Document of The World Bank FOR OFFICIAL USE ONLY Report No: 77131-KZ PROJECT APPRAISAL DOCUMENT ON A PROPOSED {LOAN/CREDIT} IN THE AMOUNT OF US$ 21.763 MILLION TO THE REPUBLIC OF KAZAKHSTAN FOR A YOUTH CORPS PROJECT March 25, 2014 Eastern Europe and Central Asia Human Development Unit Education Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective December 18, 2013) Currency Unit = Kazakhstan Tenge KZT 154.13 = US$1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS BYC Babylon Youth Centers CA Coordinating Agency CAIG Coordinating Agency Implementation Guidelines CDD Community-driven Development CPS Country Partnership Strategy CSR Corporate Social Responsibility CYA Committee on Youth Affairs of the Ministry of Education and Science ECA Europe and Central Asia FBS Fixed Budget Selection FM Financial management FRM Feedback and Resolution Mechanism GAC Governance and Anti-Corruption Action Plan GDP Gross Domestic Product GOK Government of Kazakhstan HBS Household Budget Survey HEI Higher Education Institution HS High School HQ Headquarters IBRD International Bank for Reconstruction and Development IDA International Development Association IC Individual Consultants ICB International Competitive Bidding ICC Information and Communication Campaign IFR Interim Financial Report ISP Implementation Support Plan KZT Kazakhstan Tenge LFS Labor Force Survey LCS Least Cost Selection M&E Monitoring and Evaluation MOES Ministry of Education and Science MOLSP Ministry of Labor and Social Protection of the Population MTR Midterm Review NA Non Applicable i NCB National Competitive Bidding NCS Non-Cognitive Skills NGO Non-governmental organization NEE Neither in Education or Employed NEET Neither in Education, Employment or Training OECD Organization for Economic Co-Operation and Development ORAF Operational Risk Assessment Framework PDO Project Development Objective PFM Public Finance Management PISA Programme for International Student Assessment PMU Project Management Unit POM Project Operational Manual PP Procurement Plan PPL Public Procurement Law PPP Purchasing Power Parity P-RAMS Procurement Risk Assessment and Management System QCBS Quality and Cost Based Selections SDC Swiss Agency for Development and Cooperation SSS Single Source Selection SW Staff Weeks TA Technical assistance TOR Terms of Reference TVE Technical and Vocational Education UNDB United Nations Development Business UNDP United Nations Development Program UNESCO United Nations Educational, Scientific and Cultural Organization UNICEF United Nations Children's Fund UNV United National Volunteers WHO World Health Organization WP Working Poor Regional Vice President: Laura Tuck Country Director: Saroj Kumar Jha Acting Sector Director: Alberto Rodriguez Acting Sector Manager: Andrea Guedes Task Team Leader: Keiko Inoue ii COUNTRY Youth Corps Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ............................................................................................................ 1 B. Sectoral and Institutional Context ................................................................................. 2 Youth Policy Framework and Programming ...................................................................... 5 C. Higher Level Objectives to which the Project Contributes .......................................... 6 II. PROJECT DEVELOPMENT OBJECTIVE ..................................................................6 A. PDO............................................................................................................................... 6 Project Beneficiaries ........................................................................................................... 6 PDO Level Results Indicators ............................................................................................. 7 III. PROJECT DESCRIPTION ..............................................................................................7 A. Project Components ...................................................................................................... 7 Component 1: Support Community-Based Service Learning and Life Skills Development ....................................................................................................................................... 8 Component 2: Support Institutional Development of the Committee on Youth Affairs for Youth Policy Implementation ..................................................................................... 14 Component 3: Project Management, Monitoring, and Evaluation Activities ................... 15 B. Project Financing ........................................................................................................ 15 Project Cost and Financing ............................................................................................... 15 IV. IMPLEMENTATION .....................................................................................................16 A. Institutional and Implementation Arrangements ........................................................ 16 B. Results Monitoring and Evaluation ............................................................................ 16 C. Sustainability............................................................................................................... 17 V. KEY RISKS AND MITIGATION MEASURES ..........................................................18 A. Risk Ratings Summary Table ..................................................................................... 18 B. Overall Risk Rating Explanation ................................................................................ 18 VI. APPRAISAL SUMMARY ..............................................................................................18 A. Economic and Financial Analysis ............................................................................... 18 iii Expected Benefits and Costs ............................................................................................. 19 Rationale for Public Intervention ...................................................................................... 20 Rationale for Bank Involvement ....................................................................................... 20 B. Technical ..................................................................................................................... 20 C. Financial Management ................................................................................................ 21 D. Procurement ................................................................................................................ 23 E. Social (including Safeguards) ..................................................................................... 24 F. Environment (including Safeguards) .......................................................................... 24 Annex 1: Results Framework and Monitoring .........................................................................25 Annex 2: Detailed Project Description .......................................................................................31 Component 1: Support Community-Based Service Learning and Life Skills Development ..................................................................................................................................... 31 Component 2: Support Institutional Development of the Committee on Youth Affairs for Youth Policy Implementation ..................................................................................... 38 Component 3: Project Management, Monitoring, and Evaluation Activities ................... 39 Annex 3: Implementation Arrangements ..................................................................................40 Annex 4: Operational Risk Assessment Framework (ORAF) .................................................50 Annex 5: Implementation Support Plan ....................................................................................54 Annex 6: Economic and Financial Analysis ..............................................................................56 Annex 7: Profile of Young People in Kazakhstan .....................................................................64 iv PAD DATA SHEET Kazakhstan Kazakhstan "Youth Corps" program (P127966) PROJECT APPRAISAL DOCUMENT EUROPE AND CENTRAL ASIA ECSH2 Report No.: PAD257 Basic Information Project ID Lending Instrument EA Category Team Leader P127966 Investment Project C - Not Required Keiko Inoue Financing Project Implementation Start Date Project Implementation End Date 01-Aug-2014 29-Dec-2017 Expected Effectiveness Date Expected Closing Date 01-Aug-2014 29-Dec-2017 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Andrea Guedes Alberto Rodriguez Saroj Kumar Jha Laura Tuck Borrower: Republic of Kazakhstan (“Borrower� includes the borrower of an IBRD loan, IDA credit, or Project Preparation Facility advance and the recipient of a grant) Responsible Agency: Ministry of Education and Science of the Republic of Kazakhstan Contact: Aslan Sarinzhipov Title: Minister, MOES Telephone No.: 7-7172-74-99-53 Email: Approval Authority Approval Authority RVP Approval Project Financing Data(in USD Million) [ ] Loan [X] Grant [ ] Other [ ] Credit [ ] Guarantee Total Project Cost: 21.763 Total Bank Financing: 0.00 Total Cofinancing: Financing Gap: 0.00 v Financing Source Amount Borrower 0.00 Trust Funds 21.763 Total 21.763 Expected Disbursements (in USD Million) Fiscal 2015 2016 2017 2018 0000 0000 0000 0000 0000 Year Annual 3.00 6.00 9.00 3.763 0.00 0.00 0.00 0.00 0.00 Cumulati 3.00 9.00 18.00 21.763 0.00 0.00 0.00 0.00 0.00 ve Proposed Development Objective(s) The proposed Project Development Objective is to promote young people’s community engagement and life skills through a community-based service learning program, especially for vulnerable youth. Components Component Name Cost (USD Millions) Support Community-Based Service Learning and Life Skills 20.00 Development Support Institutional Development of the Committee on 0.763 Youth Affairs for Youth Policy Implementation Project Management, Monitoring, and Evaluation Activities 1.00 Institutional Data Sector Board Education Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Education Adult literacy/non- 100 formal education Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) vi Major theme Theme % Human development Education for the knowledge economy 100 Total 100 Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Legal Covenants Name Recurrent Due Date Frequency Project implementation in accordance X Continuous with Project Operations Manual (POM) Description of Covenant The Recipient shall cause the Coordinating Agency to carry out the Project, in accordance with the provisions of a manual satisfactory to the World Bank (“Project Operations Manual�). Name Recurrent Due Date Frequency Submission of project reports X Quarterly Description of Covenant The Recipient shall monitor the progress of the Project and prepare Project Reports. Each Project Report shall cover the period of one quarter and shall be furnished to the World Bank not later than forty five days after the end of the period covered by such report. vii Name Recurrent Due Date Frequency Submission of completion report 28-Feb-2018 Description of Covenant The Recipient shall prepare the Completion Report in accordance with the provisions of Section 2.06 of the Standard Conditions. The Completion Report shall be furnished to the World Bank not later than two months after the Closing Date. Name Recurrent Due Date Frequency Maintenance of Financial Management X Continuous system Description of Covenant The Recipient shall maintain a financial management system, satisfactory to the World Bank, including adequate staffing with updated terms of reference. Name Recurrent Due Date Frequency Following World Bank Procurement X Continuous Guidelines Description of Covenant All goods, works non-consulting-services and consultants’ services required for the Project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in World Bank Procurement Guidelines. Name Recurrent Due Date Frequency Project reporting and accounting system 15-Sep-2014 Description of Covenant No later than 45 days from the Effective Date, the Project reporting and accounting system, satisfactory to the Bank, shall be operational in the Project Management Unit. Conditions Name Type Authorized or ratified execution and delivery of Grant Agreement Effectiveness Description of Condition The execution and delivery of the Grant Agreement on behalf of the Recipient have been duly authorized or ratified by all necessary governmental action. Name Type Project Operations Manual Effectiveness Description of Condition The Recipient, through the MOES, has adopted the Project Operations Manual, as defined in Schedule II, Section B.1. of the Grant Agreement, in a manner satisfactory to the World Bank. Name Type Community Procurement Handbook Effectiveness Description of Condition viii The Recipient, through MOES, has adopted the Community Procurement Handbook, in a manner satisfactory to the World Bank. Name Type Establish Project Management Unit (PMU) Disbursement Description of Condition Project Management Unit has been established within the Committee on Youth Affairs, with terms of reference, resources, staffing (including, at a minimum, a project coordinator, a financial management specialist, a procurement specialist, and a translator), and adequate office facilities, all satisfactory to the World Bank Name Type Sign contract with Coordinating Agency (for Component 1) Disbursement Description of Condition For payments made under Category 1, until the Coordinating Agency services contract, satisfactory to the Bank, has been executed between the Recipient and the Coordinating Agency, and is in full force and effect Team Composition Bank Staff Name Title Specialization Unit Joseph Paul Formoso Senior Finance Officer Finance CTR Aliya Kim Financial Management Financial Management ECSO3 Analyst Heather B. Worley Senior Communications Communications ECROC Officer Nurbek Kurmanaliev Procurement Specialist Procurement ECSO2 Keiko Inoue Senior Education TTL ECSH2 Specialist Matteo Morgandi Young Professional Economist ECSH3 Ramiro Ignacio Counsel Counsel LEGLE Jauregui-Zabalaga Zinaida Korableva Program Assistant Program Assistant ECSHD Aliya Bizhanova E T Consultant Youth Development ECSH2 Brooks Fox Evans Consultant Impact Evaluation ECSH2 ix I. STRATEGIC CONTEXT A. Country Context 1. The Republic of Kazakhstan is the largest economy in Central Asia. Two decades ago, emerging from the break-up of the Soviet Union, the Kazakh economy was half of its size today. Isolated from the world economy, it faced the immense challenge of economic transformation. Between 2001 and 2011, Kazakhstan doubled its income per capita. Kazakhstan is now a solidly upper middle income country. Gross Domestic Product (GDP) per capita in Kazakhstan rose in terms of constant US dollars PPP from $5,406 in 2000 to $11,568 in 2011. The economy grew at an average of 5 percent per year between 2000 and 2011. 2. More recently, the country weathered the 2008-2009 crisis relatively well, and had two years of strong economic recovery in 2010-2011, before slowing down in 2012. Real GDP growth in Kazakhstan slowed from 7.5 percent year-on-year in 2011 to 5 percent in 2012 due to supply constraints in industry and agriculture. Economic activity was driven mainly by domestic consumption of goods and services, supported by higher revenue from commodity exports. Despite the slowdown in 2012 favorable terms of trade impacted positively on the external position of the country (current account surplus of 3.8 percent of GDP) and on fiscal accounts of the government (consolidated budget surplus of 4.5 percent of GDP). The economy is expected to grow by about 5 percent in 2013, as agriculture and industry recover. Inflation, which had risen to over 7 percent in 2010 and 2011, is expected to moderate at about 6 percent. 3. Kazakhstan’s growth was inclusive and strongly pro-poor, allowing the country to reduce poverty and inequality substantially, though regional variations remain. The share of the population living in poverty (as measured by the Purchasing Power Parity (PPP)-corrected $2.5 per capita per day) fell from 41 percent to 4 percent during 2001-2009. In the same period, the share of the population living below $5 per day fell from 79 percent to 42 percent. Real income gains, that have significantly improved poverty indicators, are expected to continue, contributing to poverty reduction in Kazakhstan over the medium term. 4. Despite important reforms the economy remains highly natural resource-dependent and the Government of Kazakhstan (GOK) is increasing its focus on diversified and inclusive growth for the future. Over the past decade, the country has made impressive policy strides, and absorbed large natural resource-based earnings responsibly by implementing a rules-driven fiscal framework. It is improving public management, reforming its business environment and increasing resource allocation to improve social services and critical infrastructure to sustain growth. However, diversification has eluded the country, with minerals, oil and natural gas accounting for 73 percent of exports and 39 percent of GDP. Therefore, diversification of the economy and improved competitiveness are key development priorities. The development strategy of the GOK focuses on modernization, improved competitiveness and a shift towards growth based on non-oil sources. Increasing emphasis is also being put on strengthening governance, business-enabling environment and private sector enterprise. Following the Parliamentary elections of January 2012, the President of the country outlined the key government priorities within this overall strategy, including the renewed emphasis placed on regional development, diversification and improving energy efficiency of the national economy. 1 5. Employment rates in Kazakhstan compare favorably internationally, especially female employment rates. With such high levels of job access, the immediate jobs challenges for Kazakhstan lie more along the quality domain. For example, the Government is concerned about high rates of low productive self-employment, given that 33 percent of those with jobs are self- employed. More broadly, Kazakhstan is facing considerable skills challenges, reflected by the opinions of employers and poor performance on the Programme for International Student Assessment (PISA), which will become a binding constraint for further labor market improvements unless addressed. This may require additional investments into skills acquisition over the entire lifecycle, from early childhood development to adult education, including for young adults. 6. The population of Kazakhstan numbered 16.6 million in 2001, with a relatively high average annual growth rate of 1.5 percent from 2005-2011 (compared with 0.4 percent in Europe and Central Asia). Women comprise 55 percent of the total population, and 54 percent reside in urban settings. Although ethnic Kazakhs were the minority through the 1980s, by 2009 they comprised 63 percent of the population, followed by ethnic Russians (23 percent) and Ukrainians (2 percent). 7. Looking forward, Kazakhstan’s development objective of joining the rank of the top 30 most developed countries by 2050 will depend on its ability to sustain balanced and inclusive growth. In the near- to medium-term, economic prospects depend on a continuation of stability- oriented macroeconomic policies which hinge on continued adherence to the rules-driven framework for resource earnings and sustainable financial sector development. Enhancing medium- to long-term development prospects depends on the Kazakhstan success in diversifying its endowments—namely, creating highly skillful human capital, improving quality of physical capital, and strengthening institutional capital—all the necessary ingredients for development and expansion of the private sector in the country. B. Sectoral and Institutional Context 8. According to the Law on State Youth Policy in the Republic of Kazakhstan, youth is defined as those between the ages of 14 to 29 years old. According to the Statistics Agency of the GOK, the total number of youth in 2012 was 4,376 million people which constitute 26 percent of the total population. Youth population increased by about 13 percent since 1999 from 3.9 million people, to which GOK responded with state programs aimed at enhancing education and job opportunities. Geographically, the largest number of youth comes from South- Kazakhstan (732,294 youth) and Almaty (496,710youth) regions (oblasts), followed by Almaty city, East-Kazakhstan, and Karaganda. Urban youth numbers have increased in the past decade with 2.4 million young people living in urban areas, many of them pursuing technical vocational and higher education and better job opportunities in the cities or regional centers. Because of mobility, the number of young people in several regions has been declining considerably in the last three years, especially in the Northern and Eastern oblasts. There is gender balance within the youth population. 9. Youth labor market outcomes are relatively positive compared with most countries in the region, but critical pockets of disadvantages remain. On a positive note, the unemployment rate 2 among young people ages 15-28 has been falling steadily since 2000 and posted at 6.1 percent in 2011; also the share of youth out of school and out of work was estimated at 13 percent in 2009, which is below most countries in the region (HBS 2009). The underemployment rate is unknown but presumed to be higher because in 2009, 33 percent of employed young people worked in agriculture, which is seasonal. In addition, data for 2009 show that youth from families in the bottom income quintile in urban areas are three times more likely than youth from families in the top income quintile to be unemployed, this ratio being 1.5 in rural areas. Many of these differences relate to regional disparities with respect to youth employment opportunities. Rural youth face lower quality education (including vocational education and training), less access to information about labor market demands and innovation know-how, and more reasons for spontaneous migration. Young women also face specific constraints to employment, including fewer opportunities especially for wage jobs, more health and safety concerns, and, for about a fifth of them, marriage before age 20. 10. In a context of low youth unemployment, social issues and risky behaviors pose significant challenges for young people in Kazakhstan. The national report on Youth in Kazakhstan 2011 showed for nearly half of the youth population, corruption and abuse of authority remained the top concern. Only 9 percent of young people responded that they took active participation in solving problems in their communities. Rural youth appear to be even more disconnected, both from each other and also from their communities. Kazakhstan ranks fifth in the world for its rate of deaths due to suicide, with males between 25 and 34 at highest risk. Other risky social and health behaviors among young people also appear to be on the rise, including sexual violence, alcoholism, and crime. Although there are no systemic epidemiological studies, these findings are echoed in the qualitative assessment undertaken during project preparation. 11. Kazakh youth would therefore benefit from a comprehensive youth development approach that improves their ability to navigate this particularly difficult life stage, especially efforts to improve their sense of community connectedness and providing them with better preventive and coping mechanisms. This approach is distinct from one that focuses narrowly on improving youth employment and indeed, the GOK is moving towards a more comprehensive approach. The government’s current challenge is that there are few existing programs with an adequate evaluation of their impact. However, there is strong global evidence that supports a comprehensive approach focusing on “positive youth development1� and Kazakhstan appears primed to adapt select good practices. 12. Three domains appear to be important for positive youth development in Kazakhstan: (i) community engagement/service, to promote a concern for the welfare of others and enhance young people’s integration into society, (ii) skills development, in particular behavioral/life and technical skills that are needed to make the transition from school to productive employment, and (iii) initiative, to tap into young people’s naturally inventive, creative, and enterprising characteristics. The focus on these three domains are upheld by global literature on positive 1 Lerner, et al. (2013). “Positive Youth Development� in Handbook of Psychology, Second Edition, edited by Irving B. Weiner. 3 youth development2, but more importantly are based on systematic focus groups and consultations in Kazakhstan with young people in urban and rural settings (including those with disabilities); government officials; and representatives from civil society, bilateral, multilateral, and research institutions. 13. Community Engagement/Service. Comprehensive youth development programs in developed countries, most notably Finland, now include volunteering in addition to formal education and training as a way to improve youth outcomes. The most effective volunteering programs include a group dynamic to give young people opportunities to network and collaborate with each other. A culture of serving others and the community already exists in Kazakhstan. For example, according to a 2008 UNDP report on Situation Analysis of Volunteerism as a Development Resource in Kazakhstan, most people understand the characteristics that define “volunteerism� and a variety of service-oriented youth programming are available. Many traditional values are embedded in concepts of giving to or caring for others, hospitality, and mutual support. While there is generally a positive attitude towards community engagement/service among youth, some indicated that their families would not support such activities unless they were financially compensated or were given opportunities to gain skills that are tied to enhanced employability. 14. Skills Development. Beyond the requisite cognitive and technical skills needed to succeed in the labor market, emerging research highlights the importance of life skills, especially critical thinking, communication skills, collaboration, team building, creativity and innovation. Having grit or perseverance is also increasingly recognized as an important trait. In addition to these behavioral skills, young people in Kazakhstan may need other support to cope with life’s challenges, including psycho-social support and access to health and social services. The development of life skills, especially among vulnerable youth, has been found to impact future learning, labor market performance, and the reduction of risky criminal behaviors and since they remain malleable through young adulthood, youth are ideal beneficiaries for such programs. 15. Initiative. It is critically important to tap into the energy and enthusiasm that young people possess and to instill in them a sense of self sufficiency. Young Kazakhs appear to be motivated by the idea of broadening their horizons and “making it�. Whether within their own communities or in the wider world, youth engagement has the potential to spark entrepreneurship, innovation and foster young people’s positive contributions for the betterment of their communities. According to the survey of young people conducted by the MOES, about 22 percent of youth are members of a public association, and another 27 percent take part in occasional events. In fact, there are over 1,000 functioning youth associations in Kazakhstan. While there is a traditional culture of volunteerism in society, the forms of volunteering that prevail tend to be of limited duration, are rarely youth-led, and are focused on providing assistance within family circles. Giving groups of young people the space and technical and 2 Catalano, D.T,, et al. (1999). Positive Youth Development in the United States: Research Findings on Evaluations of Positive Youth Development Programs. Seattle: University of Washington, School of Social Work, Social Development Research Group; Damon, W. (2008). The Path to Purpose: Helping Our Children Find their Calling in Life. New York, NY: Simon & Schuster; Larson, R.W. (2006). “Positive Youth Development, Willful Adolescents, and Mentoring.