Kyrgyzstan: Recent Developments and U.S.
Interests
Jim Nichol
Specialist in Russian and Eurasian Affairs
August 7, 2009
Congressional Research Service
7-5700
www.crs.gov
97-690
CRS Report for Congress
P
repared for Members and Committees of Congress
Kyrgyzstan: Recent Developments and U.S. Interests
Summary
This report examines Kyrgyzstan’s uneven political and economic reform efforts. It discusses
U.S. policy and assistance for democratization and other programs and provides basic facts and
biographical information. Related products include CRS Report RL33458, Central Asia:
Regional Developments and Implications for U.S. Interests, by Jim Nichol.
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Kyrgyzstan: Recent Developments and U.S. Interests
Contents
U.S. Relations ............................................................................................................................. 1
Cooperation on Counter-Terrorism ........................................................................................ 2
Foreign Policy and Defense......................................................................................................... 4
Political Developments ............................................................................................................... 6
Human Rights ....................................................................................................................... 7
Economic Issues ......................................................................................................................... 8
Figures
Figure 1. Map of Kyrgyzstan....................................................................................................... 2
Contacts
Author Contact Information ........................................................................................................ 9
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U.S. Relations
During a visit to Kyrgyzstan in mid-July 2009,
Undersecretary of State William Burns stated that
Kyrgyzstan Basic Facts
“a new administration in Washington offers a
Area and Population: Land area is 77,415 sq. mi.;
new opportunity to strengthen our relationship
about the size of South Dakota. Population is 5.43 million
and it brings a new approach to partnership
(The World Factbook, mid-2009 est.).
between our two countries. We have an
Ethnicity: 65.7% Kyrgyz; 11.7% Russians; 13.9% Uzbeks,
opportunity to develop our relations in support of
1% Uighurs; 0.4% Germans, and others (Kyrgyz Statistics
Committee, 2001 est.). Ethnic Uzbeks are a majority in
our mutual interests throughout this region and to
southern Kyrgyzstan. About 420,000 ethnic Kyrgyz
support prosperity as well as security in this
reside elsewhere in the former Soviet Union and 170,000
country.”1 He thanked Kyrgyzstan for agreeing to
in China.
extend U.S. airbase privileges to support
Gross Domestic Product: $11.41 billion; per capita
coalition operations in Afghanistan (see below).
GDP is about $21000 (The World Factbook, 2008 est.,
He also announced that a bilateral commission
purchasing power parity).
on trade and investment soon would be set up.
Political Leaders: President: Kurmanbek Bakiyev;
Legislative Speaker: Aytibay Tagayev; Prime Minister: Igor
According to the Obama Administration’s
Chudinov; Foreign Minister: Ednan Karabayev; Defense
Congressional Budget Justification for Foreign
Minister: Bakytbek Kalyev.
Operations, “important foci” of U.S. assistance
Biography: Bakiyev was born in 1949 and was trained
to Kyrgyzstan are strengthening counter-
as an engineer. In 1991, he became first secretary of the
terrorism capabilities, halting narcotics
Kok-Yangak city Communist Party committee, then
trafficking, promoting economic development,
chairman of the city soviet (council), and then chairman
of the Jalal-Abad regional soviet. In 1994, he became
and addressing education and health needs.
chairman of the State Property Fund, in 1995 governor
Cumulative U.S. budgeted foreign aid to
of Jalal-Abad region, and in 1997 governor of Chu region.
Kyrgyzstan for FY1992-FY2007 was $905
From 2000-2002, he was prime minister, but was held
million (FREEDOM Support Act and agency
culpable in the deaths of protesters and ousted. He then
led the opposition People’s Movement, but lost a
funds), with Kyrgyzstan ranking third in such aid
legislative run-off election in March 2005. The legislature
per capita among the Soviet successor states.
appointed him prime minister and acting president in
Foreign aid was $29.964 million in FY2008 and
March 2005, and he won a presidential election in July
an estimated $29.06 million in FY2009, and the
2005. He was re-elected in July 2009.
Administration requested $48.23 million for
FY2010 (FREEDOM Support Act and other “Function 150” aid, not including Defense and
Energy Department or Millennium Challenge funds).
