C and two Ds). These contracts had resulted from a
split of a larger project and they suffered from a lack of synergy between them (see
Volume II: projects 124292, 124292, 125379).
Moreover, relevance was evaluated together with the quality of project design. There
were cases where the project as such would have scored higher for relevance but flaws in
the project design brought the score down. Overall, an adjusted score for relevance would
be between a B and a C i.e. “satisfactory”.
Scheme’s relevance in the context of the PRSPs
Both Kyrgyzstan and Tajikistan had Poverty Reduction Strategy Papers (PRSPs) in place.
Moreover, Kyrgyzstan was one of 13 pilot countries, where a Comprehensive
Development Framework (CDF) had been developed to the year 2010. Kyrgyzstan had
also been chosen as one of the pilot countries for enhanced donor coordination.
A Medium-Term Budget Framework was in place for 2005-2007. In Tajikistan, a second
PRSP was being finalised for 2007-2009 and the EC had provided targeted technical
assistance for its preparation from the TACIS Central Asia programme (Track II).
Both the first and the second PRSPs in both countries were wide-ranging documents. The
common denominator was naturally reduction of poverty but the planned means to

achieve it were numerous. In both countries, the PRSPs covered a wide range of sectors
and measures, thus enabling different kinds of development programmes to be
accommodated within them. The Poverty Reduction Scheme’s overall objective being
economic and social development of vulnerable populations, the Scheme in general was
relevant in the context of the PRSPs. Because of their wide-ranging nature and lack of
focus, the PRSPs however provided little direction for the development of the TACIS
Poverty Reduction Scheme or the new DCI instrument. For the design of local level
schemes, it was important to assess also any regional development plans, as they should
combine the national objectives with the specificities of the concerned region.
Relevance of the Scheme’s objectives for poverty reduction
Based on the EC Country Strategy paper for 2002-2006, the corresponding TACIS
Indicative Programmes for 2002-2004 and 2005-2006 set the overall and specific
objectives for the EC Central Asia Poverty Reduction Scheme.
The objectives set in the IPs were for 2002-2004 to “to assist local communities in 2-3
target regions in their efforts to tackle poverty, particularly amongst the most vulnerable
sections of the populations, through measures designed to improve local governance,
food security, social protection and employment opportunities”. Moreover, it was stated
that “efforts will, wherever possible and appropriate, also promote cross border co-
operation at the local level”.
For 2005-2006, the approach was similar: “to assist the most vulnerable sections of the
populations in the target areas in their efforts to tackle poverty and facilitate economic
and social development”. In particular, attention should be paid “to community driven
development measures designed to improve their income, food security, local
governance, social protection and employment opportunities” as well as to “activities
geared at women and female-led households” and “to strengthen the local authorities’
capacities for comprehensive medium-term planning”. Not only cross-border co-
operation but also “specific actions towards conflict prevention” were mentioned.
The objectives set in the IPs were further elaborated in the project fiches of the TACIS
annual Action Programmes for 2002-2006. Already the first fiches in 2002 spelled out
more explicitly that “reducing the potential for social conflict” was part of the overall
objective. The initial agriculture and social services focus was from 2003 onwards
complemented with regional trade and market access objectives, including rehabilitation
of the transport network.
The objectives of the Scheme were thus wider than those of many poverty reduction
schemes, whether financed by the EC or other donors. The political motivations of the EC
to step up its assistance to the region in the post 9/11 environment were clear. In practice,
a combination of poverty reduction, conflict prevention and cross-border cooperation
objectives were applied. As a result, the target groups were not always the most
vulnerable sections of the populations and geographic focus was on bordering districts
(sample projects 124274, 124292, 125083, 131392, 111726, 121849). As the original EC
selection of the target regions was already security motivated, the conflict prevention
aspect should have been mainstreamed in the Scheme and it should not have been
presented as a poverty reduction scheme only.

