2017 Kyrgyz Republic THE CENTRAL ASIA COUNTRY SERIES
Kyrgyz Republic
November 2017 ii KYRGYZ REPUBLIC pbc.org.pk For any queries or feedback regarding report, contact this please [email protected] ahsan.hamid@ or change. to subject included work. inthis data All and statistics are used correct as of September 1st, 2017,and may be authenticitythe of data, the The Pakistan Council,Business the or author(s), do not guaranteethedata of UN,WTO, the World or Bank, CIA. effort made been to cross-checkhas Although every and verify CIA World Factbook are responsibility the of author(s) the and donotthe necessarily reflect opinion Any conclusions and analysis on data based from ITC, UN Comtrade, World Doing Bank, Business and of Directors and Members of The Pakistan CouncilBusiness the companiesor they represent. The findings, interpretations and conclusions expressed doBoard views necessarily not the the of reflect Disclaimer: Ahsan Hamid Researcher: Lead Team Samir S.Amir Leader: Acknowledgements: org.pk More information its on members, PBC, the and its workings, found can be on its website: www.pbc. • • • • • The major objectivesas statedthe of PBC in its founding documents are: FoundingThe PBC’s Objectives: and reforms. State SECP Bank, and other regulators with objective the to provide assistance policy on initiatives new It on various serves taskforces also and committees of Government the of Pakistan as well of as those the recommendations to government the on legislation and other government affecting policies businesses. impact conduct the of business inand from Pakistan. has Thesubmitted PBC position paperskey and as well as other stakeholders including professional to develop bodies, consensus on major issues which worksThe PBC closelywiththe relevant government departments, ministries, regulators and institutions, on major the issues by faced Pakistan. to facilitate flow the of relevant information all stakeholdersto in order to help create an informed view compete inregional and arenas. global conducts The PBC research and holds conferences seminarsand business sector. Rather, is on its thrust easing key to advocacy barriers allow Pakistani businesses to group. advocacy pan-industry is a The PBC It is body nornot trade a does it advocate for any specific of CorporateCode Governance as applicable to listed companies. Though it is not requiredthelaw under so, to do followsthe PBC greatest the to extentpossible, the is a not-for-profitThe PBC entity, registeredSection 42 Companiesthe of under Ordinance 1984. chief by executiveheaded afull-time officer. businessesPBC cover nearly sectors of all formal the economy. It is aprofessionally-run organization (now 64)of Pakistan’s largest private-sector businesses and conglomerates, including multinationals. The Pakistan platform,is a CouncilBusiness advocacy business (PBC) policy established in2005 by 14 The Pakistan BusinessCouncil: foster andfurthertheeconomic,socialhuman resourcedevelopment ofPakistan. facilitate, to and Pakistan of development economic the in governments with interact To and toencourageinthedevelopment andgrowthofPakistani multinationals. To promote and facilitate the integration of businesses in Pakistan into the World economy for suchbusinesseswithinandoutsidePakistan. information relating to businesses of any kind, nature or description and on opportunities To acquire, collect, compile, analyze, publish and provide statistics, data analysis and other regard tomattersaffectingbusinessesin Pakistan. in awareness raising and research out carrying for works field and seminars workshops, To conduct,organize,setup,administerandmanagecampaigns,surveys, focusgroups, conduct ofbusinessinandfromPakistan. To providefortheformationandexchangeofviewsonanyquestionconnected with the AnOverview iii KYRGYZ REPUBLIC iv KYRGYZ REPUBLIC The PBC’s MemberCompanies The PBC’s The PBC’s MemberCompanies The PBC’s v KYRGYZ REPUBLIC vi KYRGYZ REPUBLIC The followingtable showsthe value percentageand change economic forselected indicators. transferwill surplus from Asia electricity Central to South Asia. generated country. inthe Kyrgyzstan of apart CASA-1000 the is also project upon which completion hefty import since independence.bills As of 2014, sourceshydro-electric made up 91% the of electricity of upreserves to 24.4 billion tons. The absence of oil and gas has however burdenedwiththe country endowments, is only the coal fossil found fuel inany significant quantity in with Kyrgyzstan probable economy2015. The however is highly susceptible to anykind of internal turmoil.Regarding natural performingThe been tourismhas in well industry recent yearswith a revenue of USD 481 Million in regarding leads sector employment both, services and contribution to GDP, 50%,and 56%respectively. years with a CAGR of 2000-2015. Out 11% for of three the major period the sectors of economy, the the to mountainous the terrain. The manufacturingsector, the on other hand, has showngrowth overthe accounted for 7%of GDP the sector in2015.The hasthrived agricultural never in well Kyrgyzstan owing contributed on an average value 42%to last export inthe the five years. Moreover, also gold extraction The economy Kyrgyz derives aconsiderablepercentage of its revenuefrom which gold exports, and bilateral were ties established two the countries. between and holds still office.Pakistan extended diplomaticrecognition toDecember 1991 Kyrgyzstan on20th implementedto be to restore order country. inthe Almazek Atambayev president was elected in2011 in 2005.The country wentthrough political fromturmoil 2005 to 2010, and constitutional reforms had Republic of Kyrgyzstan. Akayev was able to extend his tenure for next the fifteenyears, he till was ousted oncountry 31st August 1991.Askar Akayev, uncontested, running first the became president the of resentment among against locals the government Soviet the to led Kyrgyzstan becoming an independent Union in1936.Political instability prevailing USSR inthe during late the century, 20th coupled with ofpart modern-day Kyrgyzstan to Russian the was ceded empire. Kyrgyzstan of apart became Soviet the regionthe was overrun and controlled by various empires. Finally, during eastern century the 19th the and of apart became Mongol the empire for next the two centuries. From century onwards, 16th the plundering nearby settlements. early the During century, 13th region the was ransacked by Mongols The the origin of people dates BC. TheKyrgyz back to 2000 wereKyrgyz originally nomadic raiders, Kyrgyz and Russian are official the languages the of country. Muslims,being another 20%of population the are Russian Christians. Orthodox 31 people per km 31 people per population of 6.1million (2017estimate) with amedian age of 25-29years and apopulation density of 199,591 