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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: 306 - (29/06/06)

Kyrgystan turning its face to Asia and back to Europe
The Shanghai Cooperation Organisation (SCO) is a godsend for all its participants, Kyrgyzstan, Kazakstan, Russia, Uzbekistan, Tajikistan and, naturally, the host - China. India, Pakistan, Iran, and Mongolia have the status of observer. Not one is a Western country. There is no carping about human rights amongst its members, which grates so badly on the nerves of Eastern potentates.
They simply get on with talking business. Aware that they represent a huge chunk of the world's territory and population (Its member states make up 60 per cent of Eurasia and a quarter of the world's population), they have plenty of scope here. 
Kyrgyz President, Kurmanbek Bakiyev, met with SCO businessmen at the latest meeting of the SCO in mid-June in Shanghai. He congratulated all the participants on the formation of a SCO Business Council and Forum of Industrialists and Businessmen. "I am sure that our dialogue today will give us a new impulse for achieving our common goal to improve the welfare of our peoples and to develop our organization as a whole," Bakiyev said. He complimented the businessmen by saying that nobody knows better than they what problems to solve in order to create favourable conditions for mutually beneficial and mutually complementary cooperation in trade and economics between the SCO member-states. 
In their turn, the members of the SCO Inter-Bank Association are ready to invest money in the development of industrial projects in the SCO member states and, particularly, in Kyrgyzstan. The chairman of the Inter-Bank Association Vladimir Dmitriyev said that napoleonic plans are already being carried out in Kyrgyzstan, Kazakstan and Uzbekistan - projects many big financial institutions are ready to fund: transport infrastructure, water supply and water power engineering as well as processing industry.
Meanwhile, Human Rights Watch representatives said: "The SCO countries should join the international human rights protection standards" - and continued with a big list of reported infringements and a charge that in their fight against terrorism Russia, Kyrgyzstan, Kazakstan, China, Uzbekistan and Tajikistan are grossly violating human rights and the very law on humanitarian development. Whether or not the SCO leaders gave an ear to the HRW's urgent recommendations remained unlikely. Meanwhile, Bakiyev said that Kyrgyzstan will host the next SCO summit in 2007.

The Chinese colossus
The Russians for various reasons are lukewarm about the new regime and dispensation in Bishkek. Former president Askar Akayev, who now lives in exile in Russia, was very much part of the charmed circle of post-communist autocrats; and his disappearance so suddenly last year was an unseemly jolt to Moscow. It has cast a chill on Kyrgyz-Russian relations.
China is the key to real progress. "The Chinese will become our best friends," says Evening Bishkek. The daily newspaper reports that Kyrgyz MPs have sanctioned local officials to establish contacts with their colleagues from the Celestial Empire by ratifying a Kyrgyz-Chinese cooperation programme. 
"Our officials and businessmen have long been in contact with the Chinese and hardly need such documents to do that. Simply, China is more developed than we are and is quicker in reacting to global processes. The guiding proverb of the Confucius descendants is: 'Want to live - learn how to survive.' And they follow this proverb from their childhood. Now we have got an opportunity to formalise our mutual sympathies on paper by ratifying a cooperation programme," said the newspaper. 
For the record, the programme was signed in Bishkek back in 2004. MP Temir Sariyev says that "there is no getting away for us from our great neighbour. It has a vast potential and a mighty economy. Even America has to reckon with China."
Says Sariyev: "That country is also a real goldmine of human resources. There are many things we can learn from Chinese, they are developing quite dynamically and their prices are quite good for us. The trade turnover between our countries has amounted to US$1bn. The main thing we should do now is to consolidate our positions on their market. We should not forget that they have huge funds: the world's biggest currency reserves - over US$800bn," 
Says the daily: "According to Kyrgyz Foreign Minister, Alikber Jekshenkulov, in the framework of their bilateral cooperation Kyrgyzstan and China are planning to build a railroad that will connect Kyrgyzstan, China, and Uzbekistan. The MPs believe that this project is good for us. It will make Kyrgyzstan a transit state. Experts say that up to 10m tons of cargo may be carried via this route. It has also become known that China will shortly grant us 70m Yuan, of which 30m will be spent on the reconstruction of the National Hospital and the rest - at the government's discretion,"