� Journal of Community Psychology, 34(6), 677-689; Masten, A.S. (2001). “Ordinary Magic: Resilience Processes in Development.� American Psychologist, 56(3), 227-238. 4 financial support to try out an idea, even at the risk of failure, provides them with the platform to develop their experience in responsibility, autonomy, and collaboration. A key aspect of youth programming in Kazakhstan, therefore, is to make them demand driven. Youth Policy Framework and Programming 16. Youth development is regarded as an important national issue and this is reflected in the ratification of the first Law on State Youth Policy in the Republic of Kazakhstan in 2004. The rest of the legal framework that is related to young people includes the State Program for Education Development 2011-2020, Strategic Plan of the Ministry of Education and Science 2011-2015, Employment Program 2020, Business Road Map 2020, and State Health Development Program 2011-2015. In 2008, the Council on Youth Policy under the President of Kazakhstan was established to serve as a coordination unit on youth affairs and policy implementation, especially with regional local authorities. It was re-established in 2013 and now includes representatives from NGOs, the media, private sector, and youth. 17. The Committee on Youth Affairs (CYA) of the MOES was established in August 2012. Regional divisions under each local government authority (akimats) for youth initiatives were also established throughout Kazakhstan in 2012. The CYA developed the Concept of State Youth Policy 2020 “Kazakhstan 2020: Path to the Future�, which was passed in February 2013. Subsequently, the CYA drafted an updated version of the Law on State Youth Policy and this document is under discussion within the government. The draft Law on State Youth Policy in the Republic of Kazakhstan describes the challenges and risks to positive youth development in Kazakhstan, including low social value of employment, paternalism, high social value placed on consumerism, and risk of radical movements among youth. In order to overcome the challenges, the GOK proposes to improve the provision of quality and affordable education, health and sport development programs, better employment opportunities and affordable housing, along with increasing patriotic, civil and social values among youth, and improving the legal framework. Enhanced coordination among central and regional authorities and youth is also envisaged, with better monitoring, analysis and evaluation of youth programs. The updated Law on State Youth Policy is expected to be passed in the first half of 2014. 18. The GOK is making substantial investments in the implementation of youth employment programs, mostly targeting youth with a university degree (see Annex 6 for further details). Outside of youth employment, a number of donor and government initiatives aim to foster aspects of youth development, including volunteering, environmental stewardship, and healthy lifestyle promotion3. However, little is known about the impact of the existing programs since 3 Examples include volunteering days and environmental clean-up activities (supported by the United National Volunteers, or UNV); youth training on volunteerism, community mobilization, human rights, and gender equality (Youth for Motherland); training, public awareness campaigns, and legal assistance to victims or potential victims of human trafficking (European Commission, or EC); and creating conditions for exchange of ideas by promoting greater use of technologies in youth initiatives (Soros Foundation). Examples of environmental stewardship programs include a UNICEF-MOES program aimed at enabling communities and institutions to better prepare for, mitigate against, and respond to disaster and the national initiative Zhasyl El that aims to encourage and educate youth on environmental issues, with almost 140,000 Kazakhstani youth participating in planting of greenery and forest development. Finally, a few programs promote healthy lifestyles, and include activities such as conducting 5 rigorous impact evaluations have not been conducted. Perhaps most importantly, existing programs tend to exclusively focus on one facet of youth development, contrary to the findings in the World Bank’s 2007 World Development Report on Development and the Next Generation that bundled youth programs are more effective. C. Higher Level Objectives to which the Project Contributes The proposed project supports the GOK’s Strategic Plan for Development 2020 (human capital development, economic strengthening for diversification and sustained growth, communal services, and interethnic stability), as well as various policies related to youth, particularly the Concept of State Youth Policy 2020. A broad approach to positive youth development that promotes youth service, skills development, and initiative is fully aligned with the legal framework set forth for youth programming in Kazakhstan. By providing much needed technical support for the design, implementation, financing, and monitoring of youth programs, the project addresses existing constraints to an important economic and social issue for the country. The project will also produce important evaluations to inform subsequent policies and youth programs. 20. The proposed project is aligned with the overarching objectives of the Country Partnership Strategy (CPS), specifically “improving competiveness and fostering job creation�. The proposed Project contributes to the CPS objectives by helping youth get involved in the development of their communities while developing skills that are critical for life and the work place. The project also follows the GOK’s medium term vision outlined in the Strategic Plan for Development 2020. II. PROJECT DEVELOPMENT OBJECTIVE A. PDO 21. The proposed Project Development Objective is to promote young people’s community engagement and life skills through a community-based service learning program, especially for vulnerable youth. Project Beneficiaries 22. Expected beneficiaries of the project are: (a) Young people participating in the community-based service learning and skills development program (direct beneficiaries): Youth (aged 14-294) will benefit from primary prevention in educational institutions and hospitals (EC); or providing sexual and reproductive health information, education, and counseling on HIV AIDS in deprived communities (UNICEF). A minority of programs, such as the EC-sponsored program on Strengthening NGO Capacities for Sustainable Civil Society, aims to improve civic engagement in rural communities. 4 GOK defines youth as a person between 14-29 years-old. The vast majority of direct beneficiaries, however, are expected to be between 18-29 years-old since youth who should be enrolled in secondary school are not be eligible 6 opportunities to participate in a community-based service learning and life skills development and project management training program. A cohort of youth participants will also benefit from access to capital to launch their own community- based service learning subprojects, as well as opportunities to network with each other. The project is expected to benefit 8,500 young people, of which, approximately 5,100 (60 percent of total direct beneficiaries) will be “vulnerable youth5�. (b) Youth-focused organizations’ representatives and Ministry of Education and Science and regional officials (beneficiary agencies): Youth-focused organizations will benefit from opportunities to implement community-based service learning subprojects with youth. They will also receive training and become part of a network of organizations that focus on young people and youth issues. The Committee on Youth Affairs of the MOES will receive technical assistance to enhance its policy institutional framework and fiduciary and monitoring capacity, while regional officials will receive training. The project is expected to benefit 100 youth-focused organizations. PDO Level Results Indicators 23. Expected key PDO level indicators of the proposed project include:  Share of subprojects rated satisfactory at completion  Share of youth project beneficiaries that demonstrate a significantly greater improvement in defined community engagement indicator, relative to controls (Sub- level indicator: of whom vulnerable youth)  Share of youth project beneficiaries that demonstrate a significantly greater improvement in defined life skills, relative to controls (Sub-level indicator: of whom vulnerable youth) III. PROJECT DESCRIPTION A. Project Components 24. The theory of positive youth development recognizes that people navigate a unique series of transitions during their youth and emphasizes the importance of nurturing young people’s potential contributions to family, community, and society at large rather than on their deficits. Positive youth development emphasizes the mutually influential relationship between the developing individual and his or her changing context. A still evolving theory, positive youth development is associated with a range of programmatic approaches. This project includes the following five elements: and the legal working age in Kazakhstan is 16 years old. Although there are very few people who do not graduate from secondary school in Kazakhstan, primary or secondary school drop outs can only participate if they have been out of school for at least six months. 5 “Vulnerable youth� is defined as those who are (i) neither in education, employment, or training or (ii) working poor. The proxy for this indicator is (i) youth with a secondary education degree or below and (ii) youth with TVET degree. 7 (a) Community engagement: A stable intention to accomplish something that is at once meaningful to the self and is a positive contribution to the community, including volunteering and community services activities (b) Initiative: Capacity to identify a goal and then direct cumulative effort over time toward its achievement (c) Support system: Opportunities to build strong adult-youth and youth-youth relationships (d) Safe space: Access to environments that are free from physical and psychological hazards (e) Recognition for positive behavior: Public acknowledgement of behavior that contributes positively towards the future 25. The project activities will be structured around three components: (i) Support Community- Based Service Learning and Life Skills Development, (ii) Support Institutional Development of the Committee on Youth Affairs for Youth Policy Implementation, and (iii) Project Management, Monitoring, and Evaluation Activities. More details are provided in Annex 2. Component 1: Support Community-Based Service Learning and Life Skills Development (Estimated total costs including contingencies: US$ 20.0 million) 26. Emerging evidence suggests that community-based service learning6 and life skills development programs are effective tools for enhancing positive youth development. Component 1 will incorporate the five elements discussed above (community engagement, initiative, support system, safe place, and recognition for positive behavior) and implementation will follow the protocol and monitoring framework outlined in the Project Operations Manual (POM). A Coordinating Agency will be responsible for overseeing the daily administration of Component 1 activities, which are organized along four sub-components: (i) Subproject Grants and Subsistence Stipends for Community-Based Service Learning, (ii) Life Skills Development and Project Management Training, (iii) Outreach to Vulnerable Young People, and (iv) Coordination, Communication, and Accountability. 27. Sub-component 1.1 – Subproject Grants and Subsistence Stipends for Community- Based Service Learning (estimated US$ 15.0 million). This sub-component will finance subproject grants to two sets of potential recipients: (i) host organizations and (ii) groups of young people. It will also finance subsistence stipends to all youth beneficiaries. Following a community-driven development (CDD) model, organizations and young people will be selected on a competitive basis based on proposals submitted in response to calls for proposals by the Coordinating Agency. Two proposal templates will be developed: one for the host organizations and another for the youth participants. 28. Although proposal guidelines will be detailed in the POM, Component 1 follows international good practice on CDD programs and does not provide a closed list of activities 6 Service learning is a youth development strategy that integrates meaningful volunteering or community service experiences with skills acquisition, and aims to enrich the learning experience, teach civic responsibility, and strengthen communities. 8 from which applicants must choose. Instead, applicants will be asked to identify in their proposal a service learning opportunity for young people that will benefit a local community and include the five elements (community engagement, initiative, support system, safe place, and recognition for positive behavior), to be evaluated on clear selection criteria. Examples of good proposal ideas will be included in the application form. Subprojects that target vulnerable groups, as well as those that are conducted with participation by vulnerable young people, will be prioritized. For example, more consideration may be given for proposals that provide a service to the very poor, the elderly, migrants, or people with disabilities. The selection criteria could also prioritize subprojects that engage vulnerable young people or youth with disabilities. Civil works will not be financed by the subproject grants. 29. The community-based service learning program will engage young people for a period of 6 months. Each participating youth, whether through the Host Organizations or Youth Initiative Approach, will receive a monthly subsistence stipend. The subsistence stipend amount will vary depending on their educational attainment or status: (i) primary/secondary/TVET graduates and current TVET or higher education institution (HEI) students will receive approximately 21,000 tenge (approximately US$140) and (ii) HEI graduates will receive approximately 50,000 tenge (approximately US$325). In comparison, national minimum wage in 2013 is currently 18,660 tenge and the monthly full-time stipend for the Youth Internship program is 29,500 tenge. Subsistence stipends will be disbursed on a monthly basis, upon confirmation of satisfactory participation of each youth. 30. Host Organizations Approach. Host organizations will submit budgeted proposals for community-based service learning subprojects suitable for young people. The subproject grants to host organizations will cover administrative expenses, which is capped at 619,000 tenge (approximately US$4,000) per group of 5 youth hosted. Host organizations will also receive fees per participant to cover overhead. External annual audits will include random spot checks of recipient host organizations. Civil society, public, and private organizations are eligible, and selected host organizations will prepare groups of young people for subproject engagement and ensure adequate follow-up. Although group size will vary, each “cohort� of young people should be small enough (maximum 5 participants) to ensure that participants develop a working and collaborative relationship with each other and the staff. While there are over 1,000 functioning youth associations in Kazakhstan, many are based in urban areas and thus the selection criteria described above will ensure that host organizations are encouraged to extend participation to youth who are usually excluded from their programs. Thus private companies with corporate social responsibility (CSR) programs or civil society organizations aiming to extend their programs into rural areas are good candidates for this approach. This approach is an adaption of good practices from programs such as AmeriCorps and the European Volunteer Service. 31. Youth Initiative Approach. Groups of young people, with one person designated as the group leader, will submit budgeted proposals for youth-led community-based service learning subprojects. The capital for youth initiated subprojects is capped at 619,000 tenge (approximately US$4,000) for a group of 5 youths. Each group will consist of no more than 5 young people, and each person’s role will need to be clarified in the proposal. External annual audits will include random spot checks of recipient youth groups. Preference will be given to proposals that directly benefit local communities where the group of young people resides. 9 During project preparation, there was enthusiasm expressed for this approach during focus groups with young people, especially among current TVET and HEI students with higher capacity and experience with writing proposals and community service. However, this approach is also likely to be a good option for groups of rural young people, where host organizations may not be active. This approach is an adaptation of the ASHOKA Youth Ventures program, as well as other youth employment and development programs supported by the World Bank. 32. A separate Impact Evaluation of Component 1 activities will be designed, conducted and financed by the World Bank. The evaluation has the following objectives: (i) identify the efficacy of the project for improving community engagement, life skills, and labor market outcomes, (ii) understand what aspects of the intervention may have contributed most to the identified impacts, (iii) inform whether the activities should be scaled-up as one of the flagship programs delivered through the Kazakhstan Law on State Youth Policy in Kazakhstan, and (iv) contribute to global knowledge, especially as a number of countries are expressing interest in establishing such programs with World Bank assistance. Since the project is likely to have excessive demand among youth, it will require an objective lottery to fairly determine participants. 33. Sub-component 1.2 - Life Skills Development and Project Management Training (estimated cost US$ 3.5 million). Life skills development and project management training will be provided to all participants in the community-based service learning program, whether they participate through the Host Organizations or Youth Initiative Approach. The World Bank’s 2007 World Development Report on Development and the Next Generation notes that there is strong evidence that bundled youth programs are more effective and in this case, the community- based service learning activities are complemented by life skills development and project management training opportunities. Although the Coordinating Agency will facilitate the life skills and project management training activities, the actual delivery of the training programs is likely to be subcontracted. 34. The life skills development7 and project management training program will be implemented in three phases for each participant. First, before engaging in the community-based service learning program, each participant must complete a one-week life skills development and project management training module. For life skills development, participants will focus on skills such as community engagement, communication, collaboration, identifying and avoiding risky behaviors, and healthy gender relations. The project management training will focus on positive perception of social entrepreneurship as a career option; opportunity recognition for community- based projects; risk assessment; basic financial literacy; marketing; and business management skills. Second, during the community-based service learning program, the Coordinating Agency will facilitate monthly sessions between an adult mentor and every youth participant, with a focus on: (i) individualized mentoring on professional and personal goals, (ii) linking young people with public services that are available in their communities/areas, including local employment and health centers, and (iii) reinforcement of life skills development and project management training. Mentors will be selected by the Coordinating Agency and will be required to have either a background in social work or extensive experience working with youth, especially vulnerable youth. Close proximity to the youth participants is also important, given 7 The most salient life skills in the Kazakhstan context will be defined. 10 the requirement to have monthly meetings. These monthly meetings will also provide opportunities to collect data on youth beneficiaries and allow the project to monitor proposed use of funds. The monthly meetings will serve as the means for confirming satisfactory participation of young people, thereby triggering their monthly subsistence stipend disbursements. Third, each youth participant will need to complete another one-week life skills development and project management training module at the end of the program. The third phase will also include how participants stay involved as “alumni� of the Youth Corps Project. 35. To test various implementation arrangements, a short pilot for Sub-components 1.1 and 1.2 activities will be conducted prior to commencement of Round 1 of the project. 36. Sub-component 1.3 – Outreach to Vulnerable Young People (estimated cost US$ 0.5 million). Sub-components 1.1 and 1.2, at least initially, is expected to be offered with national coverage. This will ensure that the project is demand-driven and help the GoK identify where uptake is naturally strongest for community-based service learning programs. This is important for building momentum for a project that is based on an approach that is untested in Kazakhstan. Despite the possibility that this approach will only capture the “easy to reach� youth, as noted above, a strong Information and Communication Campaign framework should enable the project to recruit even among those who are ordinarily excluded from government services. Also, the selection criteria for the host organizations and youth applications will ensure that incentives are aligned to encourage vulnerable youth to participate. 37. Sub-component 1.3 will pilot approaches to engage vulnerable young people and encourage their participation in the community-based service learning and life skills development and project management training programs. Once the vulnerable youth have been identified and they have received support with the proposal process, they will be integrated into the program under Sub-components 1.1 and 1.2. Although the exact nature of the pilot programs will be determined based on data and findings after the initial round, possible ideas include provision of hands-on training to complete proposals for sub-projects, conducting targeted media campaigns for youth with disabilities or with no access to traditional media outlets, or fostering subprojects that provide daycare services for beneficiaries with small children. 38. For this project, a vulnerable youth is defined as someone who is (i) neither in education, employment, or training (NEET) or (ii) working in poverty. Defined as such, the share of vulnerable young people increases with age, comprising 22 percent of those who are 25-29 years-old. The share of vulnerable youth is only slightly higher in rural areas. According to the qualitative data analysis, part of the reason is that the vulnerable young people in urban areas are often those migrating with poor job prospects from rural areas, thus constituting a similar group. Share of Youth 15-29 Who are Neither in Education, Employed, or Training (NEET) or Working Poor Age Panel A: All Areas Panel B: Rural Areas category NEET Working Poor NEET+WP NEET Working Poor NEET+WP 15-19 3.4 0.5 3.9 3.4 0.5 3.9 20-24 17.0 1.9 18.9 18.1 3.0 21.1 25-29 22.1 2.1 24.2 23.7 3.7 27.4 15-29 13.0 1.4 14.4 13.0 2.1 15.1 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 11 39. Kazakhstan’s geographic size also lends itself to the possibility that sub-populations of young people remain “hard to reach� and therefore vulnerable. Specific selection criteria will be applied for the final determination of participating regions with: (i) the highest share of vulnerable young people, (ii) the highest nominal stock of vulnerable young people, (iii) the highest share of rural youth, and (iv) the largest increase in youth “ruralization�. Four regions – Pavlodar, Karagandy, Mangystau and Aktobe – have the highest share of vulnerable young people (defined as youth who are not working/in education or working in poverty). The nominal stock of vulnerable youth is highest in South Kazakhstan and Almaty regions, which also have the highest share of rural youth. South Kazakhstan and Mangystau have the largest increase in the indicator of “ruralization� of its youth population between 2010-2012. Thus any of the following regions would make good candidates for a regional focus (in alphabetical order): Aktobe, Almaty, Karagandy, Mangystau, Pavlodar, and South Kazakhstan. The project will take into consideration ease of access, especially in the earlier rounds of project implementation, which would make Almaty, Karagandy and Pavlodar especially good candidates. South Kazakhstan is likely to be included because of the high nominal stock of vulnerable youth, high share of rural youth, and an observed pattern of ruralization. 40. Since the project relies on self-reported information to select beneficiaries, determining who is NEET or working in poverty status may prove difficult. Therefore, the project uses education status as a proxy for vulnerability, which is divided into two eligible groups: (i) primary/secondary/TVET graduates and current TVET or HEI students and (ii) HEI graduates. Of these, the primary/secondary/TVET graduates are considered “vulnerable� and correlated with NEET and working poor status, and will comprise at least 60 percent of project beneficiaries. Although in theory, TVET graduates are eligible for university education, only 1-2 percent of TVET graduates enroll in school again. In a country with near-universal secondary education completion, this group is therefore included in the vulnerable category. Together, primary/secondary and TVET degree holders comprise approximately 1.7 million youth in Kazakhstan. 41. Among the NEET and working poor, two groups of youth stand out as requiring additional support: women and youth with disabilities. While there are no significant variations in educational attainment by gender (in fact, in urban areas, women tend to have higher levels of education), quantitative and qualitative data reveal that women with vocational training in rural areas and with tertiary education in urban areas are less likely to successfully transition to the labor market and have fewer opportunities for stable employment. If employed, young women tend to earn significantly less than their male peers. Engaging young women in the program can open more opportunities otherwise not available to them. 42. According to the 2009 UN Human Development Report on Kazakhstan, about 4 percent of children under 14 had health disorders in 2007 in Kazakhstan, and about 45,000 children received disability-related benefits. While social services ensure that the basic needs of youth with disabilities are met, a combination of factors hampers their potential to be socially integrated and reach self-sufficiency through their own capabilities. Focus groups with youth disabilities during project preparation highlighted various challenges that this group faces in getting necessary education and skills, and therefore finding employment, even in urban settings 12 where opportunities are generally more available. These factors include (i) physical barriers to mobility and the lack of effective legislation for their elimination; (ii) discrimination in obtaining college or HEI education and in the labor and credit markets; (iii) lack of sufficient incentives for employers to hire them; (iv) lack of a policy for mainstreaming youth with disabilities in the education system; and (v) the paucity of social settings where youth with disabilities can interact with other young people. 