Investment Policy Review - Kyrgyzstan

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Kyrgyzstan has substantial untapped economic growth and sustainable development opportunities. Strategically located at the crossroads between Europe and Asia, on the ancient Silk Road, this landlocked mountainous country is an established trading center and has the potential to become a regional transport and logistics hub. Temperate weather and good pasture lands for cattle breeding have made agriculture a major economic activity. Abundant mineral resources have started attracting significant investment from foreign mining companies.



Strategic priorities to diversify FDI attraction and promote sustainable development

This chapter presents a strategy for Kyrgyzstan to increase FDI inflows, foster economic diversification and achieve sustainable development outcomes.Experience from developing and transition economies shows that several benefits can be attached to projects involving FDI (e.g. higher fixed capital formation, employment, the stimulation of SMEs, transfers of skills and technology, increased tax revenues and opportunities to upgrade production along value chains) but there are also risks (e.g. environmental degradation, the displacement of local firms and interference with the rights of local communities). Thus, countries should adopt strategies that foster optimal contributions from FDI.


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