Economics

What Are The Major Natural Resources Of Kyrgyzstan?

Kyrgyzstan is rich in mineral resources.

Kyrgyzstan is a 77,202 square mile nation in the central region of Asia that is home to around 6 million people. Data from the International Monetary Fund indicated that in 2017, Kyrgyzstan's GDP was approximately $7.061 billion. The data also suggested that the nation was the second poorest in the central region of Asia with close to 32% of the population living below the poverty line. One of the challenges that affected the economy of Kyrgyzstan was the breaking up of the Soviet bloc which reduced the market for Kyrgyzstani goods. Despite the economic problems that face the economy of Kyrgyzstan, the country has a wealth of mineral resources ranging from arable land to minerals such as coal and oil.

Arable Land

Data from the CIA World FactBook indicates that approximately 7% of Kyrgyzstan's area is used to grow crops, and 44% of Kyrgyzstan's land is used to grow pasture for livestock. Most of Kyrgyzstan's arable land is located in Chuy Province, Talas Province, and the Fergana valley. Despite the low amount of area dedicated to growing crops, agriculture is one of the most vital sectors in the Kyrgyzstani economy. According to USAID, the agricultural sector contributed nearly 20% to the nation's GDP. The data also suggested that nearly 40% of Kyrgyzstan's workforce was employed in the agricultural sector. Some of the main crops grown in Kyrgyzstan include cotton, vegetables, tobacco, and wheat. Due to the importance of agriculture to the Kyrgyzstani economy, several strategies have been put in place to ensure the growth of the sector. One of the chief strategies put in place to improve the Kyrgyzstani agricultural industry was the introduction of Bio-Farming which experts believe could be the future of agriculture in the country.

Coal

A study carried out by geologists from the Soviet Union indicated that Kyrgyzstan had vast deposits of coal in most of the regions in the country. The geologists estimated that the nation had nearly 27 billion tons of coal reserves, 3 billion of which were believed to be of exceptionally high quality. Coal can be found in approximately 60 different areas in the country with some notable examples being Sulukta and Karakeche. Karakeche is exceptionally vital since it is the source of nearly half of the nation's coal production. Data indicates that Karakeche has approximately 438 million tons of coal which are mined at five sites. Mining in Sulukta was well developed during the Soviet era, however, after the collapse of the Soviet Union mining activity in the town declined. The mines and factories were abandoned for some reasons with the main one being the insufficient number of professionals to manage the mine. Coal production in Kyrgyzstan decreased significantly after the collapse of the Soviet Union, but the government has put in place several measures to increase the production of coal.

Gold

Gold is one of the essential minerals extracted in Kyrgyzstan since it accounted for more than 8% of the nation's GDP in 2016. Large-scale gold mining in Kyrgyzstan began during the 1980's and the first area where gold was mined during this period was at Makmal. One of Kyrgyzstan's most important gold mines, Kumtor, was developed in 1996. Gold was first extracted from Kumtor in 1997, and a year later, the mine had produced nearly a million ounces of gold. The gold mining industry in Kyrgyzstan has attracted foreign investment from nations such as Canada and China. The Kumtor mine has significantly benefited from the foreign investment as $370 million was put into the mine to modernize its operations. Other gold mines in Kyrgyzstan include Taldybulak Levoberezhny which is operated by a Chinese company and Bozymchakn which is operated by a Kyrgyzstani company. The government of Kyrgyzstan is looking to increase the amount of gold produced in the country to increase the amount of revenue it earns.

Oil

Most of the oil used in Kyrgyzstan is imported from other nations due to the few deposits of oil in the country. Much of the oil discovered in Kyrgyzstan was located in the southern region of the country as well as the Fergana valley. Most of the oil resources that were exploited in Kyrgyzstan came from pools situated in the Osh region. The pools in the Osh region produced approximately 112,000 tons of oil in 1992 which was significantly lower than the amount of oil consumed in the nation which was estimated to be 2.5 million tons of oil. In 2001, significant oil deposits were discovered by a Canadian company in the southern region of the country. The oil reserves were estimated to have 10 million tons of oil. Despite the large size of the reserves, Kyrgyzstan was unable to exploit the oil due to different reasons. One of the reasons why the reserves were not exploited is an insufficient foreign investment in the oil sector.

Water

Water is one of Kyrgyzstan's most important natural resource since it is primarily used to generate hydroelectric power. Data indicates that hydroelectric power accounts for more than 90% of the energy produced in Kyrgyzstan. Experts believe that less than 10% of Kyrgyzstan's hydroelectric potential has been utilized and the government has been urged to increase development in this sector. The government of Kyrgyzstan agreed with the governments of Uzbekistan and Kazakhstan to trade hydroelectricity in exchange for fossil fuels. Some of the most important hydroelectric power plants in Kyrgyzstan include Toktogul Dam, which has the highest capacity, Kurpsai Dam, and the Tash-Kumyr Hydroelectric Power Station. Most of the hydroelectric power projects in Kyrgyzstan are located along the Naryn River.

The Growth of the Economy 

The economy of Kyrgyzstan is expected to grow in the coming years due to the macroeconomic stability that the country experiences. The data also indicates that proper utilization of the natural resources in the country will ensure economic growth. Apart from proper utilization of natural resources, other factors that will ensure economic growth in the country are security and the political reforms in the country. The World Bank also emphasized the importance of diversifying the economy and equipping the younger generation with skills to ensure a positive contribution to the economy.

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