km Tajikistan and The ranks China. country fourth amongCentral the Asian states in terms of area - Kyrgyzstan Asia. landlocked inCentral is country asmall It is bordered by, Kazakhstan, Uzbekistan, is fourth the publication and features Series of Asia Central the Country Kyrgyz the Republic. – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are covered being This by PBC. the Argentina, Brazil, Columbia Chile, and Mexico were featured. In ‘5’countries 2017the of Asia Central Mozambique, Nigeria and were South Africa showcased. In 2016, ‘5’ countries from South – America traditional markets to Pakistan’s exporters. In 2015‘6’countries –Angola, from Africa Ethiopia, Ghana, doing Profile since 2015has been Series (PBC) aimed aCountry Council at introducing non- In order to promote Pakistan’s with its trade non-traditional trading Pakistan the partners, Business Executive Summary: 2 . According to National the Statistics Committee of Kyrgyz the Republic, has country a the 2 on average. Islam is dominant the religion of with 75%of country the population the in easing bilateral trade, whereas EURASIAN the economic union inits is still stages. initial Apart Organization and (ECO) Organization the of Islamic Cooperation (OIC) have had some positive effects facilitationtrade Commonwealth alliances.The of Independent StatesEconomic (CIS), Cooperation To facilitate and trade economic cooperation, Kyrgyzstan has become amember of various strategic and economies.both for Kyrgyzstan between trade and Pakistan. However, absence the of a suitable land route is a hurdle for countries with both trade quite is also differentfrom one other.calculation Adetailed showspotential two countries in 2016 was recorded at USD 20.0 Million & USD 2.9 million respectively. The nature of India and Pakistan have not significant been tradingpartners of tradedeficit The Kyrgyzstan. the with appliancesas electrical and capital were goods imported, resulting inan import bill of USD 1.4Billion. comprised mostly of raw materials and low-value Whereas, goods. high-valueconsumer such goods depicting an increase of 39%over to in 2016 were China 2015.Exports valued at USD 79.7million and Kyrgyzstan has had a constant deficit trade withChina. The deficit crossedBillion USD1.3 in2016 on imports dependency high from Kazakhstan for products food basic and fuels. mineral 484 million whereas it has asurplus, USD with 55million Uzbekistan. intrade This situation is owing to situation trade the for countries both is different. trade deficithas a Kyrgyzstan with Kazakhstan of USD In Asia, Central Kazakhstan is largest the of trading partner Kyrgyzstan followed by Uzbekistan. However, deficit trade 45% inthe compared to 2015. took lead.Kyrgyzstan the deficit had atrade of USD 0.6 withbillion Russia in2016, an improvement of Russia largest the has been to exporter Kyrgyzstan however, situation the changed China in2016when Russia was Kyrgyzstan’s 2nd largest import and partner 3rd largest in2016.Since partner 2001, export import origins of Kyrgyzstan accounting for 84%of imports in2016. Regarding imports, Russian the China, Federation, Kazakhstan, Turkey and USAare the top the 5 destinations of Kyrgyzstan; five these countries accounted for 81.5% the export of revenue in2016. Switzerland, Kazakhstan, Russian the Federation, Uzbekistan, and Turkey are top the 5 export were among top the 10imports of Kyrgyzstan. with imports totaling USD 3.84Billion. Mineral fuels, industrial machinery, footwear, iron, and plastic have on a declining been trend 2015-16 saw since 2013, and a 5.5% decline import in the period the bill aeronautical equipment, vehicles other than railway, and apparel are main the items. export Imports recorded at 1.4billion USD declined by in 2016which 1.2%over previous the year. Gold, ores& slag, point of USD 4.0 Billion in 2013, it has since declined to USD revenue 2.4 Billion in 2016. Export was For past the 16years, has apersistent country the faced deficit. trade tradedeficit The reachedhighest its inunemploymentrise is aconcern. growth rate of 3.83% and inflation down economythe at 0.42% appearsbe stabilizing,to however,the economicThe conditions of forKyrgyzstan the year 2016 areportrayed tablethe by above. With a Unemployment (ILO Method) Inflation GDP perCapita(USD) Real GDP(USDBillions) Nominal GDP(USDBillions) Indicator Major EconomicIndicators-2016 1077.04 7.68% Value 6.32 6.55 - % Changefrom2015 -1.90 3.93 0.42 3.83 1.67 vii KYRGYZ REPUBLIC viii KYRGYZ REPUBLIC compared to 2016. Apart from international regarding aspects all trade business activity have shown adecline in2017as abusinessrunning for by alocal eachcountry, Kyrgyzstan as ranks of 75th 2017on overall the ranking. According to Doing the Business Index, is which measured to determine relative the of ease starting and Russia, Kazakhstan, Ukraine, and Tajikistan to name afew. from multilateral these treaties, Kyrgyzstan has bilateral also agreements trade free with eight countries; List ofContents 3.6 Poverty: 3.5 Unemployment: 3.4 Inflation: 3.3 GDPperCapita: 3.2 GDP: 3.1 SectorsoftheEconomy: Economic Overview 2.3 Post-independence Kyrgyzstan: 2.2 AsSovietKyrgyzstan: 2.1 From AntiquitytotheSovietUnion: Short CountryHistory 1.18 Communications: 1.17 Transportation: 1.16 Government: 1.15 Languages: 1.14 ProminentReligions: 1.13 Ethnicgroups: 1.12 Lifeexpectancyatbirth: 1.11 Population: 1.10 AdministrativeRegions: 1.9 Climate: 1.8 Total Area: 1.7 Location: 1.6 CentralBank: 1.5 Currency: 1.4 CapitalCity: 1.3 Timezone: 1.2 Coordinates: 1.1 Name: Geographic andSocialIndicators List ofContents Executive Summary: MemberCompanies The PBC’s Founding Objectives: The PBC’s The Pakistan BusinessCouncil:AnOverview Disclaimer: ii Acknowledgements: 26 25 24 23 22 18 15 12 12 11 09 07 06 06 06 06 05 05 04 04 04 04 03 03 03 03 03 03 03 01 Tourism: 104 Section breaks Cover Page: Data Sources 103 6.3 Consulate: 6.2 Embassy: 6.1 EaseofdoingBusiness: Doing Business 5.8 Trade Alliances: 5.7 Trade withPakistan: 5.6 Trade withIndia: 5.5 Trade withChina: 5.4 Trade withUzbekistan: 5.3 Trade withKazakhstan: 5.2 Trade withtheRussianFederation 5.1 RegionalTrade: Trading Partners: 4.3 Trade Trend: Partners 4.2 Trade Trend: Products 4.1 Trade Overview: Trade Overview 3.9 Foreign DirectInvestment(FDI): 3.8 Tourism: 3.7 OBOR: vi iv ix iii iii ii 104 104 103 102 102 101 99 78 70 66 61 56 51 46 45 43 40 36 35 33 32 28 26 ix KYRGYZ REPUBLIC x KYRGYZ REPUBLIC from UzbekistanatHS06 Level Table 24:Kyrgyzstan’s Top 25Imports from UzbekistanatHS02 Level Table 23:Kyrgyzstan’s Top 10Imports Uzbekistan atHS06Level Table 22:Top 25Kyrgyzstan’s Exports to Uzbekistan atHS02Level Table 21:Kyrgyzstan’s Top 10Exportsto from KazakhstanatHS06Level Table 20:Kyrgyzstan’s Top 25Imports from KazakhstanatHS02Level Table 