Kyrgyzstan recently celebrated the tenth anniversary of its independence. What have been the major achievements over that period?
We have overcome the difficulties of the transition period with much dignity. Over the past ten years, an entirely new economic system has been created in the country; radical reforms have been conducted, which were aiming at liberalizing the economy, creating market institutions, privatizing and detaching property from the state and achieving macroeconomic stability. We have to highlight the importance of the international financial establishments and the donor-countries in supporting economic reforms.
Privatizing small and medium sized businesses enabled us to effect active transformation of the state property and to change the property relations. The property structure has gone through considerable changes, the share of private sector in the GDP rose from 20% as of 1992 to 60% in 2000.
Kyrgyzstan successfully liberalized the economy. Measures have been taken to reduce the share of the state and to regulate the prices; a floating exchange rate has been introduced and all limitations to capital liquidity have been removed. The scale of liberalization is proved by the fact that Kyrgyzstan is the only central Asian Country to join the W.T.O.
One of the most important steps in reforming the agricultural sector, which accounts for more than a third of the GDP, was the introduction of private property rights for land, which gave a new push to long term development not only to the sector but to the overall economy.
Over the past few years Kyrgyzstan managed to stabilize the situation in all spheres of the economy. The average economic expansion rates from 1996 to 2001 were 5.5%; inflation rates decreased from 929 in 1993 to 3.7 % in 2001. The above data proves that we have made certain progress in many directions.
How would you describe the investment climate in the Republic, and what measures have been taken to favour foreign investment into the Republic?
As mentioned above, our country was successful in deregulating the economy. Besides, we have a legislative framework that envisages important warrants and privileges for foreign investors. The investors retain the right to repatriate the capital and to export the profit in foreign currency. In general, a complete investment protection and openness of all economic sector is guaranteed to foreign investors. The government also set tax and customs breaks free economic zones. Kyrgyzstan signed mutual agreements encouraging investments with many countries including USA, France, Germany, UK, Switzerland, and dynamically developing countries like China, Malaysia, India, etc.
According to the official statistics the total volume of FDI over the 1995 - 2001 period amounted to around 711.5 mln USD. Direct investments were mainly directed to the gold deposit exploitation in Kumtor. Kumtor's production accounts for 43% of the total industrial production and 40.7% of the total export volume.
Kyrgyzstan enjoys privileged loans from international financial institutions such as World Bank, Asian Development Bank, European Development Bank, which are mainly directed to the development of the infrastructure and private sector.
Below are listed the fields of economy which are the most attractive for raising investments :
- according to experts, the hydro energy potential of the Republic is estimated at more than 142 billion kWt, whereas for today the potential is only operating at 10%.
- there are 70 explored coal deposits with the coal balance estimated at 2.3 billion USD.
- Mining and metallurgical fields are fundamental to the national economy. They account for around 60% of the total industrial production of the republic and are based on the mineral raw resources namely found deposits of gold, volfram, olovo, surma, rtut´, rare geometals, and other useful extractions. Along with this, the gold balance in the 28 deposits is more than 560 tons, of which around 90% are concentrated in the deposits "Kumtor", "Jeruy", and "Taldy-bulak".
- Works are being conducted to resume production of polycristallic cremnium on the State JSC "Kristal".
- in our mountainous country, there are excellent facilities to develop tourism. On the initiative of Kyrgyzstan, UNO announced 2002 as the International Year of Mountains. In accordance with this in October-November of 2002 a Global Mountain Summit will take place in Bishkek.
To further encourage foreign investments, a Consultancy Committee on foreign investments has been created presided over by the President of Kyrgyzstan Akaev A.A.
How are your relations developing with the Russian Federation?
Developing our cooperation with Russia is a priority politically and economically. Kyrgyzstan faced many difficulties while reinforcing the state independence. We have overcome them with the help of friendship and close cooperation with Russia. An evidence of the peculiar character of the Kyrgyz-Russian relation is the Declaration of eternal Friendship, Alliance and Partnership, signed in Kremlin by the Presidents Putin and Akaev in July 2002. We lay much hope in the development of economic bonds with Russia first and foremost due to the Agreement between Kyrgyz Republic and Russian Federation on economic cooperation for the years 2000-2009, signed in July 2000 when our president A. Akaev visited Moscow.
What role do you foresee for the Kyrgyz Republic on the Central Asian market?
Today, the country has come up to the next development stage that was envisaged in our national development strategy. "Comprehensive development basis of Kyrgyz Republic up to the year 2010" puts as the main objective attaining political and social welfare, economic stability of the people of Kyrgyz Republic in the society where freedom principles, human dignity, and equal opportunities for all are the principles of life. This program is the answer to the new challenge of the time. On the basis of economy analysis of the previous periods and its current stage, new directions are identified for the state and society, development in terms of economy, politics and social life. First, the program is looking at solving the poverty issue. The expected results of the program are reflected in the key economic and financial indices. To achieve its goals the program requires annual average GDP growth of 5% minimum. Economic reforms in Kyrgyz Republic in the coming years will be socially oriented. According to the president Akaev A. the priority task of the reforms is "smoothing the abyss between the haves and have-nots." In April, the President of the World Bank Mr John Wolferson visited our Republic and praised the "Comprehensive development basis of Kyrgyz Republic up to the year 2010" program very highly. The ultimate goal of the program strategy is reducing poverty twofold by 2010 as compared to 2000.
The stake is made on the internal factors - economic reforms, deregulating economy, extensive implementation of market mechanisms, structure transformations in the industrial, financial, banking sphere, conducting land reform. Our major asset is manpower, the nation's intellectual potential.
Integration into world economy is to our mind closely associated with the "Silk Road" doctrine. Many countries have expressed pronounced interest in this project; practical steps have already been taken. The accession of China into WTO and the forthcoming admittance of Russia into the organization will give a new push to Kyrgyz Republic economy integration process.
What would be your final message to our readers?
Kyrgyzstan is open to potential investors. We have confidence in the prolific cooperation with everyone interested in our country. For further information of our Republic, your readers can visit our Internet site www.kyrgyzinvest.org
Note: WINNE cannot be held responsible for the content of unedited transcriptions. |
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