Kyrgyzstan is a poor, mountainous country with a dominant agricultural sector. Cotton, tobacco, wool, and meat are the main agricultural products, although only tobacco and cotton are exported in any quantity. Industrial exports include gold, mercury, uranium, natural gas, and electricity. The economy depends heavily on gold exports - mainly from output at the Kumtor gold mine. Following independence, Kyrgyzstan was progressive in carrying out market reforms, such as an improved regulatory system and land reform. Kyrgyzstan was the first Commonwealth of Independent States (CIS) country to be accepted into the World Trade Organization. Much of the government's stock in enterprises has been sold. Kyrgyzstan's economic performance has been hindered by widespread corruption, low foreign investment and general regional instability. Despite political corruption and regional instability, Kyrgyzstan is ranked 44th on the Ease of doing Business Index.

Macro-economic trend

This is a chart of trend of gross domestic product of Kyrgyzstan at market prices estimated by the International Monetary Fund and EconStats with figures in millions of Kyrgyzstani Soms.

Year	Gross Domestic Product	US Dollar Exchange
1995	16,146	10.80 Soms
2000	65,358	47.77 Soms
2005	100,116	41.01 Soms

For purchasing power parity comparisons, the US Dollar is exchanged at 9.40 Soms only.

Current GDP per capita of Kyrgyzstan shrank by 54% in the Nineties. Mean wages were $0.85 per manhour in 2009.

Agriculture

Agriculture remains a vital part of Kyrgyzstan’s economy and a refuge for workers displaced from industry. Subsistence farming has increased in the early 2000s. After sharp reductions in the early 1990s, by the early 2000s agricultural production was approaching 1991 levels. Grain production in the lower valleys and livestock grazing on upland pastures occupy the largest share of the agricultural workforce. Farmers are shifting to grain and away from cotton and tobacco. Other important products are dairy products, hay, animal feed, potatoes, vegetables, and sugar beets. Agricultural output comes from private household plots (55 percent of the total), private farms (40 percent), and state farms (5 percent). Further expansion of the sector depends on banking reform to increase investment, and on market reform to streamline the distribution of inputs. Land reform, a controversial issue in Kyrgyzstan, has proceeded very slowly since initial legislation in 1998. The irrigation infrastructure is in poor condition. Agriculture contributes about one-third of the GDP and more than one-third of employment.

Forestry

Only 4 percent of Kyrgyzstan is classified as forested. All of that area is state-owned, and none is classified as available for wood supply. The main commercial product of the forests is walnuts.

Fishing

Kyrgyzstan does not have a significant fishing industry. In 2002 aquaculture contributed 66 percent of the country’s total output of 142 metric tons of fish, but in 2003 the aquaculture industry collapsed, producing only 12 of the country’s total of 26 metric tons.

Mining and minerals

In the post-Soviet era, mining has been an increasingly important economic activity. The Kumtor Gold Mine

Kumtor Gold Mine

Kumtor Gold Mine is an open-pit gold mining site in Issyk Kul Province of Kyrgyzstan located about 350 km southeast of the capital Bishkek and 80 km south of Lake Issyk-Kul near the border with China....

, which opened in 1997, is based on one of the largest gold deposits in the world. Several other gold deposits have been developed slowly, and the closing of Kumtor—expected by 2010—will deplete the contribution of the mining sector to gross domestic product. New gold mines are planned at Jerooy and Taldy–Bulak, and a major gold discovery was announced at Tokhtonysay in late 2006. The state agency Kyrgyzaltyn owns all mines, many of which are operated as joint ventures with foreign companies. Uranium and antimony, important mineral outputs of the Soviet era, no longer are produced in significant amounts. Although between 1992 and 2003 coal output dropped from about 2.4 million tons to 411,000 tons, the government plans to increase exploitation of Kyrgyzstan’s considerable remaining deposits (estimated at 2.5 billion tons) in order to reduce dependency on foreign energy sources. A particular target of this policy is the Kara–Keche deposit in northern Kyrgyzstan, whose annual output capability is estimated at between 500,000 and 1 million tons. The small domestic output of oil and natural gas does not meet national needs.