19:Kyrgyzstan’s Top 10Imports Kazakhstan atHS06Level Table 18:Kyrgyzstan’s Top 25Exportsto Kazakhstan atHS02Level Table 17:Kyrgyzstan’s Top 10Exportsto from RussiaatHS06Level Table 16:Kyrgyzstan’s Top 25Imports from RussiaatHS02Level Table 15:Kyrgyzstan’s Top 10Imports Russia atHS06Level Table 14:Kyrgyzstan’s Top 25Exportsto Russia atHS02Level Table 13:Kyrgyzstan’s Top 10Exportsto Table 23:RegionalTrade 2016 Table 11:ExportPartners (2012-2016) Table 10:ImportPartners (2012-2016) (2012-2016) Table 9:Top 25ImportsatHS-06Level (2012-2016) Table 8:Top 10ImportsatHS-02Level (2012-2016) Table 7:Top 25ExportsatHS-06Level (2012-2016) Table 6:Top 10ExportsatHS-02Level Table 5:ContributiontoFDI Table 4:HydroPower PlantsinKyrgyzstan Table 3:EconomicIndicators Table 2:Population Statistics Table 1:AdministrativeRegions List ofTables 60 59 58 57 55 54 53 52 50 49 48 47 45 41 40 39 38 37 36 32 21 17 05 04 Members– 2016 Table 45:ImportsandExports withOIC from CISatHS06Level Table 44:Kyrgyzstan’s Top 25Imports from CISatHS02Level Table 43:Kyrgyzstan’s Top 10Imports CIS atHS06Level Table 42:Kyrgyzstan’s Top 25Exportsto CIS atHS02Level Table 41:Kyrgyzstan’s Top 10Exportsto with CISMembers: Table 40:Trade Values andPercentage from Pakistan atHS06Level Table 39:Kyrgyzstan’s Potential Imports Pakistan atHS06Level Table 38:Kyrgyzstan’s Potential Exportsto Table 37:ImportcomparisonwithPakistan from Pakistan atHS06Level Table 36:Kyrgyzstan’s Top 25Imports from Pakistan atHS02Level Table 35:Kyrgyzstan’s Top 10Imports Pakistan atHS06Level Table 34:Kyrgyzstan’s Top 25Exportsto Pakistan atHS02Level Table 33:Kyrgyzstan’s Top 10Exportsto from IndiaatHS06Level Table 32:Kyrgyzstan’s Top 25Imports from IndiaatHS02Level Table 31:Kyrgyzstan’s Top 10Imports India atHS06Level Table 30:Kyrgyzstan’s Top 25Exportsto India atHS02Level Table 29:Kyrgyzstan’s Top 10Exportsto from ChinaatHS06Level Table 28:Kyrgyzstan’s Top 25Imports from ChinaatHS02Level Table 27:Kyrgyzstan’s Top 10Imports China atHS06Level Table 26:Kyrgyzstan’s Top 25Exportsto China atHS02Level Table 25:Kyrgyzstan’s Top 10Exportsto 83 82 81 80 79 78 77 76 74 74 73 72 71 69 68 67 66 65 64 63 62 Table 59:DoingBusinessinKyrgyzstan Table 58:CARECEnergyProjects Table 57:CARECTransport Projects Table 56:ExportstoTrade Allies2016 Table 55:ImportsfromTrade Allies2016 ECO atHS06Level Table 54:Kyrgyzstan’s Top 25 Imports from ECO atHS02Level Table 53:Kyrgyzstan’s Top 10 Imports from ECO atHS06Level Table 52:Kyrgyzstan’s Top 25Exportsto ECO atHS02Level Table 51:Kyrgyzstan’s Top 10Exportsto Members– 2016 Table 50:ImportsandExportswithECO OIC atHS06Level Table 49:Kyrgyzstan’s Top 25 Imports from OIC atHS02Level Table 48:Kyrgyzstan’s Top 10 Imports from OIC atHS06Level Table 47:Kyrgyzstan’s Top 25Exportsto OIC atHS02Level Table 46:Kyrgyzstan’s Top 10Exportsto List ofTables 101 100 99 95 94 93 92 91 90 89 88 87 86 85 xi KYRGYZ REPUBLIC List of Figures
Figure 1: Map of Kyrgyzstan 03 Figure 2: Population Pyramid 05 Figure 3: GDP Composition 19 Figure 4: Volume of Ores Extracted 20 Figure 5: Electricity Composition. 21 Figure 6: GDP Real and Nominal 22 Figure 7: GDP Growth Rate 23 Figure 8: GDP per Capita 23 Figure 9: Annual % Change in Inflation 24 Figure 10: Unemployment 25 Figure 11: Poverty 26 Figure 12: OBOR Map 27 Figure 13: Receipts from Tourism 28 Figure 14: Issyk-Kul Lake 29 Figure 15: Pamir Mountain Range 29 Figure 16: Song Kol Lake 30 Figure 17: Burana Tower 30 Figure 18: Osh Bazaar (Bishkek) 31 Figure 19: Net Inflow of Foreign Direct Investment (Net inflow = Inflow-Outflow) 32 Figure 20: Balance of Trade 35 Figure 21: Major Export Partners 40 Figure 22: Major Import Partners 41 Figure 23: Balance of Trade with Russia 46 Figure 24: Balance of Trade with Kazakhstan 51 Figure 25: Balance of Trade with Uzbekistan 56 Figure 26: Balance of Trade with China 61 Figure 27: Balance of Trade with India 66 Figure 28: Balance of Trade with Pakistan 70 Figure 29: Actual and Potential Exports to Pakistan 75 Figure 30: Actual and Potential Imports from Pakistan 76 Figure 31: Kyrgyzstan Trade with CIS as % of Total Trade 78 Figure 32: Kyrgyzstan’s trade with OIC as % of total trade 84 Figure 33: Kyrgyzstan’s trade with ECO as % of total trade 90 Karakol Cathedral SECTION I Geographic and Social Indicators
China (1,063 km) to (1,063km) east.China the North,the Uzbekistan to (1,314km) west the and southwest, Tajikistan to (984km) southwest the and Kyrgyzstan is a landlocked situated country Asia. in Central It is bordered by Kazakhstan (1,212 km) to 1.7 1.6 1.5 Currency: 1.4 1.3 1.2 Coordinates: 1.1 Name: 1. Geographicand • • • • UTC+6 • • Bishkek National of Bank Kyrgyz the Republic (NBKR) Kyrgyzstani (KGS) Som 41.2044° N,74.7661°E Kyrgyz Republic (Kyrgyzstan) Location: Central Bank: Capital City: Time zone: Social Indicators Figure1:MapofKyrgyzstan
03 KYRGYZ REPUBLIC 04 KYRGYZ REPUBLIC • • • City are two the Independent cities. Kyrgyzstan is into divided regions seven and two independent cities. Thecapital, Bishkek City and Osh 1.10 temperate zone. foothill northern inthe continentalDry to Tien polar high in the Shan Mountains; subtropical in southwest (Fergana Valley); 1.9 Climate: 199,591 km In terms of area Kyrgyzstan ranks fourth among Asian Central the states with atotal area of 1.8 1.11 Population: Table 1: Administrative Regions • • Water: 8,150km Arable 13,373km Land: Land: 191,801km Land: Population growth rate: 2.01%(2017estimate) Total Population: 6,140,200(2017estimate). AdministrativeRegions: Total Area: 2 . Jalal AbadRegion Issyk Kul Region Batken Region Naryn Region Naryn Chuy Region Talas Region Bishkek City City/Region Osh Region Osh City 2 . 2 . 2 . Administrative Regions Area (km 32,418 43,735 13,406 28,934 44,160 19,895 17,048 183 170 2 ) Ethnic groups: 1.13 Ethnic 1.12 Table 2:PopulationStatistics Figure • • • • • • • • 1.12 1.14 1.13
Other 5.9%(Uyghur,Other Tajik, Turk, Tatar, Kazakh, Ukrainian, Korean, German) Dungan 1.1% Russian 7.7% Uzbek 14.3% Kyrgyz 70.9% Female: 75.1 years Male: 66.5 years Total population: 70.7 years Life expectancyatbirth:
2 Age Group Age (years) 65 andolder 15-24 25-54 55-64 : Population Pyramid 0-14 65+ Female: Muslim Kyrgyz 70.9% Male: Total population: Russian Orthodox 20% Uzbek 14.3% Other 5% Russian 7.7% Dungan 1.1% Dungan Other 5.9%(Uyghur, Tajik, Turk, Kazakh, Tatar, Ukrainian, Korean, German 15-24 25-54 55-64 0-14
15
66.5 years
75% 75% Life expectancy at birth: at expectancy Life Prominent Religions: Prominent Ethnic groups: 75.1 years
10 70.7 years Age andGenderwisePopulation Statistics(2017Estimate)
Percentage
32 17 39 7 4 Population (Hundred Thousands) (Hundred Population Figure 2:PopulationPyramid 5 Kyrgyzstan 2017
Males
Females 0
1,008,005 1,187,783 541,029 197,289 108,404 Males 5
10 )
1,213,819 Females 961,365 521,250 234,412 166,844 15