The process of programme development
Based on the project fiches, ToRs were prepared for direct agreements and service
contracts. In case of grant contracts, the project fiches were translated into instructions for
applicants for calls for proposals. Subsequently, tenders and calls for proposals were to be
launched. This process, from the approval of the Action Programme to the start of project
activities could normally take from one to one and a half years. In case of the Poverty
Reduction Scheme, however, it took two to three years (sample projects 124274, 124292,
125379, 125083, 111726, 121649, 121786). The deconcentration process together with
the opening of new EC offices in Kyrgyzstan and Tajikistan were stated as main reasons
for this delay.
The delay affected the relevance of projects as there were changes in their external
environment between their conception and the start of implementation. Contractors
should have taken these changes into account by making modifications to their work
plans during the project inception phase. This was most evidently done in the case of
sample project 131392. Even more than relevance, the delay affected negatively
effectiveness and sustainability.
Individual projects’ contribution to the Scheme’s objectives
The first implementation contracts which came out from the identification, formulation
and contracting process were for participatory rural development projects which
encompassed supposedly interlinked components such as water, irrigation, agricultural
extension, micro-credit and vocational training. These were either direct agreements with
UNDP (sample projects 85399 and 85400) or service contracts (sample project 85395)
financed from the 2002 Action Programme.
The call for proposals in Tajikistan in 2006 (financed from the 2003 and 2004 Action
Programmes), though it encouraged a holistic approach (sample projects 121786 and
121849), allowed a more narrow focus as well (sample projects 121649 and 121755). The
call for proposals in Kyrgyzstan in 2006 (financed from the 2003 Action Programme) had
a special focus on small-scale water infrastructure (sample project 125083). The
objectives of these individual projects were in line with the Scheme’s overall and specific
objectives. The projects were relevant although flaws in project design lowered their
combined score for relevance and quality for project design.
In a few cases, the project documents did not demonstrate clearly the link of project level
objectives to the poverty reduction objectives of the Scheme. In some cases (sample
projects 124292 and 131392), this could be considered a mistake in the presentation of
the project logic. However, at least in two cases (sample projects 124274 and 121649) the
project objectives were only marginally linked to the poverty reduction objectives of the
Scheme.
Consistency with the beneficiaries’ needs
Poverty in the target areas is a result of complex problems, comprising low incomes,
limited access to land and water, poor social infrastructure and services, lack of human
capacities and a high level of insecurity due to the establishment of international borders
which created tension between communities and hinder trade. The holistic, area based

development approach of the above-mentioned participatory rural development projects
thus matched well with the needs on the ground.
Considering the poor state of economic and social infrastructure in the target regions,
both “soft” and “hard” components were devised. For example, rehabilitation of drinking
water and irrigation infrastructure was combined with mobilisation of target communities
(water users’ associations, community groups), awareness raising on hygiene and
sanitation and introduction of new agricultural practices and micro-credit. Such projects
were highly relevant to the needs of the population.
The implementation of “soft” components alone in some cases was less relevant to the
needs of the beneficiaries. For example, agricultural or vocational training without having
access to the means to apply what was learned was of limited value to the participants
(sample projects 124292, 121755, 85400). Even if the objectives of some service
contracts were relevant (sample projects 85395, 131392), the fact that they could not
engage in infrastructure rehabilitation diminished their value in the eyes of the
beneficiaries. Direct agreements and grant contracts which contained infrastructure
components (sample projects 85399, 85400, 121849) were considered by the
beneficiaries as more relevant to their needs.
As a conclusion, although the relevance to the beneficiaries’ needs was in general
satisfactory, it could have been better had there been an easy way to combine technical
assistance with works and supplies. TACIS as a technical assistance programme was not
an appropriate instrument for poverty reduction, with its ambiguous limits on supplies
and works. Direct agreements with the UN and grant contracts with NGOs provided a
solution to this mismatch between the beneficiaries’ needs and what could done under a
technical assistance programme.
Complementarity with other EC programmes
Other EC programmes which were active in the target regions comprised ECHO-
DIPECHO humanitarian and disaster relief and prevention programmes, budget support
and grant projects under the EC Food Security Programme and NGOs programmes such
as the EIDHR and the global NGO co-financing budget line.
The implementation partners of the Poverty Reduction Scheme and those of the above-
mentioned programmes were sometimes the same European or local NGOs or
international organisations. The instructions for calls for proposals under the Poverty
Reduction Scheme mentioned that proposed projects had to be implemented in synergy
with existing EC supported projects. The standard application form however did not
require explanation of how such synergies or coordination with other EC projects should
be achieved.
Instructions for the calls for proposals directed implementation partners to present
proposals in certain geographic areas which e.g. in the case of the Sughd oblast were
rather bordering districts than the poorest districts in the oblast. To propose a local
development project in the poorest districts as a continuation to an ECHO-financed
humanitarian project, following the EC principle of “Linking Relief, Rehabilitation and

