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KYRGYZSTAN

Books on Kyrgyzstan

REPUBLICAN REFERENCE

Area (sq.km) 
198,500 

Population 
4,892,808

Principal 
ethnic groups
Kyrgyz 52.4%
Russians 21.5%
Uzbeks 12.9%

Capital
Bishkek 

Currency 
Kyrgyz Som 

President 
Askar Akayev

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Update No: 285 - (01/10/04)

Relations with Moscow as vital as those with Washington 
The deployment of Russian and American military bases in Kyrgyzstan does not trigger rivalry but promotes cooperation, particularly in the fight against terrorism, Kyrgyz President Askar Akayev said when presenting his new book "Optimistic about the Future. Thinking about the Foreign Policy and World Order" in Moscow on September 20th. 
"The territory of Kyrgyzstan will never become a scene of rivalry between the two great nations [Russia and the United States], it will be a scene of cooperation," he said.
"There are a lot of myths" about Kyrgyzstan's relations with Russia and the United States, he said. According to these myths, Moscow and Washington want to force each other out of Central Asia with their military presence in Kyrgyzstan, he said. 
Relations with Moscow are "a top priority" of Kyrgyzstan, Akayev said. "For me personally, these relations are the closest to my heart," he said.

Minorities the key to Akayev's power
This is putting an optimistic gloss on things, but it is not all just windy rhetoric. Akayev has been brilliant at cultivating the support of the country's ethnic minorities, particularly the two largest, the Russians and the Uzbeks, who feel welcome under his rule. He knows the republic needs their skills.
As a long-time resident in Leningrad, for seventeen years in fact in Soviet times, he is as natural cosmopolitan.
The ethnic Uzbeks are rooting for him to stand again for the presidency in 2005 when new elections are due, despite the fact that it would be unconstitutional for him to do so for a third term. He is the guarantor of stability, the only one around. He may yet be induced to stand, which would disappoint certain foreign observers, who do not, however, live there.

Economy now successful, the president says
Akayev has said the country has overcome the transition period, he said in an address dealing with preparations for local elections. The reform that has been pursued for the past 13 years has helped the country overcome "an acute systemic crisis," he said. 
"We can say that the transition period is behind us and we have reached a radical and qualitative change in our development," he said. 
Kyrgyzstan has enjoyed steady economic growth over the past years and is increasing its potential in all spheres, Akayev said. "The past several years have seen positive dynamism, which has made it possible to significantly reduce poverty. Real GDP growth has been 4.5% per annum in this time, and in the past eight months it has been 8%. Inflation has been under 5% and provides the opportunity to increase the people's incomes in a rate that gives grounds to expect qualitative improvement of their living standards," the president said. 
"The republic has at last overcome the most difficult phase in its development," Akayev said at the meeting 

Kyrgyzstan aims for annual economic growth of 7-8% 
Kyrgyzstan intends to maintain its annual economic growth of 7-8% for the next few years, Deputy Prime Minister Joomart Otorbayev said at an early September conference in Moscow on the transformation of CIS economies. 
Mining industries, hydropower plants and agriculture will be the main resources for economic growth, he said. "But the main source for medium-term economic growth is small and medium sized businesses," he said. The government wants to enlarge the share of small and medium businesses in its GDP from the current 30-35% to 70-80%, he said. 
The Kyrgyz government is working on a taxation system for small and medium businesses in cooperation with international financial organizations. The system will legalize the businesses, Otorbayev said. 
Direct foreign investments have amounted to 8-10% of GDP since 1996. The annual growth of direct foreign investments reached 30-40% for the past three to four years. Inflation has stood at 2-3% for the past three years. Kyrgyzstan, which has to import all its fuel, is under pressure to strengthen its national currency against the U.S. dollar, the Russian ruble and the Kazakh tenge. 
But the problem is also to be addressed by building hydro-power stations with Russian help, showing how vital is the good relationship with Moscow.

Kyrgyzstan hydro-plant projects to cost US$2 bln - Chubais 
It will cost around US$2 billion to finish building the two Kambar-Ata hydroelectric dams in Kyrgyzstan, Anatoly Chubais, the head of Unified Energy System (UES), Russia's national electricity monopoly, said at a joint press conference with Kyrgyz Prime Minister Nikolai Tanayev. "Preliminary estimates put the cost of completing the plants at around US$2 billion," Chubais said. "This will probably be a combination of credits and investments [by the electricity holding]," Chubais said. 
Chubais and Tanayev signed a memorandum on the construction of the two plants. UES and the Kyrgyz government will draft a cooperation agreement on the project. 
"Today's memorandum turns the Kambar-Ata project into a priority for our company," Chubais said. A full-scale agreement will be signed by November 30," he said. 
Chubais also said UES might bid at a tender for a concession over Kyrgyzstan's Sevelektro power utility. "This project interests UES," he said. "We may be among the bidders," he said. 
The Kyrgyz prime minister said "the parliament is deliberating the concession, an appraisal is being conducted by experts and the World Bank, and I think we will be ready to tender the concession by the end of the year," Tanayev said. He said the concession was not a subject for discussion during Chubais's visit. 
The memorandum states that Kyrgyzstan and UES will draft a feasibility study for the completion of the Kambar-Ata plants on an equal basis. Other parties, too, are eligible to make a financial contribution. 
Work on the two hydro-plants began in 1990, however Kyrgyz officials have said Kyrgyzstan is not in a position to invest in their completion. The government has said it would like Russia to become involved. Kazakhstan, too, has shown an interest. 