05 KYRGYZ REPUBLIC 06 KYRGYZ REPUBLIC • • • • 1.16 Government: are spoken also country. inthe Breakup of spoken the languages is as follows: Kyrgyz and Russian are official both languages of Kyrgyzstan, however there areother languages which 1.15 Languages: Religions: 1.14 Prominent 1.17 Transportation: terms) inasingle nationwideelected constituency by aproportional representation vote 5-year to serve Legislative System: Unicameral Supreme or Council Jogorku Kenesh (120seats; members directly committee chairs appointed by President. the Cabinet: Proposed by Prime the Minister, appointed by President. the Defense and security Head of government: Prime Minister Head of state: President • • • • • Airports: • • • • • Other 5% Other Russian 20% Orthodox Muslim 75% Railway: 470km. Railway: Roads: Other 5.2% Other Russian (official) 9% Uzbek 14.4% Kyrgyz (official) 71.4% o o o o o o Unpaved runways: 29 Paved runways: 21 Total: 18,810km roads: 1,621 km Earth Gravel roads: 9,961 km Hard-surfaced roads: 7,228 km 1.18 Communications: • • • • Internet users: Telephones -mobile cellular: Telephones -fixed lines +996 DialingCode: Country o o o o o o Percent of population: 30.2% (July 2015est) Total: 1.713 million Subscriptions 100inhabitants: 134 per (July 2015est) Total: 7.579 million Subscriptions 100inhabitants: 7 per (July 2015est) Total subscriptions: 408,037 07 KYRGYZ REPUBLIC
Statue in Bishkek SECTION II Short Country History 10 KYRGYZ REPUBLIC of life. firstthe newspaper.Kyrgyz However, most populationthe of continued to clingtraditional their to ways mining. It thatthe also firstin the books wasperiod inthis language Kyrgyz were publishedalong with arraya wide of developmental programs such as large-scale housing, improvement and ininfrastructure economic and life political of Russia. early the During years of Russian 20th-century the began specialists More Russians settling started inKyrgyzstan and Kyrgyz the people integrated themselves into the region to Russia. was ceded Tarbagatai. According to treaty, this of day eastern the part modern Kyrgyzstan, mainly Issyk the Kul and Tashkent (1865).In late the centuryRussia 19th known and apact as Treaty the signed China of asstart Russians the played an important role in defeating Khanate the of Kokand at Bishkek (1862) By 1800s,Russians the to hadmove begun and inKyrgyzstan. settle alliance This worked the in well persistentThe conflicts ethnic thewith Uzbeks forced the toalliances Kyrgyz theform with Russians. and centuryrespectively. mid18th 19th 17th, the were overrun by Kalmyks, the Manchurian the and Qing Dynasty Uzbek the Khanate of Kokand in the fromThe era was century the a the 19th 17th to turbulentthe period, one.this During tribes Kyrgyz finally gainedfrom independence the Mongols. Horde and Oriot the and Jumgar Khanates that that succeeded empire. It wasKyrgyzstan in1510when bywho had time become this disunited. For next the 200years, Kyrgyz the remained under Golden the written language.son The Khan,Genghis of Dzhuchi, conqueredthe the tribes of Kyrgyz Yenisey region, The Mongol invasionCentral the centurycostof the 13th in Asia their independence theirand Kyrgyz Kyrgyz Empire of part became Mongol the Empire, aprocess was which completed by 1207. andto shrink, bythe twelfth the century theAltan to had shrunk range.territory Kyrgyz Graduallythe nextthe 200years. However, afterthat, ever-expandingthe Mongol Empirecaused the EmpireKyrgyz century onwards Kyrgyz the people migrated as far as Tian the Shen range and dominated region the for Kyrgyz Empire reached its zenith after defeatingthe UyghurKhaganate in840A.D. Fromthe tenth According to were David C.King, earliest the Scythians the settlers inpresent-day Kyrgyzstan. The reason, instigated they building the of Great the Wall of China. day Mongolia. The werebanditsKyrgyz persistentlyand the raided nearbyvillages Chinese and forthis The 2000 BC. then wereKyrgyz a nomadicpeople and inhabitedoriginally the areawhich is in present The firstwritten records the of civilizationKyrgyz Chinese chroniclesthe in appear beginningabout 2.1 Union, as Kyrgyzstan Soviet and era. post-independence the The history of from intocanbe divided Kyrgyzstan periods; three time distinct antiquitySoviet the to 2. From AntiquitytotheSovietUnion: Short Country History: 11 KYRGYZ REPUBLIC 12 KYRGYZ REPUBLIC country. President Gorbachev and finally on 31st AugusttheRepublic 1991 of sovereignbecame a Kyrgyzstan defeated by Askar Akayev. In USSR the itself instability prevailed after coup afailed attempt against presidentialin the elections held same inthe year communist the chief Absamat party Masaliyev was and Kyrgyz people on of 4th the July Osh 1990inthe province for as atrigger acted separation. Moreover, Ashtar, expanded into apro-democracy movement. The outburstthe violence between of ethnic Uzbek In glasnost the &perestroika eraof Gorbachev, activist groups several came into existence, one of these; In late the 1980s,nationalism was owing on rise the to of policies MikhailS.Gorbachev. leader Soviet the 1960s, Kyrgyz politicians were elevated positions to high established which apattern patronage. of local Russians generally dominated republic’s the government end the of 1950s.Starting the till from the employmentSovietsthe The mined to and locals. the Issyk jobsecurity Kul region for uranium. extracting The Russians improvedthe infrastructure general of soviettheKyrgyzstan during era as well as providing labor camps. lands.thebecamecause This for regional tensions. who Those resisted were either executed sent or to controls, and targeted suppression of indigenous the population along with confiscation the their of The collectivizationpolicies of thetheStalin impositionduring 1920s led to taxes,of forcedlabor, price MikhailVasilyevichGeneral Frunze had who played an important role Russian inthe war. civil republic of Union Soviet the in1936.Thecapital Bishkek also was renamed after Frunze the famous namethe was changed to Kyrgyz Autonomous Republic before region the attained status the of afull was named Kara-Kyrgyz the autonomous region to distinguish its people from Kazakhs. the In 1926 The independence movementKyrgyz was finally suppressed the by communists in1919 theand region in 1917. founded by Kazakhs the and Kyrgyz was inestablishing successful ashort lived autonomous government advantage of instability the to break from free Russian control. a TheAlash Order; pro-democratic party The continuedKyrgyz, their RevolutionevenBolshevik rebellion theduring takeof 1917 to tried and Tomak inthe rise region (Kyrgyz) where locals the raided station apolice to acquire weapons. broke out Russian between settlers and Kyrgyz the people. Simultaneously tensions ethnic were on the mass protest by Kyrgyz the people inTashkent where fired