Kyrgyzstan Business & Economy - The Times Of Central Asia

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President Speaks about Fighting Corruption, New Trade Routes in Eurasia

On December 15th, President Sadyr Japarov addressed the second People’s Kurultai, a national assembly of representatives of the public, to discuss current issues of national importance and develop joint proposals to promote reforms. In his speech, the President laid particular emphasis on the fight against corruption. “Corruption is a social evil not only of our people, but of all countries of the world. Because of corruption, our country did not develop for almost 30 years, only a few people became rich, and the common people lived in poverty. Currently, anti-corruption measures are in full swing. Billions of dollars are being returned to state coffers,” Japarov said, adding that a war is also being waged against organized criminal groups. “No investor will invest money in a country with criminal elements. In addition, some officials continue to obstruct investors and engage in bribery and lobbying. All these phenomena harm the image of the country. In this regard, the merciless fight against corruption will continue and intensify,” the President promised. President Japarov also touched upon the topic of new trade routes for Kyrgyzstan. “Kyrgyzstan is located on a unique trade route — the Great Silk Road between Europe and Asia. Occupying a convenient geographical location on trade routes, our country can become a bridge between East and West. For this purpose, a new multimodal transport route, the ‘Southern Corridor’ is being developed. In addition, work is underway to open a southern air corridor, which will strengthen air traffic between Kyrgyzstan and China, and connect the airports of Osh and Kashgar. “At the same time, construction of the China–Kyrgyzstan–Uzbekistan railway will begin in the near future. The pilot project for transporting cargo containers in transit by rail from China to Afghanistan via Kyrgyzstan and Uzbekistan will continue. The issue of launching a pilot container train linking Iran–Turkmenistan–Uzbekistan-Kyrgyzstan is also being considered. I am confident that these initiatives and ongoing projects will allow Kyrgyzstan to reach a new level of transport and logistics communication with the outside world,” President Japarov concluded.

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EDB Forecasts Economic Growth for Kazakhstan, Kyrgyzstan and Tajikistan in 2024

The Eurasian Development Bank (EDB) has published its macroeconomic outlook for the Bank’s six member states — Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. Bank analysts anticipate that GDP across the region’s countries will be close to a balanced growth path. Projections indicate a GDP growth in 2024 of 5.7% in Armenia, 2% in Belarus, 5% in Kazakhstan, 4.5% in Kyrgyzstan, 1.5% in Russia, and 7.3% in Tajikistan. According to EDB analysts, following Kazakhstan’s economic growth of 4.8% in 2023, an acceleration in GDP growth is anticipated for 2024, further bolstered by high investment activity. The expected decrease in interest rates is poised to provide an additional impetus. In the medium term, structural transformations are set to improve the quality of economic growth by expanding opportunities in manufacturing and service industries. Economic diversification creates prerequisites for an anticipated acceleration in 2025 and 2026, positioning Kazakhstan as a leader among Eurasian Economic Union member states in terms of growth rates. Strong domestic demand supported high economic activity in Kyrgyzstan and Tajikistan in 2023. EDB analysts project a slight deceleration in these countries in 2024, albeit with GDP growth rates still noticeably higher than the global average.

Kyrgyzstan Kyrgyzstan Business & Economy

Chinese Investors to Build Trade and Logistics Complex in Chui Region

Chinese investors are set to build a trade and logistics complex in the Chui region at a total cost of over $700 million. Akylbek Japarov met with a delegation from the Chinese Chamber of Commerce for International Cooperation headed by Deputy Chairman Liu Yan. During the meeting, the head of the Cabinet of Ministers proposed the issue of investment by the Chinese side in projects in the field of renewable energy sources. In turn, Yan expressed the Chinese sides readiness to develop further bilateral cooperation in the sphere of investment. Within the framework of the meeting, a signing ceremony was held between the Cabinet of Ministers and OcOO Kyrgyz-Chinese Investment Holding on the implementation of the investment project, Eurasian Trade and Logistics Complex. The complex will include a shopping center, an international exhibition center, a warehouse and logistics center with bonded areas, large equipment marketplaces, and housing and hotel complexes.