Development” (LRRD), could thus be perceived to have less chances to be approved than
a project proposed in the “preferred” districts.
Hence, although in principle grant projects under the Poverty Reduction Scheme could
continue the work of ECHO-financed interventions, the application of the LRRD
principle was undermined by ambiguous instructions for the call for proposals. The
instructions and the application form should require that applicants elaborate on such
links and synergies in their proposal and the links and synergies should become part of
the evaluation criteria of their application.
The instructions for calls for proposals should be worded very carefully also for other
reasons. For example, the above mentioned call, although it mentioned village water
supplies in general, did not explicitly mention drinking water under “types of action”
(like it mentioned e.g. irrigation), although drinking water had been identified earlier as a
priority and related interventions had shown good results (sample project 85400). Had it
been mentioned, it might have been possible to finance from this call for proposals the
already identified six drinking water projects that could not be financed under project
85400 because of lack of funds. Two of these projects were later financed through sample
project 121786.
Until 2006, the EC Food Security Programme (FSP) had its own regulation and consisted
of a budget support programme and a technical assistance facility in Kyrgyzstan and a
budget support programme, a technical assistance facility and a rural community
development programme (NGO grants) in Tajikistan. From 2002 to 2006, 38 M€ were
allocated to the budget support programme in Kyrgyzstan and 23 M€ in Tajikistan.
During the same period, around 4.9 M€ were contracted through the grant programme.
The amount is equivalent to what was allocated to the Poverty Reduction Scheme during
the same period.
The objectives of the Food Security budget support were to improve the design,
management and delivery of state programmes and services in agriculture and social
protection, land reform and statistics that were aimed at reducing food insecurity. Funds
were released to the partner Governments through variable and fixed instalments based
on periodical assessments of predefined targets set against a mix of process, performance
and outcome indicators. The grant programme was implemented through calls for
proposals. There was a general feeling among the interviewed persons that the FSP
budget support and technical assistance facility had been an effective tool for policy,
management and organisational development within the state structures.
Sample project 111726 in Tajikistan had been designed in the context of FSP budget
support. Its origin was a need for specific technical assistance to support agricultural
policy development by the Ministry of Agriculture. This was the most concrete and
visible example of cooperation between the Poverty Reduction Scheme and FSP budget
support. Apart from it, there seemed not to have been direct cooperation. However, it is
assumed that small-scale agricultural extension and irrigation activities at the local level
complemented FSP agricultural policy reform initiatives at the national level. This
assumption is based rather on an assessment of the initial design of the programmes than
on coordination of implementation.

With regard to the social sector, the Poverty Reduction Scheme’s initial results in
supporting the state social services were modest (sample projects 85399 and 85400).
Rather than supporting the state social services, the Scheme focused on promoting self-
help and community-based approaches for social inclusion and protection. Within FSP
budget support, the trend was the opposite: increasingly more focus has been put
overtime on social protection issues, including pensions and state institutions, at the
expense of reforms in agriculture. In the future, better coordination and stronger synergies
between the programmes should be sought under the DCI (see below paragraph on
complementarity with the DCI).
As the grant projects financed from the Poverty Reduction Scheme in the Khatlon region
in Southern Tajikistan were excluded from this evaluation, their complementarity with
grant projects financed from FSP had to be reviewed through the draft evaluation report
"Enhancing Individual Incomes and Improving Living Standards in the Khatlon Region,
Tajikistan". Based on the limited information in that report, it could be stated that FSP
grant projects had not been limited to relief type of operations, but that they had
undertaken development work in order to improve food security. The report concluded
that the two programmes “were complementary and possible to coordinate but that the
coordination was not done optimally”.
Complementarity and coordination between NGO grant projects concerns also other
NGO programmes such as the EIDHR, the global NGO co-financing budget line, the
Institution Building Partnership Programme (IBPP), the Phare and TACIS Democracy
Programme (PTDP) and the AENEAS Programme on migration and asylum. Because of
the large number of such EC programmes and the difficulty to obtain information on
projects financed through them, the Evaluation Team, as per their ToR, limited the review
to EIDHR projects.
EIDHR supported projects typically foster the setting up and development of democratic
institutions, strengthen judicial and non-judicial human rights protection mechanisms,
provide training in human rights monitoring, promote media independence, support the
abolition of the death penalty, enhance the rights of women and vulnerable groups and
help develop and enhance civil society participation in political decision-making. The
most visible part of EIDHR in Kyrgyzstan and Tajikistan, and the most work intensive
part for the EC Delegation, are the local calls for micro-projects with a budget between
10.000 and 100.000 €. Around 60 such projects were financed in Kyrgyzstan and
Tajikistan between 2004 and 2006.
There seemed to have been few contact points between the projects financed from the
Poverty Reduction Scheme and EIDHR. In the first one, the NGOs were mostly
European. In the latter, outreach to rural communities appeared to have been limited
(draft evaluation report on Democracy Building in Central Asia 1996 – 2006).
Complementarities on the ground were thus limited.
More in general, as it was evident that EIDHR had contributed to the improvement of
civil society’s working conditions in Kyrgyzstan and Tajikistan (draft evaluation report

