Economy of Kyrgyzstan

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The economy of Kyrgyzstan was severely affected by the collapse of the Soviet trading block. In 1990, some 98% of Kyrgyz exports went to other parts of the Soviet Union. Thus, the nation's economic performance in the early 1990s was worse than any other former Soviet republic except war-torn Armenia, Azerbaijan, and Tajikistan. While economic performance has improved in the last few years, difficulties remain in securing adequate fiscal revenues and providing an adequate social safety net.

[edit] Macro-economic trend

This is a chart of trend of gross domestic product of Kyrgyzstan at market prices estimated by the International Monetary Fund and EconStats with figures in millions of Kyrgyzstani Soms.

For purchasing power parity comparisons, the US Dollar is exchanged at 9.40 Soms only.

Current GDP per capita of Kyrgyzstan shrank by 54% in the Nineties.

The principal sector of the economy in Kyrgyzstan is agriculture, which contributes about one-third of the GDP and more than one-third of employment. The republic possesses a mountainous terrain, which accommodates livestock rearing, the largest sector within agriculture. The main crops are cotton, hemp, tobacco, vegetables, and fruit. By the early 1990s, the private sector provided between one-third and one-half of some harvests. Wool, leather, and silk also are major products, and much of the industrial sector is devoted to agroprocessing, the most attractive proposition for foreign investors.

The position of the country geographically works to its disadvantage. The region is prone to harsh climatic conditions and is in an earthquake zone. In 1992 there were earthquakes and mudslides, and in 1998 two mudslides also occurred in southern Kyrgyzstan.

With respect to Kyrgyzstan's potential for mining and energy extraction, the Republic is rich in mineral resources but has negligible petroleum and natural gas reserves. Among its reserves are substantial deposits of coal, gold, uranium, antimony, and other rare metals. The main barrier to development has been the inaccessibility of many of the potential resources. The government has actively cultivated foreign cooperation in processing and extracting gold while building up the nation's own reserves in the process. OPIC has recently been involved in the establishment of two joint ventures in Kyrgyzstan with Western gold companies.

Kyrgyzstan's plentiful water resources and mountainous terrain have enabled it to export hydroelectric energy. However, Kyrgyzstan imports petroleum and gas. There are plans to construct a petroleum refinery in Kyrgyzstan. The metallurgy industry is among the most important in Kyrgyzstan, and the government is hopeful of attracting foreign investment in the field.

Kyrgyzstan's principle exports, which go overwhelmingly to other CIS countries, are nonferrous metals and minerals, woolen goods and other agricultural products, electric energy, and certain engineering goods. In turn, the Republic relies on other former Soviet states for petroleum and natural gas, ferrous metals, chemicals, most machinery, wood and paper products, some foods, and most construction materials. In 1999, Kyrgyz exports to the U.S. totaled $11.2 million, and imports from the U.S. totaled $54.2 million. Kyrgyzstan exports antimony, mercury, rare-earth metals, and other chemical products to the U.S., and it imports grain, medicine and medical equipment, vegetable oil, paper products, rice, machinery, agricultural equipment, and meat from the U.S.

The Kyrgyzstan Government has reduced expenditures, ended most price subsidies, and introduced a value added tax. Overall, the government appears committed to transferring to a free market economic system by stabilizing the economy and implementing reforms, which will encourage long-term growth. These reforms led to Kyrgyzstan's accession to the WTO on December 20, 1998.

[edit] Other statistics

Investment (gross fixed): 17% of GDP (2004 est.)

Household income or consumption by percentage share:

• lowest 10%: 3.9%
• highest 10%: 23.3% (2001)

Distribution of family income - Gini index: 29 (2001)

Agriculture - products: tobacco, cotton, potatoes, vegetables, grapes, fruits and berries; sheep, goats, cattle, wool

Main article: Agriculture in Kyrgyzstan

Industrial production growth rate: 6% (2000 est.)

Electricity

• production: 11,720 GWh (2002)
• consumption: 10,210 GWh (2002)
• exports: 1,062 GWh (2002)
• imports: 375 GWh (2002)

Electricity - production by source:

• fossil fuel: 7.6%
• hydro: 92.4%
• other: 0% (2001)
• nuclear: 0%

Oil:

• production: 2,000 barrel/day (2001 est.)
• consumption: 20,000 barrel/day (2001 est.)
• exports: NA
• imports: NA

Natural gas:

• production: 16 million m³ (2001 est.)
• consumption: 2.016 billion m³ (2001 est.)
• exports: 0 m³ (2001 est.)
• imports: 2 billion m³ (2001 est.)

Current account balance: $-87.92 million (2004 est.)

Exports - commodities: cotton, wool, meat, tobacco; gold, mercury, uranium, natural gas, hydropower; machinery; shoes

Imports - commodities: oil and gas, machinery and equipment, chemicals, foodstuffs

Reserves of foreign exchange & gold: $498.7 million (2004 est.)

Exchange rates: soms per US dollar - 41.731 (2004), 43.6484 (2003), 46.9371 (2002), 48.378 (2001), 47.7038 (2000)

[edit] See also

• Kyrgyzstan
• Economy of Asia

[edit] External link

• Minister wants bigger role for local mining firms

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