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KYRGYZSTAN


 

 

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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: 302 - (27/02/06)

A remarkable anniversary
It is exactly one year on from the March 2005 revolution in Kyrgyzstan. It is a time for reckoning and re-assessment. The Kyrgyz are still restive - but so are the local ethnic Uzbeks!
It is currently common for observers to deny the gains made by Kyrgyzstan's Tulip Revolution. Many of the charges levelled against the March 2005 uprising, however, are greatly distorted. 
Kyrgyzstan is an unprecedented example in Central Asia of a state challenging its modern history and political culture, outside Afghanistan. The Kyrgyz revolution did not of course usher in Swiss-style democracy, a creation of centuries of peaceful development. Yet for the first time, the ability of ordinary citizens to influence politics has been accepted, a novel idea in post-Soviet Central Asia. 

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The revolution's detractors present a consistent set of charges: Since the fall of former President Askar Akayev, political instability has been unleashed, popular discontent has increased and organized crime plays a larger role in government. Added to the mix is the charge that the revolution weakened Kyrgyzstan's delicate geo-strategic position and exposed it to unwelcome attention from powerful regional players Russia and China. 

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Kyrgyzstan has a long way to go before it becomes a democracy with an entrenched rule of law, but it is, nevertheless, much further down that road than its wealthier neighbours, namely Kazakstan and Uzbekistan. It is a weak state, but this does not equate with anarchy or looming civil war. 
The revolution did not unleash forces leading to mass violence, but to presidential elections in July 2005 that can be characterized as broadly fair; albeit as more of a referendum on current President Kurmanbek Bakiyev than as a genuinely competitive race. 
Admitttedly, Bakiyev is much weaker than many of his regional counterparts. He cannot, for instance, have someone arbitrarily thrown into jail, tortured or worse. But is that not a commendation of the revolution, rather than the reverse?
Unlike the opaque, constantly shifting political alliances of President Askar Akayev's rule - alliances that ultimately alienated many key regional elites -- the Kyrgyz political formula is now characterized by greater transparency and consensus. 
To build a sense of legitimacy, Akayev blended a nation-building ideology with the traditional Soviet recipe of strategic regional alliances. Bakiyev has continued the latter, but has presented the former as a task accomplished. One positive sign of this development, according to Coalition of Non-Governmental Organizations President Edil Baissalov: in many government offices, Kyrgyzstan's state seal has replaced the mandatory presidential portrait of former days. 
Another common accusation is that the revolution's potential has been nullified by the government's apparent inability to undo the constitutional arrangements rammed through by Askar Akayev to install a parliament loyal to his interests. The flawed February 2005 parliamentary elections, it is argued, were never reversed, thereby proving the worthlessness of revolutionary change. 
To have dissolved parliament after the revolution, however, would only have eroded the new government's dubious constitutional basis; a basis that was, as with most revolutions, essentially extra-legal and unconstitutional. Instead, in a delicate and potentially explosive situation, the Bakiyev regime adhered to a series of compromises. The interim government sensibly chose to work with the existing parliament in the knowledge that fresh parliamentary elections would very likely return the same set of local business interests, only more hostile at having to repurchase their seats. 
One gain of the February elections was to destroy the parliamentary power of the Kyrgyz communist party, the main opposition force during the Akayev era, but a relative black hole for innovative thinking. There is now hope that an opposition can forge a genuine parliamentary coalition. The government strategy now is to pressure parliament by permitting a petition campaign for a referendum on parliament's dissolution, while moving forward with a constitutional review. The process is controversial, but, so far, reasonably inclusive. 
The likelihood of the mafia infiltrating a weak central government is another criticism brought against Kyrgyzstan's post-revolutionary government. The brazen murder of several parliamentary deputies with well-known connections to organized crime shocked both the Kyrgyzstani public and the international community. 
Organized crime in politics is nothing new in Kyrgyzstan, however, and dates far back into the Akayev era. What is new is the unravelling of deals once held between major criminal groups and the former regime; much of the recent violence is related to mafia families settling internal disputes and jockeying for position. 
While such fights are more visible amidst the greater transparency of post-revolutionary Kyrgyzstan, they do not represent a sudden upsurge when seen as part of a larger trend. Nor are they a threat to the state, as the ease with which the authorities suppressed a recent series of mafia-inspired jailhouse protests demonstrates. 
Foreign policy, another frequently cited weak point, is an area where the national interest is served quite well by an establishment inherited from the Soviet Union. These officials have successfully crafted a coherent Kyrgyzstani foreign policy based on the need to integrate Kyrgyzstan into the international community as a small state. The current foreign minister, Alikbek Dzhekshenkulov, a former ambassador to the Organization for Security and Cooperation in Europe and presidential advisor on foreign relations, is unlikely to change this. 
Kyrgyzstani foreign policymakers are not dilettantes, but people the West would be well cautioned to take more seriously - as evidenced by their skill at assuaging Shanghai Cooperation Organization (SCO) concerns about the US-leased air base at Manas and retaining an American military presence at the same time. The fact that pressure is on the Bakiyev government from Russia and China about the base only indicates that the US has failed to suggest a security framework sufficiently compelling to induce Kyrgyzstan to abandon its commitment to the SCO. 
This is not to deny that there are very serious issues with the Bakiyev regime sitting a little too comfortably on the presidential throne. The ultimate outcome of March 2005 remains to be seen. Kyrgyzstan is hardly a model, but nor should it be used as a justification for continued authoritarian rule elsewhere in the region. 

