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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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Update No: 315 - (29/03/07)

Two years on from the revolution 
Street protests, demonstrations and calls for reform led to the ouster of President Askar Akayev and carried Kurmanbek Bakiyev to power on March 24th, 2005. But two years later, the political infighting continues, with more opposition protests set to begin on April 9th. Central Asia's most democratic state may also be its most fragile, Afghanistan of course excepted, although none of its states are truly stable. 

The similarities with changes of government in Georgia and Ukraine proved superficial long ago, leaving behind a host of questions about the nature of Kyrgyz democracy, if indeed it can be called that. The Tulip Revolution is nothing like the Rose Revolution, let alone the Orange Revolution. But then Central Asia is very different from Europe. Kyrgyzstan is, moreover, a very poor country. Only Tajikistan and Afghanistan are poorer in Central Asia. But then both had devastating civil wars. 

Assuming the demonstrations that ousted Akayev were a true expression of popular will, the outcome is hardly inspiring. Bakiyev's government has done little to meet its promises of reform, whether combating corruption, promoting a freer press, or rebalancing the division of governmental powers. 

Meanwhile, the economy is stagnant, limping along at 2.7 per cent growth in 2006, far below the government's projection of an 8 per cent rise. The biggest economic story over the past year concerned the debate over Kyrgyzstan's plans to ease its debt burden by joining the Heavily Indebted Poor Countries Initiative (HIPC). Ultimately, the Bakiyev administration backed away from joining HIPC, amid strong public opposition.

Crime and murders on the rise 
Security has also declined: the looting that accompanied Akayev's departure was followed by a year in which three members of parliament were killed. Several prominent businessmen, most with alleged criminal connections, have also been gunned down, and lawmakers recently approved legislation granting themselves the right to bear weapons in self-defence. 

Akayev was at least able to keep a lid on organized crime, but under Bakiyev it seems to be open season. 

Public agitation too
Finally, and perhaps most significantly, the street protests that brought down Akayev have been revived on a regular basis. Kyrgyzstan's supposedly spontaneous demonstrations always included some element of planning, but now political leaders have it down to a science: erecting tents, carting in supporters, and supplying them with food, water, and, some say, cash and vodka when needed. 

The political opposition led the latest round of demonstrations in November 2006, securing a new, compromise constitution that reduced presidential authority. But Bakiyev counterattacked at the very end of the year, slipping in adjustments that shifted power back in his direction. 

Opposition augmented by ex-premier 
In the process, Feliks Kulov, Bakiyev's influential yet independent ally in the 2005 elections, lost the premier's seat. The president replaced him with a staunch supporter, Azim Isabekov, eliminating a potential enemy within, but creating one without. 

Kulov's move into the opposition has galvanized the flagging anti-government forces, greatly increasing the odds that this spring will bring further political unrest. 

The prolonged wrangling - and the apparent indifference of the public - begs the question of whether either side can claim a popular mandate. Bakiyev has indeed failed to deliver on most of his reform promises, and the opposition is right to feel cheated at seeing its revolutionary hopes dashed, or perhaps themselves to get their hands on the levers of power - and its rewards!. 

But protests can only go so far in prompting change. As their frequency increases, the benefits of calling the authorities to account start to pale in comparison to the drawbacks in terms of stability. 

Non-violent remedies
There are ways out of the coming crisis without taking to the streets. In a position paper published last year, local analyst Sheradil Baktygulov argued that Kyrgyzstan must do a better job of incorporating the opposition into government deliberations. A draft law on the subject is a start, he says, but it must be adjusted to include more concrete mechanisms for taking the opinions of the opposition into account. Otherwise, any routine disagreement will quickly rise to the level of a crisis, as it so often does now. 

Bakiyev's recent conciliatory stance in meetings with opposition leaders is a positive sign, but only if it marks the beginning of an ongoing consultative process. 

Baktygulov also calls for greater attention to the development of political parties. Kyrgyzstan may have taken the first step in this direction as well: under the new constitution, half of the members of parliament will be elected by party affiliation, and the winning party will have a chance to name the prime minister. This may help develop a more stable system of party politics in Kyrgyzstan by encouraging clan-based regional interest groups to unite under a national platform. 

In a more ominous sign, the constitution itself has once more become a bone of contention. Despite the fact that the country has had three different constitutions within the past year, the opposition is calling for fresh constitutional changes. As beneficial as the opposition's proposals may be, the precedent is damaging; an endless cycle of cynical constitutional reform looms, in which political actors manipulate state institutions for short-term advantage. Central Asia has seen far too much of that already. 

