Debt Should be Manageable Without Foreign Bail-Out
Debt Should be Manageable Without Foreign Bail-Out
The Kyrgyz state should have the funds to service its debt to the international financial institutions without seeking additional support, say NBCentralAsia observers.
Last week, Kyrgyz finance minister Akylbek Japarov said the next three years will be the most difficult for Kyrgyzstan in terms of servicing the external debt. This year, 80 million US dollars will be set aside from the government budget to service foreign and domestic debts. Thirty million of this is already available.
Total government spending this year has been set at 32 billion soms (843 million dollars at current rates) with revenues of 26 billion som, 685 million dollars.
The finance ministry says Kyrgyzstan has to pay off its two billion dollar external debt by 2045.
At the end of last year, public pressure forced the government to abandon plans to sign up to the Heavily Indebted Poor Countries Initiative, HIPC, a debt relief programme run by the World Bank and International Monetary Fund.
Bakhadyr Akhmatov, head of sovereign debt and assets at the finance ministry, says that now that Kyrgyzstan is going it alone, the government will have to make significant cuts in social spending.
“We have to reduce budget spending, cut social sector expenditure and develop the real economy. Joining HIPC would have helped us avoid the difficult situation we are now in,” said Akhmatov.
However, NBCentralAsia economic observers say Kyrgyzstan could service its foreign debt alone with proper economic planning and by focusing on developing the power industry, tourism and mining. Economist Jumakadyr Akeneev believes these sectors have the potential to drive economic development forward, but the current leadership must have the political will to achieve this.
Akeneev calculates that reforming the electricity industry and completing work on the Kambarata hydroelectric schemes could bring in 200 to 250 million dollars a year, launching the Kara-Keche coal mine in the Naryn region would add a further 250-300 million, while tourism has the potential to yield up to 200 million dollars a year.
Sapar Orozbakov, director of the Bishkek-based Centre for Economic Analysis, says only stable economic growth can guarantee that Kyrgyzstan will make its dept repayments on time.
“But economic growth can’t be expected without carrying out the appropriate reforms, such as reducing corruption levels and curtailing the shadow economy,” he said.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
Last week, Kyrgyz finance minister Akylbek Japarov said the next three years will be the most difficult for Kyrgyzstan in terms of servicing the external debt. This year, 80 million US dollars will be set aside from the government budget to service foreign and domestic debts. Thirty million of this is already available.
Total government spending this year has been set at 32 billion soms (843 million dollars at current rates) with revenues of 26 billion som, 685 million dollars.
The finance ministry says Kyrgyzstan has to pay off its two billion dollar external debt by 2045.
At the end of last year, public pressure forced the government to abandon plans to sign up to the Heavily Indebted Poor Countries Initiative, HIPC, a debt relief programme run by the World Bank and International Monetary Fund.
Bakhadyr Akhmatov, head of sovereign debt and assets at the finance ministry, says that now that Kyrgyzstan is going it alone, the government will have to make significant cuts in social spending.
“We have to reduce budget spending, cut social sector expenditure and develop the real economy. Joining HIPC would have helped us avoid the difficult situation we are now in,” said Akhmatov.
However, NBCentralAsia economic observers say Kyrgyzstan could service its foreign debt alone with proper economic planning and by focusing on developing the power industry, tourism and mining. Economist Jumakadyr Akeneev believes these sectors have the potential to drive economic development forward, but the current leadership must have the political will to achieve this.
Akeneev calculates that reforming the electricity industry and completing work on the Kambarata hydroelectric schemes could bring in 200 to 250 million dollars a year, launching the Kara-Keche coal mine in the Naryn region would add a further 250-300 million, while tourism has the potential to yield up to 200 million dollars a year.
Sapar Orozbakov, director of the Bishkek-based Centre for Economic Analysis, says only stable economic growth can guarantee that Kyrgyzstan will make its dept repayments on time.
“But economic growth can’t be expected without carrying out the appropriate reforms, such as reducing corruption levels and curtailing the shadow economy,” he said.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
