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KYRGYZSTAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 1,737 1,632 1,500 145
         
GNI per capita
 US $ 330 290 280 178
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
198,500 

Population 
5,081,429

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

Capital
Bishkek 

Currency 
Kyrgyz Som 

President 
Askar Akayev



Update No: 298 - (27/10/05)

Uzbek fall-out
Central Asia is in turmoil. A terrible tragedy unfolded in Uzbekistan in May when a massacre occurred in Adjidon in the eastern part of the Ferghana Valley close to Kyrgyzstan. It is no accident that an uprising occurred there right next to the one country in the region to have a revolution, earlier this year, indeed led by politicians from its southern province, Osh, adjoining Uzbekistan. Tashkent put the upheaval down brutally, killing hundreds, while many more fled to the new land of freedom, Kyrgyzstan.
Bishkek was very nervous about giving refuge to Uzbek oppositionists on such an occasion. Uzbekistan is the regional giant after all, however unpleasant its regime. Some refugees were returned across the border to Uzbek police almost immediately. They were said by Kyrgyz officials to be escapee criminals from the jailbreak that released the political prisoners, though how true this is, is not known. The remaining refugees were ferried to Romania by the US shortly afterwards, provoking Tashkent to revoke its lease of a military base to the Americans at Karsi-Khanabad on the Afghan border. 
The Kyrgyz are none too happy at having agreed to lease a similar base, but with full intelligence facilities, to the US at Kant, conveniently placed to monitor developments in North China, not just Afghanistan. They have tentatively asked the Americans to put a date on its termination, but without setting a deadline, unlike the Uzbeks of the end of the year. For there is another giant they do not want to alienate, China.

Condi comes to town
This was all tactfully explained to Condi Rice when she visited Bishkek in mid-October. The US Secretary of State was on a tour of Central Asia that conspicuously omitted Uzbekistan.
She arrived in Kyrgyzstan on 11 October on the first leg of a three-day regional tour that also took her to Kazakhstan, Tajikistan, and Afghanistan. It is significant that Kyrgyzstan was first on the itinerary, the most recent practitioner of democratic revolution in March, and Uzbekistan, that of its suppression in May, was not on the agenda at all.
She held talks with President Kurmanbek Bakiev and Prime Minister Feliks Kulov, the Lenin and Trotsky of the affair as it were. Rice praised Bakiev's role in Kyrgyzstan's Tulip Revolution last March and the country's July presidential poll, which she called "the freest and fairest elections in the region so far." 
Rice is a very bright woman, a president of Stanford University by the age of 41, who spoke to her interlocutors in fluent Russian. They were well aware that she might just be the next president of the US.
She thanked the country's leadership for its "excellent" cooperation in the war on terrorism: "We appreciate very much Kyrgyzstan's support and hosting of our forces -- the coalition forces -- at Manas [air base], which contribute to the stabilization of the situation in Afghanistan under United Nations mandate," Rice said.

Continued US Presence
Despite the diplomatic language, there are many causes for concern about this most recent of the 'colour revolutions', one fear being that is quickly reverting to Central Asian type, where there is little conception of the public interest, once politicians are elected. 
Bakiev reiterated Bishkek's position on the American presence at Manas international airport, near the Kyrgyz capital. He said U.S. troops will stay in the country as long as the situation in neighbouring Afghanistan requires. He makes it very clear that this is a temporary arrangement, and that they are there under a United Nations mandate - the war in Afghanistan. Since he said this publicly in his very first speech at his recent presidential inauguration, this is probably the best he can do to appease his giant neighbours, China and Russia, who want the US out, yet not to gravely offend the world's only superpower.
"It's not the first time we say -- I have stated this before -- that a military presence of coalition forces at the Manas international airport will last until the situation in Afghanistan is completely stabilized, until there are peacekeeping forces there acting under the aegis of the UN," Bakiev said. "This means the duration of their stay directly depends on the situation in Afghanistan." 
During the press conference, Rice repeatedly said that bilateral cooperation is not limited to security ties only. She pointed out that Kyrgyzstan's democratic reforms and anticorruption measures -- as well as its economy and agriculture sector -- have been at the centre of negotiations with the Kyrgyz leadership. 
Rice and Bakiev also agreed that Kyrgyzstan should continue its cooperation with neighbouring countries, including China, as well as Russia. 
"We do not believe that there is any reason that Kyrgyzstan has to choose between good relations with the United States and good relations with Russia -- indeed, we have good relations with Russia -- or good relations with China. Kyrgyzstan should have the very best possible relations with all of its neighbours," Rice said. 