The request for FY2010 calls for a “strategic shift” in U.S. assistance to address chronic food
insecurity, create jobs, and bolster the professionalism of security personnel. The largest increase
requested is for agricultural assistance—from about $3 million in FY2009 to a requested $14.6
million for FY2010—to boost productivity, improve irrigation, facilitate access to credit, and
provide more youth employment. The target is help for 1,000 farmers or food processors. There is
a sizeable increase in the request for the provision of military equipment to “broaden [U.S.]
access to the Kyrgyz military.” It also is claimed that “the number of [military] participants in
U.S. exchange and training programs” is expected to increase from a target of 10 officers in 2009
to 15 in 2010 (although no increase in International Military Education and Training funding is
requested). Such military-to-military relations will “improve Kyrgyz understanding and support
1 U.S. Department of State. Remarks to the Press: Under Secretary of State William Burns, July 12, 2009.
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for U.S. and NATO operations in Afghanistan” (for some Defense Department expenditures
related to the U.S. Manas airbase in Kyrgyzstan, see below).2
Figure 1. Map of Kyrgyzstan
The Millennium Challenge Corporation (MCC), created in 2004 to provide U.S. aid to countries
with promising development records, announced in late 2005 that Kyrgyzstan was eligible to
apply for assistance as a country on the “threshold” of meeting the criteria for full-scale
development aid. In March 2008, the MCC signed an agreement with Kyrgyzstan to provide $16
million over the next two years to help it combat corruption and bolster the rule of law.
Cooperation on Counter-Terrorism
The Kyrgyz government declared its support for the United States almost immediately after the
September 11, 2001, attacks on the United States and approved a U.S. request to use Kyrgyz
airspace for counter-terrorist operations in Afghanistan. The U.S. military repaired and upgraded
2 U.S. Department of State. Congressional Budget Justification for Foreign Operations FY2010, May 12, 2009.
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the air field at the Manas international airport near Bishkek, and it became operational in
December 2001. According to a fact sheet prepared by the 376th Air Expeditionary Wing of the
U.S. Air Force, the Manas airbase serves as the “premier air mobility hub” for operations in
Afghanistan. Missions include support for personnel and cargo transiting in and out of the theater,
aerial refueling, airlift and airdrop, and medical evacuation. The fact sheet reports that 170,000
troops transited through the base to Afghanistan in 2008, as well as 5,000 tons of cargo, and that
KC-135 Stratotankers had refueled over 11,400 aircraft over Afghanistan. About 1,000 military
personnel from the United States, France, and Spain are stationed at the base. They are assisted by
650 contract personnel, of which the majority are Kyrgyz citizens. The base contributed $64
million to the local economy in FY2008, which included $17.4 million in rent for use of the base,
$22.5 million for airport operations and land lease fees, nearly $500 thousand for upgrading
Kyrgyz Air Navigation operations, and about $24 million for local contracts and humanitarian
aid.3 A U.S. military officer stated in late 2007 that the Manas airbase was moving toward “a
sustainment posture,” with the replacement of most tents and the building of aircraft maintenance,
medical, and other facilities.4
In early 2006, Kyrgyz President Bakiyev reportedly requested that lease payments for use of the
Manas airbase be increased to more than $200 million per year but at the same time re-affirmed
Russia’s free use of its nearby base.5 By mid-July 2006, however, the United States and
Kyrgyzstan announced that they had reached a settlement for the continued U.S. use of the
airbase. Although not specifically mentioning U.S. basing payments, it was announced that the
United States would provide $150 million in “total assistance and compensation over the next
year,” subject to congressional approval.