43. Sub-component 1.4 - Coordination, Communication, and Accountability (estimated cost US$ 1 million). This Sub-component includes the activities that the Coordinating Agency will carry out. In particular, the Coordinating Agency will be responsible for developing two important frameworks before launching the first call for proposals: (i) Information and Communication Campaign and (ii) Feedback and Resolution Mechanism. 44. The Information and Communication Campaign (ICC) will detail public awareness- building activities to be carried out before, during, and after the project. The ICC will be designed and implemented with substantive inputs and participation by young people, and build awareness on: core project principles; beneficiary characteristics; proposed benefits at the individual, collective, and community levels; implementation mechanism including timing; roles and responsibilities of different stakeholders; and transparency and accountability measures. Concrete examples of the ICC include ensuring that sufficient outreach is conducted in order to encourage participation by vulnerable young people, as well as informing the public about the selection criteria for participants to ensure transparency and fairness. The ICC will also provide information to communities about young people’s engagements in service learning activities and the life skills they are gaining. 45. The Feedback and Resolution Mechanism (FRM) will serve as a critical monitoring tool for the project. The FRM will also be developed and implemented with substantive inputs and participation by young people, especially the determination of data collection modality. The FRM will make use of available Information and Communication Technology (ICT) infrastructure that is already used by young people. An effective and properly implemented FRM will ensure that project funds are being used as planned, that project interventions are reaching the intended beneficiaries, and that the quality of inputs are good. The objective of the FRM is to obtain real time feedback from various stakeholders, especially youth, so that the project interventions can be modified regularly, as well as to minimize governance and accountability issues. The FRM will also need to detail a process for resolving any problems once they emerge. The Coordinating Agency is expected to apply good practices from global cases to implement and continue to improve the FRM. 46. The ICC and FRM will be used as qualitative and quantitative data collection tools, thus both will need to be conducted regularly and methodically. Together, the qualitative and quantitative evaluations will build the evidence to better understand what is working and why it is working. The pilot for Subcomponents 1.1 and 1.2 activities will evaluate whether the ICC and selection criteria for the subprojects are sufficient to ensure recruitment and participation of vulnerable youth, or a more costly but still cost effective program is required to ensure their involvement. The results of the pilot will be summarized in a report, so that the approaches can be evaluated, including their effectiveness to recruit and maintain participation of vulnerable 13 youth. The ICC and FRM will be revised periodically to reflect inputs from project beneficiaries and lessons learned. 47. For the host organizations, the Coordinating Agency will facilitate the provision of training and opportunities to network with other groups on the following topics: (i) effective youth engagement strategies, (ii) role of ICC and effective community engagement, and (iii) monitoring and evaluation, including the FRM. Likewise, the Coordinating Agency will provide opportunities for young people to become better networked with each other and facilitate the provision of training on: (i) the role of ICC and effective community engagement and (ii) monitoring and evaluation, including the FRM. 48. In summary, Component 1 will finance (i) service fees to a Coordinating Agency for the day-to-day management of Component 1 activities, including the provision of necessary information and reports to the CYA of the MOES, (ii) subproject grants to host organizations and youth participations, (iii) provision of subsistence stipends, as well as life skills development and project management training to youth participants, (iv) pilot programs to improve outreach to vulnerable youth by promoting the program and supporting their application process, and (v) the development and implementation of ICC and FRM, as well as creating a sense of community among the host organizations and youth participants. A separate Bank-executed trust fund, with its own funding source, will be set up to finance the design and implementation of the impact evaluation. Component 2: Support Institutional Development of the Committee on Youth Affairs for Youth Policy Implementation (Estimated total costs including contingencies: US$0.763 million) 49. Sub-component 2.1 – Support the Development of Institutional Framework for Youth Policy Implementation, Coordination, and Evaluation Activities (estimated cost US$ .463 million). The CYA of the MOES will be the implementing agency for the project. As noted above, the CYA developed the Law on State Youth Policy and technical assistance will be provided to support its implementation and monitoring and evaluation, including young people’s feedback on the youth programming offered under the policy. The technical assistance provided through this Sub-component will include: (i) semi-annual capacity building for two staff each from the 16 regions on implementation and monitoring of youth-focused volunteering programs, culminating in seven workshops total, starting in second half of 2014, (ii) sustained capacity building on the use of quantitative and qualitative data to produce the MOES annual report on youth development, ensuring that the research methodology, data analysis, and dissemination is improved each year, (iii) capacity building on the application of findings from data analysis to better integrate youth issues into national and regional programs, and (iv) training and international exchange of experiences for the draft Law of the Republic of Kazakhstan on Volunteering (scheduled to be passed by 2020). 50. Subcomponent 2.2 – Support the Development of Training Program for, and Outreach to, Senior Secondary Students (estimated cost US$ .3 million). The sub-component will finance the provision of technical assistance, most likely by an experienced NGO, for training program development that targets senior secondary students and focuses on raising their 14 awareness of community-based volunteering and service learning. This activity will be linked with Component 1, so that senior secondary students who are nearing graduation are aware of the community-based service learning and skills development programs and encouraged to apply. Component 3: Project Management, Monitoring, and Evaluation Activities (Estimated total costs including contingencies: US$1 million) 51. A small Project Management Unit (PMU) will be financed within the CYA of the MOES to manage the fiduciary aspects of the project, supervise the Coordinating Agency, and ensure adequate project monitoring. The PMU will consist of the following staff: (i) Project Coordinator, (ii) Financial Management Specialist, (iii) part-time Procurement Specialist, (iv) Monitoring and Evaluation Specialist, (v) Youth Specialist, and (vi) Translator. It is critical that this PMU is located in close physical proximity to the MOES. Component 3 will also finance an annual audit. B. Project Financing 52. The project is supported by a US$21.763 million grant from the Government of Switzerland, Swiss Agency for Development and Cooperation (SDC), channeled through a Free- Standing Trust Fund set up with the World Bank. Allocations will be made on a grant basis following the conditions of financing from the SDC. Project Cost and Financing 53. The total project cost is estimated at US$21.763 million, financed from SDC to be channeled through a Free-Standing Trust Fund to be set up with the World Bank. Project Cost Including Grant Financing Project Components Contingencies % Financing (million US$) (million US$) Component 1: Support Community-Based Service Learning and Life Skills Development 1.1 Subproject Grants and Subsistence Stipends for 15.00 15.00 100 Community-Based Service Learning 1.2 Life Skills Development and Project 3.50 3.50 100 Management Training 1.3 Outreach to Vulnerable Young People 0.5 0.5 100 1.4 Coordination, Communication, Accountability 1.0 1.0 100 Component 2:Support Institutional Development of the CYA for Youth Policy Implementation 2.1 Support the Development of Institutional 0.463 0.463 100 Framework for Youth Policy Implementation, Coordination, and Evaluation Activities 2.2 Support the Development of Training Program 0.3 0.3 100 for, and Outreach to, Senior Secondary Students Component 3: Project Management, Monitoring and Evaluation Activities 1.0 1.0 100 15 Total Costs 21.763 21.763 100 Total Project Costs 21.763 21.763 100 Front-End Fees - - - Total Financing Required 21.763 21.763 100 IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 54. The project will be implemented over approximately three and a half years with a proposed closing date of December 29, 2017. On behalf of the Government of Kazakhstan, the CYA of the MOES will be the implementing agency for the project. A Project Management Unit (PMU) will be established within the CYA and be responsible for the overall project coordination and oversight. The CYA will be staffed with experienced personnel to mitigate the risks of insufficient capacity. The CYA/PMU will need to: (i) maintain an updated Project Operations Manual (POM), (ii) carry out fiduciary responsibilities including financial management/reporting and procurement, (iii) provide technical supervision and oversight to the Coordinating Agency, and (iv) ensure coordination and communication with other ministries and agencies. The CYA will manage a Designated Account and process all payments under the project. 55. Day-to-day project implementation for Component 1 will be the responsibility of the Coordinating Agency, which will be competitively selected and work under the supervision and monitoring of the CYA/PMU. Further details are elaborated in Annex 3. B. Results Monitoring and Evaluation 56. The CYA of the MOES was established in August 2012 and the proposed project will be the first under its supervision. Therefore, the CYA will be primarily responsible for project monitoring while the World Bank team will be responsible for project-related evaluations. 57. A simple project information management system will be developed by the CYA, based on the results indicators specified in Annex 1. The CYA will be responsible for verifying the data through periodic technical and field supervision. Although the information management system will be project specific, monitoring activities under the project are expected to enhance the capacity of the CYA to monitor other investments in youth programming. 58. The progress and achievement of the PDO will be monitored and evaluated through three types of activities: (i) regular monitoring including through the Feedback and Resolution Mechanism, (ii) mid-term review, and (iii) an impact evaluation. 59. Regular monitoring includes information gathered through the Feedback and Resolution Mechanism, and will assess the extent to which the proposed project activities are being implemented as planned and examine progress on their direct outputs. With input from the 16 Coordinating Agency, the CYA will submit quarterly project implementation progress reports to the Bank. 60. A Mid-Term Review (MTR) will be conducted no later than 24 months after project effectiveness and will focus on (i) assessing early results of project implementation, (ii) identifying any need for project design modification, including of target indicators, and (iii) agreeing on the next steps for the remainder of project implementation. A midterm report in the format agreed between the Bank and the MOES will be submitted to the Bank prior to the MTR. 61. The impact evaluation will be designed and implemented by the World Bank team. The impact evaluation will assess the final development impact in order to integrate achievements and lessons learned into the development of future youth programming investments. A separate Bank-executed trust fund, with its own funding source, will be set up to finance the design and implementation of the evaluation. A control group will serve as the counter-factual to compare the effects of the host organization and youth initiative approaches. To incentivize the youth in the control group to maintain contact, they will receive cell phone credit each time they avail themselves to an enumerator. 62. The cost of data collection and monitoring will be covered by the incremental operating costs of the CYA and the Coordinating Agency. The cost the impact evaluation will be covered by a separate Bank-executed trust fund, with its own funding source. C. Sustainability 63. The sustainability of the project interventions rests on (i) alignment of the project with the forthcoming Law on State Youth Policy and other government priorities, (ii) project design ensuring implementation through existing institutions or supporting the development of institutional frameworks, and (iii) establishment of a mechanism to ensure ongoing youth participation and the ability to gather and then learn from monitoring and evaluation results. 64. The CYA of the MOES is responsible for developing the GOK’s Law on State Youth Policy. Although regional divisions under each local government authority (akimats) were recently established, youth programming implementation mechanisms have not yet been developed. Given the dynamic policy and institutional context, the project will need to periodically assess new developments and reflect on the project design. At the same time, guidelines and frameworks established through the project should be used to inform the GOK’s approach to youth programming. No new institutions will be established under the project. 65. One of the critical aspects of ensuring sustainability of project interventions is to encourage and sustain youth participation in project implementation and monitoring and evaluation. The concept of “for youth, by youth� is critical for project sustainability since young people are most likely to carry the torch to continue initiatives launched through the project. The project will be accompanied by strong monitoring and evaluation, and it is hoped that once information on the benefits of the different approaches to youth programming become available, the GOK will secure continuation of the most cost-effective activities. 17 V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Category Rating Stakeholder Risk Moderate Implementing Agency Risk - Capacity Substantial - Governance Substantial Project Risk - Design Moderate - Social and Environmental Moderate - Program and Donor Low - Delivery Monitoring and Sustainability Moderate Overall Implementation Risk Moderate B. Overall Risk Rating Explanation 66. The overall risk associated with this project is estimated to be Moderate before mitigation measures. 67. The Moderate risk rating is based on the potential delays in project implementation due to the limited experience of the CYA in managing similar projects, including in particular financial management, procurement, and monitoring. In addition, there is a risk that contracting the Coordinating Agency, which will implement the vast majority of project activities, will take time given the large contract size and possible dearth of organizations with sufficient capacity and availability to carry out the work. These risks will be mitigated through a combination of measures, including the provision of financing to hire supplemental staff in the CYA for financial management, procurement, and monitoring; close interaction between the Bank and the implementing agency; and a detailed POM approved by MOES that clarifies roles, responsibilities and procedures for project implementation. The approved POM is also one of the conditions for effectiveness. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 68. The economic rationale for the proposed project to enhance community engagement and life skills of young people in Kazakhstan is threefold. First, the proposed activities have been selected based on international evidence regarding their impact on community engagement and life skills promotion on (i) positive youth development and (ii) the social development of the communities where the participants live. Secondly, because of their targeting strategy and their 18 content, such interventions fill an important gap in the range of public policies that currently exist in Kazakhstan for young people, in particular for disadvantaged young people who completed basic education. Finally, there is a strong rationale for the World Bank to finance the delivery of this program since its content is innovative in the context of Kazakhstan, and its design will benefit highly from the global knowledge on youth programs and skills development in the World Bank. In addition, the World Bank is uniquely positioned to ensure synergies between the Youth Corps project with other sectoral interventions at the local level, and in this way leverage the program to maximize impact on vulnerable youth. Expected Benefits and Costs 69. Benefits of enhancing community engagement and participation of young people at the community level. Increased engagement and participation in community through the application of one’s own capabilities and initiative is an integral aspect of the positive transition to adulthood. As documented in the World Bank World Development Report 2007 Development and the Next Generation, increased community engagement and initiative have been found to increase both the skills and the life satisfaction of young people. In addition, increased youth engagement has positive externalities for the community, including reduced antisocial behavior and contribution to the generation of public goods (such as participation in decision-making and solving collective action problems). 70. Benefits of enhancing non-cognitive/life skills development on preparedness for life and work. Life skills training for young people is an effective way to enhance the development of non-cognitive skills outside formal education. A growing body of empirical literature finds evidence of the high relevance of non-cognitive skills (NCS) for positive youth development outcomes, and their complementarity with investments in formal education. In particular, the development of non-cognitive skills has been found to impact future learning, labor market performance and the reduction in engaging in some risky or criminal behaviors (see Annex 7 for review of the evidence). Investing in NCS is particularly relevant for interventions that target vulnerable young people, for whom gaps in learning outcomes with respect to their peers could be reduced through “second chance� opportunities. While basic cognitive skills have been found to be less malleable after elementary school years, the literature has indicated that non-cognitive skills are more malleable during early adolescence, and they can be impacted even at later stages in life. 71. Cost and benefits of youth interventions outside school on positive youth development. The evidence regarding the costs and benefits of mentoring and extracurricular life skills education programs originates mostly in Organization for Economic Co-Operation and Development (OECD) countries and is summarized in Annex 6. Overall the literature suggests that a number of approaches, including mentoring and participation in structured life skills training, have provided life-long positive benefits to young beneficiaries under several dimensions that justified the initial investment. These include an increase in positive behavior and the associated reduced costs to the self and society, the accumulation of life skills that are associated with improvements in human capital and future schooling, enhanced healthy lifestyles, and a reduction in likelihood to engage in crime. There is wide variation with regards to the cost of these interventions and their production technology, making it particularly 19 challenging to estimate what could be the optimal spending per beneficiary in Kazakhstan with the proposed components. Rationale for Public Intervention 72. The section above described how the type of opportunities for skills development and community engagement that the project proposes to promote are likely to yield positive benefits for individuals as well as externalities for society; however, disadvantaged young people may not be interested and or able to invest in the acquisition of these skills. In addition, according to preliminary field visits and research, at present these initiatives are not provided on a large scale either by the state or by the private for profit or nonprofit sectors, thus giving a rationale for intervention. 73. Besides formal education, GOK already delivers a number of programs for young people, in the domain of active labor market programs and - to some extent - also for youth engagement (see Annex 6 for detailed description, spending level, and targeting). In addition, the nonprofit sector delivers some civic engagement opportunities through part-time short-term activities, but operates mostly in urban settings. Currently there is no national voluntary service program with successful participation by vulnerable youth. The main finding from this assessment exercise is that the project, if well targeted, would be complementary rather than competing with existing programs. In particular, young people who without higher education degrees and who do not live in major urban centers are likely to benefit the most, as the opportunities for the development of life skills and active engagement remain limited for this group. Rationale for Bank Involvement 74. The rationale for Bank involvement is that it is uniquely positioned to benefit from the global knowledge on youth programs and skills development acquired in the last decade, including in a number of countries in the Eastern European and Central Asia region. Additionally, the innovative nature of this project, especially in the context of Kazakhstan, makes it a good candidate for a rigorous impact evaluation, which will be led by the World Bank team. B. Technical 75. The theory of positive youth development emerged in the 1990s (Hamilton 1999) and has its roots in developmental psychology. Although a singular definition remains elusive, positive youth development recognizes that young people’s physical and physiological changes are linked to their cognitive, emotional, and behavioral development, as well as their social relational and institutional contexts (Lerner, et al. 2013). In other words, positive youth development is based on the notion that human development involves mutually influential relations between the developing individual and the changing external context(s). This project adapts this concept of a bidirectional individual�→context relations by triggering changes both from within the individual (attitudinal changes such as initiative and behavioral changes through life skills development) and also within young people’s environments (providing opportunities for community-based service learning and developing healthy adult-youth and youth-youth relations). 20 76. Active community engagement affects national development outcomes through three channels: by enhancing the human and social capital of individuals, by promoting government accountability for basic service delivery, and by enhancing the overall climate for investment and private decision making (World Bank 2007). Youth is a critical time for developing community engagement, since it is a time when people start to have more autonomy in social and political spheres, make critical life decisions, and form lifestyle habits with longer-term consequences. Young people also form an individual identity within a broader sub-population, as they internalize their place and status in society. It is thus critically important that young people understand not only the passive benefits and mandatory responsibilities of being a member of a community, but begin to take on active community roles. Caring for the broader community, environmental stewardship, collection action, and public accountability are so much more difficult without an active citizenry and youth is an ideal time to influence such lifelong behaviors. The World Bank’s 2007 World Development Report on Development and the Next Generation emphasizes that voluntary service programs, such as AmeriCorps, promote community engagement, but that these types of programs are most effective when young people are involved in the design and monitoring and evaluation, as well as when young people are given choices. Limitations of and obstacles to successful implementation of youth development programs include skepticism of parents (or other adult figures in the community), a tendency to focus on urban areas (and thus easier to reach youth), and a social reluctance of participants to mix with individuals of other classes and ethnic groups. The project design, while focusing on community-based service learning to promote stronger community engagement among youth, also takes into account the potential constraints to participation for some youth. This is addressed under Subcomponent 1.3, which is designed specifically to better understand how to design youth programs that aim to enhance the participation of vulnerable youth. 77. The emerging evidence suggests that behavioral/life skills remain malleable much later in life than cognitive skills (which are more effectively influenced in early childhood), which suggests that interventions targeting life skills may help improve life outcomes for youth (JPAL 2013). Admittedly, though, the empirical evidence is still nascent and this project endeavors to contribute to the growing knowledge base on this important skills category through the proposed impact evaluation. C. Financial Management 78. The financial management (FM) arrangements of the Committee on Youth Affairs (CYA) of the Ministry of Education and Science (MOES) have been assessed and found to be overall satisfactory to the Bank. The Project FM assessment carried in April 2013 established that CYA has generally acceptable FM arrangements in place. In particular: (i) CYA has functioning automated accounting software, that is used by majority of projects in Kazakhstan, as well as governmental agencies and can be easily modified to meet the Bank’s reporting requirements; (ii) the filing system is well organized; (iii) the internal control system is adequate; (iv) CYA has well-staffed Department of Finance, that includes an experienced Chief Accountant; and (v) the accounts of CYA are reviewed on a regular basis by the Accounts Committee and Internal Audit department of the MOES. However, a time-bound action plan has been agreed, taking into account the fact that the proposed implementing agency does not have any experience in the World Bank or other donor-financed projects and for capacity building 21 purposes. This Action Plan includes: (i) development of the module on the basis of existing software to meet the project’s reporting and accounting requirements within 45 days after the project effectiveness; and (ii) recruiting a dedicated FM specialist to support CYA’s Accounting Unit as a condition for disbursement. As an interim arrangement the CYA will assign a staff to the project to handle project related financial management functions. 79. While CYA follows comprehensive governmental accounting policies and procedures, the project specific controls, accounting, budgeting, flow of funds, reporting, staffing and external auditing procedures will be documented in the FM section of the Project Operations Manual (POM) that will be prepared for the Project. 80. Annual audits of the project financial statements will be provided to the Bank within six months after the end of each fiscal year and at project closing. The CYA will have to publicly disclose audit reports within one month after receipt of these reports from external auditors; the Bank will make them publicly available according to the World Bank Policy on Access to Information. As part of project implementation support and supervision missions, quarterly interim unaudited financial reports (IFRs) will be reviewed and regular risk-based FM missions conducted. 