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Update No: 255

The Kyrgyz took a fateful step in the aftermath of 9:11; they let the Americans in in a big way. They gave them a huge three-mile radius military base at Manas, 150km from the Chinese border, which has an airfield and combat aircraft.
It is becoming the main US surveillance centre and listening post for Central Asia. It forms part of the series of US bases encircling China from Okinawa, to South Korea, to Pakistan. Ostensibly to contain the terrorist threat from Afghanistan, it is really all about checking up on the Chinese, which they know full well. The US Administration says publicly that it will leave Central Asia as soon as the war against terrorism is over. In private officials admit that they are there to stay.
The long-term implications are hard to foresee. Letting in the Americans can decidedly change a society in the end.
The Chinese are well aware why the Kyrgyz are trying to ingratiate themselves with the Americans. For such a small country it is the logical thing to do. There are Kyrgyz living in China. Indeed they have their own separate region, Kyzyl-Sui. Businessmen living there and those in Kyrgyzstan proper are joining forces and forging ties. The Chinese Kyrgyz are intending to buy electricity and coal and in exchange they are selling consumer goods. But the trade is not very developed yet between people who for decades hardly exchanged words, let alone goods.
Domestically the economy is doing well from a low base, GDP growing by 5.3% in 2001.Industrial output went up by 5.4% and agricultural output by 7% in 2001, while the budget is in surplus. But the economy has a long way to go.

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ENERGY

Kyrgyzstan says interested in exporting energy to China

Kyrgyzstan would like to export electricity to China, Andrei Iordan, an advisor to the prime minister, was quoted as saying by Interfax News Agency. Prime Minister, Kurmanbek Bakiyev, sent a letter to the Chinese cabinet inviting it to sign an agreement on this matter, he said.
Talks have shown that Chinese leaders are interested in purchasing electric power in Kyrgyzstan for their country's northern area, Iordan said. Numerous investors have expressed readiness to invest in the delivery of energy to China, he said. One of the projects calls for the construction of a 190 kilometre, 220 kilovolt power line. Others call for increasing the output of the Naryn hydraulic power stations to 15bn-20bn kW hours a year, and attracting a strategic investor to construct the 360 MW Kambar-Ata-2 station at a price of US$215m-220m, Iordan said.

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FOREIGN INVESTMENT

Kyrgyz to top foreign investments in 2002

The Kyrgyz government sees as its top priority in 2002 to bring US$150-200m in foreign direct investments (FDI) to the country's economy, Finance Minister, Balot Abildayev, was quoted as saying at a recent cabinet session. FDI totalled US$73m in 2001 or 83 per cent of the amount the country received in 2000, New Europe has reported. 
The finance minister said that the government plans to improve the legislation needed for the development of the banking sector, as well as take steps aimed at boosting the public's confidence in commercial banks. The government plans to continue restructuring enterprises' debts, as well as rejuvenate the fuel and energy sector by introducing a flexible tariff policy and continuing to modernise the coal industry. Abildayev has said that one of the government's top priorities in 2002 is to reduce poverty and raise wages in the social sphere by 30 per cent. The minister stressed that the country's macroeconomic indicators had significantly improved in 2001 as compared to 2000. Inflation totalled 3.7 per cent against 9.6 per cent in 2000 whilst the nominal salary grew by 16.9 per cent, with the real one increasing 9.3 per cent.

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