

Best Countries for Business

#106 Kyrgyz Republic

09.08.10, 06:00 PM EDT

Rankvs. 2009
Trade Freedom80
Monetary Freedom120
Property Rights94
Rank-Previous Year90Red Tape12
GDP Growth2.3%Investor Protection12
Trade Balance-0.4%Personal Freedom105
Population5.4 milTax Burden110
Public Debt As % of GDPNA%Market PerformanceNA
Kyrgyzstan is a poor, mountainous country with a dominant agricultural sector. Cotton, tobacco, wool, and meat are the main agricultural products, although only tobacco and cotton are exported in any quantity. Industrial exports include gold, mercury, uranium, natural gas, and electricity. Following independence, Kyrgyzstan was progressive in carrying out market reforms such as an improved regulatory system and land reform. Kyrgyzstan was the first Commonwealth of Independent States (CIS) country to be accepted into the World Trade Organization. Much of the government's stock in enterprises has been sold. Drops in production had been severe after the breakup of the Soviet Union in December 1991 but by mid-1995 production began to recover and exports began to increase. The economy is heavily weighted toward gold export and a drop in output at the main Kumtor gold mine can sparks a decline in GDP. The government made steady strides in controlling its substantial fiscal deficit, nearly closing the gap between revenues and expenditures in 2006, before boosting expenditures more than 20% in 2007-08. The government and international financial institutions have been engaged in a comprehensive medium-term poverty reduction and economic growth strategy. In 2005, Bishkek agreed to pursue much needed tax reform and in 2006 became eligible for the heavily indebted poor countries (HIPC) initiative. Progress fighting corruption, further restructuring of domestic industry, and success in attracting foreign investment are keys to future growth. GDP grew about 8% annually in 2007-08, partly due to higher gold prices internationally, but GDP fell 1% in 2009, because of declines in remittances and investment following the global financial crisis and because of lower gold production.
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