Kyrgyzstan at the Crossroads: Climate Challenges and Economic Renewal in a Warming World

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In the shadow of towering mountains, Kyrgyzstan faces a landscape as volatile as its climate. A nation grappling with escalating temperatures, dwindling water supplies, and the spectre of energy blackouts, it stands at a pivotal crossroads. With 31% of its GDP fueled by remittances, and a youthful population eager for opportunities, the task is clear yet complex: balance the urgent climate challenges with economic renewal. As the world warms, Kyrgyzstan’s response could offer a model for resilience—or a cautionary tale.

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Photo by Olafur Eliasson, UNDP Kyrgyzstan

A staggering 99.5% of scientists are in agreement: human activities are undeniably responsible for climate change. In the present day, the world is emitting far more pollutants than it did over two million years ago. Scientists continue to investigate the potential drastic impacts that climate change could inflict on our lives. (Lynas et al., 2021) Regrettably, the outcomes we are witnessing do not bode well. 

In Kyrgyzstan, the evidence of these adverse effects is clear. Our summers are becoming hotter, winters are almost devoid of snow, and the availability of drinkable water and water for irrigation is dwindling. The spectre of floods, avalanches, and electricity blackouts looms ominously. These occurrences not only cast a shadow over our daily interactions but also cast a pall over our nation’s economy. The repercussions of these negative climate impacts are profound. We face the burden of post-disaster reconstruction costs, the depletion of vital agricultural yields that disrupts our trade stability, and a decline in labour productivity due to the increasing temperatures. (Somanathan et al., 2021) Even electricity blackouts, disrupting entire processes, add to this cascade of challenges. It’s imperative to understand that “Climate change is not what is happening somewhere “over there” – It’s happening right here in our lives and neighbourhoods.” (The Carbon Almanac, p.67).

The mitigation of climate change stands as a global imperative, leading 196 parties, including Kyrgyzstan, to adopt a legally binding treaty known as the Paris Agreement. Many studies emphasize that the world has a mere decade to enact climate change mitigation measures, lest we face severe and catastrophic consequences. The pursuit of such an audacious goal necessitates international collaboration, precisely why the Paris Agreement was put into motion. Under this action, nations regularly communicate their climate change mitigation and adaptation strategies through Nationally Determined Contributions (NDCs). 

Kyrgyzstan, too, has stepped forward by submitting its updated NDC in 2021. This document outlines the country’s strategies and ambitious objectives to reduce greenhouse gas emissions. By 2025, Kyrgyzstan aims to curtail emissions by 16.63% under a “Business as Usual” scenario and by 36.61% with international support. These NDCs chart a roadmap in alignment with the global objective of restraining the rise in global temperatures. Kyrgyzstan’s NDCs encompass several crucial facets: 

Mitigation Targets: Kyrgyzstan has committed to diminishing its greenhouse gas emissions, primarily focusing on the energy sector. The country intends to bolster energy efficiency, advocate for renewable energy sources, and transition away from reliance on fossil fuels.

Renewable Energy: Kyrgyzstan places considerable emphasis on expanding its renewable energy capacity, a cornerstone of its NDCs. With abundant hydropower potential, the country is poised to pivot towards renewables, effectively decreasing emissions and enhancing energy security. 

Climate Resilience: Acknowledging the inevitable impacts of climate change, Kyrgyzstan’s NDCs underscore adaptation strategies. These strategies encompass strengthening disaster preparedness, refining water resource management, and safeguarding ecosystems to preserve their pivotal role in bolstering climate resilience.

While the strategy may seem promising and practical on paper, recent years have revealed a series of adverse impacts. These include severe smog enveloping Bishkek during winter heating periods, electricity blackouts stemming from hydro reservoir water shortages, deforestation, and the rapid proliferation of new construction projects. These factors collectively contribute to the alarming rise in CO2 emissions.

 Given these realities, it’s evident that a persistent problem exists. As a response, let’s draw upon economic and political principles, data analysis, and good old common sense. Through this comprehensive lens, we can identify potential pathways to enhance the nation’s economic prosperity. Such an approach inherently generates a positive ripple effect, aligning with our pursuit of ambitious climate mitigation and adaptation goals.

