Kyrgyz First Deputy PM to Asharq Al-Awsat: Riyadh, Bishkek Aim to Increase Cooperation in Green Economy

Saudi Arabia and Kyrgyzstan aim to boost their comprehensive partnership amid plans to increase economic, trade, and investment cooperation in infrastructure, renewable energy, hydroelectric power, wind energy, agricultural production technology, and green economy, said First Deputy Prime Minister of Kyrgyzstan Adylbek Kasymaliev.

He told Asharq Al-Awsat in Riyadh that he was confident that Saudi-Kyrgyz relations would develop and continue, noting that his country was looking forward to a better future.

The number of Saudi tourists visiting Kyrgyzstan will likely double next year to 8,000.

Kasymaliev noted that during his recent visit to Saudi Arabia, the meeting of the joint governmental committee supported cooperation and its prospects for the future, especially investment, economic, and trade opportunities and projects that can be implemented in collaboration with partners in the Kingdom.

Work in progress

The Kyrgyz economy needs investments, said the official, noting that the main issues discussed in Riyadh focused on cooperation in several areas, including energy, energy sustainability, green economy, and solar and wind energy.

Kyrgyzstan is rich in reserves of hydroelectric resources and has only exploited ten percent of this energy, said Kasymaliev.

He explained that Kyrgyzstan is full of agricultural potential with fertile land and abundant fresh and irrigation water in mountainous areas. He also addressed investment opportunities, tourism, ways to develop the field, and cooperation in the sector.

The country has great tourism potential with available technological capabilities for investment, modern technology, and the exchange of experiences.

According to Kasymaliev, the bilateral talks included developing cooperation in education, science, health, and culture and holding cultural events in the two countries.

He said they also agreed on cooperation in infrastructure and the implementation of projects, announcing that the delegation from Kyrgyzstan decided on a collaboration with the Saudi Fund for Development amid efforts underway to implement projects in Kyrgyzstan, such as road construction and housing.

"We have previously agreed to organize a Saudi working visit to Kyrgyzstan, headed by the Undersecretary of the Saudi Ministry of Investment and large Saudi companies, between Nov. 27 and 29, to explore opportunities closely and realize the bilateral economic cooperation," said Kasymaliev.

Exploring opportunities

The official indicated that the joint government committee in Riyadh would discuss energy and other fields of common interest to enhance cooperation and explore new opportunities, noting that a team was directed to study the investment opportunities in energy, minerals, tourism, and agriculture in the country over the next two days.

Kyrgyzstan launched a 60-day tourism visa waiver for Saudis, and there was a plan to develop the system to increase its duration.

Kasymaliev explained that the system has been operating since 2012, and Saudi citizens do not need a visa to enter Kyrgyzstan and can stay for two months.

The country saw an increase in Saudi tourists, prompting authorities to grant a two-month stay, and as for Saudi businessmen, Kyrgyzstan is considering increasing the visit visa duration as an incentive to launch their business and investments in the country.

Saudi tourists

Kasymaliev expected an increase in Saudi tourists during the current year, which is likely to double to 8,000 in light of the increasing number of visitors from other Gulf and Arab countries.

During the coronavirus pandemic, the number of Saudi tourists dropped to zero, but it later increased to 4,000 in 2021, said Kasymaliev.

According to the official data, the number of arrivals from Saudi Arabia included in the classification of the World Tourism Organization (WTO) reached 5,340 tourists during the first nine months of 2022 and 3,399 in 2021.

He explained that during the last five years, Kyrgyzstan received over 30,000 Saudi tourists, with 6,771 in 2019 and 9,994 in 2018.

On the Kyrgyz-Gulf level, he stated that over 12,000 tourists from the Gulf countries entered the country during the first nine months of 2022, including 595 Bahrainis, 2,076 Kuwaitis, 5,340 Saudis, and 4,146 Emiratis.

Economic boom

The official indicated that during the past eight months, the country witnessed a growth of 7 percent, namely in industry, a strong field that generates excellent income for the country.

He also highlighted other sectors, such as agriculture and services, that boast promising solar and wind energy developments.

"We are currently focusing on energy because of our vast reserves, especially hydroelectric energy," said Kasymaliev, adding that the country is developing the sector amid economic growth.

