NYT: An Economic Boom Has Begun In Kyrgyzstan Amid Sanctions Against Russia

The country's economy grew by 11% last year.

Kyrgyzstan's economy grew by 11% last year; according to the Asian Development Bank, this was largely driven by the re-export of goods to Russia amid Western sanctions. This is reported by The New York Times reports, citing Kyrgyz officials, businesspeople, and economists.

Over the past four years, re-exports have accounted for 30–40% of the country’s economic growth, according to data cited by the newspaper. Cars, electronics, and equipment—including items with potential dual-use applications—were shipped through Kyrgyzstan to Russia, the NYT reports. High gold prices, the development of the financial and cryptocurrency sectors, and increased government spending on construction also contributed to the growth.

In Bishkek, the economic boom is accompanied by large-scale construction—roads, airports, and other infrastructure projects are being upgraded, the newspaper notes. “There’s a sense that the economy has grown—it’s like a wave, and you want to ride it,” said entrepreneur Chingiz Alkanov, who is building a logistics hub near Bishkek. At the same time, Mirlan Akzhigitov, head of the Royal Tower development company, warned: “This won’t last forever. Right now, we’re at the top of the mountain.”

Kyrgyz authorities attribute the growth to more than just re-exports. Kyrgyz Prime Minister Adylbek Kasymaliev stated that the country has increased tax revenues and customs duties, and that government investment in fixed assets has grown 16-fold since 2021. “Right now, our only path is growth. We plan to grow continuously over the next decade,” Kasymaliev said.

At the same time, the NYT notes, Kyrgyzstan is facing pressure from the West. Western countries are imposing sanctions on Kyrgyz organizations involved in supplying goods to Russia. Exports from the EU to Kyrgyzstan reached about $2.5 billion last year—eight times the 2021 level, though lower than the 2023 peak of $3.1 billion, the newspaper reports.

Kasymaliev stated that the Kyrgyz authorities are monitoring goods subject to sanctions imposed by the EU, the U.S., and the U.K. According to him, some suppliers reported shipments to Kyrgyzstan only “on paper.” “Sometimes it feels as though their main goal is to make a sale and then blame Kyrgyzstan,” the prime minister said.

At the same time, this growth is accompanied by rising prices and the risk of the economy overheating, as pointed out by the International Monetary Fund (IMF), the NYT notes: Inflation in Kyrgyzstan, for example, remains at around 11%. Economist Azamat Akenev believes that the benefits of growth are primarily reaped by representatives of the financial, construction, and logistics sectors, as well as people close to the government. “New wealthy people have emerged in the country—those who are close to the government,” he said.

Back in late February, the European Union demanded that the Kyrgyz authorities tighten controls on exports of European goods to Russia, as the country had become a conduit for the supply of equipment banned under sanctions against Moscow, Reuters reported.

In April, the EU adopted its 20th package of anti-Russian sanctions. Among other measures, it included restrictions targeting Kyrgyzstan. The European Union banned the export of computer-numerical-control (CNC) machine tools to Kyrgyzstan due to concerns about their re-export. The EU also imposed a ban on transactions with four banks in Kyrgyzstan, Laos, and Azerbaijan for aiding Russia.

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