Lamentations about the Oriental twist
Not everyone in Kyrgyzstan is happy with the new turn of events after the SCO meeting. "Kyrgyzstan is turning its face towards Asia and its back towards Europe." That's how an article in White Steamer daily, "Noodles for Kyrgyz Government," describes Kyrgyzstan's foreign policy.
As the article goes on: "The presidential entourage is trying to stir up euphoric moods in the public after a Kyrgyz delegation's visit to Beijing. They want to convince people that the delegates have done a great job by signing a 10-year economic cooperation declaration with China. Now President Bakiyev is to pay an official visit to Kazakstan and, no doubt, with the same result. Meanwhile, sensible politicians and businessmen do not share this artificial enthusiasm. The forecasts are coming true. The vice-premier is already openly saying: 'Bakiyev's visits reflect the country's new economic priorities.' Meanwhile, many people fear lest this 'cooperation' may turn into an open expansion of stronger Asian states. Unfortunately, this is quite possible."
And the article then went on to lament: "Kyrgyzstan is a tasty morsel, a virgin land, but, most importantly, not a proud country. It is glad at a penny and will bow for every penny. We are acting as beggars, we are crying too loud that we need investments. We need them desperately! We won't survive without them! That's what we said from the very beginning, while we could shift the stress and say - it is they who need our mines desperately, it is they who want to invest money in us - and to get profit from us. We are not standing with our hands stretched, in no way, we are just letting them enter our economic field, that's all, but our own interests are for us above all. If we could say that, everything would be different… But in reality - Mr. Bakiyev is going to Astana and, I bet, again for investments. And again, it turns out that we are begging them to take our national treasures."
"It is not hard to sell the Fatherland for a piece-work pay. But why are we doing this? - in order to show by our economic decisions where we are going politically. Kyrgyzstan is turning its face towards Asia and its back towards Europe (echoing the White Steamer daily tag)." That's how MP Dooronbek Sadyrbayev comments on the news that Bakiyev has given China the disputable section of the Kyrgyz-Chinese border: 'Bakiyev has insured himself, at the least, from the east. Europe does not take very enthusiastically to him, Russia is cool to him. Now he is trying to enlist China's political support.' 
Sadyrbayev goes on to vent his wrath at the new turn: " For the new 'White House' (the Bakiyev regime), the principle of multi-vector foreign policy and economy is either beyond its powers or against the grain. That's why the country is rushing from side to side, as if we don't know that our active fraternization with China may look much too demonstrative in the narrowly-viewing eyes of Moscow and Washington. Unfortunately, this is just the beginning. 'The White House' has already announced its further steps - it will move towards the Islamic world and Arab countries. This will be our foreign political priority - and one more step away from the European world… Honestly speaking, even we in Kyrgyzstan can hardly understand this, let alone, those in Russia or the US. For them our region is a source of political instability. What they want - and this is not a secret - is not to let Kyrgyzstan fall under the growing political ambitions of China and the Arab countries. So, what are our political leaders doing? Some experts say that they are seeking to show to Moscow and Washington that 'we are going away from you, rush to catch us! Beg us not to turn our back to you! Butter us up with financing!' What we are doing is a trick that would hardly be called nice or clever in international diplomacy."
There is something to be said for this line of criticism. But since when has diplomacy been 'nice?' It remains to be seen whether the new Bishkek policy is 'clever.'

