Experts on foreign policy of Kyrgyzstan

 29.12.2011

The Institute for Public Policy asked Kyrgyz experts to express their opinion on the development of the foreign policy of Kyrgyzstan in the near future.

Pavel Dyatlenko, an expert in political affairs, analytical center "Polis Asia," PhD in history, believes that “most likely, foreign policy of Kyrgyzstan will become more unidirectional. The country will select a major partner for long-term strategic cooperation.

"This is due to the fact that Kyrgyzstan is going to join the Customs Union. First of all, our country will develop a multi-faceted strategic partnership and strengthen political and economic ties with the countries of the Customs Union. Kyrgyz foreign policy will be more focused on Russia, Kazakhstan and Belarus, as it will be a vital necessity if we want to engage in this interstate association. As for Kazakhstan's relations with this country, they will be built within the Customs Union, because now we have not just a border with Kazakhstan but the border with the Customs Union. If we enter the Customs Union, this border becomes transparent for us.

“Speaking about relations with Uzbekistan and Tajikistan, there are many difficulties, but the new Kyrgyz leadership is likely to try to smooth them gradually, for example, because we are dependent on Uzbekistan in energy resources. It is better for us to make the borders with Uzbekistan and Tajikistan more open, so that we were able to develop our economy through trade, through obtaining new resources and especially energy resources. Like this we could quickly stimulate the development of our own trade and industry.

“I think that the new government will pursue the policies of improving relations with our direct neighbors. China wants to build a transit railway, a separate site of which will be located on the territory of the Kyrgyz Republic. It is beneficial for Kyrgyzstan to participate in this project, because it is possible to gain access to communications. Now there is a problem with border crossing in the south of Kyrgyzstan, and the railroad does not work. We must try to settle this matter with Uzbekistan, because the access to communications will align the balance of development between the regions of the country.

“The new government must understand which of our foreign partners has the highest value. For example, Turkey is far enough from Kyrgyzstan. During our cooperation, Turkey has invested in businesses, trading companies and in education, i.e., the boundaries of the cooperation have not been expanded yet.

“Our economy depends much on Kazakhstan and Russia, not Turkey. The potential for cooperation with Turkey is not so great and promising as the cooperation potential with Kazakhstan and Russia. We need to understand that it is more profitable to cooperate with Kazakhstan and Russia. Geography and economics cannot be abolished.

“Development of Kyrgyz-Chinese relations is the most difficult and crucial issue, which is associated with the Customs Union and the occurrence of Kyrgyzstan in it. If we join the Customs Union, the border of Kyrgyzstan and China becomes the boundary of the Customs Union, and it introduces a number of customs fees that restrict the flow of Chinese goods in Kyrgyzstan and, accordingly, the Customs Union. Kyrgyzstan will have to move quickly to production of its own goods in the apparel industry.

“The number of Chinese goods that are brought to Kyrgyzstan will be reduced after joining the Customs Union, and their prices will gradually increase because of the protective duties. The republic is likely to suffer during the transition period. If our government reaches an agreement, the Customs Union may make an exception for our country, and the products from China that we need will be imported free of duty.

“Kyrgyzstan immediately or gradually will have to abandon the re-export of Chinese goods as they arrive in Central Asia and Russia through our country, so we will have to develop our own production. How China will react to this is a very complicated issue, because China also earns much here. Perhaps, we will have to reach an agreement with the Chinese, so that the Chinese would not just bring us their goods but produce them in our country to avoid those duties. The Chinese can agree with this type of cooperation. It requires some time and negotiation to find an option that would satisfy both our country and China and also the Customs Union, because the Customs Union is not interested in deterioration of relations with China either.

“In addition, membership in the Customs Union does not mean any refusal from the established cooperation with other external partners. Kyrgyzstan has long become a member of the WTO and other international organizations. Kyrgyzstan, in comparison with other post-Soviet Central Asian countries, has much better relations with international organizations, Western countries and the United States. I think that the accumulated potential of such cooperation is likely to remain," said the expert.

Pavel Dyatlenko also expressed his opinion about where Kyrgyzstan will receive major investments from: "If we join the Customs Union, the main investments will flow into Kyrgyzstan from the countries-the participants of the Customs Union.

“It should be understood that investments from international and western institutions in Kyrgyzstan come in the form of grants, loans and credits. They do not bring us new technologies, do not create new jobs, but they simply maintain the state or the level of development that currently exists. If we want to evolve, we need to cooperate with the Customs Union. Major investments come to us from Russia and Kazakhstan. Running businesses, banks and firms prove it. We must make a choice: do we just want to exist, or do we want to develop? If we want to simply exist, international organizations and Western countries provide us with grants and long-term loans for that.

“Our business and our real economy are possible to develop only through major investment of the Customs Union countries, and only when investors come here and begin to invest in trade, food processing, mining and other industries. This is not comparable with the amount of money given by international and western organizations. Kyrgyzstan receives very little investment from the West, with the exception of funds invested in the development of the Kumtor deposit. We are mostly receiving investment from Russia and Kazakhstan. This is a real business that creates jobs, pays taxes, and so the economy develops.