Before delving into the realm of normative economic analysis, it’s important to first apply the principles of positive economics and gain insight into the current state of Kyrgyzstan’s economy. Positioned as a small, landlocked country in Central Asia, Kyrgyzstan’s economy relies on three notably volatile revenue streams: mineral resources, remittances, foreign aid, and loans. Remarkably, a staggering 31% of the nation’s GDP in 2020 was fueled by remittances. Presently, the sway of migration resonates deeply, influencing the lives of over three million individuals in the Kyrgyz Republic, asserting itself as a perpetuating economic and social dynamic. Examining the socio-economic facet, Kyrgyzstan’s population exceeded seven million individuals as of the dawn of 2023. The median age of the populace stands at a youthful 23.6 years, underscoring the prevailing vibrancy within the demographic spectrum. The sex ratio, recorded at 0.973 (indicating 973 males for every 1,000 females), tilts the national gender distribution toward the female side.

Additionally, the data unequivocally spotlights that the population of Kyrgyzstan is quite young. A salient aspect emerges from official statistics: nearly half of the capable young population is engaged in labour migration, be it on a temporary or permanent basis. The remittances funnelled back to Kyrgyzstan serve to fortify the nation’s GDP, elucidating the substantive impact of this economic phenomenon. Taking these facts into account, the country could enhance its revenue streams through strategically planned, step-by-step changes in implementing activities over the decade. This approach could potentially improve the economic conditions of the country, enabling it to mitigate and adapt to climate change effectively. 

Remittances

The amount of remittances is tied to the quality of labour, employment opportunities, and salary rates available to the citizens of Kyrgyzstan. Developing new job opportunities is closely linked to economic growth. Currently, we have a young and educated population, but limited job openings. Focusing on labour migration is a viable solution. Given the current situation with Ukraine and Russia, there’s been an inflow of Russians to Kyrgyzstan. Conversely, Kyrgyz citizens continue working in Russia. However, the uncertain crisis calls for alternative employment options. In this context, the country’s soft power, as discussed in the article, could foster a positive perception of Kyrgyzstani labour migrants outside of the CIS region. Various studies indicate that salary rates are influenced by education quality, experience, and other factors.

 This would enable our citizens to excel globally, securing well-paid white-collar jobs. Soft power would play a pivotal role in this shift. A country’s image significantly impacts the chances of securing employment abroad or even being considered by potential foreign employers. Thus, constantly presenting the country negatively on the international stage, and highlighting only vulnerabilities, indirectly hampers economic growth in the long term. 

Furthermore, there’s a concern among officials that the younger generation studying and working abroad might not return due to the country’s reputation. To address this, we need to showcase our culture, economy, and natural beauty in a positive light. Soft power can serve as a bridge for the younger generation to contribute their knowledge and innovative projects, creating new enterprises that never existed in the region.

At the same time, the development of human capital should commence through comprehensive changes in education. The strategy could shift towards creating education of international standards and including the study of commonly used languages such as English, French, and Chinese. Additionally, seriously considering the augmentation of university curricula by introducing subjects related to renewable engineering, environmental sciences, and geoengineering is important. Furthermore, focusing on the expansion of the Science, Technology, Engineering, and Mathematics (STEM) industry, which has gained significant popularity among  young people in recent years, might lead to positive economic outcomes.

Moreover, the country is presently establishing global connections with international universities and presenting prestigious scholarships for students to study abroad. Consequently, encouraging recipients of these prestigious government scholarships, such as El Umuty, Stipendium Hungaricum, and the Scholarship for studying at the Universities of Saudi Arabia or China, as well as many others, to actively contribute to the country’s advancement through meaningful projects would be highly advantageous. Overall, the growth of human capital can bring numerous benefits to the country. A proficient workforce acts as a catalyst for advancement, aiding research and development, promoting flexibility in adopting technological innovations, enhancing global competitiveness, addressing the brain drain concern, and propelling societal advancement. Accordingly, this progression results in elevated gender equality and increased active participation in civic matters. (Pelinescu, 2015; Nawaz, 2019).

