Kyrgyzstan

An image of the country's flag.

In its first two decades of existence, the Government of Kyrgyzstan (officially known as the Kyrgyz Republic) transformed the core sector of its economy – agriculture – by abolishing state-owned and collectively operated production enterprises in favor of privately owned and operated smallholder, peasant farms and garden plots. This transformation was accompanied by rapid rates of growth in agricultural output, confirming the wisdom of the radical reform path that the country‘s leaders, and especially its first President, Askar Akaev, had charted for this small, landlocked and mountainous country. These reforms, which were strongly supported by international donors, defined Kyrgyzstan as a market-oriented economy and enabled it to be reasonably successful in giving all Kyrgyz citizens a stake in the country‘s future. While the post-Soviet period was ushered in by a short period of economic collapse, after the more privatized agricultural operations were established, average rates of growth were among the best in Central Asia. Poverty levels, while still significant, began to decline in the late 1990s.

Growth in Kyrgyzstan faltered during the 2008–2009 global economic downturn, and an outbreak of political instability in 2010 raised uncertainties about the future. While water and land use issues had reportedly fueled earlier conflicts between Uzbek and Kyrgyz populations, the cause of the 2010 conflict was in the view of some reporters more complex, reflecting broader concerns related to political power and economic opportunity. However, a new government has made efforts to restore order and is likely to continue to respond to what seems to be a strong consensus that new initiatives are needed to boost agriculture-based economic growth to levels high enough to further reduce poverty. For this to happen, greater attention to issues of both property rights and resource governance will be required.

The agricultural sector remains important as a source of income for the majority of the 5.3 million Kyrgyz people, with agriculture accounting for more than 30% of Gross Domestic Product (GDP). However, regaining an upward-growth trajectory will require: greater investment in production and processing technologies; better management of common resources (especially irrigation water and pastures); and focused efforts to increase the competitiveness of Kyrgyz products and their access to the markets of neighboring countries. Further, critical sources of economic growth are now expected to lie in expanded exploitation of Kyrgyzstan‘s non-agricultural natural resources: gold; hydropower; and coal. Such expansion will require the Government to address the question of foreign investors ‘access to these national assets.

USAID and other donors have directed significant efforts toward: introducing market mechanisms in rural land-management practices; stimulating effective rural and urban land markets; and promoting sustainable use of agricultural lands. More than 2.7 million real estate units are now registered in both rural and urban areas. Nearly 100,000 mortgages (mostly in urban areas) were registered by 2010. Ongoing projects supported by the international community are continuing to strengthen the overall system of property rights and institutional capacities for management of registration. But further assistance may be necessary to: maintain transparent land-market development while averting interventions that would raise issues of corruption or nepotism; advance sustainable development initiatives in agriculture, energy, and mining; and address issues in border areas that are particularly vulnerable to conflict over resources.

KEY ISSUES AND INTERVENTION CONSTRAINTS

  • Improve women’s land rights, access to natural resources and economic security. The privatization of property in Kyrgyzstan has not eliminated gender as a determinant of land rights. Kyrgyzstan has a relatively progressive formal legal framework supporting women‘s equality, but customary law, which places strong emphasis on the maintenance and support of the household as a unit, continues to support male domination in social, economic and political spheres. Many of the programs relating to land reforms, legal literacy and development of local governance-capacity have recognized the need for particular attention to women‘s rights. In many cases, however, program achievements have not ultimately released women and their families and communities from the grip of customary law and traditional practices. USAID and other donors with experience in a variety of land-reform initiatives and natural resource governance programs are particularly well-placed to work with the Government of Kyrgyzstan (GOK) and with local women’s non-governmental organizations (NGOs) to help women and girls understand, assert and enforce their rights under the formal law – especially their rights to land and other natural resources – and work with communities, local officials, governance bodies and decision-makers to develop the mechanisms and institutions needed to enforce those rights.
  • Promote rural livelihoods by improving the livestock sector. The division of authorities and responsibilities for managing access to grazing lands has been one of the causes of unsustainable over-use of pastureland close to farming areas and under-use in more remote areas. Local government has recently been given the authority to manage pastures, but the system for management, collection of income, and reinvestment has not been developed. Donors, and perhaps especially USAID, can build upon recent legislation to support pasture-user associations, increase knowledge of and access to sustainable management practices and promote equitable access to pasturelands. In addition, if the sector is to contribute to rural economic growth, markets for animals and animal products (e.g., wool, hides) will require particular attention.
  • Strengthen water resource governance. Inefficient and poorly maintained irrigation infrastructure, water quality and conflicts over water use, distribution and access remain problematic. Despite investments in all of these areas, the sustainability of ongoing and future projects is questionable unless institutions and organizations involved in the water sector are better able to consider and plan for the ecological, economic and social dimensions of water use. Donors could assist Kyrgyzstan in its progress toward Integrated Water Resources Management (IWRM), perhaps by focusing on a group of communities currently experiencing the full weight of existing water constraints, developing IWRM plans and providing support for their implementation.
  • Develop policy and strengthen laws that promote sustainable forest use while meeting the needs of users. The forestry sector has not been well attended to in Kyrgyzstan. The legislative framework is an unwieldy series of laws and resolutions that are disconnected from principles of sustainable forest management and participatory forest management approaches. Enforcement of forest laws is weak, and unsustainable and illegal forest use continues despite government decrees issuing moratoriums on logging and suspending allocations of land for community forestry. Donors can assist the government in developing a forest management plan that can be successfully implemented and help support the desire for community forest management with program design and support for pilot programs.

