Wobbling Kyrgyz government risks further economic disruption

By bne IntelliNews June 22, 2012

Clare Nuttall in Almaty -

The Kyrgyz government is under threat from a petition started by two parties from within the four-member coalition. Should it prove successful and the government fall, the country will be plunged into weeks of uncertainty at the very least, further delaying much needed investment into the country's struggling economy.

Deputies from coalition parties Ar-Namys and Ata-Meken have signed a petition calling for a vote of no confidence in the government headed by Prime Minister Omurbek Babanov. Around 55 signatures have already been collected, according to reports in the Kyrgyz press. If correct, this would mean the plan to oust Babanov after just six months in office already has the support of more than half of the 92 MPs within the coalition. Sixty one signatures would force a vote of no confidence in the 120-member parliament.

According to Ar-Namys MP Tursunbai Bakir uulu, the majority of MPs from both parties have signed the petition and signatures are still being gathered, 24.kg reports. The initiative is understood to have been started by the Ata-Meken parliamentary faction, but its leader Omurbek Tekebayev says that he is not involved, according to K-news. "I don't know whether I'll sign it or not. First I want to hear their arguments," Tekebayev said.

Bakir uulu says he now expects several members of the Social Democratic Party of Kyrgyzstan (SDPK), another member of the cross-party coalition alongside Babanov's Respublika party, to sign the document. There are also reported to be some discontented members of Respublika who may be willing to sign. Signatures will also be solicited from Ata-Zhurt, the only one of Kyrgyzstan's five parliamentary parties to be excluded from the coalition. "I think its members will sign with pleasure," Bakir uulu suggests.

The current coalition, comprising four of the five parties represented in the Kyrgyz parliament, was formed in December 2011 following the election of former-Prime Minister Almazbek Atambaev as president. 40-year-old Babanov, who is one of Kyrgyzstan's richest businessmen, has until now managed to hold the fractious coalition government together. However, his popularity has fallen after a perceived lack of progress, especially on the economy and the much-publicised 100-Days programme to reform and modernise the state launched after the creation of his government.

Economic indicators have worsened recently, with the 7.5% GDP growth forecast for 2012 cut to just 1.8%. On June 18, the government increased its budget deficit forecast for 2012 to KGS18.5bn ($392m), KGS2.8bn higher than previously approved.

With at least three parties needed to form a majority in the current parliament, the government is inevitably unstable. The coalition was only formed after several weeks of intense negotiations in the weeks following Atambaev's election. A collapse came close earlier this year on the back of a scandal centered on shipments of radioactive coal from Kazakhstan, which was then allowed to be distributed to schools, orphanages and old people's homes in northern Kyrgyzstan.

The wobbles are disappointing for those who hoped that Kyrgyzstan's first peaceful transfer of power on December 1, and the appointment of a new parliament and president in Central Asia's most democratic elections ever, could see the country get back on track after two revolutions within just six years. Investors remained unwilling to commit to projects in the country in the 18 months following the April 2010 revolution, knowing that a change of government was imminent when interim President Roza Otunbayeva stepped down.

The election of Atambaev and the formation of a new coalition offered optimism that it could be the start of a period of greater stability, and that the government would finally be free to return to focus on the economy. However, this is now under threat, and a collapse would lead to weeks - and possibly months - of refreshed uncertainty.

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