Content

Kyrgyzstan

Situation and cooperation

Yurts in the Kyrgyz mountains

Following the political unrest of the last few years, Kyrgyzstan’s government faces huge tasks: parliamentary democracy is not yet firmly established and the internal power struggle for political influence persists. The economy has suffered serious damage as a result of the domestic political crisis. The differences in income between the richer north and the rural south are substantial, and the ethnic tensions in the south of the country are another source of potential conflict.

Poverty and unemployment are widespread, with more than 30 per cent of the population living below the national poverty line. In 2015 the average per capita annual income was only 1,170 US dollars, while youth unemployment stood at about 15 per cent.

Corruption

The rampant corruption in Kyrgyzstan is a massive obstacle to development. It harms society across the board and undermines the authority of the government. For this reason, in 2012 an act of parliament was adopted that aims to address corruption, and enforcement institutions were put in place. Initial achievements can be seen. Arrests of high-ranking office bearers on charges of abuse of power and accepting bribes are for the first time being followed up by court cases. In 2016, the Corruption Perceptions Index published by the non-governmental organisation Transparency International nevertheless ranked Kyrgyzstan 136rd of the 176 countries assessed.


Human rights

Two girls in southern Kyrgyzstan

Kyrgyzstan is a signatory to the most important international human rights treaties. A comprehensive set of fundamental rights is enshrined in the constitution. However, the lack of a tradition of rule of law in Kyrgyzstan, and the absence of an independent judicial system, are two of the reasons why the implementation of these rights is inadequate. Human rights violations are a regular occurrence, especially in police stations and prisons.

The state-legitimated discrimination against sexual minorities has tended to worsen in recent years. And in spite of a legal ban, the rights of women and girls are violated on a massive scale, especially in rural areas. Sexual violence against women is only investigated in extremely rare cases. The European Union and Kyrgyzstan have been holding a human rights dialogue since 2008 in order to improve the situation.


Economy

Construction work in Furkat, Kyrgyzstan

Following the collapse of the Soviet Union, Kyrgyzstan’s transformation process from a planned economy to a market economy initially made rapid progress with international support. With the exception of a few strategic sectors, such as electricity and water supply, the economy is now in private hands.

However, the overall economic potential of this highly agricultural country is low. Companies are barely able to compete at an international level. The majority of farms are smallholdings without any form of logistical infrastructure; moreover, the agricultural sector lacks an agro-processing industry. Potential investors are deterred by legal uncertainty, corruption and the arbitrary operating methods of the authorities. There is also a lack of skilled workers, many of whom work in Russia and Kazakhstan, meaning that they are not available on the domestic job market. The remittances of migrants working abroad account for a significant share of Kyrgyzstan’s economic strength. The economic crisis in Russia’s as of 2015 has, however, resulted in a significant reduction in the cash being transferred back to Kyrgyzstan.

Although Kyrgyzstan recorded impressive growth rates over a period of years, economic development experienced major fluctuations in the wake of the global economic and financial crisis from 2007 onwards and the domestic political crisis in 2010. In 2014 and 2015 GDP (gross domestic product) growth stabilised at around 3.5 per cent; this is also the level forecast for 2016.

Compared with other countries in the region, Kyrgyzstan has few mineral resources. Gold is by far the most important resource, accounting for up to 50 per cent of the country’s total exports. Kyrgyzstan has only insignificant gas and oil reserves, which are not sufficient to meet the country’s own energy demands. The country is using its abundant water resources as a means of generating electricity, although less than 10 per cent of its hydropower potential has yet been harnessed. This brings with it the risk of conflicts for the region, however, because the agricultural sector in Uzbekistan and Kazakhstan depends on the water carried by Kyrgyzstan’s rivers.


Transparency Initiative

Gold mining generates around 8 per cent of the country’s gross domestic product. In 2004, Kyrgyzstan signed up to the Extractive Industries Transparency Initiative (EITI). In March 2011, the country received the confirmation that it complied with EITI transparency and accountability standards, and was included on the list of compliant countries.

For Germany, Kyrgyzstan’s commitment to the EITI is an important sign on the part of the government to both the Kyrgyz population and the international community. This commitment not only signals the government’s desire for transparency but also its intention to implement reforms, tackle corruption and foster close cooperation between the state, the private sector and civil society.


Development potential

Great landscape: the Tian Shan in Kyrgyzstan

There are significant development prospects for Kyrgyzstan in the commercial and services sector, which already contributes more towards gross domestic product than agriculture. The country has managed to establish itself as a regional trading centre. Chinese goods in particular are transhipped in Kyrgyzstan before being exported to neighbouring countries in Central Asia as well as to Russia.

Tourism also offers development potential. The natural beauty of Kyrgyzstan could be tapped to a greater degree for tourism. However, this will require extensive infrastructure development as well as lasting stabilisation of the political situation.


Priority areas of German cooperation with Kyrgyzstan

Germany and Kyrgyzstan have been working together through development cooperation since 1993. Germany is one of the country’s largest bilateral donors. At government negotiations in mid-2015, some 38 million euros were pledged to this partner country for a period of two years. Germany’s engagement focuses on two priority areas:

  • Sustainable economic development
  • Health

Bilateral cooperation is supplemented by transnational regional projects concerned with economic cooperation, law and justice, education, natural resource conservation and the extractive sector, as well as adaptation to climate change.


Sustainable economic development

Bread on sale at a bazaar in Bishkek, Kyrgyzstan

Germany’s development cooperation in Kyrgyzstan aims to create permanent employment and income opportunities for all sections of the population. The engagement spotlights young people, who are hit by particularly high unemployment, and the poorest rural areas. Development cooperation is concentrating on improving the framework conditions for the private sector, since that is the only sector in which the desperately needed jobs can be created.

To supply above all small and medium enterprises with funds that will allow them to invest, Financial cooperation is supporting the micro-finance sector in rural areas and in agriculture. Within the scope of Technical Cooperation, German experts are advising public agencies on ways of improving the environment for business start-ups. And with German support the performance of selected value chains is to be raised. By way of example, food safety is to be enhanced along with the quality infrastructure, making the country’s agricultural produce more competitive.

Germany is also engaged in the areas of vocational training and the labour market. Here, Kyrgyzstan is receiving support in setting up a system of vocational training which is geared to the requirements of the domestic labour market. Another programme fostering cooperation with civil society and a special education and employment programme for young people in rural areas are encouraging disadvantaged sections of the population to participate in society.


Health

Examination in a hospital in Kyrgyzstan

Kyrgyzstan is not currently able to provide adequate medical care for its people without external support. Germany’s engagement in this sector thus aims to improve access to basic health services for all sections of the population. By strengthening the health system at all levels the partner country is to be enabled in the long term to master the challenges of the health sector independently.

In line with the national health strategy "Den Sooluk 2012–2016" Germany’s development cooperation is focusing on reproductive health and maternal and child health, as well as tuberculosis.

Within the framework of a programme to put in place an emergency care system in Kyrgyzstan, emergency facilities in several larger cities are also being refurbished and fitted out.


BMZ glossary

Close window

 

Share page