Bishkek, June 3, 2011 – World Bank Managing Director Ms. Ngozi Okonjo-Iweala completed today her two-day visit to the Kyrgyz Republic as part of her trip to Central Asia. The aim of the visit was to discuss with Kyrgyz partners ways to ease the economic and social fragility that has become the Kyrgyz Republic’s main development challenge, as well as to reiterate the Bank’s support to stabilization in the context of its new Strategy. She met with the President, Prime Minister and Minister of Finance, parliamentarians, civil society organizations, and students, and visited World Bank project sites.
“The challenge of economic and social instability needs to be addressed to permit the Kyrgyz Republic to resume the fight against poverty,” said Ms. Okonjo-Iweala. “The recent dramatic events strongly affected the Kyrgyz economy. However, the crisis is a chance for the country to confront some of the deep-seated, interconnected problems it faces. These include enhancing transparency, fighting corruption, and radically improving the management of public finances.”
The 2010 events led to a reversal of the previous gains because of the disruption in economic activity, the destruction of business assets, and diminished trade with neighboring countries. Most adversely affected were agriculture, construction, and tourism – all labor intensive sectors. In agriculture, in particular, the events caused a breakdown in seed imports just prior to the planting season and led to the deterioration in business and agricultural marketing. Fortunately, the authorities acted rapidly to address the economic consequences of the crisis.
Going forward it is necessary to focus on the further improvement of governance. Socio-economic stability will depend on restoring the macroeconomic and fiscal balance, tightening the supervision of the banking sector, safeguarding essential social spending, and improving the quality of health, education, and social protection services.
These and other issues were discussed in the meetings that Ms. Okonjo-Iweala had with President of the Kyrgyz Republic Roza Otunbaeva and Prime Minister Almazbek Atambaev. Among the important items discussed during these meetings was the World Bank’s new Strategy with the Kyrgyz Republic, which was developed in consultation with the Government over recent months. The Bank has also conducted discussions with various stakeholders, including civil society, to obtain feedback on the priorities.
“Under the proposed new Strategy, the Bank will shift the focus of its assistance from the emergency response to stabilization, and then to the quality of health and education services,” said Ms. Okonjo-Iweala. “The program envisaged for the next two years responds to the Government’s requests for support for social recovery, macroeconomic and fiscal balance, and strengthening of the banking sector.”
While meeting with women politicians and civil society representatives, Ms. Ngozi Okonjo-Iweala underscored that the Bank values these consultations and is committed to actively engaging in ongoing dialogue with the public, be it on individual projects the World Bank is supporting, or more broadly, on the economic and social agenda.
Ms. Okonjo-Iweala also visited a Bank-financed project. In Kalys-Ordo ‘novostroika’, the construction of 5.2 km roads under Bishkek/Osh Urban Infrastructure project is underway. Around 7,500 people will have improved access to the city road network and to public transport. And in Dordoi, the residents selected the construction of a pedestrian bridge over the Alamedinka River, from which 1,500 people will benefit. Since there is no school in this area, children have to go to school in the neighboring ‘novostroika’ located on the other side of the river. Before the bridge, the children had to perilously jump across the river. In addition, over 400 children of Kelechek are enjoying their time in the rehabilitated playground, which is also financed by the Bank project.
“The World Bank is very proud to team up with the Government and local communities for the implementation of these remarkable projects, which enables people with economic opportunities, provides better access to social services, while generating employment at the local level at a time of economic contraction,” said Ms. Okonjo-Iweala.
In her address to the academia and students of the University of Central Asia, Ms. Okonjo-Iweala focused mainly on the challenge of restoring economic growth after the crises of 2010. In her speech, she argued that the Kyrgyz Republic stands at a crossroad of opportunity, with the potential to re-launch economic growth from a platform of transparent institutions and the fight against corruption.
The World Bank’s overall mission in the Kyrgyz Republic is to promote economic growth, reduce poverty, and encourage a better quality of life. 45 percent of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 55 percent is in highly concessional credits – no interest, and only a 0.75 percent service charge. Credits are repayable in 40 years, including a 10-year grace period, while grants require no repayment. The financial assistance to the Kyrgyz Republic since 1992 amounts to over 914 million, in the form of grants and highly concessional credits.