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25% of the trade Kyrgyz falls within Russia

Thursday 18 August 2011

Bishkek (24.kg news agency) – “25% of the trade of Kyrgyzstan falls within Russia,” Uchkunbek Tashbayev, the Minister of Economic Regulation said today at the first meeting of the council for external economic activity under the Trade Representation of the Russian Federation (RF) in the Kyrgyz Republic.

According to him, for more intensive economic relations with the RF it is necessary to systematize the relationships between economic entities of both countries. Moreover there is an order for business projects from both Russia and Kyrgyzstan. “We managed to study thoroughly project proposals. Our Government has a trade mission in Russia and many ideas in the framework of the relevant protocols. Now we should, if it is possible, transfer to a qualitatively new level cooperation between our businessmen located in Moscow and other cities of Russia with the specialized department of our partner. We need to negotiate concerning the orders in the framework, for example, of financial reserves procurements,” explained Uchkunbek Tashbayev.

Andrey Tochin, the Principal of Economic Collaboration and Integration with the Countries of the Commonwealth of Independent States Department under the Ministry of Economic Development of the RF said that the potential of the inter-state relations in the economy is good, but there are no instruments for its implementation. “But we can create it together. It should be noted that one of the best trade pavilions in Moscow is a pavilion of Kyrgyzstan,” added he.

Whereas the other Central Asian republics have sometimes complained of Russian interference, Kyrgyzstan has more often wished for more attention and support from Moscow than it has been able to obtain. For all the financial support that the world community has offered, Kyrgyzstan remains economically dependent on Russia, both directly and through Kazakhstan. In early 1995, Askar Akayev, the then President of Kyrgyzstan, attempted to sell Russian companies controlling shares in the republic’s twenty-nine largest industrial plants, an offer that Russia refused.

Akayev has been equally enthusiastic about more direct forms of reintegration, such as the Euro-Asian Union that the President of Kazakhstan, Nursultan Nazarbayev, proposed in June 1994. Because Kyrgyzstan presumably would receive much more from such a union than it would contribute, Akayev’s enthusiasm has met with little response from Russia and the other, larger states that would be involved in such an arrangement. Akayev’s invitation for Russian border guards to take charge of Kyrgyzstan’s Chinese border, a major revision of his policy of neutrality, was another move toward reintegration.

The Kyrgyz government also has felt compelled to request Russia’s economic protection. The harsh reality of Kyrgyzstan’s economic situation means that the nation is an inevitable international client state, at least for the foreseeable future. Despite concerted efforts to seek international “sponsors”, Akayev has not received much more than a great deal of international good will. Even if the president had not lived seventeen years in Russia himself and even if his advisers, family, and friends were not all Soviet-era intellectuals with a high degree of familiarity with Russia, economic necessity probably would push Kyrgyzstan further toward Russia.

On his February 1994 visit to Moscow, Akayev signed several economic agreements. Having promised the republic a 75 billion rouble line of credit and some US $65 million in trade agreements, Russia also promised to extend to Kyrgyzstan most favoured nation status for the purchase of oil and other fuels. For its part, Kyrgyzstan agreed to the creation of a Kyrgyz-Russian investment company, which would purchase idle defence-related factories in the republic to provide employment for the increasingly dissatisfied Russian population of Kyrgyzstan. In early 1995, Prime Minister Apas Jumagulov of Kyrgyzstan and Prime Minister Viktor Chernomyrdin of Russia signed a series of agreements establishing bilateral coordination of economic reform in the two states, further binding Kyrgyzstan to Russia. After lobbying hard for inclusion, Kyrgyzstan became a member of the customs union that Russia, Belarus, and Kazakhstan established in February 1996.

For its part, Russia sees aid to Kyrgyzstan as a successful precedent in its new policy of gaining influence in its “near abroad”, the states that once were Soviet republics. Russia does not want a massive in-migration of Russians from the new republics; some 2 million ethnic Russians moved back to Russia between 1992 and 1995. Akayev, on the other hand, must find a way to stem the loss of his Russian population, which already has caused an enormous deficit of doctors, teachers, and engineers.

For these reasons, despite opposition from Kyrgyz nationalists and other independence-minded politicians, in 1995 Akayev granted the request of Russian president Boris Yeltsin to review the constitutional provision making Kyrgyz the sole official language. Early in 1996, Kyrgyzstan took legal steps toward making Russian the republic’s second official language, subject to amendment of the constitution. That initiative coincided with the customs union signed with Russia, Kazakhstan, and Belarus in February 1996.

In February 2009 the Russian government pledged to write off Kyrgyzstan’s $180 million debt as well as promising to lend a further $2 billion, give $150 million in direct aid and subsidise the building of the Kambarata-1 hydropower plant at the Kambaratinsk Dam.

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