590. The Issyk-Kul oblast is situated in the east of the Republic. In the west it borders on the Naryn and Chui oblasts, in the north on the Republic of Kazakhstan and in the south-east – on the People’s Republic of China. Only 8.5 percent of the whole population of the Republic lives in the Issyk-Kul oblast. The oblast occupies 43.5 thousand square kilometers or 21.7 percent of the whole territory. Land suitable for agricultural activities is only 10 percent, the remaining part of the territory is occupied by mountains and the Issyk-Kul lake. One of the country’s largest gold deposits developed by the joint venture Kumtor Gold Company is located in the oblast.
In the last two years the level of poverty in the oblast has been falling, in 2001 this indicator decreased by 5.7 percent. Nonetheless, the level of poverty in the oblast is still rather high, and it exceeds the average republican indicator by 7.6 percent. The level of extreme poverty is 21.3 percent. Annual income per capita in 2001 as compared to 2000 increased by 16 percent and totaled 8,325.3 soms (without taking into account the JV Kumtor Gold Company, 5,975.3 soms). In spite of the fact that the income per capita increased, its value is still low is 83.5 percent of the average republican level (without taking into account the income from the JV Kumtor Gold Company, 60 percent).
591. Social Sphere and Social Mobilization
As compared to other regions, the oblast has a relatively favorable situation in terms of medical services. The Issyk-Kul oblast is one of the two oblasts where the first pilot project on reorganization of the system of medical services has been rather successfully implemented with the support of the World Bank. Since 2001 the scheme of a “uniform payer” has been put in practice in the oblast, co-financing by the population of medical preparations, meals and other types of extended services has been introduced. The positive aspects of the reform implementation are reduction of hospital beds by 30 percent, establishment of centers for family medicine in the cities of Karakol and Balykchi and in all rayon centers, increased wages for physicians and maintenance staff, appearance of incentives to improve the quality of services and attaining final results. Reforms in the sphere of health care under the second stage of the National Program, Manas, and the project, Health Care-2, are being continued in the oblast. As a result of implementation of these programs it is planned to ensure financial sustainability of medical establishments and improve quality and access to the health care services. At the same time, the introduction of co-financing for medical services reduces the possibilities of the poor and the people with low income to secure timely and qualitative medical assistance.
For the purpose to improved access to clean water, water pipelines will be rehabilitated and constructed in 7 villages of the oblast within the framework of implementation of the project, Rural Water Supply and Sanitation, supported by the World Bank. Rural Public Associations of Potable Water Consumers will take an active part in rehabilitation of the water pipeline networks in 61 settlements during 2002-2003. Clinics and obstetric stations are being repaired within the framework of the project Health Care-2.
There is rather wide access to educational services in the oblast: 192 schools are attended by 98,584 children. As a result of purposeful work conducted by representatives of schools, aiyl-okmotu, local state administrations during the last two years, the number of children who do not attend schools has decreased a quarter. Each school keeps a record of orphans and children from poor families.
The quality of education suffers due to lack of textbooks and educational and methodological manuals. Low salaries of teachers are an impediment for attraction of qualified staff, especially in rural areas, where there are also teacher shortages. Children with psychological and physical problems do not have an opportunity to obtain proper education. There are trends towards reduction in the number of pre-schooling establishments.
In recent years, the number of families in the oblast receiving state benefits has been reducing. Thus, as of July 1, 2002, 8.4 percent of families received a monthly uniform benefit, which is 2.7 percent less than in 2000. Such a reduction depends on measures undertaken to expand the opportunities for overcoming poverty and improving the provision of targeted assistance. Commissions identifying the financial situations and the degree of needs of each poor family have been established in each aiyl okmotu. Regional poverty maps have been compiled based on the results of surveys. Regular work is being carried out for the issuing of social passports.
