The industrialization of Kyrgyzstan began in the 1930’s with the production
of heavy agricultural machinery, electric motors, light manufacturing, and
mining. Before that textiles and leather goods constituted Kyrgyzstan's main
industry. During World War Two, Kyrgyzstan benefited from the Soviets’ movement
of their heavy industry from the European theater to the East. Some of this
industry was placed in Kyrgyzstan and later formed the basis of the
industrialization of the republic. Soon after, Bishkek, Aksu, and Tokmak
received more military-related industrial plants and factories from the European
part of the Union. Before long, the republic became a major contributor to
engineering, instrument-making, non-ferrous metal manufacturing, and
coal-mining. With the increase in expertise, the volume of Kyrgyz industry
increased, boosting industrial production manifold.
In the 1980’s, the Soviet Union was heavily involved in Afghanistan. Much of
the funds that, thus far, had been allotted to the agriculture and industry of
the republics was funneled to the war front. Consequently, the republics were no
longer receiving the subsidies that helped them manage their industries. Without
the vital subsidies from Moscow, Kyrgyz industry began to decline.
It should be noted that at its height, the republic’s industry that was
centered on mining, processed uranium, antimony, mercury, and molybednum
contributed a great deal to the economy of the Soviet Union. Kyrgyz light
industry produced textiles, clothing, and footwear, while the agricultural
sector produced cotton, silk, fruits, and vegetables. Automobiles, tractors,
electrical equipment, furniture, timber, cement, and prefabricated cement walls
were among the major industrial products of the country. It should be noted tht
goods manufactured in Kyrgyzstan are of poor quality. They are not fit for
export. The country is poor, so it cannot invest in technology to bring its
industry up to par with the rest of the world or to create trade relations at an
One of the major contributors to Kyrgyz economy is hydroelectric power
generated by the Togtogul, Uchqurqan, and Qumqasoi hydroelectric stations on the
Naryn River. They produce not only most of the energy needs of the republic, but
also much surplus energy for export to neighboring countries.
The economy is heavily weighted toward gold export and a drop in
output at the main Kumtor gold mine sparked a 0.5% decline in GDP in 2002 and a
0.6% decline in 2005. GDP grew more than 6% in 2007, partly due to higher gold
Agriculture, Kyrgyz Republic’s leading industry, is the source of
the over one-third of the Kyrgyz gross domestic product. Major components of the
Kyrgyz agricultural industry are livestock breeding (meat, dairy and wool
production) as well as tobacco, cotton and industrial crops production,
gardening, beekeeping and vegetable growing. Kyrgyzstan fully covers its
foodstuff needs and exports food to Kazakhstan and Russia.
The industry of the Kyrgyz Republic, which produces over 20% of GDP, consists of
processing industry, non-ferrous metallurgy and mineral resources industry.
The “Kumtor” gold-mining project (a joint venture with “Kameko” Canada) is one
of the most significant commercial ventures in the Kyrgyz Republic. This
enterprise generates nearly 35% of the country’s total exports and is
responsible for generating approximately one-tenth of the domestic production.
Kyrgyz Republic is the third among other CIS countries for gold-mining output.
Strong hydro-energy complex is possibly the nation’s greatest heritage from the
Soviet Union. The country’s hydro-energy infrastructure is the second largest
source of Kyrgyz exports. To underscore the importance of this industry, it
should be noted that the cumulative hydro-energetic reserves of the Kyrgyz
rivers exceed those of the famous Russian Volga river by several hundred
percent. Kyrgyzstan exports electricity to Russia (over 1.5 billion kW annually)
as well as to neighbouring Kazakhstan, Uzbekistan, Tajikistan and China.
Hydro-energy complex secures the excellent perspectives to replace the import of
energy resources as the 75-100 thousand tons of oil extracted in Kyrgyzstan
annually cover only one third of the country’s need in energy.
The country has developed a sufficient environment for successful development.
Kyrgyzstan has established a multi-structural economy and posses rich natural
and highly competent human resources. The country’s strategic development plan
is proved by the consistently increasing inflow of direct foreign investments,
dynamically developing banking sector and the population confidence in financial