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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)

Books on Kyrgyzstan

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: 296 - (26/08/05)

Kyrgyz on the spot
The Kyrgyz are in a quandary. They achieved a bloodless revolution earlier this year that has put them on the world map. Everyone is courting them, since their joyous 'new spring.'
US NGOs, such as the Soros Foundation, played an important role in the victory, as did the US embassy. Kyrgyzstan already plays host to a US air base, with 3,000 personnel, at Manas east of Bishkek. This is ostensibly for the purpose of overflights in Afghan air space and related intelligence gathering. But nobody doubts that it is also being used to monitor developments in China, especially the ultra-secret northern territories. Its location could not be more useful for the CIA.
Kyrgyzstan is a member of the Shanhai Cooperation Organisation, along with Russia, China, Kazakstan, Uzbekistan and Tajikistan. This was shaken by events in May when rebels in the eastern Ferghana Valley, inspired by the Kyrgyz revolution, rose against the vile Uzbek regime and were brutally suppressed, with untold loss of life. Many fled to Kyrgyzstan.
Uzbekistan has just given the US six months to leave its military base on the Uzbek-Afghan border at Karsi-Khanabad in the wake of its assistance to the Uzbek refugees in Kyrgyzstan, flying many of them to Romania and freedom after Tashkent demanded their return. There is nothing better that the Uzbek regime would like than for Bishkek to give the Americans their marching orders too. Ditto Beijing and Moscow. 
However, Donald Rumsfeld sensed the danger and came to town, promising an increase in aid, already $50m per year and no doubt any number of other goodies on the quiet too. The Americans have the clout The Uzbek regime certainly doesn't, while the Chinese are reluctant to be drawn into a fight with the US for the soul of a nation that has just emhatically affirmed its new-found Western orientation. 
After meeting with Defence Secretary Donald Rumsfeld, the Kyrgyz defence minister, Lieutenant General Ismail Isakov, said at a news conference with Rumsfeld in Bishkek that the US military could keep using Manas Air Base, outside Bishkek, for cargo and refuelling missions as long as the security situation in Afghanistan remained unstable.
"Once there is stabilisation, there will be no need," Isakov said. "But now I agree with Mr Secretary, who mentioned that the situation in Afghanistan is far from stable."
Isakov later added: "The air base in Manas will stay as long as the situation in Afghanistan requires."
As he prepared to board his plane at Manas, the airfield from which 1,000 American troops operate, Rumsfeld told some of the air force personnel, "I wouldn't pack your bags." He added, "I have every reason to believe the relationship will continue in an orderly way."
Rumsfeld may be being too sanguine here. His visit took place at the end of July. In early August a different response came from a high quarter in Bishkek.
Kyrgyzstan may follow Uzbekistan's example and ask the United States to set a deadline for a withdrawal of its air force base, Valentin Bogatyryov, director of the Kyrgyz international institute of strategic studies under presidential auspices, told Interfax on August 5th.
"It may happen this autumn after the parliamentary elections in Afghanistan," Bogatyryov said. "As political life in Afghanistan is brought back to normal, it means that legitimate bodies of power, among them the president and parliament, should be established there," he added.
"As we know, this process will be finalised this autumn, when parliamentary elections are due to be held in that country. Thus, I can say that after the elections it will be necessary to raise the issue of completing the mission of the anti-terrorist coalition's military bases," the director said.
"As the US itself claims, the military operation in Afghanistan was finalised long ago. Only operations in individual regions are taking place there today. That is why the presence of the Manas base outside Bishkek is no longer justified," the expert said.
"Hotbeds of tension will certainly remain in Afghanistan. But in this case, the United States will either have to admit that the operation in that format failed, or, which is more acceptable, transfer normalisation efforts to the territory of that country. There are enough airfields in Afghanistan itself."
Of course Afghanistan is likely to remain unsettled even after its parliamentary elections, as it did after its presidential ones. The US will not be remiss in pointing this out to Bishkek.

Ties with Russia matter too - perhaps the most! 
Kyrgyzstan is keen to keep its relations with the Russians close as well. Developing close ties to Moscow and the Russian regions are perhaps the most important priority for them. The main, still unanswered question about this country remains, as to whether President Kurmanbek Bakiyev will just turn out to be Moscow's man.
The prerequisites to strengthen cooperation between Ekaterinburg and Kyrgyzstan are present, Acting Consul General of Kyrgyzstan to Ekaterinburg Chyngyz Kubanychbekov announced recently, cited by Interfax.
Ekaterinburg is the administrative centre of Sverlovsk region, located 1,667km east of Moscow on the border between Europe and Asia. He noted that the policy of newly elected president of Kyrgyzstan Kurmanbek Bakiyev aimed to develop cooperation between the towns and regions of Kyrgyzstan and Russia. One of the key directions in this policy is Ekaterinburg. The republic's companies interested in Ekaterinburg and enterprises of Ekaterinburg interested in Kyrgyzstan, said Kubanychbekov. He stressed in particular, on development of trade-economic relations in the chemical industry, machine-building and agriculture.