Real assistance to the poor is provided by various financial organizations extending micro-credits. During 6 months of 2002 the Issyk-Kul Oblast Center of Micro-Finance extended micro-credits through employment centers to 858 unemployed for the amount of 5.1 million soms and to 105 rural inhabitants for the amount of 590 thousand soms. The KAFC extended loans aggregating 2.4 millions soms to rural inhabitants for spring field works. Poor families also receive micro-credits from the Meerim International Charitable Fund, the Civil Unions Fund, American Fund for Support for Women, credit unions and other public foundations. Patronage of poor families has been wide spread, for example, establishments, organizations, enterprises and public associations took 372 extremely poor families under their patronage. Implementation of the programs, Decentralization and Poverty Alleviation, have been started with the support of the UNDP. In total 199 self-help groups have been formed, which drew down credits for the amount of 22.4 million soms since the time the program, Decentralization, started to be implemented. The amount estimated for the project, Poverty Alleviation, for 2002 totals 6.7 million soms.
As of January 1, 2001 there were 5,168 unemployed citizens registered, of which 368 people received unemployment benefits, 1,232 were employed in various paid public works. During the first half of 2002 the number of unemployed involved in paid public works was 1,061 people, training has been provided to 348 people, and micro-credits have been extended to 858 people. Thanks to all sources of financing, 4,305 jobs have been created within 6 months, of which 219 were in the agricultural sector. On average, more than 6.5 thousand jobs are created each year, and about half of these jobs are created by small and medium businesses. Development of agriculture and individual entrepreneurship created 56 percent of the jobs in 1999, 47.9 percent in 2000, 40.8 percent in 2001and, in the first half of 2002, 39.7 percent.
592. Real Sector
The oblast produces 16 percent of GDP of the Republic (without the JV Kumtor Gold Company, 7.9 percent). The share of the JV Kumtor Gold Company in the oblast industrial output is more than 90 percent. The remaining industry is mainly represented by enterprises processing agricultural produce, producing foodstuffs, construction materials and coal mining enterprises. Due to a temporary decline in production at the JV Kumtor Gold Company in 2002 it is expected that the volume of industrial production will be reduced by 30 percent. It is projected that in 2003 growth rate of the industrial sector in the oblast will be 19 percent mainly due to the JV Kumtor Gold Company, an increase in coal mining, food stuff and processing sectors.
In agriculture the major types of products are grain, potatoes, sugar beet, vegetables and fruit, and their share in the total republican volume is the following: grain – 16.5 percent, potatoes – 36.0 percent, vegetables – 6.3 percent. There are 5,155 peasant’s farms and farming enterprises registered in the oblast. The existing capacity (in particular, cultivation of unused land) will, in the medium term, ensure an annual growth rate at the level of 6 percent by increasing production and export of grain, potatoes, vegetables, fruit and improvement of livestock farming production capacity. In the longer-term, due to limited land resources suitable for agricultural activities and a short growing period, development of livestock framing is considered to be the most favorable. At present the oblast has 13 percent of large horned cattle, 16 percent of sheep and goats out of the total number available in the Republic, and it produces 13.0 percent of meat, 12.6 percent of milk, 18.0 percent of wool. Financial support to agricultural commodity producers is extended by credit unions and the KAFC, which allocated credits for the amount of 114.2 million soms within 7 months of 2002, while the total amount allocated in 2001 was 95.8 million soms. Within the framework of the project, Rehabilitation of Irrigation Networks, repair and rehabilitation works are being conducted at the sites “Jon” (9.2 million soms have been drawn down) and “Jerui” (18.9 million soms have been drawn down). There are 21 associations working on distribution of irrigation water over an area of 26.5 thousand hectares.
There are more than 400 subjects of small and medium business enterprises operating in the territory of the Issyk-Kul oblast. They produce 72.2 percent of industrial products (without the Kumtor Gold Company). Individual entrepreneurship is widely developed in the sphere of trade and services.
Tourism and effective use of opportunities of the unique alpine lake Issyk-Kul for summer vacation of numerous inhabitants of the Kyrgyz Republic, Kazakhstan, Uzbekistan and Russia are the priorities for development of the region. According to preliminary estimates, the number of vacationers at the Issyk-Kul in 2002 will be 15 percent higher than in 2001. Tourism development will ensure demand for the products of food industry, agriculture and services.
