Country Overview

Kyrgyz Republic Overview

The Kyrgyz Republic is a country of exceptional natural beauty and proud nomadic traditions, with a fast-growing economy and a broad range of investment opportunities. It is a mountainous, landlocked nation in Central Asia with a population of 5.3 million people. The country is home to one of the jewels of Central Asia - the Lake Issyk Kul, which means “warm lake” in the Kyrgyz language. It never freezes, and is the second largest mountain lake in the world, after Lake Titicaca in South America. The lake is surrounded by the snow-capped peaks of the Tian Shan Mountains.

The population of Kyrgyz republic is made up of Kyrgyz (64.9%), Uzbeks (13.8%), Russians (12.5%), Dungans (1.1%), Ukrainians (1%), Uygurs (1%) and others (5.7%). Islam is the largest religion in the country (75%), with a sizable Russian Orthodox presence (20%). The official languages are Kyrgyz and Russian. It is a tolerant country where all religious and ethnic groups live in peace and harmony.

The constitution defines the country as a democratic republic. The parliament currently is unicameral. The judicial branch comprises a Supreme Court, a Constitutional Court, local courts and a Chief Prosecutor. The country has a vibrant community of non-governmental organizations (NGOs).
In December 1998 Kyrgyz republic was the first Commonwealth of Independent States (CIS) country to be accepted into the World Trade Organization (WTO). After a brief period of political uncertainty in March 2005, Kyrgyz republic went on to develop rapidly in both the political and economic spheres and is carrying out sweeping economic and social reforms.

A centrally located country, the Kyrgyz Republic borders China, Tajikistan, Uzbekistan and Kazakhstan. The Government successfully develops good relations with all its neighbors and promotes regional cooperation. Besides the Commonwealth of Independent States (CIS), the Kyrgyz Republic is an active member of various regional security and economic organizations, ranging from the Shanghai Cooperation Organization (SCO) to regional economic groupings such as the Eurasian Economic Community
The country strives to balance its international relationships. Regionally, Russia and the other CIS countries remain key partners. Kazakhstan is an extremely important neighbor for Kyrgyz republic, allowing for the transit of Kyrgyz exports of agricultural and other products. Kazakhstan is also a key foreign direct investor, especially in the banking sector. China is another significant trading partner and the third largest destination for exports (after the United Arab Emirates and Russia), as well as the third largest provider of imports. China is also an important source of bilateral financial support. Recently, it provided financing to complete a section of a road linking China to Uzbekistan through the Kyrgyz Republic.

GDP grew 8.2% in 2007, due to a better business environment. The economy is expected to grow 7.0% for 2008, and 6.5% for 2009. GDP growth slowed to 7.1% in the first half of 2008 from 8.8% in the same period the previous year, reflecting spillovers from neighboring Kazakhstan through the trade, investment, and remittance channels.

The government collects significant revenue from an American military base that supports the NATO operations in Afghanistan as well as a Russian military based located 40km away.  The government made steady strides in controlling its substantial fiscal deficit, nearly closing the gap between revenues and expenditures in 2006. In 2007, the parliament made a break-through by legislating a business friendly tax-code that hacked down on the number of taxes (down to eight from sixteen) and their rates, VAT has been reduced to 10%. The country is making progress in fighting corruption, restructuring of domestic industry, and success in attracting foreign investment.