Report No. 13990-KG Kyrgyz Republic National Environmental Action Plan May 2. 1995 Infrastructure, Energy and Environment Division Country Department III Europe and Central Asia Region Environment Division Technical Department Europe and Central Asia, Middle East and North Africa Region Document of die Woas= _____ 2= _-X:X Xn C:,e, , =_ - . - CURRENCY EQUIVALENTS Currency Units = Som MEASURES AND EQUIVALENTS I cubic meter (m2) 35.310 cubic feet I hectare (ha) = 2.470 acres I ton = 1,000 kilogrammes GLOSSARY OF ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank CIS Commonwealth of Independent States EBRD European Bank for Reconstruction and Development EIA Environmental Impact Assessment EU European Union FSU Former Soviet Union GDP Gross Domestic Product GEF Global Environment Facility Geprozem Institute of Land Use and Utilization GNP Gross National Product GOKR Government of the Kyrgyz Republic Goskomekonomika (SCE) State Committee on the Economy Goskomgeol (SCG) State Committee on Geology Goskominvest State Committee on Foreign Investments and Economic Assistance Goskompriroda (SCEP) State Committee on Environmental Protection Goskomstat State Committee on Statistics Hydromet State Hydrometeorological Agency IAEA International Atomic Energy Agency IDA International Development Association IFC Intenational Finance Corporation KJKS Kyrgyzjikommunsoyuz (Urban Municipal Services) KSRS Kyrgyzselremstryoy (Rural Municipal Services) Kygyszaltin State holding company for all mining and metallurgical enterprises Kyrgyzokhotrybolovsouz Kyrgyz Hunting and Fishing Union Leskhoz State Forestry Farm mkrR Microroentgen MOA Ministry of Agriculture MOE Ministry of Energy MOF Ministry of Finance MOH Ministry of Health MOI Ministry of Industry MOT Ministry of Trade M&M Mining and Metallurgy MOWE Ministry of Water Economy PDK Maximum allowable concentration TOE Millions of tons of oil equivalent NAS National Academy of Sciences NBK National Bank of Kyrgyzstan NEAP National Environmental Program Action Plan NMP Net Material Product Sanepid Sanitary-Epidemiological Service UNDP United Nations Development Programme USAID United States Agency for International Development Vodokanal Water Supply and Sanitation Utility FISCAL YEAR January I - December 31 TABLE OF CONTENTS EXECUTIVE SUMMARY ...................................... PART ONE NATIONAL ENVIRONMENTAL ACTION PLAN: PRIORITIES FOR ACTION 1995-97 1. WHY DOES THE KYZGYZ REPUBLIC NEED A NATIONAL ENVIRONMENTAL ACTION PLAN? .......................... 1 2. SETTING GOALS AND PRIORITIES ........................... 5 A. Key Environmental Problems ............................ 5 B. Priority Actions .......... .................. 7 C. Critical Constraints ............................. 8 3. MAJOR ENVIRONMENTAL CONCERNS: DEFINITION AND UNDERLYING CAUSES .................................. 9 A. Water .......................... 9 B. Land .......................................... 11 C. Environmental Concerns Related to the Mining and Metallurgy Industry . 14 D. Air ........................ .. 15 4. FRAMEWORK FOR ACTION ........................... 17 A. Addressing Priority Problems .......................... 17 B. The NEAP Process ........................... 26 PART TWO BACKGROUND PAPERS 1. SETTING ENVIRONMENTAL PRIORITIES USING HEALTH INFORMATION .37 A. Background ..37 B. Exposures to Toxics ..39 C. Information Management ..43 D. Capacity Building and Institutional Strengthening ...... ......... 44 2. WATER RESOURCE MANAGEMENT IN THE KYRGYZ REPUBLIC ..... 45 A. General Overview . ................................. 45 B. Occurence and Characteristics of Groundwater ..... ............ 51 C. Water Resources Development and Use ...... ............... 52 D. Domestic, Industrial, and Agricultural Water Use .... ........... 58 E. Threats to the Quality of Raw Water Supplies ................. 65 F. Drinking Water Quality ..... .............. ........... 68 G. Conclusions and Recommendations ....... ................. 69 3. NATURAL RESOURCES ....................... ......... 73 A. Agriculture .................. 73 B. Forestry .................. 79 C. Watershed Protection .................. 84 D. Biodiversity Conservation .................. 86 E. Tourism .................. 91 4. THE MINING AND METALLURGICAL SECTOR ................. 95 Hot-spot in the Mining and Metallurgical Sector .................... 98 5. THE INDUSTRIAL SECTOR .............. ................. 111 A. General Overview ................................... 112 B. Toxic Industrial Waste Disposal .......................... 113 6. THE ENERGY SECTOR ................................... 118 7. LEGISLATION, STANDARDS AND ENFORCEMENT .............. 126 ACKNOWLEDGEMENTS This report is the result of a cooperative effort between the Government of the Kyrgyz Republic and the World Bank. The idea of preparing a National Environmental Action Plan (NEAP) was discussed and agreed with the government agencies responsible for enviromnental protection in March 1994. The report is expected to help the Government in developing its environmental policies and the donor agencies in targeting assistance and avoiding duplication of effort. The preparation of the National Environmental Action Plan on the Kyrgyz Republic side was overseen by a high level Steering Committee, coordinated by Mr. I. S. Muratalin, Chairman of the State Committee on Environmental Protection. Members of the Committee included the Minister of Agriculture Mr. Z. A. Asanov, the Minister of Water Economy Mr. M. Z. Zulpuev, the Minister of Health Mr. N. K. Kassiev, the Chairman of the State Committee on the Economy Mr. A. M. Muraliev, the Chairman of the State Committee on Statistics Z. A. Akeneev, the Chairman of the State Committee on Geology Mr. Sh. T. Tekenov, the President of the National Academy of Science Mr. T. K. Koitchuev, the Director of the State Agency for Technical Control in Mining Mr. A. M. Masaliev, the Director of the State Hydrometeorology Agency Mr. 0. N. Tokoev and the chief of the Department of Science and International Cooperation in the State Committee on Environmental Protection Mr. M. S. Sulaimanov. The Deputy Chairmen of the State Committee on Environmental Protection, Mr. T. A. Kulumbaev and Mr. T. S. Musuraliev provided valuable assistance in the preparation of the report. The Kyrgyz Government formed an expert Working Group to prepare the NEAP with representatives from government agencies and non-governmental organizations (NGOs), coordinated by Mr. K. D. Bozov, Chief Ecologist of the Kyrgyz Republic, and Mr. E. D. Shukurov, Director of the Institute of Biology at the National Academy of Science and Chairman of "Aleine" (an environmental NGO). The Working Group included L. M. Kiashkina, T. G. Korneeva, L. A. Epstein, T. Klimakova, S. T. Malishev, A. A. Ishmuhamedov, A. Sidikov, N. G. Mudratchenko, A. M. Isaev, G. Osmonalieva, F. S. Kovaltchuk, V. D. Zamoshnikov, N. I. Kabanova, E. A. Suerkulov, V. M. Shaposhnikova, A. A. Imanaliev, C. 0. Sadabaeva, M. C. Sulaimanov, S. A. Mambetzhanova, K. M. Noruzbaev, I. K. Kenzghetaev, I. A. Dairov and E. A. Omurbekov. The Kyrgyz experts wrote basic reports on current environmental issues and participated in series of discussions with the World Bank NEAP team. The Bank's National Environmental Action Plan team was led by K. Georgieva, Environmental Economist, and included R. Batstone, Principal Environmnental Engineer, R. Ackermann, Principal Environmental Policy Analyst, T. Garvey, Senior Water Quality Specialist, and E. Ibraimova, J. Moore, L. Talbot, H. Mishra, K. Shankar, N. Bech, K. de Wijs and D. Everett (Consultants). V. Tsirkunov, K. Lvovsky and D. Onoprishvili contributed to the preparation of sections of the report. J. Djaky, with support from E. Marinova and J. Kouame, was responsible for the production of the report. Two NEAP preparation missions to the Kyrgyz Republic were carried out in June 29-July 15, 1994 and October 25- November 10, 1994, to support the Kyrgyz Government in finalizing the NEAP and setting environmental priorities for the Kyrgyz Republic. Peer reviewers were A. Bond and M. Kosmo. The World Bank Resident Representative Mr. Michael Rathnam and Mr. Valeri Tian, Project Officer in the Resident Mission, provided valuable contribution to the NEAP process and to the report. Work on the NEAP utilized a document on the status of the environment prepared by the Government of the Kyrgyz Republic for the UNCED meeting in 1992. It also drew upon World Bank sectoral studies for the Kyrgyz Republic (on agriculture, mining and energy), as well as reports on health and poverty assessment. We wish to thank the authors of these reports for allowing us to use some of their findings. The Kyrgyz Republic: an Overview Background. The Kyrgyz Republic is a landlocked Central Asian counry with a population of 4.3 million (1994). It is among the smallest and poorest of the republics of the Former Soviet Union (FSU), covering 198,000 Km2 or less than I percent of the FSU, with a per capita income in 1993 of US$830. The Republic is divided into 6 states or oblasts, arid a capital district, Bishkek. Although the country is a democratic republic and relies on the former Soviet administrative structure, the indigenous tribal social and political structure is still strong. Demography. The Kyrgyz make up 52 percent of Kyrgyzstan's population. Tle other major ethnic groups include Russians, Uzbeks, Ukrainians, Germans, Tatars, Dungan, Kazaths, Uighur and Tajiks. Since independence, many of the Russians, Germans and Ukrainians have migrated to other republics, creating managerial and technical voids in institutions throughout the country. Prior to 1990. the country had one of the lowest rates of emigration in the Soviet Union. Approximately 64 percent of the population lives in rural areas -around Lake Issyk-Kul, the Pergana Valley, the Naryn Valley, and the lower slopes of the Tien Shan and Pamir Mountains. The remaining 36 percent live in urban areas, particularly Bishkek and Osh. Topography. Kyrgyzstan is dominated by the Tien Shan mountain range, which divides the country into 2 zones, the northern region including the Talas, Chui, Issyk-Kyul and Bishkek, and the Fergana Valley catchment in the south. The country is very mountainous, with 94 percent of the territory over 1,000 m above sea level, of which 40 percent is above 3,000 m as], with large glaciers and snowfields (Map 1, IBRD #26876). Pobeda, the highest peak, is 7,439 m. The region is seisrically very active, with frequent earthquakes and landslides. Climate. The climate is continental: cold winters and hot summers, with high local variations depending on altitude. In July, average temperatures in the lower areas range from 17°C to 270C (high temperatures can exceed 40°C), while temperatures may reach only I0°C at 3,000m. In the winter, frost occurs in all regions. Precipitation is the highest in the mountains, mostly as snow, with a maximum of 1,000mmn on the slopes of the Fergana Valley. Precipitation in the Talas region varies from 250mm to 500mm. Issyk-Kul receives from 200mm in the west, up to 600mm in the east. Rain and snow mostly occur in the fall, winter and spring, with snowfall possible until May. Summers are generally dry. Map 2 (IBRD #26620) illustrates the water resources of the country, including annual rainfall, major rivers, lakes and snowfields. Potential annual evaporation varies between 200mnm in high altitudes (above 3,500m) and 1600mm in low areas (below 500m). Evaporation in key irrigated areas can vary between 1,200mm and 1,600mm, far exceeding the average precipitation (400mm). Vegetation. Vegetation is classified vertically into three belts. Pastures and steppes dominate regions below 1,500m; this area is used for agriculture although parts of this lower belt are considered as semi-arid. In the southwest where there is more precipitation, there are relic fruit and nut forests. The second belt, between 1,500m and 3,000m, contains grasslands and broadleaf and conifer forest up to the treeline (3,000m). The highest belt (above 3,000m) contains alpine grassland and sub-alpine meadows, with a high variety of flowers, intercalated with pernmaent snowfields, glaciers and rocks. OnlY about 7 percent of the land is desert, steppe, or arable river valleys, thus readily manageable for human use. Fauna. Wildlife in Kyrgyzstan consists of some 80 species of mammals, including valuable game species such as the Marco Polo sheep and the Siberian wild mountain goat. Endangered snow leopards also inhabit the mountains, as well as different species of bear, wolf, lynx, fox, deer, marten, weasel and marmots. About 368 bird species can be encountered, the majority of which are migratory species, and there are approximately 30 reptiles and 65 fish, including three types of tout. National Environmental Action Plan: i Executive Summary EXECUTIVE SUMMARY BACKGROUND 1. The Kyrgyz Republic is a small, mountainous Central Asian country with a population of 4.3 million people. Independent from the former Soviet Union (FSU) since 1991, the country is reshaping itself socially, politically and economically, moving from the former Soviet socialist system to democracy and a market economy. Consequently, environmental policy reform is being carried out within the context of profound economic and structural change. 2. The majority of the people live in rural areas (more than 64 percent). They are mainly farmers (although only seven percent of the land is arable) and shepherds who seasonally graze their livestock over much of the mountainous countryside. Primary agricultural production accounts for about 40 percent of GDP; industry, including mining, comprises about 30 percent. The Kyrgyz economy has been very seriously affected by the loss of fiscal transfers from Moscow (accounting for about 11 percent of GDP before independence) and by the loss the assured markets of the FSU. One result has been severe economic recession --since 1990, real output has declined by 45 percent in agriculture and by more than 60 percent in industry. With $830 per capita income in 1993, the Kyrgyz Republic is among the poorest republics of the FSU. 3. Many environmental problems have temporarily abated as a result of the economic downturn. Once the economy recovers, these improvements may not be sustained unless they are complemented by appropriate policy changes, encouraging resource conservation and better environmental performance. Generally, pollution emissions and agricultural chemical contamination decreased as a result of production decreases or cutbacks in the uses of polluting inputs. Other problems have intensified, due to changing household and industrial economies. For example, although the economic downtown has resulted in a reduction of industrial pollution, deforestation and soil erosion may have increased. Overall, pollution monitoring and regulatory enforcement have been halted because of lack of funds to support staff travel and equipment. 