Economy stumbles 
The economy is faring none too well, not being helped by the disruption revolution invariably brings in its wake. GDP grew by 0.9% on an annual basis in the January-July period of this year. Ominously, industrial production fell by 10% in the same period.
The most worrying thing of all is that gold production, the main export sector, fell by 22.3% in this period. Kyrgyzstan reduced gold production by 22.3% year-on-year to 9.21 tonnes in the first half of the year, Vladimir Zubkov, head of the state Geology and Mineral Resources Agency, told Interfax recently. 
Production at the Kumtor gold field, which is developed by Canada's Centerra Gold, fell to 8.689 tonnes from 11.065 tonnes. The Kumtor gold company reported output in value down 11.6% to 4.886bn som from 6.024bn som a year previously. Kumtor Gold company and the state-owned Kyrgyzaltyn are Kyrgyzstan's biggest gold producers. 

Kyrgyz revolution: taking a turn in an unpredictable direction
As it so happens, Kyrgyzstan's revolution is veering off in an unpredictable direction, that is becoming very obvious. Persistent infighting and controversial political appointments are raising doubts about the provisional government's ability to promote civil society. Already, several alarming trends are evident that, if left unaddressed by the provisional government, could create new sources of dispute and frustration among Kyrgyz citizens. 
All branches of Kyrgyzstan's provisional government remain bogged down in political matters connected with President Askar Akayev's abrupt and messy downfall on March 24th. Some local political analysts say the governmental paralysis is largely connected with a "wild scramble for power" among members of the new political elite. In the weeks and months leading up to Kyrgyzstan's parliamentary election in February, which proved to be the revolution's detonator, top members of the erstwhile opposition to Akayev set aside personal ambitions and rivalries to forge a united front against the president. Now that Akayev has departed from the scene, the glue keeping the provisional government together seems to be rapidly decaying, with the briefly suppressed internal rivalries quickly reasserting themselves. 
The executive branch, headed by the provisional government's leader, Kurmanbek Bakiyev, has come under broad attack for its personnel policy. According to critics, Bakiyev and others in the leadership are trying to pack the top levels of Kyrgyzstan's bureaucracy with friends and family members, essentially repeating a pattern followed by Akayev. 

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ENERGY

Uzbek, Kyrgyz firms discuss gas supplies to Kyrgyzstan 


The head of Kyrgyzgaz (Kyrgyz Gas) joint-stock company visited Tashkent to discuss on supply of Uzbek gas to Kyrgyzstan, KyrgyzInfo news agency reported recently, citing the press services of Kyrgyzgaz. 
The company's Director, Igor Chudinov, had talks with his Uzbek colleagues, the report said. It added that Chudinov would discuss with the management of Uztransgaz (Uzbek Gas Transportation) a draft of a general agreement on Uzbek gas supplies to Kyrgyzstan in 2005/06. The report said since 2003 Kyrgyzstan has been using Uzbek gas transported to Kazakstan from a terminal located in Kyrgyzstan. A US$33m debt to Kazakstan has accumulated over the period. Kyrgyzgaz reported that Bishkek had paid off US$17.42m of this debt.

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FOREIGN LOANS

China to grant Kyrgyzstan 50 mln yuans 

After the session of the Shanghai Cooperation Organisation heads of states, Acting Kyrgyz President, Kurmanbek Bakiyev, met with Chinese President, Hu Juntao, and agreed that Kyrgyzstan will receive a free grant of 50 million yuans (six million Euro) from China, Interfax News Agency reported recently. 
Juntao said China respects the new government's course, and as a sign of support, will give 50 million yuan in grant money to help the country, a source in Bakiyev's press service told Interfax. 
Juntao and Bakiyev expressed satisfaction over the development of their countries' bilateral relations. China will also send "its observers to the presidential elections," in Kyrgyzstan, the report said. The Chinese government will also give Shanghai Cooperation Organisation states a soft export credit of 900 million Euro.

