Kyrgyzstan is a mountainous country with a dominant agricultural sector. Cotton, tobacco, wool, and meat are the main agricultural products, although only tobacco and cotton are exported in any quantity. According to Healy Consultants, the economy relies heavily on the strength of industrial exports, with plentiful reserves of gold, mercury, uranium and natural gas. The economy also relies heavily on remittances from foreign workers. Following independence, Kyrgyzstan was progressive in carrying out market reforms, such as an improved regulatory system and land reform. Kyrgyzstan was the first Commonwealth of Independent States (CIS) country to be accepted into the World Trade Organization. Much of the government's stock in enterprises has been sold. Kyrgyzstan's economic performance has been hindered by widespread corruption, low foreign investment and general regional instability. Despite political corruption and regional instability, Kyrgyzstan is ranked 70th (as of 2013) on the ease of doing business index.
|Economy of Kyrgyzstan|
Osh Bazaar selling foods in Bishkek
|1 Kyrgyz som (KGS) = 100 tyiyn|
|WTO, CIS, EAEU, and ECO|
|GDP||$8.093 billion (nominal, 2018 est.) $24.531 billion (PPP, 2018 est.)|
|GDP rank||142nd (nominal, 2018) 136th (PPP, 2018)|
|4.3% (2016) 4.7% (2017) 3.5% (2018e) 4.3% (2019f) |
GDP per capita
|$1,268 (nominal, 2018 est.) $3,843 (PPP, 2018 est.)|
GDP per capita rank
|157th (nominal, 2017) 146th (PPP, 2017)|
GDP by sector
|agriculture: 14.6% industry: 31.2% services: 54.2% (2017 est.)|
|2.208% (2019f est.) 1.543% (2018 est.) 3.175% (2017 est.)|
Population below poverty line
|32.1% (2015 est.)|
|27.3 low (2017, World Bank)|
|2.841 million (2017 est.)|
Labour force by occupation
|agriculture: 48% industry: 12.5% services: 39.5% (2005 est.)|
|Unemployment||7.1% (2017 est.)|
|small machinery, textiles, food processing, cement, shoes, lumber, refrigerators, furniture, electric motors, gold, rare earth metals|
|Exports||$1.84 billion (2017 est.)|
Main export partners
|Imports||$4.187 billion (2017 est.)|
Main import partners
|$6.003 billion (31 December 2017 est.) Abroad: $709.3 million (31 December 2017 est.)|
|-$306 million (2017 est.)|
Gross external debt
|$8.164 billion (31 December 2017 est.)|
|56% of GDP (2017 est.)|
|-3.2% (of GDP) (2017 est.)|
|Revenues||2.169 billion (2017 est.)|
|Expenses||2.409 billion (2017 est.)|
|Economic aid||$50 million from the US (2001)|
|$2.177 billion (31 December 2017 est.)|
On October 2012, International reserves and Foreign Currency Liquidity of Kyrgyzstan National Bank have reached US $1.96 bln, 8.6% of which is in gold. In 2012, to diversify the assets of Kyrgyzstan, the basket of currencies has been expanded by means of the Chinese yuan and the Singapore dollar. In 2012, 1 billion soms are to be spent for the purchase of gold. Gold proportion in international reserves has already grown to 8.6%. The National Bank plans to increase it to 12-15% in future.
Agriculture remains a vital part of Kyrgyzstan’s economy and a refuge for workers displaced from industry. Subsistence farming has increased in the early 2000s. After sharp reductions in the early 1990s, by the early 2000s agricultural production was approaching 1991 levels. Grain production in the lower valleys and livestock grazing on upland pastures occupy the largest share of the agricultural workforce. Farmers are shifting to grain and away from cotton and tobacco. Other important products are dairy products, hay, animal feed, potatoes, vegetables, and sugar beets. Agricultural output comes from private household plots (55 percent of the total), private farms (40 percent), and state farms (5 percent). Further expansion of the sector depends on banking reform to increase investment, and on market reform to streamline the distribution of inputs. Land reform, a controversial issue in Kyrgyzstan, has proceeded very slowly since initial legislation in 1998. The irrigation infrastructure is in poor condition. Agriculture contributes about one-third of the GDP and more than one-third of employment.
