In-depth country-focused analysis on Kyrgyzstan's economic, political and operational risk environment, complemented by detailed sector insight


Our comprehensive assessment of Kyrgyzstan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Kyrgyzstan, as well as the latest industry developments that could impact Kyrgyzstan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Kyrgyzstan before your competitors.

Country Risk

Kyrgyzstan Country Risk

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  • In light of the extreme oil price weakness into 2016, the macroeconomic and social stability outlook for Kazakhstan - the biggest oil exporter in Central Asia - has deteriorated even further, prompting us to take an even more bearish outlook on the country's growth prospects. Nevertheless, the possibility of economic and/or banking sector collapse remains limited due to the strong sovereign risk profile.

  • While the Kyrgyz som has been stable in recent trading against the US dollar, we expect the currency to depreciate significantly in 2016. The National Bank of Kyrgyzstan, which has propped up the som through heavy FX intervention, will discontinue this policy due to limited FX reserves. As a result, mounting depreciatory forces in the form of lower remittances from Russia and reduced gold exports will come to the fore, significantly weakening the som....

Kyrgyzstan Operational Risk Coverage (9)

Kyrgyzstan Operational Risk

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BMI View: Kyrgyzstan is an unattractive location for FDI, owing to its extremely underdeveloped economy and the presence of numerous obstacles to setting up a business. Despite some potential for exploitation of natural resources and tourism, opportunities for investment are few and financing options are limited. The legal protection afforded to foreign investors is weak and the government's attitude to FDI is changeable. Corruption is rife in all areas of public and private life and foreigners have little legal recourse in the event of a dispute. Limited advantages, including few trade barriers, speedy processes for setting up a business and low tax rates, do not mitigate these considerable risks. Consequently, Kyrgyzstan receives a low score of 42.3 out of 100 in the BMI Trade and Investment Risk Index, placing the...

Kyrgyzstan Crime & Security

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Kyrgyzstan poses a high degree of security risks to foreign business travellers, expatriates, and tourists. For the most part, the greatest risks to these groups are petty crime such as pick-pocketing and theft, rather than violent crimes. However, the persistent weakness of the Kyrgyz state means that there are limits to the government's ability to maintain order and security.

Combating terrorism is one of the government's top priorities. Militant Islamist ideologies are reportedly gaining adherents in Kyrgyzstan, especially in the south of the country, which shares borders with Uzbekistan and highly fragile Tajikistan - both of which are experiencing Islamist agitation. Kyrgyzstan's proximity to Afghanistan - the main hub of Islamist militancy and extremism - and adjacency to China's westernmost region of Xinjiang - where ethnic Uighurs are fighting for an independent state - exposes it to regional Islamist currents. We expect terrorism and...

Kyrgyzstan Labour Market

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As a result of a poor-quality education system and low urbanisation, there is a limited pool of poorly educated workers, the majority of which are based in rural areas. Significantly, there is also a lack of workers educated to tertiary level, which increases risks to investors looking to move into sectors requiring highly skilled workers. However, Kyrgyzstan has one of the lowest minimum wages in the region, bringing down the cost of employment and reducing the labour market risk. Kyrgyzstan is a regionally poor performer for Labour Market risk overall. We have given it a score of 47.9 out of 100, which places it 5 th from bottom in Emerging Europe (EE), between Moldova and Macedonia, and 18.4 points behind BRICS member Russia.

Availability Of Labour presents a large risk to investors, with the small size of the country's workforce contributing to its score of 46.2, placing it 21st out of 30 countries in the region. After years of...

Kyrgyzstan Logistics

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The major risks in Kyrgyzstan include poor domestic transport infrastructures, high costs and complications involved in trading internationally, low international connectivity, and a small market size. Kyrgyzstan receives an overall score of 31.12 out of 100 for its Logistics Risk, placing it in second-lowest position out of 31 countries in the region, above Mongolia only.