81. The Coordinating Agency will receive quarterly advances of funds from the Designated Account opened by the CYA of the MOES to finance expenses related to the implementation of Component 1. Payments will be made to the Coordinating Agency on two accounts specifically opened for the Youth Crops program, according to the following criteria. Funds to implement Sub-component 1.1 (Subproject Grants and Subsistence Stipends for Community-Based Service Learning) will be provided in one account (“Account 1�), and will be used solely for the following purposes: (i) paying subsistence stipends of young beneficiaries and (ii) financing subproject grants to host organizations and groups of youth to implement their proposed activities. Funds will be transferred to the second account (“Account 2�) to implement the activities under Sub-component 1.2 (Life Skills Development and Project Management Training), 1.3 (Outreach to Vulnerable Young People), and 1.4 (Coordination, Communication and Accountability). 82. With respect to subsistence stipends, each beneficiary will be provided with a personal debit card. They will receive the monthly subsistence stipend on their individual debit card, as long as they fulfilled the conditions of the program. Financing for the youth initiative group subproject proposals will be made to a separate debit card account, which will be consigned to all members of the group. Host organizations will receive financing for their subproject proposals to a bank account in the organization’s name at a financial institution of their choice. 83. Host organizations and initiative groups will receive fiduciary training, and they will keep records of cash flows and supporting documentation on a purchasing book, as specified in the POM. Monthly subsistence stipend payments and subproject proposal financing may be suspended, or even result in early termination of the subproject activities, if beneficiaries are unable to fulfill the obligations that will be specified in the POM, including: (i) adherence to using the funds received for the purposes stated in the subproject proposals and (ii) maintenance of relevant records of expenses. 22 Figure 1. Flow of Funds from Designated Account CYA of the MOES Designated Account Component 1 Components 2 and 3 Support Community Based Service TA, Project Management, Learning and Monitoring, and Evaluation Life Skills Development Coordinating Coordinating Agency Agency Account 1 Account 2 Life Skills Development & Project Management Training Beneficirary Subsistence Stipends Outreach to Vulnerable Young People Subproject grants to Host Organizations Coordination, & Youth Groups Communication and Accountability 84. Under the Bank’s accountability assessment (PEFA), issued in May 2009, the overall fiduciary risk in Kazakhstan is assessed as substantial. According to the PEFA report, various key elements of the country’s public finance management (PFM) system, including accounting, internal audit, financial reporting and external audit are still weak. The country also scores poorly in the Transparency International’s Corruption Perception Index, which is an indication of high perceived corruption. The project will thus be implemented in an environment of weak PFM capacity and significant fiduciary risk due to high perceived corruption. Ring-fencing of project activities will, therefore, be implemented, including additional reporting requirements and independent audits of the project financial statements by auditors satisfactory to the Bank. The project will only rely on country systems in budgeting and partially in internal controls. The overall FM risk of the project is Moderate after mitigation measures, with Inherent and Control Risks rated as Substantial before, and Moderate after mitigation measures. D. Procurement 85. Procurement for the project will be carried out in accordance with World Bank procurement Guidelines. Specifically, procurement will be carried out in accordance with: (i) “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers, dated January 2011; and (ii) “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by 23 World Bank Borrowers’, dated January 2011; and (iii) the provisions stipulated in the Grant Agreement. The World Bank Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credit and Grants dated October 15, 2006 and revised on January 2011, would also apply. The Component 1 follows the concept of Community Driven Development (CDD), thus procurement arrangements for this component will be in line with the Guidance Note for Design and Management of Procurement Responsibilities in Community-Driven Development Projects, dated March 15, 2012. 86. Public procurement reform in Kazakhstan began in 1996. The initial Public Procurement Law (PPL) was first enacted in July 1997. A new PPL was introduced on July 21, 2007 (No. 303-III) and put into force on January 1, 2008. Several amendments were introduced. The current/applicable PPL is dated July 2007 with amendments on June 21, 2013. The procurement system in Kazakhstan is highly decentralized, with some centralized planning and oversight. The GOK has been consistently adjusting the public procurement system to align it with the improvements and changes in the overall market economy system. However, the Bank’s June 2009 PEFA report identified the following deficiencies in the implementation of the PPL: (a) excessive use of less competitive procurement methods and single-source procurement; and (c) perception of the complaint handling system not being fully independent. 87. The overall procurement risk for the project is high. The risk rating is based on experience from past and ongoing Bank-financed projects in Kazakhstan, general public procurement environment and the current capacity of the Committee on Youth Affairs (CYA) of the Ministry of Education and Science (MOES) in administering procurement. To mitigate the risk, an experienced Procurement Specialist familiar with Bank procurement procedures will be hired by the CYA for the PMU. The Bank’s procurement staff based in the country office will provide advice and assistance on a regular basis. The procurement manual for Grant Recipients will be prepared in order to foster competition. Wide and advance advertising will be carried out for procurement packages under the Grant Program, and proactive search and contact of potential suppliers and consultants will be ensured. The procurement plan covering the initial 18 months of project implementation is being prepared by CYA. Details on project procurement arrangements are presented in Annex 3. E. Social (including Safeguards) 88. The activities to be financed by the project are not likely to have adverse social impacts. The financing of subproject grants to host organizations and groups of young people considered under Component 1: Support Community-Based Service Learning and Life Skills Development do not include construction of infrastructure or other activities that would require land acquisition that could generate adverse impacts. F. Environment (including Safeguards) 89. The project does not trigger environmental safeguards as it will only finance subproject grants, subsistence stipends, and technical assistance, thus the project will be assigned an Environmental Screening Category of “C�. 24 Annex 1: Results Framework and Monitoring KAZAKHSTAN: Youth Corps Project (P127966) Project Development Objectives The proposed Project Development Objective is to promote young people’s community engagement and life skills through a community-based service learning program, especially for vulnerable youth. These results are at Decision Meeting Project Development Objective Indicators Cumulative Target Values Data Source/ Responsibility for Unit of End Methodology Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target Quarterly 1. Share of progress subprojects rated reports Percentage 0.00 0.00 50.00 60.00 70.00 70.00 Semi-annual CYA/MOES satisfactory at including completion data from exit surveys 2A. Share of youth project beneficiaries that demonstrate a Impact significantly evaluation greater Impact CYA/MOES Percentage 0.00 0.00 0.00 70.00 80.00 80.00 baseline and improvement in evaluation World Bank end-line defined surveys community engagement indicator, relative to controls 2B. Share of Impact vulnerable youth Percentage evaluation that demonstrate Impact CYA/MOES Sub-Type 0.00 0.00 0.00 50.00 60.00 60.00 baseline and an improvement evaluation World Bank Breakdown end-line in defined surveys community 25 engagement indicator 3A. Share of youth project beneficiaries that Impact demonstrate a evaluation significantly Impact CYA/MOES Percentage 0.00 0.00 0.00 70.00 80.00 80.00 baseline and greater evaluation World Bank end-line improvement in surveys defined life skills, relative to controls 3B. Share of Impact vulnerable youth Percentage evaluation that demonstrate Impact CYA/MOES Sub-Type 0.00 0.00 0.00 50.00 60.00 60.00 baseline and an improvement evaluation World Bank Breakdown end-line in defined life surveys skills Intermediate Results Indicators Cumulative Target Values Data Source/ Responsibility for Unit of End Methodology Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target Quarterly progress Direct project reports Number 0.00 0.00 2000.00 5000.00 8000.00 8500.00 Bi-annual CYA/MOES beneficiaries including data from FRM Quarterly progress Percentage Female reports Sub-Type 0.00 0.00 40.00 50.00 55.00 55.00 Bi-annual CYA/MOES beneficiaries including Supplemental data from FRM Youth with Percentage Quarterly 0.00 0.00 2.00 4.00 5.00 5.00 Semi-annual CYA/MOES disabilities Sub-Type progress 26 beneficiaries Supplemental reports including data from FRM Share of youth Quarterly project progress beneficiaries that reports feel able to make Percentage 0.00 0.00 60.00 70.00 80.00 80.00 Semi-annual including CYA/MOES a positive data from contribution to FRM and their community exit surveys Share of host organizations reporting that they Quarterly had used the skills reports they had acquired Percentage 0.00 0.00 60.00 70.00 80.00 85.00 Semi-annual including CYA/MOES through project data from activities to FRM improve youth programming in at least two ways Information and Quarterly Communication progress Campaign reports Yes/No No Yes Yes Yes Yes Yes Semi-annual CYA/MOES developed, including implemented, and data from up-to-date FRM Feedback and Resolution Quarterly Mechanism Yes/No No Yes Yes Yes Yes Yes Semi-annual progress CYA/MOES developed, reports implemented, and up-to-date Quarterly Beneficiary progress Number 0.00 0.00 50.00 75.00 100.00 100.00 Semi-annual CYA/MOES agencies reports including 27 data from FRM Quarterly Grievances progress registered related reports to delivery of Percentage 0.00 0.00 60.00 70.00 80.00 85.00 Semi-annual CYA/MOES including project benefits data from addressed (%) FRM MOES annual report on youth Quarterly published with Yes/No No Yes Yes Yes Yes Yes Annual progress CYA/MOES support of reports project’s technical assistance Indicator Name Description (indicator definition etc.) 1. Share of subprojects rated satisfactory at completion Denominator is all subprojects approved for funding; Numerator is those that were completed with a satisfactory rating 2A. Share of youth project beneficiaries that demonstrate a Denominator is all youth beneficiaries of the project; Numerator is those that showed a positive significantly greater improvement in defined community change in defined community engagement indicator. The “community engagement indicator� engagement indicator, relative to controls will be finalized after the Community-Based Service Learning pilot program. Important aspects of community engagement include: (i) capacity to direct cumulative effort over time towards volunteering, (ii) access to environments that are free from physical and mental hazards to engage in volunteering, (iii) feelings of positive recognition, (iv) understanding of the importance of providing services to the very poor, the elderly, migrants, or people with disabilities, and (v) active participation as alumni of Youth Corps Project, where time allows for such an evaluation. After the pilot program, a composite indicator will be developed and reflected in the POM. 2B. Share of vulnerable youth that demonstrate an Denominator is all youth beneficiaries of the project who have demonstrated an improvement improvement in defined community engagement indicator in defined community engagement indicator; Numerator is those defined as vulnerable. "Vulnerable youth" is defined as those who are (i) neither in education, employment, or training or (ii) working poor. The proxy for this indicator is (i) youth with a secondary education degree or below and (ii) youth with TVET degree. 3A. Share of youth project beneficiaries that demonstrate a Denominator is all youth beneficiaries of the project; Numerator is those that showed a positive significantly greater improvement in defined life skills, relative change in defined life skills. The “life skills indicator� will be finalized after the Community- to controls Based Service Learning pilot program, which will include the life skills development and 28 project management training activities. Important aspects of life skills development include: (i) opportunities to build strong adult-youth and youth-youth relationships, (ii) knowledge about public services that are available in a young person’s community, including local employment and health centers, (iii) identifying and avoiding risky behaviors, (iv) basic financial literacy, and (v) time management. This indicator will be linked to the “Big 5� traits in the life/non - cognitive skills literature: conscientiousness, agreeableness, neuroticism (such as self- confidence and initiative), openness to experience, and extraversion. After the pilot program, a composite indicator will be developed and reflected in the POM. 3B. Share of vulnerable youth that demonstrate an Denominator is all youth beneficiaries of the project who have demonstrated an improvement improvement in defined life skills in defined life skills; Numerator is those defined as vulnerable. "Vulnerable youth" is defined as those who are (i) neither in education, employment, or training or (ii) working poor. The proxy for this indicator is (i) youth with a secondary education degree or below and (ii) youth with TVET degree. Intermediate Results Indicators Indicator Name Description (indicator definition etc.) Direct project beneficiaries Direct beneficiaries are people or groups who directly derive benefits from an intervention (i.e., children who benefit from an immunization program; families that have a new piped water connection). Please note that this indicator requires supplemental information. Supplemental Value: Female beneficiaries (percentage). Based on the assessment and definition of direct project beneficiaries, specify what proportion of the direct project beneficiaries are female. This indicator is calculated as a percentage. Female beneficiaries Denominator is all youth beneficiaries of the project; Numerator is those that are female. Youth with disabilities beneficiaries Denominator is all youth beneficiaries of the project; Numerator is those with disabilities. Participants will self-report specific types of disabilities. Share of youth project beneficiaries that feel able to make a Denominator is all youth beneficiaries of the project; Numerator is those who indicate a positive contribution to their community positive change in their ability to contribute to their community (self-reported) Share of host organizations reporting that they had used the Denominator is all host organization beneficiaries of the project; Numerator is those that report skills they had acquired through project activities to improve that they used the skills acquired through project activities to improve youth programming in at youth programming in at least two ways least two ways (self-reported) Information and Communication Campaign developed, Guidelines for ICC have been developed and followed, including periodic updates based on implemented, and up-to-date lessons learned Feedback and Resolution Mechanism developed, implemented, Guidelines for FRM have been developed and followed, including updates based on lessons and up-to-date learned Beneficiary agencies The number of host organizations benefiting from the project 29 Grievances registered related to delivery of project benefits This indicator measures the transparency and accountability mechanisms established by the addressed (%) project so the target beneficiaries have trust in the process and are willing to participate, and feel that their grievances are attended to promptly. It is understood that local sensitivities and tensions will not allow grievance or redress mechanisms to be established in all projects. Team’s clarification: “Denominator is all grievances registered through the Feedback and Resolution Mechanism; Numerator is those that are resolved �. MOES annual report on youth published with support of project’s technical assistance 30 Annex 2: Detailed Project Description KAZAKHSTAN: Youth Corps Project 1. The project activities will be structured around three components: (i) Support Community- Based Service Learning and Life Skills Development, (ii) Institutional Development of the Committee on Youth Affairs for Youth Policy Implementation, and (iii) Project Management, Monitoring, and Evaluation Activities. Component 1: Support Community-Based Service Learning and Life Skills Development (Estimated total costs including contingencies: US$ 20.0 million) 2. Under the supervision and monitoring of the Committee on Youth Affairs (CYA) of the MOES, a Coordinating Agency will ensure that the final project design for Component 1 incorporates the five elements of positive youth development selected for this project (community engagement, initiative, support system, safe place, and recognition for positive behavior) and that it is appropriate for the country context. The Coordinating Agency will follow the implementation protocol and monitoring framework outlined in the Project Operations Manual (POM), while suggesting revisions to the CYA as appropriate during implementation. The Coordinating Agency will also be responsible for overseeing the daily administration of Component 1 activities, which are organized along four sub-components: (i) Subproject Grants and Subsistence Stipends for Community-Based Service Learning, (ii) Life Skills Development and Project Management Training, (iii) Outreach to Vulnerable Young People, and (iv) Coordination, Communication, and Accountability. 3. Sub-component 1.1 – Subproject Grants and Subsistence Stipends for Community- Based Service Learning (estimated US$ 15.0 million). This sub-component will finance subproject grants to two sets of potential recipients: (i) host organizations and (ii) groups of young people. It will also finance subsistence stipends to all youth beneficiaries. Following a community-driven development (CDD) model, organizations and young people will be selected on a competitive basis based on proposals submitted in response to calls for proposals by the Coordinating Agency. Two proposal templates will be developed: one for the host organizations and another for the youth participants. 4. Although proposal guidelines will be detailed in the POM, Component 1 follows international good practice on CDD programs and does not provide a closed list of activities from which applicants must choose. Instead, applicants will be asked to identify in their proposal a service learning opportunity for young people that will benefit a local community and include the five elements (community engagement, initiative, support system, safe place, and recognition for positive behavior), to be evaluated on clear selection criteria. Examples of good proposal ideas will be included in the application form. Subprojects that target vulnerable groups, as well as those that are conducted with participation by vulnerable young people, will be prioritized. For example, more consideration may be given for proposals that provide a service to the very poor, the elderly, migrants, or people with disabilities. The selection criteria could also prioritize subprojects that engage vulnerable young people or youth with disabilities. Civil works will not be financed by the subprojects grants. 31 5. The community-based service learning program will engage young people for a period of 6 months. Each participating youth, whether through the Host Organizations or Youth Initiative Approach, will receive a monthly subsistence stipend. The subsistence stipend amount will vary depending on their educational attainment or status: (i) primary/secondary/TVET graduates and current TVET or higher education institution (HEI) students will receive approximately 21,000 tenge (approximately US$140) and (ii) HEI graduates will receive approximately 50,000 tenge (approximately US$325). In comparison, national minimum wage in 2013 is currently 18,660 tenge and the monthly full time stipend for the Youth Internship program is 29,500 tenge. Subsistence stipends will be disbursed on a monthly basis, upon confirmation of satisfactory participation of each youth. 6. Host Organizations Approach. Host organizations will submit budgeted proposals for community-based service learning subprojects suitable for young people. The subproject grants to host organizations will cover administrative expenses, which is capped at 619,000 tenge (approximately US$ 4,000) per group of 5 youth hosted. Host organizations will also receive fees per participant to cover overhead. External annual audits will include random spot checks of recipient host organizations. Civil society, public, and private organizations are eligible, and selected host organizations will prepare groups of young people for subproject engagement and ensure adequate follow-up. Although group size will vary, each “cohort� of young people should be small enough (maximum 5 participants) to ensure that participants develop a working and collaborative relationship with each other and the staff. While there are over 1,000 functioning youth associations in Kazakhstan, many are based in urban areas and thus the selection criteria described above will ensure that host organizations are encouraged to extend participation to youth who are usually excluded from their programs. Thus private companies with corporate social responsibility (CSR) programs or civil society organizations aiming to extend their programs into rural areas are good candidates for this approach. This approach is an adaption of good practices from programs such as AmeriCorps and the European Volunteer Service. 7. Youth Initiative Approach. Groups of young people, with one person designated as the group leader, will submit budgeted proposals for youth-led community-based service learning subprojects. The capital for youth initiated subprojects is capped at 619,000 tenge (approximately US$ 4,000) for a group of 5 youths. Each group will consist of no more than 5 young people, and each person’s role will need to be clarified in the proposal. External annual audits will include random spot checks of recipient youth groups. Preference will be given to proposals that directly benefit local communities where the group of young people resides. During project preparation, there was enthusiasm expressed for this approach during focus groups with young people, especially among current TVET and HEI students with higher capacity and experience with writing proposals and community service. However, this approach is also likely to be a good option for groups of rural young people, where host organizations may not be active. This approach is an adaptation of the ASHOKA Youth Ventures program, as well as other youth employment and development programs supported by the World Bank. 8. The table below summarizes the estimated cost of delivering Sub-components 1.1 and 1.2. The main costs include: subsistence stipends for young people, subproject grants to host organizations and groups of youth, life skills and project management training, and per 32 participant fee for the cost of managing participants incurred under the Host Organization Approach. Average per-proposal financing has been estimated at 100 percent of the maximum allowed amount for six month-long projects (approximately US$4,000), making the remaining costs a conservative estimate. Under the assumption that project proposals will last 6 months and groups will include 4 individuals, the project should cover 8,500 beneficiaries, of whom a total of 60 percent will be from harder to reach youth: 40 percent in the category of secondary or lower educated, and 20 percent will comprise of TVET graduates. Another 30 percent will comprise of current TVET or HEI students and the remaining 10 percent will be HEI graduates. The cost per beneficiary for a 6-month project would range from US$2,026 to US$3,136 for participants without and with a higher education institution diploma, respectively. By comparison, other programs of relevance show the following unit costs in 2012: US$866 for the Youth Internship program (lasting up to 6 months, but average duration is unknown) to US$3,694 for the professional training program. Project costs (US$) Participants below HEI graduates Target group HEI diploma Cost per group* Subsistence stipend for youths 3,360 7,800 Subproject grants 3,195 3,195 Life skills/proj mgmnt training and mentoring 1,239 1,239 Host Organization fee** 619 619 Average total cost per group 8,103 12,543 Average total cost per beneficiary 2,026 3,136 Share in total beneficiaries 90% 10% Number of beneficiaries 7,650 850 Number of financed projects 1,913 213 Total cost for service learning and life skills: $ 18,162,855 * Assuming average of 4 participants per group ** Assuming half of youth participants will enroll in Host Organizations approach Tenge US$ % Min % Avg Wage*** Wage Subsistence stipend for youths (monthly) Participants below HEI diploma 21,000 $ 140 105% 20% HEI graduates 50,000 $ 325 250% 47% Subproject grants Maximum subgrant cap (5 participants) 619,000 $ 3,994 Average subgrant for 4 participants 495,200 $ 3,195 Life skills/proj mgmnt training and mentoring Per part. LS and proj management training (twice) 15,000 $ 97 Per part. mentoring and LS reinforcement (per month) 3,000 $ 19 33 Host Org fee (per month) 4,000 $ 26 *** Note: minimum wage assumed at 20,000 TNG, the amount at the time of program preparation 9. A separate Impact Evaluation of Component 1 activities will be designed, conducted and financed by the World Bank. The evaluation has the following objectives: (i) identify the efficacy of the project for improving community engagement, life skills, and labor market outcomes, (ii) understand what aspects of the intervention may have contributed most to the identified impacts, (iii) inform whether the activities should be scaled-up as one of the flagship programs delivered through the Kazakhstan Law on State Youth Policy in Kazakhstan, and (iv) contribute to global knowledge, especially as a number of countries are expressing interest in establishing such programs with World Bank assistance. Since the project is likely to have excessive demand among youth, it will require an objective lottery to fairly determine participants. 10. Sub-component 1.2 - Life Skills Development and Project Management Training (estimated cost US$ 3.5 million). Life skills development and project management training will be provided to all participants in the community-based service learning program, whether they participate through the Host Organizations or Youth Initiative approach. The World Bank’s 2007 World Development Report on Development and the Next Generation notes that there is strong evidence that bundled youth programs are more effective and in this case, the community-based service learning activities are complemented by life skills development and project management training opportunities. Although the Coordinating Agency will facilitate the life skills activities, the actual delivery of the training programs is likely to be subcontracted. 