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Kyrgyzstan & Uzbekistan News

This Section is contributed by Kazkommerts Securities

October 12, 1998

Latest Kazakhstan Weekly News

o The National Bank of Kyrgyz Republic set up the official Som/Dollar exchange rate at 22.5077 on 10 October 1998. (Reuters)

o In his annual address to the people of Kyrgyzstan on 29 September, President Askar Akaev focussed on the state budget policies for 1999. He said that the country's 1999 budget deficit would be cut to 2.1% of GDP from the planned 4.3% deficit in 1998. According to the president, GDP was forecast to grow next year by no less than 2.5%, although the country needs an annual growth of 5-7% to have sustained economic growth. Akaev said foreign investment should reach 15% of GDP. He added that the 1999 budget should aim, above all, at social support and services. (Reuters)

o Speaking to both chambers of the Kyrgyz Parliament on 29 September, President Akaev told deputies that, as the country is currently at a "difficult stage" in the process of implementing political and economic reforms, all branches of power should consolidate". Therefore, Akaev reasoned, the next parliamentary elections should definitely not take place until 2000, as prescribed by law. In defence of the introduction of private land ownership, which much of the population opposes, Akaev said that farmers should feel that they are masters of the land they cultivate. (RFE/RLs)

o Kyrgyzstan, suffering from the reduction in direct foreign investment, intends to improve conditions for investors and entrepreneurs. President Akaev, therefore, has signed decrees to provide for measures to encourage investors and to establish a national commission to take charge of protecting and enhancing competition. In addition, a special consulting and information agency will be set up where investors will be able to obtain all necessary documents, licenses, and certificates. The country intends to double the number of people engaged in the private sector. Currently, Kyrgyzstan has 1 entrepreneur for 28 people and entrepreneurs account for about 80% of GDP. (Reuters)

o Kyrgyzstan will be admitted to the World Trade Organisation on 14 October and will, therefore, be the first former Soviet republic to join the trading group. President Askar Akaev said that WTO membership would allow Kyrgyzstan to remove trade barriers with countries both within and outside the CIS. The country will enjoy preferential trade terms with a 50% reduction in import taxes on its goods in 130 WTO member states accounting for 90% of world trades. (Reuters)

o President Akaev has called on local entrepreneurs to take part in the privatisation of the basic sectors of the Kyrgyz economy and to enter foreign markets with export products. He said that privatisation of Kyrgyzenergo, the national energy company and Kyrgyztelecom, the national telecommunication company was approaching. In the opinion of Mr. Akaev, Kyrgyz entrepreneurs have a chance to become the strongest in Central Asia as the country receives maximum support from the International Monetary Fund. He said that Kyrgyzstan was prudent to get the second segment of a three-year ESAF (Enhanced Structural Adjustment Facility) programme approved before a crisis burst in May 1998. The programme provides for about USD 78m in financing and about USD 600m in donor support for 1998-1999.(Reuters)

o Since 6 October, the official Sum/Dollar rate of the Central Bank of Uzbekistan has been 105.8/USD . (Reuters)

o The Uzbek National Bank for Foreign Economic Activities (NBFEA) intends to sell 40% of its shares to foreign investors in the near future, a bank official told Reuters. The bank has a paid-in capital of USD 514m and total assets worth USD 3.4bn. NBFEA is the country's largest state-owned bank which acts as a governmental agent on foreign financial markets. It also finances domestic investment projects and acts like a universal commercial bank.

In a recent press release, the bank reported that it had signed an agreement with Israel Foreign Trade Risk Insurance Corporation which would open a credit line worth USD 75m for Uzbekistan. (Reuters)

o Uzbekistan gathered 2.02 million tonnes of raw cotton up to 6 October, half of this year's official target of 4 million tonnes, an agriculture ministry official told Reuters. Cold weather during the growing season delayed this year's harvest by about 10 days. The harvest began in late August and is expected to end by November. (Reuters)

o U.S.-based Newton Mining Corp has reportedly started preparing a feasibility study to develop the gold deposits Kyzylmasai and Kochbulak in the Tashkent region. (Reuters).