“The relations of Kyrgyzstan with the Customs Union are important for the future of Kyrgyzstan, because real investments come from there. Goods that are produced and sold here can be competitive in the Customs Union, while the U.S. and the EU will not let our goods enter their economic space for various economic and political reasons. Even the geography itself tells us on whom to focus and how to develop our economy," concluded Pavel Dyatlenko.

Sheradil Baktygulov, an expert in public administration, stressed that: "The fourth president of the Kyrgyz Republic, during his inaugural speech, said that Kyrgyzstan would develop relations with several countries, the names of those countries were identified, and the priority was given, of course, to the Russian Federation, with which most of our citizens have business connections.

“But somehow, Atambayev did not say in this speech that Kyrgyzstan saw Tajikistan among the partner countries in Central Asia, although Tajikistan, today, is one of the key countries in the regional project of transmission of electricity between Central and South Asia (CASA -1000). Tajikistan and Kyrgyzstan will sell surplus electricity to Afghanistan and Pakistan. This project is supported by Russia. The fact that Tajikistan was not mentioned as a country with which Kyrgyzstan will cooperate is puzzling.

“Sometimes when we speak of multi-vector policy or a unidirectional policy, there is misunderstanding. Conducting a unidirectional policy in modern conditions is virtually impossible not only for Kyrgyzstan but also for others. There is an example of a unidirectional policy - this is North Korea. It has relations only with countries which were previously socialist. This is an example of a unidirectional policy based on some ideological preferences.

“Multi-vector policies mean that a country has different interests in different countries, and therefore it must rely only on those relations that would be beneficial for it. But if we are oriented toward only one or two countries, despite the fact that we have no ideological grounds, such as socialism, achieving any positive changes in the economy and in everyday life would be very doubtful. From this perspective, Kyrgyzstan will just have to continue to cooperate with various countries.

“Unfortunately, the essence of the idea of multi-vector policies for the past five or six years proved to be emasculated, because of a number of incorrect interpretations. And, accordingly, when we start talking about multi-vector policies, we need to talk about bringing the new content here. We understand that the world is not uni-polar, it is multi-polar and, accordingly, if we build our policy on unipolarity, we must make commitment not only to blindly follow policies of this country but also listen to its political leadership. Firstly, the political leadership may change, and, accordingly, priorities will be changed, too. Secondly, it does not mean that the desire of the political leadership of any country can be supported by economic and financial infusion from the budget of this country. I think we have understanding of this fact, and the prospects of cooperation between Kyrgyzstan within the framework of a unidirectional policy with any country are rather flimsy."

Sheradil Baktygulov said about uni-vector cooperation with the countries of the Customs Union: "The following can be said about unidirectional orientation to the Customs Union countries. There is a term - institutional coercion. When people say that Kyrgyzstan will work within the Customs Union or with the countries belonging to the Customs Union, we just have an example of institutional coercion. Russia's political leadership is well aware of what the Eurasian Economic Union and the Customs Union are. These are elements of geopolitical ambitions. For example, in a western direction, Russia has promising relations with Ukraine. If we are talking about the south, we must speak about the Customs Union - Kazakhstan, Kyrgyzstan, and Tajikistan.

“It's not just about creating some kind of framework of the former Soviet Union; it is about the fact that Russia, unlike in other countries, has its own vision of how it should develop in the future. First, it builds a counterweight to China, second, to the European Union countries, and third – to the United States.

“Ukraine, Kazakhstan, Kyrgyzstan and Tajikistan are the elements of the Russian spreading influence. In the case of Ukraine, for example, it is a gas infrastructure, gas storage, pipelines and so on. In the case of Kazakhstan, the situation is about the same; Kazakhstan is one of the suppliers of hydrocarbons.  This is a well-built strategy on the part of Russia. Moreover, it is not only to establish control over the infrastructure in these countries but also good markets for Russian goods. From this perspective, Russia's interest is well stated and very actively pursued.

When people say that Kyrgyzstan will cooperate with Russia, the question arises of what cooperation they are talking about. Will we supply with migrants, both legal and illegal, or will we give the control of those organizations that we have, in order to reimburse our debt? Why do we need this? Debt is debt, and it is growing every year. Well, now we give them the control over our organizations, then we will make new debt, because no country in the world receives money for nothing.

“Yes, the Russians will take these companies to repay foreign debt. But if they continue to work, new financial investment within the cooperation with Russia will not imply grants, because we will have to pay later anyway, because this investment will be included in the structure of the external public debt.

“When we are talking about the prospects of joining the Customs Union, there is usually some kind of observation that Kyrgyzstan will have to work, but nobody ever says whether we really need this. And if we do not need it, but we will join the Union anyway, what steps is the state ready to develop for its citizens? We can survive if it is about, for example, preferential taxation or changes in tax systems for citizens of Kyrgyzstan.

“There are many questions relating to the Customs Union. When the government of Kazakhstan decided to join the Customs Union, they knew what industries were the priority for the country and what they could expect from the Customs Union. Our position has not been formed yet. Why should we join the Customs Union? The society is still discussing the issue of illegal migrants, most of which work in Russia and Kazakhstan, and the issue of the garment industry. It turns out that we will be working for the interests of garment workers and migrants, not for the interests of the country. The interest of the country has not been formulated yet.

