Coping with Short Term Risks and Vulnerabilities & Accelerating Long Term Growth

Bishkek, Kyrgyz Republic, 25 June 2008 — The Government of the Kyrgyz Republic, the World Bank and the IMF held a joint conference "Coping with Short Term Risks and Vulnerabilities & Accelerating Long Term Growth." The main goal of the conference was to modify the program of long-term growth of the country in the context of current global economic shocks.

Approximately 80 persons participated in the conference, including Prime Minister Igor Chudinov, ministers of the social and economic block, members of the Parliament, and representatives of the private sector, think tanks, international and donor community.

Kyrgyz Republic’s economic growth averaged 4.7% over 1997-2007, but it has been variable and lower than many other CIS countries. Moreover, as a small and open economy, the Kyrgyz Republic is vulnerable to price fluctuations, especially fuel and food prices. In 2007, food inflation in Kyrgyzstan was 31.5 percent, and inflation in general was 20.1 percent. The current global crisis has negatively affected the Kyrgyz economy as the country is a net importer of both fuel and grains.

In his opening speech, Prime Minister Chudinov noted the timeliness of this economic conference to discuss pressing issues of price increases and slowing down of economic growth. He noted that "fighting inflation became task number one for the Government and the National Bank." At the same time, the government realizes that in dealing with short-term tasks it is important to take steps to ensure long term and sustainable growth. "Further development of the private sector and improvement of the investment climate and competitevemeness of the country are policy priorities for us," said PM Chudinov.

According to Annette Dixon, it is necessary to take further steps to attract investors and create new enterprises and new jobs in order to raise living standards of the Kyrgyz people. She noted that when dealing with the current challenges it is important that the government, with support of the World Bank and other development partners, strengthens support to the poorest families in the country.

The expected outcome of the conference is development of policy options that will be provided to the Government of the Kyrgyz Republic