4. Country development objectives and policies. Since independence, the Kyrgyz Republic has shown a strong political commitment to move toward a market economy. The Government has been focussing its efforts on eliminating the distortions of the command economy, and reducing the role of the state. A complex stabilization and structural transformation program is being implemented, with assistance from the IMF, the World Bank and other bilateral and multilateral donors. In May, 1993, the Government introduced its own currency, the som, and, despite external and internal economic difficulties, has considerably advanced the implementation of the reform program. * In the short and medium term, macroeconomic stabilization efforts have been focussing on tight monetary policy, fiscal revenue enhancement, and imposing financial discipline on the enterprise sector. Prices, interest rates, external trade and the foreign exchange regime have been liberalized, inflation has been curbed, and the currency strengthened. * Structural reforms underway include privatization, already almost completed for small- scale service and retail operations; enterprise reform, including restructuring medium and large scale enterprises and removing subsidies; and private sector development, with legislation to expand private ownership, clarify property rights, and encourage competition. Sectoral reform is currently focussed on the agriculture sector. National Environmental Action Plan: ii Executive Summary * Social stability. Increasing poverty is a major concern--about 50 percent of the population is already below the nominal poverty line, and with rising energy and food prices, may become further impoverished. Republic, oblast and rayon governments will be assuming responsibility for primary social services (including water supply and sanitation) from the monolithic sector enterprises, which will further burden constrained government budgets. 5. The country's development strategies in agriculture, energy and mining depend on improved management of the nation's natural resources. These sectors carry considerable environmental liabilities from past management practices, however, and the potential for environmental problems in the future is high if they are not managed well. Therefore, environmental management and natural resource conservation are becoming increasingly important to the country's economic development. Environmental policy changes must support and be supported by the country's broader policy objectives of social and macroeconomic stability, and economic growth. 6. Many of the policy steps from the Government reform program (macroeconomic stabilization, price liberalization, privatization, imposition of hard budget constraints) are expected to contribute to environmental improvements. For example, increased prices of natural resources should encourage resource conservation and reduce the level of air and water pollution, and waste generation. Conversely, there is evidence that privatization of some industrial activities is resulting in a decline in environmental controls, at least for the short term, as existing state oversight is removed, and enforcement capabilities weaken. 7. Exactly how sectors, enterprises and individuals will react to liberalization may not always be possible to predict. For example, strict and fully enforced regulations should encourage both state-owned enterprises and the newly emerging private sector to comply with standards and to maintain the existing environmental infrastructure. Rational fees and tariffs for resources, which have been proposed by the government, can help encourage more efficient resource use; and more clearly defined property rights structures should encourage investments in resources for long-term returns. 8. Preparing the National Environmental Action Plan (NEAP) has been and will continue to be a complex process, which includes: (i) identifying the most critical environmental issues that affect the economy and the social welfare of a country, and proposing a set of priority actions in a NEAP report; (ii) endorsement of the Action Plan by the Government and the public; (iii) mobilizing external assistance to implement the NEAP; and (iv) periodic update to reflect changing environmental conditions, priorities and implementing capacity. 9. The Government of the Kyrgyz Republic, assisted by the World Bank, initiated the preparation of the NEAP in March, 1994. A high level Steering Committee was established to guide the activity, under the leadership of the State Committee on Environmental Protection (Goskompriroda). An expert Working Group with representatives from government agencies, academia, and environmental non- government organizations (NGOs) was formed to develop the plan. This group worked in close collaboration with a World Bank environmental team. 10. Public participaticn is essential for the NEAP process. The Kyrgyz NEAP involves NGOs and the general public in three types of activities: (i) expert contributions to the drafting of the NEAP report; (ii) local discussions on environmental priorities; and (iii) broad public information on the objectives and expected outcomes from the NEAP. A Public Participation Program has been developed, financed by the Fund for Innovative Approaches in Human and Social Development (FIAHS), and launched in National Environmental Action Plan: iii Executive Summary October 1994 by a Bishkek-based environmental NGO ("Aleine"). The program will provide a vehicle for consultations with the oblast administrations and local NGOs during the final stage of NEAP preparation and during the NEAP implementation. Ii. The first phase of the NEAP, recorded in this report, focusses on critical environmental issues that threaten public health, economic and ecological stability and biodiversity, and on the options available to resolve these problems. Five main criteria were applied to this process: (i) threat to human health and welfare; (ii) significance for economic recovery; (iii) efficient utilization and maintenance of existing fixed capital, particularly environmental infrastructure; (iv) environmental policy and institutional changes allowing for the adjustment to structural transition and a market economy; and (v) full use and development of human resource capabilities. 12. The Republic cannot address all issues at once. NEAP findings affirm that environmental protection and economic development are inextricably intertwined in the Republic Knowledge and public priorities determine what actions should be taken; as both of these change over time, the NEAP will be periodically updated. The long-term social and economic development goals of the Republic should guide the setting of priorities for action. These long-term goals currently focus on increasing the productivity of renewable and non-renewable natural resources, as well as on ensuring good public health. Therefore, the key areas of concern which unite the problems identified by the NEAP team are the unsustainable use of natural resources and the impact of pollution on public health. 13. In this report, the findings of the NEAP Working Group are presented in two parts. Part One of the report explains the rationale for a National Environmental Action Plan, sets goals and priorities, and prescribes specific steps that can be taken over the next three years. Part Two contains the background papers on health, water resources, natural resources, mining, industry and energy on which these conclusions are based. KEY ENVIRONMENTAL PROBLEMS AND ACTION PRIORITIES Unsustainable use of natural resources 14. Kyrgyzstan's economic performance and social welfare are critically dependent on its natural capital. The NEAP identified five major areas of concern: * inefficient water resource management; * land degradation, mainly due to overgrazing; * overexploitation of fragile forest resources; * threat of irreversible loss of biodiversity; and * inefficient mining and refining practices. 15. Ineffective water resource management. The Republic's water resources, which are critical for all five Central Asian Countries, suffer from inefficient distribution, and are not adequately protected from chemical and biological contaminants. Elements of the problem include inappropriately designed and aging infrastructure, lack of funds for operations and maintenance, a tariff structure which captures National Environmental Action Plan: iv Executive Summary only part of the operating costs, and insufficient regulation and enforcement of waste emissions near water sources. 16. To improve the management of water resources and efficiency of water use, small targeted programs should be developed for repairing and upgrading the physical infrastructure. Expenditures should be directed toward rectifying the highest priority problems of water supply contamination, supporting the distribution of low-cost sanitation technologies, and rehabilitating and repairing irrigation networks through modest investments at the local level. Projects should be based on a least-cost approach with respect to investment, operation and maintenance, and implemented quickly with existing technology and locally-available materials. 17. Low productivity of the land. Rural poverty is both a direct outcome and a cause of increasing land degradation. Land degradation in the form of soil erosion, soil compaction, and deforestation is reducing the productivity of virtually all croplands, pastures, and forests -- resources on which at least 30 percent of the nation's economy is based. Natural regulation of waterflows is hindered, reservoirs and irrigation networks are vulnerable to silting-in, and land slides and mudflows are destroying communities and productive lands. Extensive overgrazing by livestock (particularly sheep and goats), inappropriate farming practices, and poorly designed and maintained irrigation systems are the primary causes of degradation. 18. Farmer training in specific conservation techniques such as contour ploughing, reduced tillage, integrated crop management, and intensive grazing techniques may rectify some of the worst practices, and increase farm income. A rural credit program would also facilitate short-term investment in agricultural inputs. Although authority structures are changing, and land management responsibility is returning to local communities, resource rights are still unclear. There will be few incentives for investment in the land's long-term productivity and further degradation may result if tenure rights remain uncertain. 19. Fragileforests. The condition of the forest resources in the Republic is the result of past forest and rangeland management practices. Since the beginning of the 40s almost half of the forestry cover has been lost, mostly during the Second World War. Now forests cover only 4 percent of the country's territory. Unofficial harvesting of wood is wreaking an unknown amount of damage on the already fragile forest resources. Illegal exploitation of wood for fuel and construction by rural communities is viewed as a necessary response to sky-rocketing prices and the cessation of fuel and income subsidies. The extensive grazing practices of herders dramatically reduces natural regeneration, and compounds forest management problems. 20. An integrated program for joint production and conservation activities in forests and grasslands must be developed, and forest policy should be revised to harmonize forest and grassland production objectives. Local communities (particularly the forest farms) should be able to capture the value of alternative activities, ecotourism, on the land. In particular, short-term credit needs to be available to develop collection, processing and marketing of non-wood forest products such as fruits and nuts. 21. Threatened biodiversity. The Kyrgyz Republic has an outstanding natural heritage, of great beauty and diversity. The erosion of genetic diversity throughout the country is evident and profound, however. Biological impoverishment affects regional water regimes, quality of life, and economic options. It also is a significant global resource lost. 22. Future development depends on reversing the current decline in biodiversity--through better management and protection of watersheds and expansion of non-extractive activities such as ecotourism National Environmental Action Plan: v Executive Summary and other biodiversity-conserving enterprises. A National Biodiversity Conservation strategy should be developed. It should encourage management of human activities to reduce habitat encroachment, and support economic activities which rely on biologically diverse resources. In addition, the protected area system should be reviewed and strengthened, with the active participation of the communities residing within it. 23. Wasteful mining and refining industries. A significant percentage of the Kyrgyz economy depends on the sound management of its nonrenewable mineral resources. Inefficient mine operations and processing plants have created dumps rich in materials, but badly maintained. Heavy metals and other toxins are now leaching into the environment. The economic costs of these practices are measured in terms of lost revenues from wasted resources, and potential health damages from exposure to toxins. Unfortunately, many of the minerals the Republic has relied on in the past, such as mercury and uranium, are facing very weak markets now and in the future, and it is unlikely the industry will be able to fund clean-up from its own revenues. 24. More information on mining wastes needs to be gathered through a specific data-sharing and monitoring program jointly established by the three key agencies, Sanepid, Hydromet and Goskompriroda. Documented health damages from water contamination and assessed risk of major environmental disaster should be main criteria by which mitigation measures for dealing with mine wastes are chosen. Environmental staff should be trained in environmental impact assessment to carry out a systematic assessment of mining waste dump and dam safety, and environmental surveillance of mining industries must be restored. The impact of pollution on human health 25. Under the current budgetary constraints the Kyrgyz Republic can afford to address only those pollution problems which have direct impact on public health. These areas are: * protection and decontamination of drinking water, and assistance for improved sanitation and personal hygiene; * reducing dust emissions from district heating and power plants; and * assessing the extent of soil and water contamination with uranium, mercury and other heavy metals, and agrochenuical wastes. 26. Contamination of public water supplies lie behind the most serious threats to public health in the Republic -- human exposure to water-borne diseases and toxic levels of heavy metals and radioactive wastes. Water-borne diseases may be reduced by repairing the existing water supply systems, installing low-cost but effective latrines, and enforcing land-use controls around surface water sources. Distributing simple teaching materials on personal hygiene, and supporting a low-cost rural sanitation program for latrine construction are also essential. 