Economy of Kyrgyzstan

Mother Earth Travel > Country Index > Kyrgyzstan > Map Economy History

The economy of Kyrgyzstan was severely affected by the collapse of the Soviet trading block. 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.

The principal sector of the economy in Kyrgyzstan is agriculture, which contributes about one-third of the GDP and more than one-third of employment. The republic possesses a mountainous terrain, which accommodates livestock rearing, the largest sector within agriculture. The main crops are cotton, hemp, tobacco, vegetables, and fruit. By the early 1990s, the private sector provided between one-third and one-half of some harvests. Wool, leather, and silk also are major products, and much of the industrial sector is devoted to agroprocessing, the most attractive proposition for foreign investors.

The position of the country geographically works to its disadvantage. The region is prone to harsh climatic conditions and is in an earthquake zone. In 1992 there were earthquakes and mudslides, and in 1998 two mudslides also occurred in southern Kyrgyzstan

With respect to Kyrgyzstan's potential for mining and energy extraction, the Republic is rich in mineral resources but has negligible petroleum and natural gas reserves. Among its reserves are substantial deposits of coal, gold, uranium, antimony, and other rare metals. The main barrier to development has been the inaccessibility of many of the potential resources. The government has actively cultivated foreign cooperation in processing and extracting gold while building up the nation's own reserves in the process. OPIC has recently been involved in the establishment of two joint ventures in Kyrgyzstan with Western gold companies.

Kyrgyzstan's plentiful water resources and mountainous terrain have enabled it to export hydroelectric energy. However, Kyrgyzstan imports petroleum and gas. There are plans to construct a petroleum refinery in Kyrgyzstan. The metallurgy industry is among the most important in Kyrgyzstan, and the government is hopeful of attracting foreign investment in the field.

Kyrgyzstan's principle exports, which go overwhelmingly to other Commonwealth of Independent States (CIS) countries, are nonferrous metals and minerals, woolen goods and other agricultural products, electric energy, and certain engineering goods. In turn, the Republic relies on other former Soviet states for petroleum and natural gas, ferrous metals, chemicals, most machinery, wood and paper products, some foods, and most construction materials.

The Kyrgyzstan Government has reduced expenditures, ended most price subsidies, and introduced a value added tax. Overall, the government appears committed to transferring to a free market economic system by stabilizing the economy and implementing reforms, which will encourage long-term growth. These reforms have led to Kyrgyzstan's accession to the WTO on December 20, 1998.

GDP: purchasing power parity - $12.6 billion (2000 est.)
GDP - real growth rate: 5.7% (2000 est.)
GDP - per capita: purchasing power parity - $2,700 (2000 est.)
GDP - composition by sector:
agriculture: 45%
industry: 20%
services: 35% (1999 est.)
Household income or consumption by percentage share:
lowest 10%: 2.7%
highest 10%: 31.7% (1997)
Inflation rate (consumer prices): 18.7% (2000 est.)
Labor force: 1.7 million
Labor force - by occupation: agriculture and forestry 55%, industry 15%, services 30% (1999 est.)
Unemployment rate: 6% (1998 est.)
Budget:
revenues:  $207.4 million
expenditures:  $238.7 million (1999 est.)
Industries: small machinery, textiles, food processing, cement, shoes, sawn logs, refrigerators, furniture, electric motors, gold, rare earth metals
Industrial production growth rate: 7% (2000 est.)
Electricity - production: 12.981 billion kWh (1999)
Electricity - production by source:
fossil fuel:  6.67%
hydro:  93.33%
nuclear:  0%
other:  0% (1999)
Agriculture - products: tobacco, cotton, potatoes, vegetables, grapes, fruits and berries; sheep, goats, cattle, wool
Exports: $482 million (f.o.b., 2000 est.)
Exports - commodities: cotton, wool, meat, tobacco; gold, mercury, uranium, hydropower; machinery; shoes
Exports - partners: Germany 33%, Russia 16%, Kazakhstan 10%, Uzbekistan 10%, China 6% (1999)
Imports: $579 million (f.o.b., 2000 est.)
Imports - commodities: oil and gas, machinery and equipment, foodstuffs
Imports - partners: Russia 18%, Kazakhstan 12%, US 9%, Germany 8%, Uzbekistan 8%, China (1999)
Debt - external: $1.4 billion (2000 est.)
Economic aid - recipient: $329.4 million (1995)
Currency: Kyrgyzstani som (KGS)

SOURCES: The World Factbook, U.S. Department of State

Mother Earth Travel > Country Index > Kyrgyzstan > Map Economy History