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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: 314 - (22/02/07)

Kyrgyzstan forms new government
On February 8th Kyrgyzstan formed a new government, to be led by Prime Minister Azim Isabekov. On that day, President Kurmanbek Bakiyev signed the last decrees appointing Cabinet officials.
The previous government led by Felix Kulov resigned on its own accord on December 19th, 2006. Kulov explained his stepping down by the need to bring the activity of government bodies in line with the new constitution, but political analysts said the resignation was a form of pressure on the parliament, which opposed the president.
Lawmakers then twice refused to approve Kulov as the prime minister and voted for the candidacy of Isabekov proposed by the president. 

A presidential-appointed Cabinet 
The new government has been formed under a new principle. Under the old Constitution, the candidates for ministerial posts had to be approved by the parliament. 
After a new version of the Fundamental Law was adopted six weeks previously, the right to appoint ministers reverted to the president, but with the prime minister's consent. 
Kyrgyz politicians believe Bakiyev, in forming a new Cabinet, sought in the first place to strengthen the economic bloc, which is shown by a clear division of functions between the economic and finance ministries, and also by the fact that the ministers who have achieved success during 18 months in office have kept their posts.

President behind the changes 
The changes made by Isabekov suggest that he largely followed directions from Kyrgyz President Kurmanbek Bakiyev and his deputies. The new government excludes some former popular political leaders and increases the powers of Bakiyev's closest allies.
With Isabekov having limited political capital, Bakiyev now bears full responsibility for the new government's performance. His recent reappointments suggest that the president is constructing a network of loyal subordinates to increase his own leverage against the parliament.
First Deputy Prime Minister Daniyar Usenov has kept his office, as was expected. As before, he will be in charge of the economic sector. Usenov is currently among the strongest pro-presidential figures in Bishkek. The CEO of Kyrgyzgas, Igor Chudinov, and the CEO of Elektricheskie stansii, Saparbek Balkibekov, will head a new Ministry of Industry, Energy and Fuel Resources (Akipress, Parohod.kg, February 6).
But the appointments of former Education Minister Nuruulu Dosbol as a deputy prime minister and pro-rector of the Kyrgyz-Russian /Slav/ University Ednan Karabayev as the foreign minister were a surprise.
The ministers of the law-enforcement agencies, except the Interior Minister, remain in office. They are Defence Minister Ismail Isakov, Emergency Situations Minister Dzhanysh Rustembekov and Chairman of the National Security Service restructured to the State Committee for National Security Murat Sutalinov. 
Bolotbek Nogoibayev, who earlier headed the drug control agency, has been appointed the interior minister.

Opposition sidelined 
The Kyrgyz opposition is not represented in the new government. On February 8th, lawmaker Temir Sariyev, a member of the For Reforms opposition movement, which brings together several influential political parties, said Azim Isambekov had offered him the post of minister of economic development and trade. Sariyev said he had refused for political reasons. In his view, one member of the opposition in office cannot change the work of the whole Cabinet. 
The opposition is convinced, moreover, that compared with Kulov, Isabekov will be "a purely technical premier."
A number of Kyrgyz experts argue that the government recently tamed most opposition parliament members. Reportedly, unwanted MPs were pressured by threats to hinder their businesses.

Over-inflated and corrupt state machine and economy?
Bakiyev has been criticized for inflating the size of the public sector by maintaining too many ministries and committees. Currently there are 14 ministries and 17 committees and agencies in the Kyrgyz government. Bakiyev's closest relatives have a role in his cadre policies. Among them, the president's brother Zhanybek Bakiyev, former deputy chair of the National Security Service, plays a key, albeit hidden role.
The new group of governmental appointees will secure the continuity of the existing corrupt structure of Kyrgyzstan's energy sector, banking system, and customs control. All of these sectors are controlled by public officials or people allied with the government. Under state protection, each sector conducts business by assisting the others with financial or political support.
The new government is likely to reject Kyrgyzstan's prospective joining of the Heavily Indebted Poor Countries (HIPC) Initiative. Parliament Speaker Marat Sultanov explained that HIPC will not solve the problems in Kyrgyzstan's energy sector, but would make the country even more dependent on international financial institutions. 
However, according to one World Bank employee, some top Kyrgyz officials oppose reforms in the energy sector because it would threaten a major source of corruption. Few of these officials were involved in the government's recent reshuffle. According to various estimates, key managers and government officials in this sector annually pocket about US$30 million.

Short-termism repeats Akayev's mistakes
But while Bakiyev's new government is rejecting the HIPC, it is not capable of designing any alternative strategy to reduce Kyrgyzstan's US$2 billion external debt. Bakiyev's behaviour is driven by short-term needs, instead of trying to secure more stable economic development. 
In this sense the president is repeating the mistakes of his predecessor, Askar Akayev, who was responsible for accruing the current external debt and ineffectively managing Kyrgyzstan's gold reserves and the energy sector. 
The Kyrgyz government's negligent treatment of the HIPC worsened its relations with both the International Monetary Fund and the World Bank. On February 7th both organizations released a letter emphasizing that joining the HIPC is in Kyrgyzstan's long-term economic interests.