Only 4 percent of Kyrgyzstan is classified as forested. All of that area is state-owned, and none is classified as available for wood supply. The main commercial product of the forests is walnuts.
Kyrgyzstan does not have a significant fishing industry. In 2002 aquaculture contributed 66 percent of the country’s total output of 142 metric tons of fish, but in 2003 the aquaculture industry collapsed, producing only 12 of the country’s total of 26 metric tons.
In the post-Soviet era, mining has been an increasingly important economic activity. The Kumtor Gold Mine, which opened in 1997, is based on one of the largest gold deposits in the world. New gold mines are planned at Jerooy and Taldy–Bulak, and a major gold discovery was announced at Tokhtonysay in late 2006. The state agency Kyrgyzaltyn owns all mines, many of which are operated as joint ventures with foreign companies. Uranium and antimony, important mineral outputs of the Soviet era, no longer are produced in significant amounts. Although between 1992 and 2003 coal output dropped from about 2.4 million tons to 411,000 tons, the government plans to increase exploitation of Kyrgyzstan’s considerable remaining deposits (estimated at 2.5 billion tons) in order to reduce dependency on foreign energy sources. A particular target of this policy is the Kara–Keche deposit in northern Kyrgyzstan, whose annual output capability is estimated at between 500,000 and 1 million tons. The small domestic output of oil and natural gas does not meet national needs.
In the post-Soviet era, Kyrgyzstan’s industries suffered sharp reductions in productivity because the supply of raw materials and fuels was disrupted, and Soviet markets disappeared. The sector has not recovered appreciably from that reduction; if gold production is not counted, in 2005 industry contributed only 14 percent of the gross domestic product (GDP). Investment and restructuring have remained at low levels, and the electricity industry (traditionally an important part of industry’s contribution to GDP) has stagnated in recent years. Government support is moving away from the machine industries, which were a major contributor to the Soviet economy, toward clothing and textiles. Food processing accounted for 10 to 15 percent of industrial production until encountering a slump in 2004. In recent years, the glass industry has surpassed clothing and textiles in investment received and as a contributor to GDP. In the early 2000s, the construction industry has grown steadily because of large infrastructure projects such as highways and new gold mines. Housing construction, however, has lagged because of low investment.
More than ninety percent of electricity produced is hydroelectric and the country could produce much more of such clean energy and export to its neighbors and the region. Even though Kyrgyzstan has abundant hydro resources, only less than ten percent of its potential has been developed so far. It has limited deposits of fossil fuels and most of its natural gas imports come from Uzbekistan, with which Kyrgyzstan has had a series of imperfect barter agreements. Per capita energy consumption is high considering average income, and the government has no comprehensive plan to reduce demand. Up to 45 percent of electricity generated, especially in winter time, is diverted illegally or leaks from the distribution system. Hydroelectric plants generate some 92.5 percent of domestically consumed electricity, and three commercial thermoelectric plants are in operation. Because of its rich supply of hydroelectric power, Kyrgyzstan sends electricity to Kazakhstan and Uzbekistan in return for fossil fuels. A new hydroelectric plant on the Naryn River at Kambar–Ata would supply power to parts of China and Russia, improving Kyrgyzstan’s export situation and domestic energy supply. The plant was completed in August 30, 2010. An antiquated infrastructure and poor management make Kyrgyzstan more dependent on foreign energy in winter when water levels are low. In the early 2000s, Kyrgyzstan was exploiting only an estimated 10 percent of its hydroelectric power potential. In 2001 Kyrgyzstan had about 70,000 kilometers of power transmission lines served by about 500 substations. Kyrgyzstan would be a member of the Shanghai Cooperation Organization’s Asian Energy Club, which Russia proposed in 2006 to unify oil, gas, and electricity producers, consumers, and transit countries in the Central Asian region in a bloc that is self-sufficient in energy. Other members would be China, Kazakhstan, Tajikistan, and Uzbekistan.