27. Exposure to airpollution in the largest cities is blamed for higher levels of respiratory diseases and morbidity in vulnerable urban populations, although air pollution is generally not a significant problem in the Republic. Particulates and other pollutants can be dramatically reduced by properly maintaining and operating existing equipment. For example, repairing and using existing dust filters (electro-static precipitators) in the major central heating and power plants in Bishkek and Osh, and regularly maintaining the existing bus fleets would dramatically reduce particulate levels in those areas. National Environmental Action Plan: vi Executive Summary 28. The extent of health risk from exposure to heavy metals and radioactive elements which have been mobilized from mines, tailings deposits, dumps, and processing plants is a great unknown -- existing data are inconsistent and incomplete. More information must be gathered quickly before clean-up priorities can be assigned. The clean-up costs may be very high, and tbr this reason it is important that decisions to act are based on solid information about the relative hazards at each site. The wide-spread environmental and human health costs may could be incalculable, however, if clean-up at certain sites does not occur. CONSTRAINTS TO BETTER ENVIRONMENTAL MANAGEMENT 29. Policy constraints. Moving from problems to solutions will not be easy. The Kyrgyz Republic inherited its basic institutional and policy framework for environmental management from the FSU. In particular, resources were centrally allocated, physical performance targets were pre-eminent in importance, and the administered price system and soft budget policy placed little value on natural resources. Although the Republic has taken steps to adjust this structure, the main components of the previous institutional and management system remain intact at both the local and national levels. This hinders the progress of structural change. Economic reform can facilitate environmental management. For example, the removal of energy subsidies would encourage energy efficiency, and the progress of privatization would bring managerial improvements, improve resource utilization and encourage technological changes. However, managerial resistance to reforms and lack of experience slow the process of changes and constrain the potential environmental benefits of the economic reform. 30. Institutional and human constraints. The positive effects of economic restructuring will be sustained and deepened only if they are accompanied by the development of an integrated, decentralized environmental management system. An integrated system means air, water and soil pollution problems must be considered simultaneously during the setting of environmental priorities. Decentralization means that successful environmental management will require strengthening of the environmental authorities at all levels. Both of these require general public access to comprehensive, accurate and timely information about ecological, economic and human health parameters. Both require resources at all levels to facilitate monitoring, data analysis and communication, and to provide training. Retraining will assist environmental staff in their efforts to modernize procedures and develop problem analysis and project management skills appropriate to a free market economy. PRIORITY ACTIONS 31. Acknowledging these constraints, three types of environmental actions are identified as priorities in the short term: (i) a limited amount of expenditure for the rehabilitation, operation and maintenance of rapidly deteriorating and costly to restore institutional and physical infrastructure (in particular, water and sanitation infrastructure) and small investments targeted to rural natural resource-based enterprise development; (ii) a significant effort to collect well-defined information needed to make sound judgments in the future regarding priorities for environmental action, and to ensure that the most urgent issues are tackled first; and (iii) enhancement of the environmental regulatory framework, including training and support for staff in the environmental institutions. 32. As more and better information on the precise nature and urgency of environmental problems become available, the recommendations of the NEAP will be revised and refined. The tools available to the Kyrgyz Government to integrate environmental considerations into the overall economic and social development priorities will remain the same. They include: (i) changes in policies and regulations, (ii) improvements in the institutional framework for environmental management; and (iii) expenditures on projects with environmental benefits. National Environmental Action Plan: vii Executive Summary 33. There is a need to revisit environmental laws and regulations inherited from the FSU, in order to develop a coherent legislative system which corresponds to the requirements of economic transition and to the implementation capacity of the environmental authorities. Within this revision, issues of environmental liability must be addressed. Although the concept of liability is included in the existing environmental statutes, it does not define responsibility for past pollution, which is necessary for the on- going privatization process. 34. To support more efficient environmental institutions and effective environmental policy, several activities have been identified as high priority. Training environmental staff of government and quasi-governmental organizations is emphasized, particularly in international standards for environmental impact assessments (ElAs). This will promote harmonization with international environmental standards, and help ensure that new economic activities will meet all necessary environmental requirements. On-the- job training combined with international exchanges, are recommended with an immediate focus on the evaluation of the new gold mines, and a systematic assessment of mining waste dump and dam safety. 35. Environmental personnel should also be trained and funded to carry out efficiency and environment audits in selected municipalities, industries and mining industries. This activity will create local capacity to identify low-cost efficiency improvements in the polluting enterprises and form a basis through which the public can be educated and environmental standards can be monitored and enforced. 36. Enforcement. Assuring enforcement of standards and regulations is a key objective of the NEAP, which requires (i) properly set standards, to protect public health and productivity, and (ii) an effective monitoring system. Kyrgyzstan has a system of pollution charges, user fees and fines, for both water and air, which was developed under the Soviet Union. Charges are well below the level needed--fines (when they are collected) are a small fraction of the damage or abatement costs, and user fees usually do not cover even routine maintenance costs. Like most other countries, Kyrgyzstan needs to find a balanced approach between market and regulatory instruments. To be successful in environmental reform, however, central and local administrators must first be committed to enforcing regulations, and funding routine maintenance and operation of their environmental infrastructure from user fees. NEXT STPS 37. The NEAP is an on-going process. Next steps include: (i) public review and Government endorsement of the NEAP; (ii) NEAP presentaton to the donor community; and (iii) implementation of high priority policy, institutional and investment actions. The high level Steering Committee is expected to further guide the implementation of the NEAP. 38. A small NEAP office will expedite the agreed upon framework for action. This office will facilitate collaboration among the many institutions within and outside the Government which must be involved in the environmental policy reform process, provide status reports on the implementation of projects, maintain an environmental library and information center, and update commnunications on the changing inventory of key enviromnental concerns. 39. To initiate the NEAP, Goskompriroda will focus on a limited number of high priority actions during 1995. These will include: * Defining environmental liability for past pollution to complement the on-going privatization process, and establishing legal guidelines for settling liability conflicts; National Environmental Action Plan: viii Executive Summary * Developing the capacity to carry out Environmental Impact Assessment (EIA) according to intemational standards, including training technical staff in international procedures, and establishing compatible national guidelines; * Establishing the capacity to perform efficiency and environmental audits in selected pilot enterprises--in particular the Kara-Balta mine--to identify options for an economically viable mine waste re-utilization and cleanup; * Reviewing (with international assistance) the existing legal and regulatoryframework for the protection of environmental resources, including the appropriateness and enforceability of existing standards, permit systems, fees, and fines; * Reviewing the international environmental conventions signed and ratified by the FSU, as well as new international initiatives which affect the Kyrgyz Republic; initiating a program for government ratification of the appropriate conventions and legal or regulatory reform required to be in compliance with the agreements; and * Developing a National Biodiversity Strategy which integrates ecosystem preservation with local land-based economic activities. 40. In addition to the above actions, work should be initiated by the relevant authorities and Ministries to address the most urgent needs of the water supply and sanitation sector. In particular, short- and long-term technical assistance needs should be assessed within the next year, focussing on the rehabilitation, repair and replacement of facilities with the highest immediate health and economic impact, modernizing municipal and irrigation water distribution systems, and retaining and training local technicians. In the mining and metallurgical sector, interventions should focus on collecting the data needed to make hazard assessments and determine least cost remedial actions in the most critical areas. Environmental monitoring programs and regulatory enforcement must be reinstituted before far greater economic costs are incurred. PART ONE National Environment Action Plan: I Priorities for Action 1995-97 1. WHY DOES THE KYRGYZ REPUBLIC NEED A NATIONAL ENVIRONMENTAL ACTION PLAN? The Opportunities and Constraints of Economic Transformation .1 The Kyrgyz Republic declared independence from the former Soviet Union (FSU) in August 1991, and joined the Commonwealth of Independent States (CIS) in December 1991. A new constitution was enacted on May 5, 1993, and the country introduced its own currency, the som, leaving the ruble zone. The Republic is determined to move toward a market economy, reaffirmed by the Kyrgyz people in a referendum held in 1994. 1.2 With an income of $830 per capita, the Kyrgyz Republic is one of the poorest in the FSU. Economic development relies on natural capital in agriculture, mining (gold mining in particular) and hydropower production. Rich in water resources, the Kyrgyz Republic plays a key role for the water balance in the Aral Sea basin. Reliance on natural resources for return to growth and income generation makes proper environmental management and natural resources conservation increasingly important to the country's economic development. Environmental policy, therefore, must support and be supported by the country's broader policy objectives of social and macroeconomic stability and economic growth. 1.3 The Kyrgyz Republic is one of the least industrialized countries of the Former Soviet Union. Industry, including mining, makes up about 30 percent of the GDP. Primary agricultural production comprises about 40 percent of the GDP, although only seven percent of the land in the Republic is arable. The remaining 30 percent of the GDP is comprised of primarily state service sectors such as state administration, health care, and scientific and educational institutions. During the Soviet period state social services (such as education and health care), now in decline, were relatively well-developed, while the commercial service sector was almost non-existent. 1.4 The Republic has an industrial base designed as part of a Union-wide plan for industrialization emphasizing FSU interdependence. Imposed by the central authorities of the FSU, the country's industrial structure did not correspond well to the resource potential of the Republic. As a consequence, many enterprises are entirely dependant on imported raw materials and FSU markets for their products. With a relatively small internal market, the Kyrgyz Republic is particularly vulnerable to breakdowns in inter-republic trade. Its geographical location handicaps interaction with more distant markets. In addition, industrial development under the FSU was focused on defense-related resources such as uranium and rare earths. These markets are very weak now world-wide, and the sector must be restructured if it is to survive. 1.5 Physical infrastructure, such as electricity and roads, is relatively well-developed. Electrical power reaches virtually every mountain village. The quality of many roads is worsening, however, making transport of heavy loads difficult. Rail transport within the country and to neighboring republics is very limited. Although there are a number of airports, none meets international standards at this time. These limitations in physical infrastructure make inter-republican trade very costly. 1.6 Under the FSU, the Kyrgyz Republic received highly subsidized fuel supplies. The country has considerable hydroelectric potential and exports electric power to neighboring republics; and it has sizeable resources of good quality lignite--estimated at over 50 percent of Central Asia's proven reserves. Nevertheless, the Kyrgyz economy is dependent on imported gas and oil for energy. The Republic now pays world prices for petroleum imports from Russia and Kazakhstan. In addition, Kyrgyzstan is forced to pay 60 to 80 percent of the European market price for natural gas, although the gas comes from Uzbekistan and transportation costs between the two republics are minimal. The swift rise in imported National Environment Action Plan: 2 Priorities for Action 1995-97 energy prices toward world market levels has led to large terms of trade losses for the Kyrgyz economy, especially since it has not been able to obtain favorable terms for its electricity exports. Total industrial output declined by 65 percent during the past three years, particularly in mineral beneficiation, which is a high energy consumer, and in the machinery, electro-technical and electronics subsectors. The decline in the agricultural sector has been less severe, falling by 45 percent. 1.7 The Kyrgyz Republic is strongly affected by developments in the CIS, particularly Russia. As an integral part of the USSR, the country was subject to directions from the "center" on production, investment, trade, and virtually all other aspects of economic activity. Official transfers from the USSR budget accounted for 10 to 15 percent of budget expenditures during 1989-1991. Large implicit subsidies from other republics also existed in the form of subsidized industrial and agricultural inputs and guaranteed markets. 