on Democracy Building in Central Asia 1996 – 2006), this had benefited NGOs involved
in the implementation of the Poverty Reduction Scheme as well.
On the negative side, the management and administration of EIDHR micro projects had
stretched the capacities of the EC Delegation (draft evaluation report on Democracy
Building in Central Asia 1996 – 2006), including the contract and finance section, and
thus contributed to the backlog in contracting projects under the Poverty Reduction
Scheme.
Complementarity and coordination with above and other EC programmes were
mentioned in the programming and project documents of the Poverty Reduction Scheme.
After project inception, the responsibility for coordination was normally handed over to
the contractor. How genuine the coordination effort was from thereon, depended on the
contractor. It was sometimes easier for the contractor to implement the ToR without
seeking synergies with other projects. And if the contractor tried to seek synergies with
other projects, the other projects were not always responsive to such proposals.
Within the project sample, attention was drawn (sample projects 85395, 124292) to the
fact that other EC projects did not respond to their attempts to seek synergies. In such a
situation, the contractor should bring the issue to the attention of the EC Task Manager
who has the authority, and duty, to intervene. To prevent things going this far, all
contracts should be explicit in requiring close coordination with other EC projects.
Complementarity with other donors
The necessity to coordinate with other donors was mentioned in the TACIS programming
and project documents. The documents also provided information on other donors, such
as the tables on other donors’ financial and technical assistance in the TACIS Indicative
Programme 2005-2006 and the new DCI Indicative Programme for 2007-2010. Donor
coordination meetings were taking place both in Kyrgyzstan and Tajikistan. Being a pilot
country for enhanced donor coordination, there was a donor driven Coordination Council
in place in Kyrgyzstan, with one full time staff financed by its 15 members, among them
the EC. The EC Delegation did not however participate in the preparation of a joint
Country Support Strategy, a major on-going donor coordination activity shared between
what were commonly considered the main donors to Kyrgyzstan ADB, UN, WB, DfID
and the Swiss cooperation.
With regard to coordination with the EU member states, their representatives said that
although the EC organised ad hoc meetings, there were no mechanisms to systematically
associate member states in the identification and formulation of individual projects (like
there are in countries with fully-fledged resident EC Delegations). In general, the EC role
in joint donor work both in Kyrgyzstan and Tajikistan appeared less active than what is
usually the case in countries where there are fully-fledged resident EC Delegations. The
planned future opening of independent EC Delegations in Kyrgyzstan and Tajikistan will
thus be an occasion to upgrade the EC role within the donor community in these
countries.
As in the case of other EC programmes, the responsibility for coordination with other
donors was after the project inception handed over to the contractor. Difficulties faced by

the contractors were similar to those experienced in the coordination with other EC
programmes. The remedies should follow the same path: contractors should be bound by
a contractual obligation to coordinate with other donors, and if this did not work out, they
should alert the EC Task Manager to take the case further.
The EC Task Manager would naturally not have the same authority as within the EC
assistance but at least the matter could be brought up with the concerned other donor.
Partner country officials complained to the Evaluators about the lack of coordination
between donors but recognised that they themselves should play a more active role in
donor coordination. An idea to support a donor coordination function at the regional level
in Batken (which was abandoned in 2006 within sample project 85395) was taken up
again in April 2007 within project 131392. As donor assistance to the region is not
massive and GTZ and other donors had already provided related support to the oblast
administration, the regional aid coordination function could be further strengthened by
project 131392 without letting this activity to disturb its main activities.
There will be a major new ADB programme to coordinate with in Kyrgyzstan: the
Southern Agriculture Area Development Project which will be implemented from July
2007 to June 2013 in the oblasts of Batken, Jalalabad and Osh through loans and grants
totalling over 31 MU$. The Project has five components out of which four are technical:
farm development, agribusiness development and marketing, irrigation and drainage, and
land improvement. In addition, a Project Management Unit will be set up in the Ministry
of Agriculture in Bishkek with possibly at least one field office in the regions. All four
technical components are such that either synergies or overlapping will be possible with
TACIS and DCI interventions. Sample project 131392 and future agricultural projects, as
well as the on-going and future water infrastructure projects, should closely coordinate
with the ADB project. As ADB will provide loans for irrigation infrastructure, it would
welcome complementary EC capacity building assistance to form and strengthen water
user associations.
Complementarity with the DCI
By the time of the Evaluation, the majority of the TACIS Poverty Reduction Scheme
budget for 2002-2006 was still to be contracted. Hence, TACIS and DCI interventions
were going to be implemented in parallel at least up to 2010. This was also the period
covered by the new the DCI Indicative Programme for Central Asia. The period from
2007 to 2010 could thus be considered a transition phase between the TACIS-financed
Poverty Reduction Scheme and poverty reduction initiatives financed under the DCI.
New TACIS projects during the transition period will be financed from the 2005-2006
Action Programmes. In Kyrgyzstan, there were also three new NGO projects to be
financed from the 2004 AP, to be contracted before July 2007 following a call for
proposals at the beginning of 2007. The TACIS project pipeline in Tajikistan consisted of
actions that were similar to those financed from the 2002-2004 budgets: calls for
proposals for small projects supporting income generating activities (agro-processing,
SMEs etc.) and water infrastructure rehabilitation (drinking water, sanitation, irrigation,
etc.) plus a bigger service contract for training and advisory services for farmers.

