Environmental initiatives of the parliament almost led Kyrgyzstan to an economic collapse.
The republic is preparing to join the Customs Union. Integration, according to official sources, is needed to raise the standard of living, which is impossible without a radical restructuring of the economy. It's re-export character doesn't suit the power authorities, which is understandable. Resale of foreign goods in order to feed the country and one can see it according to labor migration. Kyrgyzstan needs of the real economy, but, alas, the better progress is not observed. Only worsening is on hand.
Whom are working for?
It is known that the republic buys more abroad than it sells. The volume of imports significantly exceeds exports. The situation in Kyrgyzstan is that rare items, even domestically produced, might be interesting for buyers abroad, including countries of the Customs Union. And not so long ago the republic almost lost the main export article and the largest industrial production. But let's not run ahead.
According to experts, thoughtless actions of legislators lead to the collapse of the economy. Deliberately they work for the destruction of the country or the best of intentions, it is not clear. However, during the year, they adopted a series of laws that put an end to the main business cards of the republic - its depths. The government expects to transform the mining industry in the engine of development, but under the circumstances, it is hardly real.
And traditionally, Kumtor came under attack of the legislators. During the last decade, it was chief export enterprises of the republic and the largest industrial facility. The share of Kumtor in the country's GDP is estimated at 7 percent and the volume of paid taxes and other fees to the treasury - hundreds of millions of dollars.
Dig deeper and...
In 2013, the parliament and the government revised the arrangements with the mining company. The parties decided to split the assets of the company in half. It is seemingly fair, if not a slight hitch. Production costs still lie on a private company. What about the government? It, as usual, has no money and, in the near future, obviously, is unlikely to appear. Despite the fact that the deposit can still get used for decades, while remaining an excellent source of revenue for the budget, the mine was nearly stopped.
The problem is that the Parliament tried to force the mining company to abandon the Kumtor open pit. Reason - care about nature, and in particular on the glaciers, which allegedly are considerable damaged. And not to the latest to declined, the Parliament adopted a law banning the industrial activity near the ice caps. That's it is still unclear how this will stop the global warming, because of which, according to scientists, the area of glaciers in Kyrgyzstan is reduced by more than half a century.
Anyway, but the Parliament believes that the company should stop open-pit and start underground mining. It is a pity that no one explained to legislators with what such a ban is fraught with. And now emerge interesting numbers.
As it turns out, that in order to begin development of the underground mine, at least two years of preparatory work is needed. Extract ore from the mines - an extremely dangerous occupation. Breed in that areas are weak and need to be strengthened. And while safe mines are not built on the site, gold mining will actually be terminated. At least - till the middle of 2016. Especially for a new (underground) facility more than $ 200 million is needed, half of which should be found by the Kyrgyz party. After all, it, according to the agreements with the Canadian investor, the joint venture owns half the assets in the future. Will the government find money?
However, even after the underground mine will work, reach the previous level of output will still be unreal. It is technically impossible. Productivity of such mine is more than 10 times lower than when extracting ore open-pit mining. That is, for example, if Kumtor mine extracts up to 16,500 tons of ore, after the transition to underground mine it will drop to 1,500. Correspondingly the amount of gold mined will also reduce, and the forces and means will be spent much more. This will eventually lead to a reduction of direct and indirect revenues to the Kyrgyz economy in three and half times! Now, for comparison, the overall benefits for the country of Kumtor operation for the entire period of operation (2014-2026 years) is estimated at $5 billion, and after the transition to underground mine, this figure will be about $1.3 billion.
Not less worrisome is that because of the reduction of work, many workers will be selected for redundancy, most of them - the citizens of the republic. Now Kumtor employs about 3,000 people. Not more than 600 people will be able to work in underground mine. How parliamentarians are going to explain it to their families - is difficult to imagine.
Throw cold water
One can only wonder the optimism of the authorities, who continue to believe that with such a policy Kyrgyzstan will able to preserve GDP growth. The National Bank, for example, predicts an increase in the pace of economic development in 2014 by 4.8 percent. However, due to the fact that the company, which accounted for 7 percent of GDP may stop, to reach this figure is unlikely.
Fortunately, not everything is so bad in Kyrgyzstan. The bill, which nearly destroyed the main industrial enterprises, came to the table to the president. Almazbek Atambayev, having studied it, realized the consequences. The Head of the Republic rejected the bill, arguing that in the form in which it was approved by the deputies, it will cause serious damage to the economy and put the country on the brink of collapse. The President of Kyrgyzstan couldn't go at this step. However, will this decision cool the ardor of legislators?