11. The life skills development8 and project management training program will be implemented in three phases for each participant. First, before engaging in the community-based service learning program, each participant must complete a one-week life skills development and project management training module. For life skills development, participants will focus on skills such as community engagement, communication, collaboration, identifying and avoiding risky behaviors, and healthy gender relations. The project management training will focus on positive perception of social entrepreneurship as a career option; opportunity recognition for community- based projects; risk assessment; basic financial literacy; marketing; and business management skills. Second, during the community-based service learning program, the Coordinating Agency will facilitate monthly sessions between an adult mentor and every youth participant, with a focus on: (i) individualized mentoring on professional and personal goals, (ii) linking young people with public services that are available in their communities/areas, including local employment and health centers, and (iii) reinforcement of life skills development and project management training. Mentors will be selected by the Coordinating Agency and will be required to have either a background in social work or extensive experience working with youth, especially vulnerable youth. Close proximity to the youth participants is also important, given the requirement to have monthly meetings. These monthly meetings will also provide opportunities to collect data on youth beneficiaries and allow the project to monitor the propose use of funds. The monthly meetings will serve as the means for confirming satisfactory participation of young people, thereby triggering their monthly subsistence stipend disbursements. Third, each youth participant will need to complete another one-week life skills 8 The most salient life skills in the Kazakhstan context will be defined. 34 development and project management training module at the end of the program. The third phase will also include how participants stay involved as “alumni� of the Youth Corps Project. 12. To test various implementation arrangements, a short pilot for Sub-components 1.1 and 1.2 activities will be conducted prior to commencement of Round 1 of the project. 13. Sub-component 1.3 – Outreach to Vulnerable Young People (estimated cost US$ 0.5 million). Sub-components 1.1 and 1.2, at least initially, is expected to be offered with national coverage. This will ensure that the project is demand-driven and help the GoK identify where uptake is naturally strongest for community-based service learning programs. This is important for building momentum for a project that is based on an approach that is untested in Kazakhstan. Despite the possibility that this approach will only capture the “easy to reach� youth, as noted above, a strong Information and Communication Campaign framework should enable the project to recruit even among those who are ordinarily excluded from government programs. Also, the selection criteria for the host organizations and youth applications will ensure that incentives are aligned to encourage vulnerable youth to participate. 14. The World Bank’s 2007 World Development Report on Development and the Next Generation identified the lack of programs to counteract isolation of disadvantaged youth as a major shortfall of existing youth programs. To this end, Sub-component 1.3 will pilot approaches to engage vulnerable young people and encourage their participation in the community-based service learning and life skills development and project management training programs. Once the vulnerable youth have been identified and they have received support with the proposal process, they will be integrated into the program under Sub-components 1.1 and 1.2. Although the exact nature of the pilot programs will be determined based on data and findings after the initial round, possible ideas include provision of hands-on training to complete proposals for sub-projects, conducting targeted media campaigns for youth with disabilities or with no access to traditional media outlets, or fostering subprojects that provide daycare services for beneficiaries with small children. 15. For this project, a vulnerable youth is defined as someone who is (i) neither in education, employment, or training (NEET) or (ii) working in poverty. Defined as such, the share of vulnerable young people increases with age, comprising 22 percent of those who are 25-29 years-old. The share of vulnerable youth is only slightly higher in rural areas. According to the qualitative data analysis, part of the reason is that the vulnerable young people in urban areas are often those migrating with poor job prospects from rural areas, thus constituting a similar group. Share of Youth 15-29 Who are Neither in Education, Employed, or Training (NEET) or Working Poor Age Panel A: All Areas Panel B: Rural Areas category NEET Working Poor NEET+WP NEET Working Poor NEET+WP 15-19 3.4 0.5 3.9 3.4 0.5 3.9 20-24 17.0 1.9 18.9 18.1 3.0 21.1 25-29 22.1 2.1 24.2 23.7 3.7 27.4 15-29 13.0 1.4 14.4 13.0 2.1 15.1 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 35 16. Kazakhstan’s geographic size also lends itself to the possibility that sub-populations of young people remain “hard to reach� and therefore vulnerable. Specific selection criteria will be applied for the final determination of the participating regions with: (i) the highest share of vulnerable young people, (ii) the highest nominal stock of vulnerable young people, (iii) the highest share of rural youth, and (iv) the largest increase in youth “ruralization. Four regions – Pavlodar, Karagandy, Mangystau and Aktobe – have the highest share of vulnerable young people (defined as youth who are not working/in education or working in poverty). The nominal stock of vulnerable youth is highest in South Kazakhstan and Almaty regions, which also have the highest share of rural youth. South Kazakhstan and Mangystau have the largest increase in the indicator of “ruralization� of its youth population between 2010-2012. Thus any of the following regions would make good candidates for a regional focus (in alphabetical order): Aktobe, Almaty, Karagandy, Mangystau, Pavlodar, and South Kazakhstan. The project will take into consideration ease of access, especially in the earlier rounds of project implementation, which would make Almaty, Karagandy and Pavlodar especially good candidates. South Kazakhstan is likely to be included because of the high nominal stock of vulnerable youth, high share of rural youth, and an observed pattern of ruralization. 17. Since the project relies on self-reported information to select beneficiaries, determining who is NEET or working in poverty status may prove difficult. Therefore, the project uses education status as a proxy for vulnerability, which is divided into two eligible groups: (i) primary/secondary/TVET graduates and current TVET or HEI students and (ii) HEI graduates. Of these, primary/secondary/TVET graduates are considered “vulnerable� and correlated with NEET and working poor status, and will comprise at least 60 percent of project beneficiaries. Although in theory, TVET graduates are eligible for university education, only 1-2 percent of TVET graduates enroll in school again. In a country with near-universal secondary education completion, this group is therefore included in the vulnerable category. According to the figure below, primary/secondary and TVET degree holders comprise approximately 1.7 million youth in Kazakhstan. Number of 15-29 Year-Olds by Completed Education Degree (OOS=Out of School Youth) Source: HBS 2009. 36 18. Among the NEET and working poor, two groups of youth stand out as requiring additional support: women and youth with disabilities. While there are no significant variations in educational attainment by gender (in fact, in urban areas, women tend to have higher levels of education), quantitative and qualitative data reveal that women with vocational training in rural areas and with tertiary education in urban areas are less likely to successfully transition to the labor market and have fewer opportunities for stable employment. If employed, young women tend to earn significantly less than their male peers. Engaging young women in the program can open more opportunities otherwise not available to them. 19. According to the 2009 UN Human Development Report on Kazakhstan, about 4 percent of children under 14 had health disorders in 2007 in Kazakhstan, and about 45,000 children received disability-related benefits. While social services ensure that the basic needs of youth with disabilities are met, a combination of factors hampers their potential to be socially integrated and reach self-sufficiency through their own capabilities. Focus groups with youth disabilities during project preparation highlighted various challenges that this group faces in getting necessary education and skills, and therefore finding employment, even in urban settings where opportunities are generally more available. These factors include (i) physical barriers to mobility and the lack of effective legislation for their elimination; (ii) discrimination in obtaining college or HEI education and in the labor and credit markets; (iii) lack of sufficient incentives for employers to hire them; (iv) lack of a policy for mainstreaming youth with disabilities in the education system; and (v) the paucity of social settings where youth with disabilities can interact with other young people. 20. Sub-component 1.4 - Coordination, Communication, and Accountability (estimated cost US$ 1 million). This Sub-component includes the activities that the Coordinating Agency will carry out. In particular, the Coordinating Agency will be responsible for developing two important frameworks before launching the first call for proposals: (i) Information and Communication Campaign and (ii) Feedback and Resolution Mechanism. 21. The Information and Communication Campaign (ICC) will detail public awareness-building activities to be carried out before, during, and after the project. The ICC will be designed and implemented with substantive inputs and participation by young people, and build awareness on: core project principles; beneficiary characteristics; proposed benefits at the individual, collective, and community levels; implementation mechanism including timing; roles and responsibilities of different stakeholders; and transparency and accountability measures. Concrete examples of the ICC include ensuring that sufficient outreach is conducted in order to encourage participation by vulnerable young people, as well as informing the public about the selection criteria for participants to ensure transparency and fairness. The ICC will also provide information to communities about young people’s engagements in service learning activities and the life skills they are gaining. 22. The Feedback and Resolution Mechanism (FRM) will serve as a critical monitoring tool for the project. The FRM will also be developed and implemented with substantive inputs and participation by young people, especially the determination of data collection modality. The FRM will make use of available Information and Communication Technology (ICT) 37 infrastructure that is already used by young people. An effective and properly implemented FRM will ensure that project funds are being used as planned, that project interventions are reaching the intended beneficiaries, and that the quality of inputs are good. The objective of the FRM is to obtain real time feedback from various stakeholders, especially youth, so that the project interventions can be modified regularly, as well as to minimize governance and accountability issues. The FRM will also need to detail a process for resolving any problems once they emerge. The Coordinating Agency is expected to apply good practices from global cases to implement and continue to improve the FRM. 23. The ICC and FRM will be used as qualitative and quantitative data collection tools, thus both will need to be conducted regularly and methodically. Together, the qualitative and quantitative evaluations will build the evidence to better understand what is working and why it is working. The pilot for Subcomponents 1.1 and 1.2 activities will evaluate whether the ICC and selection criteria for the subprojects are sufficient to ensure recruitment and participation of vulnerable youth, or a more costly but still cost effective program is required to ensure their involvement. The results of the pilot will be summarized in a report, so that the approaches can be evaluated, including their effectiveness to recruit and maintain participation of vulnerable youth.The ICC and FRM will be revised periodically to reflect inputs from project beneficiaries and lessons learned. 24. For the host organizations, the Coordinating Agency will facilitate the provision of training and opportunities to network with other groups on the following topics: (i) effective youth engagement strategies, (ii) role of ICC and effective community engagement, and (iii) monitoring and evaluation, including the FRM. Likewise, the Coordinating Agency will provide opportunities for young people to become better networked with each other and facilitate the provision of training on: (i) the role of ICC and effective community engagement and (ii) monitoring and evaluation, including the FRM. 25. In summary, Component 1 will finance (i) service fees to a Coordinating Agency for the day- to-day management of Component 1 activities, including the provision of necessary information and reports to the CYA of the MOES, (ii) subproject grants to host organizations and youth participations, (iii) provision of subsistence stipends, as well as life skills development and project management training to youth participants, (iv) pilot programs to improve outreach to vulnerable youth by promoting the program and supporting their application process, (v) the development and implementation of ICC and FRM, as well as creating a sense of community among the host organizations and youth participants. A separate Bank-executed trust fund, with its own funding source, will be set up to finance the design and implementation of the impact evaluation. Component 2: Support Institutional Development of the Committee on Youth Affairs for Youth Policy Implementation (Estimated total costs including contingencies: US$0.763 million) 26. Sub-component 2.1 – Support the Development of Institutional Framework for Youth Policy Implementation, Coordination, and Evaluation Activities (estimated cost US$ .463 million). The CYA of the MOES will be the implementing agency for the project. As noted 38 above, the CYA developed the Law on State Youth Policy and technical assistance will be provided to support its implementation and monitoring and evaluation, including young people’s feedback on the youth programming offered under the policy. The technical assistance provided through this Sub-component will include: (i) semi-annual capacity building for two staff each from the 16 regions on implementation and monitoring of youth-focused volunteering programs, culminating in seven workshops total, starting in second half of 2014, (ii) sustained capacity building on the use of quantitative and qualitative data to produce the MOES annual report on youth development, ensuring that the research methodology, data analysis, and dissemination is improved each year, (iii) capacity building on the application of findings from data analysis to better integrate youth issues into national and regional programs, and (iv) training and international exchange of experiences for the draft Law of the Republic of Kazakhstan on Volunteering (scheduled to be passed by 2020). 27. Subcomponent 2.2 – Support the Development of Training Program for, and Outreach to, Senior Secondary Students (estimated cost US$ .3 million). The sub-component will finance the provision of technical assistance, most likely by an experienced NGO, for training program development that targets senior secondary students and focuses on raising their awareness of community-based volunteering and service learning. This activity will be linked with Component 1, so that senior secondary students who are nearing graduation are aware of the community-based service learning and skills development programs and encouraged to apply. Component 3: Project Management, Monitoring, and Evaluation Activities (Estimated total costs including contingencies: US$1 million) 28. A small Project Management Unit (PMU) will be financed within the CYA to manage the fiduciary aspects of the project, supervise the Coordinating Agency, and ensure adequate project monitoring. The PMU will consist of the following staff: (i) Project Coordinator, (ii) Financial Management Specialist, (iii) part-time Procurement Specialist, (iv) Monitoring and Evaluation Specialist, (v) Youth Specialist, and (vi) Translator. It is critical that this PMU is physically located in close physical proximity to the MOES. Component 3 will also finance an annual audit. 39 Annex 3: Implementation Arrangements KAZAKHSTAN: Youth Corps Project Project Institutional and Implementation Arrangements 1. The project will be implemented over approximately three and a half years with a proposed closing date of December 29, 2017. On behalf of the Government of Kazakhstan, the CYA of the MOES will be the implementing agency for the project. The Chair of the CYA, under the guidance and supervision of the line Vice Minister, will be responsible for overall leadership and management of the project, as well as liaison with the World Bank, other relevant ministries, and stakeholders. 2. A small Project Management Unit (PMU) will be established within the CYA of the MOES to help manage the project, including fiduciary aspects, and ensure adequate project monitoring including consistent supervision of the Coordinating Agency. Project implementation will rely primarily on the existing structure of the MOES, thus the PMU will follow CYA/MOES protocol. The PMU will consist of the following staff: (i) Project Coordinator, (ii) Financial Management Specialist, (iii) part-time Procurement Specialist, and (iv) Monitoring and Evaluation Specialist. It is critical that this PMU is physically located in close proximity to the MOES. 3. The CYA, with support from the PMU, will need to: (i) develop the Project Operations Manual (POM), (ii) carry out fiduciary responsibilities including financial management/reporting and procurement, (iii) provide technical supervision and oversight to the Coordinating Agency, and (iv) ensure coordination and communication with other ministries and agencies. The POM is a condition of effectiveness and will include the following sections: (i) administrative, financial management, procurement, and accounting procedures for the project, (ii) terms of reference (TOR) for the Coordinating Agency and other key contracts, (iii) implementation procedures for the community-based service learning and life skills development programs, and (iv) outlines for the ICC and FRM. The CYA will manage two Designated Accounts and process all payments under the project. Project administration mechanisms 4. Day-to-day project implementation for Component 1 will be the responsibility of the Coordinating Agency, which will be competitively selected. The roles and responsibilities of the Coordinating Agency will be reflected in the Terms of Reference. Components 2 and 3 will be implemented by the PMU under the guidance of the CYA/MOES, and are critical for ensuring a strong linkage between the project activities and the Law on State Youth Policy that is under development. These implementation arrangements are reflected in the figure below. 40 Figure 1. Youth Corps Project Implementation Arrangement Committee on Youth Affairs (CYA) under the MOES - Implementing Agency Project Management Unit (PMU) Component 2: Institutional Development for Youth Policy Implementation Impact Evaluation (IE) Coordinating Agency Under the supervision and monitoring of the CYA/MOES Component 3: Project Management, M&E Companent 1: Community-Based Service Learning and Life Skills Development - Community-Based Service Information and Information Learning & Campaign (ICC) & Feedback - Life Skills/Project and Resolution Mechanism Management Training (FRM) - Outreach to Vulnerable Young People Financial Management, Disbursements and Procurement Financial Management 5. The Committee on Youth Affairs (CYA) of the Ministry of Education and Science (MOES) will be responsible for the project FM function, including budgeting and panning, accounting, financial reporting, and internal controls and auditing. The Chief Accountant of the CYA will have overall responsibility for the financial management arrangements. The CYA does not have prior experience in implementing Bank or other donor-financed projects, thus, they will be supported by specially recruited dedicated FM Consultant. 6. The FM arrangements of the CYA were reviewed and found to be overall satisfactory. In particular: (i) the CYA is using automated accounting software that was acceptable to the Bank when used by other projects in Kazakhstan; (ii) filing system is well organized and documents are easily retrievable; (iii) internal control system is adequate and described in the accounting policies developed by the Ministry of Finance and followed by the MOES and CYA; and (iv) CYA has its accounts reviewed by the Accounts Committee and Internal Audit Unit of the MOES on a regular basis. 41 7. The CYA will develop the FM section (or Manual) of the POM describing in detail the FM arrangements under the project, including budgeting and planning, accounting and reporting, internal control procedures, staffing arrangements, flow of funds and external audit. 8. The overall FM risk of the project is Moderate after mitigation measures, with Inherent and Control Risks rated as Substantial before, and Moderate after mitigation measures. 9. Current arrangements for budgeting and planning are considered to be adequate. CYA will be responsible for preparing annual budgets for the project based on procurement plans and in line with the FM Manual and the budgeting procedures of the GOK. These budgets will form the basis for allocating funds to project activities. The budgets may be prepared in accordance with the IFRs format (disbursement categories, components and activities, account codes, and broken down by quarter). Annual budgets should be agreed with the Bank. Approved annual budgets should then be entered into the accounting system and used for periodic comparison with actual results as part of the interim financial reporting. 10. There is a Finance Division, which is staffed with the Planning and Budgeting Specialist and Chief Accountant. The staff members are not familiar with World Bank requirements and procedures for FM and disbursements. The accounting unit will be supported by the dedicated FM Consultant who will need to be selected as a condition of disbursement after project effectiveness. Before such specialist is hired, the CYA will assign one of its staff in the Finance Division to handle FM function of the project. Training will be provided by the Bank’s FM specialist to equip the CYA staff with skills necessary to carry out the assigned functions and responsibilities. The Chief Accountant will have overall responsibility for project FM, including timely audit of project financial statements. 11. The CYA is using 1C accounting software for budget organizations. Accounting and reporting under the proposed project will be maintained in a separate module that will need to be tailored to meet the project accounting and reporting requirements, including generation of interim unaudited IFRs. 12. The CYA follows the accounting policies and procedures described in the order and guidelines developed by the Ministry of Finance for budget organizations. However, the manual does not specifically describe the internal control mechanisms to be followed in the application and use of project funds and project implementation. A project-specific FM Manual will have to be developed, as part of the POM for the Project, that describes key internal control mechanisms to be followed by staff in the application and use of project funds, with specific focus on ensuring completeness of accounting transactions, reliability of accounting data, safeguarding of project assets, including safe custody of cash and other assets, proper monitoring of contracts, proper authorization and documentation of all project expenditures, and full accountability of project funds. The manual reflects the project structure that allows for adequate segregation of functions, job descriptions for staff with different authority levels, as well as the flow of funds to support project activities, including proper manual management of the disbursement function, contracts management and documentation flow. The manual also describes procedures for regular financial reporting to ensure close monitoring of project activities. 42 13. It is agreed that the CYA would submit IFRs for the project to be generated by the project accounting system based on formats agreed with the Bank at negotiations. The un-audited IFR reports will be submitted to the Bank within 45 days of the end of each quarter, with the first reports being submitted after the end of the first full quarter following initial disbursement. 14. The CYA will have the Project’s accounts audited by an audit firm acceptable to the Bank. The grant agreement will require annual audits of the project financial statements, to be performed by independent auditors acceptable to the Bank and in accordance with International Standards on Auditing (ISA). The auditors’ TOR will be prepared by CYA and cleared by the Bank. The annual audit reports will be in a format in accordance with ISA, and they will include an opinion on the project financial statements, incorporating the Statement of Expenditure (SOE) Withdrawal Schedule, if used, as well as a management letter. The audit reports will be submitted to the Bank by June 30 of each year. 15. The following table identifies the audit reports that will be required to be submitted by the CYA together with the due date of submission. Audit Report Due Date Continuing Entity financial statements N/A Project financial statements (PFS). Within six months of the end of each The PFS include Sources and Uses of Funds, Uses of fiscal year and also at the closing of Funds by Project Activity, SOE Withdrawal Schedule, the project. and Notes to the financial statements 16. The audited project financial statements shall be made available to the public in accordance with the Bank’s Access to Information Policy. Upon receipt of the audited financial managements, the Bank will also make them available to the public. 17. As part of its project supervision missions, the Bank will conduct risk-based FM supervisions, initially after every six months and thereafter at appropriate intervals, depending on the level of assessed risk. These will pay particular attention to: (a) Project accounting and internal control systems; (b) Budgeting and financial planning arrangements; (c) Review of the IFRs; (d) Review of audit reports, including financial statements, and remedial actions recommended in the auditor’s Management Letters; and (e) Disbursement management and financial flows, and counterpart funds, as applicable. Disbursements 18. The CYA staff does not have knowledge and experience of the Bank’s disbursement procedures. Thus, they will be provided with training during the project launch and hands-on training during implementation. The Accountant of the CYA will be supported by the FM Consultant who will be handling the disbursement function as well. 43 19. Project funds will flow from the Bank, either via a Designated Account, opened with a commercial bank, acceptable to the Bank, which will be replenished on the basis of full documentation or using SOEs, or by using the direct payment method or Special Commitment. Further details on this will be provided in the Disbursement Letter. Procurement 20. Procurement for the project will be carried out in accordance with Bank’s Guidelines. Specifically, procurement will be carried out in accordance with: (i) “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers�, dated January 2011; (ii) “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers�, dated January 2011; and (iii) the provisions stipulated in the Grant Agreement. The World Bank Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credit and Grants dated October 15, 2006 and revised on January 2011, would also apply. The Component 1 follows the concept of Community Driven Development (CDD), thus procurement arrangements for this component will be in line with the Guidance Note for Design and Management of Procurement Responsibilities in Community-Driven Development Projects, dated March 15, 2012. 