By Samantha Brletich, Eurasia Contributor
Despite restrictions and subjugation, Kyrgyzstan has been able to maintain successfully its cultural identity before, during, and after its Soviet annexation into the Soviet Empire. Kyrgyzstan does not lack for culture and history, but newer traditions are fascinating to the observer even more so than the ancient artifacts and buildings of the country. This past April a Kyrgyz civil rights group sponsored a song writing contest for local musicians to express their disapproval of United States presence at the Manas airbase, not too far from the capital of Bishkek. Now, a new tradition, a beauty pageant, Miss World Tourism 2008, is the latest such addition that is conceived by Kyrgyzstan.
The Miss World Tourism pageant is supposed to be a great event attracting foreign investors from around the world. The pageant was to be held in May-June 2008, but the event continued to be postponed due to the lack of funds. The event’s main fundraiser, John Singh, failed to meet his fundraising goals, which angered Kyrgyz government officials, especially the Tourism Minister Turusbek Mamashov. In July, Singh vanished leaving much of his fundraising work incomplete. The Kyrgyz news agency “24” (www.24.kg) brought up an interesting point: why are officials so concerned with this pageant as the country is on the brink of a major food and energy crisis?”
The contest is believed to bring about much sought worldwide attention, foreign investment, and an increase in tourism to Kyrgyzstan. The delaying of the beauty pageant is just hurting their economy more since it was certain that the event would attract foreign investors.
Kyrgyz law offers protection to foreign investors from the corruption that in the past has prevented foreign investment from engaging in the country’s economy. However, continuing red tape within the Kyrgyz government and corruption among corporate heads has stalled talks with foreign investors. This is surprising due to the variety of sectors and industries that the Kyrgyz government has and is willing to let outside parties invest in.
Compared to last year, Kyrgyzstan has nearly doubled the amount of foreign investment, which totals $1.7 billion. Much of the foreign investment was in equity, financial ending and reinvesting revenue; the rest of the investment was in the financial and manufacturing sectors, bringing in almost $200 million. All of this investment brought in the Kyrgyz capital of Bishkek over $243 million, with Kyrgyzstan’s tourist spot Issyk-Kul receiving $1.2 million. If the Miss World Tourism pageant was to be held at Issyk-Kul—following Tourism Minister Mamashov’s logic—investment in this area would be greater.
The significant jump in Kyrgyzstan’s foreign investment indicates that the country is growing. Kazakhstan, Russia, and Belarus are the top three investors in Kyrgyzstan. Uzbekistan has expressed interest in Kyrgyz markets, but negotiations between the two fell through over a water protocol due to Uzbekistan’s “intolerable terms” in regards to energy and recent protocol that Kyrgyzstan, Kazakhstan, and Uzbekistan were supposed to sign. This will cause future complications for negotiations since water is vital in the region, and in Central Asia who controls the water controls the region.
Recently released Kyrgyz economic indicators have made the country more attractive investment-wise because of decreasing inflation. A report by the World Bank states that Kyrgyzstan is one of the most productive reformer states, Kyrgyz willingness to admit the importance of the private sector, and the steady increase in foreign investment since 2005.
Much of the investment however, takes place in Kyrgyzstan’s tourism and financial centers, not in its mineral markets. Foreign investors especially those in Canada have learned that it is not always easy to mine gold.
Centerra Gold Inc, a subsidiary of Cameco had bought Kumtor with permission from the Kyrgyz government to mine there. In June, a Kyrgyz District Court invalidated their license covering the Southwest area, the Sarytor, and the exploration license covering Kumtor. This was done to increase the Kyrgyz holdings of the mine. Calls for more government involvement in the mine came about when many structural and safety flaws were discovered, which the Canadian company neglected. The cancellation of the licenses can signify two things: a government crackdown on investors or a way to push Centerra to comply with government old and newly-imposed regulations, which in turn increase the country’s stake in the mine and in the gold.
However, this is unusual. Centerra has been operating in the country since the 1990s. It probably wasn’t the last few years that the government realized what financial harm they were doing to themselves by giving Centerra an unprecedented amount of control over its territory and over one of its most valuable resources and lucrative markets. The government’s revocation of the license puts up a red-flag for many foreign investors who wish to dig around in Kyrgyz mineral deposits. With many Canadian companies invested in Kyrgyzstan’s gold and with the government losing out, the Kyrgyz businesspeople have decided to develop their tourism industry.
In general terms, tourism in Central Asia has boomed—there has been a steady increase of 10-15% of tourists in the few years. In 2007, Kyrgyzstan welcomed 10 million tourists and tourism in the country has increased 109% in one year. The Ministry of Economical Development has forecasted that tourism will bring $100 million to the country by 2010. The country’s tourism industry relies much on the country’s unique cultural and ancient beauty making Lake Issyk-Kul and the historical Tian Shan Mountains popular tourist destinations. The Miss World Tourism was slated to be held on Lake Issyk-Kul. Since Issyk-Kul is such a popular tourist destination, the region would greatly benefit from the economic gains resulting from the beauty pageant. That may never happen if the pageant is delayed further.
The country’s government has allocated 15 million soms to the industry. The government is guaranteed to capitalize on their investment since the Kyrgyz tourist season is seven to eight months long. The tourism industry is attracting private entrepreneurs and private businesses by creating jobs and profit. Such privatization is alluring to foreign investors since many former Soviet states are economically blocked off from the West due to corruption. Old and outdated infrastructure, including inadequate transportation infrastructure and limited flights makes tourism to the country difficult. However, many tourist agencies have set up their own increasing access to the small country. Kyrgyz participation in World Tourism Day, the London Tourist Fair, the Tashkent International Fair, and the International Tourism Exchange Fair in Berlin are vital to the development of Kyrgyzstan’s tourism industry. The actions that the state takes could make or break the future of the industry. Entry into the country needs to be eased; more luxury hotels and attractions need to be developed, and air flights to and from places need to be increased.