In Kyrgyzstan, TACIS projects in the pipeline differed from their 2002-2004
predecessors. Road rehabilitation had been mentioned already in the 2003 Action
Programme but only in 2007 there was going to be a tender for a road rehabilitation
project in the Batken oblast (financed from the 2005 AP).
The project was to be complemented by a call for proposals for small projects in the
Kyrgyz and Tajik communities along the road. Moreover, a rural schools and related
water infrastructure rehabilitation project, to be financed from the 2006 budget, was
entering a new area within the TACIS Poverty Reduction Scheme, infrastructure in the
education sector.
On the other hand, the DCI Indicative Programme, under its Priority area 2, planned to
deal with poverty reduction at two levels: (i) at the central government level, through
support for sector reform programmes in agriculture and land reform and for social
protection and (ii) at the local level, to help extend and modernise regional/local
infrastructure, promote productive employment, decent work opportunities and local
economic activities and improve social protection and the quality of social services. DCI
support will also be provided to build the capacity of local public authorities. DCI
assistance will continue to be targeted at a few specific geographical areas identified
within TACIS e.g. the Ferghana valley and Southern Tajikistan.
The DCI local level scheme will be implemented both in Kyrgyzstan and Tajikistan (as
well as in Uzbekistan). Based on the IP description it resembles the 2002-2006 TACIS
Poverty Reduction Scheme. The specific objectives are the improvement of living
standards and employment and income generation opportunities at community level
through the upgrading of existing infrastructure at local and regional level, the
development of agriculture, SMEs and social services, improvement in social safety nets
and enhancement of local economic development. The respective annual DCI Action
Programmes should contain a limited number of components drawn from these
objectives.
The expected results of the DCI local level scheme are:
Extended/modernised regional and local water, transport and energy infrastructure;
Improved access to quality services for agriculture, training, education, health care
and social protection;
Strengthened cooperation among producers, communities, local authorities,
universities, private and non-profit sectors, aimed at generating new SMEs, income
and employment opportunities and;
Strengthened capacities of local public authorities and self-government bodies, and
participation of civil society for effective governance.
The DCI national level scheme should be complementary to the local level scheme:
support to sector-specific reform aspects and administrative capacity for agriculture and
land reform in Tajikistan (and Turkmenistan) and to social sectors in Kyrgyzstan and
Tajikistan (as well as in Turkmenistan). The specific objectives are to achieve
administrative reforms, to develop policies and improve the capacity and efficiency of
authorities to carry out agricultural and social sector reforms and programmes aimed at

