Kyrgyzstan is a lower-middle-income country in Central Asia, surrounded by Kazakhstan, China, Tajikistan and Uzbekistan. It is known for its stunning natural beauty and nomadic traditions. After being controlled by a rotating series of tribes and clans, the country finally gained sovereignty in 1991 after the dissolution of the Soviet Union. Since its inception, the nation-state of Kyrgyzstan has made economic progress. However, there have been serious obstacles during the transition. So, why is Kyrgyzstan poor?

Poverty in Kyrgyzstan

According to the World Factbook, it is home to approximately 6.2 million people, with only three million or nearly half, in the labor force. Additionally, 33.3% of the total population lived below the national poverty line in 2021, making Kyrgyzstan the second poorest nation in Central Asia after Tajikistan. There is also a significant wealth disparity between the urban and rural populations, with 70% of the country’s poor living in rural areas.

Causes of Poverty in Kyrgyzstan

Kyrgyzstan’s economy heavily depends on farming, which accounts for 20% of the country’s gross domestic product (GDP). Furthermore, 40% of the workforce is employed in agriculture and more than 50% of the farming output comes from household plots where many individuals participate in subsistence farming. However, due to the slow modernization of its agricultural sector, food insecurity persists in rural Kyrgyzstan.

According to research, 16% of the “poorest quintile of households in Kyrgyzstan” do not have enough food. This inadequate food intake can lead to acute energy deficiency (AED) and reduced physical activity. As a result, the most impoverished people in Kyrgyzstan lack the energy to work and earn income, making it challenging for them to break the cycle of poverty.

Secondly, Kyrgyzstan is only able to export cotton and tobacco as it has few natural resources that the rest of the world wants. While the country has untapped coal deposits and a major gold mine, little has been done to take advantage of these resources. Another factor that causes poverty in Kyrgyzstan is its severe lack of access to proper banking and financial services. There has been little competition between large commercial banks and the country has continued to rely on imperfect Soviet methods for accounting and banking.

Furthermore, the Kyrgyz Revolution of 2010 led to the discovery of high-level corruption in the banking sector. In fact, more than $170 million or 10% of the country’s assets, was stolen by the former president’s son. Due to these serious issues with the banking infrastructure, many people, particularly those in rural Kyrgyzstan, do not have access to banking services, preventing investment and economic growth. There is also a lack of services crucial to aiding entrepreneurs, such as credit risk assessments and bank loans.

USAID in Kyrgyzstan

To address food insecurity, the United States Agency for International Development (USAID) implemented the Farmer-to-Farmer initiative in 2018. The initiative aims to boost Kyrgyzstan’s economy by providing technical assistance to its agriculture sector. The program brought 79 agricultural specialists from the United States (U.S.) to assist the country’s “farmers, agribusinesses, agricultural education and advisory services” improve their services and make more profit, thereby breaking free from the cycle of poverty. The program, which ran until September 2023, reached 4,320 people, including both men and women, with 85% of them being trained.

Final Remark

Like several other landlocked developing nations, Kyrgyzstan faces challenges, such as a high poverty rate and food insecurity. Organizations like USAID, which are working to eliminate food insecurity in the country, can improve the lives of Kyrgyzstan’s most vulnerable citizens.

– Akhil Reddy

Photo: Flickr
Updated: June 01, 2024