Very nearly one-half of Kyrgyzstan's foreign trade is with former Soviet countries. Kyrgyzstan's largest trading partner is Russia, comprising almost 40 percent of foreign trade. Behind Russia is Ukraine, the United States, Uzbekistan, Turkey, the United Kingdom, Germany, South Korea, and other countries. Kyrgyzstan exported to Germany goods worth US$148 million in 1999. Russia imported goods worth US$70 million, Kazakhstan imported goods worth US$50 million, Uzbekistan imported US$46 million, and China imported goods worth US$25 million. In the same year, Kyrgyzstan imported from Russia goods worth US$110 million, from Kazakhstan US$73 million, from Uzbekistan US$50 million, from the United States US$56 million, from Germany US$47 million, from China US$36 million, and from Canada US$26 million.
Kyrgyzstan's main exports are processing industry products (67 percent) and agricultural goods (17 percent), while the main imports were machine-building products (21 percent), coal and petroleum products (11 percent), food and tobacco (7 percent) and textiles (6 percent).
Kyrgyzstan is heavily dependent on the outside world for fuel imports. In 1999 Kyrgyzstan imported 576 million metric meters of natural gas, 1,075,000 tons of coal and 368 tons of high grade petroleum fuels (diesel and gasoline). Kyrgyzstan sustains this level of fuel imports primarily through exporting electricity. The country exported, primarily to Kazakhstan and Uzbekistan, 2,001 million kilowatt hours in 1999.
|Trade (expressed in millions of US$): Kyrgyzstan|
|SOURCE: United Nations. Monthly Bulletin of Statistics (September 2000).|
The Kyrgyzstan government has taken measures to improve the trade environment. Customs procedures and non-tariff barriers have been reduced in recent years in anticipation of the country's joining the World Trade Organization (1998). However, Kyrgyzstan's trade potential is complicated by the fact that Kyrgyzstan is land-locked. Few goods and services move from Uzbekistan into Kyrgyzstan. The borders with Tajikistan and China have been subject to heavy security regulation. But Kyrgyzstan's border with Kazakhstan is a long and relatively open border. The Kazakh and Kyrgyz languages are closely related and mutually comprehensible. However, Kazakhstan produces few of the manufactured goods that Kyrgyzstan requires. Consequently, Kazakhstan serves mainly as a transshipment point for goods from outside Central Asia, particularly Russia and Europe.
The Kyrgyzstan government has taken steps to improve the foreign investment climate in the country. A new foreign investment law was adopted in September 1997. The law was adopted to bring the country into conformance with the standards of the World Trade Organization. The law provides protection against expropriation, that is, nationalization of property by the government. According to the law, foreign investors have the same legal status and conditions as Kyrgyz investors and can do business as wholly-owned foreign businesses in Kyrgyzstan or as joint ventures either with Kyrgyz partners or other foreign partners. Foreigners can buy stocks and securities in Kyrgyz companies and participate in privatization programs. Foreign investors can repatriate capital, that is bring earnings from foreign investments and foreign trade back into the country. They can also freely export profits as foreign currency or as goods produced or as commodities or services bought. Local currency is freely convertible into foreign currency, including for import purposes or payment against project expenses. Investors may retain earned foreign currency, without having to convert it into local currency.