Kyrgyzstan International Affairs Kyrgyzstan Business & Economy Kyrgyzstan Business & Economy Kyrgyzstan Features

ADB to Help Improve Agribusiness Value Chains in Kyrgyzstan

As per a press release on its website, on December 7th the Asian Development Bank (ADB) has said it is providing a $20 million loan and a $20 million grant to the Kyrgyz Republic to help small and medium-sized agribusinesses improve their processing and storage capacity and reduce post-harvest handling losses through inclusive, resilient, and climate-adaptive horticultural value chains. “The project will enhance the resilience of farmers, including women, against market volatility, natural hazards and climate change, and increase household and national food security,” said ADB Director General for Central and West Asia, Yevgeniy Zhukov. “By equipping them with climate-smart agricultural technologies and strengthening value chains, farmers and all stakeholders along the value chains will be able to minimize resource cost and increase profitability.” The Climate-Resilient Agricultural Value Chain Development Project will provide long-term funds to qualified participating financial institutions to extend structured loans for horticulture value chain investments, including fruit and vegetables. Aiyl Bank, the most prominent bank financing the country’s agriculture sector, has been selected as the first financial institution to participate in this project. “About 80% of small businesses in the Kyrgyz Republic are currently funded by family, friends, and informal sources,” said ADB Principal Natural Resources and Agriculture Specialist, Giap Minh Bui. “To stimulate private investment in modernizing agricultural value chains, it is critical that local banks have access to stable long-term funding sources and offer a range of term-lending products that are appropriate for and affordable to horticulture entrepreneurs, including women.” Aside from establishing modern processing, storage and refrigerated facilities, the project will also help establish contract farming arrangements between farmers and processors and/or exporters; train women business-owners; and implement measures to facilitate cross-border trade and branding for products that are unique to the Kyrgyz Republic. These measures aim to increase profitability for horticultural producers and agribusiness enterprises, and strengthen market linkages to increase national food security.

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Kyrgyzstan’s Economy Grew Strongly in 2022 and So Far in 2023, Says IMF

Kyrgyzstan’s Economy Grew Strongly in 2022 and So Far in 2023, Says IMF The economy of Kyrgyzstan performed strongly in 2022, expanding at 6.3% despite the headwinds from the difficult regional environment. Tax revenue improved sharply, and public debt declined to 49% of GDP. Headline inflation fell from 14.7% in December 2022 to 9.2% in October 2023, Nikoloz Gigineishvili, head of an International Monetary Fund (IMF) mission that held consultations with the Kyrgyz Republic during November in Bishkek said in a statement on December 4th. The current account deficit widened significantly to 43.6% of GDP in 2022 as non-oil imports increased by 26% of GDP and gold exports were suspended, while re-exports to Russia were not captured in official statistics, the statement said. Growth is expected to remain at around 4% in the medium term, and inflation to decline to mid-single digits. However, further escalation of the war in Ukraine and secondary sanctions which could further weaken the Russian economy and result in the return to Kyrgyzstan of migrant workers could reduce trade and growth, the IMF statement concludes.

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Plans Approved to Complete the Gasification of Bishkek within Three Years

Speaking at a briefing on ‘How the authorities want to accelerate the gasification of residential communities in Bishkek’, the Deputy Director General for Economics and Finance of Gazprom Kyrgyzstan LLC, Arzymat Aldayarov stated that it is planned to fully gasify Bishkek within three years. During the company's operations so far, 53 settlements have been gasified, 1,250 kilometers of street gas distribution pipelines have been laid, and 53,000 households have been able to connect to gas. This year, the investment program included the possibility of the gasification of residential complexes and villages, but due to the environmental situation and the need to reduce the load on electrical networks, it was decided to carry gas to eleven facilities, including a handful of residential complexes. In part of the points, the supply of blue fuel has already been provided. “In 2023, we signed a road map with Bishkek City Hall,” the Deputy Director General said. “Within this framework, it is planned to fully complete the gasification of the capital within the next three years. Together with the Cabinet of Ministers, the issue of preferential loans for gasification through state banks has been resolved.”