Guarded optimism
Despite what some observers may think, though, Kyrgyzstan is no basket case. The struggle for power there is more transparent and competitive than anywhere else in the region. There exists a solid foundation of civil liberties - including the freedom of assembly and expression - that Kyrgyz citizens have already come to take for granted. 

But the line between taking liberties for granted and just plain taking liberties is blurred in Kyrgyzstan. Putting up a wall between the two should be the next task for the country's democracy-builders. 

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The following is an informed account of the situation:-
Friday, March 23, 2007, EURASIA INSIGHT 

Political discontent simmers in the Ferghana valley 
Political discontent is brewing throughout the Kyrgyz, Tajik and Uzbek portions of the Ferghana Valley, as regional elites in all three states are unhappy with the behaviour of central officials. Discontent is perhaps most acute in Southern Kyrgyzstan. Members of the region's political elite are publicly complaining that the long-running political confrontation in Bishkek, pitting President Kurmanbek Bakiyev against members of the Kyrgyz parliament, is threatening stability in the regions. 

In comments published in early February by the 24.kg news agency, Jantoro Satybaldiev, the Osh region's popular governor, stated that "central authorities have lost touch with the problems of the provinces." Incessant political manoeuvring in Bishkek is starting to have serious economic consequences for southern Kyrgyzstan, Satybaldiev added. He cited the delay in the approval of a 2007 state budget, saying such inaction had deprived funds for social services, and thus had fuelled popular anger. "The parliament is too politicised - it assumes many responsibilities that do not belong to it," said Satybaldiev, who also serves as the special presidential representative for the region. Satybaldiev called on the central government to grant regional authorities an expanded economic decision-making role. However, the Bakiyev administration appears unlikely to heed the request. Officials in Bishkek are concerned that such action could possibly promote the fragmentation of the country. They also are concerned that the president's opponents in parliament might try to establish control over regional political machines, and use them to launch a fresh political assault on the executive branch. 

The president's position is somewhat awkward given that he himself is a southerner, and his rise to the presidency was seen by many residents in the region as a long-overdue corrective to the economic and political imbalances between the northern and southern sections of the country. Rather than addressing local grievances, authorities in Bishkek would rather discipline regional governors, some political analysts believe. On February 5, a group of protesters in Osh demanded Satybaldiev's resignation, accusing him of collaboration with Kyrgyzstan's disgraced former president, Askar Akayev. They also claimed that the Osh governor was "betraying the ideals" of Kyrgyzstan's Tulip Revolution of 2005. 

Observers suggest that members of presidential administration may have played a role in organizing the protest. In Tajikistan and Uzbekistan, the source of local dissatisfaction is linked to a more common source - the heavy-handed behaviour of central officials. Following his re-election in late 2006, Tajik President Imomali Rahmonov carried out a far-reaching government reshuffle that included the removal of Kasim Kasymov as governor of the Sughd Region, which encompasses the Tajik portion of the Ferghana Valley. Local observers say the aim of the reshuffle was to strengthen Rahmonov's influence over the region's political apparatus. Tajik political analyst Daler Gufronov, writing for the Asia Inform news agency, characterized Kasymov's ouster as "thunder on a clear day." According to a report distributed by the Regnum news agency, Rahmonov offered the prime minister's portfolio to Kasymov, who "for unknown reasons" turned the offer down. The rebuff reportedly angered Rahmonov, and the ousted governor ended up with only a minor post within the ruling People's Democratic Party. Having been in charge of Sughd Province for seven years, Kasymov had forged powerful patronage networks. Thus, only weeks after Kasymov's departure from power, Rahmonov began a wide-ranging "cadre rotation" in municipal executive bodies throughout the region. In the Uzbek part of the valley, long-standing resentment toward the centre continues to grow. Human rights organizations documented that discontent with the central government's economic policies was a major factor in stoking the Andijan events of 2005. 

Tashkent has done little to address those complaints since then. Instead, President Islam Karimov's administration appears preoccupied with maintaining tight political control over the region, a desire underscored by the political purges carried out in 2006 in both Andijan and Ferghana provinces. 

