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Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 1,632 1,500 1,400 143
GNI per capita
 US $ 290 280 280 179
Ranking is given out of 208 nations - (data from the World Bank)


Area ( 


ethnic groups
Kyrgyz 52.4%
Russians 21.5%
Uzbeks 12.9%


Kyrgyz Som 

Askar Akayev


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: 274 - (27/010/03)

Akayev to stay reported in our last issue that President Askar Akayev was going to refrain from seeking a new term of presidency. Speculation had been fuelled by the recent adoption of a law that gives lifelong privileges to former presidents - including immunity from prosecution. He has spoken to senior lawmaker, Omurbek Tekebayev, about wanting to leave voluntarily. "President Akayev, as he has mentioned a couple of times, told me once again that he will not run for presidency in 2005." This all now looks, however, as if it was a mere ploy to generate popular support for his re-election and to flush out possible rivals.
He addressed the second congress of the Association of Kyrgyz Entrepreneurs in early October and urged the delegates to look beyond the CIS markets for their exports, referring to Kyrgyzstan's five year-membership of the World Trade Organisation as having not been fully followed up. He also stressed the need to make their operations more transparent so as to attract foreign investment.
The congress, with 700 delegates from every region of the country, then nominated him for a new term. He is seen by many as indispensable in the light of his high international standing for over a decade, attested by the approval of his reforms way back in the early1990s by Margaret Thatcher, a real accolade in the former Soviet Union. There is also the vested interest of placemen to consider as in the old Soviet tradition.

Eying membership in the CIS Economic Union
Kyrgyzstan is, nevertheless, keen not to overlook new opportunities within the CIS. It is hardly surprising that the Kyrgyz are looking to broader horizons within the CIS to expand their opportunities abroad, with people who understand their peculiar problems.
Kyrgyz Foreign Minister, Askar Aitmatov, said recently that the country supports the plans of Russia, Belarus, Ukraine and Kazakstan to strengthen economic integration. The former Soviet republic believes in the group's idea of trade and economic cooperation development since the first days of the formation of the four CIS states' new global union, he was quoted as saying.
"Kyrgyzstan is eager to partake in the union's activity," the foreign minister said. "Our viewpoint on the CIS is clear. We have always backed the CIS integration process, especially in the economic sphere. The country supports the formation of free trade area within the CIS and is ready to make concrete steps towards the implementation of this idea, which is important for may countries of the Commonwealth," he added.
Earlier this year, the four leaders underscored their readiness to set up a common economic area. They signed the pact at the CIS summit meeting in Yalta in late September.

Kyrgyzstan now rated poorest in CIS
Kyrgyzstan is a very poor country, as the traveller from the west can hardly fail to notice. According to its own National Statistics Committee, hardly likely to exaggerate the situation, 40% of the population live below the poverty line, while another 14% are considered "extremely poor." 
These figures make the republic the poorest in the CIS, a dubious accolade previously held by Tajikistan. 
"The methods used by our office are based on those of the World Bank," the National Statistical Committee Chairman, Zarylbek Kudabaev, said. The office assesses the cost of basic foodstuffs and non-food products.
In spite of the fact that United Nations and World Bank anti-poverty programmes have emerged in Kyrgyzstan, no changes have surfaced in the percentage of citizens living below the poverty line in the last six years.
"The percentage of the 'extremely poor' people living near starvation with no means of support was 15% in 1997," the report said.
Djalal-Abad Oblast authorities in southern Kyrgyzstan said nearly 45% of the families in the oblast are poor. Of that total, almost 31% are extremely poor.

GDP is on the up
It is very much in this context that one should view broader statistics of economic growth in the country. GDP is growing at an annual rate of 3.4%, if the gold production from the Kumtor mine is left out, which suffered a devastating contraction last year. 
The other extractive industries and the energy sector led the way, growing by 20% and 15% respectively. GDP growth net year is expected to be 4.1%.
There has been $43m of FDI into Kyrgyzstan so far this year, a meagre sum, comparable to earlier years, except when Canadian gold companies were investing in Kumtor. Kyrgyzstan has been considered too remote to interest foreign investors.

New security situation 
The Kyrgyz took a fateful step in the aftermath of n 9:11; they admitted the Americans in a big way. They have rented them a huge three-mile radius military base at Manas, 150km from the Chinese border. It has an enormous airfield and in Soviet days was used to train pilots from across the world to fly Russian civil and military aircraft.
It is becoming the main US surveillance centre and listening post for Central Asia. It forms part of the series of US bases encircling China from Okinawa, to South Korea, to Pakistan. Ostensibly to contain the terrorist threat from Afghanistan, it is really all about checking up on the Chinese, which all parties know full well. The US Administration says publicly that it will leave Central Asia as soon as the war against terrorism is over. In private officials admit that they are there to stay.
The long-term implications are hard to foresee. Letting in the Americans can decidedly change a society in the end.
The Chinese are well aware why the Kyrgyz are trying to ingratiate themselves with the Americans. For such a small country it is the logical thing to do. There are Kyrgyz living in China. Indeed they have their own separate region, Kyzyl-Sui. Businessmen living there and those in Kyryzstan proper are joining forces and forging ties. The Chinese Kyrgyz are intending to buy electricity and coal. They are selling the Kyrgyz in their homeland consumer goods. But the trade is not very developed yet between people who for decades hardly exchanged words, let alone goods.

