To begin perhaps
you could give us some background information
about the state of the Kyrgyz agricultural
sector. How would you describe its development
and its current situation?
I would like to mention Kyrgyzstan is an
agricultural country. The share of the GDP
of agricultural sector is about 38-40 %.
If to include processing industry, which
is also in the agricultural sector, for
which the ministry of agriculture is in
charge, then it is about 49%. The biggest
achievement that we managed to implement
is the land reform. I would like to say
that Kyrgyz Republic has achieved the most
prominent results in this land reform among
CIS countries. By the way, all actions and
measures were consistent. The reform took
into account first of all, the interest
of peasants and farmers who live and work
in the agricultural sector. On the bases
of 1300 collective farms we got about 84
000 farms. Today 97, 5 % of land is owned
by farms, associations and cooperations.
Only the small part of land belongs to the
State. At the initial stage 25% of land
was within the national fund of redistribution,
because we took into account the interest
of the future generation. In fact we were
the first to introduce private ownership
of land. Two years ago this norm started
to work. Today incompliance with our legislation,
land can be sold, purchased, changed and
inherited. In other words our peasants and
farmers became full owners of land. The
reform also has taken in support branches
of agriculture like mechanical workshops,
plant protection fertilizing and those services
that provide electricity to the agricultural
sector. One of the main tasks of this ministry
is to create a support services in agricultural
sector. Even by maximum privatization of
this sector. So the private sector could
lend services for peasants and farmers.
This concerns first of all veterinary, irrigation
service, plant protection and fertilizing
services.
Since you mentioned this aspect, what
measures and facilities do ministry give
to farmers and peasants to achieve practical
skills in agriculture sector? Even though
the Kyrgyz Republic is an agricultural country,
it is very important that the right tools
are given to peasants so they may become
competitive enough within the world market.
First of all, we recommend the structure
of the plowing land, taking into account
the competition and demand of the internal
and the external markets. For these we make
very deep research of both markets. The
next stage would be the analytical work
on the part of ministry of agriculture as
far as breeding and seed is concerned. The
policy is being elaborated. This policy
is recommended to farmers and peasants.
We also make recommendations about practical
ways of getting best results in producing
high quality seeds and breeding. Moreover,
we give full picture of both external and
internal markets, as far as price balance
is concerned. The potential supply markets
are outside of the country. We have consultative
services for this purpose. Taking into account
that our farmers are new farmers they need
very serious consultative help. Such service
is the corresponding service, which is supported
by the World Bank and Swiss program Helvetas.
The support is in form of loans, credits
and grants. These financial institutions
are giving consultative services in all
provinces of the country. In other words
our farmers are well informed about marketing,
management and effective production. The
consultative service is very young since
it is just being created. However it is
already working effectively. Besides that,
in order to support our farmers several
projects are being implemented by leading
financial institutions. They are World Bank,
DBD, DFID, British agency, Swiss project
and several others. In total 12 projects
are working. World Bank and Asian Development
Bank support the major ones. They involve
almost all aspects of agriculture. For example:
sheep development, cattle breeding, and
rehabilitation of irrigation system. I would
like to point out that 90% of agricultural
products grow on irrigated land. There is
a project that takes care about clear drinking
water and a rural water supply. Another
project is about agricultural service support.
The ministry coordinates all these issues
and projects and serves as an implementing
agency. The total amount of money in all
projects is more than 300 million dollars.
The total portfolio is about 500 million
dollars. This is the state support of reforms
in the agricultural sector.
The agricultural sector has grown considerably
within the last years, we can bring an example
of 5 to 6 % growth comparing to the previous
year. This can be particularly attributed
to the shift from cotton to grain production.
Do you plan to encourage further grain production
in Kyrgyzstan? Do you think that grain is
Kyrgyzstan´s advantage in the sector
of agriculture?
First of all we should take into account
the balance of growth in agricultural production.
We orient our farmers to produce certain
products. We take into account the balance.
State protection should be present and the
population of the country should be provided
with basic products. In Kyrgyzstan we have
all opportunities to supply the population
with all products. We can include meat production.
We have about more than 9 million hectors
of nice pastures. In Australia and New Zealand
sheep and cows can be all year around in
pastures. As for our country we need to
take into account our climatic conditions.
Hence we cannot keep cattle in pastures
in winter. The cattle that come back from
pastures should be provided with forage.