police shots the crowd,at violence and ethnic there was an uprising inKhojent spread soon which across Turkestan the region. This was followed by a Russian army for First the World War multiple triggered revolts throughout region. the July On4th 1916, The presence of Russiansettlers in theandKyrgyzstan efforts to conscript thepeople Kyrgyz into the 2.2 ignored to alarge extent. was handled by security Russian External the Federation. By 1993there was itsDuring early years, inadequate internal protocols security aseriousthreat did not it pose so was and was this widely appreciated by international the community. president of Kyrgyzstan. early During years of Akayev the presidency, Kyrgyzstan appeared to flourish 1991.RunningOctober uncontested Askar Akayev received 95%of votes the cast and first the became After achieving independence,theRepublic’s SupremeSovietscheduled direct presidential elections in 2.3 AsSovietKyrgyzstan: Post-independence Kyrgyzstan: pharmaceutical factory atpharmaceutical factory Bishkek. order to strengthen an credit ties; export of USD 10million was offered forthe establishment of a A diplomatic resident mission at ambassadorial level was established at Bishkek inAugust 1995.In establishment of diplomatic relations Pakistan between and Kyrgyzstan on was signed May 10th 1992. Pakistan extended diplomatic recognition to Kyrgyzstan 1991.Aprotocol on December 20th for the Sariyev’s successor PMon became April 13th 2016and inoffice is still once again parliament was dissolved in April 2016 owing to corruption charges. Sooronbay Jeenbekov; and dissolved afterthree months. Otorbaev was succeeded by Temir Sariyev on 1st May 2015, but but in2014his coalition collapsed.parliament The new OtorbaevDjoomart underhad a short lifespan Aalay Karashev was formed. Zhantoro Satybalidyev formed government anew on September 2012, 5th Parliamentboth and PMresigned the over corruption alleged charges and an interim government under Atambeyev contested for presidency the in2011and won; he is incumbent the president. In March 2012, in less than three weeks; by he was succeeded Omurkek Babanov. power from presidency the to parliament. Almazek Atambeyev prime was elected minister but resigned Kyrgyz forcingthe country. to flee Bakiyev thebecame interimRoza Otunbeyeva president and shifted of elections legitimacy the the was challenged. Ethnic violence broke out Uzbeks in2010between and in 2007forcing government the to go for constitutional reforms. was re-elected in2009but Bakiyev country. The prosecutor general and a member parliamentof (MP) were assassinated.Riots broke out Kurmanbeki president was elected Bakiyev in2005,however instability political prevailed inthe Tulip Revolution. unpopularhighly and was forcedthe to country andflee laterto This resign. came be known to the as 2003 Russia allowed was to also setup an in Kyrgyzstan. airbase By 2005, President Akayev had become moved away from Russian the to UScamp. the This led to increased tensionswith Russia. However, in in Afghanistan. Al-Qaeda as a seen This wassurprising movetheRepublic as appeared to have suddenly In 2001,during his third term,President Akayev offeredthe United States an airbase at Manas to combat force republic the had to rely on support from Uzbekistan and Kazakhstan. 2000. In 1999Kyrgyzstan was attacked by Muslim militants from Tajikistan. to lack Due the of amilitary five years. AkayevIn 1998 convincedthe legislature allowto run him forto third a -term as president in to extend his tenure elections 2001. Akayev in 1995 and presidency the till called secured for another Kyrgyz Republic. In by 1995apetition signed 1.2million people urged legislature the to allow Akayev again acause of resentment for many. According toconstitution new the was renamed country the May constitution 1993anew was adopted, however presidential the suggested model by Akayev was resentment among general the population owing to nepotism Akayev inthe administration. On5th 13 KYRGYZ REPUBLIC
Balyachy, Kyrgystan SECTION III Economic Overview 16 KYRGYZ REPUBLIC Table 3:EconomicIndicators 3 2 1 According to UNDP majorlysector caters to domestic the market. It largest the is also employer. sectorpercentageThe as a share service the of of GDP increasingbeen has since independence. The earnings and its share is 29%inGDP, average 42%of earnings last inthe export five the years. Manufacturing is a major contributor to export The has country gotrich depositswith mineral beinggoldthelargest export item contributing on an resources. conducted bya survey UNDP, has country the ahuge potential to generate from electricity renewable and fuel mineral oils,mineral constitutedbeen in 2016 they nearly 11% of import the bill. According to anet importerhas been of items food since its independence. Thelargest import item of has Kyrgyzstan Kyrgyzstan owing to mountainous the terrain and climatic uncertain conditions. Moreover, Kyrgyzstan Kyrgyzstan is ranked as 141st the largest economy world. inthe Agriculture has never in thrived The majoreconomic indicators 2010 to 16 forperiod arethe showntablethe below: in 3. The majorcauses behindthe deterioration economythe in were: economy. difficulties These were primarily thetransited as country caused from a commandafree to market Kyrgyzstan, arelatively young alot faced country of economic immediately difficulties after independence. Kyrgyzstan has aGini3 of Coefficient shows 26.8,which alow level of income inequality country. inthe Population (Millions) FDI (NetInflowsUSDMillion) Exchange Rate (SomperUSD) Annual %inflation GDP percapitaUSD Nominal GDPUSDMillion • • Migration. • • • (0:completeequality)-(100: inequality) HumanDevelopment Index UnitedNationDevelopment Program Economic Deterioration ineducation, care health services. and other social Increasing transportation costs. ofLoss cheap supplies energy from other republics. Termination of subsidies. 1 , Kyrgyzstan ranks 120on HDI the Overview: 4,794.36 2010 Economic Indicators 402.40 880.04 45.96 5.45 7.97 1,123.88 6,197.77 2011 701.30 46.14 16.50 5.51 2 indicating alow level of human development. 1,177.97 6,605.14 2012 324.40 47.00 5.61 2.69 1,282.44 7,335.03 2013 640.17 48.44 5.72 6.61 1,279.77 7,468.10 2014 352.90 53.65 5.84 7.53 1,139.26 1,121.08 6,678.18 2015 64.46 5.96 6.50 1,077.04 6,551.29 2016 467.00 69.91 6.08 0.42 17 KYRGYZ REPUBLIC 18 KYRGYZ REPUBLIC category and 16.5%by category food the total manufacturing output of 140Billion Kyrgyz Soms in2015,58.5%was contributed by metals the excluding and equipment, machinery followed by beverages food, and the tobacco category. Out of the Output of manufacturing the is sector dominated by production the of and products metals basic metallic manufacturing to sector GDP the has increased over last the decade. manufacturing showed sector aCAGR of 11%.Unlike sector, agricultural the contribution the of the Since manufacturing 2000,the of sector Kyrgyzstan has done well, 2000&2015,the between employed 15percent of labor the force. Inpetrochemicals. Manufacturing 1999,the accounted sector for 20percent of country’s the GDP and of manufacturing including power the industry, engineering and metal-work, fuel, chemicals, and underwent considerable contraction. 