Kyrgyzstan is a partner country of the EU INOGATE energy programme, which has four key topics: enhancing energy security, convergence of member state energy markets on the basis of EU internal energy market principles, supporting sustainable energy development, and attracting investment for energy projects of common and regional interest.
Substantial post-Soviet growth in the services sector is mainly attributable to the appearance of small private enterprises. The central bank is the National Bank of the Kyrgyz Republic, which nominally is independent but follows government policy. Although the banking system has been reformed several times since 1991, it does not play a significant role in investment. High interest rates have discouraged borrowing. A stock market opened in 1995, but its main function is trading in government securities. Because of the Akayev regime’s economic reforms, many small trade and catering enterprises have opened in the post-Soviet era. Although Kyrgyzstan’s mountains and lakes are an attractive tourist destination, the tourism industry has grown very slowly because it has received little investment. In the early 2000s, an average of about 450,000 tourists visited annually, mainly from countries of the former Soviet Union.
Kyrgyzstan's principal 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.
Reexport of China-made consumer goods to Kazakhstan and Russia, centered on Dordoy Bazaar in Bishkek, and to Uzbekistan, centered on Kara-Suu Bazaar in Osh Region, is particularly important; it is thought by some economists to be one the country's two largest economic activities.
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.
The tax regime in the Kyrgyz Republic is administered by the State Tax Service. Collected taxes reached 18.1% of GDP in 2012.
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 Kyrgyz Soms.
|Year||Gross Domestic Product||US Dollar Exchange|
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 1990s. Mean wages were $0.85 per man-hour in 2009 and this rate represented underemployment when compared to effective market pay. In the first half of 2012, Kyrgyz economy shrank by 5.8%. This downturn was largely due to decline in gold production at the Kumtor mine.
The budget deficit in mid-2012 was 23-billion soms and accounted for 7% of GDP while the target was to reduce it to 6%.
The following table shows the main economic indicators in 1992–2017.
|GDP in $
|8.07 Bln.||6.20 Bln.||8.12 Bln.||10.98 Bln.||11.67 Bln.||13.00 Bln.||14.26 Bln.||14.78 Bln.||14.89 Bln.||16.10 Bln.||16.39 Bln.||18.47 Bln.||19.56 Bln.||20.54 Bln.||21.60 Bln.||22.97 Bln.|
|GDP per capita in $
|...||−5.4 %||5.4 %||2.6 %||3.1 %||8.5 %||7.6 %||2.9 %||−0.5 %||6.0 %||−0.1 %||10.9 %||4.0 %||3.9 %||3.8 %||4.5 %|
|...||42.1 %||19.7 %||4.3 %||5.6 %||10.2 %||24.5 %||6.8 %||8.0 %||16.6 %||2.8 %||6.6 %||7.5 %||6.5 %||0.4 %||3.2 %|
(Percentage of GDP)
|...||...||122 %||86 %||73 %||57 %||48 %||58 %||60 %||49 %||49 %||46 %||52 %||65 %||58 %||59 %|
Investment (gross fixed): 17% of GDP (2004 est.)
Household income or consumption by percentage share:
Distribution of family income - Gini index: 29 (2001)
Agriculture - products: tobacco, cotton, potatoes, vegetables, grapes, fruits and berries; sheep, goats, cattle, wool, dairy products
Industrial production growth rate: 6% (2000 est.)
Electricity - production by source:
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)
The American Chamber of Commerce in Kyrgyzstan was founded in cooperation with the US State Department in 2005 to promote and support the development of international and especially American business in Kyrgyzstan.
