Kyrgyzstan to seek foreign funds for $13bn investment programme

By bne IntelliNews January 15, 2013

bne -

Kyrgyzstan has given the green light to a long-term $13bn investment programme intended to transform the country's economy and end its dependence on the Kumtor gold mine. That will see it aim to leverage international funds to power projects in mining, infrastructure and agriculture.

The 2013-17 investment programme was approved by President Almazbek Atambaev, Prime Minister Zhantoro Satybaldiyev, and other members of the Council for National Development on January 14. It replaces a $7bn investment programme proposed by Atambaev in December, and includes additional investment projects. Bishkek says it plans to target international investors and donors to finance the plans.

Funding from Russia for the Kambarata-1 hydropower plant ha already been secured, and the government is in talks with China over the planned China-Kyrgyzstan-Uzbekistan railway. The focus of the programme will be on the agriculture, communications, infrastructure, mining and engineering.

Speaking at the council meeting, Atambaev said that Kyrgyzstan aims to expand the economy by at least 7% per year over the next five years, which would bring GDP per capita to $2,500 by 2017. That is equivalent to no more than 10% of the same indicator in neighbouring Kazakhstan, which projects GDP per capita of $24,000 in five-years time.

Atambaev also said he wants to see the country enter the top 30 in the World Bank's "Doing Business" index by 2017 (it currently stands in 70th place), and to advance from 154th place to among the top 50 countries on Transparency International's corruption perceptions index, Kabar reports. Such ambition would clearly help Kyrgyzstan access a larger pool of international financing options.

"Kyrgyzstan must become a strong and democratic state with a stable political system and a rapidly growing economy which will ensure decent living standards for the people," Atambayev told the council meeting, according to Reuters.

Kyrgyzstan's economy, which is mainly based on the mining, agriculture and tourism sectors, has suffered several setbacks in the last decade. The country's two revolutions in 2005 and 2010 slashed growth in both years, and have deterred investment. Just as the economy was getting back on track in 2012, a fall in gold production at the Kumtor mine caused the economy to contract by 0.9% in 2012 according to official statistics, although the IMF forecasts growth will rebound to 8.5% in 2013.

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