Thus we need to feed them during the winter
times in farms. Now I would like to gradually
pass to grain supply. Of course we have
very good opportunities to develop cattle
breeding, but we should not forget about
food for cattle. That's why our country
pursues the policy of growth in grain production.
This is purely for population food in forms
of cereal and flour. Thus, I want to say
that dynamic growth of last years is not
fully satisfactory. At the same time we
want to make amendments in ration grain
production. About 90 % of need in grain
will be supplied. At the same time taking
into account climatic conditions of the
country we will have to import the first
sorts of wheat from other countries. This
volume is about 100 thousand tons. In other
words we see the dynamics of grain growth.
Now we are going to reorient to the production
of forage, taking into account the growth
of animal breeding. We can also include
here poultry.
One way to capitalize all these greater
production outputs from the agricultural
sector is to further develop the food processing
industry. What is the ministry doing in
order to develop food processing industry?
I'm aware that the number of joint venture
entries is already working in this area.
Could you give us some examples in which
foreign investors are joining with local
producers in the food processing industry
and what your ministry is doing to attract
further investments?
To continue what I have told, we import
some sorts of grain to provide the top quality
flour that we produce in our country. Our
economic entities produce top quality flour,
which is partially exported. Today of course
the biggest reserve in the agriculture is
in the processing industry. If we speak
about semiannual results, then we do have
good results. The growth rate is 111, 4
% as far as the food products are concerned.
In total of food processing industry it
makes up 4, 8 %. But we are planning to
improve the situation. We are planning to
achieve not less than 10 % growth rate per
year and we have all opportunities for these.
We have high quality and ecologically pure
production. For example these last years
we haven't been using any chemical for production.
We use mostly organic chemicals. Only the
most necessary minimum minerals are used.
Before the rate was rather high and comprised
15 %. Now it has been decreased as a kind
of subsidy from the government in the sector.
Tactically we are planning to create equal
conditions for all the taxpayers. In our
organizational structure we have united
all the fiscal bodies into one structure.
This is done in order to streamline the
administration of the tax system and create
a united database for the taxpayers. Then
a taxpayer will work only with one fiscal
body that will control taxpayers. Now we
are in the very beginning because only a
month has passed since all this was made.
There is a certain plan for the improvement
of the body. If you are interested in it
here is this plan on paper.
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What is the
Ministry of Finance doing to create a more
favorable investment climate and to make Kyrgyzstan
a more appealing destination for investments?
It is the main task not actually only for
the Ministry of Finance, but for the whole
country. It is under the personal control
of our President. We have conducted 2 summits
with our big investors. We have a definite
plan of our activities in the form of matrix
where we have determined all the measures
to overcome all the barriers, which prevent
us to attract investors. First of all we
have started with the revision of all the
legislative documents that prevent us to
work. Our second task is to simplify the
regulatory base by the government bodies
and the introduction of minimal rate of
commissions, which are necessary for the
entrepreneur to start a business here. As
a fiscal body, which regulates fiscal policy,
we have to think over and work out certain
procedures and regulations for the investors
to come here and invest their money.
I am personally on the side of attracting
the investors with the help of certain advantages
provided for the investors. But now we implement
a joint program with the International Monetary
Fund. We have signed a memorandum and it stipulates
us not to decrease the rates of the taxes
too much and to provide too favorable advantages.
Of course, on some points of the memorandum
we are trying to come to an agreement with
the experts of the International Monetary
Fund. We have actually managed to come to
a certain decision.
Taking into account the ecology of pastures,
our meat is in high quality. That's why
we have all conditions for potential investors
to invest in our processing industry. We
have a lot of positive examples of worldwide
companies that participate in food processing.
Particularly Vim Bill Dan company, which
works in milk processing.
The company invested more than 2 million
dollars last year and it is planning to
invest more from 5 up to 7 million dollars
for further development. The company is
working very successfully. It has big profits.
Another company that works successfully
in our market is Reemtsma Kyrgyzstan. This
company invested about 200 million dollars,
both in the assets and circulation. It works
in the tobacco market, using local tobacco
and other sources. Currently we have preliminary
agreements with investors from Malaysia.
We are opening free economic zones and we
should include Malaysian companies' participation
in meat and vegetable production. We have
high quality dried apricots and grapes.
