Kyrgyzstan: A “free market” disaster

The convulsions in the central Asian nation of Kyrgyzstan have a lot less to do with the yearning for democracy there than they do with the aftermath of the World Trade Organization’s forced “liberalization” of its economy. The policy has left the country with a few wealthy autocrats and devastated the lives of the overwhelming majority of its people.

Kyrgyzstan, in 1998, became the first former Soviet republic to be accepted into the World Trade Organization.

A USAID report to the U.S. Congress a few years later bragged: “Kyrgyzstan’s major achievement since independence in 1991 has been to establish the basic framework for a market economy. Foreign investment is strongly encouraged and the country’s privatization is regarded as among the most ambitious of the former Soviet republics. Kyrgyzstan has been successful in implementing a tight fiscal policy which contributes to economic stability.”

Numerous reports document that what was a largely stable managed economy with a substantial barter component has been transformed into a capitalist set-up that has made a few rich while it has impoverished the country’s majority.

As early as 2002, Mark Ames of the Moscow-based alternative newspaper, The Exile, reported on many of the deteriorating conditions that have laid the groundwork for the current chaos and violence:

“Entry into the World Trade Organization didn’t do a single thing for Kyrgyzstan. In fact, in the three and a half years since joining, the country’s economy, which was one of the best performing in the region until then, slowed dramatically to the point of contraction, its debt ballooned and foreign investment has practically disappeared. The WTO-enforced liberalization of the economy meant that neighboring autocratic regimes like Uzbekistan, which violate the neo-liberal orthodoxy by subsidizing industry, have undercut the Kyrgyz and devastated local industry.

“Worse still, its experiment with democracy, which according to the dogma preached by the fundamentalist neo-liberals is supposed to walk hand in hand with free markets, has, since joining the WTO, been abandoned for the usual Central Asian autocracy. The New York Committee to Protect Journalists recently chose Kyrgyzstan as one of the 10 worse places for a journalist to work in the world due to government harassment. Clearly the WTO is a cover for transnational companies to open up new markets in underdeveloped countries hiding under the guise of once-fashionable late-20th centrury dogma.”

A review of reports from a variety of sources indicate that since the collapse of the Soviet Union almost all government-owned enterprises in Kyrgyzstan have been transferred to private control and that WTO-mandated budget cuts have diminished the resources of the government and ballooned its debt.

Exports of gold, mercury and electricity have increased while domestically Kyrgyz goods are being replaced with imports.

Gas-powered vehicle use has increased and, coupled with a huge speed up in de-forestation, has led to deterioration in the country’s wildlife and air quality.

The World Health Organization reports growing mortality rates and decreasing life expectancy since the Soviet days. The population, which once received free medical care, now is paying rapidly escalating health care costs with many going with no medical care whatsoever.

In short, it appears that Kyrgyzstan, is one of the best modern-day examples of the failure of “free market” capitalism to meet the needs of the people.

For an interesting website that has Kyrgyzstani oral histories go to:

Photo: Map of the Central Asian nation of Kyrgyzstan. Kingvinvin/CC


John Wojcik
John Wojcik

John Wojcik is Editor-in-Chief of People's World. He joined the staff as Labor Editor in May 2007 after working as a union meat cutter in northern New Jersey. There, he served as a shop steward and a member of a UFCW contract negotiating committee. In the 1970s and '80s, he was a political action reporter for the Daily World, this newspaper's predecessor, and was active in electoral politics in Brooklyn, New York.