About Kyrgyz Republic

Kyrgyzstan is a landlocked, largely mountainous country in Central Asia, bordered by China, Kazakhstan, Tajikistan and Uzbekistan. The population of slightly above six million is predominately young. Kyrgyzstan is a lower-middle-income economy, with per capita gross national income of $1,170 in 2015. Its 0.655 human development index ranking classifies it as a medium human development country. 2. Since independence in 1991, Kyrgyzstan has undergone complex social, economic, and political changes, including two uprisings, in 2005 and 2010, which overthrew authoritarian regimes. The new constitution adopted in June 2010 established Kyrgyzstan as a parliamentary democracy. Parliamentary elections in 2011 and 2015 – largely recognized as free and fair – have created a more responsive parliamentary system, building the foundation for improved governance and application of the rule of law, gender equality, and human rights.

Since 2014, Kyrgyzstan has been a lower-middle-income country with average annual domestic product growth of 4.8 per cent. Extreme poverty decreased from 5.3 per cent in 2010 to 1.2 per cent in 2015. Government peacebuilding efforts over the past five years led to increased stability and trust of the population in institutions, and reduced conflicts. The civil society sector in Kyrgyzstan is one of the strongest in Central Asia, engaging with the Government through numerous consultative public councils. Despite these notable results, Kyrgyzstan faces a number of challenges.

Public sector effectiveness, efficiency, accountability and transparency of institutions and processes, undermined by weak oversight by the parliament and society and limited capacity for transparent, inclusive policy implementation and service delivery, remain key areas for improvement. Judicial and human rights institutions must be strengthened to ensure access to justice for all and implementation of the laws. Cross-border tensions – triggered among other factors by disputes over natural resources, unsettled borders and insufficient risk-coping mechanisms still periodically intensify, undermining stability in the region. Rising violent extremism threatens the development gains made by Kyrgyzstan and the entire Central Asia region over the past twenty years, requiring a regional response. The main drivers of violent extremism are growing inequalities, weak rule of law, perceptions of injustice and exclusion, corruption, and mistreatment of certain groups. Violence against women and girls, child marriage, and the economic and social status of rural women all require government action. Citizens’ expectations for more transparent, effective basic services have yet to be met, and polls show that citizens perceive corruption, accountability, and sustainable economic development as priorities.

Poverty remains high, at 32.1 per cent in 2015, and is concentrated in rural areas, varying across regions but highest in Jalal-Abad, Batken, Naryn, regions and Osh city. Although remittances helped reduce the national poverty rate by 6-7 percentage points, labour migration and remittances created such side effects as outflow of human resources, dependency on external factors, and erosion of family fabric. Key factors explaining high poverty rates are: volatile, tenuous economic growth; poor infrastructure; weak institutions; and inequitable access to natural resources. Access to basic public services such as electricity, heating, clean water and sanitation remains suboptimal in rural areas. Rural women and children face even greater challenges and disadvantages. The increase in urban poverty and fall in extreme poverty have important policy implications. More attention must be paid to measuring chronic poverty and inequality for appropriate planning and budgeting, and to non-monetary dimensions of poverty (access to education, health, water and other utilities) so that no one is left behind. The availability and disaggregation of economic, financial and social data is limited for a realistic assessment of growth inclusiveness. 

Income inequality remains high, with a Gini coefficient of 41 per cent in 2015. Unemployment, at 8.5 per cent, is concentrated among youth and women, and the gender gap in the labour force is widening. Women account for only 40 per cent of the economically active population. In rural areas the gender gap in employment is wider, despite slightly higher employment rates. Agriculture, susceptible to climate change, remains the main employer in the economy (32 per cent of total employment). Seventy per cent of the poor depend entirely on agriculture. Small and medium-sized enterprises contribute 19 per cent to employment and 37 per cent to the gross domestic product due to challenges in the business environment, with burdensome regulations, including legal barriers to women’s participation in the labour force; lack of skilled labour; insufficient access to infrastructure (such as a reliable supply of electricity), finance, and reliable public services. While accession to the Eurasian Economic Union in 2015 improved access to a large market for goods, services and labour offers advantages, structural reforms to raise productivity and diversify the economy are necessary for the full benefits of integration to be captured.

Kyrgyzstan is particularly vulnerable to climate change, the effects of which include glacial melting and higher risks of glacial lakes outflows, disrupting the water regime and disasters. Extremes in weather and climate, and unsustainable natural resources management, are causing over 20 kinds of dangerous processes that trigger natural disasters, making the socio-economic situation even more fragile and increasing pressure upon local communities. Direct economic losses deriving from natural disasters are   estimated at 1-1.5 per cent of annual gross domestic product. Low resilience of people and communities, limited policy and institutional frameworks, and poor forecast and response capabilities impede adequate response to climate change and disasters. Disaster management governance relies on an emergency management structure that is insufficient for a systemwide approach to addressing risks. A multi-disciplinary ‘risk governance’ paradigm needs to be adopted.

Kyrgyzstan is characterized by high degree of biodiversity concentration at both ecosystem and species levels. However, natural resources exploitation over the past 50 years has severely damaged its ecosystems (forests, pastures and arable lands). The rural poor, especially women and children, depend on access to natural resources – particularly land and water – for sustainable livelihoods. Climate change and more frequent natural disasters worsen the situation. The state of the environment thus largely hinges on the appropriate, rational management of energy, environment and natural resources. 

38%

Level of poverty in the country

126

Human Development Ranking as of 2011 (out of 187 countries)

66

on Gender Equality Index (out of 146 countries)

5.7%

Economic growth in 2011

2200

$ GDP per capita (by purchasing power parity in 2010)

31%

of GDP is the amount of remittances from migrants in 2012 (about $1.7 billion)