poverty reduction, enhancing living standards and food security, including of those
administrations targeted by the DCI local level scheme.
The DCI national level scheme will be implemented through a new DCI budget support
programme. In Kyrgyzstan, it will be devoted to social protection, including support to
decentralisation of social services to the oblast/district level.
In Tajikistan, the new DCI FSP budget support programme will promote reforms both in
the social sector and in agriculture and land reform. In both countries, the DCI budget
support programme should be combined with DCI support to reforms of the public
finance management and budget systems.
As pointed out earlier in the paragraph on complementarity with other EC programmes,
there had been an emerging discrepancy between the TACIS Poverty Reduction
Scheme’s approach and the FSP budget support approach (the two programmes were also
based on different regulations). The Poverty Reduction Scheme’s results in supporting the
state social services were modest (sample projects 85399 and 85400) and the Scheme had
focused on promoting self-help and community-based approaches for social inclusion and
protection. Also, support to income generating activities - to agriculture, agro-processing
and small businesses - remained the first priority. Within the FSP budget support
programme, focus had been shifting from agriculture towards social protection issues,
including support to the reform of state institutions for social assistance. In addition to the
shift of focus from agriculture to the social sector, the approach to concentrate on the
reform of state institutions could be seen to contradict the self-help and community-based
approach of the TACIS Poverty Reduction Scheme.
In Kyrgyzstan, the new DCI budget support programme for 2007-2009 was going to
focus on state social assistance. At the same time, the first draft DCI Action Programmes
2007 and 2008 for the DCI local level scheme were to address agricultural marketing
issues, agro-processing and water infrastructure. The discrepancy was more evident as
both the national level budget support programme and the local level scheme were to be
financed under the DCI. The complementarity of DCI assistance at the two levels, as
aimed in the DCI Indicative Programme, was questionable. Assistance programmes at the
two levels were seemingly not being prepared jointly.
Better complementarity and coherence is needed between the two levels, on one hand the
DCI budget support at the central government level, and on the other, the DCI poverty
reduction initiatives at the local level. From the poverty reduction point of view, income
generation and productive infrastructure as well as social services and social
infrastructure should be supported. Within the social sector, national level reforms should
not focus only on state institutions but also on role of the civil society. The DCI local
level scheme should support state reforms at the national level through pilot projects in
the targeted regions, in accordance with the planned fiscal decentralisation. The DCI local
level scheme should also support community-based alternative and/or complementary
social services, in line with the policy work at the national level, or even better, inspiring
and influencing new policies. Among the donor community, UNICEF would be a natural
partner for the EC in this coordinated policy and grass-root level work.

3.2 Effectiveness
Introduction
Effectiveness refers to the extent to which the aims and objectives of the programme have
been achieved. In the case of the TACIS Poverty Reduction Scheme, this entails the
contribution of the Scheme to poverty reduction objectives. At the project level, the
Evaluation Team looked for evidence that projects achieved their planned results,
contributed to capacity building within the beneficiary organisations, improved
households’ income generating opportunities, increased the percentage of women and
female-led households benefiting directly from the projects, and whether projects
produced any unforeseen results, either positive or negative.
More in particular, the Evaluation Team looked for evidence to substantiate the claim that
projects had (a.o.) increased households’ access to safe water, strengthened community
based associations and state authorities at various levels, improved the availability of
training schemes in rural management techniques, increased available sources of credit to
the poor, increased the creation of new private micro and small enterprises, etc.
Achievement of the projects’ results was judged from the beneficiaries’ perspectives as
well as from the EC’s perspective. This also brought into view the effectiveness of
targeting projects and the success (or failure) of the project to reach its intended
beneficiaries.
In addition, the Evaluation Team looked for lessons to be learned from the projects in
terms of their design and results and whether these lessons learned could help improve
the design of EC projects. In more generic terms: what were the recommendations for
future design and implementation of the poverty reduction scheme under EC’s new
Development and Co-operation instrument (DCI)?
The evaluation applied a scoring to each of the sample projects. The methodology was
presented in Chapter 2. The individual Project Evaluation Reports, including the value of
scores for each sample project, are presented in Volume II of the Evaluation report. For
effectiveness, 6 projects scored a B, 6 a C and 1 received a D, giving an average score
between B and C.
This was not a good result but the score was slightly biased since the sample included
three small framework contracts which resulted from a split of a larger project, and all
three suffered from bad design and a lack of synergy between them. The three framework
contracts scored two Cs and a D for effectiveness. The adjusted score for effectiveness
was remained between B and C i.e. ”satisfactory”.
Capacity building
Most rural based projects supported community based organisations (self-help groups or
cooperatives), either for water (drinking or irrigation), agriculture or credit related
activities. This was a strong element in the Scheme and even in those cases where there
was little time to assist the groups with training or other types of support, the projects
worked through these groups. For example, in sample project 85399:

