For much of the past year Kyrgyzstan has experienced political turmoil that is in part connected with economic disparity in the country. A recent report by the International Monetary Fund (IMF) suggests Kyrgyzstan may experience better than previously anticipated growth in 2003. However, observers caution, widespread poverty and corruption will likely continue to create obstacles to economic expansion.
The IMF report, released March 7, expressed optimism about Kyrgyz economic trends, but outlined several challenges that the government must confront.
"The level of external debt remains high, more needs to be done to reduce poverty and improve social conditions, and in light of the decline in gold resources, greater diversification of the economy is needed, built on stronger small- and medium-scale enterprises," says the report. Without changes that encourage a greater degree of entrepreneurship, the report suggested, corruption will persist and the country's monetary, tax, trade, banking and legal systems will still look too risky to foreign investors.
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Mark Berniker is a freelance journalist specializing in Eurasian economic and political affairs. This is part four of an eight-part series on political risk in Eurasia.