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Kyrgyzstan to sell food wheat to Ukraine

Kyrgyz Prime Minister, Nikolai Tanaev, recently announced Kyrgyzstan plans to sell 50,000 tonnes of food wheat to Ukraine as the latter has faced trouble with its harvests, Interfax News agency reported. "The wheat will be sold at 5 som per kilogram, (a price) the state antitrust policy agency set for buying grain from the population," Tanaev said. "The grain sold to Ukraine will in no way affect wheat and flour supplies for the Kyrgyz population. Kyrgyzstan will sell grain it accepts from farmers as payment for taxes and electricity." 
The agriculture ministry said Kyrgyzstan will harvest 1.2m tonnes in 2003 and "fully ensure food safety." Grain will not be imported, the premier said.

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Focus on rising ground-water levels in the south

The problem of rising ground-water levels in and around reservoirs in southern Kyrgyzstan continues to play havoc with the health and agriculture of rural people there. Lack of properly maintained drainage systems is cited as the root cause, IRIN News Agency has reported.
"This is the second house I have built here, but the wall falls down again," Haitbai Pazylov, a resident of the Kyzyl-Shark village in the southern province of Osh, told IRIN. "It is swamp now and nothing more. You can have neither garden nor orchard, everything withers on the vine," he said. 
Such testimonies are hardly new. In the neighbouring village of Savay in the Kara-Su District, over the past 15 years between 250 and 260 ha of arable land have become saturated, with some 250 homes rendered uninhabitable. 
Local inhabitants in the area blame the massive nearby Kampyr-Ravat reservoir, which came on line in the early 1980s. "Now water has reached our toes - just dig with a shovel and there will be a puddle," one resident asserted.
According to Momunjan Israilov, the deputy head of the village council, a drainage system was built to deal with the problem, only to close up with silt, allowing the ground waters to rise again. "Nothing helps," he said. 
In the Kara-Su and Uzgen districts of Kyrgyzstan, as well as the neighbouring villages of Kurgan-tepe District across the border in Uzbekistan, estimates of up to 1,000 ha of arable land have been lost, reflective of the cross-border nature of the problem. 
Compounding the issue are reports of increasing health ailments as a result of the problem. 
Kamil Atakhanov, a local physician, confirmed that high humidity in areas of rising ground-water levels could indeed increase the risk of respiratory, vascular and rheumatic diseases. Moreover, diseases like malaria and dysentery were also typical of such places. "Swamps provide an optimal habitat for the propagation of malaria mosquitoes and various bacteria," he told IRIN. Moreover, the traditional diet of local people was also changing as the land was no longer capable of producing what it once did in plenty, he added. 
According to the Ministry of Ecology and Emergency Situations, there has been a noticeable rise in ground-water levels in the area, rendering thousands of once arable land unusable. "The soil structure is worsening," one scientist at the Osh Technical University told IRIN, citing destruction of topsoil, as well as extinction of flora and agricultural crops once found in the area. He estimated upwards of 185 settlements within the affected area were being impacted. 
Biymyrza Toktoraliev, an ecology professor and member of the [Kyrgyz] National Academy of Sciences, maintained that building contractors had failed to properly forecast the implications of constructing such huge artificial reservoirs, as well as the parallel neglect of irrigation norms and drainage systems management.

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EBRD and IFC finance small businesses in Kyrgyzstan

Kyrgyzstan Bank will receive US$3m from the European Bank for Reconstruction and Development (EBRD) and International Finance Corp (IFC) for small business finance in the former Soviet republic under an agreement inked in mid-September, the head of EBRD in Kyrgyzstan said, Interfax News Agency reported. 
The funds stem from a micro and small financing programme, introduced in April last year. They will be used to offer small businesses constant access to bank loans. The two banks, and the US and Swiss governments, provided US$14.8m in loans for the programme earlier. Technical aid is being given by the European Union and USAID. Some US$2.5m, in 1,500 loans, were given by Kyrgyzstan, Ineximbank, Kazkommerts-Kyrgyzstan, and Demir Kyrgyz International Bank to small enterprises in Bishkek and its suburbs, Tokmak, Osh, and Dzhalal-Abad with assistance from EBRD consultants. The project is part of an EBRD programme to develop small business in Central Asia that has provided US$366.4m for 67,000 businessmen. The EBRD has subsidised 19 projects in Kyrgyzstan, with a combined value of €210m in over a decade, including five projects in the public sector and the rest in the private sector. 

France offers to help Kyrgyzstan in fight against drug trafficking

President Jacques Chirac offered to his Kyrgyz counterpart Askar Akayev on 6th October, France's assistance to help his central Asian country fight against drug trafficking and secure its borders, the Elysee [presidential office] has said, AFP News Agency has reported.
Mr Akayev was on a visit to France, the first since 1994, to try and establish economic, political and cultural relations which at the moment are practically non-existent.
Mr Chirac "noted that France is disposed to develop cooperation with Kyrgyzstan in all areas, and to reinforce the programmes developed by the European Union for the fight against drug trafficking and for border security," said the president's office.
"We consider the stability of Central Asia to be crucial," declared the president, who also discussed with Askar Akayev the situations in Afghanistan, Iraq and Iran. 

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