1990 and 1995 production Between sectors declined in all Immediately following collapse the of Kyrgyz the USSR, the industrial and manufacturing sectors 3.1.2 agriculture has sector sufferedfrom adrop in productivity overthe years. produce and from eggs livestock the contribute section majorly from to exports the Kyrgyzstan. The From crops the sub-sector, only tobacco and cotton are inany exported significant quantity. Dairy vegetables, and cotton whereas livestock the category is dominated by and livestock, wool. poultry gross output agricultural respectively. The crops Sub-sector is dominated grains,by potatoes, legumes, Republic 2005–2015;crops for period and the livestock contributed on an average 52%and 45%of the According to agriculture the statistics published by National the Statistics Committee of Kyrgyz the sectors combined. total output of 196.9Billion Kyrgyz Soms, amere 0.2%was contributed by forestry the and fishing the fishing,the contribution of hunting and fishing the to gross output is negligible and as of2015 out the of Although comprises sector agricultural the of four sub-sectors; crops, livestock, hunting, and forestry & The agriculture and livestocksector employs around 30% the activelaborof force the of Republic. Kyrgyz 3.1.1 AgriculturalSector: 3.1 SectorsoftheEconomy: the GDPthe in2015followed by construction the contributing sector another 8%to GDP. the sector is dominatedservice The the by ‘Repair transportation’of category which made up about 18% of GDP.sector mainlycaters service The the domesticto market. sector employed service The around 50% the of labortotal force in2016 and contributed 56%the to 3.1.3 ServiceSector: Manufacturing Sector: reflected by an increase in its contribution the GDP,to were 56% the GDP.services of in2016 sector, reduce toservice 29%in2016.The the on other hand, has shown rapidgrowth overthe years as GDP in2016. The manufacturingwhichsector contributed 35% the GDPto seen in1991 hasits share over years, the contribution the of agriculture the has sector declined from 37%in1991to 14%of the At oftime the independence, had each sector nearly an share equal Kyrgyz in the economy. However, 3.1.4 GDPcomposition: reflected by to 29%reduce
GDP in 2016. over theover years, the contribution of At the time of At Figure
% of GDP 3 10 20 30 40 50 60 : GDP Composition 0 1990 3.1.4 an increasein itscontrib ution
The independence, 1992 in 2016 GDP composition:GDP Agriculture as %Agriculture GDP of as manufacturing 1994
. The servicesector, theon other hand, hasshown rapid growth theover years 1996 each sector had
sector the 1998
agriculture sector has declined from 37%in 199 GDP Composition GDP which Figure 3:GDPComposition 2000 to the GDP, in 2016 services were 56% theof GDP. Manufacturing of as% GDP contributed 35% to the GDP in 1991 nearly 2002 an equal share in the Kyrgyz economy. However, Year 2004
2006
2008 Services as % GDPServices of as 2010 has seen 2012 1 to 14% of the 2014 its share 2016
as as
19 KYRGYZ REPUBLIC 20 KYRGYZ REPUBLIC owned company, KyrgyzAltyn, however operations in2016owing ended to depletion of reserves. Makmal gold mine is second the largest gold mine inKyrgyzstan. The mine was operated by a state- international market. gold increased by exports almost 6%but total the by value decreased 3%owing to reduced prices inthe economy, it susceptible is highly to shocks international inthe bullion markets. In volume 2014the of Inc.Gold with latter the majority the being shareholder. Although revenue from gold is central to the The KumtorGold mine joint is a venture the of governmentKyrgyz Canadianand a company,Canterra tons of proven of gold reserves and another 60.4Million tons of probable reserves. located Issyk inthe Kul region is which 80Km from capital the city Bishkek. Kumtor has 8.83Million of 2015,it made up around 7%of GDP. the Thelargest the country in aregold foundreserves at Kumtor Kyrgyzstan is resources. rich inmineral is Gold top the resource mineral inKyrgyzstan extracted and as 3.1.5 has richhydro power resources; however, are exploited. fully these to be still of domestic oil and fuels are these gas, both imported and form amajor portion of imports. Kyrgyzstan The fieldsmain coal the are in south and north Fergana, Uzgenian, Kavaksky, and Jergalan. the In absence are 656.6 million tons currently of reserves under exploration development with further pipeline. in the with probable of 24.4billion reserves tons. Proven of are coal reserves more than 1.7billion tons. There is only the fossil found fuel Coal inabundant quantities inKyrgyzstan. There are 35 major deposits coal company, KyrgyzAltyn, however operations ended in 2016 owing to depletion of reserves. Makmal gold mine is the second largestgold mine Kyrgyzstan. in international market. gold exports Kyrgyzstan hasrich hydro powerresources; however, these are still tofully be exploi absence of The main coal fieldsin are t Coal is is Coal the only fossil found fuel abundant in quantities 4:VolumeofExtracted Ores Figure economy, it highlyis susceptible to Gold Inc. with the latterbeing the majority shareholder. Although revenuefrom goldcentral is to the KumtorThe Gold ismine a joint venture of the Kyrgyz government andCanadian a company, Canterra provenof reserves goldof and another 60.4 Million pr tons of located in the IssykKul region 2015,of it made Kyrgyzstanrich is in mineral resources. is Gold the are 656.6 tonsare million probablewith reserves of 24.4billion tons. reservesProven of coal are morethan billion 1.7 tons 3.1.5
Tonne Mining andQuarrying: 10000 1000 2000 3000 4000 5000 6000 7000 8000 9000
0 domestic Mining and Quarrying: and Mining
increasedalmost by but 6% the total decreasedvalue by 3% owing to reduced prices the in 4569 1997
up around 7% ofGDP. the The largest gold reservesin the country are found at Kumtor 4973 1998 oil and gas,
o 6683 1999 f reservescurrently under exploration with further development 5155 2000 hesouth and north Fergana, Uzgenian, Kavaksky, and Jergalan. In the
which is Ores Minedat Kumtor Mine Gold 5126 2001 both both shocks
4655 2002 Figure 4:VolumeofOresExtracted thesefuels are imported and
80 Km from the capitalcity Bishkek. Kumtor has8.83 Million tons 4634 2003
in in the international bullion
3303 2004 6135 2005
top top
3887 2006 Year mineral resource extracted Kyrgyzstan in and as in Kyrgyzstan.
