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kyrgyzstan

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KYRGYZSTAN


 

REPUBLICAN REFERENCE

Area (sq.km) 
198,500 

Population 
4,753,000

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: 267 - (27/03/03)

The Kyrgyz republic is in poor shape and little promising news has come out of it of late. It has endemic poverty and not much chance of making a serious dent on it for a long time.
There was a time ten years ago when its president, Askav Akayev, was the darling of the West. The country became the recipient on a per capita basis of more foreign aid and credits than any other FSU state. This has left it with a debt-servicing problem.

FDI critical
The normal route to modernisation is to attract FDI on a large scale, at least that has become the accepted norm in the post - 1989-91 world. Kyrgyzstan has attracted far less FDI than any other FSU state, even than Tajikistan and Turkmenistan. There are just no great lures, excepting precious metals. The main exception is gold; but that has not turned out so well. The Canadian company, Cameco, found itself losing money last year on a big investment in the Kumtor gold mine due to a natural disaster.
However, there are some signs of renewed interest in the gold sector. Another Canadian company, Basic Gold, is upping its investments in gold exploration 100% this year, while US and Australian companies are showing interest too. Apex Silver intends to return to Kyrgyzstan to explore for silver.

Public disaffection
Even if the Western companies do come in, there is a major problem. Extraction of metals is an affair that has the least trickle-down effects of any economic activity, excepting possibly that of oil and gas. Generally, the closer to the high tech end of the economy, the more FDI can benefit it.
Agriculture can lead to general benefits and FDI can help here when it is forthcoming, but it rarely is. Kyrgyzstan is a poor nomadic society which never was much developed by the Soviets in the old days.
People understand this; and opinion polls show a consistently pessimistic outlook. In a recent one 52% had a negative view of the economy, indeed over 60% in Bishkek, a very dispiriting statistic. Usually the capital city fares better than regions in a country. Not so in Kyrgyzstan.
Some 57% describe their conditions of life as "difficult, but bearable." The political situation is deemed peaceful and favourable by large minorities and as "explosive" by only 6.8%. But basically the Kyrgyz are having a hard time and know it.

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ENERGY

Eurasian economic union official discusses energy in Kyrgyzstan 


Eurasian Economic Union Secretary-General, Grigorii Rapota, met with Kyrgyz Prime Minister, Nikolai Tanaev, on 11th March to discuss possible Russian investment in energy projects in Kyrgyzstan. No concrete decisions were made at the meeting, according to akipress.org. 
Kyrgyzstan has sought foreign assistance in completing the construction of a series of hydroelectric installations on the Naryn River that were begun in the Soviet era, as well as to begin new projects to take advantage of the country's large hydroelectric potential. 

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FOREIGN LOANS

ADB approves TA grant to Bishkek

ADB has approved a US$580,900 technical assistance (TA) grant to strengthen the capacity of the Kyrgyz Republic to manage externally assisted projects, the Asian organisation said in a statement, reports New Europe. "The government needs to improve the quality of implementing such projects," the ADB press release noted.
The size of external assistance will shrink progressively during the next three years to reduce the debt burden. "It can minimise the adverse impact of reduced external assistance on growth and poverty reduction if it improves its implementation of projects and targets poor regions and groups. Line ministries have not yet developed effective procedures and systems for managing and monitoring projects while institutional weaknesses compound the problem." The TA will improve project management and monitoring procedures, develop a management information system for the Ministry of Finance and provide training.

UNDP allocates aid to Kyrgyz Ombudsman's office 

The United Nations Development Programme (UNDP) has allocated about US$140,000 to Kyrgyzstan's Ombudsman office. 
An agreement on the humanitarian project was signed by Jerzy Skuratowicz, UNDP Kyrgyzstan Resident Representative/UN Resident Coordinator, and Tursunbai Bakir-Uulu, Kyrgyz Ombudsman. 
The project will be carried out within nine months. It includes a creation of the special libraries on human rights problems and training of the Ombudsman office's staff in the countries where the Ombudsman institute is acting successfully. 

New World Bank representative affirms further assistance to Kyrgyzstan

New permanent representative of the World Bank to Kyrgyzstan, James Chris Lovelace, arrived in Bishkek and was received by president of the Kyrgyz Republic, Askar Akaev, in the Government House recently, reports New Europe. During the meeting issues on the further development of cooperation between the Kyrgyz Republic and the World Bank were discussed including financial aid, which is important for Kyrgyzstan. These are comprised in the World Bank's Aid Strategy to Kyrgyzstan for 2003-2006. The strategy takes account of the purposes, tasks and priorities in the Comprehensive Development Framework till 2010 and the National Poverty Reduction Strategy for 2003-2005. 
The new permanent representative expressed his opinion that within the next few years his organisation intends to increase the volume of aid to Kyrgyzstan through grant basis in interests of economic growth, human development and poverty reduction.

US$40m for Kyrgyz institution development

The US Congress recently decided to allocate Kyrgyzstan US$40m, Chairman of the Committee for Affairs of Sport and Tourism of the Legislative Assembly of the Jogorku Kenesh (parliament), Aidarbek Kerimkulov, told a press conference at the Kabar agency, reports New Europe. 
According to Kerimkulov, US$40m will be allocated as a credit and technical grant to develop democratic institutions in Kyrgyzstan. A similar amount would be given to Uzbekistan.

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TRANSPORT

China-Kyrgyzstan-Uzbekistan railway

The construction of the China-Kyrgyzstan-Uzbekistan railway is expected to start at the end of 2004 and in the beginning of 2005, KABAR News Agency reported. 
A trilateral commission is preparing an agreement to be signed at a high level by the three states on construction of a transnational railway, Deputy Prime Minister, Minister of Transport and Communication of the Kyrgyz Republic, Kubanychbek Jumaliev, said in an interview with journalists. 
According to his data, the project cost for construction of the Kyrgyz site has decreased from US$1bn to US$950m. 
One of the reasons for this cut in outlay is because of the reduction of the length of the track by 30 km. The railway will be built by setting up a consortium that will include the governments of China, Kyrgyzstan and other companies interested in participating in the project, in particular, Germany, Iran, Asian Development Bank, Jumaliev said. 
The recoupment of the project will be over 14 years. After putting the railroad into operation, Kyrgyzstan becomes the transit country because the republic is located in the centre of Central Asia which will favourably influence its economy. 
Thanks to the project, the road between Beijing and Europe will shorten. It will be possible to save money for freight traffic activity, the Deputy Prime Minister, Minister of Transport and Communication of the Kyrgyz Republic said. 

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