“There are three ways in which it is now necessary to work in order to mitigate the effects of entry into the Customs Union.

“The first direction is a differentiated approach to business. We will be able to improve our position, if we change the tax laws when entering the Customs Union. Then we will have an opportunity to entice the Kazakh and Russian businessmen into Kyrgyzstan, so that they would register their business here and start selling something from the territory of Kyrgyzstan to their own countries of Kazakhstan and Russia and even beyond - to Afghanistan, Pakistan and China. This may be one strategy. I am referring to the simple procedure for registration and a simplified system of taxation of business.

“Large businesses are more or less well established, but the same principles may be applied to the taxation of small businesses. There are mid-size businesses, micro-businesses, but these are different things, and they need different tax regulations. There must be a more flexible approach. If the government fails to provide every citizen with a comfortable level of existence, we must empower citizens themselves to secure a sufficient level of existence.

“When we approach business differentially, it will be possible that businessmen from Russia and Kazakhstan will transfer their businesses to Kyrgyzstan. Business can stay in Kazakhstan or Russia, but the registration of the head office may be done, for example, in Bishkek, Karakol, Osh, or Batken, and this will lead to the fact that the businessmen will prefer to pay taxes at the place of registration of the business. We are a party to various agreements that avoid double taxation, i.e., it is possible to pay taxes at the place of profit, but it is also possible to pay them at the place of registration.

“The second direction is the rent capital. For example, the basis of income is labor compensation fund, despite the fact that we have the lowest salaries. But there is also the rent capital. That is, the rent is not going into the state budget today. Rental income is an income from the land and its resources; it includes fueling complex, energy, gas and so on. But this income does not go to the state budget; it exists as a profit of state enterprises, and it goes into the pockets of those who are affiliated with this business. Let it be a semi-legal business, let government officials be engaged in representation on the board of directors and so on. These are huge amounts of money, and they are not in the budget. In this regard, changes in tax policy, so that the money went into the budget of Kyrgyzstan, will mitigate the situation of doctors, teachers and so on.

“The third direction is the value added tax. It is necessary to reduce the tax burden on wages of Kyrgyzstan citizens. It turns out that the government gives with one hand income to teachers and doctors, and then with both hands the government takes it away. We have emasculated the idea of value-added tax, and it has lost its essence. VAT involves winding interest to the value added. For example, if the product is ultimately 100 soms, and the value added is 10 soms VAT must be charged from these 10 soms. However, in our country, every broker who pays the VAT charges it from the entire cost of production. It is perversion of the essence of the value added tax. All these things need to be reviewed, but we all got used to it, and we continue to use it.

“If we do not fundamentally change it, and no effort is made in this direction, we should not expect investors to come to our country," said Sheradil Baktygulov.

Commenting on the statement of the newly elected president, saying that the main strategic partner was Russia, the expert said: "Allegations that the main strategic partner of Kyrgyzstan is Russia have been made during 20 years by every president since the beginning of independence. This is a strategic partner, a traditional partner and so on. In principle, no one doubts that Kyrgyzstan will work with Russia. It is just a kind of nod to the political leadership of the Russian Federation.

“As for working with Western countries, Kyrgyzstan is a party to many international organizations. There are bilateral agreements, plus the very position of the region and investment in the economy, in principle, determines the direction of cooperation between Kyrgyzstan and other countries, besides Russia. For example, Russian investors are not even in the top five investors. Most investments in Kyrgyzstan are made by Turkish, Chinese and Kazakh capital. The list of these countries, despite the above-mentioned statement [made by Atambayev], shows that Kyrgyzstan will keep on working with the countries that invested money in its economy. Even when we talk about the Kumtor and other enterprises, which invested quite a lot, but again its Canadian capital, it does not occupy the first place among investors either.

“The accumulated reality of economic relations today will determine the parameters of external cooperation between Kyrgyzstan and other countries, including the Russian Federation. This includes also a new regional energy project CASA-1000 under the Asian Development Bank.

“During the last summit of the SCO, Russian Prime Minister Vladimir Putin also said that Russia was ready to contribute at least $500 million to this project. China virtually started working in this direction, although the major players are four countries, but some of these countries will be bound by bilateral treaties. For example, there could be a Russian-Tajik agreement or a Kyrgyz-Russian agreement on the construction and joint operation of hydraulic structures on rivers. In this context, we cannot talk about the exclusive focus on one country," said Sheradil Baktygulov.

Speaking about how the new government would build relationships with its neighbors and work out a new strategy, Sheradil Baktygulov noted that "the whole practice of successful development of the European Union and other countries shows that a strategy of good-neighborly relations today is the best. When we are talking about the strategy of good-neighborly relations, it is assumed that the methods and measures to achieve these very good-neighborly relations are different, they depend on the situation in each country."

The expert focused on relations with Tajikistan, Uzbekistan, Kazakhstan and other immediate neighbors: "If we talk about Tajikistan, it is possible to propose the following: Tajikistan is now making active attempts to break the traffic deadlock, and the international community supports these efforts. There is a large transport project for the construction of three roads in the direction of Russia and Kazakhstan and, perhaps, a small project to build a road from Pakistan via Afghanistan and Tajikistan to China. I have already mentioned the energy project.