5182 2007 obable reserves. 4967 2008
The ismine operated by a state form form 4464 2009
There areThere35 major markets
a major portion of imports. ofmajora portion 5765 2010 6020 2011 . In 2014 In 2014 .
4955 2012 ted. 7289 2013 the volume of in the pipelinein the coal deposits
8640 2014 - 6583 2015 owned owned .
There .
Table 4: HydroPower Plants inKyrgyzstan 4 The CHPPstwothermal 2014, hydro-electric sources made up 91%of generated. total the electricity sources waselectric recorded at 63%in1990.Since contribution the then increasing has been and in utilized. The figurebeen above shows that the lowest percentage generation of electricity from hydro- nearly 80%of country, the however less than 10%of its 150,000gigawatt-hour (GWh) potential has Kyrgyzstan enjoys abundant hydropower potential owing to its mountainous terrain covers which 3.1.6 to sell their surplus their to during sell electricity summers deficient to energy the nationsSouth of Asia. When aims to bridge demand-supply this shortfall. The objective is to enable Tajikistan theand Republic Kyrgyz CASA-1000, ajoint venture of four countries; Afghanistan, Kyrgyz the Republic, Pakistan and Tajikistan Tajikistan facepower shortages inwinter as water levels reduce. face chronic shortages eachyear. of during electricity same the period Whereas Kyrgyzstan both and power during summer the months. However, South-Asian countries like Pakistan and Afghanistan world.in the Since power their generation is dependent on river flow, countriesthese have surplus CASA-1000: of output electricity against output adesigned of 4,100GWh. Uch-Kurgansk HydroelectricPower Station Shamaldysai HydroelectricPower Station Kambarata-2 HydroPower Plant Tash-Kumyr HydroelectricPower Station Kurpsai Dam Toktogul Dam electricity 5 twoThe thermal CHPPs Table Uch Shamaldysai Hydroelectric Station Power Kambarata Tash Dam Kurpsai Toktogul Dam Name hydro sources was recorded at 63%in 1990. Since then the contribution has been increasing and 2014, in utilized.figure The above shows that thelowest percentage of electricity generation from hydro 80%of the country, howeverless than 10% of its 150,000 gigawatt Kyrgyzstan enjoys abundanthydropower potential owing its to mountainous terrain which coversnearly Composition. 5:Electricity Figure
Combined heat and power plant - 3.1.6 Kurgansk Hydroelectric Power Station - 4: Hydro Power Plants in Kyrgyzstan Energy Sector: Kumyr Hydroelectric Power Station % of Total - Combined heatandpower plant
100% electric sources madeup 91% of the total ele 20% 40% 60% 80% 0%
output againsta designed output of 4,100 GWh. Kyrgyzstan and Tajikistan have some of most the abundant and clean hydropower resources - 2 Hydro Power Plant Power Hydro 2 Energy Sector: Energy
Name 1990 1991 1992 5 4 , fueled by, fueled imported gas, andoil, generate coal, less than 1,000 GWh per year of , fueled by, fueled imported gas, oil, and generate coal, less than 1,000GWh year per 1993
Electricity hydroelectric (% sources production from of total) coalElectricity oil, sources and (% production from of gas total) Composition of ElectricityProduction Composition of
1994
1995
1996 Figure 5:ElectricityComposition. 1997
1998 Capacity (MW) 1999 1,200 180 240 360 450 800 2000 ctricity generated 2001 Year
2002
2003 180 24 360 450 800 1,200 Capacity (MW) 2004 0 - hour (GWh) potential has been
2005
2006
2007
2008
Naryn River Naryn River Naryn River Naryn River Naryn River Naryn River Location 2009 Naryn River Naryn Naryn River Naryn Naryn River Naryn Naryn River Naryn Naryn River Naryn Naryn River Naryn Location 2010 2011
2012 - electric 2013
2014
21 KYRGYZ REPUBLIC 22 KYRGYZ REPUBLIC harvest inKazakhstan.harvest In 2016real growth remained at 3.8%. and petroleum by Russian refineriesthe cost in rise and a of importedwheat owing to adeclinegrain in conditions such as; strengthening of USdollar against Kyrgyz the increase Som, prices inselling of oil contributed to growth. this In economy 2014the continued to show growth despite unfavorable external The repair the of KumtorGold Mine and favorable climatic conditions for agriculture have also economic sectors of inall growth economy the seen has been with areal GDP growth of 10.5percent. coordinated macroeconomic reforms. and policy monetary Post-implementation of reforms, these In Government 2013,the and National the of Bank Kyrgyz the Republic implemented of aseries conditions, economy the grew by nearly 5percent. resulted ina0.5percent inreal GDP. fall However, in 2011 due to favorable and external internal closurethe of borders the with Uzbekistan and Kazakhstan, coupled with internal turmoil political growth rate was almost zero. In 2010,just as economy the was recovering from financial crisis, global the mine) and unfavorable climatic conditions seriously hindered economic growth, GDP in2001-2002the Post Asian the Financial Crisis, technological problems by faced largest the enterprise (Kumtor Gold However, growth this was interrupted by Asian the Financial Crisisof 1998-1999. and coming the online of Kumtor the mine Gold allowed economy the to gather steam post-1996. The aftershocks the of dissolution the USSR of economicaffected till 1995.Agricultural growth reforms 3.2 GDP: The be completed to project was initially expected by 2018. However, delays are expected. each and Afghanistan and Tajikistan contributing USD 300million and USD 250million respectively. total cost is USD 950 million, with The Republic Kyrgyz and Pakistan contributing USD 200million next(the 750kilometers). According to afeasibility study conducted by project the team, estimated the Republic and Tajikistan first (the kilometers) 477 fromthenand Tajikistan to Afghanistan and Pakistan complete, CASA-1000 the transmission move lines will at electricity voltages high Kyrgyz the between grain harvest Kazakhstan in Figure 7:GDPG Figure Figure 6: GDPReal and Nominal
Percentage Change USD Billions 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 -25 -20 -15 -10 10 15 -5 0 5 - 1990 1990 rowth Rate 1992 1992 Nominal GDPNominal (US $Millions)
1994 1994
. In 2016 growth real remained at 3.8%. 1996 1996 Annual PercentageAnnual Change Real GDP prices) in (2010 GDP (RealGDP Nominal) and Real GrowthRate GDP 1998 1998 Figure 6:GDPReal andNominal 2000 2000 2002 2002 Real GDP [US $ Millions (2010 constantReal GDP$Millions (2010 [US prices)] Year Year 2004
2004
2006 2006
2008 2008 2010 2010 2012 2012 2014 2014 2016 2016
value of USD1, 282.4.In 2016,GDP capita per was recorded at USD1, 077. USD 258.1was recorded in1999during Asian the Financial Crisiswhereas highest 2014witnessed the The trend overall forcapita GDPper positive been has since independence. However,the lowest value of 3.3 GDPperCapita: Figure 6: GDPReal and Nominal grain harvest Kazakhstan in Figure 8: GDPper Capita USD value of USDof 258.1 recordedwas 1999 in duringAsian the Financial whereas Crisis 2014 witnessedhighest the overallThe trend for GDP percapita has been positive sinceindependence. However, the lowest value 7:GDPG Figure
USD Capita: per GDP 3.3 Percentage Change USD Billions 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 -25 -20 -15 -10 1000 1200 1400 10 15 -5 200 400 600 800 0 5 - 1990 0 1990 1990 1 rowth Rate , 282.4 1992 1992 1992 Nominal GDPNominal (US $Millions)
.
