THE INVESTMENT SECTOR AND TNC ACTIVITIES IN THE KYRGYZ REPUBLIC
Abstract
In recent years, the activities of transnational corporations (TNCs) have been a key element in the development of international eco-nomic relations. On the one hand, these companies are a “product” of the intensively devel-oping world economy, since their operation provides the basis for economic growth and technological progress in any country. On the other hand, TNCs are a powerful mechanism for influencing the economy of states and the world as a whole. Kyrgyzstan is no exception in this respect: the slightest change in the economic situation in the country tends to have a strong influence on the activities of the TNCs, which, for their part, take these ups and downs “very hard.”
After gaining independence, Kyrgyzstan took the path of transition from the centralized planned economy to a market-oriented economy. For objective reasons the republic met with a number of economic difficulties: rupture of trade ties, sharp drop in production, crisis of the management sys-tem, etc. These negative processes made it necessary for the government to develop new approaches in the field of economic reforms.
The severest problem was the financial one: the huge deficit of the state budget and the lack of long-term credit resources and funds at the disposal of enterprises pointed to the objective need for attracting foreign investment. Everyone understood that the attraction of foreign direct investment (FDI)and advanced technologies would enable the country to develop its industrial base, gain international experience, enter the world market with its own products, create additional jobs, and strengthen its national currency.
Nevertheless, Kyrgyzstan’s integration into the world economic system has turned out to be much more complicated than expected. In the beginning, it was not all plain sailing for Kyrgyzstan in its efforts to attract foreign capital, and the republic has had to travel a difficult road before achieving the current indicators.
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References
Here and below we cite data of the National Statistics Committee of the Kyrgyz Republic (from 1993 to 2004).
See IBC Report for the 1st Quarter of 2006.
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