It is the belief of the American Chamber of Commerce that the economic interests of the international and American business community and those of the people of Kyrgyzstan are one.Banking in Kyrgyzstan
In mid-1995, the banking system in Kyrgyzstan continued to be dominated by the central savings bank (the National Bank of Kyrgyzstan, created in 1991) and by the three major commercial banks that succeeded the sectoral banks of the Soviet era and remained under state control. Those banks, the Agricultural and Industrial Bank (Agroprombank), the Industrial and Construction Bank (Promstroybank), and the Commercial Bank of Kyrgyzstan, owned 85 percent of banking assets in 1994.New commercial banks, of which fifteen were established in 1993 and 1994, were owned by individuals or enterprises and had much less financial power than the state-owned banks. The new commercial banks have the right to buy and sell foreign currency and open deposit accounts. The National Bank is the official center of currency exchange, but in the mid-1990s it did not adhere to official exchange rates. In mid-1994, the government established the Bank for Reconstruction and Development, which uses state funds, foreign currency assets, and loans from abroad to aid small and medium-sized enterprises and to invest in targeted spheres of the economy, especially housing, construction, power generation, and agriculture.The banking system has remained concentrated in the same areas as in the Soviet period. Although some diversification has occurred, loans tend to go to traditional clients. Because new commercial banks are small and initially were owned by state ministries and state-owned enterprises, competition has developed slowly. Through 1994 Soviet-style accounting and reporting systems remained in use, and banking services such as domestic and international payments have remained at the same noncompetitive level as they were prior to 1991.
Capabilities vital to a market-type economy, such as credit risk assessment and project appraisal, are lacking. Post-Soviet regulations on capital funds, exposure limits, and lending practices have not been enforced. The technical infrastructure of the banks also requires substantial overhaul. In addition, the National Bank has been plagued by scandal; the first director, an Akayev protégé, was linked to several illegal financial operations in 1993 and 1994.The limitations of the banking system have made it unable to efficiently mobilize and allocate financial resources into the national economy. This failure has hindered privatization and other types of economic reform that require substantial amounts of risk capital upon which borrowers can rely. Especially critical are the bad loans held by the three state-owned banks (influenced by government interference in loan decisions, together with poor financial discipline on the part of major enterprises) and eroded capital base. In 1995 the National Bank's outstanding loans to agricultural and industrial enterprises totaled 1 billion som each.Bozymchak
Bozymchak is an open-pit copper mine and concentrator in Ala-Bukinsky region, Jalal-Abad, Kyrgyzstan; it also contains gold by-product. It is being developed by KAZ Minerals. The project commenced commissioning in 2014.Corruption in Kyrgyzstan
Kyrgyzstan is ranked as the 135th least corrupt country in the 2017 Corruption Perceptions Index, and despite having a strong legal framework, there still exists a huge gulf in implementation of the law. Kyrgyzstan’s rampant corruption which penetrates all levels of society, including the presidency, eventually caused the Tulip revolution in 2005, overthrowing Askar Akayev, and the 2010 Kyrgyzstani revolution, ousting Kurmanbek Bakiyev from office.Economic Cooperation Organization
The Economic Cooperation Organization or ECO is a Eurasian political and economic intergovernmental organization which was founded in 1984 in Tehran by the leaders of Iran, Pakistan, and Turkey. It provides a platform to discuss ways to improve development and promote trade and investment opportunities. The ECO is an ad hoc organisation under the United Nations Charter. The objective is to establish a single market for goods and services, much like the European Union. The ECO's secretariat and cultural department are located in Iran, its economic bureau is in Turkey and its scientific bureau is situated in Pakistan.
The nature of the ECO is that it consists of predominantly Muslim-majority states as it is a trade bloc for the Central Asian states connected to the Mediterranean through Turkey, to the Persian Gulf via Iran, and to the Arabian sea via Pakistan. The current framework of the ECO expresses itself mostly in the form of bilateral agreements and arbitration mechanisms between individual and fully sovereign member states. This makes the ECO similar to ASEAN in that it is an organisation that has its own offices and bureaucracy for implementation of trade amongst sovereign member states.