1.8 Many environmental problems appear Figure 1.1: Air Pollution from Point Sources and to have improved as a result of the economic Industrial Production in 1987 downturn. Generally, pollution emissions and Constant Rubles (x Million) agricultural chemical contamination have (1980 -1983) declined as a result of production declines or cutbacks in the application of polluting inputs. Figure 1.1 relates declines in pollution 20 7000 emissions with the changes in industrial 6000 production. Other problems may have E intensified, however, due to changes in P 150- *2 household and industrial consumption or * 100 ~~~~~~~~~~~~3000 patterns. For example, deforestation may be - . increasing as rural households are turning IL a - * x increasingly to wood for fuel. Pollution * mnonitoring and regulatory enforcement have 190 7 1990 M 1992 i9m virtually ceased because of the lack of funds mAir pollution from point sources to support staff travel and equipment, or the ---Industrial Production lack of will to close facilities on which hundreds or thousands of people depend either directly or indirectly for their livelihood. 1.9 Social and economic concerns. Although income levels are low, the population is well-educated and in the past enjoyed social support in the form of education, health services, and guaranteed income and pensions. Unfortunately, provision of social services, previously secured by the central government and the enterprises, is severely limited by restricted budgetary policy and collapse of the state sector. Future levels of these services are uncertain. Increasing poverty is a major concern -- about 50 percent of the population is already below the nominal poverty line, and with rising energy and food prices may become further impoverished. Republic, oblast and rayon governments will be assuming responsibility for primary social services from the monolithic sector enterprises -- further burdening constrained local budgets. Among those responsibilities will be maintenance of public infrastructure and municipal services (e.g., safe water supply and sanitation). 1.10 Economic stabilization and adjustment. In the short and medium term, macroeconomic stabilization efforts have been focusing on fiscal revenue enhancement, and imposing financial discipline on the enterprise sector; Prices, interest rates, external trade and the foreign exchange regime have been liberalized, while succeeding in curbing inflation and strengthening the currency. National Environment Action Plan: 3 Priorities for Action 1995-97 1.11 Structural reforms underway include privatization, already almost completed for small-scale service and retail operations and advancing for medium and large enterprises, enterprise reform, including restructuring large scale enterprises and removing subsidies, and private sector development, with legislation to expand private ownership, clarify property rights, and build an incentive framework encouraging investment and breaking up dominant structures. Sectoral reforms are designed to promote a rapid response in key sectors of the economy, particularly in agriculture and in the financial sector. 1.12 Many of the policy steps of the Figure 1.2: Share of Environmental Investment Government reform program (price of Total National Icome liberalization, removal of imports and export quotas, privatization, imposition of hard budget constraint) are expected to contribute 05 to environmental improvements. For example, increased prices for natural 0 4 resources should encourage resource 03 ~03 conservation and reduce the level of air and water pollution, and waste generation. On 02 2 the other hand, economic downturn and 01 budgetary restrictions have severely constrained environmental spending. The 0 _ l _ l _9*3_ share of environmental investments in the 1985 1990 Year 1992 1993 country's national income dropped to a record *efnbgesh] low level of 0.05 percent in 1992, going up in 1993, yet to still very low level--0. 12 percent (Figure 1.2). 1.13 In the short term some policy measures may also have an adverse environmental impact. Price increases force individuals and organizations to shift to alternative fuels, some of which are more polluting, such as coal, or more ecologically damaging, such as wood stripped from erosion-prone slopes. For example, up to 95 percent of rural households are using wood fuel (in combination with other energy sources). Most of it is freely collected along roads and in forests--only about 17 percent of the firewood used is purchased'. Accelerating deforestation is the result. Similarly, privatization, not combined with proper enforcement of environmental regulations, may lead to neglecting necessary environmental costs and worsening the environmental performance of the privatized enterprises. 1.14 Selection of sources of energy supply should be based on cost considerations, including environmental externalities, and should be combined with conservation measures which can be quickly and inexpensively implemented. Changes in the power market from 1990 to 1994 are illustrated in Figure 1.3. Although the overall energy consumption has decreased, mostly as a result of dramatic output decline, the shares of electricity, and firewood and dung cakes have increased. For electricity, the increasing share is due to raising residential electricity consumption (tripling in rural households and doubling in urban households between 1990 and 1993)2. This probably reflects state policy encouraging the consumption of nationally-produced electricity, including lax collection of electric fees, and the reduced availability of other fuels. Raising share of firewood is particularly alarming in light of the fragile condition of the national forests. Energy consumption per capita is well below the average for the FSU, mostly because of a low share of energy intensive industries in the economy. I/ Kyrgyzstan Energy Sector Review. _/I Kyrgyzstan Energy Sector Review. National Environment Action Plan: 4 Priorities for Action 1995-97 1.15 Many industrial enterprises use old Figure 1.3: Breakdown of Total Primary Energy Supply techinologies and equipment is poorly mlainitained due to lack of funds for maintenance and spare parts. With the break tip of the FSUJ, the financial position of these 7OM enterprises has further deteriorated. 6__ Industrial restructuring will influence the iricdustry mix--the most significant short-term soa _l ICm environmental benefits may be gained through s _ CCU ma.rlrket-induced shifts away from industries _ NahJrHI ,"s whlich are no longer viable, to processes a _Prd Pructs whichl pollute less. Non-ferrous mining (such 200D _ E -Wnoty as gold) and hydroelectric power generation applzear to) he promiiising sectors -- both of o whilch can have negative environmental 199. 1994 impacts if not welli-managed. Environmental regulationis will need to be responsive to poteunial development in these areas. .16 Agriculture has considerable potential for development and is a key sector targeted for support and refornm. Foreign investors are interested in the development of gold mining. Both agriculture and miiiing also bring with them severe environmental liabilities from past management practices. The reform prograni must be balanced to avoid incurring further social and environmental costs, and economic ;lialysis of rcforin options must integrate these costs. I 17 This period of economic change is a unique opportunity to introduce sound environmental policies whichi reinforce the economic signals. If environmental policies are integrated with economic change as they should be, then they will be more easily and effectively adopted. For example, environmental charges and fees should be introduced as part of an overall tax reform package. Actions which disCoLurage "bad behavior" (such as pollution fees) can be balanced with rewards (reduced income taxes, or tax rehates for investing in clean technologies). Likewise, actions which regulate landuse or assign pollution liability should be made clear at the beginning of the privatization process, rather than later when owners have a vested interest in resisting regulatory control. Rational fees, tariffs and standards for resource use, such as those proposed by the government, will help encourage more efficient resource use In addition, miore clearly defined rights structures will encourage investments in resources which pro. idle long-term returns. National Environment Action Plan: 5 Priorities for Action 1995-97 2. SETTING GOALS AND PRIORITIES 2.1 Why is it important to be concerned about environmental issues? Kyrgyzstan faces difficult economic and social dilemmas. Why not defer environmental issues until other problems have been addressed? The simple answer is that some environmental issues can not wait because they are critical for the economic development of the Republic, the protection of public health, or because their neglect may lead to irreversible damage. Other environmental issues may have a relatively minor impact on the economy or on the public--they can and should be postponed. 2.2 Choosing what is important today and what can be deferred is not easy. It requires both scientific knowledge and public consensus. Knowledge and public priorities will change over time. As a result, the National Environmental Action Plan (NEAP) will be updated. The NEAP focuses on a small number of crucial problems which deserve priority attention now and emphasizes the collection and dissemination of sound information. Other issues will be raised in the future, as the success of this Action Plan is assessed, conditions change, and new information is available. 2.3 The NEAP distinguishes between priorities and goals. Priorities are the actions that need to be taken in a two or three year period, carefully allocating available resources. Priorities will need to be adjusted and new ones introduced from time to time in order to reach long-term goals. The long-term goals for the Kyrgyz Republic address two priority areas: (i) increasing the productivity of renewable and non-renewable natural resources; and (ii) ensuring good public health. Both are of critical importance for the economic development and public welfare. A. KEY ENVIRONMENTAL PROBLEMS 2.4 The key areas of envirorunental concern identified by the NEAP team are the unsustainable use of natural resources and the impact of pollution on public health. The nature of the concerns is summarized below. Greater detail on each of the issues can be found in the attached background papers. Unsustainable use of natural resources 2.5 Inefficient use of water. The Kyrgyz Republic is rich in water resources, although the amount of available water varies greatly throughout the country. Watersheds and catchments must be actively managed to protect and maintain these supplies. The irrigation, rural and urban water supply and sanitation infrastructure in the Kyrgyz Republic is well developed, but it is falling into disrepair due to financial and personnel shortages. Its continued functioning is also essential. The economic and social costs of inadequate maintenance could be very large, especially if new capital investments are required to replace facilities that are no longer usable. 2.6 Land degradation due to overgrazing, and inappropriate farming and irrigation practices. The majority of the Kyrgyz people live in rural areas (Figure 1.4) and depend directly or indirectly on the productivity of the land. For rural populations to have an acceptable standard of living, soil productivity must be maintained and enhanced, and the production of renewable resources (livestock, crops and forests) managed in a sustainable manner. If steps to reduce erosion are not taken, there will be growing economic, political and social costs from lost productivity and from sedimentation-caused capacity loss in reservoirs. National .iivironment Action Plan: 6 Priorities for Action 1995-97 2.7 Overexploitation of fragile forest Figure 1.4: Population of the Kyrgyz Republic resources. The State Forest Fund includes (Thousand People) fifteen percent of the the land area in the Republic. Deforestation in Kyrgyzstan is very serious, however, and most of the land in the Fund is used as rangeland. The loss of forests is due to high levels of tree harvesting in the past, the enormous pressure of - extensive grazing by large numbers of 2 | _ _ livestock, and the increased demand for _ _ wood, as a result of reduced imports of wood __ _ _ _ ___ _ .P - from FSU republics and reduced availability * R.Pp of other fuels. The official timber harvest is Iwo about 40,000 m3. The estimated illegal *_ fuelwood and timber extraction is about o 500,000 m3 or higher. Unfortunately, there g i E ; are no accurate figures on the existing standing stock, annual growth, or rate of deforestation. Uncontrolled cutting, however, will increase hardship in the future for rural people dependent on wood and non-wood products; it will accelerate deterioration of the upper watersheds and reduce biodiversity. 2.8 Loss of biodiversity. The ecosystem and species diversity of Kyrgyzstan is naturally high because of the dramatic relief, numerous microclimates, and diverse landscapes. A relatively large number of animals are endangered, however, and are listed in the Red Data Book of Kyrgyzstan. While hunting is officially regulated, enforcement of hunting control is very limited and licensing is very liberal (particularly for foreigners). Protected areas cover only 2.7 percent of the territory, and capture remnants of several ecosystems--most of them too small to maintain viable populations. There is a real threat for irreversible habitat loss, with negative global and local impacts. In the Kyrgyz Republic biodiversity protection is critical for potential development of tourism and therefore has a significant economic value. 2.9 Wasteful mining and refining practices. The Kyrgyz economy depends on the sound management of its nonrenewable mineral resources as well. Some of these will grow in importance in the future; others will no longer be in demand. Inefficient mining and refining industries created dumps rich in materials, but so badly maintained that heavy metals and other toxins are leaching into the environment. The economic costs of these practices are measured in terms of lost revenues from wasted resources, and potential health damages from exposure to toxic mine wastes. Impact of pollution on public health 2. 10 Current data suggest that the most serious human health concerns in Kyrgyzstan -- childhood nutrition, hepatitis A, tuberculosis, maternal and infant morbidity and mortality -- are generally related to environmental exposures against which low-income populations have few defenses. These include such as unsanitary living conditions, use of contaminated food, poor water supply, inadequate nutrition, and exposure to toxins or biological contaminants. In addition, public health is expected to worsen as public infrastructure deteriorates. Infant and child morbidity are also increasing, caused largely by respiratory diseases in the winter from insufficient heat and more polluting fuels in homes and schools, and diarrheal diseases in the sunmmer from poor sanitation and contaminated water supplies. National Environment Action Plan: 7 Priorities for Action 1995-97 2.11 Water pollution. In general, Kyrgyz water supplies are of excellent quality at their source. Water contamination occurs as the result of the deteriorated condition of the piped distribution systems, including treatment plants, and the lack of protection of the surface water sources from residential, industrial and agricultural wastes. Simple steps, such as funding regular maintenance and operations of the systems, enforcing land-use controls near water sources, and instituting low-technology, local solutions to sanitation would reduce many of the social costs associated with poor public health, and avoid irreversible damage to aquifers. 