Political showdown brewing
A political showdown in fact is brewing in the country, where parliament and Prime Minister Feliks Kulov are pressing for an overhaul of the National Security Service, contending that the agency is obstructing efforts to contain rampant crime. Kyrgyzstan is at risk of becoming a failed state unless President Kurmanbek Bakiyev takes immediate steps to address governmental dysfunction, some MPs warn. 
Parliament on January 26th adopted a resolution calling for the dismissal of National Security Service (NSS) chief Tashtemir Aytbayev, along with his deputy, Vyacheslav Khan, alleging that the duo had contacts with organized criminal elements and engaged in a wide variety of illegal activities, including weapons and narcotics trafficking. 
During the parliamentary session, Interior Minister Murat Sutalinov asserted the NSS obstructed criminal investigations into numerous high-profile crimes. MPs also were presented with evidence that Khan possessed three passports - Kazakhstani, Kyrgyz and Russian - was involved in several murky business ventures. Sutalinov and his Interior Ministry deputy, Omurbek Subanaliyev, survived a parliamentary vote of confidence. 
A presidential spokesman on January 27th indicated that Bakiyev would not endorse the resolution to force Aytbayev's ouster. Nadyr Momunov, a Bakiyev spokesman, was quoted by the Kabar news agency as saying the president "was not given sufficient evidence to dismiss the current NSS chairman." 
The parliamentary resolution was adopted a day after Kulov issued a statement assailing Aytbayev's anti-crime record, saying that "the work of the NSS and some other state structures gives [the public] grounds for criticizing authorities' failure to fight crime and corruption." In addition to Aytbayev, Kulov singled out Ryspek Akmatbayev, reputedly one of Kyrgyzstan's foremost underworld figures, as a source of instability in the country. "The continuous spread of criminal activity ... will cast doubt on the viability of Kyrgyzstan's democratic and civilized development," Kulov's statement warned. 
Kulov's verbal broadside apparently was prompted by the January 24th dismissal of murder charges against Akmatbayev. The prime minister described the court's action as a "heavy blow to our international image." Akmatbayev has two prior convictions related to organized criminal activity and has served a total of seven years in prison. Kulov said the Akmatbayev case showed that Kyrgyzstan's judicial system had lost its independence. 
"Today it is no wonder that courts acquit suspects whose involvement in especially serious crimes is obvious to everyone," Kulov's statement said. "Many people today are frightened. They think the criminals are winning. All they expect now is a further escalation of crime and arbitrariness." 
Akmatbayev, speaking at a news conference, countered that Kulov was engaging in nefarious activities of his own, alleging that the prime minister was skimming funds provided by international donors. He repeated allegations that Kulov had been involved in the murder of Tynychbek Akmatbayev, Ryspek's brother, during a prison riot in October 2005. At the time of his death, Tynychbek Akmatbayev was an MP who headed parliament's Committee on Law Enforcement. When asked if his feud with Kulov could lead to bloodshed, Ryspek Akmatbayev responded, "Nobody [else] needs to suffer. ... I suggest that we meet man to man. I will kick his ass, and that will be that." 
Meanwhile, Aytbayev, the NSS chief, also denied what he characterized as "baseless" accusations. "Nobody can say that I have connections with the criminal underworld," he told MPs during the January 26 session. "I am ready to account for my actions wherever and before anyone." 
Bakiyev does not appear prepared to publicly intervene in this government crisis. Through his spokesman Momunov, Bakiyev was critical of both Kulov and Aytbayev, saying their "verbal duel did not reflect well on them." Momunov also said the president felt the two should "control their emotions" and set an "example of political propriety." 
At a government session January 26, Kulov sought special powers to combat crime and corruption, saying his office was finalizing an emergency anti-crime blueprint. "The scale of corruption has become so great that specific mechanisms must be adopted," Kulov said. A day earlier he disclosed his intention to assume control of the Interior Ministry's anti-crime division. He also urged parliament to pass legislation bolstering protections for witnesses in criminal cases. In addition, he courted support from Kyrgyzstan's non-government sector for an anti-corruption campaign. 
While Kulov's position has attracted widespread support, underscored by the parliament resolution on Aytbayev's dismissal, some observers suggest the prime minister is motivated by a desire to exploit Kyrgyzstan's chaotic conditions to enhance his own political position at Bakiyev's expense. Bakiyev's reluctance to support the parliamentary resolution could be part of a presidential strategy designed to prevent Kulov, widely acknowledged to be his strongest rival for power, from gaining any political advantage from the crisis. 