SUMMARY

At the time Kyrgyzstan achieved independence in 1991, the country‘s incoming President, Askar Akaev, envisioned the country as ―the Switzerland of Central Asia.‖ The characterization reflected the country‘s geography as a small, landlocked mountainous country, but not the steep challenges that Kyrgyzstan would have to meet to establish an independent economy capable of trading successfully in international markets (Schmitt 1997, 1).

Following the dissolution of the Soviet Union, and Kyrgyzstan‘s Independence, the state-dominated economy of the Soviet era quickly collapsed; national income dropped by 74% between 1991 and 1994, and rates of poverty rose. The incoming government chose a path of radical market-based reforms, starting immediately with the restructuring of state-owned and collectively operated agricultural enterprises into cooperative or corporate farms, and continuing a few years later with efforts to privatize ownership of all land and to institute other market-based reforms. Although agricultural growth has been positive since the mid-1990s, poverty levels have remained relatively high. Within Central Asia, Kyrgyzstan is second only to Tajikistan in terms of poverty rates.

More than 56% of Kyrgyzstan‘s land is technically classified as agricultural. However, most of this land is suitable only for livestock production and much of it is located relatively far from areas of year-round rural residence. Much of the land classified as arable (constituting slightly less than 7% of total land area) is irrigated cropland in the fertile Ferghana Valley. Only 0.4% of total land area is in permanent crops. Forestland covers 4.5% of the land and is home to rare and endangered species such as the giant buzzard and the snow leopard. Kyrgyzstan has the world‘s largest natural-growth walnut forest.

Farm output now consists largely of commodities consumed in Kyrgyzstan and neighboring countries (wheat, barley, dairy, potatoes and fruits and vegetables), although cotton and tobacco are also produced for industrial processing and export. Production of sheep and cattle has recovered from steep declines in the early 1990s, but productivity remains low. Poor nutrition resulting from the overuse of degraded pastures near residences and farms, disease and poor livestock management combine to constrain growth of the livestock sector.

Prior to independence, all land was state property, with use rights granted to occupants. In rural areas, most land was allocated to large, state-owned agricultural enterprises where production was carried out in accordance with principles of central planning. Small household plots were allowed, however, and accounted for a large share of local food production. More than a decade of reforms privatized most of the country‘s arable land, which is held by 2.7 million peasant farmers and households. The GOK controls pastureland and 25% of arable land (held in the Land Redistribution Fund or LRF), with legislation devolving authority to local government bodies. Kyrgyzstan‘s land reform program has reorganized and strengthened the system of land administration, streamlined procedures, and facilitated the registration of more than 2.7 million landholdings. The reforms continue, and include adoption of zoning regulations and revision of land allocation procedures to improve transparency.

Sixty-four percent of the population resides in rural areas. However, urban centers have seen rapid, unplanned growth. Migrants from rural areas seeking urban employment are populating informal settlements on the periphery of the cities. Much of Kyrgyzstan‘s urban population now lives in slums illegally located on public or private land.

Under the Constitution of the Kyrgyz Republic, women and men are considered equal. However, the application of customary law, which places strong emphasis on the maintenance and support of the household as a unit, leaves women in an unfavorable position in terms of land rights in the event of marriage, divorce or death of a spouse.

Kyrgyzstan‘s abundant water resources include glaciers, lakes, rivers, and groundwater. Water resources are unevenly distributed across the country, however, and irrigation is necessary for intensive cropping. Water pollution, inefficient and poorly maintained irrigation infrastructure, and international agreements directing shared use and development of water resources challenge the sector. Kyrgyzstan‘s increased use of water resources to generate power has increased tensions with other Central Asian countries.

Kyrgyzstan‘s forestry sector has not been well attended to. Despite legislation to improve forest management, there has been little positive impact on forest resources. Illegal logging continues despite a moratorium on timber harvesting and sales, and Kyrgyzstan‘s forestry resources are deteriorating. Allocations of land for community forest management have been suspended until issues of sustainable forest management and procedures for land allocation can be resolved.

Kyrgyzstan has high mineral potential, a long mining tradition, and well-trained technical personnel. Gold exports from the Kumtor Mine have been an important source of earnings since 1997, and exploration for and exploitation of further gold deposits, oil and gas reserves and other minerals has been increasing. However, poor environmental management of mines during the Soviet era has left Kyrgyzstan with heavy contamination of former mining sites and their surrounding communities. Some of the waste is radioactive.

Published / Updated: February 2011