Investment Risk in Branches of the Kyrgyz Economy

Abstract

In 1992 Kyrgyzstan was among few Central Asian countries that initiated the process of intensive systemic transformation based on, in general terms, a transition to a market economy and involved economic liberalization and the implementation of institutional changes including the privatization of the state - owned sector. In subsequent years similar reforms - although often with different structure and scope - were launched in the remaining countries of the region.

After the first few years of intensive and widespread economic reforms, Kyrgyzstan began to attract the attention of foreign investors. In the period 1992-1997 the total flow of foreign investment in Kyrgyz Republic reached the level of 644.7 million US dollars, and became a dominated form of the investment activities. It has been recognized that foreign investment promotes the restructuring of industry and ensures the integration of the national economy into the word economy. Moreover, it stimulates economic growth and development, providing economies in transition not only with financial resources but also  with new technologies, better management techniques and access to international markets. Therefore, the desire to attract foreign investors became one of the main driving forces of the reform process in Kyrgyzstan and in all transition economies.