A Special International Report Prepared by
                           The Washington Times Advertising Department - Published on December 6, 1999
                           [Home Page]

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Advertisers

(1) Renton group

(2) Hotel Pinara Bishkek

(3) Hyatt Regency Bishkek

(4) Volare Apparel Inc.

(5) Kyrgyztamekisi

(6) Areopag-Bishkek, Ltd.

(7) Kyrgyzstan Airlines, CH2M Hill-UNICO and HOCHTIEF International

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A Special International Report Prepared by The Washington Times
Advertising Department
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Writer:
Karin Palmquist
Marketing Director:
Michelle Goldberger
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For more information, call
The Washington Times International Advertising Department
at (202) 636-3035
(202) 635-0103 fax
e-mail: natlad@wt.infi.net

Copyright © 2000 News World Communications, Inc.

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“Our Democracy Comes From the Mountains.”

In the mountains of Central Asia lies a tiny country many have never heard of and few have visited. It is breathtakingly beautiful, with snowcapped mountain ranges and alpine lakes. Since independence in 1991, Kyrgyzstan – formerly part of the Soviet Union – has distinguished itself from its Central Asian neighbors as the most politically and economically stable country in the region.

High on President Askar Akayev’s list is the preservation of the democratic system, equal rights, religious freedom and ethnic peace.

When asked by people in the West what kind of democracy he has chosen for his people, and what Western country this democracy has been modeled after, President Akayev says he tells these people his country’s democracy comes from the mountains, when the different clans elected their kings (Kahns). This democratic system will be tested next year, as the people of Kyrgyzstan go to the polls, first in March for parliamentary elections, and then in December for presidential elections.

“We are making every effort to assure that these elections will be fair and transparent,” the President says. Newspapers have reported police harassment of opposition figures and obstruction of rallies. A prominent newspaper editor was recently jailed after being found guilty of slandering the president. Even at that, there are twenty-four political parties in the country, and the many independent newspapers are lively and critical.

Set in the context of Central Asia, President Akayev is liberal and progressive. The leaders of Tajikistan, Turkmenistan, Kazakhstan and Uzbekistan are far more autocratic, allowing little or no opposition.

“One of our main focus points has been inter-ethnic peace,” the President says. “All ethnic groups are represented in the Assembly of the People of Kyrgyzstan today.” Ethnic clashes between Kyrgyz and ethnic Uzbeks claimed hundreds of lives in the Southern part of Kyrgyzstan in the early nineties, and there is still some tension along the border with Tajikistan. But by the volatile standards of young Asian democracies, Kyrgyzstan’s different ethnic groups are living in peaceful coexistence.

The Kyrgyz government is seeking close economic and diplomatic ties to the Islamic world, but only if it does not threaten the secular foundations of the state. The President, though a devout Muslim, seeks to keep religion and state separate.

At several points during our interview, the President stressed the importance of religious freedom. (Kyrgyzstan is 72% Muslim) “Every religion is represented in Kyrgyzstan,” he says. “But there is no extremism. The Kyrgyz are liberal followers (of their various religions.) The people are tolerant. There are no religious conflicts. There are ethnic conflicts, but no religious conflicts.”

Examples of religious extremism in Uzbekistan and Tajikistan are many, and some have spilled over into Kyrgyzstan. The most recent was this fall, when a band of militant, Islamic Uzbek extremists took a group of seventeen people hostage, among them four Japanese geologists, in the Batken region of Southern Kyrgyzstan.

The separatists’ actions were not primarily directed at Kyrgyzstan, but rather at the Uzbek government. They demanded free passage to Uzbekistan, and the release of a number of prisoners there. The ultimate goal of the militants was said to be the creation of an Islamic state in Uzbekistan. The militants were rumored to be supported financially by Saudi millionaire Osama bin Laden, accused of masterminding the bombings of the American embassies in Nairobi and Dar Es Salaam. None of this has been confirmed, and even now, after the conflict is over, it is uncertain exactly who was behind the conflict, and why they did it.

The conflict was very sensitive to the Kyrgyz government, since it involved four citizens of Japan, the country’s largest country-to-country donor.

The incident brought this tiny nation into the international public eye and caused some negative press in the West. The U.S. State Department issued a travel warning for Kyrgyzstan earlier this fall, in direct response to the development in the South.

The conflict was solved in late October and the hostages were freed. The Kyrgyz and Japanese governments have offered no official comment, but most observers believe a ransom was paid to the militants by the Japanese government.

However, these same observers also believe the conflict is not over. They express concerns that the conflict has not been solved. They fear the militants have simply gone to ground for the winter, and they will be back, perhaps as early as spring.

Reforming the economy

Since independence, Kyrgyzstan has carried out a series of simultaneous reforms. The first reform was an economic reform, transforming the Kyrgyz economy from a planned to a market economy. Liberalization of prices and of domestic and foreign trade led to a galloping inflation in the early years after independence. In May of 1993, a strict monetary policy aimed at stabilizing the national currency, the Som, was introduced. The policy had the desired effect and a year later the Som was the most stable currency in the CIS.

Arguably, most important sector of the Kyrgyz economy is agriculture, contributing about half of the country’s GDP. It runs totally independent of subsidies. (In Soviet times, thirty percent of the budget was used to subsidize the agricultural sector.) A land reform policy has privatized most of the state-owned collective farms. Earlier this year, agricultural reforms were carried out, aimed at improving the quality of the crop and the livestock. With the help of the World Bank and the Asian Development Bank, a system of micro-lending has been introduced.

Kyrgyzstan is in the middle of a large-scale privatization process. Smaller industries were privatized in the first couple of years following independence, followed by medium to large enterprises from 1995 to 1997. Eighty-five percent of the creaking state-owned enterprises are now in private hands. Foreign investors have not been rushing to invest in these newly privatized companies. In general, the opinion of foreign investors seems to be that the state-owned enterprises offered up for auction are over-valued and over-priced. These “crown jewels” of Kyrgyzstan come with a lot of liability, and the systems and the equipment is often old and outdated.

The president says that one mistake the government made when privatizing these companies was not making them transparent in accordance to international accounting standards, and thus more attractive to foreign investors.

The third stage of the privatization process will involve the largest of the state-owned enterprises; enterprises in the energy, aviation, telecom and mining sectors. This three-year program is to be completed by 2003.

The Kyrgyz economy is adjusting to the terms of a market economy. “The first serious test of the economy was the financial crisis in Russia last year,” the President says. “It showed the Kyrgyz economy is transparent. It is now the government’s top priority to attract new investors.”

“Kyrgyzstan has no real significant natural resources,” says President Akayev. “Kyrgyzstan’s main resource is its people. People, especially the young people, are our promise for the future.”

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