2.12 Air pollution. Although there are localized air pollution problems of an unquantified extent around smelters and mining waste dumps, the primary air pollution-related health problems are due to low quality fuels and non-operating pollution control devices associated with energy plants and transportation. These problems can be dramatically reduced by properly maintaining and operating existing dust collectors in the major industries and in district heating and power plants, and by regularly maintaining the city bus fleets. 2.13 Mining wastes (uranium, mercury, and heavy metals). Waste management in general is not well-developed, but in the mining industry, where the presence of toxics in the wastes makes good management of grave importance, the quality of environmental controls has been at best inconsistent and at worst critically negligent. Environmental monitoring has ceased for funding reasons at virtually all sites, the extent of health risk is unknown at the nearly 50 uranium tailings sites inherited from the Soviet Union, at the Haidarkan mercury combinat, or at the Kyrgyz Mining and Metallurgical Combinat (heavy metals). Experience in other countries shows, however, the localized risks to human health from exposure to these toxics can be severe. B. PRIORITY ACTIONS 2.14 There are many important problems in Kyrgyzstan -- how do we judge which environmental issues should receive priority attention? The Kyrgyz Republic's overriding objectives are to ensure sustained economic growth and to reduce poverty. Economic transfornation and the creation of new employment opportunities are key to attaining these objectives. Funds for environmental investments are limited and should go to actions which will support positive economic changes, or to problems which may be aggravated by the economic changes. 2.15 Three types of environmental actions are identified as priorities in the short term: (i) Well-targeted expenditures are required to strengthen institutions and to rehabilitate, operate and maintain physical infrastructure that is rapidly deteriorating. Both will become increasingly costly to repair or replace. Timely investment in water and sanitation infrastructure will yield high benefits relative to the cost, just as small investments targeted to rural natural resource-based enterprise development can build strong links between economic development and natural resource conservation. (ii) A significant effort to collect well-defined information for pollution loads, environmental degradation, resource use, status of waste sites and impacts on both population and ecosystems is required in order to make sound judgments in the future regarding priorities for environmental action. The ratio of economic benefits to costs is again likely to be high. Better information will help ensure that the most urgent issues are tackled first. National Environment Action Plan: 8 Priorities for Action 1995-97 (iii) The environmental regulatory framework should be enhanced and the ability of staff in environmental institutions to operate effectively in the changing economic structures should be supported and strengthened. International assistance should be well coordinated and applied to the most important economic and environmental issues will facilitate this process. 2.16 Section 3 of Part I presents a summary of the major current environmental concerns. Recommended actions are described in the following Section 4. Part II provides a more detailed description of those concerns in the form of background papers on environmental health, water management, natural resource management, mining and metallurgy sector, industry, and energy. C. CRITICAL CONSTRAINTS 2.17 Financial constraints. In the current economic climate competition for funding both on national and on local levels is severe, and spending for environmental activities is harshly restricted. In order to prevent irreversible deterioration of public utilities and ecosystems, at least minimal resources should be secured for continued operation, maintenance and repair of vital infrastructure, as well as for important inputs in agriculture and forestry. Currently, only a negligible amount is available in the national budget, which imposes the need for raising funds through international assistance. Over time, a growing proportion of the money must come from the users of municipal and agricultural or forestry services. 2.18 Policy and institutional limitations. Money is not the only constraint. Under the former soviet system, generous financing for large capital investments was easily available, and proved to be the most inefficient way to improve resource productivity or environmental performance. In fact, broad economic policy reform and market accountability will address many of the causes of wasteful resource use and environmental degradation without the need for costly environmental expenditures. Efficient policy combined with small- and medium-scale targeted interventions tailored to the local economic and ecological structure have proven to be far more effective. No amount of investment will make up for policies that are misplaced or that encourage inappropriate practices. 2.19 Human resources. Successful policies and effective institutions are only possible if well-trained staff is available. While there are many highly skilled technical specialists in the country, locating appropriately trained and committed local managers to implement projects, devise low-cost innovative solutions to problems, and direct efficient and competitive enterprises is difficult. This Action Plan stresses actions to ensure that the human resources are available and sound incentives are in place to build a sustainable future for Kyrgyzstan. National Environment Action Plan: 9 Priorities for Action 1995-97 3. MAJOR ENVIRONMENTAL CONCERNS: DEFINITION AND UNDERLYING CAUSES A. WATER 3.1 Limited water supply. Although Figure 1.5: Actual Water Use by Sector (1992 - 1993) Kyrgyzstan is water rich, available water (Million m3) supply is determnined by agreement among the five Central Asian States on the sharing of surface and ground water3. Kyrgyzstan uses all of its allotted share. Map 2 (IBRD #26620), attached at the end of this report, indicates the distribution of rivers, rainfall, permanent snowfields and glaciers throughout the country.) Water availability is therefore very limited. There are numerous opportunities for low-cost improvements in ,p (414) efficiency and water conservation, not utilized 8e/6 at this stage. This is evident in the water distribution systems in the larger cities, and in the major irrigated areas of the Chu and _ Industry (860) Naryn River basins. In these areas, irrigated DOMunCpa 414) agriculture alone uses about 88 percent of the total water consumed. Basic improvements in the water distribution infrastructure and Agncuture water-use practices could result in major 88lb water conservation benefits. The water surpluses gained could in turn provide opportunities for new development in either agriculture or industry. Figure 1.5 illustrates the water consumption imbalance among the three primary sectors of the economy. 3.2 Inadequate operation and maintenance of irrigation systems. Key elements of the irrigation infrastructure of the Republic are aged, including pump stations, diversion works, and reservoir facilities. In addition, regular canal cleaning has declined, and water control structures are not repaired. As a result of the lack of maintenance, repair, and replacement, irrigation capacity and the volume of water delivered have declined. Out of the budget of 285 million soms which was agreed upon in 1993 with the Ministry of Finance, only 60 million soms were officially allocated, and 30 million soms actually provided (an amount only sufficient to pay minimal salaries). Expenditures on maintenance and repairs have declined from 56 percent of the estimated requirements in 1991, to 9 percent in 1992, and 5 percent in 1993. While increased efficiencies and restructuring of sector institutions, infrastructure, and modes of operation are needed, failure to adequately fund general operations and maintenance will have costly consequences in such an economically vital sector. Agriculture contributes 28 percent of the GDP (constant 1992 prices). Agricultural production is highest on irrigated lands. 31 Under the forner Soviet Union, Kyrgyzstan was required to allow over 75 percent of the water in rivers that originated in the Republic but flowed into neighboring republics to pass on to them for their use. Current inter- republic agreements continue this division of water-rights, with no compensation from the other republics to Kyrgyzstan for this valuable resource. National Environment Action Plan: 10 Priorities for Action 1995-97 3.3 Shortage offunds and personnel. An estimated 70 percent of the current water supply network is in poor condition and needs rehabilitation, repair, and replacement. About 97 percent of the piped water supply systems for rural people is provided by wells that supply water mains, hydrants and standpipes. Much of this system was built prior to 1970. There are no funds to install additional disinfection equipment where it is needed or to buy chemicals for existing units. Funds are only available for emergency repairs. Barely 10 percent of the previous number of staff are available to monitor drinking water quality in this highly dispersed system of water supply in rural areas. The lack of staff and budget has resulted in about a 75 percent reduction in the rate of expansion of coverage and in untrained personnel operating and maintaining many systems. 3.4 Exposure to contaminated water. Ground water supplies 90 percent of all drinking water provided by centralized pipe systems, and a high proportion of industrial water. The observed quality of freshwater from underground sources fed into the centralized distribution systems in urban and rural areas meets the present state standard for drinking water with respect to physical, chemical, and bacteriological parameters and generally does not require treatment before distribution. The deteriorated condition of piped distribution systems and the exposure of some of the surface water sources, however, create vulnerabilities to contamination and associated health risks. Some towns must still rely on surface water that is locally vulnerable to contamination from agro-chemicals, livestock manures, and sanitary wastes. Areas of low water quality are located in the most populated regions of the Chu river basin, in Osh and Djalal-Abad Oblasts, and in rivers flowing into Issyk-Kul Lake. 3.5 Contamination of the upper part of many aquifers with substances such as heavy metals, oils, and sanitary wastes is extensive in areas near industrial and mining sites and cities. The effect of these pollution sources is to create a layer of contaminated water overlying the deeper zones of good quality water that is being withdrawn by water supply wells. Unlike immiscible fluids such as oils which would tend to float above the good quality water, soluble substances such as heavy metals and nitrates gradually diffuse throughout the aquifer--eventually contaminating it to dangerous concentration levels if the infiltration of pollution from the surface continues. Hence, further pollution should be prevented even in those cases where pollution already exists. The intrusion of saline ground water into the aquifers due to over-pumping municipal water supplies and irrigation wells is another example of unsafe exploitation of groundwater. This has been observed particularly in Osh and Djalal-Abad Oblasts. 3.6 Unprotected surface water sources. Efforts to enforce sanitary protection zones in areas near surface water intakes or where water infiltrates into the aquifer have proven ineffective. Uncontrolled construction of homes without sanitary facilities or connection to sewers, expansion of livestock operations, laundries, storehouses for agro-chemicals and fertilizers, and unsafe disposal of liquid and solid municipal and industrial waste have continued to expand in an unregulated manner. They are all sources of surface water contamination. Osh provides an important example of the consequences of ineffective control of land use near raw water sources and the resulting vulnerability of the water supply. One of the principal water sources for Osh is the Ak-Buura River which is prone to sudden and damaging floods. This basin has numerous large livestock and farming operations, and dachas without adequate sanitation facilities, from which wastes are washed into the water supply system during these floods, resulting in disruption of service and dangerous contamination of the raw water supply. 3.7 Waste water collection capacity in the towns equals about 70 percent of the volume of water supply capacity. All the towns served with waste water collection systems are provided with biological treatment facilities. However, no systematic assessment is available of the current performance and effectiveness of these treatment facilities, and anecdotal reports from the sanitary inspection service indicate that over half are ineffective or inoperable. Sanepid inspections also show that municipal solid waste is not collected in a timely manner, and over 90 percent of all municipal solid waste disposal sites do not meet sanitary standards. These conditions contribute to the steady increase in untreated pollution entering the environment and infiltrating into underground aquifers and surface water channels. National Environment Action Plan: 11 Priorities for Action 1995-97 3.8 Health damages from poor personal hygiene. Hepatitis-A and OKZ4 both increased in 1993. The most infected areas are Osh and Djalal-Abad oblasts. These oblasts have large irrigated areas where canals and other open water supplies are contaminated by free-ranging livestock and incorrect disposal of human excreta. Drinking water is probably not the main source of waterborne diseases in adults, as the Kyrgyz people traditionally drink boiled water in the form of tea. Children, however, often inadvertently drink untreated water. Infection also takes place by eating contaminated food and through poor personal hygiene. These are largely cultural factors, and individuals need to be educated about how they can limit their exposure by altering their behavior. 3.9 Conclusions. There are sufficient quantities of raw water of excellent quality available for domestic and industrial use for the foreseeable future, provided water resources aie properly managed. Without significant renovation of the urban and rural distribution networks, improvement in the efficiency of on-farm use of water, and initiation of a major effort to increase water conservation in all sectors, water availability will be a constraint to future development. 