Debt manoeuvres to balance the books in Biškek

In order to reduce foreign borrowing, Kyrgyzstan plans to collect more than USD 1.1 billion from the population. While its budget is periodically refinanced with huge sums, raised as a result of anti-corruption campaigns.

Biškek (AsiaNews) - Kyrgyzstan is the Central Asian country that has undergone the most upheavals and transformations, and in this period of great geopolitical changes it is not easy to understand which trends are prevailing at the political and economic level, against the backdrop of a strengthening of the role of state institutions in an authoritarian and centralising direction. The editors of Radio Azattyk tried to identify in practice the most influential factors in the economy of Biškek.

One rather remarkable fact is the decrease in the public debt, which had actually appeared to be steadily increasing since 2020, reaching the figure of USD 6.6 billion.

But if one compares this sum with the total volume achieved by the Kyrgyz economy over the past five years, the debt is reduced from 63% to 44%, which is much less than the growth in the general condition of the country.

By increasing revenue and finances, it makes it easier to pay debts, which is what matters most to creditors, and enables new investments to be made. To give an example, Japan's public debt constitutes 250% of its GDP, but Tokyo's economic power does not make it fearful of new credits.

As the economist Nurgul Akimova explains, ‘the ratio of debt to GDP in Kyrgyzstan has been reduced by 45%, which significantly lowers the risk of repayment, but the overall growth in its volume makes it necessary to open new credit lines to cover state expenditure and the implementation of strategic projects.

The very structure of the public debt is changing, increasing domestic credits in an attempt to reduce borrowing from abroad: in the next three years, the state plans to pledge 100 billion som (over 1.1 billion dollars) from the population, even though many MPs have pointed out that domestic debts are much more expensive than those taken on by other countries.

Kyrgyzstan's budget is periodically refinanced with huge sums, obtained as a result of anti-corruption campaigns. As the head of the services Kamčybek Tašiev has stated, from 2020 to today, 209 billion sums have been recovered in this way, compared to a 2020 budget outflow of 155 billion.

One of the most prominent figures in this respect is Rajymbek Matraimov, former vice-president of the Customs Agency, extradited in 2024 from Baku to Biškek, who had to pay back 200 million dollars, i.e. 17 billion som.

It is not very clear how these sums are reinvested, which also involve property and real estate, such as those attributed to the mafia leader Kamči Kolbaev, who was killed in a gunfight with the police in October 2023, which exceed one billion dollars.

One of the most noticeable trends in Kyrgyzstan is the increasing intervention of the state in the economy, with the construction of houses under mortgage, the activation of new lotteries, the production of alcoholic beverages, property insurance, the preparation of medicines, textile production and even taxi services.

The biggest operation in these years was the nationalisation of the Kumtor gold mine, but also of several high-capital banks, the pension fund, airports and energy companies, and war industries, often under the slogan of fighting corruption and organised crime.

The former prime minister Akylbek Žaparov, who was also dismissed at the end of the year for ‘fiscal problems’, had emphatically declared at the financial forum in May that ‘the state has assumed the leading role in the country's economy, we are no longer dependent on the invisible hand of the markets, we are first violin of the orchestra’.

Now he will have to defend himself in investigations for ‘conflicts of interest’, which threaten to become the main issue in the development of the Kyrgyz economy.