Causes of Poverty in Kyrgyzstan

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SEATTLE — Kyrgyzstan is a mountainous country located in Central Asia, west of China and south of Kazakhstan. It gained independence from the Soviet Union in 1991 and has had a rocky road, politically and economically, since then.

The Gross Domestic Product of Kyrgyzstan is $5.4 billion and it has the second-lowest Gross National Income in Europe and Central Asia, after Tajikistan. The poverty rate is 32.1 percent. Kyrgyzstan ranks at 126 out of 187 countries on the Human Development Index and at 66 out of 146 countries on the Gender Inequality Index. Poverty is a relevant issue, and there are three main causes of poverty in Kyrgyzstan.

  1. No more Soviet support
    Kyrgyzstan does not export many goods. Agriculture is the largest sector, and while the country has gold deposits that make mining attractive, that does not make up for the other economic deficiencies. When Kyrgyzstan was part of the Soviet bloc, it could count on other Soviet satellites for market opportunities, and on Russia for investment. Since independence, it no longer has this safety net.

    Unemployment is 8.4 percent, so many workers leave the country and go to Russia. However, the remittances from former workers are not enough to sustain the economy. The economy has stabilized since the 1990s, but it has a long way to go before it can support the six million citizens of Kyrgyzstan.

  2. Insufficient agricultural development
    Perhaps the most important of the causes of poverty in Kyrgyzstan is its dependence on agriculture despite gaps in knowledge and resources. Two-thirds of the population live in rural areas, and these people are not all adequately trained in land management, animal husbandry, veterinary practices and harvest techniques. The result is land that can no longer produce food and feed animals at full capacity, and a group of people who cannot subsist on their agricultural efforts alone.

    It is not surprising then that three-quarters of poor people in Kyrgyzstan live in rural areas and that 12 percent of the total population is food insecure.

  3. Lack of financial resources
    Financial resources, such as a strong banking system, investment capabilities, microfinancing and personal finance management, are all key to sustaining economic growth, regardless of the dominant sectors.

    Another result of the Soviet collapse in Kyrgyzstan is weak financial institutions. Few people, especially those in rural areas, have access to banks and therefore have no ability to invest or save. Even at a national level, money is frequently mismanaged and Kyrgyzstan ranks poorly on the Corruption Perceptions Index.

Kyrgyzstan may have a high poverty rate, but it has made great strides in reducing poverty over recent years. In 2000, the poverty rate was 62 percent. It has since been halved. Economic and political uncertainty pose barriers to poverty reduction and economic development, but there is reason to hope. The causes of poverty in Kyrgyzstan are not incurable. Since the political revolution in 2010, Kyrgyzstan has been steadily stabilizing, and there is no reason to believe it won’t continue reducing its poverty rate.

Olivia Bradley

Photo: Flickr

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Olivia Bradley

Olivia lives in Somerville, Massachusetts/Waterboro, Maine. Her academic interests include international relations, peace and justice and Italian. Olivia still has the “when I grow up” goals of a kid – she wants to work for the UN, publish a book, be an editor/literary agent, travel, work for a nonprofit, and go back to school, among many others.

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