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Kyrgyzstan Review, 10 years ago




[02.04.23] Shadow Economy Accounts For Over 20% of the Kyrgyz GDP

The spread of corruption in Kyrgyzstan is threatening the nation's system of authority, President Askar Akaev told a Security Council session on Monday.
 
"Corrupted structures are currently trying not only to lobby their interests in the state governance system, but also to seize power in the country. Corrupt elements are seeking to destroy such authority institutions and law enforcement agencies," Akaev said.
 
"Although a struggle against corruption has long been declared a state priority, no serious achievements are visible yet. Sociological polls conducted in the country by specialists from the UN Development Program have shown that every third Kyrgyz citizen regards corruption as the main reason for economic problems in the country. Research indicated that in each region of the country, people face bribery - extortion in government, educational, and medical institutions," the president said.
 
Akaev called for adopting a national strategy on conscientious state governance. "This will be a real step towards uprooting corruption. This measure will increase the bureaucrats' responsibility for professional and conscientious performance of their duties," the president said, adding that it is necessary to set up special working groups to analyze the share of the shadow economy.
 
"According to the prime minister's information, the shadow economy accounts for 20% of GDP, and according to law enforcement agencies this figure is 10%," the president said.
 
Kyrgyzstan's laws are "too lenient" on corruption, Akaev noted. "It is necessary to make penalty for corruption as tough as possible, as it is an extremely dangerous evil for the country. We need to follow the example of China - cruel punishment has a proper effect on the state officials, after facts of bribery are publicly revealed" Akaev said.
 
"The damage from the failure to repay European Bank for Reconstruction and Development loans granted under government guarantees has topped $6 million. This is a result of collusion between some officials from the National [Bank of Kyrgyzstan] and a number of commercial banks. They first embezzled this money knowing that the government would pay for this, and then the banks went bankrupt. It is the matter of honor for law enforcement agencies to solve this crime," the president said.
 
The situation in the country shows that law enforcement and fiscal agencies, instead of fighting corruption, are affected by this phenomenon themselves, he said.
 
The Security Council approved a national strategy for fighting corruption.
 
Interfax, April 02, 2003

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