3.10 The regulation of land use and enforcement of pollution prevention has been seriously inadequate in areas around water sources. This has led to negative health consequences in the form of increased morbidity and mortality among populations with vulnerable raw water supplies--particularly those using rivers, canals, and open reservoirs. 3.11 The present system of financing the maintenance, rehabilitation, repair, replacement, and modernization of drinking water and irrigation water supply infrastructure is insufficient. As a result, major health and economic costs are already evident. These problems will inevitably grow as the present infrastructure ages, and functions deteriorate further, including intakes, pumps, disinfection equipment. canals, gates, and distribution pipe systems which in most areas are over 30 years old. 3.12 The key water management organizations have been seriously weakened during the past few years. The Republic depends on these organizations and their staff for protection and management of this vital resource. Decreased size and improved efficiency of public sector organizations are legitimate aims during this stage of the transition, but the loss of highly trained staff and inoperable and out-of-date equipment may leave these organizations permanently crippled, with direct health and economic consequences as water management and water supply deteriorates. B. LAND 3.13 This section looks at some of the causes for the low productivity of land in the context of crop production, livestock management, and forestry, and describes briefly the high potential benefits from biodiversity conservation in Kyrgyzstan. 3.14 Low crop yields. Kyrgyzstan's principal crops are cereals, maize, and cotton. The main crop production regions are the Fergana Valley in Osh and Djalal-Abad Oblasts, in the Chu and Talas valleys, and in the Issyk-Kul basin. Crop production contributes 40 percent of the gross value of agricultural output (livestock contributes 60 percent), and in 1990, about half of the total value of exports came from the agricultural sector. Agricultural policy has been directed towards self-sufficiency in cereals for food security, with a number of supporting regulations, such as compulsory marketing, and centralized farm management. 4/ Identified OKZ is defined as acute enteritis, colitis, gastro-enteritis and rotavirus infections caused by identified factors. Unidentified OKZ is defined by unidentified gastro-intestinal infections and unidentified toxic food infections. National Environment Action Plan: 12 Priorities for Action 1995-97 3.15 The ovenvhelming problem with regard to crop production in Kyrgyzstan is one of economics. Inappropriate policies and regulations, bureaucratic hindrances and slow structural reforms (particularly land redistribution), in combination with inflation, delayed payments to crop producers, and absence of credit facilities, are the main reasons for the problems in the agricultural sector. As a result, many farmers turn away from commercial production to food crops for subsistence. This is evident from the decline in marketed and processed output, which is much greater than the fall in primary agricultural production. 3.16 Agriculture productivity is presently Figure 1.6: Use of Agro-chemicals per year constrainied primarily by the lack of an in the Kyrgyz Republic adequate water supply to the irrigated lands (tons) and sufficient nutrients to achieve reasonable harvests. Compared to Western countries, use of agro-chemicals is low and has declined 733 significantly over the last decade (Figure 700 6139 1.6). The application rates of fertilizers are 10 s to 20 percent of the rates in Western 5x 43* 4530 countries. Average use of pesticides is less than 50% of application rates in the West. 4000 3479 Increased agricultural inputs would enhance 300 23 the productivity of crop production. 20 Increased use of inputs must proceed with l iii caution, however, to avoid water pollution low associated with the improper handling and o storage of agro-chemicals--which is already a 1980 1981 1985 199 1991 1992 1993 problem in some areas. 3.17 On-site soil erosion and salinization of improperly irrigated lands are the key long-term environrmental concerns related to landuse. About 60 percent of the arable lands are affected by topsoil loss and 6 percent by salinization. Compared to the lack of adequate water and nutrients, soil erosion and salinization have less immediate impact on production levels. They are the product of improper water supply management and cropping practices, however, and if not addressed these problems will have profound long-term effects on the productivity of the land. 3.18 It is important to emphasize that sound economic policies in agriculture will initially have a greater impact in addressing rural environmental problems than specific environmental measures. This is because environmental problems in rural areas stem to a large extent from a reaction of farmers and livestock holders to the prevailing economic insecurity and to poverty. 3.19 Decreasing productivity of rangelands. The size of Kyrgyzstan's herds have dropped dramatically since independence. Nevertheless, they are still at levels which are twice the estimated carrying capacity of Kyrgyzstan's grasslands, and soil erosion and reduced productivity affects 60 percent of the pastures. Most of the livestock has been moved from collective and state ownership to the private sector and grazing pressure has increased on lands around settlements. With land tenure uncertain and monetary instruments weak, many people are keeping their assets in their herds--a traditional source of wealth and security. 3.20 The implementation of economic reform policies, such as price liberalization and land tenure assignment, should encourage more sustainable livestock management. Overall herd size is already shrinking as a result of the changing economic situation. Flock structure is changing, and more seasonal lambs are being sold for meat export. In addition, livestock grazing patterns can be more carefully National Environment Action Plan: 13 Priorities for Action 1995-97 managed. For example, depending on the life cycle of the particular fodder species, animals can be concentrated on small plots of land for short periods and frequently rotated--resulting in a less destructive feeding pattern. 3.21 Disappearingforests. Forests cover Figure 1.7: Land Use Categories in the Kyrgyz Republic about 4 percent of the country, or 7 percent of the manageable land area (Figure 1.7). The Forest Department, under the State Committee for Environmental Protection, is responsible for the management of 15 percent FoeSt (0 8) of the territory. Map 3 (IBRD #26688) illustrates the lands under the administration of the Forest Department. At the local level, _ 9 the Forest Department is represented by 32 Z., 45% Leskhozes ("forestry farms''), managing 95 percent of the state forest land. These lands are not subject to privatization. Leskhozes are productive entities and are involved in CsnM (14) collecting, processing, and marketing fruit, 7% honey, lumber, furniture, firewood, livestock and crops. About 55 percent of their land is leased out by regional and national authorities as rangelands to herding groups from both Kyrgyzstan and neighboring republics. These leases are currently being restructured or reclaimed. The leskhoz budgets are channelled through the Oblast and local authorities. These authorities may reallocate funds at their discretion, which has resulted in budget cuts of up to 70 percent for some of the leskhozes, as local government priorities are often not focussed on forestry. Curtailed funds mean that forest management activities are minimized, and enforcement capability against illegal cutting and grazing is very weak. In addition, processing and marketing forest products are hampered by the lack of short term credit facilities. 3.22 Biodiversity at risk. Map 4 (IBRD #26687) shows the major categories of protected areas. They are widely dispersed, with no connecting corridors. Wildlife numbers are decreasing rapidly from intensive hunting, and habitat fragmentation and destruction. 3.23 Kyrgyzstan has good prospects for tourism development, due to its great scenic beauty. Adventure tourism such as mountaineering, trekking, and horseback riding have the greatest immediate potential. Wildlife resources are key elements of these attractions and tourism revenues may be used in part to support conservation goals. Map 4 also includes cultural heritage sites which may be of interest to tourists. These sites are frequently adjacent to protected areas or leskhoz lands. Infrastructure, facilities and services are currently lacking, however, and widespread hunting and poaching have made wildlife very wary and difficult to observe and enjoy. Lack of finances for the protected areas and pressure from grazing, hunting and firewood collection contribute to the management problems. There is a need to prepare a National Biodiversity Conservation Strategy which integrates conservation with development and other institutional goals in a cost-effective manner. International resources should be coordinated to assist in this effort. Ratifying international conventions would facilitate this process. The long-term benefits will be substantial. 3.24 Degraded watersheds. Due to the seismic activity of the country, steep slopes, and unstructured fragile soils, the land is naturally very susceptible to soil erosion. The situation is aggravated by human activities, mainly through inappropriate livestock management and the loss of a protective vegetative National Environment Action Plan: 14 Priorities for Action 1995-97 cover. Land slides, mud flows and gullies are ubiquitous in the landscape, causing damage to infrastructure and endangering human life. There is clear evidence that irrigation systems and reservoirs are silting up, causing drainage problems and loss of storage capacity. The extent to which hydropower reservoirs are silting-in and losing storage capacity is unknown, but judging by the amount of soil erosion in the upper catchments, downstream sedimentation must be high. In addition, the water storage capacity of the soils is low, and streams and rivers have extreme seasonal variations in flow, resulting in destructive floods and water shortages. 3.25 Conclusions. Improving the productivity of land in the broadest sense will depend on sound economic policies, and well defined land use management. These, and other measures to improve the income of rural populations will go a long way toward addressing some of the most pressing environmental problems in rural areas. At the same time, a forward looking strategy will include modest measures to ensure a sound biodiversity strategy. C. ENVIRONMENTAL CONCERNS RELATED TO THE MINING AND METALLURGY INDUSTRY 3.26 The mining and metallurgy (M&M) sector is commonly associated with significant environmental problems. Inadequate information is available, however, to proceed with measures other than information collection and establishing a sound regulatory and enforcement framework. Environmental investments in the sector risk being very expensive, and the country cannot afford to make inefficient investments which do not achieve tangible environmental improvements at least cost. 3.27 The mining and metallurgical sector is facing serious financial and market-related problems, not least because of the rapid increase in energy prices (the cost of energy is often more than 50% of the cost of production). Many skilled technicians and managers departed after independence. 3.28 The mining and metallurgy sector accounted for 10 percent of industrial production and 11 percent of the workforce in 1992. The minerals produced include antimony and antimony oxides, mercury, gold, uranium oxide, minor rare earths (lanthanum, cerium, dysprosium, erbium, gadolium, holmium, etc.), molybdenum and calcium fluoride. A mine and processing plant for tin and tungsten is currently under construction. In the past the sector was oriented primarily toward the traditional markets of the FSU and thus is now heavily affected by the collapse of these markets. The future world markets for the Republic's mineral resources are either modest (gold, antimony and mercury) or not promising (uranium, rare earths, tin/tungsten and molybdenum). 3.29 Gold production is the only sector which is attracting notable interest on the part of foreign investors. The development of two commercial gold deposits in joint venture with foreign companies is being in progress (one of them, in Kutmur, is co-financed by the IFC), and further exploration for bulk deposits is likely. It will be critical that the development of these gold deposits be carried out in the context of sound environmental policies, including environmental impact assessments which meet international standards. Exposure to toxics 3.30 There are a number of areas, usually associated with active or closed mines or processing plants, which are identified by Kyrgyzaltin as sites of particular environmental significance due to abandoned mine workings, tailings deposits, waste dumps or impoundments. Map 5 (IBRD #26619) (Mining Hot Spots and Mining Areas) identifies the major locations of concern. Monitoring at all of these sites has been limited due to lack of resources, and the state of containment of potential toxins is unclear in a number of instances. National Environment Action Plan: 15 Priorities for Action 1995-97 3.31 Mercury and antimony. The surface antimony mine in Kadamzhay and the deep shaft mercury mine in Haidarkan are both located in the middle of settlements of approximately 12,000 inhabitants each. There are no sanitary or safety zones separating housing from the mines and tests in housing areas indicates residents are exposed to antimony and mercury vapors. Although the reliability of the data is unclear, the morbidity rates in the exposed settlements appear to be very high, and it is thought that the non-mining population is exposed to unacceptable health risks. 3.32 The mercury mine in Haidarkan is scheduled to be closed and production shifted from mercury to other heavy metals. Soil pollution will remain, however. Consequently, a monitoring program is urgently needed to determine the extent and impact of residents' exposure to on- and off-site pollution. The need for major measures cannot be ruled out, such as relocating inhabitants from the contaminated area. 3.33 Radiation. Under the Soviet Union, uranium was a critical strategic asset and in high demand. Since independence, uranium mining operations have ceased, while uranium oxides processing at Kara- Balta continues using imported concentrates. Sites such as the facilities at Kara-Balta and some former uranium tailings dumps have been called by local experts "clear and present dangers to the health and safety of numbers of people". For many combinats, mines and waste dumps, however, information is not available on the environmental conditions within and around the sites. The lack of data makes any statement about conditions at the sites controversial. The absence of environmental oversight, however, also makes the existence of hazardous conditions likely. In addition, there is concern for exposure to radiation from nuclear testing in China. 