Industry and manufacturing

In the post-Soviet era, Kyrgyzstan’s industries suffered sharp reductions in productivity because the supply of raw materials and fuels was disrupted, and Soviet markets disappeared. The sector has not recovered appreciably from that reduction; if gold production is not counted, in 2005 industry contributed only 14 percent of the gross domestic product (GDP). Investment and restructuring have remained at low levels, and the electricity industry (traditionally an important part of industry’s contribution to GDP) has stagnated in recent years. Government support is moving away from the machine industries, which were a major contributor to the Soviet economy, toward clothing and textiles. Food processing accounted for 10 to 15 percent of industrial production until encountering a slump in 2004. In recent years, the glass industry has surpassed clothing and textiles in investment received and as a contributor to GDP. In the early 2000s, the construction industry has grown steadily because of large infrastructure projects such as highways and new gold mines. Housing construction, however, has lagged because of low investment.

Energy

Because it has limited deposits of fossil fuels and low investment in extraction industries, Kyrgyzstan is very dependent on foreign sources of energy. Most natural gas imports come from Uzbekistan, with which Kyrgyzstan has had a series of imperfect barter agreements. Per capita energy consumption is high considering average income, and the government has no comprehensive plan to reduce demand. An estimated 45 percent of electricity generated is diverted illegally or leaks from the transmission system. Hydroelectric plants generate some 92.5 percent of domestically consumed electricity, and only three commercial thermoelectric plants are in operation. Because of its rich supply of hydroelectric power, Kyrgyzstan sends electricity to Kazakhstan and Uzbekistan in return for fossil fuels. A new hydroelectric plant on the Naryn River at Kambar–Ata would supply power to parts of China and Russia, improving Kyrgyzstan’s export situation and domestic energy supply. However, in 2006 that project, which would include one of the largest hydroelectric dams in the world, remained incomplete because of lack of investment. An antiquated infrastructure and poor management make Kyrgyzstan more dependent on foreign energy when water levels are low. In the early 2000s, Kyrgyzstan was exploiting only an estimated 10 percent of its hydroelectric power potential. In 2001 Kyrgyzstan had about 70,000 kilometers of power transmission lines served by about 500 substations. Kyrgyzstan would be a member of the Shanghai Cooperation Organization’s Asian Energy Club, which Russia proposed in 2006 to unify oil, gas, and electricity producers, consumers, and transit countries in the Central Asian region in a bloc that is self-sufficient in energy. Other members would be China, Kazakhstan, Tajikistan, and Uzbekistan.

Kyrgyzstan is a partner country of the EU INOGATE

INOGATE

INOGATE is an international energy co-operation programme between the European Union , Turkey and countries of the NIS, with the exceptions of the Baltic States and the Russian Federation. Formally it describes itself as supporting "international cooperation between the European Union, the...

 energy programme, which has four key topics: enhancing energy security

Energy security

Energy security is a term for an association between national security and the availability of natural resources for energy consumption. Access to cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led...

, convergence of member state energy market

Energy market

Energy markets are those commodities markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy...

s on the basis of EU internal energy market principles, supporting sustainable energy

Sustainable energy

Sustainable energy is the provision of energy that meets the needs of the present without compromising the ability of future generations to meet their needs. Sustainable energy sources include all renewable energy sources, such as hydroelectricity, solar energy, wind energy, wave power, geothermal...

 development, and attracting investment

Investment

Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 for energy projects of common and regional interest.

The South Korean style manufactured bituminous coal

Bituminous coal

Bituminous coal or black coal is a relatively soft coal containing a tarlike substance called bitumen. It is of higher quality than lignite coal but of poorer quality than Anthracite...

 called yeontan (йонтан) is gaining popularity in Kyrgyzstan's energy industrial scene.

Services

Substantial post-Soviet growth in the services sector is mainly attributable to the appearance of small private enterprises. The central bank is the National Bank of the Kyrgyz Republic, which nominally is independent but follows government policy. Although the banking system has been reformed several times since 1991, it does not play a significant role in investment. High interest rates have discouraged borrowing. A stock market opened in 1995, but its main function is trading in government securities. Because of the Akayev regime’s economic reforms, many small trade and catering enterprises have opened in the post-Soviet era. Although Kyrgyzstan’s mountains and lakes are an attractive tourist destination, the tourism industry has grown very slowly because it has received little investment. In the early 2000s, an average of about 450,000 tourists visited annually, mainly from countries of the former Soviet Union.