Bakiyev faces growing opposition
Just over one year after Kyrgyzstan's March 24 Tulip Revolution Kyrgyz President Kurmanbek Bakiyev faces outspoken criticism of his regime from both political and non-governmental sources. Although the current political situation in Kyrgyzstan largely resembles the final years of former president Askar Akayev's regime, when the general public was dissatisfied with widespread corruption and ineffective economic policies, most political actors now strive to avoid another revolution. That is one gain of the turn events have taken.
The majority of Bakiyev's opponents are his former political allies who helped him to oust Akayev's regime. Corrupt regime politics are driving more and more prominent political figures into the opposition camp. To date, Roza Otunbayeva, Azimbek Beknazarov, and Omurbek Tekebayev are Bakiyev's most active challengers. All three leaders were also strong opposition forces against former president Akayev. For several years they acted separately by leading own political factions, but in late 2004 they united into one block.
The new political opposition claims that Bakiyev is repeating the mistakes made by Akayev. Specifically, the president is becoming increasingly authoritarian in appointing government members and curbing freedom of speech. To avoid a further deterioration of political transparency in Kyrgyzstan, the new opposition is acting more thoughtfully than their counterparts did during the Akayev era. In particular, former foreign minister and Akayev critic Otunbayeva is drawing attention to the success of political party building in Kyrgyzstan. According to her, the current opposition values social cohesion and seeks to involve large numbers of people, as opposed to clustering around a few charismatic individuals.
The new political opposition is also revealing some previously unknown details about the March 24 revolution. According to Otunbayeva, shortly before the parliamentary elections in February-March 2005, Bakiyev was pushed forward by political figures from southern parts of the country. She claims that three years ago, when Absamat Masaliyev, an "elder statesman" of Kyrgyz politics and a parliamentarian from the south, was still alive, he informally anointed Bakiyev to become the next presidential candidate. Political figures such as Usen Sydykov pledged to follow Masaliyev's orders after his death and supported Bakiyev as the Tulip Revolution unfolded. 
Otunbayeva has been criticized for not revealing the nuances of the current political regime while she was still part of the post-March 24 government (analitik.kg, March 12). However, she claims that she was not able to remain in the government because she constantly confronted the president's cadre politics and opposed the many manifestations of nepotism. She was offered various positions in the foreign service before parliament rejected her nomination to become foreign minister. 
Otunbayeva and Beknazarov had asked Bakiyev to make a report on March 24 about the progress made by the new government since last year. Both opposition leaders are pessimistic about changes brought by the revolution, yet neither denies the fact that the revolution was necessary. 
Meanwhile, the president had announced beforehand that March 24 would be a public holiday, with nation-wide celebrations organized by the government. Top government officials -- Bakiyev, Prime Minister Felix Kulov, Head of Presidential Administration Usen Sydykov, State Secretary Dastan Sarygulov, and Vice Prime Minister Adakhan Modumarov -- were all actively promoting the day's symbolic significance. Celebrations were held in all of Kyrgyzstan's largest cities, and a special monument commemorating the Tulip Revolution was erected in Jalalabad, Bakiyev's birthplace. 
Bakiyev's efforts to celebrate the March 24 anniversary show the president's detachment from society's prevailing mood. Behind the spectacle of the upcoming events, there is deep disappointment with the regime among both the urban and rural populations. For many Bishkek residents the events of March 24, 2005, are still closely associated with the looting and banditry that followed the takeover of the government headquarters and the demoralization of law-enforcement agencies. Businessmen who suffered from arson and theft still have not received monetary compensation for their losses. "March 24 should be called the day of triumph for looters and hooligans," one student from Bishkek commented bitterly. 
Speculation was circulating in Bishkek that another mass uprising against Bakiyev government might have taken place on March 24 this year. However, it did not. Members of the new opposition have confirmed that they are determined to build exclusively constructive relations with the government until the next presidential and parliamentary elections are held in 2010. 