A number of German, Chinese and Turkish
companies are coming to our market to participate
in processing of these apricots and grapes.
We have considerably improved investment
and foreign investment protection legislation.
We have a block of measures to attract investors
and to create all favorable conditions for
them in here. The matrix has been developed
and the government functionally follows
all the points of the matrix. The point
is about commission system and flexible
tax measures. I can say that in the coming
3-5 years we are expecting considerable
number of investors. The amount of annual
investments in the processing industry will
not be less than 50 million dollars. Here
we are talking about direct investments
that are based on the interests of businessmen.
Kyrgyzstan needs to increase its exports.
Your current major trade partners are China,
Kazakhstan, and central European countries
and others like Turkey. What countries or
regions you think or you would like to see
as export regions particularly for food
processing products?
I think that the geography of our export
is changing. If earlier we exported products
of food processing and agriculture to Russia,
nowadays we retain some export to Russia.
Currently we have the supply market and
we are successfully cooperating with several
regions of Russia both on federal and regional
level. At the same time the reorientation
in export is taking place. For example,
last years we have developed the production
of beans. We produce about 30 thousand tons
of beans. About of 80 % of it goes to Russia
and Turkey. Nowadays we have already started
to export dried fruits to Europe. Considerable
amount of the export production will go
to Turkey. We will expand our export to
China in the field of sheep, primary processing
of skin, wool and fur. As for high quality
vegetables and fruits that are produced
in the south of the country they to India
and Malaysia. The export geography is definitely
increasing.
Our readers are interested not only
in the investment climate and export economy
but also in people that run those politics
and make the country change for the better.
So being the minister of agriculture I would
like to ask you on a more personal level
about yourself and your background. How
long have you been in this position and
what do you consider to be your greatest
achievement?
If you allow me to make some addition before
answering to this question then for improvement
of our economy, besides supplying food and
solving normal development of agricultural
food complex we need to solve problems of
export. In today's agenda along with food
processing production increase we need to
increase agricultural export production
by 8-10 % annually. I would like to stress
that we work very intensively on the completion
of National Strategy of poverty prevention.
Currently we are working on mobilization
of rural population. The poorest population
lives in the rural area. We are purposefully
working with rural population. We are giving
concrete supports to poorest parts of rural
districts, so they can adapt to agricultural
production. We are also working on the State
development program till 2010. It is a national
program, which has been agreed on international
business and approved in national forum.
I think that the implementation of this
program will solve number of problems. The
growth of economy depends on the growth
of agricultural sector as well as the improvement
of rural living standards.
As for myself I will be brief. My background
resembles to biography of my colleagues.
I was born in 1958 in Ton region of Issyk-Kul
province. After finishing a secondary school.
I worked for a year then I got a profession
of a plover of 4th level. At the same enterprise
I worked for different positions.
After that I entered the Kyrgyz Agrarian
Academy. After graduation I worked at water
resources department starting from an engineer
up to chief engineer then to chairman of
provincial union of water resources department.
Then I was a functional comsomol party leader.
After that I received my second education
of politician.
Then I worked as a first deputy minister
of water resource ministry. Before it was
a separate ministry. After reorganizing
and restructuring I was chairman of resources
department simultaneously I was deputy minister
of agriculture. Starting the March of 2000
I am the minister of agriculture, water
resources and processing industry. I have
two kids. My daughter is 20 years old and
she studies in Moscow. After graduation
this year she is planning to study in one
of the English speaking countries. My son
is 13.
My wife is a businesswoman. All my life,
destiny and career are connected to Kyrgyzstan.
I have a lot of friends and relatives that
live and work in rural places. I know very
well how farmers and peasants live, since
I'm from rural life. I know what's sheep
breeding because I grew up in that kind
of region. The land there needs irrigation
for growing plants.
Considering all of that, I think you
are the best person to be the minister of
agriculture, water resources and processing
industry.
I don't know whether I'm good or not. It's
up to our president and people to decide.
Thus we should justify the trust of people
and one should ask people about our activities.
I know Kyrgyz language very well. Most of
my friends are Kyrgyz including Spanish
person in front of me. I think the knowledge
of second language is equal to second life.
I cannot tell who I am by mentality and
what's my native language. I would like
to say that citizens of Kyrgyzstan should
know many languages in order to gain many
friends. Thank you.
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V.I.P. INTERVIEWS
