Send message to Author

Paper abstract:

The effects of foreign investment in natural resources on worker welfare and host country politics are a subject of ongoing debate. This paper examines this issue by analyzing the impact of Kyrgyzstan's dominant foreign-invested gold mine, which in 2020 accounted for 12.5% of Kyrgyzstan's GDP. One of the key findings is that mines with foreign ownership tend to isolate the benefited mining community from local residents. Using data from Kyrgyzstan household panel surveys from 2010 to 2016, the study shows that Kumtor, the country's largest foreign mine, offers better social benefits only to mine-related workers. The study also finds that the mining industry's wealth is associated with economic grievances among the non-mining sector and social division. The study also suggests that Kumtor's higher corporate earnings lead to higher levels of inequality and less trust in local leaders by mine workers.

Send message to Author

Paper abstract:

The relationship between trade and poverty has been on the academic and policy agenda for a long time. In spite of this, no consensus has been reached so far as to whether trade has an unambiguously positive effect on poverty. The purpose of the present study is to identify the effect of trade on the well-being of Kyrgyz farmers employing household survey data “Life in Kyrgyzstan” for 2012 and 2013. In doing so, the standard Rajan-Zingales (R. G. Rajan & Zingales, 1998) identification strategy (or Dean Yang’s identification strategy (Yang, 2008) as applied to migration) is employed. Specifically, by constructing a measure of demand shock for agricultural commodities produced and sold by the farm households and interacting it with a measure of natural trade openness, the production and consumption channels of the effect of trade on poverty are explored. Results suggest that trade has a big impact on Kyrgyz farmers. However, this effect crucially depends on the level of farmers’ integration into markets: households living close to oblast centers and/or the cities of Bishkek and Osh, on average, benefit from trade, while those living in very remote areas are not able to take advantage of this potential. Thus, a farm household that is the most integrated to trade (i.e., lives in the oblast center or in Bishkek or Osh), which is exposed to a positive 75th percentile of the foreign demand shock experiences a rise in its annual consumption by 5-13%, ceteris paribus. At the same time, a household living 75th percentile distance away from the economic center and subjected to the same level of shock is hurt, by a fall in its consumption by 11-34% per year. Therefore, policies to improve farmers’ integration into agricultural markets are crucial in ensuring that more households can benefit from trade. Among possible ways to achieve this are improving the state of the rural roads, agricultural technology, and access to markets.

Send message to Authors

Paper abstract:

This study attempts to examine the quantitative impact of financial shocks on society, more precisely on the nation`s income within sustainable development in the Kyrgyz Republic. We focus on financial shocks as they have received wide attention in the policy debate after the global financial-economic crisis of 2008. Seasonally adjusted quarterly data from 2008 to 2019 was used to study the transmission mechanism of the financial shocks on the nation`s income in the Kyrgyz Republic by employing the vector autoregression approach (VAR). The data set includes the following variables: gross national product on purchasing power parity rates (GNI), deposits of the banking system of Kyrgyzstan, credits of the banking system, remittances inflow, foreign direct investment inflow, CPI (consumer price index).

The conducted empirical analysis indicated that the wealth of the nation in the Kyrgyz Republic is affected by financial shocks through the transmission channels, in particular, remittances inflow, exchange rate, and banking (deposit and credit) channels, which afterwards influence the GNI of the country. In the first stand of results, it was revealed that the effects of an external shock disseminated through the channels of transmission and had an impact on national income. The second strand of the results investigates the positive relationship between transmission channels as remittances inflows, banking sector and GNI within the first six quarters. Thus, a decline in the variables has a significant affirmative effect on the nation`s income which in turn affects consumption. On the other hand, the response of remittances to a GNI shock is positive, statistically significant and has a multiplicative effect within the ten periods. From the empirical standpoint, an exception is the exchange rate channel that adversely influences GNI within first four quarters. Particularly, the variance decomposition analysis demonstrated that in a baseline specification, almost 17 % of 1 % standard deviation in GNI explained by deposits, 16 % by remittances 16 % (which in turn has effects on FDI by 22 % and on exchange rate by 33 %), by CPI 1 %, while own shock accounts for 60 % within the first 6 months. Therefore, the policymakers of the Kyrgyz Republic may foresee the crisis transmission through for above- mentioned transmission channels.

Send message to Authors

Paper short abstract:

Co-author: Kalybek Choroev bbolotbek@mail.ru

Paper abstract:

The paper focuses on the process of building a socio-economic system in Kyrgyzstan based on the principles of a modern market economy. The study highlights the deep crisis phenomena that have acquired a systemic character in the country's economy, leading to significant social stratification and poverty. To address these issues, theauthors accomplish economic-mathematical and econometric analysis using new information technologies and methods of machine learning to analyze and forecast the labor market of Kyrgyzstan.

The research uses mathematical models and methods to study the modern labor market of Kyrgyzstan, including its conjuncture, dynamics, and main characteristics. The study proposes mathematical models for labor market analysis that take into account the gender component and sectoral asymmetry in the Kyrgyz Republic’ economy. Additionally, new balance models have been developed to study labor resources, employment, and unemployment, taking into account external and internal labor migration, as well as balance models for the female segment of the labor market.

The paper also examines the features of employment and sectoral segregation, as well as the main factors determining the growth of the level of unemployment, including female unemployment. The study uses machine learning and regression and factor analysis methods to explore the influence of macroeconomic factors on the level of employment and unemployment, constructing probabilistic predictive models for analysis and estimates and forecasts of employment and unemployment, including the gender component.

In conclusion, the research provides a systematic approach based on mathematical modeling, econometric forecasting methods, and new information technologies and methods of machine learning for the analysis and forecast of the labor market of Kyrgyzstan. The study's findings could be of great theoretical and scientific and practical importance to policymakers and stakeholders seeking to develop and implement strategies to improve the country's socio-economic system and labor market.