To clearly understand the economic situation we must look at the history. We were part of the Soviet Union and as a republic we got annual subsidies of around $700 million USD.

And you can imagine what will happen when quite of a sudden the country collapse, and till we one of a sudden get missed these subsidies, but it is also very important that he lost our markets because all countries became independent. Everybody started to survive. Normally wanted to come back with this unification. And you can imagine that the smallest countries have the biggest problems because we don't have internal market, we have the market with the population of 5 M people is low purchasing power so we're cut from the subsidies, we lost our markets, our enterprises collapsed, so it was a very difficult period at the beginning of our independence and I would say this is quite a big tragedy not only in the economic sphere but also in the social sphere. Immediately poverty started to grow, people lost their source of incomes and socially aggressed in many countries of the former Soviet Union of our size. We're even the worst kind of social expectation like Moldova, say Caucasus Republics, Tajikistan, all countries of our size have real strong social aggressed. So, thank God, we avoid this type of things. We are maintaining more or less stability. Also you can imagine, because GDP of our country is 1.5 bln and we have subsidies of 50% of this amount. Can you imagine everything is collapsed? We survived. These were very difficult ten years, unprecedented difficult.

What we asked immediately to apply for an assistant program from International financial institutions, donor countries and since then we got quite significant support from them. At the moment if you multiply 700 M to 10, it is 7 bln, and all markets were cut down, so we put some money (???) on top of this amount. Of course we collected sovereign debts, we collected debts in front of World Bank, IMF, ADB, EBRD, etc. And amount of debts is around $ 1.3bln which is something like 90% of GDP, so we collected the debts of not several billion but quite 1.3 and last year was the first year when the country started to export more than to import. More or less we found our face, our way in the division of, let's say, in the division of competition around the world. Now our producers found there niche in the neighboring markets, so its quite good situation. So we reach the level of macroeconomic stability, inflation is about 3%, very, very low, export is larger than import. IMF approved our economical medium and long-term program and we are following it, so there is more or less stabilization. So, we are not any more at house (?), so the country is moving ahead and is developing, GDP is 5-6% a year growth in the last 5-6 years, the industrial production is also growing but this year was a bit complicated, I can even later recommend about that, agriculture grows about 6-8% a year. The country immediately started, so once and forever we chose democratization and market economy. We first started mass privatization in 1991; now 90% of the enterprises are in private hands, we first introduced national currency within the former Soviet countries, in 1993, very first. It was quite a revolutionary step because we had one ruble still used we had enormous pressure. We first introduced private ownership on land in 1998 and we first entered the World Trade Organization. So we are moving very quick in reforms and we will continue because we have to survive and we immediately start kind of shock therapy so we are immediately going to the market economy.

Now there is no doubt that Kyrgyzstan has improved tremendously in the last 3-4 years, nevertheless there is still a number of issues such as the heavy reliance in the mining sector, What alternatives are there to this dependence?

We have identified 6 sectors where we want to develop quick, where we want to be successful and where we want to invite investors, where they can take the profits from the country. First is hydroelectric energy sector. We are mountainous country, so we have quite powerful rivers and our main source of income; we believe will be hydro electrical energy, because it is clean, ecological.

The National Energy, Hydro-Energy Company has been unbundled and it's created 6 different companies.

Really it is split in two, now it started restructuring of this company, preparing for privatization. We split company for two, one responsible for generation and the second for distribution. But we'll continue restructuring and finally, privatization of those strategic areas of our country. The second part is mining, as we already said. The country is rich in natural resources, especially gold, and we have here, probably we'll see Kumtor, gold mining company and this is kind of locomotive of our economy and they already got during a few years more than hundred tons of gold, so it's quite a big achievement for us. We have a couple of more promising mines of gold and other minerals - it is the second sector and the first sector is obviously tourism, because we are a nice country. I hope we'll have a chance to go out.

Yes. We already have quite a number of tourists on the Issyk-Kul Lake, it's full of tourists now and we believe we have to develop this. The fourth is the agro processing, if you look from a satellite at our part of the world, you will see this is kind of mountains, surrounded with the deserts and next to the mountains you have river, and river fishing agriculture should be around the mountains and we are happy to be around the mountains and we have water. In Uzbekistan they had the Aral Sea and the environment is in a disaster. So we have fish for agriculture. For agriculture you need two things: sun and water and we have both. We have already heavy export of our agricultural products but we want to let these products be processed because it is more competitive to the market. It's more, let's say, efficient that we will ship value-added product to all sides of the market and because it will be short. The fifth area is information technologies. We don't need transport for this time. We have very highly educated population. We want these people to work for external customers to produce our software or computer design. The reasons are very simple: the cost of one engineering man per hour in the West is $70 and we have 15, so we are telling the potential customers to come to us and we will supply everything, same quality, cost efficient data.

