CPC - Caspian Policy Center


the caspian region’s reactions to the current russo-ukrainian war: kyrgyzstan

The Caspian Region’s Reactions to the Current Russo-Ukrainian War: Kyrgyzstan

Author:Caspian Policy Center

Oct 28, 2022

CPC NOTE:  With individual articles for each of the eight countries of the Caspian Region, the Caspian Policy Center is reporting the effects of Russia’s war in Ukraine on the countries of the region

While the Russia-Ukraine crisis has unfolded, Kyrgyzstan has experienced multiple challenges as a result, particularly regarding economy and security. 

According to the World Bank, the Kyrgyzstani economy could be affected more than others in the region by the inevitable decrease in migrant workers' remittances from Russia. Kyrgyzstan’s banking regulator has predicted that remittances from labor migrants in Russia might decline by 20 percent in 2022 compared to 2021. Since more than 1 million Kyrgyz nationals live and work in Russia, this has made the value of remittances of critical importance to the economy. Because of this, the unavoidable decline in migrant remittances could lead to a difficult economic situation in the coming months.  

The slump in money flows can be attributed to the sudden contraction in the size of the Russian economy since the sanctions on Russia were applied. The sanctions imposed against Russia after the start of a full-scale war in Ukraine sharply collapsed the ruble exchange rate, immediately affecting the Kyrgyz currency.  

"The Russian Federation is one of the main trade and economic partners of the Kyrgyz Republic, and changes in the countries' economies may have an indirect impact on the Kyrgyz currency market," the Kyrgyz National Bank explained at the time. 

In order to maintain the exchange rate, the Kyrgyzstan’s National Bank has conducted five currency interventions for a total of  $284.3 million. Despite this, by mid-March, the dollar exchange rate had increased to about 105 Kyrgyzstani soms (KGS). Later, however, it began to decline in exchange offices, and on March 18, it was about 100 KGS. The National Bank explained the change by the fact that the market was "saturated" with dollars. Amidst the economic crisis, according to preliminary estimates, Kyrgyz GDP in January-March of this year amounted to KGS 146 billion and increased by 4.5 percent compared to the same period in 2021, Deputy Chairman of the National Statistical Committee Bakytbek Shokenov explained at a press conference in Bishkek. 

He said excluding enterprises for the development of the Kumtor gold mine, the volume of GDP in January-March of this year amounted to about KGS 138 billion and increased by 3.8 percent. 

Moreover, since the beginning of the Russian invasion in Ukraine, Kyrgyzstan has been grappling with its territorial conflict with Tajikistan. Reports indicate that at least 37 civilians, including four children, and over 100 people total were killed during the conflict between Kyrgyzstan and Tajikistan. The border clashes that broke out on September 14 reportedly began when Kyrgyz and Tajik border guards exchanged fire along a disputed segment of the border. With hundreds more wounded, fighting has affected civilian populations in at least 12 villages located on both sides of the largely undemarcated border between the two countries.  

Kyrgyzstan’s President Sadyr Japarov, in his address to the nation, on September 19, 2022, said about the conflict: “There are enough funds in the state budget, and we are able to fully provide for our soldiers and the displaced citizens. We also have funds for the rapid reconstruction of homes destroyed in the fighting. Despite the difficulties, the country is able to stand up as one against any challenges. This is the envy of our enemies, both internal and external.” 

“Only two years ago. there was a shortage of weapons and ammunition in our army, and there were not even enough uniforms for our soldiers. Today it is not the case. Our army is being strengthened both morally and materially by efforts from various sides.” he added

As a result of the border clashes, Russia’s President Vladimir Putin held discussions with the Presidents of Kyrgyzstan and Tajikistan and urged the sides to prevent further escalation and to take measures to resolve the situation exclusively by peaceful, political, and diplomatic means as soon as possible, and confirmed Russia’s readiness to provide necessary assistance to ensure stability at their shared border.

Amid international pressure, President Japarov and Tajikistan’s President Emomali Rahmon, attended the regional security and cooperation summit in Uzbekistan and signed a ceasefire agreement during the Shanghai Cooperation Organization Summit. 

On September 23, 2022, the U.S. Mission to the Organization for Security and Cooperation in Europe (OSCE) posted an announcement on the latest border clashes, stating: “We welcome and support the ceasefire and urge both sides to withdraw all forces from the shared border and engage in negotiations to resolve the issue… we urge the parties to strictly adhere to the Helsinki Final Act principles that all OSCE participating States have committed to uphold, among them: sovereign equality and respect for the rights inherent in sovereignty; refraining from the threat or use of force; respect for the territorial integrity of states; and the peaceful settlement of disputes.” 

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