Kyrgyzstan. This small CAR (Central Asian Republic) has made great steps forward in remodellig its country in the last 6 years. It has introduced upbeat foreign investment and business legislation which has attracted much needed capital. It does not have the natural resources of other CARs but has made up for it to a large extent by its progressive attitude to foreign capital. - Read on->
Regards
John Menzies
LONDON, Feb 25 (Reuters) - The Central Asian republic of Kyrgyzstan appealed to British business for increased foreign investment on Wednesday, offering the lure of an accelerated privatisation programme in 1998.
Almas Chukin, adviser to the chairman of the State Property Fund, also said the country may seek a credit rating ahead of a debut international bond issue, possibly as early as this year.
Chukin told businessmen at the London Chamber of Commerce and Industry that the sale of state assets would resume at ''full speed'' after some setbacks last year.
The government would sell stakes of 50 to 65 percent in larger firms in strategic areas such as energy and telecommunications in the second half of 1998, he said.
Kyrgyzstan, sandwiched between China and the other former Soviet republics of Kazakhstan, Uzbekistan and Tajikistan, has won plaudits for its macroeconomic stabilisation programme.
Tony Myron, principal banker on the Central Asia team at the European Bank for Reconstruction and Development (EBRD), said it was a front-runner in reforms, being the only former Soviet state with full currency convertibility.
But a lack of oil and gas and poor air links have limited foreign interest in the country of 4.4 million people.
Bolot Jamankulov, First Deputy Minister of Trade and Industry, said Kyrgyzstan had gone through a sharp adjustment at independence, with gross domestic product (GDP) falling 50 percent between 1990 and 1995.
Now the economy was recovering. GDP increased 10.4 percent in 1997, thanks to the start-up of the Canadian joint venture Kumtor Gold Project, which ranks among the world's 10 largest known gold deposits.
Production from the Dzherui Gold Project, the country's second largest, is expected to start in 2000 with Australia's Normandy Mining set to sign a joint venture agreement next month.
The economy is still heavily reliant on agriculture after a collapse in industrial output in the early 1990s.
But Jamankulov said the tide was turning with the industrial sector's share of GDP increasing to 15 percent in 1997 from a low of 12 percent in 1996, against 32 percent in 1992.
''Everything that could have died is already dead, and everything that can grow is starting to grow,'' said Chukin.
''The key problem now is financing which is why we want to encourage foreign investment.''
A new foreign investment law was passed last September which officials hope will facilitate foreign inflows.
Suerkul Abdybaly-Tegin, member of the board of the National Bank of Kyrgyzstan, said the central bank was committed to maintaining a floating exchange rate policy for the som and would continue a strict monetary policy.
''Our monetary policy will be aimed at decreasing inflation further,'' he said.
Year-on-year consumer price inflation stood at 13.7 percent in January, down from 34.7 percent a year ago. Three-month Treasury bill rates are currently around 18-19 percent
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