Kyrgyz Economic Woes

The sudden resignation of Kyrgyzstan's Deputy Premier Boris Silaev has stoked fears of an imminent government collapse which could intensify the economic woes of this Central Asian republic.

To general astonishment, Silaev announced on November 15 that he had accepted a job offer from Moscow's Mayor Yuri Luzhkov. He said he was leaving home to run a prefecture in the Russian capital.

The departure of such a highly experienced political figure convinced many analysts that the fall of the government headed by Prime Minister Amangeldy Muraliev must soon follow.

Without Silaev, the government will clearly be weakened. It would then not be difficult for President Akaev to dissolve the administration. This, he probably calculates, would demonstrate to the West that he is serious about turning the country around economically.

There was a storm of speculation that Silaev's exit might be linked to the scandal now raging over a massive contract to build a 23,500-square-metre luxury hotel complex in the centre of Bishkek, on the site of a dilapidated sports stadium.

A parliamentary investigation found that the project contravened a number of laws governing architecture and municipal construction. The Prime Minister ordered a halt to the project. But the building still went ahead, despite protests from deputies.

Analysts believe the building scandal will not in itself bring down the government, but might be used as pretext for ministers to walk out before they are sacked by Akaev and used as a scapegoat for the economic crisis.

In 2001, Kyrgyzstan is due to repay 160 million dollars of external debt, 20 per cent of which the government hopes to cover with foreign credits.

In recent years, well over 1.5 billion dollars in foreign aid has flowed into the country. Without foreign assistance Kyrgyzstan would struggle.

With the coming of winter the government urgently needs credits for restructuring the energy sector. The Kyrgyzenergo organisation has debts of well over 20 million dollars. Other bodies such as Kyrgyzgaz and Kyrgyztelecom are in a similar plight.

The government would like to privatise these institutions but cannot find anyone in impoverished Kyrgyzstan who could afford them. It hopes to gain some relief from the latest tranche of credit from the World Bank.

To make things worse, relations between Kyrgyzstan and the West have seriously deteriorated since this year's parliamentary and presidential elections which attracted international accusations of ballot-rigging and bribery.

Leaders of major Western countries have yet to congratulate Akaev on his overwhelming election victory for a third term in office.

President Akaev is thought to want to repair fences with the West in several ways: admitting that some state bureaucrats are corrupt and obstructing reforms; putting foreign investment as a top priority; or even, it seems, sacking the government.

He recently invited US congressmen to visit Kyrgyzstan and inspect its democratic credentials.

But the departure of one of Kyrgyzstan's most influential politicians is seen by many observers as a captain abandoning a sinking ship. In his farewell speech, Silaev openly admitted that prospects for development of Kyrgyzstan are too hazy to place any long term hopes in them.

Ordinary people were shocked by his last interview in which he said, "There will be nothing for me here. In Moscow there is hope for something better. For me, for my children and for my grandchildren."

Bektash Shamshiev is an IWPR contributor