“Now the question is what the role of Kyrgyzstan in this process is. There are no intersections of these corridors on the territory of Kyrgyzstan. Now there are talks that a part of the road to China may be through Kyrgyzstan, but an alternative option is that it may be through the Murghab, i.e., via Tajikistan.

“If we do not actively work with either Tajiks or with the Afghans, the Pakistanis or the Chinese on the issue of the transport corridor, we will remain on the sidelines in the truest sense of the word. These are trade routes. These will be the shortest roads for the delivery of goods to Pakistani ports, and from these ports - to the territory of the Russian Federation and Kazakhstan. These regional projects exist, they will be implemented in this direction, and the negotiation process has begun, but we are, as always, on the sidelines. This is just an example of regional cooperation.

“Uzbekistan. Traditionally, it so happens that we have had special relations with Uzbekistan. It is imperative that we have good relations with Uzbekistan.  It is possible to work with China, Afghanistan, Pakistan and Tajikistan in common regional projects aimed at addressing common problems, but Uzbekistan often gets out of this system. As the Uzbek government protects and promotes, above all, the country's interests, common regional goals, in principle, will not be a priority for it. We always face with painful moments - supplies of gas, electricity and water. There is not any progress, and negotiations on the joint use and maintenance continue. But the problems remain, and we should always work hard to solve them.

“We have bilateral agreements on eternal friendship and brotherhood with almost all countries, but in fact, as we see, they do not work. We have similar agreements with Kazakhstan, but here very much depends on personal relationships. In this connection, relations with Kazakhstan, too, should be built a little differently.

“There are personal relationships of the political leadership, and there are personal relationships of citizens of Kazakhstan. They understand that thanks to Kyrgyzstan, low food prices are kept on southern borders of Kazakhstan. When Kazakhstan virtually closed the borders with Kyrgyzstan, value of the food basket in the southern part of Kazakhstan increased two to three times. From this point of view, agricultural and food products freely cross the Kyrgyz-Kazakh border, and the goods belonging to the category of textiles and industrial products are limited - no more than fifty kg per person. And now these products are sorted by range: five pairs of socks can be brought into the territory of Kazakhstan, but not six or more.

“China and Turkey, in principle, are actually the largest investors in Kyrgyzstan. Their capital and their citizens occupy a very large share in almost all spheres of production in the country, ranging from small businesses, for example, hairdressers, and ending with big business, such as road construction. The main contractors are generally representatives of Chinese and Turkish companies. Also, Chinese and Turkish companies are engaged in gold mining and, accordingly, trading operations. They are, indeed, the countries whose interest is represented in Kyrgyzstan, so we will continue to work in this direction.

“Since 2010, the situation with Turkey has changed dramatically. Previously, the Turks treated us with suspicion. Now there are three basic agreements, which will be felt somewhere in five to seven years. First, it is a bilateral agreement between Turkey and Kyrgyzstan to increase trade. This is the sum of two to three billion dollars a year, but to achieve it, we will need about five years. Second, there is an agreement between Turkey and Pakistan to increase trade with Kyrgyzstan, and it is about the same amount, from two to five billion dollars. Third, Turkey has taken a step in that direction - its cancellation of the visa regime between Turkey and Kyrgyzstan.

“Together, these three agreements will lead to the fact that migration flow of Kyrgyz citizens will grow in the direction of Turkey. Kyrgyzstan will be able to take part in regional projects and, especially, in transport and energy projects. When there is agreement and understanding between, say, key players such as Turkey and Pakistan, the chances are much increased.

“But clear proposals or wishes of Kyrgyzstan have not yet been formulated, i.e., it is not clear where we participate. We have a vision of what we want to receive -its money - but we have not ideas about how to get them and how this can be done. This is probably applicable to all the vectors of our present cooperation.

“Kyrgyz-Chinese relations. Most likely, there will be a traditionally cautious approach. The Chinese are building quite friendly relations with its bordering neighbors within the foreign trade policies of China, including in the revival of the Silk Road. This is quite a successful strategy," said Sheradil Baktygulov.

Continuing the theme of investment, the expert added: "The investment flow is divided into two types - private investment and investment at the state level. If we talk about investments at the state level, now a joint Russian-Kyrgyz kerosene trading company is being established. Clearly, this is a brainchild of ‘Gazprom,’ which is a public entity. As we know, the production of five Russian oil refinery plants will be delivered to the transit center ‘Manas’, and it is a lot of money. But again, the investment will be used to provide minimum standards for the base, located here.

“If we are talking about the products of five Russian oil refineries, it must be borne in mind that this does not mean that they will deliver the goods at once, and they all will be stored on the territory of Kyrgyzstan. It's about logistics. Respectively, this is rental capital, which will be invested in fueling infrastructure. A certain amount of fuel will be supplied, and this uninterrupted supply will be carried out on a daily basis. But this does not mean that there will be much investment here. We must not forget that the global crisis continues, and each country has a need for investment for their own economies, and the Russian Federation, the European Union, the United States, China and Turkey are no exception.