21. Procurement activities will be carried out by the CYA. An experienced Procurement Specialist familiar with the Bank procurement procedures will be hired to assist the CYA. The Bank’s procurement staff based in the Astana Country Office will provide advice and assistance on a regular basis. The risk assessment rating for the entire project was done through Procurement Risk Assessment and Management System (P-RAMS). Identified risks and proposed mitigation measures are described in the Table 1 at the end of this section. The procurement risk is rated as high. The procurement manual will be prepared in order to foster national competition, wide and advance advertising will be carried out, and proactive search and contact of potential suppliers and consultants will be ensured for implementation of Grant Program. The procurement plan covering the first 18 months of project period is under preparation. The procurement plan will be updated at least once per calendar year and each update will be subject to the Bank’s prior review. The initial procurement plan together with the subsequent updates will be published on the Bank’s external web site in line with the requirements of the Bank’s Guidelines. A General Procurement Notice covering the project procurement activities will be prepared and published before the Grant Agreement signing date. Specific Procurement Notices will be published for all International Competitive Bidding (ICB) and National Competitive Bidding (NCB) procurement, as well as, all consulting services contracts as required under the respective Guidelines. 22. Procurement of Goods. Goods contracts above US$500,000 equivalent will be procured under ICB procedures using the Bank’s SBD for procurement of goods. The NCB method will be applicable for procurement of goods contract with the estimated budget of less than US$500.000. The sample NCB bidding documents shall be prepared taking into account the NCB conditions set forth in the Grant Agreement. In case of NCB, the sample bidding documents shall be prior reviewed and agreed by the Bank before launching the bidding process. 44 Goods contracts with an estimated budget less than US$100,000 equivalent may be procured using Shopping procedures on the basis of at least three written price quotations obtained from qualified suppliers. The list of suppliers to be invited to submit quotations should be defined by a tender committee. 23. Selection of Consultants. The methods for selection of consultants will include Quality and Cost Based Selections (QCBS), Fixed Budget Selection (FBS), Least Cost Selection (LCS), Selection based on Consultants Qualifications (up to US$300,000), Single Source Selection in compliance with Paragraph 3.8 of the Bank’s Consultant Guidelines, and Individual Consultants (IC). Contracts estimated to cost above US$300,000 equivalent will be advertised through United Nations Development Business (UNDB), the Bank’s website and local media (one newspaper of national circulation or the official gazette, and MOES’s website). Shortlists of consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants under the provisions of paragraph 2.7 of the Bank’s Consultant Guidelines. 24. Delegation of Procurement Function for Community Subprojects. The execution of procurement under Component 1 will be delegated to two sets of potential recipients: (i) host organizations and (ii) groups of young people. Host organizations and groups of young people will be selected on a competitive basis, based on proposals submitted in response to calls for proposals by the Coordinating Agency. Procurement responsibilities, procedures and sample documentation are described in detail in the Project Operational Manual (POM) and in the detailed Community Procurement Handbook which is provided to all participating communities and host organizations. The Community Procurement Handbook will be in line with the Guidance Note for Design and Management of Procurement Responsibilities in Community- Driven Development Projects, dated March 15, 2012. Subprojects will involve the procurement of goods and consultancy services (mostly training activities). They will receive support from, and be supervised by Coordinating Agency. Procurement activities will be governed by the OM and the Community Procurement Handbook which set forth the procedures to be used. 25. Operating Costs. The expenses of the CYA would include communications, translations, bank charges, office supplies, cost of advertisements, mail and business trip expenses. Such costs will be financed by the project based on the annual budget prior reviewed and agreed by the Bank. The purchase will be carried out in accordance with the implementing agency’s internal administrative procedures. Operating cost will not include salaries of civil servants. 26. Training and Study Tours. Training and study tours will be carried out based on the annual training/study tours to be prepared by the CYA, prior reviewed and agreed by the Bank. The institutions for training/study tours would be selected considering the availability of such services, duration of training/study tour and reasonableness of cost. 27. Governance and Anti-Corruption Action Plan (GAC). The project will follow the Bank Group’s Anti-Corruption policies as set forth in the Guidelines: On Preventing and Combating Fraud and Corruption in Projects financed by IBRD Loans and IDA Credits and Grants (current edition). The Bank team intends to maintain close oversight and will carry out prior review of all major contracts according to the thresholds that will be regularly reviewed and 45 adjusted as needed in the procurement plan. The following measures will be carried out to mitigate corruption risk: (a) Training of fiduciary staff starting from project launch and periodically thereafter; training will be customized to the procedures and methods that would be required for the next 12 month periods. The relevant project staff shall attend the Central Asia Regional Procurement Workshops organized by the Bank on a regular basis. (b) Prior review: There will be close supervision by the Bank’s procurement accredited staff. In addition, all contract amendments will be subject to prior approval by the Bank. (c) Publication of Advertisements and Contracts: All publications for advertisements and contract awards, including the results of the awards, will be done in accordance with the Procurement Guidelines and published in the Bank client connection system and on external websites, i.e., UNDB and Bank websites. (d) Debarred Firms: Appropriate attention will be given to ensuring that debarred firms or individuals (to be verified from the Bank’s external website) are not given opportunities to compete for Bank-financed contracts. (e) Temporary suspended firms: Appropriate attention will be given to ensuring that temporary suspended firms or individuals (to be verified through client connection) are not given opportunities to compete for Bank-financed contracts. (f) Complaints: All complaints by bidders will be diligently addressed and monitored in consultation with the Bank. (g) Tender Committee: If required, the Bank will review qualifications and experience of proposed members of the evaluation committee(s) with a view to avoiding nomination of unqualified or biased candidates. All members will be required to sign a confidentiality/impartiality form. (h) Monitoring of contract awards: All contracts are required to be signed within the validity of the bids/proposals and, in case of prior review contracts, promptly after the Bank’s “no objection� is issued. Procurement plan format shall include information on actual dates (of “no objections� and award) and will be monitored for cases of delay which will be looked at on a case-by-case basis to identify the reasons. The CYA will maintain up-to- date procurement records available to the Bank staff and auditors. (i) Monitoring of payment vs. physical progress: Monitoring reports prepared for the Bank will be customized to include a form to monitor physical progress compared to payment installments to avoid upfront-loaded payments. (j) Timeliness of payments: Payment to contractors, suppliers and consultants will be monitored through semi-annual IFRs to ensure timely payments. The CYA will maintain a system/database to ensure payments to the suppliers and contractors are paid without delay according to the conditions of the contract. Table 1: Summary of Procurement Risk Assessment Rating Rating Risk Mitigation Before After CYA staff lack capacity to High Qualified procurement consultant will provide on- Substantial undertake the proposed the-job training to CYA staff and to bid 46 procurement work under the evaluation committee members. Consultant will project, particularly regarding provide assistance in the preparation of bidding international procurement or Bank documents, bid evaluation reports and contract procurement guidelines. agreements. Training in procurement under Bank guidelines will also be provided by Bank staff during the project launch workshop. Bid evaluation committee members High Consultant will provide assistance in the Substantial are not familiar with international preparation of bidding documents, bid evaluation procurement procedures, and may reports and contract agreements. The risk may obstruct or delay the procurement continue to be high as some of the evaluation process, especially the evaluation committee members may not agree with the of bids and proposals. consultant assessment. Lack of awareness of procurement Medium Carry out public awareness programs using Low opportunities available in the various media, such as newspapers, brochures, project for goods and services. radio, TV, project website, etc. 28. Frequency of Procurement Supervision: Initially, procurement supervision will include prior review of contracts and procurement implementation support missions (part of project supervision missions) once every six months. Once the capacity of the implementing agency is strengthened, frequency of procurement supervision missions and prior review thresholds may be revised. 29. Post Review: All the contracts not subject to prior review will be post reviewed. There will be a number of shopping contracts. 30. Prior Review Thresholds: Prior review thresholds will be set up in the project procurement plan and will be generally based on the following requirements:  All contract awarded through ICB Goods (>US$500,000).  All consulting contracts for firms >$100,000 and contracts with individual consultants estimated to cost US$50,000 equivalent or more.  All direct contracts, single-source contract and amendments are subject to the Bank’s prior review. Table 2: Thresholds for Procurement Methods and Bank’s Prior Review Contract Value Expenditure Contracts Subject to Prior Threshold Procurement Method Category Review (US$) Goods >= 500,000 ICB All ICB contracts <500,000 NCB First 2 NCB contracts <100,000 SH First contract NA DC All DC contracts Consultant QCBS/QBS/LCS/FBS  >=$100,000 for firms Services CQS  All SSS (including  All TORs training) NA SSS 47 NA IC  >=$50,000 for individuals  All SSS  All TORs Notes: a/ Shortlist may be composed entirely of national consultants for assignments of less than US$300,000 equivalent per contract. b/ As appropriate, these methods may be adopted for assignments costing less than 300,000. ICB – International Competitive Bidding NCB – National Competitive Bidding SH – Shopping DC – Direct Contracting QCBS – Quality and Cost Based Selection QBS – Quality Based Selection LCS – Least Cost Selection FBS – Fixed Budget Selection CQS – Selection Based on Consultants’ Qualifications up to $300,000 depending on the nature of assignment. SSS – Single Source Selection IC – Individual Consultants Environmental and Social (including safeguards) 31. The activities to be financed by the project are not likely to have adverse social impacts. The financing of subgrants to host organizations and groups of young people considered under Component 1: Community-Based Service Learning and Life Skills Development do not include construction of infrastructure or other activities that would require land acquisition that could generate adverse impacts. The project does not trigger environmental safeguards as it will only finance subproject grants, subsistence stipends, and technical assistance, thus the project will be assigned an Environmental Screening Category of “C�. Monitoring & Evaluation 32. The CYA of the MOES was established in August 2012 and the proposed project will be the first under its supervision. Therefore, the CYA will be primarily responsible for project monitoring and evaluation while the World Bank team will be responsible for the impact evaluation. 33. A simple project information management system will be developed by the CYA, based on the results indicators specified in Annex 1. The CYA will be responsible for verifying the data through periodic technical and field supervision. Although the information management system will be project specific, monitoring activities under the project are expected to enhance the capacity of the CYA to monitor other investments in youth programming. 34. The progress and achievement of the Project Development Objectives will be monitored and evaluated through three types of activities: (i) regular monitoring including through the Feedback and Resolution Mechanism, (ii) mid-term review, and (iii) an impact evaluation. 35. Regular monitoring includes information gathered through the Feedback and Resolution Mechanism, and will assess the extent to which the proposed project activities are being implemented as planned and examine progress on their direct outputs. With input from the 48 Coordinating Agency, the CYA will submit quarterly project implementation progress reports to the Bank. 36. A Mid-Term Review (MTR) will be conducted no later than 24 months after project effectiveness and will focus on (i) assessing early results of project implementation, (ii) identifying any need for project design modification, including of target indicators, and (iii) agreeing on the next steps for the remainder of project implementation. A midterm report in the format agreed between the Bank and the MOES will be submitted to the Bank prior to the MTR. 37. The impact evaluation will be designed and implemented by the World Bank team. The impact evaluation will assess the final development impact in order to integrate achievements and lessons learned into the development of future youth programming investments. A separate Bank-executed trust fund, with its own funding source, will be set up to finance the design and implementation of the evaluation. A control group will serve as the counter-factual to compare the effects of the host organization and youth initiative approaches. To incentivize the youth in the control group to maintain contact, they will receive cell phone credit each time they avail themselves to an enumerator. 38. The cost of data collection and monitoring will be covered by the incremental operating costs of the CYA and the Coordinating Agency. The cost the impact evaluation will be covered by a separate Bank-executed trust fund, with its own funding source. 49 Annex 4: Operational Risk Assessment Framework (ORAF) KAZAKHSTAN: Youth Corps Project Risks 1. Project Stakeholder Risks 1.1 Stakeholder Risk Rating Moderate Risk Description: Risk Management: Preparation included a stakeholder assessment with widespread consultations with the public at large, including focus Given the innovative approach of groups with young people, NGOs, bilateral and multilateral donor partners, and government officials. In addition, the project, there may be a lack of quantitative and qualitative data analysis has been conducted to understand the youth characteristics and their understanding and knowledge of the vulnerabilities. The quantitative data analysis was conducted with HBS and Labor Force Survey data. The qualitative benefits of the program for possible data were collected in rural, peri-urban, and urban settings and include gender-disaggregated focus groups and beneficiaries, host organizations, individual life stories of young people with disabilities. Project design reflects findings from the quantitative and and within communities. As a qualitative analysis. result, there may be limited demand for the youth participants initially Resp: Bank Status: Completed Stage: Preparation Recurrent: Due 01-Jul- Frequency: resulting in low participation rates. Date: 2013 Also, there may not be sufficient Risk Management: numbers of NGOs/organizations with the capacity to participate in An Information and Communication Campaign will be developed and launched as soon as the project is effective in such a program. order to continue to raise awareness and dialogue with stakeholders. The ICC will be reviewed and updated on an annual basis. Resp: Client Status: Not Yet Stage: Implementation Recurrent: Due Frequency: Yearly Due Date: Risk Management: A Feedback and Resolution Mechanism will be developed and launched as soon as the project is effective in order to continue to gather feedback from stakeholders. The FRM will be reviewed and updated on an annual basis. Resp: Client Status: Not Yet Stage: Implementation Recurrent: Due Frequency: Yearly Due Date: 2. Operating Environment Risks 50 2.1 Sector and Multi-Sector Rating Moderate Risk Description: Risk Management: Insufficient coordination with other Thorough research was conducted to better understand the youth focused programs that are offered by the GOK, government agencies, donors, and major in particular the Ministry of Labor and Social Protection and programs related to the Employment 2020. NGOs addressing youth issues and/or Furthermore, the team consulted a number of bilateral and multilateral institutions and NGOs to become familiar youth related projects in the country may with their programs. Synergies were built where possible, and overlaps or conflicts avoided during preparation. pose the risk that the project During implementation, the MOES will need to continue to seek alignment with youth focused programs interventions are not well aligned with facilitated by other government agencies, donors, and major NGOs. existing programs. Resp: Bank Status: Not Yet Stage: Both Recurrent: Due Frequency: Yearly Due Date: 3. Implementing Agency (IA) Risks (including Fiduciary Risks) 3.1 Capacity Rating Substantial Risk Description: Risk Management: An institutional capacity assessment of the Committee on Youth Affairs of the Ministry of Education and Science was There may not be existing capacity carried out during preparation to determine areas that require strengthening, in particular the fiduciary and technical in the Committee on Youth Affairs capacity. of the Ministry of Education and Science to implement and monitor Resp: Bank Status: Completed Stage: Preparation Recurrent: Due 01-Jul- Frequency: the Project. Further, there is no Date: 2013 familiarity with World Bank Risk Management: processes and procedures. A Project Management Unit within the CYA will be set up to implement the Project and, throughout implementation, it is expected to transfer capacity through training and knowledge exchange to the CYA to ensure longer term sustainability of the youth programs in Kazakhstan. The staffing of the PMU will be reviewed annually. Resp: Client Status: Not Yet Stage: Implementation Recurrent: Due Frequency: Yearly Due Date: 4. Project Risks 4.1 Design Rating Moderate Risk Description: Risk Management: The approaches taken in the project Sufficient knowledge of the project and the concept of community-based service learning would be built amongst are innovative and especially in policy makers and the public during preparation and implementation through a rigorous preparation process and strong harder to reach areas, there may be ICC activities. During preparation, rigorous quantitative and qualitative data analysis was conducted to understand lack of familiarity with the concept youth characteristics and vulnerabilities. 51 of community-based service Resp: Bank Status: Not Yet Stage: Both Recurrent: Due 28-Feb- Frequency: learning or life skills development Due Date: 2018 targeting young people. Therefore, there is a risk of lack of participation due to the innovative and hence unfamiliarity with the Project. 4.2 Social and Environmental Rating Moderate Risk Description: Risk Management: The targeting of vulnerable and An in-depth social analysis, based on rigorous quantitative and qualitative data, was conducted during project marginalized groups needs to be preparation. In addition, the Feedback and Resolution Mechanism will regularly gather feedback from participants and conducted in a way as to not worsen stakeholders. Project implementation agencies and organizations will be trained to be sensitive to the social impacts of their vulnerabilities. No the project. environmental are foreseen. Resp: Both Status: Not Yet Stage: Both Recurrent: Due Frequency: Due Date: 4.3 Program and Donor Rating Low Risk Description: Risk Management: The Swiss Government is the only Abundant consultations between Bank, the Government of Switzerland as well as the GoK have been held to ensure a donor of the Trust Fund. Potential common understanding about objectives and scope of the project. During preparation, a meeting was held in April risks associated with the Donor 2013 to ensure that Government of Switzerland understands and is supportive of the project design. Consultations and include delays because of lengthy or sharing of documents will continue during project implementation. numerous consultations with Swiss Resp: Bank Status: In Stage: Both Recurrent: Due Frequency: Yearly counterparts. Progress Date: 4.4 Delivery Monitoring and Rating Moderate Sustainability Risk Description: Risk Management: M&E capacity is likely to be low. M&E is an integral part of the Project, and funded under it. The Bank team is also expected to provide strong Also, since the project is financed preparation and implementation support in this area. In terms of sustainability, good practice frameworks will be by a grant, the program's financial developed (ICC and FRM, for example) that can be easily adopted by the GOK after project closure. The knowledge sustainability after project closure is built through the impact evaluation will also contribute towards the improvement of future youth programs. not guaranteed. Resp: Client Status: Not Yet Stage: Implementation Recurrent: Due 28-Feb- Frequency: Due Date: 2018 52 5. Overall Risk Overall Preparation Risk: Moderate Overall Implementation Risk: Moderate Risk Description: Risk Description: The overall risk rating for this Project is moderate. While the Project's approach is The overall risk rating for this Project is moderate. While the new to the Kazakh context, the benefits of such a program are not controversial and in- Project's approach is new to the Kazakh context, it is a program that depth assessments were conducted during preparation phase, including focus groups benefits youth and enjoys adequate GOK support and linkages to and quantitative and qualitative data analysis on a range of stakeholders. The general other government-run programs. Project preparation, which sense is that young people and NGOs would welcome a project that is focused on included a thorough implementation assessment and focus groups community-based service learning, especially in areas where government services with stakeholders, is expected to minimize implementation risks. usually do not reach. 53 Annex 5: Implementation Support Plan KAZAKHSTAN: Youth Corps Project Strategy and Approach for Implementation Support 1. The Bank is well placed to provide implementation support based on its global experience with youth focused programs, especially in skills development. The following Implementation Support Plan (ISP) has been designed to meet the requirements of the project, both in terms of implementation support and fiduciary, social and environmental safeguards. In addition, this ISP takes into consideration the risks identified in the ORAF (Annex 4). The ISP will be reviewed at least once a year to ensure that it continues to meet the implementation support needs of the project. 2. As noted in the project description section, the impact evaluation will be designed and implemented by the World Bank team. Implementation Support Plan Time Focus Skills Needed Resource Estimate Partner (per year) Role Overall experience in project Bank TTL (10 SW) All management, including Economist (8 SW) implementation procurement and financial aspects — Youth Specialist (8 SW) management. mainly related ICC Specialist (2 SW) to community- Strong technical expertise in FM specialist (2 SW) based service positive youth development First 12 learning and life Procurement specialist programming. months skills (1 SW) development, Strong technical expertise in social Youth M&E and impact engagement of targeting, with country expertise. evaluation specialist (4 vulnerable youth, and SW) Strong technical expertise in Social development M&E M&E, especially impact specialist with country evaluation. expertise (3 SW) Overall experience in project Bank TTL (10 SW) management, including Economist (8 SW) procurement and financial management. Youth Specialist (8 SW) ICC Specialist (2 SW) Strong technical expertise in 12-48 FM specialist (2 SW) positive youth development months programming. Procurement specialist (1 SW) Strong technical expertise in social Youth M&E and impact targeting, with country expertise. evaluation specialist (4 SW) Strong technical expertise in Social development 54 M&E, especially impact specialist with country evaluation. expertise (3 SW) Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments TTL 8 SW annually Field trips as required Based at HQ Economist 8SW annually Field trips as required Based at HQ Youth specialist 8 SW annually Field trips as required Based in Kazakhstan ICC specialist 2 SW annually Field trips as required Based at HQ FM specialist 2 SW annually 1 trip annually Based in Kazakhstan Procurement 1 SW annually 1 trip annually Based in Kazakhstan specialist Youth M&E and impact evaluation 4 SW annually Field trips as required Based at HQ specialist Social development specialist with 3 SW annually 1 trip annually Based in Kazakhstan country expertise 55 Annex 6: Economic and Financial Analysis 1. The rationale for the World Bank investment to enhance community engagement and life skills of young people in Kazakhstan is threefold. First, international evidence demonstrate that investment in youth life skills development and community engagement promotion has positive effects not only on youth, but also on the economic and institutional development of the communities where the target young people live. Secondly, such interventions complement the existing youth policies and programming and provide specific focus on disadvantaged youth in the Republic of Kazakhstan. Finally, the program reflects on lessons learned from similar projects in different projects and offers innovative approach to youth issues in Kazakhstan. In addition, the World Bank is uniquely positioned to link the project with a network of different development programs at various levels to maximize the impact on disadvantaged youth. 2. The analysis in Annexes 6 and 7 below was conducted using three official sets of data, detailed below, to elaborate statistics regarding the social and economic status of young people.  