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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: 268 - (25/04/03)

Riots in the south's villages
Kyrgyzstan is a very poor country. Nearly half of the population live below the poverty line, defined as living on US$2 per day. Man cannot live by bread alone; but he does need it all the same. And US$2 buys one a loaf of bread, but not much to put on it in Kyrgyzstan. A truly benighted land.
In the capital, Bishkek, international aid and credit contribute to a flow of finance that keeps people afloat. If not leading to 'trickle down', the funds at least lead to 'trickle about' as well as quite a lot of 'trickle out'.
The people know this state of affairs and are angry with the government. Weekend riots took place in the south of the republic's villages in mid-March, in which 2,000 protesters gathered in the Dzhalal Abad region and 6,000 in an adjacent region's main village. Four protesters died and 61 were hurt, the interior minister, Temirbek Akmataliyev, said on March 18th.
He was speaking on national TV, and said that the protesters were demanding the release of Azimbek Beknazarov, opposition member and parliamentary deputy.

President at bay
The president, Askar Akayev, has long lost any lustre he may once have enjoyed in the eyes of the population. He was unusual among Central Asian republican leaders in not having been the communist boss of the country before independence (also true of Tajik President Rakhmanov, but he was a top communist apparatchik before 1991 all the same).
Akayev traded on this for years, getting the support of Margaret Thatcher and others in the West, who lent money to Kyrgyzstan in huge amounts in the early 1990s. Wisdom took over by mid-decade, and the supply of credit dried up. But all that money, at least theoretically, has to be paid back. It won't be. Akayev, if not his international creditors, knows that.

Post-9:11 ideas
He has hit on a totally new line to become internationally acceptable. Post-9:11 he offered the US a large air base at Manas, only 150km from the China border, but rather further from Afghanistan, the ostensible target of surveillance, which is to be its primary activity. Its personnel are to amount to 3,000.

IMF urges faster economic reforms in Kyrgyzstan
The International Monetary Fund has the view that economic growth in the Kyrgyz Republic should resume at a strong pace this year, but that much remains to be done to improve the nation's prospects. In its recent annual review of the Kyrgyz economy, the international lender said the economy should "grow again in 2002 at about the strong pace of the preceding five years." The state's economy contracted by 0.5 percent in 2002 due to one-time factors after growing by more than five percent in each of the preceding two years. 
The lender praised the authorities for containing inflation, increasing foreign reserves, keeping the exchange rate stable and making inroads into poverty reduction and better income distribution. "Despite the encouraging progress seen in those areas, many challenges remain," the IMF report said. "The level of external debt remains high, more needs to be done to reduce poverty and improve social conditions, and in light of the decline in gold resources, greater diversification of the economy is needed, built on stronger small- and medium-scale enterprises," it added. 
The IMF urged more efforts to stamp out corruption in order to encourage business investment and economic diversification and to instil greater public faith in state institutions. The IMF said it would be crucial to broaden the tax base as part of a broad reform of the tax system, to diversify the export base and eliminate trade barriers. With regard to the country's monetary policy, the fund urged the authorities to "react quickly" to any signs of a resurgence of inflation by tightening monetary conditions through open market operations. The IMF also said that reforming the legal system and strengthening the banking sector would be the key to fostering a good business climate and subsequently attracting foreign investment.

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FOREIGN ECONOMIC RELATIONS

Kyrgyz president hopes CIS will set up free trade zone this year 

Kyrgyz President Askar Akayev has expressed the hope that "we shall succeed in making a breakthrough this year and approving the provision of a free trade zone in the Commonwealth [of Independent States, CIS] at a meeting of heads of CIS states in Yalta [Ukraine] this autumn," ITAR-TASS News Agency has reported. 
Bishkek, the Kyrgyz capital, fully backs all the initiatives by Ukraine and its leader, Leonid Kuchma, aimed at setting up a free trade zone inside the CIS and strengthening other integration processes, Akayev said following the talks with Kuchma in Bishkek. Akayev is confident that "the breakthrough in this area will serve the cause of further strengthening the CIS." 