On February 3, 2009, President Bakiyev announced during a visit to Moscow that he intended to
close the Manas airbase. Many observers speculated that the decision was spurred by Russia,
which offered Bakiyev a $300 million loan for economic development and a $150 million grant
for budget stabilization in the wake of the world economic downturn. Russia also stated that it
would write off most of a $180 million debt and would invest in energy development. The United
States was notified on February 19, 2009, that under the terms of the status of forces agreement it
had 180 days to vacate the airbase.
The Defense Department announced on June 24, 2009, that an agreement of “mutual benefit” had
been concluded with the Kyrgyz government “to continu[e] to work, with them, to supply our
troops in Afghanistan, so that we can help with the overall security situation in the region.”6 The
agreement was approved by the Kyrgyz legislature and signed into law by President Bakiyev, to
take effect on July 14, 2009. According to Kyrgyz Foreign Minister Kadyrbek Sarbayev, the
government decided to conclude the annually renewable “intergovernmental agreement with the
United States on cooperation and the formation of a transit center at Manas airport,” because of
growing alarm about “the worrying situation in Afghanistan and Pakistan.” The agreement
3 U.S. Air Force. 376th Air Expeditionary Wing. Fact Sheet: 376th Air Expeditionary Wing, Manas Air Base,
Kyrgyzstan, February 2009, at http://preview.afnews.af.mil/manas/library/factsheets/factsheet.asp?id=12682
4 Lt. Col. Michael Borgert, “Liberandos: Thank You for a Job Well Done,” 376th Expeditionary Services Squadron
Public Affairs, September 9, 2007.
5 For background, see CRS Report RS22295, Uzbekistan’s Closure of the Airbase at Karshi-Khanabad: Context and
Implications, by Jim Nichol. Perhaps indicating Kyrgyz pressure on Russia to compensate for use of the base, Russia in
October 2006 pledged grant military assistance to Kyrgyzstan.
6 U.S. Department of Defense. DoD News Briefing, June 24, 2009. See also U.S. Department of State. Daily Press
Briefing, June 25, 2009.
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permits the transit of personnel and non-lethal cargoes, although Kyrgyzstan is not permitted to
inspect the cargoes, he stated. A yearly rent payment for use of land and facilities at the Manas
airport would be increased from $17.4 million to $60 million per year and the United States
pledged more than $36 million for infrastructure improvements and $30 million for air traffic
control system upgrades for the airport. Sarbayev also stated that the United States pledged $20
million dollars for economic development, $21.52 million for counter-narcotics efforts, and $9.6
million for counter-terrorism efforts.7 All except the increased rent already have been authorized
or appropriated.8 The agreement also reportedly includes stricter host-country conditions on U.S.
military personnel. One Kyrgyz legislator claimed that the agreement was not a volte-face for
Kyrgyzstan because Russia and other Central Asian states had signed agreements with NATO to
permit the transit of supplies to Afghanistan.9
According to the State Department’s Country Reports on Terrorism 2008, Kyrgyzstan’s porous
borders have permitted easy access for trafficking in persons and illicit goods and Kyrgyz law
enforcement has lacked the equipment, manpower, and funding to effectively detect and deter
terrorist operations in the country, particularly in the south. Hizb ut-Tahrir (HT), banned as an
extremist group in Kyrgyzstan since 2003, operates largely in the south but is spreading to the rest
of the country. Supporters of the Islamic Jihad Union and the Islamic Movement of Uzbekistan
terrorist groups were also believed to maintain a presence in Kyrgyzstan. U.S. assistance has been
provided to modernize border posts, centralize communications between border posts and
relevant government agencies, and install radiation detectors at border crossings. U.S. counter-
narcotics assistance has been used to set up, train, and equip a Drug Control Agency and Mobility
Interdiction Teams to carry out drug busts, but corruption has hampered effectiveness.10
Foreign Policy and Defense
In January 2007, President Bakiyev stated that his “blueprint” for foreign policy emphasized
close ties with neighboring states—Kazakhstan, Uzbekistan, Tajikistan, and China—“built on the
principles of respect for sovereignty, territorial integrity, and common security.” To advance
regional integration, he called for strengthening participation in the Shanghai Cooperation
Organization (SCO; composed of China, Russia, and the Central Asian states, except
Turkmenistan) and the Collective Security Treaty Organization (see below). Among other
countries, he stressed that “strategic partnership” with Russia was a “key priority.” He called for
“beneficial cooperation” with regional and world powers, especially “Russia, China, the
European Union, Germany, Japan and Turkey.” He also urged increased trade and economic