360 new Self-help Groups (SHGs) uniting 1980 members were formed in 30 target
villages. All members received trainings on basic principles of social mobilization,
participatory planning, financial management and organizational development;
Associations of Self-Help (SHGA) groups were formed in all target villages to serve
as umbrella organization for village SHGs. All SHGAs are actively engaged into
village socio-economic development;
6 agricultural cooperatives were established based on the most mature SHGAs in 6
villages;
Leaders and members of agricultural cooperatives received trainings on legislation,
taxation, marketing, management, business planning, innovative technologies,
business mapping and;
Study tours to learn best practices of cooperatives development had been organized
for leaders of agricultural cooperatives.
Another important activity that was supported by the Scheme (sample projects 85395,
121849) was the drafting of community development strategies for administrative units
above village level and of village development plans. This activity contributed to building
stronger and more effectiveness groups, and expanded the possibilities to raise funds
(either from own or outside sources).
On closer inspection, the performance of groups varied, and some of the variation could
be attributed to the short time that the projects were able to devote to training or capacity
building. Whereas in the case of sample project 85395, four umbrella rural associations
had been established, each of which had formulated a work plan under the project, in
other projects training had not been able to prepare the groups to perform their tasks
properly. In sample project 125083, a water users’ group had been established but the
evaluators found no evidence of a work plan or a training manual. Especially where
groups had been established for the purpose of receiving grants or credit, capacity
building had not brought them to a level where they could function effectively or where
some form of sustainability would be guaranteed. The groups functioned more as a
conduit for donor assistance (sample projects 85399, 121649).
A number of projects worked with local administration at regional, district and sub-
district level and one sample project worked directly at the ministerial level (sample
project 111726). This last project was also supposed to work in a number of pilot districts
but these activities hade not yet taken place. However, the Scheme seemed to have been
effective in building capacity at community level, but less effective in strengthening
district, regional or state authorities.
Access to drinking water
Three projects (sample projects 85399, 125083, 85400) were able to support increased
access to safe drinking water. This support was mostly made available through grants
provided to the community based groups or self-help groups. The construction of
drinking water facilities in the targeted rural communities was successful for all three
sample projects, and targets had been reached and even exceeded (sample project 85400).
Through sample project 85400, over 19000 people gained access to clean water from
pipes. Groups provided counterpart funds for these investments, at the level of 10 percent

of the total costs. An important complement to investments in physical infrastructure was
training on hygiene and sanitation.
Improved nutritional indicators and food security levels
The evaluation team found little information on the situation of nutrition or food security
in the project documents. Even in cases where baseline data had been collected at the start
of the project, these data would normally not include useful information on food security
(proxy) indicators. This pointed to a design issue that needs to be considered in future
EC-financed interventions: food security is of overriding importance in the rural areas of
Kyrgyzstan and Tajikistan and should not be left to presumed synergies with ongoing the
Food Security Programme (mostly at macro-level) as indicated in the past in the TACIS
Action Programmes.
In the future, when tender instructions or ToRs point to an integrated area approach to
development, the basic four-dimensional characterisation of food security (or insecurity)
should be taken into account1
:
The ability to improve and maintain the level of acquirement;
The ability to cope with shocks to acquirement;
The ability to improve and maintain the level of utilisation and;
The ability to cope with shocks to utilisation.
Of particular importance is the impact of increased market orientation on food security2
.
As many donors (the EC included) are supporting greater market orientation at the macro
level, it is likely that people move more and more out of subsistence production and
towards production for the market. This trend is to be reinforced by micro-level
interventions, such as credit delivery programmes that encourage poor households to
engage in market-oriented production. The designers of policies and programmes at both
macro and micro levels should therefore be aware of the likely impact of such a shift on
the food security of the poor.
Training schemes in rural management techniques
Training to farmers was provided through various modalities: Agricultural Information
Centres (AIC), Farmer Field Schools (FFS), NGOs, or external consultants. Projects
provided two types of training: Training of trainers (ToT) and training of farmers. Of the
four sample projects which provided agricultural training, two worked mostly with the
ToT approach (sample projects 121786, 85395) and two provided the training directly to
farmers (sample projects 121849, 121649). In terms of effectiveness and efficiency, the
former type is the preferred model, but each project should be able to apply and test the
training modules on the final beneficiaries. Only in this context can projects and the
institutions they support become learning organisations.
1
Source: Food Security, Poverty and Women: Lessons from Rural Asia, IFAD website (download on May 9, 2007).
2
Increased market orientation among the poor has two opposing effects on food security. First, there is a positive
effect arising from the diversification in livelihood structures that is made possible by market orientation. But there is also a
negative effect because the loss of subsistence production deprives the poor of a useful buffer against periodic shocks to
food security. This negative effect must be neutralized if households are to reap the full benefit of interventions. In other
words, measures to facilitate market orientation must be complemented by measures to protect the subsistence base of the
poorest households. Since the shift from subsistence production to greater market orientation generally takes time, these
complementary measures must be such that the level of subsistence production can at least be maintained, if not improved,
in spite of reduced labour input. In other words, a labour-saving, land-augmenting type of technological improvement is
needed in the sphere of subsistence production. Measures to provide such a technological input should be taken in tandem
with measures to provide credit and other facilities for market-oriented production in order to ensure that interventions have
the greatest possible impact on the food security of households.