Ethnic Uzbeks in Kyrgyzstan voice complaints over discrimination, corruption
Ethnic Uzbeks in Kyrgyzstan are growing restive, as some community leaders voice complaints about rising discrimination. Members of President Kurmanbek Bakiyev's administration have remained largely silent on inter-ethnic issues, but local officials have downplayed the complaints. 
Uzbek community representatives held their seventh annual conference in the southern Kyrgyz city of Jalal-Abad on January 8, endorsing a statement that criticized rising corruption and discrimination, and appealed to Bakiyev to adopt "a clear policy stance" on minority rights. 
"We remain targets of a campaign of harassment launched by fiscal bodies, law enforcement agencies, and executive power structures that live on the taxes we pay," the document stated, according to a translation published by the Ferghana.ru website. 
"There is among representatives of the titular nation a tendency of incitement of hatred with regard to Uzbeks and other ethnic groups," the document continued. "Economic development and prosperity are impossible without equal terms and opportunities for all ethnic groups." 
Comprising roughly 13 per cent of Kyrgyzstan's overall population of 5 million, Uzbeks are the country's largest ethnic minority group. Most Uzbeks live in the southern regions of Osh and Jalal-Abad. In recent years, Uzbeks have agitated for broader civil rights, seeking, for example, the designation of Uzbek as an official language of Kyrgyzstan. They have also called for greater Uzbek representation in the judiciary and law-enforcement agencies, and for greater state support of Uzbek-language cultural activities and education. 
The increasing view among Uzbeks is that the March 2005 revolution that ousted former president Askar Akayev and installed Bakiyev was not a beneficial development for their community. Akayev, during the last years of his administration, courted Uzbek support by espousing a policy called "Kyrgyzstan is our common house." Uzbeks also used the People's Assembly, a formal association of ethnic minorities established by Akayev, to represent their interests. Uzbek leaders say that Bakiyev has shown little interest in continuing the Akayev line on inter-ethnic relations, noting that the People's Assembly has lost much of its former influence. 
Uzbeks have been alarmed by the nationalist rhetoric employed by Bakiyev administration officials. The government's inability to curb corruption is also a source of concern. "Uzbeks traditionally play a prominent role in the business sector, especially in the south. The rise in corruption has affected this sector the most," said an Osh-based political analyst, who spoke on condition of anonymity. 
Some observers believe Uzbek complaints about discrimination are related to a wide-ranging struggle over economic assets unleashed by the March revolution. The redistribution of property has occasionally turned violent, underscored by the assassination in September 2005 of Bayaman Erkinbayev, a prominent Osh-based entrepreneur who at the time of his death was a member of parliament. "The [Uzbek business] elite is worried about expanding redistribution of property that started following last March. Many of them have a lot of property and [business] interests. They are using discrimination rhetoric [in an attempt] to safeguard their property," one observer said. Kadyrjan Batyrov -- a Jalal-Abad-based entrepreneur with wide holdings who is also a prominent Uzbek community leader in the region -- is believed by some analysts to be a central figure in the discrimination complaints. Aibek Akbarov, first deputy governor of Jalal-Abad and a participant at the Uzbek annual conference told journalists that Batyrov exerted influence over 100 of the 150 meeting participants. Jalal-Abad Governor Zhusup Zheenbekov, meanwhile, claimed that Batyrov was fomenting ethnic discontent after failing to receive government permission to obtain a lucrative land parcel in the center of the provincial capital. "We cannot distribute land-plots in the centre to whichever person who requests them," the governor said. 
Other observers contend that Uzbek discontent is linked primarily to a breakdown of informal channels of communication among Kyrgyz government officials and Uzbek community leaders. Some Uzbek leaders maintained close personal ties to Akayev. Following the March revolution, however, no Uzbek leader has a strong relationship with Bakiyev. Anvar Artykov, an ethnic Uzbek who was Bakiyev's ally during the revolution, was dismissed in early December as the governor of the Osh region. 
Another factor influencing Uzbek actions is an internal power struggle. Many of those recognized as community leaders during the Akayev administration are now facing challenges from influential entrepreneurs, such as Batyrov. For example, in August 2005, Muhamedjan Mamasaidov, a prominent Uzbek leader and Akayev supporter, was forced out as head of the Republican Uzbek National Association. 
Regardless of the motivations behind the complaints, it appears unlikely that Bakiyev will respond in a way that satisfies Uzbek leaders. According to a former Kyrgyz official who maintains ties to the Bakiyev administration, the president does not feel inclined to adopt a forceful position on the inter-ethnic issue. "Bakiyev is in a tenuous position. He fears that open promotion of ethnic minority rights may erode his support base among Kyrgyz nationalists," the former official said. 

