Kyrgyzstan's Budget Worries

Parliament in Kyrgyzstan has spent nearly two months reviewing a budget put forward by the new coalition government, amid concerns that the numbers just do not add up. More alarmingly, some experts are warning that failure to pass the budget could be exploited by forces wishing to derail the political process.

The expenditure side of the budget has been bumped up in response to wage demands from public-sector workers, so that the anticipated deficit is 21 billion soms, about 440 million US dollars, which some economists argue is unsustainable.

The government argues it will make up the revenue it needs by selling off a number of state assets, chief among them Kyrgyztelecom, for which it says it has a buyer lined up offering 100 million dollars. In addition, it is raising import duties on a range of consumer items and is hoping for higher revenues from the Kumtor gold mining concern.

Economist Jumakadyr Akeneev suggests that revitalising the mining sector and improving the regulation of hydroelectricity sales could provide additional sources of budget revenue.

Experts warn that failure to adopt the budget, for all its flaws, could play into the hands of those who oppose the recently-formed governing coalition of Ata Jurt, the Social Democrats and Respublika, and who might even attempt to incite the kind of protests that ousted previous administrations in 2005 and 2010.

“It’s pretty obvious there are certain forces who would like to see the coalition collapse and [Almazbek] Atambaev stop being prime minister,” Akeneev said.

Another economic expert, Jusup Perenbaev, warns that if the budget does not go through, the consequences could be “worse than April 2010”.

He argued that unrest would be impossible to control, as the security forces were not up to the job of maintaining order, whole thise who wanted to make trouble “sense they will not be held accountable for their actions, because we cannot punish them. The state essentially doesn’t exist.”

The audio programme, in Russian and Kyrgyz, went out on national radio stations in Kyrgyzstan, as part of IWPR project work funded by the Norwegian Ministry of Foreign Affairs.