7 Tolkun Namatbayeva, “Kyrgyzstan Allows U.S. to Keep Using Base,” Agence France Presse, June 23, 2009.
8 The $36 million for infrastructure improvements was authorized by the National Defense Authorization Act for
FY2008, P.L. 110-181 ($30 million), and the Duncan Hunter National Defense Authorization Act for FY2009, P.L.
110-417 ($6 million) and funded by yearly appropriations. The $30 million for air traffic control system upgrades and
the $21.52 million for counter-narcotics efforts were provided in P.L. 111-32, the Supplemental Appropriations Act,
2009; the $9.6 million for counter-terrorism efforts was authorized under “Section 1206” of the National Defense
Authorization Act for FY2006, P.L. 109-163.
9 See also CRS Report R40564, Kyrgyzstan and the Status of the U.S. Manas Airbase: Context and Implications, by
Jim Nichol.
10 U.S. Department of State. Country Reports on Terrorism 2008: South and Central Asia, April 30, 2009; 2009
International Narcotics Control Strategy Report, February 27, 2009.
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cooperation with the “Arab countries, South Korea, Pakistan, India, and others in South-East
Asia.”11
Kyrgyzstan’s relations with Uzbekistan have been marked by trade, border, and other disputes.
Tension escalated in mid-2005 when Kyrgyzstan permitted U.N. emissaries to evacuate about 450
Uzbek refugees who had crossed the border to flee fighting in the Uzbek city of Andijon. Uzbek
officials maintained that Kyrgyzstan had served as a base of operations for “terrorists” (including
citizens of Kyrgyzstan) who invaded and attacked Andijon and as a safe haven after the
“terrorists” fled. Perhaps somewhat easing tensions, visiting President Bakiyev and Karimov
issued a statement in October 2006 reaffirming mutual adherence to the 1996 Kyrgyz-Uzbek
Treaty on Eternal Friendship. In February 2009, Uzbekistan excoriated Russia for pledging to
invest $1.7 billion to build a hydro-electric power complex on Kyrgyzstan’s Naryn River, which
Uzbekistan claimed would reduce the amount of water it receives. In late May 2009, Uzbekistan
blamed Kyrgyzstan for lax border controls that allegedly enabled terrorists to slip into Uzbekistan
to carry out attacks. In August 2009, Uzbekistan denounced Kyrgyzstan’s intention to host a new
Russian military base as adding to instability in the region.
Bakiyev seeks to bolster Kyrgyz-Russian relations to ensure economic and trade benefits, to
receive security assistance to combat terrorism, and to balance ties with the United States and
China. Kyrgyzstan signed the Commonwealth of Independent States’ (CIS) Collective Security
Treaty (CST) in 1992 and 1999, which calls for mutual consultations on military support in case
of outside aggression. Several hundred Russian border troops (most reportedly were Kyrgyz
citizens) guarded the Chinese border until 1999, when Russia handed over control to Kyrgyzstan.
However, some Russian military facilities remain under a 15-year accord signed in 1997. Russia
further ramped up its security presence in September 2003 with the signing of a 15-year basing
accord with Kyrgyzstan for use of the Soviet-era Kant airfield near the capital of Bishkek and
other facilities. The Russian troops ostensibly also form part of a CST rapid reaction force.
