Publication: Kyrgyz Republic : Update on the Mining Sector
Date
2002-09
ISSN
Published
2002-09
Author(s)
World Bank
Abstract
The study, discussed at large with the
Government of the Kyrgyz Republic, outlines several
development objectives envisaged for the mining sector,
namely, to maintain production, and social well-being at
existing "kombinats"; to create competitive legal,
and fiscal conditions, attractive to private sector
investment; to increase the value added of the sector in
terms of taxes, jobs, and induced spin-off industries; to
sustain the sector's socioeconomic, and environmental
performance; to provide acceptable conditions for closure of
non-viable operations; and, to create a professional
organization of public institutions. However, and despite
government efforts to achieve the objectives, the study
finds most of these are not being met. On reviewing the
macroeconomic indicators for the country's mining
sector, though some have increased since 1994, by and large
are deceiving: employment in the sector has decreased, and,
tax revenues are actually negative, implying a subsidy by
the central treasury to the sector. Virtually all growth in
the sector results from the Kumtor gold mine opened in 1997.
Notwithstanding external factors outside government's
control (price of gold) the study finds poor performance in
the sector is due to deficiencies in the policy, legal and
regulatory framework, and fiscal and institutional
conditions pertaining to the industry. Findings point at the
fundamental error by the Government, in taking direct equity
participation in mining ventures, suggesting new tax
policies to invert the excessively generous tax concessions,
i.e., to apply a value added tax. Moreover, a revision to
the Mining Law is essential, to provide easier access for
exploration rights, and mining titles, including new
legislative proposals, while strengthening institutions,
professional competencies, environmental protection, and,
adopting the United Nations Reserve Resources Classification system.
Link to Data Set
Citation
“World Bank. 2002. Kyrgyz Republic : Update on the Mining Sector. © Washington, DC. http://hdl.handle.net/10986/15358 License: CC BY 3.0 IGO.”