This consists of the historically integrated agricultural region of the Ferghana Valley which allows for trade and common agricultural production in the border region of Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan. Free trade agreements between the industrial nations of Iran and Turkey are due to be signed in 2017. Likewise the Pakistan-Turkey Free Trade Agreement is due to be signed. Pakistan has free trade agreements with both Afghanistan and Iran which are signed and are in the process of implementation, and currently most of Afghanistan trade is through Pakistan. And the Afghanistan-Pakistan Transit Trade Agreement is designed to facilitate trade for goods and services for Central Asia via both Afghanistan and Pakistan. This is in addition to the Ashgabat agreement which is a multi-modal transport agreement between the Central Asian states.Further cooperation amongst members is planned in the form of the Iran–Pakistan gas pipeline, as well as a Turkmenistan–Afghanistan–Pakistan pipeline. Current pipelines include the Tabriz–Ankara pipeline in addition to the planned Persian Pipeline. This is in addition to the transportation of oil and gas from resource rich Central Asian states such as Kazakshtan and Turkmenistan of minerals and agriculture that complements the industrialisation underway in Iran, Pakistan and Turkey. Pakistan plans to diversify its source of oil and gas supplies towards the Central Asian states including petroleum import contracts with Azerbaijan.Economic Cooperation Organization Trade Agreement
The Economic Cooperation Organization Free Trade Agreement or ECOTA was an agreement reached on 17 July 2003 at the ECO summit in Islamabad whereby a free trade region was formed between the countries of Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan. As of 2008, the ECOTA is in effect.Kumtor Gold Mine
The Kumtor gold mine (Kyrgyz: Кумтөр, IPA: [qum.tør]; Russian: Кумтор) is an open-pit gold mining site in Issyk-Kul Region of Kyrgyzstan located about 350 km (220 mi) southeast of the capital Bishkek and 80 km (50 mi) south of Lake Issyk-Kul near the border with China. Located in Tian Shan mountains at more than 4,000 m (14,000 ft) above sea level, Kumtor is the second-highest gold mining operation in the world after Yanacocha gold mine in Peru.Kyrgyz Republic commemorative currency
Commemorative currency in the Kyrgyz Republic is the set of commemorative banknotes and coins issued by the National Bank of the Kyrgyz Republic that are not meant for general circulation. All the banknotes and coins are either denoted by som, the underlined C, or its subunit the tyiyn. Kyrgyz is the language used on the commemorative currencies although Russian and to a lesser extent English is used in conjunction as well. The central bank regularly issues commemorative currencies to mark various occasions or to celebrate the various aspects of Kyrgyzstani culture or wildlife. Several of these have also won numerous regional and international awards. Commemorative coins are minted in several locations including, Kazakhstan, Lithuania, Poland, Russia (Saint Petersburg Mint), Slovakia and the United Kingdom (Pobjoy Mint), while the commemorative notes are printed in the United States (Crane Currency).Kyrgyz Stock Exchange
The Kyrgyz Stock Exchange (KSE) was founded in 1994. Until 2000 the exchange functioned in the form of a non-profit membership organization with a total membership of 16. In May 2000 the KSE was transformed into a joint stock company. In 2001 the Kazakhstan Stock Exchange became a shareholder. The Kyrgyz Stock Exchange is a member of the Federation of Euro-Asian Stock Exchanges.