I 1994 n 1994 1994
2016, GDP per capita recordedwas at USD
. In 2016 growth real remained at 3.8%. 1996 1996
1996
Annual PercentageAnnual Change Real GDP prices) in (2010 GDP (RealGDP Nominal) and Real GrowthRate GDP 1998 1998 1998 Figure 7:GDPGrowthRate GDP per CapitaGDP per Figure 8:GDPperCapita 2000 2000 2000 2002 2002 2002 Real GDP [US $ Millions (2010 constantReal GDP$Millions (2010 [US prices)] Year Year Year 2004
2004 2004
2006 2006 2006 1 , 077 ,
2008 2008 2008 .
2010 2010 2010 2012 2012 2012 2014 2014 2014 2016 2016 2016
23 KYRGYZ REPUBLIC 24 KYRGYZ REPUBLIC then inflationthen indeclinebeen has and low reached all-time an of 0.43%in2016. quarter of year. the Afterthat, an increase ininflation during the 2014 was observed Rublecrisis, since affectsthe economy. Kyrgyz The spike ininflation in2011 was foodcaused rising by the pricesin last anet importerBeing of items food and fuel, price external shocks ineither of commodities these greatly in gas prices by Uzbekistan inflationary escalated the also pressure the on economy Kyrgyz sharehigh of items food Kyrgyz (47%)inthe Consumer Price Index. Apart from prices, an food increase prices, coupled with an increased money supply caused which aspike ininflation owing the to relatively inflation in2008when was seen 24%.Thisreached surge be could attributed rise to;a of31.5%infood to-GDP ratio) increased from 11.1%in2001to 30.3%in2007.The highest inflation the lastdecade in for money and are-monetization of economy. the Monetization of economy the (measured by M2x- 1990s.This inthe created high expectations, had which been conditions for an increase indemand in 2006inflation was downpercent. to 5 Several years of low inflation substantiallyreduced inflationary In government 2000s the the adopted to target a contractionary policy monetary inflation. As a result, inflation once again high. reached all-time an currentandfiscal account deficits hadbeen addressed. not Asa result,crisis global during the1998-1999 by 1999annual inflation was aroundpercent. 10 However, core macroeconomic problems suchthe as ten-fold prices. increase From infood 1994onwards government the on reducing focused inflation and Russianthe of ‘’gradual policy modernization’’. Dissolution of command the system was followed by a by shock the of price liberalization. The western program of ‘’shocktherapy’’ alternatethebecame for 1992-1994inflationpercent. was period as 32 the During as high This inflationary pressure was caused 3.4 Inflation: ten the Russian policy of ‘’gradual modernization’’. Dissolution theof command system followedwas a by by the shock priceof liberalization. The western prog fiscal 1 by 1992 period the During Figure 9: Annual %Change in Inflation prices shareof food items (47%) inKyrgyz the Consumer PriceIndex coupled with an increased money supplywhich causedspike inflation in a owing to the relatively high 2008 w ratio) increased from 11.1%in 2001 to 30.3% 2007.The in highest inflation re a money and expectations, which had been high the in 1990s. created This conditions for anincrease demand in for downinflation 2006 was In2 the crisis inflation onceagain reached an all then inflation hasbeen decline in and reached an all quarterof the year. After that,an increasein inflation was observed during the2014 Ruble crisis, since Kyrgyz the affects ec Beingnet a importer foodof items and fuel, external price shocks either in of thesecommodities greatly - Inflation: 3.4 fold increase food in prices. From 1994 onwards thegovernment focused on reducing inflation and % Inflation 999 annual inflation was around percent.10 However, core macroeconomic problems suchas the and current account 10 15 20 25 30 35 40 by by 0 5 hen inflation reached 24%.surge This could be attributed to;rise a 31.5%of in food prices, 000s the governmentadopted contractionary a monetary policy to target inflation. Asa result, in 1996 Uzbekistan also escalated the inflationary pressure theon Kyrgyz economy - monetization of the economy. Monetization theof economy (measured by M2x 1998
onomy.spike The in inflation 2011 in was caused by rising food pricesthe in last - 1994 inflation1994 aswas high as percent.32 to to 2000 deficits 5 percent.5 Several years of low inflation substantially reduced inflationary
had notbeen addressed. Asa result, during the1998 2002 Figure 9: Annual %ChangeinInflation Annual Inflation % Inflation Annual - time high. 2004
- time lowof ram ‘’shockof therapy’’ becamealternate the for 2006 Year
. Apart from food prices,an increase gas in 2008 0.43%in 2016.
This inflationaryThis pressure was caused
2010
in in thedecade last seenwas in
2012
- 1999 global global 1999 2014 - to - 2016 GDP GDP
countries of Russia and Kazakhstan. an average for 25.59%of GDP the at current prices. Amajor chunk of come these from neighboring the supported is further observation by that fact the over last the ten years, remittances have accounted on or retardation GDP. inthe indicates This observation thelack of employment opportunities. This The unemployment observed. been rate has remained more or less constant irrespective of anygrowth In of case the Kyrgyzstan, no significant correlationbetween unemployment and GDPgrowth has for law-based rule the treatment of peasants having aplot of land as self-employed. would arrived at be using ILO the Another method. factor reducing official the unemployment rate is as unemployed. This would likely indicatethe official rate of unemployment being lower than which that ineffectiveness of retraining programs, have led to all many personseligible not registeringthemselves to low Owing method. unemployment benefits,lack of vacancies provided the by government theand 5 Two of methods unemployment calculating are inKyrgyzstan; used official the method the and ILO 3.5 Unemployment: countries an a erage obser ationfurther is supported by thefact that o er the last ten ye retardation the in D . obser ation his indicatesthe lack employmentof opportunities. his obser ncase the yrgyzstan of no significant correlation between unemployment and D growth hasbeen law would be arri edusing at the as unemployed. his would ineffecti eness retrainingof programs ha e method. wing to lowunemployment benefits lack of acanciespro ided the by go ern wo methods calculatingof unemployment are used in yrgyzstan the official method and the 6 10:Unemployment Figure
ILO International Labor Organization Organization Labor ILOInternational Unemployment: 3.5 Unempolyment % (ILO mthod) based rule for treatment peasantsof ha ingplot a ILOInternationalLaborOrganization ed. unemployment he ratehas remained moreor less constant irrespecti e anyof growth or
of of for for Russia and azakhstan. . of the D atcurrent prices. ma orchunk of thesecome from the neighboring