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Economy : Like the
other central Asian States, the government of Kyrgyzstan inherited a
seriously unbalanced and dysfunctional economy from the Soviet Union.
It chose a policy of rapid change, including privatisation and a
freely floating and convertible currency (the Som, introduced in 1993)
which has, by and large, been reasonably successful in ensuring steady
economic growth (currently 3.5 per cent). This was also an important
factor in attracting foreign aid and investment, which has done much
to bolster the economy.
Despite the relatively small area of fertile land, agriculture remains
the largest employer, occupying almost half of the working population
and contributing a similar proportion of GDP. Half of the irrigated
agricultural land is devoted to livestock, which is the mainstay of
the farming sector. Other agricultural products include grain,
potatoes, fruit and vegetables, cotton and tobacco. Kyrgyzstan’s
economic potential lies in its mineral resources: there are known
deposits of iron ore, copper, lead, zinc, mercury, antimony, tin,
bismuth, vanadium, bauxite, molybdenum, manganese, silver and gold.
Oil reserves, provisionally thought to be sufficient to cover domestic
needs for 20 years, were located in 2001. There are also large amounts
of stones such as marble, granite and limestone.
The industrial sector was the main casualty of the post-Soviet era and
output of metal goods, machinery, electronics and textiles has
declined over the last decade. In the service sector, tourism has
future potential but, given the dearth of necessary infrastructure,
this must be considered a long-term objective. Finance grew quickly
during the late 1990s following reform of the banking industry. In
November 2000, the privatisation of several major state enterprises
(including telecommunications, air transport and energy) was agreed by
the government despite serious domestic opposition. Kyrgyzstan belongs
to the Central Asian Economic Union (ECO) which aims to promote
regional economic co-operation and trade among the former Soviet
republics and their neighbours. Kyrgyzstan is a member of the World
Bank, the IMF (which in October 2001 agreed a US$100 million loan),
the European Bank for Reconstruction and Development (as a ‘country of
operation’) and the Asian Development Bank. The United Nations
Development Programme has also been active in Kyrgyzstan.
Business : Kyrgyzstan is actively seeking overseas partners to
modernise its industry and introduce new technology. To this end, it
has enacted a number of laws to encourage and protect foreign
investors; the law on property extends to all foreign investors the
rights granted to Kyrgyz citizens with respect to ownership;
foreigners are allowed to purchase businesses and buildings to carry
out their activities, but the Government reserves the exclusive right
to own land, natural resources, water, agriculture and livestock.
There are significant tax holidays for foreign investors. In order to
invest in Kyrgyzstan, foreigners must be registered with the Ministry
of Economy and Finance. Applications to set up in Kyrgyzstan should be
sent in the first instance to the State Committee on Foreign
Investments and Economic Assistance (Goskominvest). The Government is
particularly interested in encouraging investment in mining, industry
- including electronics, light agricultural machinery and
pharmaceuticals - petroleum, hydroelectricity and agriculture. Office
hours: Mon-Fri 0900-1800, Sat 0900-1300 (Mar-Oct). Government office
hours: Mon-Fri 0900-1700, Sat 0900-1300 (Nov-Feb).
Commercial Information : The following organizations can offer advice:
State Technical Committee of the Kyrgyz Republic on Foreign
Investments and Economic Development, Room 210, ul Erkindik 58A,
720040 Bishkek (tel: (312) 223 292; fax: (312) 661 075); or Ministry
of Finance, Prospekt Erkindik 58, 720040 Bishkek (tel: (312) 228 922;
fax : (312) 227 404); or Kyrgyz Chamber of Commerce and Industry,
Foreign Affairs Department, Kievskaya 107, 720001 Bishkek (tel : (312)
210 574 or 210 565; fax : (312) 210 575; website :
http://www.ihk-kg.de).
Information : can also be obtained from the US Department of Commerce
International Trade Administration, USA Trade Centre, 1401
Constitution Avenue, Washington, DC 20230, USA (tel (202) 482 4655;
fax : (202) 482 2293; e-mail : bisnis@ita.doc.gov; website :
http://www.bisnis.doc.gov). |
