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Update No: 253

The Kyrgyz have taken a fateful step. They have agreed to the US having an airbase, replete with full surveillance equipment and 3,000 personnel, at Manas, which is 250 km from the western border of China. Naturally, the Chinese are none too pleased. They feel that the Americans are encircling them, with bases in Japan, South Korea and Taiwan. They are quite right of course. The anti-terrorist campaign is paying off well for those in the US Administration, such as Defence Secretary Rumsfeld, long committed to a course regarding China as the inevitable next enemy.
The base is being surrounded by a three-mile security zone in the hands of the Americans. Everything points to Kyrgyzstan becoming another outpost of American empire within a few years.
This should have hugely beneficial consequences for the Kyrgyz previously largely ignored by the rest of the world. Once the Americans take over everything begins to change.
The Kyrgyz are being pro-active here. The Kyrgyz government has approved a draft on setting up a National Development Corporation. The Chairman of the State Committee for the Management of State Property, Sadriddin Dzhiyenbekov, told a sitting of the Kyrgyz government that the main purpose of the new organisation was to attract investments. 
Such a decision has been regarded as being very important, especially now when events in Afghanistan might have a negative impact on the investment attractiveness of the country. During the several months of the current year about US$43m of direct investment have been attracted to the country. More was expected, yet the recent events in Afghanistan have formed a negative climate in the wider Central Asia region in terms of the inflow of investors. Experts reckon that if the conflict in Afghanistan is settled quickly, then additional investment opportunities will be opened to Asian countries, including Kyrgyzstan. On the contrary, should the current crisis be protracted crisis, and then the attractiveness of the country will be decreased resulting to an unpredictable outflow of investments. 
Though work is being done in Kyrgyzstan to create a favourable investment climate, Dhiyenbekov thinks that previous system has become outdated. That is why a new approach on attracting foreign investment has been worked out, one which makes it necessary to set up a powerful structure with resources behind it. The charter fund of approximately US$21m of the Kyrgyz National Development Corporation will be formed from illiquid state assets, namely unfinished construction and illiquid packages of shares. The plan is to use the shares as security to attract favourable credits without government guarantees. Moreover, the corporation will assume the task of settling questions related to the registration of enterprises and issuing of licences.

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ENERGY

Southern Kyrgyz oilfields starting production, more investment needed

A few months ago, the press published delighted reports of the discovery of large oilfields in the south of the republic that will enable Kyrgyzstan to become more self-sufficient in the energy sphere in the future, ,Obshchestvennyy Reyting,' Bishkek reported recently. How are things currently going with exploiting these deposits? When will Kyrgyzstan start getting the first oil there? Should we pin any hopes on this? 
The head of the State Geology Agency department of geology and an investment, Vladimir Petrovich Zubkov, said, "We can hope to get oil from the oilfields, moreover oil is already being produced there. But it is too early yet to hope for large industrial exploitation, as mainly prospecting work is being carried out there so far."
Geologists have long been interested in the region: the deposits in the foothills in southern Kyrgyzstan have been studied for almost a century. Now Canada's Codima Petroleum company is prospecting the oilfields near the town of Mayli-Say [in Dzhalal-Abad Region, southwestern Kyrgyzstan]. It was the results of the company's prospecting that gave rise to such a turbulent reaction, when oil horizons were discovered in the first boreholes. As Vladimir Petrovich correctly noted, any new discovery or semi-discovery causes this sort of hullabaloo.
Nonetheless, there is oil there. Moreover, these oilfields are unique, since oil can be extracted at shallow depths, in simple structures, to use lay terms. Unfortunately, the deep oil-bearing horizons in the Fergana valley have not yet been prospected. Kyrgyzstan was unlucky with the division of the territory in the Fergana valley. So unlike their neighbours, Kyrgyzstan got only the edges of the valley and the foothills that are not very favourable for prospecting, and classic oil reservoirs are unlikely to be expected there. To date Codima Petroleum has drilled about seven or eight wells, and test pumping, or so-called well testing, is being carried out. Approximately two tonnes of oil a day is already being extracted, at least from these wells. This is semi-industrial extraction, but not too bad for the conditions. 
There is no information yet on whether oil is being stored in tanks or whether the question of supplying it to the refinery is being tackled yet.
The report added: "For the time being, it would not be a bad idea for the Foreign Investment Coordination Council or some other body - we have lots of them - to get the relevant companies in to form a full survey of these deposits. And also to ensure proper financing for our geologists, so that they are not, like the whole country, dependent upon those who agree to carry out prospecting work. Incidentally, there are a lot of our former compatriots working for the Candian company, Codima Petroleum. We should not allow those who are devoted to their jobs here, despite such negligence by the state, to feel obliged to leave for places where their skills are finally appreciated, as they should be."

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FOREIGN LOANS

China allocates 5m yuan to Kyrgyzstan

A member of the Chinese State Council, chairman of the international committee for natural calamities, Ismail Amat arrived in Kyrgyzstan on a three-day visit. He met the Kyrgyz first deputy prime minister, Nikolay Tanayev, on 16th January, Kyrgyz Television first channel has reported.
As a result of talks on joint projects, China allocated a 5m-yuan grant [to Kyrgyzstan].
Earlier 3m yuan were allocated for strengthening borders, providing the Interior Ministry with special equipment and to refurbish the national opera and ballet theatre. 
The television correspondent reported that the member of the Chinese State Council, the chairman of the international committee for natural calamities, Ismail Amat, had arrived in Kyrgyzstan for the first time...
However, the first deputy prime minister, Nikolay Tanayev, admitted that the [Kyrgyz-Chinese] trade turnover and exports had decreased lately. The trade turnover was almost US$170m in 2000 alone. He said that this shows that it is time to increase mutual supplies.
The construction of a railway line from Kashgar [Kashi in western Chinese Xinjiang Uighur Autonomous Region], through Dzhalal-Abad [southwestern Kyrgyzstan] to Andizhan [eastern Uzbekistan] will promote that. An agreement was reached to build a northern branch of the railway. China is ready to allocate a soft credit for building the railway and send experts for doing a feasibility study.
In its turn, the republic is ready to supply electricity [to western China] using the credit...
A document on allocating a 5m-yuan grant to Kyrgyzstan was signed at the end of the meeting. This is the fourth Chinese grant to be channelled into developing the republic.

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