Although the purpose of the base purportedly is to combat regional terrorism and defend CIS
borders, it also appears aimed at countering U.S. and NATO influence. On August 1, 2009,
Presidents Bakiyev and Medvedev signed a memorandum of intent to set up a new battalion-
strength Russian military base in southern Kyrgyzstan. Kyrgyzstan joined NATO’s Partnership for
Peace (PFP) in 1994 and has participated in several PFP exercises in the United States, Central
Asia, and elsewhere. Kyrgyzstan also is active in the Shanghai Cooperation Organization, a trade
and collective security grouping formed in 2001 and consisting of China, Russia, and all the
Central Asian states except Turkmenistan.
Kyrgyzstan’s armed forces number about 10,900 active ground and air force troops. As of March
2009, about 5,000 border guards also are included within the armed forces. Paramilitary forces
include 3,500 police troops and 1,000 National Guard troops. Nearly two dozen Kyrgyz troops
serve in U.N. observer forces.12 Most troops are ethnic Kyrgyz conscripts, though some officers
are Russians. About one-third of the armed forces are female. Most Kyrgyz officers receive
training in Russia and the Russian language remains the language of command. A four-year
military reform plan launched in late 2008 calls for disbanding some military units, forming rapid
reaction forces (“mobile troops”), stationing some of these forces in southern Kyrgyzstan,
reducing Defense Department staff by 1,200, cutting the number of officers by 600, and raising
the number and wages of contract soldiers. Also, some conscripts are being permitted to pay for
11 Open Source Center. Central Eurasia: Daily Report, January 12, 2007, Doc. No. CEP-950201.
12 The Military Balance, International Institute for Strategic Studies, February 1, 2009.
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one month of military training, after which they will be included in the reserves. The Kyrgyz
defense minister has reported that Russia provided $2.4 million of weapons in 2008 in exchange
for basing rights at Kant, and that such transfers help Kyrgyzstan replace its aged military
equipment. Over the period from FY1992 through FY2008, the United States has provided over
$140 million to Kyrgyzstan for peace and security programs (excluding some military aid
associated with the Manas airbase) to counter terrorist threats, to counter narcotics trafficking,
and to counter the proliferation of weapons of mass destruction.
A reported 800 guerrillas belonging to the terrorist Islamic Movement of Uzbekistan (IMU) and
other groups from Tajikistan invaded Kyrgyzstan in July-August 1999. They allegedly aimed to
create an Islamic state as a springboard for jihad in Uzbekistan. Another possible aim may have
been to secure drug trafficking routes. Kyrgyzstan received air support from Uzbekistan and
Kazakhstan and expelled the invaders in October 1999. In August 2000, a reported 500 IMU and
other guerrillas again invaded Kyrgyzstan (others invaded Uzbekistan). Uzbekistan provided air
and other support, and Kyrgyz forces defeated the guerrillas by late October 2000. In 2002 and
2003, the IMU allegedly set off bombs in Bishkek and Osh. Kyrgyzstan arrested the bombers in
May 2003, reportedly before they were able to carry out a plan to bomb the U.S. embassy. About
a dozen alleged IMU members invaded from Tajikistan in May 2006 but were soon defeated
(some escaped). After this, the Kyrgyz defense minister claimed that the IMU and other terrorist
groups were an increasing national security threat. The U.S. State Department designated the
IMU as a Foreign Terrorist Organization in September 2000.
Political Developments
In late September 2007, the Kyrgyz constitutional court, heavily influenced by President
Kurmanbek Bakiyev, invalidated all constitutional changes since the adoption of the 2003
constitution. Bakiyev announced a few days later that he was setting up and supporting a new
political party, the Ak Jol People’s Party. He then pushed through a snap referendum in October
2007 on a draft constitution he unveiled that set forth strong presidential powers.13 A day after the
referendum, he dissolved the legislature and set new elections for December 2007, a move many
observers viewed as preventing opposition parties from carrying out effective campaigns during
the short period of time. Some of those who observed the vote on the new constitution alleged
that many irregularities took place.
