Kazakhstan was the first country in the Asia-Pacific region to be directly affected by the crisis, due to its exposure in the banking sector. After a decade of rapid expansion at 9% real gross domestic product growth per year, the economy plummeted in the second half of 2008, growing only 3.3%. In 2009, GDP is expected to contract by 2%.

The government responded with swift policy actions through a series of crisis mitigation measures. In 2007, an anti-crisis plan was implemented to stabilize the banking sector and revive economic activities in the construction industry, small and medium-sized enterprises, agro-industries, and public works, resulting in job creation. The plan was expanded in late 2008, with support of US$10 billion from the National Fund of the Republic of Kazakhstan, the national oil fund. An employment-generation program, which includes public works, jobs in social institutions, internships and staff retraining, was started in March 2009, and aims to provide 350,000 jobs.

The ADB loan, which is sourced from ADB’s US$3 billion Countercyclical Support Facility (CSF), will provide fiscal stimulus and finance part of the crisis mitigation measures. Under the loan, ADB will also monitor and assess macroeconomic and financial sector performances as well as implementation of the anti-crisis measures during the program period.

"Kazakhstan is a major economy in Central Asia and a delay in its recovery will have adverse domestic and regional effects, in terms of trade and employment of migrant workers, on neighboring countries’ economic prospects," said Jose Antonio Tan III, an Economist at ADB’s Central and West Asia Department.

The CSF, established in June 2009, supports ADB’s developing member countries (DMC) needing to increase fiscal spending to counter the global economic crisis. To be eligible to access the CSF, DMCs must be adversely affected by the global economic crisis, demonstrate sound macroeconomic policies, and have a countercyclical program in place.

ADB last month approved the first CSF loan to the Philippines. The CSF loan will have a five-year repayment term, with a three-year grace period, and will cost around 200 basis points over ADB’s financing cost, pricing that reflects spreads prior to the onset of the global economic crisis.