"New" Kyrgyz coalition to form government

By bne IntelliNews April 1, 2014

bne -

A new government coalition has been formed in Kyrgyzstan less than two weeks after the previous government collapsed over corruption allegations. However, the new "For Strengthening Statehood" administration is made up of exactly the same three parliamentary factions as the previous coalition.

The Social Democratic Party of Kyrgyzstan (SDPK), Ar-Namys and Ata Meken, the three members of the Unity Before Happiness coalition that split on March 18, announced on March 31 that they had agreed to form a new government. Opposition leaders have mocked the collapse and speedy re-formation of the coalition, although by keeping many of the same figures in power, Kyrgyzstan is likely to offer more continuity for investors.

The coalition is expected to appoint Kyrgyzstan's acting head of government Joomart Otorbaev prime minister on April 2. Otorbaev will present his programme at an extraordinary sitting of the Jogorku Kenesh (parliament), on April 1. The coalition, which is led by Ar-Namys's leader Felix Kulov, has also agreed the next prime minister will enjoy the right of veto on the appointment of government members.

Before reaching a final agreement, members of the coalition had reached out to the two remaining parties in the parliament, Respublika and Ata-Jurt. However, they failed to find common ground.

"We were interested in expanding the alliance, but the Ata-Jurt faction refused to join a coalition at the last minute, while Respublika did not collect enough signatures from among its members," Ata Meken leader Omurbek Tekebayev explained.

Economic challenges

The new alliance was immediately criticised by Deputy Chairman of the parliamentary Budget and Finance Committee Kurmanbek Dyykanbayev, a member of the opposition Respublika faction.

"The creation of the new coalition will bring no dividends for the economy," he said. "Who needed this show? The country was left for 10 days without government when the exchange rate of the som is falling and problems of farmers should be solved ahead of spring field work; things are not right in the economy, who will bear responsibility for this?" he asked.

The new government will be the fourth since the last parliamentary election in 2010. Earlier, President Almazbek Atambayev complained that governments in Kyrgyzstan struggle to last for more than a year because of corruption, and expressed hope that the new administration might make it to the end of the current parliament.

The previous government collapsed after Ata Meken quit the coalition, accusing Prime Minister Zhantoro Satybaldiyev of corruption while he headed efforts to rebuild southern Kyrgyzstan after deadly ethnic violence in June 2010. Ata-Meken insisted shortly after the split that it would not join a new government, preferring to focus on preparations for the 2015 elections, but has since revised its position.

While the opposition has criticised the disruption caused by the split and re-formation, the fact that there has not been a handover of power should offer some continuity in the ongoing negotiations over the Kumtor gold mine.

Bishkek has been trying since 2012 to increase the state's shareholding in the project, which accounts for around 12% of Kyrgyzstan's GDP. On February 6, the parliament voted in favour of a deal with majority owner Toronto-listed Centerra Gold that would give Kyrgyzstan a 50% stake in a new joint venture that will own the mine - despite voting down a similar deal in October. The government now has until June to nail down the deal, to comply with the four-month deadline set by parliament.

Notice: Undefined index: social in /var/www/html/application/views/scripts/index/article.phtml on line 259

Related Articles

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

COMMMENT: Great challenges for Eurasia call for decisive solutions

Juha Kähkönen of the IMF - The Caucasus and Central Asia (CCA) region continues to navigate a wave of external shocks – the slump in global prices of oil and other key commodities, the slowdown ... more

IMF calls for Central Asia to tighten monetary policy

Naubet Bisenov in Almaty -   Caucasus and Central Asian (CCA) countries need to tighten their monetary policy to anchor inflation expectations, but excess tightening may weaken financial ... more