Kyrgyzstan's transport networks are hampered by the rugged, mountainous terrain which makes increasing capacities difficult, and the frequent geographic activity which makes large investment in infrastructures risky. Due to this, the rail and road networks suffer a lack of quality, increasing risks in terms of delays due to impassable sections of track or road. Air transport is relatively adequate in terms of quality, but the geographic spread of airports in Kyrgyzstan is limited and air cargo is an expensive method of transport.

Kyrgyzstan also...

Kyrgyzstan Trade & Investment

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Convoluted bureaucratic procedures act to inhibit investors' activities, however the country's fiscal environment is one of its greatest assets, with low corporate and profit tax making it an attractive option. As a result foreign direct investment is relatively high, and the government is looking to increase FDI as a means of boosting the country's prospects. Poor legal infrastructure and an unsophisticated banking sector are two additional contributing factors to Kyrgyzstan's extremely poor performance on Trade and Investment. BMI gives the country a score of 39.4 out of 100 in our Trade and Investment Risk Index, which places it 29 th out of 30 countries in Emerging Europe (EE), only ahead of neighbouring Tajikistan, which scores 38.1. Kyrgyzstan is ranked 9.3 points behind BRICS member Russia, and 38.8 points behind regional frontrunner Estonia.

Kyrgyzstan underperforms on Economic Openness largely due...

Kyrgyzstan Industry Coverage (4)

Defence & Security

Kyrgyzstan Defence & Security

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BMI View: Kazakhstan's determination to develop a solid domestic defence manufacturing base has been exemplified in its strong push to setting up numerous joint ventures and partnerships with key foreign industry players as well as its efforts to organise its own international exhibition of weapons and military equipment - KADEX. With a somewhat unstable regional environment, Kazakhstan will see to its defence expenditure being increased over our forecast period in an effort to be ready to combat any potential breaches in security. However, BMI believes that if it is to truly excel in this field and achieve its goal of creating a strong...


Kyrgyzstan Power

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BMI View: Gas-fired power will remain the dominant source of electricity in Uzbekistan as strong domestic gas production, limited gas export outlets and modernisation of ageing gas-fired power generating capacity will slow efforts to diversify the power mix. Economic headwinds will further weigh on power sector expansion, as plummeting prices for gold, cotton and copper will shrink export revenues significantly - representing a pertinent obstacle to an uptick in government-backed investment.

Latest Updates And Structural Trends

  • The development of Kyrgyzstani and Tajikistani hydropower will remain a contentious issue in Central Asia, as Uzbekistan strongly opposes developments due to worries that the downstream of the Amu Darya and Syr Darya rivers will suffer negative...

Kyrgyzstan Power

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: Ashortage of funding, a lack of diversification in power sources and problems with extending the electricity grid will mute Kyrgyzstan's power generation growth. Overreliance on hydropower will result in the power sector remaining vulnerable to intermittent electricity generation.

Headline Power Forecasts (Kyrgyzstan 2015 - 2021)
2015e 2016f 2017f 2018f 2019f


Kyrgyzstan Telecommunications

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BMI View: We maintain a cautiously optimistic outlook for the Central Asian telecommunications market as a whole. There are some growth opportunities in the region, particularly with regard to 3G and 4G technology Uptake. Nevertheless, state interference and political risk remains the most important risk of doing business in the Central Asian region. This was again amplified as government involvement became a key theme over the course of 2015. In Turkmenistan, a new state-owned company was created to spur competition, in Kyrgyzstan, state-owned Kyrgyz Mobile Company was sold to state-owned MegaCom and in Uzbekistan, state-owned Uzmobile launched a GSM network to better...

Latest Kyrgyzstan Articles

  • We have upgraded our oil price forecast this month with markets having pric...

  • In BMI's regular round-up of production investments, we track the latest pr...

  • Record profits achieved in 2015 were due, in no small part, to the performa...

Latest Kyrgyzstan Blogs

  • China's ambitious plan to build connections with Europe and the Middle East...


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