The main source for the construction of indicators is the Kazakhstan Household Budget Survey (HBS) 2009. This is a household survey conducted by the Kazakhstan Statistical Office on a quarterly basis and representative at the regional (oblast) level to provide information about households’ living standards, including consumption and income, and poverty. Poverty is defined according to international standards, as per capita consumption below 2.5 US$ per day in purchasing power parity (PPP) to Kazakhstan prices. The survey contains also information on household members’ demographic characteristics, education, employment status, and main language spoken in the household.  The Labor Force Survey 2009 was used for data on employment/unemployment and labor force participation, but has the limitation of not providing information on wages, incomes or consumption. The LFS has been used in the economic analysis to compute education rates of youth in the labor force and sector of employed youth.  In addition, we relied on the National Population Census 2012 to show demographic data of the youth population by region. Expected Development Impact Greater community engagement and participation of young people at the community level 3. Increased engagement in community and application of one’s skills is an integral aspect of the positive transition to adulthood. As documented in the World Bank World Development Report 2007 “Development and the Next Generation,� increased community engagement and initiative has been found to enhance the skills of young people. In addition, it also reduces antisocial and destructive behavior. 56 4. Evaluations of youth programs demonstrate their positive impact on skills development, labor market outcomes and norms change. A longitudinal study9 of the AmeriCorps Program found positive impact years after the program completion on life and job-related skills, individual values, and community engagement. In Macedonia, a World Bank project created the so-called Babylon Youth Centers (BYC), where young people participated in life skills training as a part of non-formal education format. An analysis of that program showed that the 19 year olds who had spent more than two years in the BYCs were 16% more likely to be employed than 18 year-olds, with only one year or less of exposure to BYCs programming. The project also had a positive effect on youth behavior and improved their awareness about healthy lifestyles (which included positive changes in behavior in respect to smoking, drug abuse, alcohol and unsafe sex). 5. Youth projects also have positive impacts on youth civic engagement. The AmeriCorps program, for example, had strong indicators of (i) youth’s connection to community, (ii) knowledge about problems facing their community, (iii) participation in community-based activities, (iv) choosing careers in public service, and (v) personal growth through service. In Macedonia, the project also had a significant impact on young people’s participation in their communities. Additional analysis showed that youth programs encouraged active citizenship, public services and management of public goods, such as water supply, sanitation, forests, roads, schools, and health clinics (Stern, 2005; Besley, 2004; Jimenez, 1999; Narayan, 1995; Venkatraman, 1998). Development of non-cognitive skills 6. A growing body of empirical literature finds evidence of the high relevance of non- cognitive skills (NCS) for positive youth development outcomes, and their complementarity with investments in formal education10. In particular, the development of non-cognitive skills has been found to impact future learning, labor market performance and the reduction in risky or criminal behaviors. Disadvantaged youth may particularly benefit from such programs. 7. NCS have an important impact on cognitive learning through traits, such as motivation and self-discipline, which are correlated with enhanced effort and achievement in test scores (Decke and Heimson, 2006). Carneiro et al. (2006) show how low levels of social skills matter more than cognitive skills on the probability of remaining in school at age 16. Using a longitudinal youth survey from the United States, Heckman, Sixtrud and Urzua (2006), estimate that an increase in the non-cognitive test scores from the 25th to the 75th percentile of the distribution has the same impact on college graduation chances than increasing cognitive skills from the 25th to the 75th percentile. 8. In addition, a number of studies document the importance of these skills for labor market outcomes, and even in reducing the gaps attributed to differences in cognitive ability. One of the explanations may lay in the fact that employers place much value on non-cognitive skills, and “many employers rely on tools to assess these skill sets for hiring, promoting, and wage setting (Farkas, 1996; Jenkins, 2001; Psacharopoulos and Schlotter, 2009)�11. 9 Corporation for National and Community Service, Office of Research and Policy Development, 2007. 10 Brunello and Schlotter (2011) offer a recent review of the literature, whose key findings are reported here. 11 Sanchez and Valerio (2010) 57 9. The study conducted by Heckman, Sixtrud and Urzua (2006) found that in the United States moving from the lowest quartile to the highest quartile of the distribution of non-cognitive skills such as self-esteem and locus of control at age 15-21 was associated with about 10 percent higher earnings at age 30 for males and more than 30 percent for females. In terms of employment probability, such an increase in non-cognitive skills was associated with 15 and 40 percent increases in employment, respectively. Perhaps even more telling was the fact that the labor effect of moving up in the distribution of non-cognitive skills was found to be equal to the one associated with a similar shift in the distribution of cognitive ability. Positive associations between higher NCS at young age and better labor market outcomes later in life were also documented in Germany, UK and Sweden12. Lindquist and Westman (2010) showed that non- cognitive skills and level of education were particularly important to explain average earnings among workers at the lower end of the wage distribution. 10. The evidence from middle and low-income countries are limited. Results from a household survey, measuring non cognitive skills in Peru, point at positive returns of non- cognitive skills in terms of earnings (Arias et al. 2010). Specifically, an increase of one standard deviation of socio-emotional characteristics has an impact of between 5% and 9% on earnings, depending on the characteristic measured. Literature on effective interventions to improve NCS remains scarce. At the same time, there is a consensus among researchers that development of life skills is an important component of successful youth employment interventions (Betcherman at al. 2004 for a review). Greater cost-effectiveness of youth programs 11. The Youth Corps project includes two main components: life skills education and mentoring, and active community engagement. An anticipated impact includes (i) an increase in positive behavior, (ii) accumulation of life skills as a way to improve the country’s human capital, and (iii) greater awareness of healthy lifestyles. 12. The effects of the life skills education, as a self-standing intervention outside school, are more difficult to identify. One exception is an ongoing analysis of the second round of the Juventud Empleo program in the Dominican Republic, in which the skill-building component treated some of the participants with life skills and some with vocational training. Preliminary results indicated that while participants of the vocational training did not show improved outcomes compared to the control group, the life skills training yielded positive results in terms of employment probability13. 13. Mentoring programs offer another extra-curriculum approach to development of youth life skills. Evidence of such programs with a greater focus on at-risk young people in the United States, such as Big Brother Big Sister and Philadelphia Sponsor a Scholar, demonstrated that beneficiaries stayed in school longer and there was a notable decline in their aggressive or risky behavior, including drug abuse (see table 1 for more information). 12 Carneiro, Crawford and Goodman (2007) for Britain, Heineck and Anger (2010) for Germany. 13 This was also corroborated by a qualitative assessment of the program (Fazio, 2012) 58 Table 1: Estimated cost and benefits of mentoring programs Program name and Impact (treatment group reductions Duration Cost description compared to control) Big Brother Big Sister Grade point average +3.0% (mentoring) Lying to parent - 36.6% 18 500- Skipped school day -52% months+ 14 1500$ # Times hit someone - 31% Initiating drug use - 45% Sponsor A Scholar 2.9 (100 10th grade GPA HS + (mentoring) point scale) freshma 1485$ % attending college (1st 32.8% n year year after HS) STEP Short-run 2 (employment, academic Gains in test scores improveme summer N/A remediation and life skills) nt s Quantum opportunity Graduating from HS or +26% (counseling, educational Enrolled GED in 4 year +15% 10600 4 years services, tutoring, financial Employed college full time +13% $ incentives to participate) Receiving welfare -22% Note: Reproduced from Cunha (2008) 14. There is a number of government funded school-based and public youth programs in Kazakhstan (Cadap, 2012). These programs, however, tend to be limited in their geographical coverage or targeting. Not all regions benefit from these programs and some youth, particularly most vulnerable, are excluded. In addition, some of the projects are organized ad-hoc. The Youth Corps project can complement the existing initiatives and reach out to the most disadvantaged youth population. The design of the project also offers an opportunity to pilot innovative methods and address sensitive but essential subjects for youth healthy development, such as safe sex and family planning. Based on the evidence of the prevalence of risky behaviors among youth in Kazakhstan (see youth profiling section), it is important to consider including a component on healthy lifestyles (see table 2 for more information estimated benefits of health focus in youth programming). 14 Results are shown at 18 months from inception. 59 Table 2: Estimated cost and benefits of programs healthy lifestyles Benefits Benefits Program name Description (per Costs minus Youth) costs Community-wide intervention Project Northland designed to reduce adolescent $1,575 $152 $1,423 alcohol use. School Intervention to prevent and Life Skills Training reduce the use of tobacco, alcohol $746 $29 $717 (LST) and marijuana. Teen Outreach Prevent teenage pregnancy and $801 $620 $181 Program dropping out of school Group or individual intensive Multidimensional treatment for adolescents with Treatment Foster chronic antisocial behavior, $32,087 $843 $31,243 Care (MTFC) emotional disturbance, and delinquency. Note: Reproduced from Washington State Institute for Public Policy Rationale for public intervention 15. The government expenditure for labor market programs over the period 2009 to 2011 fell from 0.32% of GDP in 2009 to 0.13% of GDP. Some of these initiatives also target youth (see box 1)15. These services require beneficiaries to be registered as unemployed. An analysis of these programs suggests that some programs target educated, but unemployed university or vocational college graduates in urban areas (for example, Youth Internship program)16. Many of these initiatives are carried out through national efforts such as the National University Student Networks or NGOs (see box 2). 15 The most prominent is the implementation of the Employment 2020 Strategy, with 57.6 billion tenge (approximately US$370 million) allocated in 2012 to its programs. The program relies on 204 employment centers around the country and on an information system to collect data on vacancies and labor supply. The main interventions include vocational training, labor intermediation, rural infrastructure works, assisted rural urban migration, and promotion of self-employment (especially in rural areas). In 2012 a total of 104,000 people participated in at least one of the activities, and 59 percent were youth. The Youth Internship program was initiated by the MOES and the Ministry of Labor and Social Protection (MOLSP) and aims to provide graduates with first- hand experience in the workplace, as well as relevant training. In the past three years, approximately 50,000 college and university graduates have been employed through the program. In 2011, youth internships were implemented within the framework of Business Road Map 2020 and regional development programs which included more than 16,000 young people. In order to increase the return of skilled youth to rural areas, the MOES jointly with the Ministry of Agriculture has been implementing the With Diploma to Village program, which aims to support employment of technical and vocational education (TVE) and higher education graduates in rural areas through the provision of housing and other incentives. More than 5,000 youth have participated in the program since 2009 and were deployed to work in rural areas, mostly in teaching, health, and socially oriented professions. Although youth with low or basic skills are able to access means-tested subsidies to enter vocational education, most youth employment programs except for public works target higher educated young people. 16 As the latter have important tuition fees, even graduates from vocational schools cannot be considered necessarily disadvantaged. 60 16. Young people with general secondary education or lower can access professional training courses, event-oriented initiatives and public works. These initiatives consist of the mobilization of young people during specific national sporting or cultural event, during the voting period, or devoted to caretaking or embellishment of public urban spaces. The Youth Corps project can provide a more balanced approach and open more opportunities to youth with fewer opportunities. World Bank’s contributions 17. The World Bank’s experience of working on education and youth issues positions its well to draw on the rich experience and lessons learned from different regions and contribute to project design and implementation with strong considerations of the country’s unique context. 61 Box 1: Main Active Labor Market Programs in Kazakhstan as part of the Employment 2020 Strategy Social jobs - can be organized in any firm regardless of its ownership. These jobs are for professionally experienced people and apart from increasing employment rate, they aim to help people in sustaining their existing skills and improving them further "on the job". Jobs are partially subsidized by the government up to 12 month (gradually decreasing from 50% of the wage but not more than KZT 26 000 per month to 15% of the wage but not more than KZT 7 800). By termination of the contract, the employer can offer a permanent position. Public works - do not require professional skills (nor preparatory training) and are beneficial for a society. One of the advantages is related to the opportunity to organize it as a part-time job with flexible work hours. Examples: safeguard of territory, houses; cleaning; care for elderly, patients and children; help with paperwork and conducting surveys; etc. Youth internship - can be organized in any firm regardless of its ownership and has to meet the profession of a graduate. Eligible participants: graduates of TVE and higher education organizations who are under 29 years. Internship is fully subsidized by the government up to 6 months, in the amount of KZT 29 500 (FYI: it will be recalculated and increased in the next years). By termination of internship employer can offer a permanent position, but otherwise provides feedback and formal document, verifying the completion of internship. Professional training and retraining - Provided to (i) unemployed, in case no job can be found due to the lack of necessary professional qualifications, (ii) employed individuals, and those who take care of children under 7, from low-income families; (iii) part-time workers. Qualifications are chosen in accordance with the market demand and provided by pre-defined list of institutions and training centers. Labor Market Programs Expenditures and Beneficiaries 2010-2012 Expenditure KZT million 2012 Expenditure US$M Beneficiaries Program Title (nominal) per beneficiary 2010 2011 2012 2012 2010 2011 2012 TNG US$ Prof. training, retraining and 8114 13342 16047 104 56,191 31,491 28,024 572,616 $ 3,694 advanced training Public Works 4335 4755 5496 35 100,277 104,515 104,511 52,588 $ 339 Social Jobs 3682 2312 4202 27 46,561 32,700 38,710 108,551 $ 700 Youth Internship 3378 642 3345 22 42,040 22,836 24,918 134,236 $ 866 Unemployment benefit 833 899 868 6 16,451 17,395 14,350 60,486 $ 390 Source: World Bank SPEED Database based on data from MOLSI (2013) 62 Box 2: Youth programs on civic engagement and non-work-related activities A number of youth initiatives related to civic engagement and other non-employment related programs have had a big support in Kazakhstan. They cover a wide variety of topics and focus both at a local and national level. Civic Engagement Programs - these programs have served local communities by increasing awareness of volunteerism and capacity for local stakeholders. The projects aim at both increasing youth civic participation and developing their capacity to be able to contribute to public policy. The activities cover a broad range of different topics such as: open days and environmental cleaning up activities (UNV support); youth training on volunteerism, community mobilization, human rights and gender equality (Youth for Motherland); training, public awareness campaigns and legal assistance to victims or potential victims of human trafficking (European Commission); and creating conditions for exchange of ideas by promoting greater use of technologies in youth initiatives (Soros Foundation). Environment Program - a number of programs focused on capacity building and information campaign in environmental issues have taken place in recent years. Some examples of these were: aiming at enabling communities and institutions to better prepare to mitigate and respond to disasters (UNICEF, MoES); familiarizing with nature safely by plantation of over 29 million trees over the country (MoES). Healthy Lifestyle - programs that promote a safer and healthier lifestyle have included activities such as conducting primary prevention in educational institutions and hospitals (EC); or providing sexual and reproductive health information, education and counseling for HIV in deprived communities (UNICEF). Non-work related Programs in Kazakhstan Implementing Program Agency Theme Year Target Group Objectives Ministry of 2007- Plant trees over the Zhasyl El Education and Environment Students present country. Science Graduates and Development of rural Ministry of With Diploma to 2009- young areas through support of Education and Employment Village present professionals in graduates that move to Science social sector rural areas. Increase capacity for rural Strengthening NGO Delegation of Civic 2010- Rural dwellers, NGO workers making Capacities for European Engagement 2012 including youth their work more effective Sustainable Civil Commission and sustainable. UNV Support To Greater awareness of Kazakhstan Caspian Civic 1998- Local volunteerism and Regional UNDP, UNV Engagement 2002 Communities international UNVs under Development difficult conditions. Program 63 Annex 7: Profile of Young People in Kazakhstan The right time to invest in young people in Kazakhstan 1. According to the 2012 Census, 26% of the inhabitants of the Republic of Kazakhstan are young people between the ages of 14 and 29, or a total of 4.5 million people17. Young people constitute the largest age group in Kazakhstan (see Figure 1). The positive demographic growth presents a significant human capital capacity and carries important opportunities for immediate and long-term economic growth. Figure 1: Age-Gender Population Pyramid in Kazakhstan Source: Kazakhstan in figures (2012). Agency on Statistics of the Republic of Kazakhstan Regional distribution of young people 2. In absolute terms, South Kazakhstan dominates as the region with the highest stock of young people (more than 730,000 in 2012), followed by the Almaty oblast and Almaty city (with 503,000 and 429,000 youth, respectively). The highest concentration of rural youth is in South Kazakhstan, Almaty oblast and Jambyl. Almaty and Astana cities host more young people relative to the population, at about 30%. In the oblasts, the highest concentration of youth is in Aktobe, Mangistau and South Kazakhstan (see figure 2). 17 Youth population is defined as people between 15 and 29 years of age. Source: LFS 2009 64 Figure 2: Geographical Distribution of Youth Population in Rural and Urban Areas 800,000 35 29.1 29.6 30.6 700,000 27.5 28.1 27.1 26.4 28.0 30 26.2 25.1 26.1 600,000 24.1 24.2 24.2 24.9 22.2 25 500,000 Youth Population Urban 20 400,000 Share 15 300,000 10 200,000 Rural 100,000 5 0 0 Share of young people in total population (second axis) Note: Youth population is defined as people between 14 and 29 years of age. Source: Census Population Estimates for 2012. 3. The republic of Kazakhstan is also highly heterogeneous in its ethnic composition (see Box 2). The population of the country has always been very mobile and migration trends have shaped its current composition. The net results of international and domestic population mobility are visible in relative changes in the stocks of young people per region, which appear much more volatile than the average youth population growth rate (-1%) in the same time span (2010-2012) (see figure 2). Figure 3: Percentage Change in Regional Youth Population over 2010-2012 10% Urban change Rural change 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% Note: Youth population is defined as people between 14 and 29 years of age. Source: Census Population Estimates for 2012. 65 4. It is important to note that most regions experience a rapid reduction in their young rural population suggesting an increased rural-to-urban migration. There are important trends in the gender composition of youth influxes in the cities. In particular, Astana city and Almaty city experienced a sharp growth in the number of young women. Over three years the share of young women in Astana increased by 8%, and that of young men by 2.5%. Unlike other regions, South Kazakhstan and Mangistau experienced important influxes of young people in their rural areas, leading to an increase of the rural youth population by 3% and 8% respectively. On the other hand, regions in the North and in the East of the country have the highest outflows of youth. Box 2: Ethnic Distribution in Kazakhstan Regions Kazakhstan is a multi-ethnic country with only 63.1% of the population consisting on Kazakhs according to 2009 census data. Despite the emigration of Russian and Russian speaking groups over the last two decades, ethnic Russian still present a large share of the population (23.7%). Kazakh youth have a prevailing share in Astana and Almaty cities as well as the northern and eastern regions. The share of Russian youth is pronounced in the western regions and Almaty oblast. The region of Akmola shows the most ethnic diversity among youth population. Youth Ethnic Distribution by Oblast Russians Other Kazakhs Almaty city 96.2 1.8 Astana city 92.5 5.7 East Kazakhstan 90.8 6.1 North… 82.8 11.7 Pavlodar 77.5 18.7 South… 74.3 16.5 Mangystau 74.0 9.6 Kyzylorda 73.9 4.3 Kostanay 70.7 14.3 Karagandy 67.7 20.1 Jambyl 63.1 24.9 West Kazakhstan 61.5 35.1 Atyrau 52.1 36.2 Almaty 51.7 36.1 Aktobe 50.9 33.8 Akmola 40.8 42.3 0 10 20 30 40 50 60 70 80 90 100 Note: Youth Population includes people between the ages of 14 and 28. Source: National Population Census of The Republic of Kazakhstan 2009 5. According to HBS 2009 data, around 7% of the youth population changed residence in a year and this share sharply decreases for those in the 25-29 age category (Table 1). The main reason 66 to move is education, whereas the employment factor doesn’t count for much18. The fact that the labor mobility is low implies a reduced capacity of the youth population to seize labor market opportunities. Table 1: Yearly Youth Residential Mobility Reason for changing residence Didn't hospital, prison, Age move work married study military moved to another residence 15-19 91.0 0.6 1.2 5.9 0.8 0.6 20-24 92.8 1.3 1.0 2.6 0.8 1.5 25-29 97.4 0.6 0.6 0.0 0.0 1.4 Note: Statistics constructed based on the reason of changes in the household composition during the quarterly interview. Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Life transitions 6. Young people in Kazakhstan make a rather quick transition into adulthood by international standards (see figure 5). By the age of 20 and 21, more than 50% of young men and women have joined the labor force respectively. The transition to marriage happens considerably later, after the age of 27 for men and 25 for women, with an exception of some ethnic groups such as Uzbek (See Table 2). There are also some regional variations in the marriage patterns (see figure 6). Figure 4: Transition to Adulthood 18 These values could be underestimated because it only captures household’s members mobility but not if the entire household were not followed up in the surveys rounds because it moves to another residence. 67 Note: Youth population is defined as people between 15 and 29 years of age. Source: LFS 2009 Table 2: Marriage rates among Young People, by sex, age group and ethnicity 18-24 25-29 18-29 Rural Urban Rural Urban Rural Urban Male Kazakh 7% 11% 34% 50% 18% 26% Russian 9% 10% 37% 47% 19% 25% Ukrainian 3% 10% 23% 52% 10% 27% Uzbek 8% 5% 43% 51% 20% 23% Other 8% 13% 38% 39% 21% 24% Women Kazakh 20% 21% 60% 58% 35% 35% Russian 22% 20% 53% 54% 35% 34% Ukrainian 21% 22% 63% 55% 40% 38% Uzbek 30% 21% 65% 55% 42% 34% Other 24% 21% 54% 54% 36% 33% Note: The nationality of the household head is used to approximate the ethnicity of household members. Youth population is defined as people between 15 and 29 years of age Source: LFS 2009 Figure 5: Regional Distribution of Youth Marriage Rates Mangystau 29.0 Atyrau 27.9 Pavlodar 24.1 Astana city 23.8 Aktobe 23.3 West Kaz 23.1 South Kaz 21.0 Kostanay 19.9 Jambyl 18.8 Karaganda 18.5 East Kaz 18.5 Kyzylorda 18.2 North Kaz 17.2 Almaty 15.9 Akmola 15.7 Almaty city 15.3 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 7. Youth in Kazakhstan are also likely to make a relatively quick transition from school to work (see figure 7). Overall, the data indicates that the share of young people Neither in Education nor in Employment or Training (“NEET�19 hereafter) is rather small, and only starts increasing around the age of 21 for young women, and around 23 for young men. Most of the out of school and out of work are unmarried. The share of unmarried and jobless youth varies considerably by gender and education. Low educated individuals (especially those who did not complete secondary education) are very unlikely to be out of work or out of marriage. On the other hand, 19 We are unable to identify the young people in training so the NEET rates presented in this paper could be slightly over-estimated to the extent that some jobless people are following full time training courses outside education. 