The volume of capital investments in 2002, according to preliminary estimates, will be 85.7 million soms or about 1 percent of the total volume of capital investments. With interregional projects the volume of capital investments will be about 6 percent. It is planned that 27.2 million soms or 3.4 percent of the total amount of budget expenditures for capital construction would be allocated from the republican budget for 2002. Basically, public investment is allocated for construction and maintenance of infrastructure facilities and coal mines. Private investment is used for construction of facilities for services and tourism. The existing volume of investments is clearly insufficient for sustainable development of the region. At the same time, underdeveloped transport communications, existing restrictions on cargo transit and administrative barriers inhibit an increase in the volume of direct investment. Access to telephone communication in rural areas is limited, TV program reception is complicated due to the mountainous terrain.
Of all the problems, the most important and specific for the Issyk-Kul oblast are the following:
· a relatively high level of poverty;
· limited access to the services of health care, education, clean potable water;
· insufficient volume of investments for attaining sustainable economic growth;
· poor development and condition of communications, including transportation and telecommunications;
· ineffective use of recreational capacities of the Issyk-Kul lake and a low quality of tourism services;
· poor condition of irrigation networks; and
· a low degree of processing of agricultural products.
To reduce poverty and attain sustainable economic development, the oblast developed an action plan on support of the Comprehensive Development Framework of the Issyk-Kul Oblast for 2002-2003, which was approved at the kurultai of representatives of local communities as of February 9, 2002. The Issyk-Kul oblast has realistic pre-requisites for overall rehabilitation of the socio-economic situation. Given the specifics of the region, special attention will be focused on:
development of the mining complex, processing industry;
development of small and medium business, especially in the areas of processing of agricultural products and tourism;
privatization of sanatoria and spas located at the Issyk-Kul, which will serve as a basis for appearance of proprietors, increase in the volume of investments for infrastructure development, improvement of tourism services, increase in budget revenues;
preservation and development of the landscape and biodiversity of the unique Issyk-Kul basin, as an asset of not only Kyrgyzstan, but an object of a global importance;
continuation of the agrarian and land reform given the specifics of the region and mentality of its inhabitants;
rehabilitation of the irrigation network;
rehabilitation and construction of surface roads; and
increase of access to telecommunication services for the population.
Under the system of social protection, certain measures will be undertaken to improve its targeted nature and provide support to poor families. Approaches connected with the provision of micro-credits, training and engagement in paid public works will be widely used as active policy measures to increase employment and ensure sustainable income generation.
Special attention will be paid to strengthening of primary medical and sanitary assistance. Measures will be implemented on optimization and saving of budgetary expenditure and upgrading the level of medical providers’ knowledge. Construction and rehabilitation of water pipeline networks in villages will allow increased access to clean water and improved resistance to diseases. Repairs and construction of hospitals, in particular in rural areas, will be continued.
Access to educational services will be expanded by creating incentives and conditions for attraction and retaining of teachers in rural schools. The quality of services will be upgraded as a result of reforms in the educational system within the framework of the approved Concept. The educational process will be improved by equipping schools with textbooks and educational and methodological manuals, repairs of premises and construction of new schools.
Given the potential of the Kyrgyz Republic on providing transit services in international trade, the Issyk-Kul region has realistic perspectives of gaining the largest benefit. Implementation of the Doctrine of the Great Silk Road will have the most positive effect on development of the Issyk-Kul oblast, as historically the Great Silk Road connected West and East, passing through the Issyk-Kul basin. A significant step in this direction will be rehabilitation and construction of the highways Barskoon-Bedel and Karakol-Enilchek with an exit to the Chinese People’s Republic, as well as Tyup-Kegen with an exit to Kazakhstan and Russia, modernization and construction of new airports of the international level.
Cooperation with the Aga-Khan Foundation on establishment of a zone for elite tourism at Lake Issyk-Kul can be a rather promising direction of development.