On 22 June 2022, the OECD, in co-operation with the Government of the Kyrgyz Republic and with the European Union’s financial support, held a webinar on weathering the economic storms in Central Asia. Participants discussed the observed and expected impacts of the Russian invasion of Ukraine and the ensuing international sanctions on Central Asian economies, with a focus on the Kyrgyz Republic. The webinar was organised as part of the OECD Policy Component of the EU Central Asia Invest initiative and brought together the OECD, the Asian Development Bank, the UN International Fund for Agricultural Development, and representatives of the public and private sectors in the Kyrgyz Republic.
Opening the webinar, Ms Ainura Usenbekova, Deputy Minister of Economy and Commerce of the Kyrgyz Republic, stated that while the Kyrgyz economy had started recovering from the pandemic, new challenges related to the global context had emerged. In response, the government has developed an anti-crisis plan to ensure food security, private sector support, trade and financial stability.
Mr Hans Farnhammer, Head of Co-operation at the EU Delegation to the Kyrgyz Republic, emphasised the relevance and timeliness of the webinar’s topic. While forecasts on the impact of the war and sanctions had initially been bleak, they have not yet materialised, with the Kyrgyz currency stabilising and remittances showing no sign of decline.
Ms Céleste Laporte Talamon, Policy Analyst in the OECD Eurasia Division, presented the OECD’s findings on the impact of the war and sanctions on Central Asia and on the Kyrgyz Republic in particular. The presentation delved into the trade and investment transmission channels on the region. Ms Laporte Talamon also provided an overview of the Kyrgyz Republic’s first policy responses and discussed longer-term policy options.
Mr Samir Bejaoui, Country Director for Kyrgyzstan and Moldova at the UN International Fund for Agricultural Development (IFAD), presented an overview of the impact of the war and sanctions on the Kyrgyz agricultural sector. He recalled the importance of agriculture for GDP and employment in Kyrgyzstan, as the sector contributes to 20.8% of GDP and occupies more than one million smallholder households, and addressed the risk of food insecurity arising from the war.
In the next session, Ms Lilia Aleksanyan, Economist at the Asian Development Bank, discussed the financial sector’s exposure to sanctions in Central Asia. She explained in particular that, while the Kyrgyz banking sector is among the smallest in the Caucasus and Central Asia, it is also one of the least concentrated and dollarised in the region.
In the last session, Mr Askar Sydykov, Executive Director of the International Business Council of Kyrgyzstan, and Mr Talant Omuraliev, an independent banking expert, discussed the early impacts of the war and sanctions on Kyrgyz businesses. Mr Sydykov talked in particular about the search for alternative trade routes with shipping companies. Mr Omuraliev touched on difficulties related to the lack of options for correspondent banking accounts in USD.