3.34 Due to the lack of monitoring, there is no conclusive evidence of radon pollution from natural sources, although the nature of the substrate makes the existence of radon emissions a possibility. There is sufficient evidence, however, of the need for general health-oriented monitoring of radiation, particularly in areas surrounding dumps related to uranium mining and processing, at the sites of former accidents, and from contaminated materials, such as old equipment and uranium-containing coal used for fuel. D. Ait 3.35 Increased pollutionfrom coal. Air pollution problems are dominated by the growing shift from gas to coal for power and heat, especially in the major urban areas. The shift is a consequence of the rapidly rising prices for natural gas which has to be imported at close to market rates. The Kyrgyz Republic has abundant supplies of coal that is low in sulfur but causes harmful emissions of particulates and coal ash, which are a problem in the largest cities. Like other fuels, the price of coal is also rising, due to increases in the cost of freight and the physical difficulty of transporting coal within the country. Because of these difficulties, coal burned in the north is primarily imported from Kazakhstan. Industrial air pollution has significantly declined because of the rise in fuel prices and the large contractions in the economy. Until industrial restructuring has progressed further, however, it is difficult to predict future trends. 3.36 In rural areas without central heating and power plants, heating is provided by coal, wood, and manure/straw fuels. Rural communities are gradually installing additional transformer capacity (both with and without government financial assistance) to enable conversion to electric space and water heating and electric cooking. Electricity consumption in the rural households is increasing; however, most of the poor rely on wood and nanure/strawfuels. The shift in fuel supply toward more reliance on fuel wood creates even greater environmental pressure on the few remaining forests. National Environment Action Plan: 16 Priorities for Action 1995-97 3.37 Air pollution in Bishkek. Air pollutants accumulate in the lower levels of the atmosphere over the city of Bishkek due to its climate, geographical position and meteorological conditions. Seventy-eight percent of the pollutants are emitted by the municipal power plants. In addition, there are also over 270 relatively small industrial, municipal and transport enterprises within the municipal area which have both routine and sporadic atmospheric emissions. There are no large industrial polluters such as oil refineries or metallurgical plants, however. Private transport contributes to air pollution, as well, but its share is probably declining due to the sharply rising price of fuel. 3.38 Conclusions. The largest air pollution reduction benefits can be achieved through the installation and/or correct use of dust filters (electro-static precipitators) in the major power and central heating plants in Bishkek and Osh. This is a relatively inexpensive measure that can bring about significant benefits to human health. In addition, systematic maintenance of the large public bus fleet will go a long way toward reducing the most harmful emissions from vehicles. National Environment Action Plan: 17 Priorities for Action 1995-97 4. FRAMEWORK FOR ACTION A. ADDRESSING PRIORITY PROBLEMS Water supply systems at risk 4.1 The health and economic well-being of the Kyrgyz population depends critically on a well functioning water supply and water management infrastructure. Failure to ensure sound maintenance of the already deteriorating system will cause significant long-term costs both to individuals and to the economy as a whole. There is no need for massive investments in sophisticated technology to reverse the process of deterioration -- rather, the emphasis should be placed on the gradual introduction of new institutional arrangements, on halting the exodus of skilled people from public sector organizations, and on simple, well known, and low cost investments in the impressive water management and sanitation infrastructure that already exists in the country. In addition, a modest program is justified to expand these services to vulnerable groups. 4.2 Policy response. Water supply and waste water operations by the Urban Municipal Services (KJKS) are financed through water tariffs and fees paid by its clients for services. In the case of households, water charges are paid as part of a lump sum charge paid to the local communal department for municipal services. Domestic tariffs for water and sewer services are established by local authorities based on the accounts of the local unit of KJKS which are regulated by the State Committee on Prices, which unfortunately do not allow the cost of maintenance of existing facilities to be included in the rate base. At present tariffs cover between 50 and 100 percent of real operating expenses. 4.3 Tariffs negotiated with industrial enterprises include the underpayment by domestic and municipal consumers which results in a significant cross subsidy by industry to these other consumers. The central government, which formerly subsidized services and construction of new facilities, provided 1 million soms in 1994 for construction, but no operating subsidies. Arrears are currently very large--(more than 12,000,000 soms) and growing. It is estimated, however, that if current tariffs reflected the full cost of operation and maintenance, few household could afford to pay the water charges. 4.4 A new water law was passed by the Supreme Soviet in the fall of 1994. The new law strengthens the legal basis for water management and the regulation of both water quality and water use, but the provision to begin the gradual recovery of state costs for infrastructure construction, operation, and maintenance costs was eliminated for agriculture and forestry water uses. At present therefore, the Ministry of Water Economy (MOWE) has no means to assess water charges to recover even part of its costs, and no means to reorganize irrigation to decentralize responsibility for routine maintenance activities to the farmers or other local irrigation organizations such as water use associations or farmer- owned irrigation districts. 4.5 In order to ensure the long-term financial sustainability of the country's water management program, the overriding policy issue is therefore to establish sound mechanisms for mobilizing local funds to finance essential infrastructure operation and maintenance services for domestic, industrial, and irrigation water supply. Even before it is possible to resolve the many difficult questions regarding local government organization and finance, immediate measures need to be identified to mobilize funds for rehabilitation and essential maintenance and operations including the purchase of chemicals. Essential steps in municipal water supply and in irrigation will be (i) gradual increase in domestic and industrial tariffs, and (ii) introduction of water charges for irrigation water users. National Environment Action Plan: 18 Priorities for Action 1995-97 4.6 Technical assistance needs. Donor financing could be sought for essential technical assistance needs which might include: (i) Assistance in developing municipal and Oblast governance and financial reforms; (ii) Assistance in strengthening health assessments at the Oblast and Rayon levels, including strengthening local units of Sanepid, Goskompriroda, Goskomgeol, and MOWE monitoring capability and related joint information systems; (iii) Assessment of rehabilitation and modernization needs for irrigation water distribution, and preparation of studies and proposals to gradually reform irrigation water pricing and increase cost recovery; (iv) Development of cost management programs for the maintenance of municipal and irrigation services; and (v) A wide range of training and capacity building activities at the Oblast, Rayon, and municipal levels including, for example, introduction of modern financial management systems such as accounting procedures at the municipal level. 4.7 Financing. Modest amounts of expenditures are recommended to address the highest priority problems of water supply contamination, the most vulnerable water sources, and those population groups most affected in terms of health risks and/or poverty. Interventions could include completion of projects; rehabilitation, repair or replacement of facilities that are not working properly, including pump stations, wells, pipe networks and mains, intakes, reservoirs and storage tanks; treatment works including disinfection equipment, sewers and private sanitation facilities; and purchase of spares and chemicals. Priorities should be based on an assessment of the following factors: (i) Health. The extent to which the proposed project reduces health risks, based on direct measurement of the incidence of water borne diseases, child morbidity and mortality. Decisions can also be based on consistent detection of high risk factors including contamination with bacteria, nitrates, or other factors which can be shown to represent a high health risk under current conditions at the specific location. (ii) Productivity. The economic impact of the problem or the intervention in terms of its impact on agricultural income, reductions in the cost of water, and the effects on local employment (particularly the potential intensive use of local labor). (iii) Equity. The use of low-cost measures using local materials and private businesses and contractors, and the impact on areas with especially low income. (iv) Technical and Financial Factors. Proposed projects should demonstrate that they are based on a least-cost approach with respect to investment, operation, and maintenance; can be implemented quickly with existing technology and available materials; and are capable of being phased over time. 4.8 An inter-ministerial or multi-agency team should form an emergency working committee to evaluate and select proposals from the concerned agencies and local units of government. The Working Committee, possibly with foreign technical assistance, could issue guidelines for identification and preparation of project proposals, develop, describe, and issue criteria for project evaluation and selection, visit project sites, and compile and possibly collect data on which to base the evaluation of sub-projects. National Environment Action Plan: 19 Priorities for Action 1995-97 The guidelines would include well defined procedures for the preparation of feasibility studies, including a standardized, and simplified report format. 4.9 Pilot and demonstration projects. To deal with the most urgent problems, and to demonstrate immediate action at the local level, a number of pilot and demonstration projects should be considered which demonstrate new approaches, materials, and techniques, and have immediate local benefits. (i) Low cost sanitation demonstration projects, such as the introduction of new latrine and septic tank design and construction methods, which emphasize opportunities for income generation (construction of slabs, latrine construction, etc.) and community participation. (ii) Improved operation and performance of existing waste water treatment plants; introduction and pilot testing of lower cost (investment, operation, and maintenance) treatment systems for small towns and villages with piped water and sewer service. 4.10 Consideration should also be given to supporting a village grant and/or credit program to support essential works and income generating activities. 4.11 Longer-termn water supply requirements. At this time, additional water resources should be sought through savings and efficiency improvements in irrigation water use, since industrial and domestic water use is only 10 percent of total water use in the Republic. Investment in additional and new sources of water supply for these latter water uses should be made only after water wastage and inefficiencies are eliminated. This approach is likely to prove far less costly.5 For example, for Bishkek there are plans to expand or supplement the existing sources over the next 10-20 years. A major new field has been identified -- Issik-Atainskoe -- with a capacity nearly equal to the two existing fields. Development of this new field would avoid the growing problems of managing the pollution of the existing aquifers, but at considerable expense. The intrusion of contaminated water into the deeper portions of the existing aquifers should be prevented, and greater efforts made to prevent pollution from industrial, municipal, irrigation, and livestock sources. 4.12 Greater use of the shallower, sometimes polluted ground water for so-called technical or non- potable uses for which it is suitable would also ease the pressure on aquifers and conserve the high quality water for drinking purposes (about 130,000 m3/day are already withdrawn for these uses in Bishkek). 4.13 Institutional strengthening. The capability of government agencies and other institutions to systematically assess priorities is crucial to ensure effective actions with very limited resources. The process for priority setting, planning and capital budgeting can be improved by strengthening the processes and linkages among different agencies to ensure the flow of timely health and economic impact data. The extreme limitations on financing needed for rehabilitation, repairs, and particularly extensions of service into new areas, requires rigorous attention to priority-setting based on the relative impact of improvements on health and the local economy. This type of benefit-cost-analysis requires good quality and timely data on such things as the results of sanitary inspections, tap and water quality data, health statistics, flow distribution data, water shortages and outages, and economic data on production in irrigated areas. 5/ In areas where street and yard standpipes are the predominant mode of water service, water use will tend to be quite low in per capita terms, but there could still be substantial waste where fittings and fixtures are in poor condition. National Environment Action Plan: 20 Priorities for Action 1995-97 4.14 Furthermore, the government must make every effort to ensure that the key water management organizations in the public sector are fully functional and that key technical people remain with these organizations. The tremendous restructuring that these organization have already undergone was necessary in part, but the government should take urgent steps to ensure that these economically vital organizations are not crippled. 