An entrepreneur who spoke to EurasiaNet on condition of anonymity complained that the purges have stoked corruption and exacerbated local economic difficulties. Prior to the political changes, local entrepreneurs were already buckling under what some described as confiscatory tax policies. Starting in early 2006, Uzbek authorities imposed a monthly fee that is not connected to sales revenue, requiring all entrepreneurs to pay the state the equivalent of 7.5 minimum monthly wages, or roughly US$85. For the average small businessman, who generates about US$200 per month in income, the tax rate comes out to over 40 per cent, and serves as a disincentive to stay in business. Concurrently with imposition of the flat tax, the government expanded efforts to collect excise taxes on some imported goods. The heightened collection effort has hit Ferghana Valley residents especially hard, given that many local entrepreneurs rely on cross-border trade. Inter-state issues are also playing a role in the Ferghana Valley's rising discontent. In September 2006, for example, Karimov and Bakiyev signed an agreement easing visa requirements for Kyrgyz and Uzbek citizens. However, almost six months after the signing of the agreement, authorities have not fully implemented the visa-free travel regime. 

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FOREIGN COOPERATION

Bishkek, Tehran to expand cooperation

Iranian Ambassador to Bishkek, Mohammad-Reza Sabouri, met Kyrgyz Foreign Minister, Erdnan Karabayev, on March 17th to discuss cooperation between the two countries in cultural, political, parliamentary and economic fields and regional and international issues, Interfax News Agency reported. 
Karabayev pointed to the establishment of bilateral friendly ties after Kyrgyzstan's independence in 1991 and said Iran-Kyrgyz relations have undergone major development in all fields over the past 15 years. The Kyrgyz foreign minister said that officials of both sides are willing to further bolster their mutual ties in various domains. Meanwhile, he appreciated Iran's assistance to his country on different occasions.

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FOREIGN INVESTMENTS

Calls for more foreign investment in exploration

Kyrgyzstan is hoping to receive 1.8 billion som or more than 47 million Euro in foreign investment for geological exploration this year, 10.6 per cent more than in 2006, the state secretary of the country's Geology and Mineral Resources Agency, Duishenbek Kamchibekov, said, Interfax News Agency reported on March 16.
He said the agency has drafted a plan of action to ensure rapid economic growth in 2007.
The plan includes measures to develop the mining sector and expand exploration by raising foreign investment. Foreign direct investment in exploration has been growing steadily, increasing to 1.628 billion som (38.1016 som) last year from 1.407 billion som in 2005 and 1.200 billion som in 2004, he said. There are plans to draw up technical specifications for the development of the Trudovoye (Lisisty and Tashkoro blocks) and Uchkoshkon tin deposits, the Togolok gold deposit, and the Andash and Bozymchak gold and copper deposits.
In addition, there are plans to stabilise gold production at the Kumtor deposit and ensure annual growth in gold output by Centerra Gold Inc. The plan calls for mining 14.25 tonnes or 10.717 billion som of gold at Kumtor this year. An additional 500 jobs are expected to be created at the deposit. The plan also calls for Kyrgyzaltyn to invest 25 million som of its own money and four million Euro of foreign investment to boost gold production. This company is expected to mine 1,565 kg of gold this year, compared to 1, 278.3 kg in 2006. Work is also supposed to accelerate at the Jerooy deposit, investment in which is targeted at about 45 million Euro.
There are plans to complete the feasibility study for the project, and build the infrastructure for the mine - a plant, tailings dump and auxiliary facilities. The project is expected to create 213 new jobs. The company also plans to accelerate the development of the Taldybulak Levoberezhny deposit, which is supposed to receive 390 million som of investment this year. There are plans to complete design work and start the main construction work on the mine, creating 91 new jobs. At the Trudovoye (Lisisty and Tashkoro blocks) tin deposit, there are plans to complete all design work and begin construction on infrastructure. Sarydzhaz Mineral Mining Company plans to spend 10 million Euro on this project.
The plan also calls for measures to stabilize raw material supplies and production processes at the Kadamzhay Antimony Works and increase production this year to 4,000 tonnes of antimony worth 760 million som. Investment is targeted at 58.5 million som, and 139 new jobs are expected to be created.
Another important project, Kamchibekov said, is reviving core production at the Karabalta Mining Works with 136.5 million som of direct investment from UralPlatina Holding. Production at Karabalta, not including uranium products, is targeted at 98.3 million som this year. With secondary processing of uranium waste, production of uranium products is forecast at 100-120 tonnes, or 0.8 billion-1.2 billion som. Forty jobs are to be created here.

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