Twelve parties were registered for the December 2007 election. The new constitution established
a 90-seat legislature elected by party lists. A new election law stated that a party could not win
seats unless it received 5% or more of the vote of all registered voters. Another provision stated
that a party could not win seats unless it gained at least 0.5% of the vote in each region. This
provision did not specify how the percentage was to be calculated, leading to controversy that
was eventually settled by a Supreme Court decision. On election day, initial results appeared to
indicate that only Ak Jol and Ata Mekan had surpassed the 5% hurdle. The CEC later disqualified
Ata Mekan because it had not received 0.5% of the vote in one region and announced that Ak Jol
had won 71 legislative seats, the Social Democrats 11 seats, and the Communists 8 seats. In its
final report on the election, observers from the OSCE assessed the race as “fail[ing] to meet a
13 The Venice Commission concluded that the draft constitution placed an “excessive concentration of power in the
hands of the president.” European Commission for Democracy Through Law (Venice Commission). Opinion on the
Constitutional Situation in the Kyrgyz Republic, Opinion No. 457/2007, December 17, 2007.
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number of OSCE commitments.” Although the observers fell short in declaring the results
invalid, they stated that there were “serious irregularities and inconsistencies” in vote-counting,
and that there was “questionable consistency” between reported preliminary and final results.14
Kyrgyzstan’s legislature voted in late March 2009 to hold an early presidential election on July
23, 2009. The Central Electoral Commission (CEC) declared that six candidates, including
Bakiyev, had met the requirements to run. Several opposition party leaders refused to run in what
they considered a hastily called election. Two candidates were considered to be true opposition
figures, the main one of which was Almazbek Atambayev. He was a former prime minister and
was backed by the United Popular Movement, a bloc of opposition parties. During his campaign,
Bakiyev pledged to greatly boost pensions and wages and to launch democratization initiatives.
Atambayev pledged to end nepotism and to create a parliamentary form of government (to be
implemented at the end of his term). According to the CEC, Bakiyev received 76.43% of 2.25
million votes cast, followed by Atambayev with 8.9%. Almost as many people checked a box
“against all candidates” as voted for Atambayev. In a preliminary assessment, election observers
hosted by the Organization for Security and Cooperation in Europe (OSCE) stated that despite
some positive aspects of the election, such as real choices among candidates and the involvement
of civil society, the election “failed to meet key OSCE commitments for democratic elections....
Election day was marred by ... evidence of ballot box stuffing, inaccuracies in the voter lists and
some evidence of multiple voting. The process further deteriorated during the counting and
tabulation.” The observers also criticized the bias of state-owned media toward Bakiyev, the use
of government resources by Bakiyev’s campaign, pressure and intimidation by Bakiyev’s
supporters against other candidates, and irregularities in forming electoral commissions. These
actions contributed to popular distrust that the electoral process was democratic.15 The United
Popular Movement and other opposition parties denounced the election as fraudulent (even before
voting was over) and launched protests, which resulted in hundreds of detentions and arrests by
the police.
Human Rights
According to the U.S. State Department’s Country Reports on Human Rights Practices for 2008,
Kyrgyz police and security forces at times employed torture, beat detainees and prisoners to
extract confessions, and used false charges to arrest persons and solicit bribes for their release.