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FOREIGN AGREEMENTS

Bishkek, Beijing sign package of agreements 


Kyrgyz President, Kurmanbek Bakiyev, and China's President, Hu Jintao, signed a joint declaration and an agreement on technological and economic cooperation, the Kyrgyz presidential press service said. Bakiyev was on an official visit to China on June 9th-10th. In the course of his visit, Bakiyev also met with State Council Premier, Wen Jiabao, and the chairman of the Standing Committee of the National People's Congress, Wu Bangguo, Interfax News Agency reported.
The two presidents also signed intergovernmental agreements on cooperation in the culture, sports, agriculture, healthcare, education, intellectual property protection, and archiving areas. Kyrgyzstan and China also concluded a contract on constructing a cement factory in Kyzyl-Kiya in the Batken region in southern Kyrgyzstan, the press service said.
"The package of documents that was signed shows that the two countries intend to expand and deepen mutual relations," Bakiyev said. "Political, economic, and cultural-humanitarian relations between the two countries are developing successfully, but we need to raise them to a qualitatively higher level," Hu said.
"There are four areas in which cooperation between Kyrgyzstan and China should be improved. Firstly, the two countries should observe the earlier agreements and understandings under the 10 year cooperation programme, secondly they need to maintain dynamism in their bilateral relations at a level of mutual trust and interaction and thirdly, they should develop trade cooperation and implement major projects in the transportation, information and communications technology and construction areas," he said.
"We are satisfied with the work on the project of building a railroad to connect China, Kyrgyzstan and Uzbekistan and are interested in the soonest possible start of its construction," he said. Bakiyev also participated in a Kyrgyzstani-Chinese business forum. He told the forum that his country has the third largest hydropower resources in the Commonwealth of Independent States and is able to export 142 billion kilowatt-hours of electricity a year. Bakiyev said that Kyrgyzstan is willing to export electricity to China's western region. He also invited Chinese electricity companies to supply equipment to Kyrgyzstan and participate in the development of its power grids. "However, only 10 percent of the power resources has been tapped," said Bakiyev, hoping Chinese electricity companies to provide facilities to his country and join in the development and upgrading of its electric power system. 
A delegation accompanying Bakiyev on the visit included a number of business executives. Before departure for China, Bakiyev said the two countries have established well-working and trustworthy relations. He also voiced the hope that they will be able to broaden mutually beneficial long-term cooperation.

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GOLD PRODUCTION

Kumtor gold firm sees gold production down 37%

The Kyrgyz-Canadian joint venture Kumtor Gold Company rescued gold production at the Kumtor field 37 per cent year-on-year in the first quarter of 2006 to 88,848 ounces or 2.7635 tonnes, Kumtor Gold co-owner Centerra Gold Inc and Kumtor Operating Company said in a joint press release, New Europe reported.
The release said the gold production fell due to the low gold content in ore, which was graded at an average 2.36 g/t for Au compared with 3.68 g/t in the first quarter of 2004. The average sale price of gold was 548 Euro/oz in the first quarter of 2006, up from 425 Euro/oz in the same period of last year. Kumtor Operating Company's revenue in the first quarter of 2006 was 59.2 million Euro, down from 64.3 million Euro in the same period of last year. The Kumtor mine will produce 410,000-420,000 oz (13 tonnes) of gold this year, according to an adjusted target. The original target was 461,000 oz (14.3 tonnes). The mine produced 501,487 oz (15.6 tonnes) in 2005.

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MINERALS & METALS

Alocoa may build aluminium plant 

US company Alcoa Inc., the world's biggest aluminium producer, may build a plant in Kyrgyzstan with the capacity to turn out 340,000 tonnes of aluminium annually. The Kyrgyz Industry, Trade and Tourism Ministry said that their deputy minister, Turat Dzhun-ushaliev, had recently met representatives from Alcoa to discuss construction plans for the 1.3 billion Euro plant, Interfax News Agency reported.
The vice president of Alcoa's energy and supply division, Marc A.Pereira, and the company's director general for Russia, Michael Mohajery, expressed their interest in building a plant in Kyrgyzstan, Dzhunushaliev said. "However, this interest has not yet led to an agreement or protocol of intent, the deputy minister said. Alcoa said it now needed to hold several more talks and that it would give its reply in the near future. Alcoa earlier announced the construction of an aluminium plant in Trinidad & Tobago worth 1.5 billion Euro. The company is also implementing an aluminium project in Iceland.

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