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kyrgyzstan

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  KYRGYZSTAN

REPUBLICAN REFERENCE

Area (sq.km)
198,500

Population
4,476,400

Principal
ethnic groups

Kyrgyz 52.4%
Russians 21.5%
Uzbeks 12.9%

Capital
Bishkek

Currency
Kyrgyz Som

President
Askar Akayev

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Background:
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: 254

The Kyrgyz are fortunate. They have a common enemy with the US - or rather their enemies, while not identical, are in cahoots. The Islamic Movement of Uzbekistan (IMU) has been targeting Kyrgyzstan for years. It was declared a terrorist organisation back in September 2000 by the Clinton Administration due to its links with bin Laden and al-Qaeda, engaging in drug trafficking, kidnapping and the murder of civilians. On June 24th 2001 IMU made incursions into southern Kyrgyzstan, taking advantage of the period when snow had melted in the high passes of the Pamirs.
Then on September 11th we all know what happened. The US launched its war into Afghanistan, targeting al-Qaeda and the Taliban, the allies of IMU. But the Americans want to eliminate the 3,000-strong IMU as well. For this they need military cooperation with Kyrgyzstan. From that it was but another step to conceive the idea of a permanent military base to monitor Afghan territory.
The Kyrgyz are now agreeing to the US setting up a huge complex at Manas, with a three-mile square security zone. It will be an air and surveillance base, permitting intelligence - gathering about the whole region - and China. Indeed, it will be a key link in the ring of bases that the US now has encircling China , from Japan, South Korea and Taiwan to Pakistan and now Uzbekistan. Some 300 miles from the Chinese border, this is clearly the main function envisaged for it. The operation against IMU will be a sideshow.
However, that does not mean that IMU is not a serious threat. It is for the Central Asian states it is targeting; for those surrounding or in the Fergana Valley, have plenty of dire poverty, the very conditions that breed fanaticism. But the Kyrgyz are nomads in origin and nomads do not make god fanatics.
The threat of IMU is, nevertheless, a real one and in a sense a godsend for the regime. It can justify unusually tight security measures. 
A massive show of force took place on the outskirts of the capital, Bishkek, in early February with combined US - Kyrgyz forces in a Partnership for Peace Programme. A French military contingent of 400 troops, with SIK Mirage 2000 fighters also came to town, later in the month. The French aircraft will be using Kyrgyzstan to monitor Afghan territory.
This sort of international presence with prestigious US and French forces deployed adds enormously to the legitimacy of the regime. Kyrgyzstan is at last being put on the map, so the population can feel.
That is some compensation for the poor living conditions that still prevail. But, more importantly, there is the expectation that US and general Western involvements in reviving the economy will now grow. Indeed it certainly will.
The World Bank, the IMF and other international agencies have already extended huge sums of credit without much visible effect apart from certain infrastructure projects. What Kyrgyzstan needs is foreign investment and that is what it is hoping for. Inconsistencies in laws and administrative norms remain an obstacle, says the head of the presidential office for attracting foreign investments, Kasymbek Mambetov.
The law on foreign investment, which will be revised as the present one has become obsolete, fails to correspond to modern economic realities. Kyrgyzstan's market is small, therefore, "fast and large investment is unlikely," he noted. However, sectors such as hydroelectric facilities, tourism, food processing, mining and transportation are likely "to attract foreign investors."

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AGRICULTURE

Kyrgyzstan boosts grain output


Kyrgyzstan increased gross grain production by 16.3 per cent over 2000, to 1,825,000 tonnes, Minister of Agriculture, Water Resources and Processing Industry, Aleksandr Kostyuk, said at a government session in Bishkek on 30th January, Interfax News Agency has reported.
In particular, the gross production of wheat grew by 14.6 per cent to 1.19m tonnes and corn by 30.9 per cent to 442,800 tonnes.
The gross production of raw cotton increased by 11.7 per cent to 98,200 tonnes, potatoes by 11.7 per cent to 1,168,000 tonnes and oil-yielding crops by 10.3 per cent to 58,800 tonnes.

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ENERGY

Kyrgyzstan offers to sell China electricity


Kyrgyzstan would like to export electricity to China, Andrey Iordan, an adviser to the prime minister, told Interfax News Agency on 14th February.
Prime Minister Kurmanbek Bakiyev has 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 areas, Iordan said.
Numerous investors have expressed a readiness to invest in the delivery of energy to China, he said.
One of the projects calls for the construction of a 190-km, 220-kV power line. Others call for increasing the output of the Naryn hydraulic power stations to 15bn-20bn kilowatt-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 investment appeal boosted by US presence


The United States' military presence, as well as that of their allies in the anti-terrorist coalition has helped to boost Kyrgyzstan's investment attractiveness, a Kyrgyz official noted recently. Kasymbek Mambetov, head of the presidential office for attracting foreign investment, explained that the Kyrgyz government's priority is to secure direct foreign investment, adding that inconsistencies in laws and administrative norms represent an obstacle to investment, New Europe reported recently. 
The law on foreign investment, which will be revised as the present one has become obsolete, fails to correspond to modern economic realities. Kyrgyzstan's market is small, therefore, "fast and large investment is unlikely," he noted. However, sectors such as hydroelectric facilities, tourism, food processing, mining and transportation are likely "to attract foreign investors."

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FOREIGN LOANS & AID

Kyrgyzstan can't manage 2002 debt repayments


Kyrgyzstan is due to pay off US$103.7m in foreign debt this year, the republic's finance minister, Bolot Abildayev, said at a cabinet meeting on 14th February, ITAR-TASS News Agency has reported.
According to the minister, it is the largest sum in years to be paid off in one year: it amounts to nearly one-half of the state budget revenues expected to be received in 2002.
According to the Finance Ministry, it is already clear that the republic will not be able to pay off all of its debts within this year.
Its budget revenue this year is expected to amount to US$243.6m.

UN development programme underway in Kyrgyzstan

Kyrgyzstan is the first CIS country where the UN Development Programme has begun implementing projects to improve the environment in cities. This information was released by Erzhan Murat, head of the UN Development Programme's office in Kyrgyzstan at a briefing in Bishkek in early February.
Kyrgyzstan was selected as the country is pursuing "progressive and sustained development," Mural explained. Called LIFE, the project will help implement national environmental programmes, Interfax News Agency informed. The UN Development Programme will spend some US$400,000 on the LIFE programme from its budget and distribute it among local authorities in the form of grants.
Members of the non-governmental organisation, Association of Kyrgyz Small Towns, said a top priority is to reconstruct uranium storage facilities located near towns.

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