ADB to credit Kyrgyzstan in 2004-2006 
The Asian Development Bank (ABD) plans to provide Kyrgyzstan with loans totaling over US$120m in 2004- 2006, Muhammad Tusnim, director of the bank's East and Central Asia department, said at a press conference in early September. 
Tusnim held consultations with representatives from the republic's government on September 4-6, in addition to representatives from a number of ministries and donor organizations to discuss ADB activity. He also studied progress in transport, agricultural and social projects being financed by the bank in the republic. 
The ADB acknowledges that the republic has achieved a lot over the past years and the bank plans to increase soft crediting and aid, Tusnim said. He said that the bank plans to pay out US$32.8m to Kyrgyzstan this year to build the Osh-Sarytash-Irkeshtam highway, joining Kyrgyzstan and China and US$7.5m to develop border customs posts and promote regional trade. 
The bank plans to pay out US$18m in 2005 to develop education and US$22m to develop the financial sector. 
In 2006 the ADB plans to provide US$30m to develop agriculture and US$10m to support professional technical education. 
Tusnim said that the republic is receiving soft credits on very good terms - for 30 years at 1.5% per year with a grace period of eight years

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FOREIGN ECONOMIC COOPERATION

Kyrgyzstan and Japan contemplate cooperation

Kyrgyz President, Askar Akayev, and Japanese Foreign Minister, Yoriko Kawaguchi, discussed prospects for bilateral cooperation and the advancement of regional cooperation in Central Asia at a meeting in Bishkek on August 30th. "Japan attaches great significance to the development of cooperation with Central Asian countries, Kyrgyzstan in particular," Japanese foreign Ministry press secretary, Hatsuhisa Takashima, said, Interfax News Agency reported.
"Japan favours peace in the insecure region bordering Afghanistan and Iraq, which prompts the determination to render assistance to Central Asian states for their more successful development," Takashima said.
"To this end, Japan is planning a number of programmes, one of which includes training and courses. The needs of each particular Central Asian country will be defined in detail later," he added.
Speaking of Kyrgyz-Japanese cooperation, he said: "Japan strives for closer cooperation with Kyrgyzstan and will continue helping it advance various areas of the Kyrgyz economy and promote the operations of Japanese business in Kyrgyzstan." He added, "Japan will be extending its efforts to develop civil society in Central Asia and Kyrgyzstan and the development of democracy." Kyrgyzstan is a leader in the region in economic and democratic reform, he noted.

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TOURISM

Kyrgyzstan to decide on Issyk Lake bank tourist complex

No decision has yet been made with respect to the construction of an 800 hectare tourist complex on the southern bank of the Issyk-Kul Lake, Zhantoroz Kanimetov, chairman of the parliamentary Science, Education and Culture Committee, told Interfax News Agency on September 3rd. 
The Issyk-Kul region administration has negotiated a deal with Chinese businessmen to rent out the land area, but a final decision is to be made by the government and approved by parliament, he said.
The Issuk Kul Ecological and Economic System Law signed by President Askar Akayev in August does not allow possession of recreation areas or tourism infrastructure by foreign organisations or individuals but can be rented out to them for up to 49 years with a clearance with the Kyrgyz government and parliament, Kanimetov said. "Furthermore, Kyrgyz citizens must add up to about 90% of the work force in foreign installations," he said. If the rented area is not used for the agreed purpose, Kyrgyz authorities may cancel agreements with foreign parties, Kanimetov said. The new law will protect the environment and tackle the economic issues of the unique Central Asian area, he said. "We must not allow Issyk-Kul to meet the fate of the Aral Sea," Kanimetov said. According to the Issyk-Kul regional administration, the Beijing-based Zhunkung company has for years been negotiating with Kyrgyz authority the construction of a tourist complex that would include a golf club, nearly 200 cottages, horse riding paths and hunting areas on the bank of the lake. By early reports, the company intends to invest €200m in this project.

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