>>Recent economic news from Kyrgyzstan presents conflicting future prospects
STORY: Instability stalks Kyrgyzstan. It’s prone to revolution, the rule of law is weak, corruption is deeply-rooted and ethnic tensions simmer just below the surface.
Under-pinning all this is its relatively impoverished economy. Alongside Tajikistan, Kyrgyzstan is the poorest country in Central Asia, with little arable land or natural resources.
All this makes the Kumtor gold mine in the mountains of eastern Kyrgyzstan so important.
It’s owned by Toronto-listed Centerra Gold (which is, itself, part owned by the Kyrgyz government). The mine makes up around 12% of the country’s annual GDP.
That’s why the announcement earlier this month by Centerra that the gold reserves at the mine are actually more than 50% larger than originally thought was so important (Nov. 8).
Centerra went further and said the life-span of the mine would be extended by another five years to 2023. Good news, indeed, for Kyrgyzstan.
Less positive was an announcement by the national bank that it expects inflation to be higher in 2013 than first thought (Nov. 19). It now forecasts inflation in 2013 at around 11%, up from an earlier forecast of 8%. Rising food prices have created the inflationary pressure — a bad economic sign not just for Kyrgyzstan but for the entire Central Asia region.
This article first appeared in issue 114 of the weekly Central Asia newssheet by the Conway Bulletin. For more information on the newssheet and to subscribe for free, please click here