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FOREIGN INVESTMENT

13 foreign investors eyeing Kyrgyztelecom buy


The state property and investment committee in Kyrgyzstan said 13 telecommunications companies from Turkey, Southeast Asia and Europe are in contention for a 51% stake in the Kyrgyzstan-based telecom provider, Kyrgyztelecom, Interfax News Agency reported. The bid was postponed until June 15th, 2003 from March 31st, 2003. 
"Some contenders did not have enough time for a serious analysis of the documents and the situation the company's in," the committee stated. 
If a telecom company has annual revenue of at least US$100m they are entitled to bid. The government owns 77.84% of Kyrgyztelecom while the Kyrgyz Social Fund owns 12.51% and companies and private shareholders own 9.65%.

Kyrgyzstan welcomes investors by lifting visa barriers for 28 states 

A decree adopted by the Kyrgyz government on 15th April 2003 introduced a simplified visa regime for citizens of 28 states and cancelled the need for them to be registered at the interior affairs directorates, Kyrgyz Deputy Prime Minister Dzhoomart Otorbayev said at a news conference in the house of government of the Kyrgyz Republic, Kabar News Agency has reported. 
According to Otorbayev, the citizens of the 28 states have a right to get entry-exit visas in the republic's representative offices in their countries, as well as in their consulates in Kyrgyzstan. They just need to submit their applications; no invitation or other documents are needed for a stay of up to one month. 
The Interior Affairs Ministry has issued an order cancelling the obligatory registration of citizens of the same 28 states. Otorbayev has also said that consulate services are being set up at all checkpoints at Kyrgyzstan's borders. Apart from that, consulate services will be set up at the airport of Osh, in the towns of Torugart, Irkeshtam and Chaldovar. 
Otorbayev has stressed that this is only a first step toward the simplification of the visa regime. The list of the countries will grow, as more countries with stable economic and political regimes are expected to be added to it. 
The main aim of this is to show the world that Kyrgyzstan adheres to integration into the world economy. Otorbayev said that these measures demonstrate the aspiration of the government to turn Kyrgyzstan into "an investment paradise." 
Kyrgyzstan is the first of the CIS states to introduce such measures. 

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NUCLEAR ENERGY

US-Russian project to help Kyrgyzstan repair nuclear-storage facility 


Kyrgyz Ecology and Emergency Situations Minister, Satybaldy Chyrmashev, announced on 16th April that a joint US-Russian pilot project to renovate a deteriorating uranium-waste storage facility in northern Kyrgyzstan will begin this year, Interfax News Agency has reported. 
According to Chyrmashev, the facility at Kadzhisai holds more than 600,000 tons of radioactive waste and poses a threat to Lake Issyk-Kul. The Russian Atomic Energy Ministry drew up the feasibility study for the project. Chyrmashev said that Kyrgyzstan would welcome the participation of Russian experts in the restoration of all 30 domestic radioactive-waste facilities because of their experience in restoring Soviet-built storage facilities. The U.S. contribution to the pilot project will be primarily financial, while Kyrgyz and Russian personnel will do most of the work, Chyrmashev said. 

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TRANSPORT

Taraz-Talaz-Suusamyr road restoration project on the cards


A US$9.15m deal has been signed by the Kyrgyz government and the Islamic Development Bank for the restoration of the Taraz-Talaz-Suusamyr road, Interfax News Agency quoted a source in the state foreign investment committee as saying recently. 
The project was given the green light by the IDB board three years ago. The credit would be used to finance a feasibility study of the project. The road is the only surface transport joining Talas region in northwestern Kyrgyzstan with other areas of the country and Kazakstan; which is why it is so important. The project is to cost about US$53m and will be divided into various stages. The renovation of the Taraz-Talas-Suusamyr road will help expand traffic between the central regions and Talas region, and with the border regions of Kazakstan.

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