Kyrgyzstan seeks $1.2 billion in aid to rebuild country after months of instability

Kyrgyzstan seeks $1.2 billion in aid

BISHKEK, Kyrgyzstan — Kyrgyzstan’s government appealed to an international donors conference Tuesday for $1.2 billion in aid to rebuild the country after months of political and ethnic violence.

The caretaker government leading the country until October parliamentary elections is pinning its hopes for stability and democratic reform on resuscitating the Central Asian country’s economy.

Economic growth for this year had been estimated at 5.5 percent before a bloody April uprising that unseated former President Kurmanbek Bakiyev, but authorities say the economy is now set to contract by 5 percent.

Poverty is one of the key sources of tension in Kyrgyzstan, where both the United States and Russia have military air bases.

Kyrgyzstan has battled to regain a semblance of stability and continuity since Bakiyev was overthrown amid widespread despair over falling living standards and rampant corruption.

The bulk of the damage to the economy was caused by ethnic violence in the southern cities of Osh and Jalal-Abad, whose economies rely heavily on trade and agriculture.

In June, hundreds were killed when small clashes in Osh, Kyrgyzstan’s second-largest city, swelled into devastating rampages by ethnic Kyrgyz mobs on Uzbek neighborhoods. The violence, which later spread to Jalal-Abad, left hundreds of minority Uzbeks dead and forced 400,000 others to flee.

The official death tally currently stands at 351, although senior government officials have said the real figure is likely much higher.

As well as devastating around 2,300 homes, the unrest also ravaged major markets and businesses, depriving the south of important sources of employment and economic development.

Speaking at the opening of the donor conference, President Roza Otunbayeva said around $100 million would be needed to rebuild the economy of Osh. She said it would take a further $350 million to reconstruct destroyed homes in Osh and Jalal-Abad.

Kyrgyzstan is also seeking substantial support in restoring its energy infrastructure, as well as revitalizing the banking and agricultural sectors.

Despite the long-term support sought by the Kyrgyz government, the most immediate attention is being paid to the humanitarian situation in the south, where thousands have been forced to take refuge in tents or live with relatives.

The United Nations humanitarian coordinator for Kyrgyzstan, Neal Walker, said a revised flash appeal launched over the weekend is seeking $96 million to fund a wide range of assistance programs covering food security, health, shelter and education.

Kyrgyz Finance Minister Chorobek Imashev stressed the need to prop up the country’s anemic banking sector as a way of pumping much-needed credit back into the economy. Banking was heavily reliant on a major domestic lender that authorities say was controlled by Kurmanbek Bakiyev’s family and that has since been nationalized.

Prospects for investment have been hurt by the interim government’s swift moves to nationalize a swathe of businesses, including real estate, banks and media companies, in the wake of the April revolt.

But Otunbayeva insisted the measure was aimed at overturning corrupt practices prevalent under the former government.

“Nationalization was made necessary by exceptional circumstances and the desire to cancel the effects of the illicit acquisition of assets by aggressive takeovers, at below-market prices, and through the use of administrative resources by the deposed President, his family and his entourage,” Otunbayeva said.