ECONOMY
Despite
the backing of major Western donors, including the International
Monetary Fund (IMF), the Kyrgyz Republic has had economic difficulties
following independence. Initially, these were a result of the
breakup of the Soviet trading bloc and resulting loss of markets,
which impeded the republic's transition to a free market economy.
The government has reduced expenditures, ended most price subsidies,
and introduced a value-added tax. Overall, the government appears
committed to the transition to a market economy. Through economic
stabilization and reform, the government seeks to establish a
pattern of long-term consistent growth. Reforms led to the Kyrgyz
Republic's accession to the World Trade Organization (WTO) on
December 20, 1998.
The Kyrgyz
Republic's economy was severely affected by the collapse of the
Soviet Union and the resulting loss of its vast market. 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.
Agriculture
is an important sector of the economy in the Kyrgyz Republic.
By the early 1990s, the private agricultural sector provided between
one-third and one-half of some harvests. In 2002 agriculture accounted
for 35.6% of GDP and about half of employment. The Kyrgyz Republic's
terrain is mountainous, which accommodates livestock raising,
the largest agricultural activity. Main crops include wheat, sugar
beets, cotton, tobacco, vegetables, and fruit. Wool, meat, and
dairy products also are major commodities.
Agricultural
processing is a key component of the industrial economy, as well
as one of the most attractive sectors for foreign investment.
The Kyrgyz Republic is rich in mineral resources but has negligible
petroleum and natural gas reserves; it imports petroleum and gas.
Among its mineral reserves are substantial deposits of coal, gold,
uranium, antimony, and other rare-earth metals. Metallurgy is
an important industry, and the government hopes to attract foreign
investment in this field. The government has actively encouraged
foreign involvement in extracting and processing gold. The Kyrgyz
Republic's plentiful water resources and mountainous terrain enable
it to produce and export large quantities of hydroelectric energy.
The Kyrgyz
Republic's principal exports are nonferrous metals and minerals,
woolen goods and other agricultural products, electric energy,
and certain engineering goods. Its imports include petroleum and
natural gas, ferrous metals, chemicals, most machinery, wood and
paper products, some foods, and some construction materials. Its
leading trade partners include Germany, Russia, China, and neighboring
Kazakhstan and Uzbekistan.
The Kyrgyz Republic exports antimony, mercury, rare-earth metals, and chemical products to the United States. It imports grain, medicine and medical equipment, vegetable oil, paper products, rice, machinery, agricultural equipment, and meat from the United States. In 2008 Kyrgyz exports to the U.S. totaled $2.5 million; 2008 Kyrgyz imports from the U.S. totaled $44.3 million, much of which was equipment, food products, and commodities provided by assistance programs.
GDP: 2008 (est.), $4.6 billion; 2007, $3.75 billion; 2006, $2.8 billion; 2003, $1.9 billion.
GDP growth rate in 2008: 7.6%.
Inflation rate at end of 2008: 24.4%.
GDP per capita (2008 est.): $870.
Unemployment rate (as of the end of 2008): 11.1%.
Natural resources: Abundant hydropower; significant deposits of gold and rare earth metals; locally exploitable coal, oil, and natural gas; other deposits of iron, bauxite, copper, tin, molybdenum, mercury, and antimony.
Agriculture: Products--tobacco, cotton, wheat, vegetables (potatoes, sugar beets, beans), fruits (apples, apricots, peaches, grapes), berries, sheep, goats, cattle, wool.
Industry: Types--small machinery (electric motors, transformers), light industry (cotton and wool processing, textiles, food processing), construction materials (cement, glass, slate), shoes, furniture, mining, energy.
Trade: Exports (2008)--$1.6 billion: cotton, wool, meat, tobacco, gold, mercury, uranium, hydropower, machinery, shoes. Partners--Switzerland 27.3%, Russia 19.2%, Uzbekistan 14.3%, Kazakhstan 11.3%, France 6.7%, Afghanistan 2.8%. Imports--$3.3 billion: oil and gas, machinery and equipment, foodstuffs. Partners--Russia 44.3%, China 14.6%, Kazakhstan 11.4%, Uzbekistan 4.4%, U.S. 3.0%.
Total external debt mid-2008 was $3.16 billion, of which $2.19 billion was public debt.