A remittance economy 
Today, Kyrgyzstan's economy is sustained largely by remittances from labour migrants mainly residing in Russia, Kazakstan, Europe, and the United States. Kyrgyz civil society activist Edil Baisalov recently commented that Kyrgyzstan is simply "doomed" regarding economic growth because almost US$1 billion in remittances is sent annually by the country's "main export commodity - labour power." 
However, these remittances do not bring down the external debt. Akayev was for a while the darling of the West, which enabled him to run up a huge external debt.

But political long-termism
The new government will probably work towards strengthening Bakiyev's positions before the next presidential elections in 2010. According to Sultanov, although the government is loyal to the president, the parliament is still a strong counterweight as "no other [Kyrgyz] parliament ever vetoed so many presidential decrees." 
But Sultanov also jokes, "Today, none of the existing state structures enjoy the population's full support."
Despite the weak government and a president seeking to increase his own powers, Kyrgyzstan still possesses multiple points of view. A number of local mass media outlets freely publish criticism against state structures and specific political actors. The government will not be able fully to curtail the activity of the local press. Yet while the accusations are made, the law-enforcement agencies do not carry out any anti-corruption activities.

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FOREIGN RELATIONS

Moscow wants to expand cooperation with Bishkek 

Russian Foreign Minister Sergei Lavrov said Moscow has been backing efforts by the Kyrgyz authorities to bolster stability in the country. "We are interested in a comprehensive strengthening of our cooperation, and of course, we support the efforts of the Kyrgyz authorities to guarantee stability in the country," Interfax quoted Lavrov as saying at talks with his Kyrgyz counterpart Alikbek Dzhekshenkulov on January 16 in Moscow.
The Russian minister said he would discuss all aspects of the successful development of bilateral relations at the meeting. "We want to develop cooperation at the regional level, primarily in the area of security in the Central Asian region," he said, highlighting the importance of bilateral cooperation in the framework of such organisations as the Collective Security Treaty Organisation (CSTO), the Shanghai Cooperation Organization (SCO), the Eurasian Economic Community (EurAsEC) and the Commonwealth of Independent States (CIS).
At the same time, Dzhekshenkulov expressed hope that the parties will be able to synchronize actions as strategic partners both in the bilateral sphere and within the framework of regional organizations.
Dzhekshenkulov gave Lavrov a letter from Kyrgyz President Kurmanbek Bakiyev to the Russian authorities. The Kyrgyz minister said the letter confirms once again that Kyrgyzstan and Russia have the relations of allies and invites Russian President Vladimir Putin to visit Kyrgyzstan.
Russia's Sarydzhaz Mineral Mining Company won the tender for the rights to the Kensu tungsten deposit in Kyrgyzstan, a government spokesman said. The director of the State Agency for Geology and Mineral Resources, Vladimir Zubkov said the Russian company presented the best and most realistic programme for developing the deposit. In addition, the company is already working actively at the neighbouring Trudovoye tin and tungsten deposit, where it is drafting blueprints for an ore processing plant and opening old mine workings. 
There were four applicants to bid in the tender: the Russian company, a Kyrgyz-Chinese joint venture, a Japanese company, and a Kyrgyz company. However, the Japanese company was disqualified because it did not present a development program for the deposit, the Geology and Mineral Resources Agency's chief resource use inspector, Kadyrbek Kakitayev said. 
He said the tender commission unanimously declared Sarydzhaz Mineral Mining the winner as this company, unlike the others, proposed to produce an end product with a far higher value than just concentrate. This will be possible thanks to the production facilities that the company is building at the Trudovoye deposit, which is located on the same ore field as Kensu, he said. 
"The winner of the tender is prepared to invest 28 million Euro in the development of the Kensu deposit," Kakitayev said. Under the terms of the tender, the bidders were supposed to submit a financing plan and confirmation of financing resources of at least 20 million Euro. Kensu has C1+C2 reserves of ore and tungsten trioxide of respectively 5.849 million tonnes and 29,539 tonnes, he said. The ore bodies can be 60 per cent mined by open-cast methods and 40 per cent by deep mining. Kensu is located in the Sary-Dzhaz ore field in the IssykKul region, in the upper reaches of the Kensu River. The altitude of the deposit varies from 3,300-3,750 metres, the agency said.

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MINERALS & METALS

Firms apply to bid for uranium plant

Three companies have applied to bid at a tender which began on January 23 for the Kyrgyz government's 72.28 percent stake in Kara-Balta Mining, a major Soviet-era uranium-processing enterprise and one of Kyrgyzstan's biggest industrial enterprises, Almaz Imanaliyev, head of the Kyrgyz State Property Committee's State Property Fund told Interfax. Imanaliyev named the bidders as the locally registered Imotu Enterprise; Canada's Stans Energy Corporation and UralPlatina Holding, which is a member of Russia's Renova Group. Investment tenders are held in two stages, according to current legislation. "We need to involve all relevant agencies in the assessment of bids when enterprises of strategic importance are being sold, in order to affirm the guarantees and financial strength stated in the proposals," Imanaliyev said. The tender commission met on January 23 to unseal the envelopes containing the bids, Imanaliyev said. The commission decided to make a detailed study of the bids.

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