Kyrgyzstan partnered with South Korean and Turkish companies to invest in hydroelectric power, the cheapest type of electricity.

He indicated that many foreign companies invest in hydroelectric power stations, local companies, and the local private sector invest in small-scale hydroelectric power stations.

The government is focusing on building solar power stations and solar energy, said Kasymaliev, adding that Kyrgyzstan produced 15 billion kilowatt-hours per year, which attracted foreign investment in the sector.

Kumtor mine

Kyrgyzstan now wholly owns the Kumtor gold mine, and negotiations with the Canadian company were successful.

Kasymaliev explained that Kyrgyzstan agreed to resolve the deal peacefully, and before transferring ownership of the Kumtor mine, the Canadian company used to supply the treasury with $10 billion.

Last year the company gave Bishkek $125 million, but this year it provided the treasury with $300 million within ten months, and before the ownership was transferred, it provided $70 million in previous years.

Ukrainian crisis

Asked about the impact of the Russian-Ukrainian crisis on stability, the economy, and food supply globally, in Europe and Kyrgyzstan in particular, Kasymaliev stressed that it affected all global economies, including his country's.

All products and commodities saw a price increase, negatively impacting the economy, while customs revenues declined.

The International Monetary Fund will forecast steady global growth and continuing disinflation when it releases an updated World Economic Outlook on Jan. 17, IMF Managing Director Kristalina Georgieva told reporters on Friday.

Georgieva said the US economy was doing "quite a bit better" than expected, although there was high uncertainty around the trade policies of the administration of President-elect Donald Trump that was adding to headwinds facing the global economy and driving long-term interest rates higher.

With inflation moving closer to the US Federal Reserve's target, and data showing a stable labor market, the Fed could afford to wait for more data before undertaking further interest rate cuts, she said. Overall, interest rates were expected to stay "somewhat higher for quite some time," she said.

The IMF will release an update to its global outlook on Jan. 17, just days before Trump takes office. Georgieva's comments are the first indication this year of the IMF's evolving global outlook, but she gave no detailed projections.

In October, the IMF raised its 2024 economic growth forecasts for the US, Brazil and Britain but cut them for China, Japan and the euro zone, citing risks from potential new trade wars, armed conflicts and tight monetary policy.

At the time, it left its forecast for 2024 global growth unchanged at the 3.2% projected in July, and lowered its global forecast for 3.2% growth in 2025 by one-tenth of a percentage point, warning that global medium-term growth would fade to 3.1% in five years, well below its pre-pandemic trend.

"Not surprisingly, given the size and role of the US economy, there is keen interest globally in the policy directions of the incoming administration, in particular on tariffs, taxes, deregulation and government efficiency," Georgieva said.

"This uncertainty is particularly high around the path for trade policy going forward, adding to the headwinds facing the global economy, especially for countries and regions that are more integrated in global supply chains, medium-sized economies, (and) Asia as a region."

Georgieva said it was "very unusual" that this uncertainty was expressed in higher long-term interest rates even though short-term interest rates had gone down, a trend not seen in recent history.

The IMF saw divergent trends in different regions, with growth expected to stall somewhat in the European Union and to weaken "a little" in India, while Brazil was facing somewhat higher inflation, Georgieva said.

In China, the world's second-largest economy after the United States, the IMF was seeing deflationary pressure and ongoing challenges with domestic demand, she said.

Lower-income countries, despite reform efforts, were in a position where any new shocks would hit them "quite negatively," she said.

Georgieva said it was notable that higher interest rates needed to combat inflation had not pushed the global economy into recession, but headline inflation developments were divergent, which meant central bankers needed to carefully monitor local data.

The strong US dollar could potentially result in higher funding costs for emerging market economies and especially low-income countries, she said.

Most countries needed to cut fiscal spending after high outlays during the COVID pandemic and adopt reforms to boost growth in a durable way, she said, adding that in most cases this could be done while protecting their growth prospects.

"Countries cannot borrow their way out. They can only grow out of this problem," she said, noting that the medium-growth prospects for the world were the lowest seen in decades.

Kyrgyz First Deputy PM to Asharq Al-Awsat: Riyadh, Bishkek Aim to Increase Cooperation in Green Economy