It isn't getting any better!
Bakiyev's administration has become increasingly embattled in recent months, amid burgeoning crime and corruption. The administration's inability to bring the adverse trends under control prompted international observers to dub Kyrgyzstan a "faltering state." The influence of nationalists within the cabinet, including Deputy Prime Minister Adahan Madumarov, seems to have grown as the government's difficulties have mounted. 
While central officials have not responded to the Uzbek conference statement, Zheenbekov, the Jalal-Abad governor, denied that Uzbeks have experienced an erosion of their rights. "It's difficult to even comprehend [the Uzbek conference statement]. Neither Uzbeks nor other nationalities were ever discriminated against in our region," Zheenbekov asserted. 
The government's reluctance to address the inter-ethnic issue could destabilize southern Kyrgyzstan. Several events in recent weeks have revived concerns about the potential for inter-ethnic clashes. In one incident, Kyrgyz women disrupted an official meeting at the Mayor's Office in Jalal-Abad, allegedly threatening to carry out a pogrom against Uzbeks. In making their threats, the women referred to the horrific 1990 inter-ethnic massacres and rioting in the Osh region that left dozens dead. 
Another troubling episode occurred January 12th near the Uzbek exclave of Sokh, which is surrounded by Kyrgyzstan's Batken Province. Robert Avazbekov, a representative of the Foundation for Tolerance International told EurasiaNet that Uzbeks reportedly beat up two Kyrgyz citizens. The next day roughly 150 residents of the Kyrgyz village Sogment gathered, intending to retaliate. A potentially more serious incident was averted largely through the foundation's mediation efforts. 