“In this regard, we have only the option of private investment, because investment at the state level may remain empty promises, as these promises will not have financial reinforcement. Speaking of private investment, again, why to invest in an unknown country, where the return would be too long and too low, so we must not expect an increase in the flow of private investment either. In this regard, investment will flow in Kyrgyzstan according to established trends in the country.

“There have been a lot of speculations that there will be a sharp decline in investment following the withdrawal of troops from Afghanistan. Investment does not depend on whose troops entered or left a country, especially Afghanistan. Investments go where there is an opportunity to earn money. Moreover, withdrawal of the NATO and the U.S. troops from Afghanistan means that there will be new business opportunities.

“There are territories controlled by the Taliban, but there are also areas that are controlled by supporters of Karzai. We have very good prospects to develop the halal business, as well as an opportunity to promote a sewing business.

“We are proud of our garment industry, but the Kyrgyz clothing is not in the clothes of premium class. A small number, perhaps five to seven percent of all products, is presented in the segment for the middle class people, although the principal place there is occupied by sewing products from Eastern Europe. Kyrgyzstan's clothing makers occupy the lower segment, i.e,, it is very democratic clothing with very democratic prices. The quality is good, but the fact is that this is the third segment, and we feel comfortable in this segment, and in this regard, Afghanistan and Pakistan is a consumer's paradise for us. Kazakh or Russian producers cannot compete with us in this segment. Only the Chinese can compete with us, but we can deliver the same garment products quicker.

“Americans will withdraw troops, but the Taliban will have to consume it all. One can work with everybody. The question is what kind of tactics and strategy will be chosen. Business is not divided into black and white. There is always a semitone, and it all depends on how much people are genuinely willing to work and on what terms. From this point of view, we can and should work and do business with Afghanistan," concluded Sheradil Baktygulov.

According to Anar Musabaeva, a political analyst, "There will not be any radical changes in foreign policy from the perspective of the main foreign partners of the country. Kyrgyzstan’s foreign policy is largely determined by our geopolitical position in the first place, in the Central Asian region, and in the second place, on the Eurasian continent. I think the key foreign policy partners will not change - Russia and Kazakhstan. Besides, I think that there will be built relations with the United States, despite the fact that there was some bias towards Russia, both in the election and post-election rhetoric by the new president. But, nevertheless, I believe that foreign relations remain virtually in the same direction.

“I think one of the foreign policy challenges for the country will be building relations with our closest neighbors, i.e., with Uzbekistan and, to some extent, with Tajikistan. Given the rather complicated bilateral relations with Uzbekistan, of course, we will need to exert much effort to build foreign policy relations in a stable manner, because it is one of the most important countries in the region, and there we will need to show the utmost good sense and rationalism. However, we will also have to take into account the rather complicated legacy of the ethnic and inter-ethnic conflict in 1990 and 2010. Of course, on the one hand, it will be a very great difficulty, but on the other hand, I think that this problem should be solved anyway, but it again depends on the position of the leadership and on its vision.

“I also believe that Kyrgyzstan must expand mutual relations not only with the countries of our region - Central Asian and post-Soviet - but also with other countries such as Turkey, Japan and Eastern countries, including our closest neighbors - Afghanistan, Pakistan and Iran.

“We must look for points of mutual interests with those countries. These can be educational and cultural programs. Of course, everyone would like to see economic relations, but we need to understand that in economic terms, we depend on our neighbors, like Russia, for example. If, however, we build a strategy in the long term, we must also understand that relationships are formed gradually, and again this must be considered from the standpoint of the interests of the country and our statehood.

“We should not build just economic or just cultural relations. It would be great if it were balanced between economic, political and cultural interests. But then again, some countries will move closer precisely in terms of cultural ties and only then gradually establish economic ties. With other countries, it might be worth building economic relations, for example, to develop tourism and so on. It is very hard and painstaking work.

“It cannot be done overnight, especially because, unfortunately, before we had no clear strategy or clear concepts of what we wanted. Foreign policy was built in a very opportunistic and incompetent way. If we want to talk about Kyrgyzstan as a full member of the international or at least, regional community, we should move to another level of diplomatic and foreign relations.

“As for the Kyrgyz-Chinese relations, de facto relations are developing, and they will evolve. Another thing is that we have a deep-rooted perception in the public mind there is a danger of penetration of the Chinese culturally and economically. But I think we should look at this situation from the standpoint of the global implications and understand that China is a great power that is powerfully developed, despite a slight slowdown in economic growth and other problems. We see that in comparison with other countries, global financial and economic crisis does not hit China, and the country continues to develop sufficiently dynamically.

“We need to consider China not as a threat, in terms of economic development, but perhaps we should focus on the fact that relations with China will develop, because it is such an objective trend that emerges from the global economic development. The position that the Chinese economy occupies in the world, as well as forward-looking expectations, suggest that by 2015 or sooner China will surpass even the United States of America in terms of development.

“So, I think we need to focus on a rational, pragmatic approach and develop relations with China, focusing precisely on the interests of the country. And it may be wise to ensure that the population did not have a distorted perception of relations with China as a threat.

