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Update No: 257 - (30/05/02)

First protest against the regime
The Kyrgyz republic has had its first serious public display of discontent with the Akayev regime. After being hailed as liberal and reformist by Westerners in the early 1990s, the regime has been cracking down on the opposition of late.
President Akayev had been scheduled to attend a session of parliament on May 16th on of all subjects, political unrest in the country. He may have got wind of trouble ahead. He cancelled his appearance at the last minute for "reasons of health." If only he had known, Julius Caesar could have used the same excuse on the Ides of March, 57 BC.
For there are people out to remove Akayev altogether. And for a number of reasons. A demonstration took place in the parliament square, with clashes with riot police, which broke up the 200-strong crowd. They were calling for charges against parliamentary deputy and opposition leader, Azimbek Beknazarov, to be dropped. He was among the crowd and is charged with an abuse of power when he was a local prosecutor five years ago. His supporters allege that the charges are politically motivated.
The protest was also directed against cession of territory to China negotiated by the regime. Indeed, the ultimate demand was for the resignation of Akayev as president.
Mr Beknazarov was arrested in January, but released in March, when five were killed in an earlier protest dispelled violently by riot police. Riot police immediately ringed the protesters in Bishkek, a comparatively small contingent. They dispersed the crowd without bloodshed this time; but at least 94 were detained, including journalists. They faced a US$15 fine or two weeks in prison.
This relatively mild treatment shows that the regime is not that oppressive as yet, not as much as in Turkmenistan or Uzbekistan for instance, next door.
On May 16th 3,500 people blocked the main Bishkek-Osh highway in solidarity with Mr. Beknazarov; the road was soon made clear, however.
The mid-May demonstration in Bishkek was organised by the Ar-Namys Party led by Abdysapar Bayalinov. An opposition is forming within Kyrgyzstan, while one without, including a former mayor of Bishkek and ex-premier, remains to be reckoned with.

Economy recovers
The economy fares reasonably well, GDP growing at around five per cent annually for the last three years, 5.1% in 2000, 5.3% in 2001 and prospectively 5.6% this year. The outlook is improving although FDI remains modest.

The US come to town
Foreign investor interest may soon pick up, however, as the US presence in the republic mounts. A key player in the Afghan war, Kyrgyzstan has provided the Americans with what looks likely to be their prime air base in Central Asia, only 150km from the Chinese frontier.
It is at Manas near Bishkek and will eventually have 3,000 personnel engaged in surveillance and collation of information, an espionage centre in short, with China as much in its sights as Afghanistan. The US-Kyrgyzstan axis has been born, although 'axis' may not be deemed the appropriate word to any but the Chinese. A massive airfield, it was during the Soviet era, the place pilots from the satellite air-forces and other nations, were trained on the various types of military aircraft being supplied by the USSR.

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ENERGY

US ready to expand investments in Bishkek

US Ambassador to Kyrgyzstan, John O'Keefe, was due to visit the Batken Region in Kyrgyzstan recently. As reported by the Kabar News Agency, the main subject of the meetings between the ambassador and the local authorities would be the attraction of investment to the oil, gas and mining industries for the region. Large deposits of oil, gas, antmony, gold, quartzite, precious stones and rare earth metals were found during the time of the USSR in the region. However, at that time they were not used to the capacity that they should have been. 
Batkenneftegas oil and gas enterprise was set up recently to implement a project to develop them in the region. This year the enterprise is to implement the extraction of oil and gas at Burgondinskiy and Arnakskiy deposits, which used to be rented to Uzbek entrepreneurs. According to the estimation of local experts, the oil reserves add up to two million tonnes and gas reserves add up to 4.5bn cu. m. Besides this, experts estimate that the gold reserves can add up to more than 150 tonnes. Local officials strongly believe that this meeting should play the main role in attracting investment from international and American companies.

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FINANCIAL NEWS

IMF official praises Kyrgyzstan's progress in reducing poverty

International Monetary Fund mission head, Tapio Saavalainen, believes that Kyrgyzstan is making progress in implementing the Poverty Reduction and Growth Facility (PRGF) programme, Interfax News Agency has reported.
The mission head told Kyrgyz Prime Minister Kurmanbek Bakiyev at their meeting that Kyrgyzstan is fulfilling all the terms of the PRGF programmes, including the level of tax collection, the budget deficit ceiling, and the amount of foreign currency reserves and domestic net assets. This enables the mission to raise the issue of providing further financing for the programme at a session of the IMF Executive Board on 27th June.
Saavalainen noted that the fund is expected to sign an additional memorandum on economic policy with Kyrgyzstan that envisages checking the programme's implementation every six months over the next three years, as well as establishing quantitative indicators to control the programme's implementation.
The official said that until 2nd May the IMF mission in Kyrgyzstan will be assessing the prospects for the country's economic growth, inflation and its balance of payments.
Kyrgyzstan joined the IMF in May 1992, and in December 2001 received its first US$14.9m as part of the PRGF loan. The programme envisages a total loan of US$90m and will last through 2004.

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FOREIGN ECONOMIC RELATIONS

Iranian-Kyrgyz ties advance, focus on regional security

Iranian President Mohammad Khatami of Iran met with Kyrgyz President Askar Akayev in Bishkek recently, when they discussed the bilateral relations between the two states as well as regional security issues and reconstruction works in Afghanistan.
Their meeting was sealed with the ratification of a series of cooperation accords such as the declaration on friendship between Iran and Kyrgyzstan. 
In addition, the Kyrgyz and Iranian officials signed an agreement on avoiding double taxation, an agreement on cooperation in the tourism sector, an agreement on the proper use of laws and cooperation of the customs services, and a memorandum of understanding in the fight against illegal drug trafficking.
Addressing journalists, Khatami commented that Iran had made a great contribution in settling the situation in Afghanistan and that the outside forces had been responsible for the disaster in the country. Notably, Khatami observed that there were broad possibilities for cooperation in the Asian region but the region should not become an arena for competition between the great powers.

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