MARCH 6 2015 (The Bulletin) – According to a recent publication by the Kazakhstan/Russia-funded Eurasian Development Bank (EDB), foreign investment in Kyrgyzstan in 2014 measured only $187m, down by 70% from 2013.
In 2013, the Central Asian country received over $623m in foreign direct investment (FDI), mainly from China, Russia, Britain, and Canada.
The EBD said the macroeconomic downturn which began in early 2014 was the main reason for the reduction of foreign activity. The recurring threat of nationalising the gold mine at Kumtor, together with monetary issues and galloping inflation, are also all factors.
The Kyrgyz government has tried to remedy the situation by increasing interest rates above 10% and protecting the national currency, the som, from the financial strains common throughout the region. Although it has performed better than the rouble, the som has lost over 20% against the dollar in the past six months.
FDI is a lifeline for countries like Kyrgyzstan, which rely on remittances from migrant workers abroad and capital injections from foreign investors.
ENDS
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(News report from Issue No. 222, published on March 11 2015)