Police corruption was a major problem, but the government took some steps to address it,
including prosecutions and increased salaries. The executive branch at times interfered with the
judiciary. Lawyers and citizens commonly believed that judges were open to bribes. The
government at times restricted freedom of speech and of the press. During the year reports of
lawsuits against opposition newspapers increased. In June, President Bakiyev signed a law on
television and radio broadcasting that increased regulatory controls and retained state control over
the State Radio and Television Company, rather than creating a national public interest
broadcaster as earlier pledged. There were continued reports of media harassment. In contrast to
2007, there were no reports of cases of violent attacks on journalists. In October, Kyrgyzstan
14 OSCE. Office for Democratic Institutions and Human Rights. Kyrgyz Republic Pre-Term Parliamentary Elections,
16 December 2007, OSCE/ODIHR Election Observation Mission Final Report, April 24, 2008. Referring to the OSCE
preliminary assessment, the State Department evinced “serious concerns” about the conduct of the election and called
for reforms. U.S. Department of State. Press Release, December 21, 2007.
15 OSCE. Election Observation Mission, Kyrgyz Republic—Presidential Election 23 July 2009: Statement of
Preliminary Findings and Conclusions, July 24, 2009. See also CEDR, July 28, 2009, Doc. No. CEP-6005.
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ended broadcasts of Radio Free Europe/Radio Liberty programs on local radio and television
stations. [renewed....] In August, the president signed a law banning protests near the legislature,
presidential residences, schools, military facilities, roads, and gas pipelines. The law also prevents
spontaneous demonstrations by requiring that permits be obtained far ahead of time. There were
cases of government harassment of the political opposition. Human trafficking remained a
problem, and victims alleged that government officials facilitated, or were complicit in,
trafficking. However, the report stated that the government had made significant efforts to address
trafficking, including by improving assistance to victims. The country was a source, transit, and
to a lesser degree, destination for trafficked persons.16
Economic Issues
Kyrgyz GDP reportedly grew 6% in 2008, but increasing prices for food and energy imports
contributed to an rise in inflation to 22.5% for the year.17 The International Monetary Fund (IMF)
predicts that GDP growth will decline to less than 1% in 2009 and will only be 2.9% in 2010.18
Gold production still is the most significant industrial source of GDP and export earnings.
Agriculture accounts for a major portion of GDP and employs one-half of the workforce. Cotton,
tobacco, wool, and meat are major agricultural products. Before the global economic downturn, at
least one-fifth of the labor force (500,000 people) had worked in Russia and elsewhere and their
remittances reportedly had amounted to almost one-third of Kyrgyzstan’s GDP. In December
2008, the IMF approved an 18-month Exogenous Shocks Facility loan of SDR 66.6 million to
help Kyrgyzstan manage the impact of the global economic downturn. Grants and loans provided
by Russia in early 2009 also will substantially assist Kyrgyzstan in mitigating the effects of the
downturn, according to the IMF.19
Over 40% of the population lives below the poverty line. Crime and corruption stifle economic
growth and private foreign investment. Kyrgyzstan leads Central Asia in the privatization of
farms, industries, housing, and retail outlets. Kyrgyzstan has surplus hydroelectric energy, rare
earth mineral reserves, and tourism potential that could boost its development. U.S. support
contributed to Kyrgyzstan’s admission into the World Trade Organization in late 1998. Foreign
loans have been a significant factor in Kyrgyzstan’s budget, contributing by early 2009 to
external debt of about $1.4 billion (33% of GDP; excludes the prospective Russian energy loan),
placing the country at a moderate risk of external debt distress, according to the IMF. Some debt
rescheduling has occurred. The IMF in 2006 invited Kyrgyzstan to participate in its Highly
Indebted Poor Country debt relief initiative, but public opposition to being termed a “poor”
country supposedly led authorities to reject participation.
16 U.S. Department of State. Country Reports on Human Rights Practices for 2008, February 25, 2009.
17 The World Factbook, 2009.
18 IMF. Kyrgyz Republic: 2009 Article IV Consultation and First Review Under the 18-Month Arrangement Under the
Exogenous Shocks Facility—Staff Report, July 2009.
19 IMF. Kyrgyz Republic: 2009 Article IV Consultation and First Review, July 2009.
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Author Contact Information
Jim Nichol
Specialist in Russian and Eurasian Affairs
jnichol@crs.loc.gov, 7-2289
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