Kyrgyzstan Country Profile

Snapshot of the Kyrgyzstan Country Profile


Kyrgyzstan has been experiencing a period of major constitutional politics for several years now and has combined with perceived failures relating to anti-corruption, energy security and economic performance to ensure that the country's political situation remains unstable. Observers argue that a focus on constitutional crafting shifted the attention of both politicians and the public away from fighting corruption while new legislation had been put on hold due to political instability. However, tackling corruption has been on the political agenda in Kyrgyzstan for some time now and has formed the backbone of electoral campaigns, the 2005 Tulip Revolution and, most recently, the spring 2010 ousting of President Kurmanbek Bakiyev.

Positive developments in relation to corruption and investment:

  • In 2005, Kyrgyzstan ratified the United Nations Convention against Corruption, established the National Agency for the Prevention of Corruption (NAPC), and passed the State Anti-Corruption Strategy in cooperation with stakeholders from governmental authorities, NGOs, mass media, business structures, and international organisations.
  • Kyrgyzstan has a liberal investment regime with a broad foundation of commercial laws.
  • The Government of Kyrgyzstan has established a one-stop shop licence and permits office under the Ministry of Economic Development and Trade, which assists investors with bureaucratic procedures.
  • President Bakiyev has also formed a commission to oversee the improvement of a new tax code intended to optimise the performance of tax agencies and favour the development of SMEs.

Risks of corruption:

  • Corruption is ingrained in government structures, and paying a bribe is a normal part of people's everyday life. Trading across borders, paying taxes and obtaining licences for standard business operations are highlighted as some of the hardest factors to deal with in terms of administrative rigidity.
  • There is a lack of clarity between the responsibilities of different anti-corruption agencies, a lack of agency coordination, and a lack of practical corruption-specific training of public institutions and employees.
  • The Kyrgyz legal and regulatory environment is still developing and remains highly bureaucratic, inconsistent and fraught with corruption. Despite hundreds of arrests based on suspected official bribe-taking and embezzlement, there have been no successful prosecutions under the corruption section of the Criminal Code.
  • Due to potential legal complications and judicial deficiencies, it is recommended that companies include a provision for international arbitration within their contracts.