Economic Development 
Rice said Bishkek and Washington intend to deepen their partnership. She said the United States will "help Kyrgyzstan become a strong and functioning economy." 
Rice also said her talks with officials in Bishkek included discussion of the possibility that Kyrgyzstan could participate in the US official agency aid programme known as the Millennium Challenge Corporation. But she said the country has yet to meet the criteria on good governance, openness, and democracy. 
"There is hard work ahead for Kyrgyzstan on matters of constitutional and political reform, on matters of economic reform, and the fighting of corruption," Rice said. "I know that these are issues that are a high priority for you [Bakiev], and I am glad that we had the opportunity to discuss how the United States might assist in Kyrgyzstan's economic and political reforms." 
The Millennium Challenge Corporation was established at the initiative of the U.S. President George W. Bush in January 2004 to provide development assistance to countries that "rule justly, invest in their people, and encourage economic freedom." It has particular emphasis on obviating corruption which remains rife in this country, as in its neighbours. The point being that the US is not going to give large sums of taxpayers money to any country, until it is satisfied that it will be used for the national benefit and not, like so much aid in the past, disappear into the private bank accounts of the big-shots.

Kyrgyzstan's revolution at risk
The Kyrgyz, nevertheless, have reason to be nervous about developments at home too where the revolution is at risk of unravelling, as the country's new president and parliament find themselves on a collision course. 
Two recent developments - the dismissal of Azimbek Beknazarov as prosecutor general, and the assassination of MP Bayaman Erkinbayev - have lifted the lid off a long-simmering power struggle involving the executive and legislative branches. The incidents also underscored the prominent role of criminal elements in Kyrgyzstani politics. 
President Kurmanbek Bakiyev dismissed Beknazarov on September 19. Beknazarov had been aggressively pursuing corruption cases, including several involving friends and relatives of former president Askar Akayev, who fled the country amid the Tulip Revolution in March. Officially, presidential aides attributed the dismissal to supposed malfeasance in two particular cases, one involving the murder of prominent businessman Abdalim Junusov and the other related to a shooting incident at a hotel in the southern city of Osh. Presidential allies also expressed dissatisfaction with Beknazarov's maverick style. "Beknazarov's actions have crossed some boundaries," said Miroslav Niyazov, secretary of the Kyrgyz National Security Council. "This man has formed a mistaken and inflated idea about the role and place of the prosecutor's office." 
Beknazarov characterized his ouster as politically motivated, linked directly to unease within the executive branch over the prosecutor's diligent efforts to uncover instances of official corruption. At a September 20 news conference, he alleged that corruption within the top ranks of government was rampant under Bakiyev. A statement issued by a coalition of non-governmental organizations, including Kyrgyz Citizens against Corruption, condemned Bakiyev's action, saying the executive branch was intent on stopping Beknazarov before he turned his attention on the actions of the incumbent administration. "Bakiyev sacrificed Beknazarov to the interests of criminality," the statement said. "Incumbent authorities are not interested in the struggle against corruption. Organized criminal elements have begun to openly cooperate with officials." Meanwhile, some political analysts also saw the firing as an attempt by Bakiyev to consolidate his hold over the executive branch. They noted that a political ally of the president, Busurmankul Tabaldiyev, was appointed acting prosecutor-general. 
Two days after Beknazarov's firing, two masked gunmen killed Erkinbayev, a member of parliament and a wealthy entrepreneur, as he was returning to his Bishkek home. Political analysts differed on the possible motive for the killing. Some linked it to politics, as Erkinbayev was one of the catalysts for the March protests in southern Kyrgyzstan that ended up driving Akayev's administration from power, while others expressed the belief that the murder was rooted in the victim's murky business behaviour. 
Beknazarov's dismissal and Erkinbayev's assassination have galvanized parliamentary resistance to Bakiyev's administration. A parliamentary resolution adopted September 22 asserted that "the criminal situation in the country has sharply deteriorated over the past several months." The resolution also sought to dilute presidential powers. It specifically called on the president to consider a reshuffle of his team and urged that Prime Minister Feliks Kulov -- a one-time Bakiyev rival now widely considered seen as a tenuous ally - be given responsibility for carrying out an anti-corruption campaign. In addition, MPs sought to exert greater legislative oversight over the Interior Ministry, the National Security Service and the prosecutor's office, demanding that the three agencies keep parliament informed on the Erkinbayev murder investigation. 
Prior to passing the resolution, MPs assailed Bakiyev's administration for allowing corruption and criminal behaviour to rise to levels unseen even during Akayev's administration. Some criticized the president personally for appointing friends and relatives to important governmental posts. One MP, Kabai Karabekov said the presidential administration "resembles a Mafioso structure." Bakiyev attributed current problems to corruption within law-enforcement agencies, emphasizing that the difficulties long predated his administration. "It is no secret to anyone that law-enforcement agencies and bandits are to a certain extent working together," Bakiyev said. "This situation didn't appear yesterday." 
The president also fired back at MPs, demanding that they provide "the names of specific relatives of mine who are currently occupying an official post." He went on to accuse MPs of criminal behaviour. "You are perfectly aware of what is happening [concerning corruption]," Bakiyev told MPs during the September 22 parliament session. "Among you present here [in parliament] are businessmen who, unfortunately, are often in conflict with the law, and who are evading taxes." 
During a public appearance on September 26, Bakiyev sought to redirect attention away from the building conflict between the executive and legislative branches. He called on the government to occupy itself with "stimulating economic activity instead of politics." 
MPs seem disinclined to ease up on the administration, however. Many legislators now view Bakiyev's team as incapable or unwilling to curb the criminal influence in government, political analysts say. On September 23, parliament passed a law granting MPs the right to carry firearms for self-defence. Some MPs are concerned that, in the weeks ahead, Bakiyev may attempt to politically weaken Kulov and, potentially, even try oust him from the government. If the president adopts such a course, it would likely provoke a sharp response from parliament, political observers say. 
Another concern is that the political tension in Bishkek could deepen the divide separating residents of northern Kyrgyzstan from southerners. Many northerners associate the rise in crime and corruption with the March revolution, which was led mainly by politicians with southern political roots, including Bakiyev. In a broader sense, the political wrangling is prompting many Kyrgyz to lose faith in the revolution's potential to bring about a more responsive government. The great popular complaint against Akayev's regime was that it had grown out of touch with the day-to-day concerns of the population. Now, the perception is growing among Kyrgyz citizens that members of the executive and legislative branches are intent mainly on accumulating personal wealth and gaining control over income-generating state assets, instead of working to improve socio-economic conditions in the country. 

