Improving Resource Governance in the Kyrgyz Republic: 12 Priority Issues for the Mining Sector
Natural resources form a substantial part of the economy of the Kyrgyz Republic. Gold extraction is the biggest contributor. According to the latest Extractive Industries Transparency Initiative (EITI) report, which covers 2013-2014, the mining sector contributed around 8 percent of GDP, over 50 percent of industrial production, 40 percent of total exports, 17 percent of tax revenues and 8 percent of total government revenues.
To capture greater benefits for the country and mining-affected communities since 2012, the government of the Kyrgyz Republic has undertaken significant reforms in mineral resource governance, mainly with regard to licensing, the fiscal regime and revenue sharing. Officials have also worked to increase transparency.
To help the Kyrgyz Republic realize more benefits from its endowments of minerals through the improvement of mining sector management, NRGI conducted a high-level analysis of the country’s mineral resources governance with a more holistic approach, considering linkages to broader macroeconomic issues including revenue management, public spending and private sector development. The analysis also addresses broader governance issues, including government strategy and transparency and accountability.
The analysis utilized the Natural Resource Charter and the Natural Resource Charter Benchmarking Framework, a robust framework for unified natural resource governance that outlines policy options and practical advice based on global best practices in natural resources management. The framework is structured around 12 good practice principles, called precepts, that cover the sequence of decisions that governments must make to turn subsoil resources into development.
In each of these 12 decision areas, the paper presents a brief contextual overview of existing Kyrgyz Republic resource management policies and processes followed by a priority issue, identifying further work needed to address key policy challenges. The paper aims to catalyze a discussion among Kyrgyz Republic stakeholders about further policy development based on a holistic approach, which addresses both real opportunities for growth and development and a series of economic and political challenges that natural resource extraction presents.