Institute for War and Peace Reporting | Giving Voice, Driving Change

Kyrgyzstan: Rural Communities Seek Share in Prosperity

Industry asked to put some of its profits back into local development.
By Aziza Turdueva
The “people power” that drove last year’s revolution in Kyrgyzstan is still there - only now it is focused on local concerns. Across the country, impoverished communities are trying to secure a stake in local industries, or at least some of the income they generate.

In the latest action, people in the Toktogul district of central Kyrgyzstan have asked the government to give them a ten per cent share in two hydroelectric stations currently under construction.

The Kambarata-1 and -2 plants, both incomplete, sit further up the river Naryn from the giant Toktogul dam, a Soviet-era plant whose turbines generate most of the country’s electricity.

Local people argue that having a share of the two new plants’ assets would offset the damage they envisage the construction work will do to the environment and the local economy.

Hydroelectric power is a key resource in this mountainous country, and offers the prospect of significant revenues if exports of electricity to neighbouring countries can be increased.

Their demands have been backed by the district council, an elected local government body, which had put forward some demands of its own: it wants an assessment of ecological and other damage done by the older Toktogul power station and reservoir over the years. The costs would then be paid out to residents by the country’s major power station operator.

The groundswell at Toktogul and other places where communities are demanding a share in industry seems driven by endemic rural poverty - sharpened by a sense that local residents do not benefit from profitable enterprises, yet are vulnerable to environmental problems.

Previous successes may have given heart to Toktogul’s residents. After a cyanide spill eight years ago, inhabitants of the village of Barskoon near Lake Issykkul mounted protests and eventually won compensation from the Kumtor gold mining company.

At Karakeche, where the country’s biggest coalfields are situated, a local leader, Nurlan Motuev, seized control of mines last year and provided nearby villages with free coal. Motuev was ousted earlier this year, but residents of Jumgal district are still demanding that they should pay discount prices for their coal.

Rural areas of Kyrgyzstan are desperately under-funded, with poor roads, and shortages of schools, clinics, and clean drinking water. Local government can barely sustain itself financially, let alone undertake infrastructure projects

So targeting major enterprises, especially those with foreign investors, offers communities a rare opportunity for fundraising.

For example, Chinese investors are prospecting for gold at the Togolok pass in Issykkul region, close to the border with China, and their proposals to build two plants in the area have led to demands for money to build a hospital and school and lay on running water in the village of Uchkoshkon.

Kurmanbek Dyikanbaev, who heads Kyrgyzstan’s Association of Rural Communities and Villages, believes the government should introduce new rules according to which mining contracts would stipulate that a proportion of revenues are spent on local development.

“The draft contract would set out money for the region or district where a mining and processing plant was to be built. Then the government would guarantee that the arrangements were carried out,” he explained.

At the same time, Dyikanbaev accepts that sometimes people make demands that go beyond what is reasonable.

Kubanychbek Isabekov, a member of the Kyrgyz parliament, believes taxation laws could be changed to allow some tax revenues from industrial plants to be spent on social, ecological and infrastructure development in the areas where they are located.

Isabekov too favours direct payments by investors into the local economy. “Foreign investors need to be on good terms with residents of the area. They need to make concessions to the proposals or demands made by local people,” he said.

One example – even before any legislation has been enacted – shows how this might be done. The British-based Oxus Gold, developing the Jeruy gold seam, has agreed with the regional government in Talas province that three million US dollars should be earmarked for local development projects. At the same time, a lower tier of local government in Bekmoldo, the actual site of the gold refining plant, is still demanding compensation for environmental damage.

Aziza Turdueva is a correspondent for Radio Azattyk, the Kyrgyz service of RFE/RL in Bishkek.