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CONSTRUCTION

Construction investment in Kyrgyzstan drops 

Capital investment in construction, reconstruction, expansion and new equipment in Kyrgyzstan totalled 7.629 billion som in the first ten months of 2005, down 13.6 per cent from the same period last year, Interfax News Agency reported.
There was a decline in investment due to 64.2 per cent drop in foreign grants and humanitarian aid, 32.2 per cent decrease in foreign loans, 42.5 per cent drop in funding from local budgets and 17.4 per cent decrease in household investment. Capital investment financed by foreign direct investment increased by 6.1 per cent to 556.2 million som, and investment by companies and organisations was up 4.7 per cent to 3.342 billion som. Gross construction output rose 1.9 per cent year-on-year to 6.352 billion som in the first ten months of 2005, including 3.9 per cent to 792.4 million som in October. Investment in construction of electricity infrastructure fell 29.3 per cent year-on-year to 848.4 million som in the ten months, of which 46.2 per cent came from companies and organisations. Around 47.1 million som was invested in the construction of the Kambaratin hydropower station, 38.2 per cent less than in January-October 2004.

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FOREIGN COOPERATION

Kyrgyz president wants more cooperation with China 

Kyrgyz President, Kurmanbek Bakiyev, said that Kyrgyz-Chinese cooperation should be deepened, including within the framework of the Shanghai Cooperation Organisation (SCO), Interfax News Agency reported.
"The effectiveness of Kyrgyz-Chinese cooperation, both bilateral and within the framework of the SCO, should be increased," Bakiyev said at a meeting with Chinese vice president, Zeng Qinghong, in Astana, the Kyrgyz presidential press service told Interfax. The Kyrgyz authorities are going to abide by all international obligations earlier undertaken by Kyrgyzstan, the president said. Bakiyev recognised the importance of building the Osh-Sary-Tash-Irkeshtam highway that links Kyrgyzstan and China and is likewise a gateway to Uzbekistan and Tajikistan. Moreover, Bakiyev spoke in favour of resuming the work of the Kyrgyz-Chinese intergovernmental commission. China attaches great importance to cooperation with Kyrgyzstan and considers Kyrgyzstan one of its main partners in the central Asian region, he said. 

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FOREIGN RELATIONS

Iran-Kyrgyzstan to expand ties

Recently a meeting was held between Iran's Majlis National Security and Foreign Policy Commission chairman, Alaeddin Boroujerd, and Kyrgyz Ambassador to Tehran, S Tairov. During the meeting, there were negotiations for expansion of political and economic cooperation between the two states in tune with the current potentials, Interfax News Agency reported.
At the meeting, it was reported that according to a report released by Majlis Media Department, Boroujerdi declared Iran's support for closer economic and trade ties between the two countries. He said that considering the importance of the need for raising the regional status of both states, the economic growth and multifaced development of countries of the region is necessary.
Boroujerdi even congratulated the re-election of President Nursultan Nazarbayev and hoped that the scheduled visit of Nazarbayev to Iran in the coming year will pave the way for further bolstering of mutual bonds.
Tairov is also pleased with broadening of bilateral relations and presented a report on the latest economic and trade developments of his country. He called for the support of the Iranian parliament for further expansion of ties in the domain of politics and economy.
Tairov said that an official invitation will be sent to president Mahmoud Ahmadinejad to attend president Nazarbayev's swearing-in ceremony. Meanwhile, he appreciated Iran for sending observers to Kyrgyzstan to supervise the recent presidential election in the country.

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GOLD PRODUCTION

Kyrgyzaltyn reduces gold production 27% 

Kyrgyzstan's state-owned gold producer, Kyrgyzaltyn, saw gold production plummet 27.4 per cent to 1.137 tonnes in 2005 from 1.566 tonnes in 2004, delegates heard at a session of the State Geology and Mineral Resources Agency, Interfax News Agency reported. 
Kyrgyzaltyn's Makmal mine produced 654 kg or just 63 per cent of its targeted gold. Makmal produced 950 kg in 2004 and aims to produce 1.05 tonnes in 2006. The meeting's participants said Kyrgyzaltyn was struggling financially and was "practically on the verge of bankruptcy." They described its performance last year as "unsatisfactory." Yury Dostovalov, the geology agency's official in charge of the mining industry, told Interfax that gold production at the Makmal deposit, where gold is currently open-cast mined, fell due to a delay with commissioning a deep mine, caused by the misuse of loans. Dostovalov said a British bank lent Kyrgyzaltyn 5.9 million Euro in 2002 and that 70 per cent of the money was ear-marked for the Makmal deep mine's construction.

