Kyrgyzstan dreams of a richer tomorrow, seeks willing int’l partners

Kyrgyzstan dreams of a richer tomorrow, seeks willing int’l partners

Kyrgyzstan aims to bring its natural resources to the attention of potential investors, in order to reduce its reliance on imports from richer neighbors and increase its export income.

Despite its huge hydroelectric potential, Kyrgyzstan still imports a large amount of natural gas and coal annually from neighboring countries.

To reduce this dependence and develop the industry itself, Kyrgyz authorities intend to accelerate the development of its existing natural resources, as well as joining a natural gas pipeline network linking Central Asia with China.

This network originates in Turkmenistan, the country with the world's fourth-largest natural gas reserves. Kyrgyz senior officials repeatedly note that large reserves of natural resources have been discovered but await development.

According to official data, proven reserves of gold in Kyrgyzstan amount to more than 430 tons, coal reserves over 1 billion tons, and aluminum deposits over 340 million tons among others.

A country that has experienced two revolutions in the last seven years is still far from being truly stable and, as a consequence, is lacking foreign investment.

The new Kyrgyz authorities have made great efforts to change the situation. Kyrgyz President Almazbek Atambayev has stated that with the advent of political stability, investors will come to Kyrgyzstan, which will promote economic development.

Canada is one of the key countries interested in the development of the natural resources in Kyrgyzstan. Since 1994, the Canadian Centerra Gold Company has produced 18 to 20 tons of gold annually from the Kumtor gold mine in Kyrgyzstan. The company's contribution to the country's GDP is close to nearly 12 percent.

The Kyrgyzstan government hopes to reduce its reliance on one foreign company in the mining sector, and is trying to diversify through other foreign investors. In order to draw more investment in mining, Kyrgyzstan is ready to make geological data available to potential Chinese investors.

This issue, among other important topics, was discussed during the visit of Chinese Premier Wen Jiabao to Kyrgyzstan in December 2012. Gradually China has become the second largest investor in Kyrgyzstan and has demonstrated a growing interest in developing the mineral resources of the country.

Chinese companies are to take part in the development of the Kuru-Tegerek poly-metallic deposit and Ishtamberdy gold deposit in the south of Kyrgyzstan. Chinese company Hongbo intends to develop deposits of rare earth metals.

In addition, China is also paying attention in the development of coal deposits at Tegene with reserves of 585 million tons.

During Premier Wen's visit, the construction of a railroad to Uzbekistan and a new hydroelectric power cascade in central part of the country, as well as potential investment in a tractor plant were also discussed.

Yet Chinese and other investors in Kyrgyzstan still have to face the issue of conflicts between foreign companies and local communities that require ecological preservation and the mandatory involvement of locals in mining operations.

To prevent such conflicts, a norm has been introduced, aiming to create a balance of interests between all three stakeholders - the state, investors and the local community.

According to experts, Kyrgyzstan is creating comfortable conditions for investors wishing to use their capital to develop mineral deposits. "But investors will come to Kyrgyzstan only on one condition - political stability," said Kyrgyz political analyst Mars Sariev. "In this case, Kyrgyzstan will benefit, because in other CIS countries access to resources is more complicated due to bureaucratic obstacles."

At the same time, Kyrgyzstan, which is located at the center of a cluster of geopolitical interests for China, Russia and the US, needs the political support of superpowers and friendly relations with wealthy neighbors. Without these, an independent access to the raw market will not be easy.

With this in mind, Kyrgyzstan intends to strengthen its economy through the joint development of natural resources with large investors. Only in this way can Kyrgyzstan economy become competent. 

by Kuban Abdymen

"Global Times", China