At the last but not least we'll ensure services country for the region, services: financial services, transport services, etc. Of course we are surrounded with these countries and we have to be complimentary to these big economies and we also place this position as important marketing. These are six priorities and we have some success in all of them, more or less. This year we had very big growth in textile export, for example, we are quite happy we have reached it. You asked me about services, transport services, we want to market our Bishkek airport as a harp for all the Eurasian continents.

If you look at the map, it is exactly in the middle between Paris and Shanghai, it's logical that cargo planes come to Kyrgyzstan, and obtain more efficient distribution from here. Our advantage is that we can concentrate on this process because Kazakhstan concentrates on the hydrocarbons minerals. We will follow the example of countries like Bahrain, tiny countries that are very successful as transit hubs for goods or travelers. We are now promoting a railway connection between Uzbekistan and China it will be the shortest distance between Shanghai's and Paris because currently the railway line goes through Tran Siberia down to china, just a few hundred kilometers through Kyrgyzstan territory will allow a much shorter byway.

The Chinese government is very keen on this project, the reason being that they have to develop the western parts of China

How do you think the western world perceives central Asia and how aware foreign investors are they of the opportunities in Kyrgyzstan´s?

First able the 11th of September brings central Asia to the map of the world; it is of course a tragic event. Before hardly anybody knew about our country. So it is good that we are a main spot in the map. We must promote central Asia as a one big region and one big market, unfortunately the division amongst regional countries is very strong so we as a smallest one within central Asia must make a bigger effort in promoting the our image and regional cooperation should be our target. As far as the Kyrgyz republic within central Asia we are not attractive for FDI we are a land locked country and have small population with a mountainous topography and no access to sea. This means that we have to be more active in attraction of investments. We have to create conditions for the investors to come and our efforts have to be bigger than neighboring countries that have bigger potential and opportunities. That is why we identified the policy of attraction of FDI as our nations main priority, each foreign investor here has to be treated as a very important friend of the country they have to have all conditions to perform the normal operations and they will get favorable regimes from all agencies of the state and from all people of our society, only then that is achieved we would be able to attract investments. This is a clear message from our political leaders and I am the one in charge of implementing this policy.

How do we want to market ourselves? Two particular ways. We are now hosting a military air base now everyone is started to think about the Kyrgyz Republic because of the airbase in Manas Airport. The twelve countries are there as part of the antiterrorist coalition and we are hosting them, nowhere in the world you would see twelve nations under one command fighting terrorism and we are happy that this place is in the Kyrgyz republic because it has not only brought us to the front headlines of the media world, its improved our communication, our security, it has stopped drug trafficking. Kyrgyzstan is not ethnically bias contrary to other countries; if you look around the world most countries have separate ethnic groups. So we are a neutral hub for distribution of goods and services to Afghanistan. Many NGOs and aid organizations are using our direct railway line connecting us with Afghanistan, the world food organization is situated in Showed want the rich countries and the international financial institutions if they have funds to supply to Afghanistan is better to buy those goods and services here because it is cheaper and closer and in terms of transport and logistical cost and it would help the Kyrgyz economy as well as a poor country.

The second marketing tool effective since September is that there are two countries in the region part of the WTO, China and the Kyrgyz Republic. From here the Chinese market can be penetrated without tremendous limitations contrary to Kazakhstan, Uzbekistan and others. We are then the best gateway to China from this side of the world, if you are looking to target the Chinese market look to place your enterprise in the Kyrgyz Republic which would allow you to get free access obligations since you there is double WTO membership. We want to exploit these advantages in addition to regional cooperation because our traditional markets like Russia and Kazakhstan are booming because of the rise in oil prices as well as the progress of their economies. We want to supply them; the average income of Kazakh citizens is much higher than that of our people. Cooperation with our neighbors will bring about a more equal.

Efforts to attract foreign investment to the Kyrgyz republic are many; nevertheless there are some deterrents to the influx of FDI like the rampant corruption. The efforts made by the government to remedy this are many, how would you reassure investors of the situation here?

Perhaps you know the magazine published by EBRD "Economies in Transition". They make a good analysis of all countries in transition considering different parameters like transference openness, free market access, fiscal systems etc. Regarding regulating system we are number four in the ranking ahead of central and Eastern Europe and countries like Bulgaria, Romania and others. So our regulatory system is already quite simple. If you wanted to establish a shop you would have to collect licenses permissions etc, so we already have a reasonable system. We want to go even further and cut official corruption as well it means that agency collecting fees based on the issuing of certain permission and certification licenses. We are fighting this very actively because we are committed to creating a favorable investment climate. All special accounts where this money goes to will be closed and the deadline is December 31st this year. Corruption exist everywhere in the world but it is more pronounced here, we know that we have this problem, we will only solved this problem when state employees are better paid. The problem is that the country does not have a good state budget and we will fight against this corruption. We are implementing many measures to bring it under control like transparency international reports, showing that we are making progress in the right direction. We are telling investors that if you have been harass they can come to government and clearly say it and we will take the necessary measures about it. Our advantage is that we have limited number of investors so we can monitor the activities of each of them.