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The Kyrgyz Republic Cries for Economic Freedom

Posted By Anthony B. Kim On April 8, 2010 @ 3:41 pm In International | Comments Disabled

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The Kyrgyz Republic, host to a strategic U.S. airbase at the Manas airport, is in political turmoil triggered, at least on the surface, by government-mandated price hikes in fuel, electricity, and mobile phone rates. The landlocked economy is one of the poorest of the former Soviet Union, and the economy’s transition to economic freedom has lagged far behind the more Western –oriented former Soviet republics like Georgia or the states along the Baltic Sea.

Over the years, the Kyrgyz Republic has implemented some positive economic reforms, notably introducing a more flexible labor code and implementing a flat tax rate of 10 percent for both individuals and corporations. However, the country’s overall economic development has been severely constrained by widespread corruption and a weak judiciary. According to the Heritage Foundation’s 2010 Index of Economic Freedom [2], the Kyrgyz Republic scores just 18 points on the 0-100 scale for freedom from corruption, with the editors noting that “corruption is endemic at all levels of society.”

President Kurmanbeck Bakiyev, apparently toppled by the current unrest, came into power in 2005 during the country’s so-called Tulip Revolution, with a pledge of more meaningful economic development and democracy. Instead, the country got a different type of sweeping reform that transferred: “management of the economy and security to new bodies controlled by [Mr. Bakiyev’s] family and close associates,” as noted by the Financial Times [3].

It is not surprising when people denied economic freedom seek change through political means. If government controls the means of production, all economic decisions become political decisions as well. And when avenues of political protest are blocked, blood runs in the streets.


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URL to article: http://blog.heritage.org/2010/04/08/the-kyrgyz-republic-cries-for-economic-freedom/

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[1] Image: http://www.foundry.org/wp-content/uploads/Kyrgyz.jpg

[2] 2010 Index of Economic Freedom: http://blog.heritage.orgwww.heritage.org/index/

[3] Financial Times: http://www.ft.com/cms/s/0/c3b7f250-421e-11df-9ac4-00144feabdc0.html

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