“To sum up, China is and will be our great neighbor, one of the great powers, the world's economies, a dynamic country, and a source of innovation and technological progress, so we need to properly build relations. These relations must be economically beneficial not only for China but also for Kyrgyzstan. There are so many moments with respect to the corruption, for example, because there is misstatement of bilateral trade relations and so on. Those flaws and problems hinder long-term relations and destroy a mutually beneficial basis to develop the economy. We must strive to develop these relations, the relations that would benefit not just certain individuals or groups of individuals, but the entire country,” said Musabaeva.

During the interview, Anar Musabaeva emphasized: "If we count on the long-term perspective, I am a supporter of a multi-polar policy, although it is a kind of pejorative term today. I think it happens because of substitution of concepts, incorrect interpretation and misunderstanding of the specifics of a small state, which is in a worse position in comparison with its nearest neighbors in terms of the resources and political weight.

“In my opinion, the only correct strategy is precisely the multi-vector policy, because such a small state like Kyrgyzstan, being also rather poor, not having essential prerequisites to take some leadership in foreign policy, should expand its relations in different directions. We cannot afford to depend on any single foreign center of influence. In the long run, it can be very damaging. Many politicians are guided by some very short-term goals and rhetoric, saying that we do not need a multi-vector orientation. They say that it is important to have someone strategic partner and the like. I think this is a fundamentally wrong position.

“It is desirable that new leaders of the country build more reasonable policies and take into account national interests. National interests imply the country's interests, the interests of all people, and all of society. Since we are aware of existing limitations, such as the fact of being a small country, it seems to me that we must build a balanced foreign policy and not seek to join some single center of political influence," said the expert.

Anar Musabaeva commented on how, in her opinion, the new government will build its relationship with its immediate neighbors: "It's hard to say. It depends on who will head the Foreign Ministry and the new structure of government. This, of course, depends on the political will of the President and legislators, as they must have a coherent vision of how to build foreign relations.

“In any case, I think, it is very important for the new government to understand that a person who will head the Foreign Ministry understands the importance of building a foreign policy that will not be subject to market conditions, but will focus on long-term strategic objectives of the state. It is also important that the foreign policy is lined up by professionals in this field. I think it is important to make the selection of public servants who will work in the field of foreign policy and in the diplomatic service more stringent, in order to avoid some blunders of building relations in accordance with the commercial interests of our ruling elites. That is, all these negative aspects need to be overcome, and the question is whether there will be enough political will for it, and even if there is an understanding of how foreign policy is important for our state.”

The expert also sharpened the focus on whether a new strategy would be worked out: "We live without a strategy, and this is one of the challenges, one of the important issues in our state. Due to the lack of strategy, we have very situationally built relations in foreign policy. Perhaps, on the one hand, this is due to the fact that, according to many analysts, we are actually under external management, and decisions, including on our relations with other states, are no longer made in Kyrgyzstan. This is a very deplorable situation. If there is political to reverse this situation, of course, such a strategy is needed.

“But I cannot say anything about whether it will be worked out or not. I do not see some progress in this direction. One cannot make a foreign policy strategy sitting in his office on the basis of purely commercial interests of the ruling elite.

“Perhaps it should be more widely discussed and, above all, by the expert community. But we do not see a request from the authorities to ensure the use of some kind of expert mechanisms to produce foreign policy strategy based on the interests of this country. But, given the state of our expert community, the potential itself and, say, the virtual absence of think tanks, which would be involved in foreign policy matters, unaffiliated with various parties, there are some concerns that this strategy may not be developed at all, at least in the near future. And if it will be worked out, again there is a danger that it will be worked out by ‘desk’ staff, so it would be idle without meaningful guidelines and well-designed mechanisms."

Responding to a question about where the major investments could come from, Anar Musabaeva noted that, "the question of investment is not a solid economy as it is considered to be. Much depends on the political context of the conditions that exist in the country for business, regulatory environment, and so on. That is, all in complex will affect the ability to attract investment. Our experience in this regard is sad enough after the events of 2010, when investments decreased, and the country had a rather complicated economic situation.

“Foreign investors are in no hurry to come to Kyrgyzstan, because the country is incomprehensible to them. Again this implies a high level of corruption, political instability, the raider seizures, redistribution of property, lack of rule of law, insecurity of property rights and so on. All of this is having an effect and not causing optimistic expectations. However, there is always a choice, and whether to change this situation or not, it depends on the will of the political leadership. If all these negatives are eliminated, I think the investment will come and not necessarily only from our traditional economic partners - Russia and Kazakhstan - but also from other countries," concluded Anar Musabayeva.

Tamerlan Ibraimov, director, Center for Political and Legal Studies, also believes that "multi-vector direction will undoubtedly continue in foreign policy. But the emphasis will be placed more on Russia, and Atambayev showed that. First of all, this is due to economic reasons; we are dependent on petroleum supplies and on those loans that we get. Although cooperation with Russia has traditionally been close enough.

“With regard to foreign policy in general, I do not think there will be some bias. Well, there may be closer relations with Turkey, given Atambayev’s traditionally close relations with Turkey. I think the U.S., Europe, and our neighbors will continue to be our partners.