Kazkommertsbank Kyrgyzstan gets EBRD loan 

Kazkommertsbank Kyrgyzstan (KKB-K) received a 5m Euro loan which marked the launch of a new international programme that provided financial aid in the Central Asian republic. This programme also stressed expanding into economically depressed regions and to agricultural regions, New Europe reported.
European Bank for Reconstruction and Development (EBRD) provided 2.25m Euro while the rest of the aid was provided by the International Finance Corporation (IFC) and the International Cooperation and Development Fund of Taipei China (Taiwan ICDF) through the Financial Intermediary Investment Special Fund.
KKB-K, a privately owned Kyrgyz subsidiary of Kazakstan's Kazkommertsbank, will use the funding to facilitate the development of micro and small enterprises (MSEs) by making formal finance available to them either in local currency or Euro.
This loan is the first to be made under a new 30m Euro Kyrgyz micro and small enterprise financing facility, known as KMSEFF II, of which 20m Euro is provided by the EBRD as part of its Early Transition Countries (ETC) Initiative which aims to provide increasing support to smaller private sector projects in the Bank's seven lowest-income countries of operations. It builds on the success of an earlier micro- and small enterprise facility of 12.6m Euro which was set up in April 2002 and is now fully committed. KMSEF II is supported by co-financing from Taiwan ICDF, IFC and Switzerland's State Secretariat for Economic Affairs (SECO).
It also has technical cooperation funding from the recently established multi-donor ETC Fund, the EU and the US Agency for International Development (USAID). 
KMSEFF II is bigger in cash terms than its predecessor and intends to expand the number of participating banks with credit lines from two to a targeted five. MSE lending has proved a vibrant sector of the Kyrgyz economy. 
The Kyrgyz participating banks have opened 40 MSE lending departments in 12 cities and trained 217 loans officers to assess and administer loan requests.

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INDUSTRIAL OUTPUT

Kyrgyzstan posts 10% drop in H1 industrial output 

Industrial output in Kyrgyzstan was down 9.8 per cent year-on-year in the first half of 2005 to 23.94bn soms (US$584.4m), Interfax News Agency reported recently, citing figures released by the national statistics committee. Output in the mining industry fell 32.7 per cent to 384.9m soms.
Kyrgyzstan produced 13.7 per cent less coal, 3 per cent less oil, 2.3 per cent less natural gas, 21.7 per cent less sand and gravel, and 7.1 per cent less salt, including sodium chloride. Output in the manufacturing industry amounted to 18.36bn soms, down 12.3 per cent. There was a 20.7 per cent reduction in metal and finished metal product production, while output of machinery and equipment grew 29.1 per cent.
Kyrgyzstan produced 290.8m soms worth of oil products and nuclear materials, a 31.4 per cent drop. Production was down 24.3 per cent for motor fuel and 5.9 per cent for fuel oil. There was a 65.9 per cent slump in the processing of radioactive materials. Diesel fuel production increased 24.9 per cent.
The country produced 240.4m soms worth of chemicals, down 8.4 per cent. Production and distribution of electricity, gas and water grew 2 per cent to 5.19bn soms. There was a 1.4 per cent increase in electricity output and 2.8 per cent for thermal energy. Distribution was up 5.2 per cent for electricity and 4.7 per cent for thermal energy. Water purifying services were reduced 9.4 per cent and distribution fell 22.5 per cent. Meanwhile, Kyrgyzstan's GDP grew 0.9 per cent year-on-year in January-July to 47.843bn soms, the country's national statistics committee told Interfax. GDP grew 2.7 per cent to 44.507bn soms, minus the contribution made by the Kumtor gold mine, which is one of the country's key enterprises. The committee said Kyrgyzstan had inflation of 2.5 per cent in the seven months. Kyrgyzstan had a trade deficit of 166.3m Euro in the first half of the year. Imports were 488.5m Euro and exports 322.2m Euro including gold mined at Kumtor. Exports minus the Kumtor gold were 202m Euro.

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MINING

Kyrgyzstan reduces gold production by 22.3% in H1 

Kyrgyzstan reduced gold production by 22.3 per cent year-on-year to 9.21 tonnes in the first half of the year, Vladimir Zubkov, head of the state Geology and Mineral Resources Agency, said, Interfax News Agency reported recently.
Production at the Kumtor gold field, which is developed by Canada's Centerra Gold, fell to 8.689 tonnes from 11.065 tonnes. The Kumtor gold company reported output in value down 11.6 per cent to 4.886bn som from 6.024bn som a year previously. Kumtor Gold company and the state-owned Kyrgyzaltyn are Kyrgyzstan's biggest gold producers.

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