Publication: Mining Industry as a Source of Economic Growth in Kyrgyzstan

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Bogdetsky, Valentine
Ibraev, Karybek
Abdyrakhmanova, Jyldyz
The study 'Mining as a source of economic growth in Kyrgyzstan' is developed by the project implementation unit of the World Bank for 'building capacity in governance and revenues streams management for mining and natural resources'. This study is aimed at defining a role for the mining industry in the country and evaluating its possible impacts on economic development in the future. Mineral resources development is an essential condition for successful economic development of Kyrgyz Republic. In fact, it is the only possible way to raise social welfare in remote high mountainous regions. At the present time, some recovery of investment activities in mining industry has been observed. However, the lack of long-term capital investments in mining and geological exploration projects is still acutely felt. International experts have noted more than once that in spite of the significant size of territory and good level of geological study, the minerals potential of the country remains underdeveloped. At present, its output is 25.578 billion som or 48 percent of all the industrial production. Its share in Gross Domestic Product (GDP) is 10.2 percent, in export volume-41.1 percent and tax revenues - 11 percent. The royalty on subsoil use yields budget revenues of 568.0 million som per year. The mining industry involves more than 15 thousand workers. Monthly average wage is about 10 600 som about four times higher than the average for Kyrgyzstan, which was 2240.3 som in 2004. The study showed that creation of one job in mining industry would lead to creation of 1.6 jobs in related industries that provide supply of goods and services for mining. The prognosis of mining sector development to 2020 is made on the basis of the results of the study of data related to: production volume, direct and indirect employment, tax revenues to state budget. The implementation of recommended reforms will require significant efforts by the Government. However, they will be repaid by the enhancement of mining industry, which will become a substantial source of economic growth in Kyrgyzstan.
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Bogdetsky, Valentine; Ibraev, Karybek; Abdyrakhmanova, Jyldyz. 2005. Mining Industry as a Source of Economic Growth in Kyrgyzstan. © World Bank, Bishkek. License: CC BY 3.0 IGO.
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