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Area (


ethnic groups

Kyrgyz 52.4%
Russians 21.5%
Uzbeks 12.9%


Kyrgyz Som

Askar Akayev


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A Central Asian country of incredible natural beauty and proud nomadic traditions, Kyrgyzstan was annexed by Russia in 1864; it achieved independence from the Soviet Union in 1991. Current concerns include: privatization of state-owned enterprises, expansion of democracy and political freedoms, inter-ethnic relations, and terrorism.

Update No: 258 - (27/06/02)

The Kyrgyz are hoping to turn the corner sometime soon. Actually they have been reporting GDP growth of over 5% annually for the new decade, coming in at 5.1% in 2000, 5.3% in 2001 and a likely 5% in 2002. There is even a steady, if not spectacular inflow of foreign direct investment (FDI), which was US$100m in 200, 60m in 2001 and a likely 100m this year.

Opening up
Kyrgyzstan has been trying to attract foreign investors for years. President Askar Akayev is keen to see FDI rise. Formerly a scientists, he spent 17 years in Leningrad and became a member of the Soviet Academy of Sciences, with international connections. He has a cosmopolitan mind-set, which earned him several Western friends in the 1990s. They have become somewhat disillusioned with his dictatorial ways subsequently.
But one should not expect too much too soon of a country that has not shed its nomadic past or legacy of communist mores. The burden of the Soviet mind-set cannot be lifted overnight.

New programme
Akayev announced yet another programme to create a better investment climate in a recent conference in Bishkek. Representatives from the US and the EBRD were present, as well as private business people.
The conference is not the first to raise the issues of economic reform in the country, but it is the first after 9:11. That was made a main theme by US Ambassador John O'Keefe and EBRD representative Fernand Pillonel, who also chairs the International Business Council of Bishkek (IBC). There is a new willingness to involve foreigners in economic affairs, Germany being a significant potential player, as well as security matters. The US now have a surveillance base at Manas, 150km from the Chinese border. It will eventually have 3,000 personnel, veritably one of the biggest US foreign spy bases in the world.
Kyrgyzstan may be remote and lacking in resources, although it does have some valuable minerals. It is unlikely to acquire a powerhouse economy such as Kazakstan's next door. But it is on course for a more advanced and eventually it is to be hoped, a prosperous way of life.

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IMF-WB study on Kyrgyz finance system

The joint mission of the International Monetary Fund and World Bank has finished the first stage of work on realisation of a review of the financial sector of the Kyrgyz Republic (FSAP), the Kabar News Agency reported recently. 
The second mission of the programme will arrive in Kyrgyzstan in August 2002, from results of which, a strategy and plan of action on the realisation of reforms in the banking system will be produced. 
The programme is directed at the realisation of the analysis of the financial system development and its role in the economic growth of the republic, rendering of assistance to the government of Kyrgyzstan and the National Bank by studying the financial sector to reveal its advantages, deficiencies and vulnerability to various macroeconomic shocks.

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Kyrgyz President welcomes more investment from China 

At a Chinese-Kyrgyz business meeting, Akayev said that as good neighbours share common interests, so Kyrgyzstan and China have had active political exchanges and favourable growth in trade since the two countries established diplomatic relations ten years ago, the 'People's Daily' reported from Beijing. 
Kyrgyzstan hopes that bilateral trade and economic cooperation will progress further as China is one of the most important trade partners with Kyrgyzstan, he said. 
The two countries share great potential in jointly developing industries like energy, transportation, mining and processing agricultural products, Akayev said, adding that with the development of west China, there will be booming opportunities in tourism. 
China would like to promote cooperation of mutual interests in various fields with Kyrgyz enterprises and create a more favourable environment for bilateral trade, especially cross-border trade, said Yu Xiaosong, president of the China Council for the Promotionof International Trade (CCPIT). 
Chinese customs shows, the bilateral trade volume between China and Kyrgyzstan totalled US$120m last year and reached US$56.33m in the first four months of this year, a year-on-year rise of 17.2 percent. In addition more than 500 Chinese enterprises have so far registered in Kyrgyzstan with a total investment of US$30m.

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Bishkek secures US$30m ADB loan

The Kyrgyz government and Asian Development Bank (ADB) have signed a memorandum on cooperation for 2002-2005 under which the bank will provide up to US$30m, the Kabar News Agency reported. 
The memorandum outlines the lending programme and a draft on technical aid over the three-year period. The lending programme includes financing for education, reforms of the financial sector, a project to develop agriculture in the regions, the southern road corridor (through Uzbekistan, Tajikistan and China), a regional programme of cooperation among customs services, and a regional energy programme. The latter two projects will be launched this year. 
The technical aid programme includes 15 projects worth US$8.2m involving the technical preparations for investment projects and financing for consulting services.

Switzerland helps Kyrgystan with US$5m grant

The Swiss Confederation has announced its decision to allocate US$5m to the Kyrgyz government "free of charge" which will be distributed to finance the CISAC credit programme on the restructuring of the country's energy sector, the Kabar News Agency reported. The corresponding agreement was signed during the proceeding visit of an official Kyrgyz delegation headed by President Askar Akaev, to Switzerland.
The expected aid is the second trans-financing of the programme, the social sector in Kyrgyzstan benefited by US$2.7m. Within the framework of the visit, the exchange of ratification diplomas on bilateral agreement on the avoidance of double taxation, the agreement on technical, financial and humanitarian aid was also considered, Kyrgyz Finance Minister, Bolot Abildaev, disclosed at a press conference in Government House. The final agreement of the visit was a trilateral agreement between Kyrgyzstan, Switzerland and WTO on trade contribution in Central Asian countries in the sum of US$1.5m.
Switzerland is one of the main donors of the republic, rendering its aid on a grant base. The new grant is expected to be received after an ABD experts' review; the experts are currently visiting Bishkek.
Akaev also met his Swiss counterpart, Kaspar Villiger, the statesman of the Swiss parliament, and attended an international board meeting on the organisation of Bishkek Mountain Summit which will be held in the Autumn. It is worth noting that last year the volume trade Switzerland and Kyrgyzstan went up to US$125m against US$37.2m in 2000. Kyrgyzstan exported the goods worth US$124m, and imported only US$1m in goods. Switzerland receives cotton fibre and fertilisers for its agricultural crops.

World Bank grants loans for Bishkek road construction

According to the Bishkek City administration, the World Bank has decided to give Kyrgyzstan 520m soms, which is approximately US$50.8m, for the next two years. Eurasiaweek reported that this money will be used to repair about 30 kilometres of road in Bishkek. 
According to the same reports, the China Road Company of China has been chosen to repair the roads since it had recently won an international tender from amongst 14 other companies.

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