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TELECOMMUNICATIONS

Russia's Rostelecom eyeing stake in Kyrgyztelecom 

Russia's national long-distance operator Rostelecom is likely to participate in a tender for the Kyrgyz government's 77.8 per cent stake in Kyrgyz fixed-line operator, Kyrgyztelecom, reported Interfax News Agency.
The Kyrgyz government directly holds 77.84 per cent in Kyrgyztelecom, 12.51 per cent is owned by the Social Fund of Kyrgyzstan, five per cent is owned by the company's employees, one per cent is owned by the company's management and the remaining 3.65 per cent is held by other individuals.
According to preliminary information, the price of the stake in Kyrgyztelecom, which also has a GSM licence will exceed US$20 million. Russian firm, AFK Sistema Telecom's public relations director, Anna Boiko, said that the management company of the telecommunications assets of Sistema has not yet decided whether it will take part in the tender. Another potential bidder, Russian telecommunications holding Altimo, formerly known as Alfa Telecom, has declined to comment on the issue. Altimo is controlled by Russia's Alfa Group. The tender is expected to be held in the near future. The precise date of the tender has not yet been determined.
In 2002 the Kyrgyz government announced a tender for the sale of a 51 per cent stake in Kyrgyztelecom. A Swedish firm Swedtel AB received the rights to the stake by offering US$15.6 million but refused to pay the amount so Kyrgyz government decided to cancel the results. Later, the Arextech/Detecon consortium, acquired the purchase rights by offering 16.2 million Euro for the stake. However, after the political crisis in the country in 2005, which culminated in Askar Akayev, the former Kyrgyz president, fleeing the country, the new government decided to cancel the tender results altogether on the ground that the wining consortium was controlled by Akayev's son Aidar Akayev

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TOURISM

International fairs to boost tourism sector in Kyrgyzstan 

Kyrgyzstan, a country which has a unique and cultural potential can easily turn the tourism sector into a leading branch of the economy. However last year reported a decreased number of tourists to Kyrgyzstan due to the political instability, fears of terrorism, low quality infrastructure and lack of advertising, Interfax News Agency reported.
The main instrument that can boost tourism in a country is by participating in international tourist fairs. Only one or two Kyrgyz tour operators participate in the major international tourists fairs on a regular basis because the cost of participation is too high and the absence of state support also prevents more tour operators to participate in the fairs.
A record number of Kyrgyz tourist firms took part in World Travel Market 2005 last November. 
Kyrgyzstan has participated in the tourist fair in London since 1998. WTM-2005 occupied an area of 39,500 square metres and gathered more than 5,000 tourism professionals from 190 countries. Kyrgyzstan was represented by private companies Tien Shan Travel, CAT, Novi Nomad, Top Asia, and Horizon Travel, as well as the Issyk-Kul Tour Operators Association and the Destination Marketing Association of Kyrgyzstan (DMA).
Each of the Kyrgyz participants had to pay a fee of US$1,100. According to Yulia Sunchaleyeva, DMA director, the Kyrgyz Embassy in London organised a meeting before the fair and arranged for an interview of the fair organisers with the Issyk-Kul Tour Operators Association. This year in January, Kyrgyz tour operators took part in Vakantiebeurs, a tourist fair in Netherlands.
The Kyrgyz participants advertised tours along the Great Silk Road and mountain tourism in Kyrgyzstan. The next major international tourist fair that will take place soon is the International Tourism Burse (ITB) in Berlin.
All Kyrgyz tour operators monitor the efficiency of their participation in all exhibitions or fairs. In the above fairs, Kyrgyz tourist firms conducted talks with major international travel agencies and received invitations to the upcoming tourist forums in Warsaw, Beijing, and Dubai.

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