“The same applies to China. I think the economic penetration of China will continue. China traditionally tries, at least outwardly, not to have any influence on the political life of the country. Economic spectrum of relations with China will steadily increase. It is clear an economic impact entails political influence, whether we want it or not. Given that China does not make any sudden movements, gradually, over the next 5-10 years, China's share in the economy of Kyrgyzstan will probably be the biggest.

“How to view it depends on us. Objectively speaking, China is the most powerful economic power on the planet, and we are its neighbors, so China's influence on us will be very large. How Kyrgyzstan will manage it: we can fully enter into the sphere of influence of China and dissolve in it, or we can pursue our own policies, but given the realities that exist today, we could reach a good balance between the interests of China, Russia and the Western countries. In this respect, Kyrgyzstan has yet to develop clear mechanisms of this balancing.

“With regard to the strategy of foreign policy, I doubt that a radically new strategy will be worked out. Most likely, this will not happen, the more that new ideas do not seem to be proposed. Everything will continue. With regard to relations with our neighbors and external partners, again neither the statements by Atambayev, nor by the candidates for the post of prime minister, whether it is Babanov or someone else, do not have anything like that. None of them said that we had to completely change our course or go in another direction. Kyrgyzstan, by and large, is not a country that would comply with any new trends in foreign policy, and we must make friends with everyone. There may be some accents due to the fact that there are economic reasons, and in this respect, our main partners are Russia, Kazakhstan and China."

During the interview, the expert commented on Kyrgyzstan's relations with Western countries: "I do not think there will be some changes, even if we consider the words of Atambayev that in 2014 the U.S. base will be withdrawn from the territory of Kyrgyzstan. First, we still have to live until 2014, and who knows what the situation in Afghanistan will be and how the relations between Russia and the United States will develop. That is, relations with the West are not likely to deteriorate. This is a stable relationship, given that Kyrgyzstan receives assistance from stability of Western financial institutions. I think that Kyrgyzstan will continue to balance."

Speaking about investments, Ibraimov noted, "It will be the international financial institutions that do not large investments but only support our budget and some infrastructure projects. I think the share of Chinese investments will increase. There will be more close collaboration with the Customs Union, EurAsEC, i.e.,those areas where money basically came from to us. Kazakhstan is traditionally one of our major investors. Now the issues related to the beginning of construction of power plants, including Kambar-Ata-1, are being worked out, and if it is done, Kazakh investments will come to Kyrgyzstan. The flow of money from Turkey is also possible," said Tamerlan Ibraimov.

"Most likely, the foreign policy of Kyrgyzstan will be unidirectional,” said Ivan Kamenko, an expert in the field of public security, foundation "Egalitee." “Basically, so far we are doomed to unidirectional policies. I do not exclude some areas of foreign policy - Russia, CIS, Customs Union and Single Economic Space, plus Turkey as a partner, and traditionally - China. But these will be more economic ties rather than political.

“With regard to the development of Kyrgyz-Chinese relations, I think, no significant changes will happen, except that the entry into the Customs Union can bring change in the economic plane. Perhaps external economic balance with China will become worse and more difficult, but, again, in the first place, it will hit our citizens more than the Chinese producers. Therefore domestic social unrest is possible in Kyrgyzstan, rather than in China.

“Based on the statements by Atambayev, actions and desires of Americans to leave Afghanistan, America apparently would withdraw from the region itself. Perhaps the relationship with the United States will be complicated, so we will have only the Eastern orientation."

Ivan Kamenko commented how the new government would build its relationship with its closest neighbors: "Most likely, no radical turns in strategies for working with our closest neighbors will happen. Everything will be in the traditional framework, and it does not portend anything of a supernova. Basically, it will focus, of course, on Moscow, the Moscow-based political choice, their opinion, conditions and interests. Especially, if we are included, as we are told, in the Customs Union and Single Economic Space zone, it will bring us even closer to Kazakhstan, Belarus and Russia. In general, we will have such an economic and political orientation that there may be some cooling of relations with our neighbors, I mean, Tashkent, Dushanbe and Beijing.

“Entry into the Customs Union can only adversely affect relations with our closest neighbors. Between us, there is a lot of communication, a very high trade turnover and a lot of personal ties between families. If customs border procedures are tightened, it will bring negative aspect into the social life of citizens, so there may be social negative effects. I believe that this is not a positive trend, because it deprives us of a unidirectional right choice."

Ivan Kamenko also noted: "I do not think there will be some dramatic changes. The West has its own problems. Basically Kyrgyzstan's relations with Western countries and especially the United States were built on the basis of, say, grant aid and loan commitments. That is, the country received money in the form of grants to promote democracy, civil society and so on. In exchange, they were assured in democracy building. America and Western countries have invested very much in Kyrgyzstan, but the dividends were not enough.

“Plus, now a pressing concern is the mining industry. It hung in the air, because for 20 years, the problem has not been solved yet. Of all the gold mines, only Kumtor operates at full capacity, and now the question of this deposit excites the public. The potential for protest against the company developing the Kumtor deposit is growing. Such sentiments deter investors and potential Western partners.

“Of those who are not afraid of social instability, there are most likely Russia, Kazakhstan and Belarus," said the expert.

