subject: Kyrgyzstans New Prime Minister Pledges To Protect Foreign Investment [print this page] Back in September, Kyrgyzstans Parliament overwhelmingly voted Zhantoro Satybaldiyev to be the Prime Minister. He pledged to bring economic growth to the country and fight corruption within the government. Satybaldiyev believes that Kyrgyzstan is desperate for foreign investment, and has subsequently ruled out nationalising the Kumtor gold mine.
Toronto-based mining company Centerra Gold currently runs Kumtor. There had been calls to nationalise the mine, which employs 2710 members of permanent staff, but Satybaldiyev stood firm on his belief that foreign investors will bring Kyrgyzstan out of its current economic slowdown.
The Kumtor gold mine is the biggest gold mining venture run by a Western-based company in all of Central Asia. In 2011, it accounted for 12 per cent of Kyrgyzstans Gross Domestic Product, as well as half of its exports. Some unforeseen geological factors have slowed the mines production this year, however, there is a lot of hope for the future.
Christian Beddies, head of the International Monetary Funds monitoring mission, said that he expects real GDP to grow by about one per cent this year and about 6.5 per cent over the medium term on the back of the recovery in gold production, growth in agriculture, trade and construction.
Last year, the IMF approved a three year, $103 million economic support package to revive the countrys economy, and at the end of this year, they are expected to approve a third review of the economy, which will open up another $15 million to the country.
There is no denying that this nation of 5.5 million mostly Muslim people has experienced tough times. Two presidents have been toppled by violent revolts since 2005, and around 500 people were killed in inter-ethnic clashes in the summer of 2010, but Satybaldiyev seems to be the man to put the country back on the right path. His commitment to foreign investors, as well as the support of the IMF, could lead to Kyrgyzstan becoming one of the economic leaders in an area of the world where so many investors are looking to capitalise.
Kyrgyzstan is an incredibly resource-rich nation. Along with its massive gold reserves, it also contains substantial deposits of coal, uranium, antimony and a vaiety of other valuable metals. The current government is actively encouraging funds from foreign investors in all of these areas.
Though lacking the large petroleum and natural gas reserves some of Kyrgyzstans boarding nations have, its mountainous terrain and plentiful water resources can provide large quantities of hydroelectric energy to export. In a world constantly looking for cleaner energy sources, hydroelectric energy could represent the future.
There is no doubting the potential of Kyrgyzstans economy, but in order to reach that potential, the nation must create an economic environment that is inviting to foreign investors.
By refusing to nationalize the Kumtor gold mine, Satybaldiyev has demonstrated that foreign investment will be the key to recovery. He will punish those who try to hold Kyrgyzstan back, and after a recent visit to the Kumtor mine, is very pleased with his countrys current relationship with the Canadian investors.
