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Economy and Business in Kyrgyzstan

According to COUNTRYAAH, Kyrgyzstan is one of the poorest of the former Soviet republics. Despite much assistance from Western donors, the country has had great financial difficulties since 1991. The country has problems attracting foreign investment due to the high level of corruption.

Business of Kyrgyzstan

Since independence in 1991, Kyrgyzstan has pursued a relatively liberal economic policy and implemented comprehensive market and land reforms. Kyrgyzstan was the first of the Commonwealth of Independent States (SUS) to join the World Trade Organization.

Agriculture is the most important trade route in Kyrgyzstan, with livestock farming and especially sheep farming as the most common mode of operation. Arable land occupies 7% of the area, and 70% of this is dependent on artificial irrigation. Since the 1950s, there has been a significant expansion of the industry, mainly based on local agricultural products such as wool, cotton, silk and sugar. However, all parts of the industry have experienced a sharp decline in production following the dissolution of the Soviet Union.

Most of the industry is located in Bishkek and in the cities of the Fergana basin. The mountainous landscape is an obstacle to transport, but since the Second World War a number of roads have been built north-south across the mountain barriers. Sideways from the Turksib Railway link the cities of the Fergana Basin and Bishkek to the railway network of the former Soviet Union.

Agriculture

Agriculture and forestry contributed to approx. 33.6% of GDP in 2008 and the sector employed approx. 5 5% of the workforce. Animal husbandry is the most important food route in agriculture and sheep are the most important livestock, followed by cows, horses and yaks. Important agricultural products are cotton, tobacco, wheat, barley and potatoes.

Mining

Kyrgyzstan has important deposits of coal, gold, tin, mercury, zinc, tungsten, uranium and antimony. In December 1992, a Canadian gold digging company was assigned the task of helping Kyrgyzstan to dig for gold in the Kumtor mines in southeastern Kyrgyzstan. The extraction started in 1997, and it was estimated that the area contains the 8th largest gold reservoir in the world. Kyrgyzstan has small oil and gas reserves and must therefore import it from neighboring Kazakhstan and Uzbekistan. The authorities announced in 2001 that a new oil field had been found in the west of the country.

Energy

Hydropower is the most important source of energy in Kyrgyzstan. The largest hydropower plants are built in the Naryn River. Hydropower also represents an important export item. In 2016, almost 90 per cent of the country's electricity needs were covered by hydropower. The remainder was mainly covered by black coal and lignite.

Industry

In 2006, industry, mining, power generation and construction accounted for approx. 20.1% of GDP and 17.6% of the workforce were employed in these sectors. The most important industrial enterprises are related to metallurgy and production of agricultural machinery, electronic components, textiles and food products.

Tourism

The tourism industry is poorly developed in Kyrgyzstan. During the Soviet period, tourism was restricted in part because of the country's location on the border with China (border areas were strictly guarded), but also because the Issyk Kul area was closed to non-Soviets due to military industry. Issyk Kul was first opened to anyone other than the Soviets in 1991. Issyk Kul, on the other hand, was a favorite place of departure for citizens of the Soviet Union. Most non-Soviets visiting the country at this time were associated with mountaineering activities. Today, the country is open to tourists, but the facilities are still poorly developed and access is difficult.

Foreign Trade

In 2008, Switzerland, Russia and Kazakhstan were the most important countries for Kyrgyzstan's exports. The country's most important export goods are cotton, wool, meat, metals and mineral products. Major trading partners for the country's imports are Russia, Kazakhstan, China and the United States. The main import products are oil, gas, mineral products, machinery, electronic equipment, chemicals and food products.

Transport and Communications

Kyrgyzstan had 18,500 km of roads in 2006, of which 16,854 had a fixed tire. Due to the difficult terrain, Kyrgyzstan has a small railway network. A railway line has been built between the cities of Bishkek and Rybach (Balykchy), mainly for the transport of goods. The country also has a line from Bishkek and westwards, which connects to the main line between Almaty and Tashkent, as well as a short stretch into the town of Dzjalal-Abad in the Fergana basin. The total railway length is 470 km. Kyrgyzstan has two international airports. One in Bishkek (Manas) and one in Osj. The main means of transport inland are bus, minibus and taxi.

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