Foreign Aid

Especially in the current circumstances, where international corporations are leaving the Russian market due to sanctions and opting to relocate to neighbouring countries like Kazakhstan or Uzbekistan, the immediate hosting of interested stakeholders could potentially offer economic benefits for Kyrgyzstan. However, the current state of political instability within the country and its relatively limited adherence to legal norms might deter major enterprises from considering Kyrgyzstan as a viable option for establishing enduring business ventures.

Simplifying the registration process for international small and medium enterprises, streamlining business registration procedures, reducing the burden of compliance requirements, strengthening intellectual property rights, and introducing comprehensive data privacy and cybersecurity regulations. These measures, coupled with the establishment of startup visas and immigration policies, as well as providing tax incentives for startups—such as reduced corporate tax rates—to alleviate initial financial pressures, could potentially trigger a ripple effect across other sectors of the economy in the long term. Furthermore, the extensively discussed positive impact of entrepreneurship on economic growth further underscores the significance of these initiatives (Thurick et al., 2023)

Natural Resources

After training a highly qualified generation of specialists and allowing them to gain experience abroad, the next step would involve transferring this expertise internationally gained back to the country. This could involve fostering innovative engineering projects in the renewable energy transition. Employing local staff would contribute to the economy, instead of solely relying on hiring international experts. Modern and technologically advanced solutions could also address food security and other critical issues.

Conclusions

In summary, considering the points mentioned above and revisiting Kyrgyzstan’s Nationally Determined Contributions (NDCs), it becomes evident that the country’s progress towards its specified goals within three-year timeframes appears to be lagging. Given this perspective, it could prove valuable to explore diverse approaches to economic development. Traditional economic development theories emphasize factors such as strong institutional quality, democratic support, or freedom of choice. However, Kyrgyzstan underwent a shift from a parliamentary to a presidential governance structure after the 2020 revolution and subsequent 2021 constitutional reform, signalling a return to an autocratic system. In alignment with the unconventional economic viewpoints presented in Knutsen’s 2010 article “Investigating the Lee Thesis: How Bad Is Democracy for Asian Economies,” the notion that democracies fit well-established countries may not align with Kyrgyzstan’s current circumstances. However, if the current government adeptly manages strategic planning for societal prosperity, it could drive rapid modern economic, legal, and transformative changes in a shorter timeframe by eliminating additional layers of approval from various stakeholders.

Conversely, autocracy brings inherent societal risks, including heightened corruption, nepotism, reduced accountability, and limited civic political engagement. These factors undoubtedly contribute to a decline in institutional quality, which ultimately exerts a negative influence on long-term economic growth. However, the interplay between institutional quality and economic growth is a subject of ongoing debates in the realm of economic development studies, suggesting that these two factors exhibit mutually causal relations. This implies that both favourable institutional quality could lead to positive economic growth and vice versa, where economic development fosters positive changes in formal and informal institutions. (Chong and Cesar, 2000, Acemoglu et al. 2005, Fabro and Aixalá, 2009). Currently, Kyrgyzstan cannot rapidly revert to a parliamentary system to continue progressing towards consolidated democracy. Therefore, within the realm of optimistic possibilities, the solution lies in concentrating on multifaceted national development in the present. This approach holds the potential to cultivate new political stability or democratic prospects over the long haul. 

In conclusion, circling back to climate change scenarios, if temperatures rise by 1.5 degrees, 2 degrees, or beyond, specific regions globally, including Kyrgyzstan, could become uninhabitable. In the worst-case scenario, over the next few decades, the sole viable option might be the mass external migration of nearly the entire population. In such a scenario, possessing a prepared pool of human capital, fostering a favourable international perception of Kyrgyzstan, and possessing proficiency in diverse skills and languages would be pivotal for adapting to unpredictable circumstances. Thus, the earlier-mentioned strategies could also yield favourable outcomes for a nation in the long term.

References: 

1. Acemoglu, Daron, Simon Johnson, and James A. Robinson. “Institutions as a fundamental cause of long-run growth.” Handbook of economic growth 1 (2005): 385-472. 
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Main photo: UNDP Kyrgyzstan, Artwork by Olafur Eliasson