Meanwhile, Sergei Masaulov, president of the Center for Advanced Research, answering the question about how to develop foreign policy of Kyrgyzstan, said: "I have repeatedly said that it is desirable to have a certain vector, but apparently this is difficult, and a certain battle will unfold over it. In addition to the proposals that we have heard in his inaugural speech, the President sounded quite certain proposals.

“But most importantly, we now see some strengthening of Turkish positions. And this is an entire vector, because taking into account the concept of the new Silk Road, which we learned in early November, we can say that we now have a completely new option: Americans do not say themselves but push forward skirmishers. The concept of the new Silk Road is a direct U.S. strategy, and the instigator or the skirmisher in this situation is Turkey. In this regard, we can estimate the Turkish delegation here and its presence in large numbers at the President’s inauguration. I'm definitely not ready to talk about the selection of a single vector. Rather, we shall be again between different poles.

“With regard to relations between Kyrgyzstan and China, I think Kyrgyz-Chinese relations will develop quite well. China is our principal trading partner, and it would be arrogant superficiality not to draw attention to the fact that the maintenance of relations with China could be a top priority in foreign policy.

“I do not think that in the case of Kyrgyzstan joining the Customs Union, everything will be formed very quickly; there must be a program of sequential steps. It is impossible to immediately deprive the mass population of the opportunities for earnings and, therefore, re-export will continue and close relations with China will be maintained.

“I think that foreign policy will depend on the mechanisms of its generation. If there are clearly formulated mechanisms, and the policies will be discussed in different formats and in different centers but adopted in a single center, we will get a more balanced version, and this is just what the country needs. In this case, we are not going to speak of unidirectional or multidirectional policies, most importantly, that they will be weighted and balanced."

Sergei Masaulov commented how the new government would build relationships with its neighbors: "I think we again will have to balance. I mean we will balance between the others' suggestions. I think that if the new president and his team have a desire to implement those concepts about which they spoke previously, there will be an attempt to establish its own policy. If not, I repeat again, the destiny of endless balancing between strangers’ proposals is waiting for us."

Answering the question of how close the relationship the Western countries would be, Sergei Masaulov said: "I am convinced that the relationship will be quite close, because it is dictated, first of all, by the economic situation of the country. The authorities should take into account the direct social appeal of people who are in Kazakhstan and Russia, and the masses of people who are still culturally and ideologically linked to other countries, which are historically our partners.

“In this case, I repeat, there will be developed a certain vector, and it is clear that under the historical logic, Kyrgyzstan will be directed to the Eurasian space.

“Meaningful development of foreign policy, above all, means that we must determine a great frame of national interests, and second, determine the balance frame, i.e., determine what is the balance of interaction with external partners and how this would benefit Kyrgyzstan. Then there will be some certainty. But I still repeat that without the social support, it is very difficult to do it.

Our politicians always listen to some proposals coming from outside. In this way, our leaders are usually manipulated. It would seem that the leader acts in the name of national interest, but then, having received a proposal from another external center, he suddenly changes his position and begins to frantically search for an excuse to change the course, which he had previously declared. It happens to us regularly. I say that the greatest problem of the country is that the mechanisms of making foreign policy have not been formed yet," said Sergey Masaulov.

Asked about the investments, the expert noted that, "in order to have investments, we need a few conditions. First, what is called the investment attractiveness. Clearly, I'm not saying anything new, because any businessman looks at the extent to which he can ensure the normal functioning of the invested money and getting a decent profit.

“Investment climate is a broad concept that involves the legal aspects, i.e., functioning of the entire legal infrastructure in the country, but it does not exist here, as there are no courts. This concept also involves the political culture, including the culture of the population. But the most important aspect is the presence and existence of the statehood. We have a terrible shortage of statehood. Yes, there are all the attributes of the state, but in fact the state is non-operational. This is actually a tool of the political groups that at that time possesses the levers of power.

“In this respect, the one who tries to get a quick profit will look for options, for example, re-export, resale, and so on, but it is very difficult to expect serious investment, because another characteristic of the investment climate is the presence of a normal banking system. We have not a system bank in the country and, accordingly, no investor will come here without introducing a system bank. So if you wait for Russian investments, you have to bring a Russian bank here. So far our government only offers to buy the Zalkar Bank, which is a fragment of the former AUB, but no one in this situation will buy the Zalkar Bank. And again we are waiting for loans and investments.

“However, it is impossible to get investment, if the government does not fulfill its role, because it is not the investor who must negotiate with the so-called local population but the government. And the investor, in turn, has to deal with the government. If the investor signed a contract, fulfilled all the prerequisites and pays the money, he must work without any worries. But in our country, the investor ceases to negotiate with people and says that he knows nothing, and it's not in his jurisdiction. It just shows that there is no functioning state and government.

“I would say that our country has not an investment climate that would allow to hope for a great investment. If the new leadership will be able to negotiate with the population, to have system banks, then the investment climate will improve, and investments will come to the country. And we, first of all, must wait for investment from our partners in the EurAsEC and, possibly, from the Customs Union, i.e., from Russia and Kazakhstan," said Sergei Masaulov.

Material was prepared by Tatyana Vikhareva and Anna Kapushenko

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