IS KYRGYZSTAN BETTER OFF?

In 2001 Kyrgyzstan achieved growth
in key macroeconomic indicators. According to
the statistical information, last year there was an increase in the country\'s GDP,
inflation dropped, local currency kept a relatively firm exchange rate against the US
dollar and there was a rise in real household incomes.
Although Kyrgyzstan enjoyed macroeconomic growth and financial stability,
this proved to be insufficient to bring any real changes to the people\'s lives and no
progress has been noticed in terms of the improvement of the living standard of the
population.

In 2001 Kyrgyzstan\'s GDP grew 5.3%. The rate of inflation dropped to 3.7%. Throughout the year, the nominal exchange rate was
stable. If in 2000 the exchange rate against
the US dollar was 48.3, in 2001 it was 47.7. The
development of average salaries (with 100 representing the previous year) was 98.5 in
1999-2000; in 2000-2001 the figure was 112.9%.

The Head of the Finance department
of the Kyrgyz government, Toktobek Akmatov, noted in an interview that such a growth
indicates that the country\'s economic policies are on the right track that the government
contributes to the development of Kyrgyzstan\'s economy.
He also added that the macroeconomic stability achieved has brought positive
opinions on the part of the international community and foreign experts.

However, some people view these
economic indicators differently, with more of skepticism.
They say that these indicators neither reflect nor bring any improvement to
the lives of ordinary people. Ex-Prime Minister of Kyrgyzstan Amangeldi Muraliev says that
although the financial situation in the country has been stable, it has not been able to
bring any substantial changes to people\'s lives and that the living conditions of the bulk
of Kyrgyzstan\'s population remain the same as they were two or three years ago, if not
worse. Another well-known Kyrgyz politician,
Dosbol Nur uulu, who is the leader of the Jangy Kyrgyzstan (New Kyrgyzstan) party,
expressed his distrust of the statistical information in an interview. He says that the
official figures are far from reality and are intended for the world community and donor
countries. What is real, according to him, is
that the living standards of the people keep deteriorating. Today, the minimum living wage
in Kyrgyzstan is around 1500 Soms (US$331), but the average monthly salary is only 1400
Soms (US$29). From this perspective,
Kyrgyzstan today is a 100% poor country, says Nur uulu.

The party leader also questioned
macroeconomic growth. According to him, at the moment there are no well-functioning plants
or factories in Kyrgyzstan and there are no exact figures for the agricultural sector, the
largest sector of the country\'s economy. \'It
is for the most part due to the operations of the Canadian \"Kumtor Operating
Company\" that we are witnessing good macroeconomic indicators\', Nur uulu says.

Meanwhile, the Paris Club of
creditors has decided to reschedule Kyrgyzstan\'s foreign debt, which is another good news
for the country\'s economy. The Kyrgyz foreign
aid amounts to nearly US$1,5 Billion. According to Kyrgyz Finance Minister Bolot
Abildayev, \'the Paris Club has given Kyrgyzstan facilitated foreign debt conditions with
big concessions.\' If this year Kyrgyzstan was
supposed to pay $45 million, it now has to pay $5 million. Although the rescheduling of
debt saves the national budget and prevents the government from cutting many social
programs, it does not necessarily improve the people\'s lives, since it may just help to
prevent them from further deterioration. Although
it certainly provides relief to the country, it does not solve the basic problems of the
Kyrgyz economy.

The economic situation can affect
all aspects of people\'s lives, social as well as political.

The economic situation may be coming to play a decisive role, a it may both
bring political popularity to the government or lead to social explosions. One of the
explanations of the bloody events in Aksy in March 2002, and perhaps indeed the root
causes of these tragic events, lie in the poor economic and social conditions that
Kyrgyzstani people today live in. If this is
true, what has been going on in the country recently proves the exact the opposite of what
the macroeconomic indicators would like observers to think.

Aisha Aslanbekova