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FOREIGN COOPERATION

Poland to cooperate With Kyrgyzstan 


Poland is interested in active cooperation with Kyrgyzstan, Ambassador of Poland in Kyrgyzstan, Vladislav Sokolovsky, said at the opening of the recent international exhibition "Bishkek - 2005", Interfax News Agency reported.
Sokolovsky said that Polish businessmen in large numbers had arrived at the Bishkek exhibition. The entrepreneurs were acquainted with opportunities in the country and to plan ways of cooperation. According to the Ambassador, Poland joined the European Union one and half years ago. In turn this is a good opportunity for Kyrgyzstan to introduce new technologies together with the Polish enterprises in manufacture and to develop industry. "Kyrgyzstan is the country with which it is possible to cooperate and work. The Polish businessmen in your country are interested in stability and the investment climate," Sokolovsky said.

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FOREIGN ECONOMIC RELATIONS

Kyrgyz premier discusses economic issues with Russia 

Kyrgyzstan's Prime Minister, Felix Kulov, on September 30 was on a two-day official foreign visit to Russia. Kulov said his visit was purely political but it was focused on economic issues. He stressed the importance of relations with Russia and considered Russia as a main strategic partner, Interfax News Agency reproted.
Kulov said that the talks revolved around the participation of the Russian capital in a number of Kyrgyz industrial enterprises and various economic sectors. Kulov also said the new Kyrgyz government would focus on the fight against corruption and unemployment in the country to improve the economic situation. He said, "One of the main reasons for the recent revolution in the country was the economic situation. Therefore, it is obvious what could happen if we do not improve our economy." 
Meanwhile at another meeting with Kyrgyz President, Kurmanbek Bakiyev, head of federal financial monitoring service of Russian Federation (Rosfinmonitoring), Victor Zubkov, said that Russia will assist Kyrgyzstan in creation of a financial intelligence service, Kyrgyz presidential press service said. 
Zubkov has observed that Russia will provide methodical and technical aid, provide experience exchange, training and internship for specialists from Kyrgyzstan. For his part, Bakiyev stressed an importance of interaction between the two states in activities against money laundering. "We shall apply all efforts to pass legal acts related with creation of a new structure - financial intelligence service of Kyrgyzstan," he said, adding that the new service is a totally new structure and therefore it needs methodical and other aid. 
Zubkov also met Akylbek Zhaparov, minister of economy and finance of Kyrgyzstan. Meetings with experts from the National Bank of Kyrgyz Republic and heads of other state structures were also planned during Zubkov's visit to Kyrgyzstan. Kyrgyzstan is part of the Eurasian Group to Counter Money Laundering and Funding of Terrorism. This group includes Belarus, China, Kazakstan, Russia, and Tajikistan. Kulov believes there should be no redistribution of property in Kyrgyzstan.
He described Russia as Kyrgyzstan's number one friend, adding that his country should also have good relations with other nations.

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