External trade

Kyrgyzstan's principal exports, which go overwhelmingly to other 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. In 1999, Kyrgyz exports to the U.S. totaled $11.2 million, and imports from the U.S. totaled $54.2 million. Kyrgyzstan exports antimony, mercury

Mercury (element)

Mercury is a chemical element with the symbol Hg and atomic number 80. It is also known as quicksilver or hydrargyrum...

, rare-earth metals, and other chemical products to the U.S., and it imports grain, medicine and medical equipment, vegetable oil, paper products, rice, machinery, agricultural equipment, and meat from the U.S.

Reexport of China-made consumer goods to Kazakhstan and Russia, centered on Dordoy Bazaar

Dordoy Bazaar

Dordoy Bazaar is a large wholesale and retail market in Bishkek, Kyrgyzstan. It is one of Asia's greatest public market places, comparable to Bangkok's Chatuchak weekend market or Tehran's Grand Bazaar...

 in Bishkek, and to Uzbekistan

Uzbekistan

Uzbekistan , officially the Republic of Uzbekistan is a doubly landlocked country in Central Asia and one of the six independent Turkic states. It shares borders with Kazakhstan to the west and to the north, Kyrgyzstan and Tajikistan to the east, and Afghanistan and Turkmenistan to the south....

, centered on Kara-Suu

Kara-Suu

Kara-Suu is a town, river and valley in Osh Province, Kyrgyzstan, in the Fergana Valley. The town is 23km northeast of Osh and is the capital of Kara-Suu District....

 Bazaar in Osh Province

Osh Province

Osh Province is a province of Kyrgyzstan. Its capital is Osh. It is bounded by Jalal-Abad Province, Naryn Province, Xinjiang, China, Tajikistan, Batken Province and Uzbekistan.-Geography:...

, is particularly important; it is thought by some economists to be one the country's two largest economic activities.

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

Free market

A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...

 economic system by stabilizing the economy and implementing reforms, which will encourage long-term growth. These reforms led to Kyrgyzstan's accession to the WTO

World Trade Organization

The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 on December 20, 1998.

Investment

The stock market capitalisation of listed companies in Kyrgyzstan was valued at $42 million in 2005 by the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

.

Other statistics

Investment (gross fixed):
17% of GDP (2004 est.)

Household income or consumption by percentage share:

• lowest 10%: 3.9%
• highest 10%: 23.3% (2001)

Distribution of family income - Gini index:
29 (2001)

Agriculture - products:
tobacco, cotton, potatoes, vegetables, grapes, fruits and berries; sheep, goats, cattle, wool
Industrial production growth rate:
6% (2000 est.)

Electricity

• production: 11,720 GWh (2002)
• consumption: 10,210 GWh (2002)
• exports: 1,062 GWh (2002)
• imports: 375 GWh (2002)

Electricity - production by source:

• fossil fuel: 7.6%
• hydro: 92.4%
• other: 0% (2001)
• nuclear: 0%

Oil:

• production: 2000 oilbbl/d (2001 est.)
• consumption: 20000 oilbbl/d (2001 est.)
• exports: NA
• imports: NA

Natural gas:

• production: 16 million m³ (2001 est.)
• consumption: 2.016 billion m³ (2001 est.)
• exports: 0 m³ (2001 est.)
• imports: 2 billion m³ (2001 est.)

Current account balance:
$-87.92 million (2004 est.)

Exports - commodities:
cotton, wool, meat, tobacco; gold, mercury, uranium, natural gas, hydropower; machinery; shoes

Imports - commodities:
oil and gas, machinery and equipment, chemicals, foodstuffs

Reserves of foreign exchange & gold:
$498.7 million (2004 est.)

Exchange rates:
soms per US dollar - 41.731 (2004), 43.6484 (2003), 46.9371 (2002), 48.378 (2001), 47.7038 (2000)

External links

• Minister wants bigger role for local mining firms