In many cases, the knowledge transferred was on crops, trees and animals already known
by the majority of farmers, although at times new varieties were introduced. In sample
project 85395 new varieties of apples and tomatoes were promoted, and sample project
121649 was designed around the (re-)introduction of herbs and plants for medicines,
cooking or perfume. Although little knowledge had (yet) been transferred in the latter
case, the former project (sample project 85395) had been more active and a large number
of farmers had been trained. It was difficult for the Evaluation Team to assess the
effectiveness of these training sessions since farmers had not yet had the opportunity to
see results after one crop season, but initial indications (through feedback received from
farmers and community leaders) were positive.
The Evaluation Team noticed that the projects had various approaches to the payment for
advisory services. Although in most cases, these services had been provided for free,
more and more projects, or the organisations providing the services, had introduced some
form of payment. Although it is outside the scope of this evaluation to advice on paying
for extensions services, there are a number of factors that need to be taken into account
(also by future projects):
Paying fees promotes the comprehension that training is something valuable and
worth paying for;
Consistency towards the farmers: Farmers should not receive free training from one
organisation and have to pay to the other;
Farmers with few resources (subsistence farms) will never be able to afford fee
paying services and should be able to receive at least basic services for free; and
Organisations providing extension type services should at least obtain part of their
revenues directly from services provided to farmers.
Irrigation and drainage networks
Of the four sample projects which supported rural communities, three were directly
involved in the rehabilitation or construction of irrigation systems (sample projects
85399, 85400, 125083) and one (sample project 85395) provided training on the use of
irrigation.
The schemes had been selected by local community based organisations in participatory
settings (with the exception of sample project 125083 where the rehabilitation of a 1.5 km
canal for irrigation had been decided before the formation of the community interest
group), and mostly involved rehabilitation of existing structures.
For most schemes the evaluators did not find evidence of feasibility studies or
assessments for the selected schemes. This was seen as a shortcoming, since the existing
systems all dated from Soviet times, and the setting for farming (in terms of market and
subsistence needs) had completely changed since that time.
Delays in construction has plagued most schemes, either because of initial planning
(resulting in longer than expected inception period such as in sample projects 85399 and
121849) or because of adverse external factors (such as weather conditions in sample
project 125083). Since construction is seasonal (some construction cannot take place
under the harsh winter conditions, whereas other works cannot take place in seasons

where there is competing demand for agricultural labour), relatively small delays can lead
to the loss of a cropping season, reducing the returns on investments and – more
important – the opportunity for projects to work with the farmers on the completed
schemes.
Credit available to target population
Credit was seen as an important vehicle to promote commercial activities in rural
communities and many donors were making efforts to improve access to (subsidised)
credit schemes. Among the 13 sample projects, credit issues were addressed in varying
degrees by seven projects. Three of these (85395, 85399, and 85400) had actually worked
with beneficiaries on the provision of credit, and a further four provided information to
their target group on the available credit options.
Sample project 85395 was to upgrade the capacity of small business and farmer groups
with training on financial simulations and financial planning. Although contacts had been
established with a micro-credit bank (OXUS), and the bank had shown interest, no group
had been able to obtain credit in the timeframe of the project. The second sample project
85399 had been able to negotiate a contract with another micro-credit bank (KAFC),
through which resource-poor farmers were able to obtain loans against favourable
conditions. For this purpose, a micro-credit fund of approximately 200.000 EUR was
allocated from the project budget to KAFC. As a result, 395 local self-help groups
received micro-credits, with amounts between 300 and 400 Euro.
The loans were mainly used for animal feeding. Repayments on these loans were close to
100 percent and repeat loans had been provided. It was not possible to assess the effects
on income and wealth accumulation since results from the investments would not show
before another 1 or 2 years. In the case of the third sample project 85400, the project had
set up 6 revolving funds within JRCs, with a total credit portfolio of 130.000 Euro. Over
5000 beneficiaries (38 percent of them women) had received soft loans for livestock, crop
and fruit production, small scale trade and SME development.
One of the observations by the Evaluation Team was that revolving fund type of credit
schemes provided opportunities for the poorest to participate in social and economic
activities and they provided a vehicle for obtaining stronger cohesion in the community.
Formal credit schemes on the other hand, were able to provide better conditions for
commercial development (they will normally only finance commercially viable projects)
and could be a conduit for further economic development (they will seek new target areas
for their credit operations).
Support of micro and small enterprises
Projects financed under the Scheme supported businesses in two areas: in improving
agro-based enterprises (training farmers in business plans, finances etc.) and in
supporting urban based small or medium sized enterprises. Of the 13 sample projects,
five projects fell into the first category, and eight fell into the second category.
In most rural based projects, support was provided to farmers (or farmer groups) in terms
of farming business techniques. Although this support was generally welcomed, the
Evaluation Team noticed some reservations among farmers in terms of the practical
applicability of these trainings. If farmers were not able to obtain credits or inputs, the

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