Regardless of Whether We Want It Or Not Energy Tariffs Should Be Increased in Kyrgyzstan: World Bank Country Director

AKIPRESS.COM - The economic situation in the Kyrgyz Republic, particularly in the context of the outcomes achieved in 2016, is one of the pressing topics of today.

Despite the positive dynamics in the country's economy, there are certain factors calling for attention, such as debt-to-GDP ratio, power tariffs, attracting investors, etc. What should Kyrgyz citizens expect in 2017? Should the energy tariffs be increased and why? Should Kyrgyzstan expect default? These are the issues discussed by Lilia Burunciuc, World Bank Country Director for Central Asia.

- How do you assess the current economic situation in the KR? What forecast can be given in 2017?Despite negative external factors, the Kyrgyz economy has in fact been quite resilient. Growth remained fairly robust at 3.

8 percent in 2016, and we are expecting it to slightly decrease to 3.4 percent this year, mostly due to lower gold production.

Inflation has also remained very much under control, which is important for businesses and the general population.This being said, we do see some emerging signs of stress.

In particular, a slowdown in private sector activity. If you look at the country's export performance you will see that businesses are struggling.

A considerable part of the economy remains informal and not productive. However, the only sustainable path for social and economic growth is through formal private sector activity, so the current state of affairs is cause for concern and attention.

- What impedes the transition to a more effective economy with better jobs, enhanced productivity, and better competitiveness on foreign markets? What should the country focus on its efforts?Kyrgyzstan has a significant potential in hydropower generation, agriculture, mining, and tourism that could help it to become a thriving nation. To tap this potential, the country needs to do the following:Provide favorable conditions for the private sector and attracting private investment.

The private sector is the engine of economic growth. Today, many countries in the world compete for private investments.

Therefore, any country should improve its investment climate for an investor not to go elsewhereUse the country's human capital dynamic and educated youth. The task is to leverage this important asset today, as well as create conditions for development of entrepreneurs for the future economyDevelop the country's infrastructure (in the energy, irrigation, and transportation sectors) through resolving the issues of inadequate tariff policy and stimulating public private partnershipProvide an adequate social safety net for the poor and vulnerable groups.

- What will be your assessment of the situation with the Kyrgyz debt burden being almost 60% of GDP? Is there a threat of default?I can give you a very clear answer to that question: there is absolutely no risk of default on the public debt of the Kyrgyz Republic. This is because the debt of the country is highly concessional (contracted from the World Bank and other partners at rates much below those of the market) such that interest...