The administrative bodies of the KSE are:
Shareholders General Assembly: main administrative body
Board of Directors: supervisory body
President: individual bodyKyrgyzstani som
The som (Kyrgyz: сом) is the currency of the Kyrgyz Republic. The ISO 4217 currency code is KGS. The som is sub-divided into 100 tyiyn (Kyrgyz: тыйын).List of banks in Kyrgyzstan
This is a list of banks in Kyrgyzstan.Makmal gold mine
The Makmal gold mine is an open-pit gold mine in Toguz-Toro District, Jalal-Abad Region, Kyrgyzstan, just to the south of Kazarman. It was the largest gold mine in the Soviet Union.The mine is currently run by the Makmal gold mining combine, or Makmalaltyn (Kyrgyz: Макмалалтын), a branch of Kyrgyzaltyn (a publicly traded company), and has an output of close to 1.2 tonnes of gold per year.Manas Bank
Manas Bank is a commercial bank in Kyrgyzstan currently in insolvent liquidation.It was established in 2008 by Latvian banker Valērijs Belokoņs, who In 2007 acquired then insolvent Kyrgyz commercial bank Insan Bank, and renamed it as Manas Bank. Manas Bank started its operations from 1 January 2018, offering a range of corporate and retail banking services. However, within 28 months, on 8 April 2010, following a regime change in the Kyrgyz Republic, the Kyrgyz National Bank placed Manas Bank under its administration to investigate money laundering. Contrary to some reports, Manas Bank was never nationalised by the Kyrgyz government. While continuing to formally belong to Valērijs Belokoņs, on 6 July 2015, Manas Bank was placed into insolvent liquidation.
In August 2011, Belokoņs pursued international arbitration against the Kyrgyz Republic claiming that the government's interference with Manas Bank amounted to “expropriation” of the bank. On 24 October 2014, the arbitral tribunal awarded Belokoņs a US$15 million compensation (plus legal costs) for the “expropriation” of Manas.However, upon Kyrgyz Republic's appeal, on 21 February 2017 the Paris Court of Appeal annulled the arbitral award finding that Belokons had bought Manas Bank “in order to develop … money-laundering practices”. The court said such money laundering would not be monitored in Kyrgyzstan because of Belokoņs's “privileged” relationship with Maxim Bakiyev, the son of the then President of Kyrgyzstan. The court further held that the arbitral award must be annulled because to allow its enforcement would reward Belokoņs for “criminal activities”, which would be contrary to French international public policy.In particular, the court found that after Belokoņs took over Manas Bank, $5.2bn flowed through its accounts in less than three years, and concluded this “dazzling success” in a poor country “cannot be explained by orthodox banking practices”. Bank records presented to the court showed that client accounts had been opened in the names of people whose identification documents, including passport details, had been stolen. One Manas Bank client, New-Zealand-registered company Lakerock Contracts Ltd, had $534m go through its account in nine months. Examination of the company's registration documents found the named company head, and sole signatory for the multimillion-dollar account, was a taxi driver in Belarus. When interviewed on request by the Belarus police, he told officers he had never signed any of the documents and knew nothing about Manas Bank or Lakerock. Another company BMD Commerce, had $24m through its account in a year, including multimillion-dollar physical cash deposits and withdrawals. The authorised account holder on the Manas Bank forms was a resident of Latvia. Latvian police and Kyrgyz border records showed this person to be a 20-year-old man who had never been to Kyrgyzstan. Subsequently, the investigation found he was serving a prison sentence in Latvia when much of the account activity was taking place.The Paris court of appeal concluded in its judgment that Manas Bank “was taken over by Mr Belokon in order to develop, in a state where his privileged relations with the holder of economic power guaranteed him the absence of any true monitoring of his activities, money-laundering practices which could not have flourished in the less favourable environment of Latvia.”Belokoņs appealed the judgment to the French Supreme Court on 12 May 2017 but Belokoņs's appeal was dismissed by the Supreme Court on 12 July 2018.National Bank of the Kyrgyz Republic
The National Bank of the Kyrgyz Republic (Kyrgyz: Кыргыз Республикасынын Улуттук Банкы, romanized: Kyrgyz Respublikasynyn Uluttuk Banky) is the central bank of Kyrgyzstan and is primarily responsible for the strategic monetary policy planning of the country as well as the issuance of the national currency, the Som.Outline of Kyrgyzstan
The following outline is provided as an overview of and topical guide to Kyrgyzstan:
Kyrgyzstan – sovereign country located in Central Asia. Landlocked and mountainous, Kyrgyzstan is bordered by Kazakhstan to the north, Uzbekistan to the west, Tajikistan to the southwest, and China to the east.