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Germany Grants Kyrgyzstan €26 mln for Technical and Financial Cooperation


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BISHKEK (24.kg news agency) – Germany granted Kyrgyzstan €26 million for bilateral technical and financial cooperation projects. Agreements for 2012-2014 between the Kyrgyz government, represented by the Ministry of Economy, and the government of Germany were signed yesterday.

Of the roughly 100,000 ethnic Germans living in Kyrgyzstan as recently as the beginning of the 1990s, an estimated 10,000 still live there at present.
Historically, the German minority in Kyrgyzstan figures prominently in bilateral relations. The first settlements of German Mennonites in the country date back to the 19th century. During WWII, ethnic Germans were also forcefully resettled in Kyrgyzstan and another wave of immigrants began in the 1950s. The German government offers support to the members of the German minority, especially in the social, cultural and education sectors. Giving Kyrgyz citizens of German extraction some prospects for the future was a major objective of the framework declaration adopted by independent Kyrgyzstan and the Federal Republic of Germany on 4 July 1992, which placed cooperation on a new footing. In the same year, a German diplomatic mission was opened in Kyrgyzstan.
So far the only EU country with a fully fledged embassy in Kyrgyzstan, Germany is Kyrgyzstan’s most important partner in the European Union.

According to the document, the funds are allocated for implementation of social projects in healthcare, education, and infrastructure domains.

The financial cooperation stipulates allotting of €5.5 mln for the third phase of complex healthcare sector program, €4 mln for base mother and child welfare system, €1 mln for development of micro-financial system in rural regions, and € 5.5 mln for improvement of municipal infrastructure.

Another €5 mln is allocated as part of a technical cooperation project for the second phase of sustainable economical development, €3 mln for the Prospects for Youth program. €2 mln will be transferred to the fund of development projects in rural regions, implemented in cooperation with the civil society.

Development cooperation

At the intergovernmental consultations between Germany and Kyrgyzstan in May 2012, Sustainable Economic Development and Health Care Reform were confirmed as the priority areas of bilateral development cooperation. The aim is to provide long-term support to promote the country’s stable and sustainable development. The focus of development cooperation should take into account potential areas of social conflict, in particular by promoting youth and structurally weak areas. By focusing cooperation on these sectors, the German Federal Government is supporting the Kyrgyz government’s reform efforts and helping the country attain its Millennium Development Goals.

Financial Cooperation (FC) focuses on two areas: enlarging the microfinance sector, especially in rural areas, and helping Kyrgyzstan implement its National Health Care Reform Programme Manas Taalimi and its follow-up programme Den Sooluk. FC also supports emergency medicine, HIV/AIDS and tuberculosis prevention as well as helping to improve the health of mothers and children. Germany also cooperates with Kyrgyzstan in the energy sector.

In bilateral Technical Cooperation (TC), the German Federal Government is mainly engaged in a programme to promote sustainable economic development and vocational training. The programmes are helping the Kyrgyz government – in tandem with the private sector – to improve overall economic conditions and other factors affecting the country’s competitiveness with a view to effecting structural change that creates jobs and generates income. In addition, Kyrgyzstan is provided consulting services through regional projects, e.g. the project supporting legal and judicial reform in Central Asia and a project to promote regional cooperation on basic education.

However, overall, bilateral trade between the two countries is insignificant with a large trade surplus in Germany’s favour. The downturn in German exports to Kyrgyzstan in recent years (2010: €35 mln) was reversed in 2011 (€67 mln). There has also been an increase in German imports from Kyrgyzstan (from €6 mln to €12 mln). The main German exports to Kyrgyzstan are motor vehicles and other machinery as well as chemical products (pharmaceuticals and cosmetics). Kyrgyzstan exports agricultural products to Germany. Overall, there is little investment activity by German companies because of the unfavourable conditions for business and currently little prospect of the situation improving. So far, only two companies have made significant investments. They are making an important contribution to the development of the Kyrgyz economy.

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