4.15 Data and monitoring requirements. There have been reports of significant loss of reservoir storage capacity due to sedimentation in the 15 major and 24 smaller reservoirs. While the detrimental effects of deforestation and erosion caused by inappropriate grazing practices and construction of roads and other infrastructure are evident in many watersheds of the Republic, there appears to be little or no systematic data on sediment transport in the streams and rivers where this might be a significant problem, and no data on rates of reservoir sedimentation and its economic consequences. Since the effects of stream and reservoir siltation are long-term and costly problems to rectify, more systematic monitoring and diagnostic analysis of this problem, and implementation of low-cost preventive measures, should receive priority attention. Maintaining water storage capacity is vital for Kyrgyzstan not only as a source of hydro-power but especially to guarantee adequate water supplies for irrigation during the summer months when water flows are often low and unreliable. 4.16 During the last few years, monitoring capacity has dramatically deteriorated due to a sharp decrease in financing. Lack of basic chemicals, spare parts, glassware, supplies, lack of cars and gasoline, etc. have also contributed to the deterioration of the quality of results. As described above, the types and amounts of future investment depend critically on sound information on water quantity and quality in selected parts of the country. In this regard, the capabilities of the major institution active in this area -- Hydromet -- should not be left to deteriorate any further. Small expenditures on reliable monitoring can prevent wrong and potentially very costly investment decisions. Low productivity of land and forest resources 4.17 Agricultural policy reform. During the privatization and transformation process in agriculture, efforts should focus on changes in policies including land tenure, payments to producers, and agricultural credit. These will contribute most toward increasing crop yields in the longer term. In the longer run, farmers should be given information and supported in their efforts to reduce soil erosion through reduced tillage, mulching, contour ploughing, strip cropping, improved irrigation and better storage and handling of agro-chemicals. 4.18 Support to the forestry farms (leskhozes). Modest investments in leskhozes are warranted at this time, however, as the leskhozes are not undergoing restructuring or privatization and could contribute significantly toward environmental improvements in rural areas. At present, the leskhozes are suffering radical budget cuts of up to 70 percent. A program to support tree planting would be sensible, given the multiple benefits of such a program: there is an urgent need for local construction wood (tree poles) and for firewood in rural areas. Increasing the tree cover would also reduce soil erosion, land slides and mud flows in the fragile upper catchments, moderate streamflows and provide habitat for wildlife. 4.19 In addition, support to forest-related activities provides employment opportunities in rural areas which are particularly important at this time when the job situation in agriculture and industry is very uncertain. Tree-planting is labor intensive, as are the collection, processing and marketing of non-wood forest products, particularly fruits, nuts and honey. It is highly desirable to provide short-term financial credit for these kinds of activities, which encourage a sustainable rural economy. 4.20 In the longer run, the Forest Department (which has recently been integrated in the State Commnittee for Environmental Protection) needs to develop a consistent forest policy, combining production withprotection objectives. The present forest policy emphasizes the protective role of forests, National Environment Action Plan: 21 Priorities for Action 1995-97 and most activities -- including the afforestation program -- are focused on this issue. On the other hand, there is an urgent need to meet the growing demand for wood. If this demand is not at least partially met, illegal cutting of trees for firewood and construction will accelerate and further increase the pressure on natural forests. A first step in developing new directions in forestry would be to set up a good data base, providing information on standing stock, growth rates, production and consumption. 4.21 Improved livestock management. To reduce the degradation of pasture land, the numbers of livestock will need to be reduced over the next five years, and an effective landuse planning system based on land capability needs to be developed. Because semi-nomadic grazing is an important part of Kyrgyz history and culture, such a change will be met initially with considerable resistance. Appropriate land tenure is essential: secure grazing rights encourage local enforcement of stocking limits and sustainable management of the grasslands. The information needed to determine carrying capacity is readily available from the Institute of Land Use and Utilization (Geprozem). Introduction of grazing management practices such as no-grazing zones and rotational grazing could be part of such a plan. 4.22 Part of the solution to reduce the number of livestock also lies in changing the flock structure from meat and wool production using ewes and wethers, to a flock oriented toward seasonal prime lamb and higher quality wool production. A growing market for lamb exists in the Middle East and could be further developed. Currently, lamb is being sold to Iranian buyers. Meat products can only be sold on hard currency export markets, however, if industry standards are thoroughly upgraded and enforced. At present, no Kyrgyz enterprise could meet the standards of the European Union or the United States Department of Agriculture. The removal of export taxes and barriers provides one incentive to achieve such standards. Provision of credit to private enterprises for purchase of self-contained mobile abattoirs would further promote industry competitiveness. 4.23 Biodiversity conservation. The country has a high diversity in habitats and species and is of outstanding scenic beauty, particularly the Tien Shan mountains which are second only to the Himalayas. Adventure tourism has great potential, but services and infrastructure are inadequate. Biodiversity conservation is severely constrained by a small and fragmented protected areas network, hunting, poaching and by a general lack of public awareness. 4.24 Low-cost efforts in biodiversity conservation could have important payoffs in the future. This is a good time to prepare a longer-term national biodiversity strategy and secure an enlarged protected area network not only to stop the major loss of habitat and reduction in the number of (endangered) species, but also to improve catchment protection and to attract international tourism which can be an important source of foreign exchange earnings. This is an area suitable for international donor support. 4.25 As part of developing a national biodiversity strategy, the hunting licensing system should be reviewed and hunting areas reduced. The species that are hunted should be re-assessed on the basis of an inventory of hunted species. Over time, a reduction in hunting activity will make rare animals less shy and therefore more accessible to tourists who visit Kyrgyzstan to see its natural beauty. This change will take time, however, as local livestock holders view wild animals such as wild goats or wolves as competing with, or endangering, their herds. If national parks or reserves are to serve their intended purpose, much greater effort will be required to involve local people in park management and decisions affecting their livelihoods. 4.26 Information forfuture decision making. Information on soil erosion and its effects is scattered in different agencies and not readily available for making informed decisions. A coherent policy to deal with land degradation would benefit greatly from a country-wide assessment of the status of watersheds, including the degree of soil erosion and the occurrence of, and susceptibility to, mud flows and land slides. At the same time, a program to monitor river siltation and sedimentation of reservoirs will provide a basis for deciding how to prioritize the erosion problems among different watersheds. National Environment Action Plan: 22 Priorities for Action 1995-97 Health damages 4.27 Low-cost sanitation measures. The major public health problems are indirectly related to environmental causes. The main concerns are waterborne diseases such as Hepatitis A and diarrheal diseases. The main causes in rural areas are related to poor sanitation and open water supplies. There are virtually no public funds budgeted for sanitation, although sanitation is a major public concern. 4.28 Government officials often think of improved sanitation in terms of sewer connections and biological wastewater treatment which are very expensive for individual households and communities. Low-cost alternatives could significantly reduce health risks. Both international and local resources should be applied to install low-cost but effective latrine technologies. In addition, poverty plays a large role in rural health status. Projects which promote the construction of improved latrines with local building materials and local labor will have a three-fold effect -- improving the environment, the health status of the population and the economic condition of the poorest members of society. 4.29 Public awareness campaign. A well-targeted public information campaign and appropriate school curricula emphasizing the virtues of basic sanitation principles and food hygiene are likely to bring about significant human health improvements, especially in rural areas. 4.30 Land use controls. Public health will also be enhanced by ensuring that water supply sources are strictly protected. Land-use restrictions must be strictly enforced around water sources. 4.31 Reducing dust emissions. Air pollution (other than inside homes and factories) affects the health of urban populations in Bishkek and to a smaller extent in Osh, especially during the winter when dust emissions from the major power and heating plants may be trapped near to the ground as a result of atmospheric conditions. The highest priority is to maintain and properly operate existing dust collectors as well as to upgrade equipment where it is needed. Experience in many countries shows that the benefits of controlling dust emissions tend to significantly exceed the costs. 4.32 How critical is the health damage from mine wastes at the three largest combinats? Information on priority areas for cleanup of mine wastes is still inconsistent and incomplete. A number of studies of potential health hazards from mine wastes at Haidarkan, Kadamjai and Orlovsky are underway and should be completed. Until there are reliable health analyses of the rmine waste areas, significant expenditures should be avoided on cleanup or even on (pre)feasibility studies because of the risk of wasting large amounts of money on unnecessary work. Using donor resources more effectively and mobilizing additional extemal resources 4.33 Coordinating actvities. One of the objectives of the NEAP Office is to help coordinate demand and supply of donor assistance. The interests of the various actors are not always congruent, and it is important that the Kyrgyz Government retain oversight and control over the many different activities, and avoid overlap (both in internal requests, and in external commitments). A first step is to prepare a detailed list of donor activities with a particular emphasis on environment-related work (the Box below provides an initial and incomplete listing). This list will only retain its value, however, if it is continuously updated. Over time, the goal is to efficiently extract the maximum benefit from international assistance, to ensure that it dovetails with national programs, and to avoid overlaps and duplication. This is also an opportunity to identify new potential sources of funds, and to prevent scarce grant resources from being used for low-priority activities that are not part of the Action Plan. National Enviromment Action Plan: 23 Priorities for Action 1995-97 Initial Survey of International Assistance Activities for Environment Gennany (German Association for Technical Cooperation, GTZ, and NABU, a Gennan NGO): Proposed the establishment of a Man And Biosphere (MAB) reserve (UNESCO) for the entire catchment of Lake Issyk Kul and the Eastern Tien Shan mountains. NABU is conducting research in the area, financed by GTZ. GTZ is also supporting a pilot program in water quality monitoring in the Chu valley. Japan: Supply of agro-chemicals. The Netherlands: Supply of agro-chemicals and technical assistance for environmental improvements in Bishkek public transport, a coordinated monitoring system, industrial waste minimization, and NG0s. Switzerland: Funds and technical assistance for forestry projects, beginning in 1995. Five projects have been proposed: development of a forest information system; forest management in the (northern) spruce area; forest management and silviculture in the (southern) walnut area; afforestation; and training of technical fotest staff. Switzerland is also providing support for the NEAP Office. United States Agency for International Development (US-AID): Technical assistance support for water resource management. European Union (EU): The EU intends to support environmental institution building. At present, the Union is supporting a pre-feasibility study to review options for cleaning up the Minkush mine site. Asian Development Bank (ADB): ADB is planning to provide assistance for environmental regulatory reform and for setting environmental standards. Additional support would also be provided for capacity developmnent in Goskon;pfiroda. European Bank forReconstruction andDevelopment (EBRD): The EBRD ispreparing aproject tosupport the public and emerging private sectors in developing tourism. The EBRD tourism project has two objectives: (i) to promote the Kyrgyz Republic as an ecotourism destination while assuring their protection; and (ii) to promote local culture and protect the national heritage by reviving and marketing handicrafts. The project will support private enterprise development such as small hotels, rest camps, tour operators, travel agencies, guides, park wardens, and vendors. Global Environment Facility (GEF): Likely to support a regional biodiversity project involving Kyrgyzstan, Kazakhstan, and Uzbekistan. International Atomic Energy Agency IAEA): Interested in supporting monitoring of Uranium tailings. United Nations Development Prgramme (UNDP): UNDP Is likely to help organize a seminar on institutional capacity building for envirommental management. World Bank/IDA: Through its policy lending operations, the World Bank and IDA have been supporting proper pricing of exhaustible resources to promote conservation and reduce environmental degradation. Assistance for the agricultural sector also addresses the issueofland degradation. Sectoral reviews in Mining and Energy have identified environmental concerns and proposed steps to deal with them. The Bank is supporting the preparation of the Kyrgyz NEAP and will work with the Government to determine specific areas of assistance. National Environment Action Plan: 24 Priorities for Action 1995-97 The Aral Sea Program: a Case of Successful Coordination Five riparian states share the Aral Sea Basin, an area of 690O km2. ke They are the Kyrgyz Republic, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan. The Aral Sea itself lies between szakbstan and Uzbekistan. Two key rivers drain into the sea: th