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KYRGYZSTAN
>> Regional Overview >> Kyrgyzstan Overview
Development Challenge FY2001 Program /
Activity & Budget InformationSummary Tables
Program Summary
Previous Years' Activities
2000, 1999, 1998, 199755
Introduction
Although small, poor, and without the oil and gas resources of several of its neighbors, Kyrgyzstan is important to the United States. Its progressive leadership, and vocal commitment to democracy and a market-based economy make it an important example of reform that is working within the region. Kyrgyzstan’s location at the headwaters of major river systems in Central Asia enables it to dramatically affect critical and sensitive issues such as agriculture, electricity generation, and the environment in the down-river countries of Kazakhstan, Uzbekistan, and Turkmenistan. Any negative action on the part of Kyrgyzstan would seriously affect regional stability, and pose a threat to American economic and political interests in Central Asia. USAID assistance to Kyrgyzstan supports broader U.S. goals of regional stability, economic prosperity, and democracy through programs aimed at: improved fiscal and financial sector soundness; growth of the private enterprise sector; more transparent, efficient and responsive public administration; increased involvement of citizens in decisions affecting them politically and economically; and improved, more sustainable health and social services.
The Development Challenge
Though it inherited one of the least efficient and least competitive industrial sectors in the former Soviet Union, Kyrgyzstan was the first Central Asian Republics (CAR) to undertake meaningful reform. Kyrgyzstan has become a "laboratory" for demonstrating that democracy can work in Central Asia.
Kyrgyzstan presented a mixed economic picture in 1999. GDP rose by 3.5% during the first nine months of 1999, and agriculture output rose by 9%. However, the value of the national currency again declined sharply, and the consumer price index rose proportionally. Kyrgyzstan, like its CAR neighbors, has had almost no experience in developing its own monetary policy. Four commercial banks have collapsed due to poor fiscal management. A number of USAID programs were affected by the complete change of leadership in the Ministry of Finance. External debt, one of the highest in the region, rose to more than $1.3 billion, of which $86.3 million will be due in 2000. Insurgents from Tajikistan took Japanese and local citizens hostage on the southern border, creating an unexpected drain on the national finances to restore order, and increasing instability in the south.
The challenge for U.S. assistance is to help the country continue economic and democratic reforms that will have a direct positive impact on the citizens of Kyrgyzstan. In the economic area there have been some gains. The privatization program is almost complete, with 97% of the businesses and more than half of all land in private hands. Medium and micro-credit enterprise loan programs have expanded to more than $3 million throughout the country with a better than 97% repayment rate. USAID advisors are helping develop the regulatory framework for the energy sector. A decree forcing all stock trades to pass through the Kyrgyz Stock Exchange (KSE), and the increase of companies being privatized on the KSE contributed to the significant rebound of the Exchange in 1999. USAID assisted in Kyrgyzstan’s adoption of international accounting standards, helping to make businesses and banks become more transparent, and enabling them to manage and plan their finances more effectively.
In 1999, with USAID support and significant NGO input, the government adopted an improved electoral code that generally meets international standards. USAID worked closely with the Parliament to open a legislative drafting center. USAID contributed to NGO, political party and charity laws passed by the Government of Kyrgyzstan in 1999. Successful USAID-assisted housing and local government programs have promoted greater citizens’ participation and local government operational efficiency. Many NGOs, with USAID assistance, are preparing the citizens for the early 2000 parliamentary elections.
The country's standard of living has not changed since independence (compared with other countries in the region that have experienced substantial slippage). Nevertheless, the social costs of the transition have been high. Government-supplied social services, critical to maintaining public support for reform, are inadequate. USAID’s very successful pilot project in health care financing and delivery provides visible proof that government reforms can improve citizens’ lives. The program permits people to choose their primary health care provider and makes high quality, essential health care more accessible and affordable. It is being expanded nationally with $18.5 million in World Bank support. The health partnership program, reproductive health, and infectious disease control programs have all contributed to a healthier society.
Partnerships, training and exchanges remained an important component of USAID assistance. USAID trained over 320 reform-minded government leaders and professionals (45% were women), in areas directly related to democracy and a free-market economy. USAID supports a number of partnerships that seek to build long-lasting relationships between the United States and Kyrgyzstan. USAID used the country as a venue for a number of training courses for participants from other Central Asian Republics, using Kyrgyzstan as a model in areas where reform has been successful.
Other Donors
The International Monetary Fund and World Bank have extended significant monetary credits to address balance of payments issues and to encourage economic reform. Kyrgyzstan currently has an International Monetary Fund’s three-year Extended Structural Adjustment Facility focussing on fiscal reform. The Asian Development Bank, the World Bank, and the European Bank for Reconstruction and Development are expanding their loan portfolios in Kyrgyzstan.
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: January 13, 2003 |
