A high-altitude
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www.kyrgyzbusiness.com

Economy At A Glance

Kyrgyzstan’s economy is not large by world standards. The country’s GDP is around 6,5 billion dollars (to compare: Kazakhstan has 133 billion, Uzbekistan — 67 billion and Russia 1,3 trillion dollars).

Industry in Kyrgyzstan is mostly represented by small and medium-size production with dominating agriculture and mining. Cross-border and domestic trade also plays a role, with China being by far the largest foreign trade partner, followed by the countries of the Customs Union (Russia, Kazakhstan etc.).

Several major mining companies have their presence in Kyrgyzstan (the most notable is Centerra Gold which develops the Kumtor mine), however by numbers the mining sector is dominated by small and medium-size mining projects, encompassing the entire spectrum of commercial minerals — from precious metals to construction materials and mineral water.

If you disregard the destinations of the export of gold from the Kumtor mine which are always at the whim of the bullion traders and change in the course of the year (thus confusing the foreign trade statistics), the main foreign trade partners of Kyrgyzstan are its regional neighbours: China, Russia, Turkey etc.

For a very long time the re-export of Chinese goods has been an important business in the Kyrgyz economy. After Kyrgyzstan joined the Customs Union in 2014 (with Russia, Kazakhstan, Belarus and Armenia), this activity started to fade, although import from China is still a notable business. Chinese goods are brought in for the resale in other Customs Union countries «as is» or undergo simple re-processing and then eventually get sold within the Customs Union.

Agriculture is concentraded in two relatively low-altitude plains — the Chui Valley and the Fergana Valley and also on the rim of the Issyk Kul lake in the East. There are no large producers; small and medium-size agricultural firms and cooperatives fill up the market. This is very good to maintain competition but is a headache for large wholesale buyers.

Several Kyrgyz agro firms are focused on supplying large Russian supermarket chains, such as the Magnit network. It has been recently announced that a Chinese corporation will be developing largest ever plantations of friut trees in the Chui Valley — a very logical move, given the optimal climate for this kind of production.

Light industry grows at a fast rate: Kyrgyz textile factories, very profitable because of availability of cheap raw materials from China and inexpensive local labour force, supply international customers with a large assortment of clothing: anything from construction site robes to haute couture items.

Travel industry plays a notable role in Kyrgyzstan’s economy. It is mainly focused on the resort area around the Lake Issyk Kul and trips along the ancient Silk Road, so much enjoyed by foreign visitors. In the winter the country opens dozens of ski bases and resorts which mainly attract tourists from Kazakhstan and Russia, apart from the local skiers.

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