68 some of the highest rates of incomplete transitions are seen among women with (i) vocational training in rural areas, and secondary and (ii) tertiary education in urban areas. Figure 6: Work Status by Gender Male Female 100% 100% 90% 90% 80% 80% In school 70% 70% 60% In school 60% 50% 50% Employed 40% 40% Employed 30% 30% 20% 20% 10% 10% 0% 0% 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Note: Youth population is defined as people between 15 and 29 years of age. Source: LFS 2009 Skills 8. Secondary education is compulsory in Kazakhstan. Only 6% of young people out of school did not complete secondary education. There are variations of non-completion of secondary education by region and place of residence. In the northern parts of the country and in the major cities that host many educational institutions, the rate of education is higher (see figure 8), while the bulk of low skilled youth out of school (those with no secondary education) lives in rural areas. Figure 7: Educational Attainment of Youth out of education by region 69 100 90 TERTIARY 80 70 60 VOCATIONAL 50 40 30 GENERAL SECONDARY 20 10 16 13 12 11 9 7 7 - 6 5 5 3 3 2 1 1 1 6 PRE- SECONDARY Note: Youth population is defined as people between 15 and 29 years of age. Source: LFS 2009 9. With more than 90% of young people completing secondary education there is no visible gender gap in education attainment. In fact, in urban areas the share of women with tertiary degrees is higher than that of men (figure 9). Figure 8: Educational Attainment of Youth out of education by Area and Gender Note: Youth population is defined as people between 15 and 29 years of age.Source: LFS 2009 10. There is clearly a rural/urban gap in term of education attainment for the youth population out of school. Urban young people are better educated than young rural residents. However, there are no such differences in household income (Figure 10). Overall, there is a low inequality in educational attainment across income groups and the youth population in the bottom quintile 70 of the income distribution presents similar outcomes to the second and middle quintile, both in the rural and the urban areas. Figure 9: Educational Attainment of Youth out of education by Income Quintile and Area 100 90 80 70 60 50 College 40 30 20 Secondary 10 0 Primary or None rural urban rural urban rural urban rural urban rural urban I II III IV V Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 11. In terms of ethnic groups, the educational attainment varies slightly. Some minorities like the Ukrainians or the Tatars have lower education levels both in rural and urban areas. The two main ethnic groups, the Kazaks and the Russians have similar levels of education. Figure 10: Educational Attainment of Youth out of education by Ethnicity and Area 71 100 University 90 80 College 70 60 50 Secondary 40 30 20 10 Primary or None 0 rural urban rural urban rural urban rural urban rural urban rural urban rural urban rural urban Kazakh Russian Ukrainian Uzbek Tatar Uigur German Other Note: The nationality of the household head is used to approximate the ethnicity of household members. Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009. 12. Besides this quantitative evidence on education achievement, there is evidence that young people in Kazakhstan are underperforming in terms of skills quality and relevance with respect to labor market. Out of all ECA countries, in 2008 Kazakhstan was only second to Belarus in terms of firms’ complaints about the lack of sufficiently skilled workforce. This fact is likely to constitute a binding constraint for future growth and economic diversification. Figure 11: Lack of skilled Workforce 72 Source: Enterprise Surveys Project 2008 13. The recent analysis of the PISA test scores conducted by the World Bank showed positive effects of Kazakhstan’s strive to ensure universal secondary education. It pointed, however, to the need to enhance the quality of education. Overall, inequality of opportunity was found to be below the average of European countries. However, in terms of learning outcomes Kazakhstan schools could do significantly better given the level of economic development in the country. Kazakhstan young people scored on average 32 points in PISA–which is equivalent to ¾ years of schooling- below what could be expected given their GDP per capita. Figure 12: Kazakhstan PISA Scores in comparison with selected OECD countries 570 550 530 510 490 Reading 470 450 Math Science 430 410 390 370 350 OECD Russia Serbia Brazil Indonesia Albania Kazakhstan Peru average Note: Countries sorted on the reading score. Source: OECD PISA. 73 14. Although the average performance tends to be better in urban areas, the quality of education provided is similar across geographic areas. This means that the difference in results between rural and urban areas is mainly explained by disparities in endowments, such as socio-economic status or mother tongue, rather than the location of students and schools. In particular rural and Kazakh speaking students, as well as female students, tend to score consistently lower, regardless of their economic conditions. 15. The quality of skill is also reflected in the low levels of computer literacy among young people. The lack of computer skills can pose additional challenges in securing jobs. The computer literacy rate for Kazakhstan in 2009 was below 45% and presents a wide regional disparity. Figure 13: Youth Level of Computer Literacy by region 100 90 Owning an e-mail and Internet 80 Owning a set of text editing 70 60 50 40 30 20 10 0 Note: Youth population is defined as people between 14 and 28 years of age. Source: National population Census of the Republic of Kazakhstan 2009. Youth labor market disadvantage Joblessness 16. Overall, young people in Kazakhstan enjoy a favorable situation in the labor market by regional standards, with low and decreasing unemployment rates, and a reduction in the inter- regional unemployment gap over time. 74 Figure 14: Youth Unemployment Rates (2001-2011) by region 35.0 Republic of Kazakhstan Akmolinskaya 30.0 Aktubinskaya Almatinskaya 25.0 Atyrauskaya West Kazakhstan Zhambylskaya 20.0 Karagandinskaya Kostanaiskaya 15.0 Kyzylordinskaya Mangistauskaya 10.0 South Kazakhstan Pavlodarskaya North Kazakhstan 5.0 East Kazakhstan Astana city 0.0 Almaty city 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Note: Youth unemployment is defined for people between 15 and 24 years of age Source: Agency of statistics of the Republic of Kazakhstan. Official Statistics. 17. Education plays an important role in the success of the young people in the labor market as shown in Figure 16. Figure 15: Education Attainment and Labor Status for Youth out of education Employed Inactive Unemployed Tertiary or more 79.7 5.8 24-29 Secondary 77.7 7.9 Primary 66.2 14.5 Tertiary or more 80.6 9.2 20-24 Secondary 77.4 11.2 Primary 68.8 12.4 Secondary 72.2 11.8 15-19 Primary 67.7 15.2 0 20 40 60 80 100 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009. 18. Despite not being counted as unemployed, the numbers discouraged workers give a wider picture of the labor market situation. A discouraged worker is a person in the working-age that has given up looking for employment for reasons such as perception of discrimination or lack of demand. The HBS data shows that when asked about a reason for not looking for a job, discouragement is cited most often, followed by the lack of information about job search strategies and tools. Those young people that expressed desire to work but are discouraged or 75 have other reasons for not looking for a job are, ultimately, unutilized supply of labor and a symptom of inadequate labor absorption. Table 3: Reasons for not looking for a job despite desire to work Don't know where Other Age category Discouraged and how to find a reasons job 15-19 0.0 100.0 0.0 20-24 5.5 66.9 27.6 25-29 34.1 51.7 14.2 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009. Employment quality and earnings 19. While employment rates are high, there is an important heterogeneity in employment quality among young people. About a third of young people work in agriculture. The data from national statistics on average wages suggest that agricultural employment remains overall associated with low productivity employment. More striking is the fact that only 15% of youth in agriculture did not complete secondary education (either general or vocational). Contrary to many other countries, the rural workforce in Kazakhstan cannot be considered unskilled and could be potentially mobilized and interested in service learning if offered some compensation. Figure 16: Characteristics of the Employed Youth Note: Youth population is defined as people between 15 and 29 years of age. Source: LFS 2009 20. A second indicator of employment quality relates to earnings, in particular, the share of young people with low incomes20 determined in relation to the established minimum wage. Table 4 shows that the proportion of the working youth with incomes below the established minimum wage shows a decreasing pattern along age groups, consistent with the unequal work-related income distribution. 20 Income from labor is computed as the monthly equivalent of reported quarterly earnings from salary, income from entrepreneur activities and income received from the sale of agriculture products. 76 Table 4: Share of Employed young people with Incomes below Minimum Wage and Average Income Amount % Below Average work- Age Gender minimum related incomes wage (tenges per month) 15-19 Men 17.0 22724.8 Women 19.1 21510.1 20-24 Men 8.1 33530.2 Women 10.2 28638.5 25-29 Men 5.4 42337.6 Women 8.2 33295.7 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 21. Despite the fact that in Kazakhstan the national monthly minimum wage is set at a relatively low rate (for year 2009 was 13,717 Tenge), about 17% of young men aged 15-19 earned less than the minimum wage. This share decreases to 8.1% for the 20-24 cohort and to 5.4% for the upper cohort. Importantly, there is a sizable wage gap between young women and young men, in favor of young men. 22. Understanding wage dynamics for young people is a particularly relevant issue to allow appropriate setting of the subsistence stipend for young volunteers in the Youth Corps program. 23. Table 5 shows that there is wide variation in monthly earnings for young people. Youth aged 20-24 who live in a household from the top consumption quintile exhibit monthly earnings that are nearly two times higher than that of young workers in a household in the bottom consumption quintile. Table 5: Income Distribution by Age Cohort and Gender Average Work-related Income per Household Consumption Age Gender Quintile I II III IV V 15-19 Women 17013.5 22109.0 22422.4 23823.7 23816.9 Men 18945.7 21064.8 25121.0 22895.8 28478.1 20-24 Women 21821.2 24468.7 28417.1 30104.1 35729.0 Men 26106.5 30518.6 31073.2 34856.0 44053.1 Women 21482.5 26833.2 29478.8 35514.4 48004.6 25-29 Men 30061.6 35415.5 40231.6 45943.2 57287.0 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 24. In addition, the data shows how the distribution of earnings tends to be constant across educational groups of young people. It is important to acknowledge the limitation in the current data, as we cannot account for worked hours21. However, these figures can suggest an 21 Thus, people with lower education are probably in need to work more time than people with higher education in order to achieve the same income. 77 appropriate subsistence stipend, to target the low-earners across education levels. These are shown in table 6 (Panel B), which updates the 2009 earnings in 2012 wage prices22. Table 6: Youth Monthly Income in 2009 and 2012 prices Panel A: 2009 prices Panel B: 2012 prices Education First Second Third First Second Third Area Level quartile quartile quartile quartile quartile quartile (25%) (median) (75%) (25%) (median) (75%) Rural Primary 11744.5 22781.7 33469.7 16912 32806 48169 Secondary 13212.5 22544.7 32090.4 19026 32464 46210 College 13585.2 22388.0 32251.6 19563 32239 46442 University 13745.6 23133.2 32221.3 19794 33312 46399 Urban Primary 17388.1 32025.4 43412.0 25039 46117 62513 Secondary 18810.9 32477.8 46201.5 27088 46768 66530 College 19474.3 31929.5 46605.2 28043 45978 67111 University 19996.3 32813.9 47200.3 28795 47252 67968 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Youth labor market disadvantage out of work and working poor youth 25. In the effort to determine what youth may be at greatest disadvantage, this analysis takes into account both the state of young people joblessness23, and the extent to which a young person may be working but still live in poverty. As such, labor market disadvantage is defined as being either in unemployment, inactivity outside full time education, or working below subsistence levels24. Under this definition, about 14.5% of young people in 2009 could be considered at labor market disadvantage (Table 18, Panel A). This rate grows with age, as more youth complete school and face challenges in the labor market. Thus, as many as 24% of young people in the 25- 29 age group and 19% in the 20-24 age group are either unemployed, inactive out of school, or in working poverty. 26. If we restricted the sample to the youth living in rural areas (Panel B), the share of young people with labor market disadvantages increase to 15% pointing to urban-rural disparity. Table 7: Percent of Youth 15-29 in Labor Market Disadvantage (working poor or jobless) Age Panel A: All Areas Panel B: Rural Areas category NEET Working Poor NEET+WP NEET Working Poor NEET+WP 15-19 3.4 0.5 3.9 3.4 0.5 3.9 20-24 17.0 1.9 18.9 18.1 3.0 21.1 25-29 22.1 2.1 24.2 23.7 3.7 27.4 15-29 13.0 1.4 14.4 13.0 2.1 15.1 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 22 Lack of data for 2012 prevents a computation of 2012 earnings, so we are assuming that the growth in mean wages measured by the statistical office, used to adjust wages to 2012, occurred uniformly across education and geographic groups. 23 The literature is now converging on the utility of NEET rates (defined as the share of youth neither in education, employment or training) rather than unemployment rates, as those that describe the state of joblessness among young people. 24 The working poor are working people with consumptions levels lower than US$2.5-a-day. 78 27. There are no significant variations in the proportion of working poor youth by ethnic groups (Table 8). Table 8: Young Working Poor by Ethnicity and Area Ethnicity Area 2.5$ a day 5$ a day Kazakh rural 2.04 20.43 urban 0.73 11.92 Russian rural 2.10 21.68 urban 0.33 9.55 Other rural 2.66 19.77 urban 1.82 12.28 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Regional dimensions of youth disadvantage and targeting for Youth Corps Youth poverty in Kazakhstan 28. The share of young people living in poverty is higher for those living in the rural areas compared to the urban areas, with the exception of Akmola where the opposite is true. Within the rural areas, the regions of Mangistau (10.1%), Aktobe (9.9%), Pavlodar (8.8%) and Karaganda (7.2%) present shares well above the average when extreme poverty is considered (2.5$ a day). When the 5$ a day poverty line is considered, the regions that occupied the first four position are: Mangistau, South Kazakhstan, Atyrau and Pavlodar. In most of the cases, the proportion of poor young people living in urban areas does not exceed 3%. Table 9: Youth Poverty by Region and Area Region Area 2.5$ a day 5$ a day Region Area 2.5$ a day 5$ a day Akmola rural 1.61 42.20 Kyzylorda rural 2.77 47.08 urban 8.57 39.43 urban 2.60 33.46 Aktobe rural 9.84 44.92 Mangistau rural 10.08 79.83 urban 3.28 38.69 urban 1.84 53.99 Almaty rural 6.03 53.14 South Kaz rural 4.88 66.99 urban 2.35 34.71 urban 5.38 42.65 Atyrau rural 5.45 65.76 Pavlodar rural 8.85 60.62 urban 0.00 32.20 urban 1.41 24.29 West Kaz rural 2.76 51.53 North Kaz rural 3.04 34.80 urban 0.00 36.32 urban 0.57 15.43 Jambyl rural 5.56 55.95 East Kaz rural 4.55 43.18 urban 2.99 42.16 urban 2.00 25.77 Karaganda rural 7.16 51.24 Astana city rural urban 1.38 29.65 urban 0.58 22.67 Kostanay rural 5.46 49.13 Almaty city rural urban 0.37 20.52 urban 0.13 12.03 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Regional dimension of youth disadvantage and targeting for youth corps 79 29. The map below represents the share of young people aged 15-29 who are either out of work or working in poverty. This share ranges from 9% in Kostanay, to 18% percent in Pavlodar. Thus, the degree of regional variation is sizable. It is clear, however, that no single regional grouping can easily capture youth disadvantage. For instance, there are six regions with rates of youth labor disadvantage above 15 percent, led by Pavlodar, Aktobe, and Mangistau. Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 30. Considering only rural areas, which the analysis above singled out as having generally worse youth outcomes, the range of disadvantage widens from 7% in Kostanay to 21.8% in Pavlodar, with nine regions exhibiting youth disadvantage rates above 15 percent. Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 80 31. Considering joblessness alone, the NEET rates (youth neither in education, employment or training) fluctuate between 8 and 16%, led by Pavlodar, but nearly equally high in parts of the North East, Center and West of the country. Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Table 10: NEET Distribution by Area Region All Rural Urban Region All Rural Urban Akmola Areas 16.1 13.2 20.0 Kyzylorda Areas 13.5 15.4 10.4 Aktobe 15.8 13.8 17.9 Mangistau 15.1 14.4 16.0 Almaty 11.0 11.3 10.0 South Kaz 13.7 13.5 14.0 Atyrau 12.6 10.5 14.7 Pavlodar 16.7 17.8 16.1 81 West Kaz 13.9 14.4 13.2 North Kaz 12.9 15.9 7.4 Jambyl 13.0 12.1 14.2 East Kaz 13.5 12.8 14.0 Karaganda 16.4 19.3 15.5 Astana city 14.5 14.5 Kostanay 8.3 5.0 12.7 Almaty city 6.3 6.3 Note: Youth population is defined as people between 15 and 29 years of age. Source: HBS 2009 Community participation of young people in Kazakhstan 32. The regularly surveys conducted by the GoK on the youth population 25 provide an initial set of evidence on the extent of young people’s participation and engagement in their communities. 33. Overall, young people appear more concerned about governance and social issues than about the state of the economy. In particular, in 2011 48.7% of young people reported as their top concern corruption and abuse of authority (this number has declined from 55% in 2010). Social concerns followed in second to fourth place: the increase in crime among young people (17.7%) and decrease of cultural level of the society (15.5%), and drug distribution (14.5%). Trailing in the last positions were in order: human rights and freedom abuse (13.4%), religious extremism and transnational terrorism (12%), environment pollution (11.5%), effects of the economic crisis on national economy (9.8%), migration (9.3%), ethnic dissent (8.3%), gap between the rich and the poor (7.1%), authorities’ negligence about youth concerns (6.9%), and AIDS (6.6%). 34. Both the quantitative and the qualitative evidence suggest that a large majority of young people do not feel to be making a contribution in society. About 22% of youth reported to be a member of a public association, and another 27% reports to take part in occasional events. While this level of activity could be potentially interpreted as interest in being engaged, only 9% of young people responded positively to the question “do you participate in the life of Kazakhstani society and in the solution of social problems?�, with about 40% answering negatively and the remainder being unable to answer the question. This echoes the preliminary qualitative findings, in which both young men and young women in rural South Kazakhstan reported that “local young people are not very well perceived by this community�, “they are perceived as idle people practicing petty crimes� or “young people in this community have never had any voice�. 35. 9% of survey respondents who felt that they participate in society, listed the following activities: participation in election events (more than 40%), through their work (30%), through participation in public events (15%) and volunteer clean-ups of the country (15%). Serving the community through cleaning or improving green spaces was also a recurrent answer in qualitative survey, indicating that this may be one of the volunteering activities that are best known to the young. This data suggests prima facie that the opportunities for actively engaging and serving their community remain limited to young people. Qualitative evidence from young people living in rural areas in also indicates that no form of structured and constructive entertainment or sport activities existed in their communities. Most youth meet in bars, at each other’s’ homes, or do not meet much at all. 36. Although more than 80% of young people perceived that their rights as citizens are being guaranteed, there are signs of limited confidence in their security in the future. For instance, 25 National Report “Youth of Kazakhstan - 2011� 82 89.7% of respondents reported that peace and social cohesion are a fundamental value, but 49.2% are not confident that there will be stable interethnic relations in the future. Negative perceptions on interethnic and interreligious relations were particularly high from respondents of South and Western Kazakhstan. 4. Risky behaviors 37. There is sufficient qualitative and quantitative evidence to suggest that young people in Kazakhstan are exposed to risky or lethal behaviors, at the rate higher than international averages. According to the latest available WHO statistics26, Kazakhstan ranks fifth in the world for its rate of deaths due to suicide, at 25 for 100,000 people in 2008. Notably, the suicide rate is five times higher among men than among women. In terms of age group, males between the age of 25 and 34 were those at most risk, with 70 deaths per 100,000. In 2008 alone, more than 1000 young people between the ages of 15-24 died due to suicide in Kazakhstan. 38. Secondly, reducing drug abuse has been recently highlighted by the President as a national priority (Cadap, 2012). Due to the lack of epidemiological studies realistic information on the prevalence of drug abuse in the country is still missing. Official statistics indicate that about 1.08% of the whole population is user of injected drugs. With regards to young people, the most recent large sample study conducted in 2006 on 5000 young people in six regions among youth aged 14-15 found that about 14% were regular smokers, 12% were systematic consumers of alcohol, about 4.5% had used drugs once and about 1.2% were systematic users. Table 11: Number of deaths due to Table 12: Substance abuse in 2006 among suicide in 2008 school children aged 14-15 in six regions27 Age (years) Males Females Total Variable Values 05-14 66 19 85 Systematic smokers (40 times or 14.0% 15-24 657 239 896 more during their lives) 25-34 860 152 1012 Nasval users 2.1% 35-44 656 120 776 People consuming alcohol 45-54 522 97 619 systematically (40 times or more 12.2% 55-64 240 52 292 during their lives) 65-74 143 41 184 People who had used drugs at least 75+ 86 47 133 4.8% All 3241 768 4009 once Source: World Health Organization 2011 Average age on the occasion of first 14.0 years usage of drugs People consuming drugs systematically (40 times or more 1.2% during their lives) People who had consumed marijuana 2.7% during the last 12 months Injecting heroin consumers 0.1% Source: Cadap 2012. 26 http://www.who.int/mental_health/media/kaza.pdf 27 UNDOC Survey conducted on 4992 school children aged 14-15 in Pavlodar, Karaganda, Kostanai, Akmola, Almaty, South Kaz. Source: Cadap 2012. 83 39. Finally, the most recent data indicates that condemnation of criminal activities in Kazakhstan is concentrated on people of the age of 18 and 29, with more than half of the total condemnation occurring in this age-group. The qualitative survey has highlighted that youth who have been out of work for a long time, have limited skills or opportunity to migrate to cities have higher risks to engage in criminal activities. Figure 17: Condemnation of Criminal Activity by age groups 50 45 39.5 40 35 32.5 30 25 20 15 10 4.2 5 1.7 0 14-15 year 16-17 yea 18-29 year 30 year and older Source: Kazakhstan Statistical office 2009 40. Additionally, the qualitative study undertaken as part of the project preparation suggests that young people have also limited access to reproductive health services. According to preliminary findings both young men and young women reported that “most young people practice sex without condoms� and that women have no access to family planning tools. Sexual violence and alcohol abuse were listed as recurrent problems. Defining “Vulnerable Youth� in Kazakhstan 41. Based on the above findings, “vulnerable youth� in Kazakhstan is defined by the combination of youth neither in employment nor in education or training (“NEET�), as well as young people who cannot live above substance level even if employed (“the working poor�). For the latter, data on youth who lived in households with consumption below US$2.5 a day was used, which are standard measurements of extreme poverty. Using this definition, the regions with the highest share of vulnerable youth (considering rural and urban together) are in Pavlodar, Karagandy, Mangystau and Aktobe. It is also clear that some regions show wide disparities between rural and urban areas in terms of youth vulnerability. 42. The traditional identification of youth vulnerability is to focus on those who are unemployed. However, more recent thinking of youth development shows that a more comprehensive approach is appropriate and in fact, crucial to maintain social cohesion. For instance, identifying vulnerable youth in a comprehensive way that includes both NEET and the working poor has been highlighted as a crucial step to address social cohesion issues, for instance in regions such 84 as the Middle East and North Africa28, where joblessness or dire working conditions have shown to be a primary motive for social tensions. 43. In the case of Kazakhstan unemployment is generally low and in fact, compares favorably internationally. Thus youth idleness is better captured by NEET rates rather than unemployment rates because while a region may show low rates of unemployment, it could still show high NEET rates if young people out of work stopped looking for employment because they are discouraged. Other social and poverty indicators were also analyzed. For this reason, the use of comprehensive indicators may shed new light on geographic areas that could otherwise appear well performing, including Aktobe. 44. Secondly, the immediate jobs challenges for Kazakhstan lie more along the quality domain. For example, the Government is concerned about high rates of low productive self-employment, given that 33 percent of those with jobs are self-employed. Thus “underemployment� is a concern, which is better reflected by using working poverty indicators. 45. Finally, Kazakhstan is also facing considerable skills challenges, reflected by the opinions of employers and poor performance on the Programme for International Student Assessment (PISA), which will become a binding constraint for further labor market improvements unless addressed. The lack of quality skills may require additional investments into skills acquisition over the entire lifecycle, from early childhood development to adult education, including for young adults. However, because Kazakhstan also has near-universal secondary completion, secondary education attainment is not a good proxy to measure youth vulnerability (even if in some regions non-completion of secondary education is higher than others). The focus on labor outcomes such as NEET or working in poverty status, rather than on educational attainment, is because in other countries youth tensions have shown to be high and causing political instability precisely because of the unmet high expectations among educated youth. 46. The team also identified regions with the largest number of youth, which are South Kazakhstan and Almaty regions. These two regions also happen to have the highest share of rural youth. South Kazakhstan and Mangystau regions also have the largest change in the rural to urban youth population, or “ruralisation� of youth. If demand for the project interventions are high, the project will likely need to target by geography, and will use the indicators above to make a final decision. References: This section uses information related to the youth population in Kazakhstan from many sources: Labor Force Survey (LFS) 2009 - Household survey carried out quarterly on a nationwide sample basis to provide information on labor market situations and trends. 28 See World Bank (2013): Jobs For Shared Prosperity in the Middle East and North Africa. Chapter 2. World Bank (2007): World Development Report 2007, Development and the Next Generation. 85 Household Budget Survey (HBS) 2009 - Household survey conducted on a quarterly basis and representative at the regional level (oblast) to provide information about household living standards. National Population Census 2009 - Provide demographic, economic and social data of the population in Kazakhstan. 86