 Industry |
Heavy and light industry was never the main priority
of economic development in Kyrgyzstan. Although,
the planned economy and diversification of manufacturing
in Soviet Union, did have a big impact on the development
and specialization of the industrial sector of the
country. Soviet Russia, Ukraine and Kazakhstan were
oriented on the production of machinery, military
industry and metal in vast quantities, Kyrgyzstan
was a small, but not so poor in its considerable
resource based on gold, different ores and agricultural
products. The specific and diverse specialization
of the country's industry can be out lined as follows.
Kyrgyzstan has different kinds of industrial production:
mining industry (gold, zinc, coal), oil industry,
metal processing, food processing, light manufacturing
like textiles, bottling and packaging. It is important
to point out, that industry in Kyrgyzstan today
is in the reconstruction stage or merely development.
One of the major tasks of the reform is the introduction
of a corporate management system, privatization
and governmental involvement in production plans
for satisfying local and export demand in the specific
products.
Planned economy and massive exports during the times
of SU did provide sustainable, although not very
rational development of the several industries.
The Chaotic processes that took place after the
collapse of the soviet block in both political and
economic spheres caused evident damage to the overly
dependent industrial sector. Illegal export/sale
of factory's equipment, insufficient efforts for
the sector revival and in many instances the lack
of management skills; stop the production for several
years. With a process of incarnation and reforms,
followed by Russian crisis of 98, Kyrgyz industry
one more time experienced a fall in productivity,
thus causing new strategy for resources management
and, in particular, attracting foreign investments
and expanding export.
At present time the main priority of the development
in industry is given to mining. Extensive research
of the mountain potential and its usage in mining
gold already brings Kyrgyzstan a considerable profit
(as an example only one mine contributed about 4%
to the country's GDP in 2000-2001). Although gold
is given a priority, other metals and ores are also
mined, moreover, materials rather then gold are
considered to be one of the major exports of Kyrgyzstan.
"We mine copper, mercury, zinc and gold. Our
mountains are very rich, but bigger opportunities
are in mining coal. For example the ore coal will
last for 200 years under intensive use." Mr.
Jeenbekov, Minister of Foreign Trade and Industry.
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The near future is seems
to be very attractive, government hopes to increase
an amount of export by 10% in 2007. It is also very
essential to understand the potential not only of
industry itself, but also of its location. "The
geopolitical location of Kyrgyz Republic is very
advantageous. The fact that we are neighboring with
China, India and Afghanistan is very attractive
from the supply markets' point of view. As for Kazakhstan
and Uzbekistan, they are potential suppliers of
raw materials for us.
Certainly they are also potential markets for our
goods. Russia, Europe and America etc are sources
of financial and technological resources".
Mr. Jeenbekov,
Minister of Foreign Trade and Industry. The
countries advantageous situation on the map can
indeed be profitable in many trade and industrial
activities of the country.
Second priority of the development is given to light
manufactories and food processing. Due to the developing
process in agricultural sector, Kyrgyzstan can expect
to bring back the fame of Soviet time, when it was
a one of the qualified and best producer of textiles,
wool and leather. Initially there are multiple factories
and manufactories in Bishkek and it's region, specializing
on textile industry. However low subsidies and rough
credit policy does not allow a considerable number
of enterprises to rehabilitate, plus falls and obscure
procedures of the privatization legislation, leaves
many factories with no opportunities and future.
The processes, which are taking place in the food
processing industry are pretty similar, however
food industry has a priority of being needed everyday,
thus it is more successful on attraction of investments
and productivity.
Another quite attracting and largely debated industry
potential is oil. Although it is just at the research
stage, government and investors are hoping to achieve
some success in this potential sphere.
Evaluating all that just been written it would be
fair to say that there are obstacles to the development.
Amongst others the biggest challenge that can be
faced by an investor- is an upgrading and modernization
of technology and equipment. More than 60% of the
functional manufactories work on the equipment dated
back to 1950s. This is a challenge, and another
one is overcoming bureaucratic procedures of registration,
taxation and cooperation with State Property Fund.
The process of privatization did not reach its apogee
and it probably going to take some time.
As Kyrgyzstan moves on towards the future, it struggles
with defining its priorities of the country's development
at present it is informational technology, financial
and banking systems, leaving the production industry
on the sustainable stage. However the objective
of the present government and development is an
attraction of foreign investors and capital, which
can boost countries potential. And later are obvious
and developing, although challenges are overwhelming
and the process itself takes a considerable amount
of time and money. |
