Kyrgyzstan's principal exports include wool, hides, and cotton
(which combined to provide nearly 80 percent of total exports
in 1994), together with electric power, electronic products, ferrous
and nonferrous metals, food products, and shoes. Besides fuels,
the largest volume of imports is in construction materials, ferrous
metals, pharmaceuticals, chemicals, and machinery. The largest
CIS trading partners are Russia, Kazakstan, and Uzbekistan, and
the largest non-CIS partner is China (see table 15, Appendix).
The predominance of barter agreements makes quantification of
the latter relationship approximate, however. Of the estimated
US$44 million of trade with China in 1994, less than one-quarter
was in cash. During the late 1980s and early 1990s, Kyrgyzstan's
economy was highly dependent on external trade. Total exports
and imports in 1991 amounted to nearly 80 percent of the country's
GDP, but by 1993 that total had shrunk to 52.5 percent. External
trade, which in the early 1990s was conducted principally with
the other republics of the former Soviet Union, resulted in a
large trade deficit, mainly because of the need to obtain petroleum
products and natural gas at the much higher prices of post-Soviet
markets. During the first years of independence, the deficit from
interrepublic and hard-currency (see Glossary) trade was about
20 percent of GDP.
In 1994 Kyrgyzstan substantially liberalized state regulation
of trade. All export and import license requirements, the issuance
of which was the center of recurring corruption rumors in the
early 1990s, were eliminated excepting some hazardous materials.
Export taxes, which had been levied mainly in retaliation for
Russian export taxes, were reduced or eliminated, and plans called
for their complete elimination by the end of 1995. Import duties
on goods from non-CIS countries were fixed at 5 to 15 percent;
there are no duties on goods from within the CIS.
The Ministry for Industry, Trade, and Material Resources is the
chief agency for obtaining goods for export and distributing imports.
Until the liberalization of 1994, a number of government-signed
clearing agreements with former Soviet republics set terms for
barter agreements that often avoided the problems caused by late
payments. In 1993 such an agreement with Russia exchanged raw
cotton, wool, and tobacco and scrap metal for petroleum products,
wood, and metal products. Another agreement with Uzbekistan brought
natural gas and fertilizers in exchange for nonferrous metals,
electrical products, and butter. A third example is the coal-for-electricity
arrangement with Kazakstan (see Energy, this ch.). Commodity values
for such agreements usually were close to world levels, but the
rigid procurement methods required for such bilateral trades have
distorted the rest of the national economy.
In 1994 Kyrgyzstan's foreign trade decreased by 16.6 percent
(to US$93.4 million, after a drop of 65 percent in the 1992-93
period) for exports and by more than 50 percent (to US$52.6 million)
for imports. Trade with non-CIS partners showed a surplus, but
more than 85 percent of trade still was transacted with CIS nations.
Although the condition of the domestic economy did not seem to
favor an upturn in foreign trade for 1995, Kyrgyz policy makers
expected that increased foreign assistance would improve the trade
In February 1994, Kyrgyzstan joined with Kazakstan and Uzbekistan
in creating the Central Asian Free Trade Zone in reaction to the
collapse of the new ruble zone proposed by Russia in late 1993.
Although not the full organization of Central Asian nations that
had been envisioned by intellectuals since before independence,
this exclusively economic agreement was able to abolish trade
barriers among the partners immediately, and trade between Kyrgyzstan
and Kazakstan increased in 1994. But further conditions on credit,
prices, taxes, customs, currency convertibility, and creation
of a common economic zone in the Fergana Valley, the vital economic
region shared by the three partners and Tajikistan, were delayed
throughout 1994 and the first half of 1995. Kyrgyzstan has announced
its intention to join the World Trade Organization (WTO--see Glossary),
successor to the General Agreement on Tariffs and Trade (GATT).
Data as of March 1996