Kyrgyzstan’s revenue decreases, ambition remains high

EITI implementation raise hopes for better governance in the mining sector.

Government revenues from mining saw a slight decrease in 2012, according to Kyrgyzstan’s EITI (KEITI) Report launched yesterday. The mining sector contributed a total of US$ 217m to state coffers, generated mainly by gold production. As in previous years, the report confirms the dependency on Centerra Gold’s Kumtor mine which alone accounted for more than 70% of the revenue. After a turbulent year, the Kyrgyz government and Centerra  reached agreement in February on the creation of a joint venture that will split control of the Kumtor mine equally between the government and Centerra.

KEITI’s 2012 EITI Report addresses one of the main issues that concern local communities and civil society in Kyrgyz republic: it clarifies the benefits that the country receives from the development of its extractives sector, says the National Coordinator Karybek Ibraev. And, while the Report brings transparency to the revenues from mining, considerable challenges in Kyrgyzstan’s extractive sector remain to be addressed. Reducing conflict among local communities, companies and the government, and increasing investor confidence was high on the agenda when representatives from KEITI met with other EITI stakeholders in Astana at the end of last year to discuss challenges in the sector and priorities for the EITI process. Clearer tax legislation, elaboration of model agreements that include a social package, and a fairer and more accountable distribution of revenues to local levels so that citizens can more clearly see the benefits from the natural resources, were considered crucial to achieve this goal.

As a result of these conversations, KEITI is now executing an ambitious 2014-2015 workplan. Preparations have already begun for the 2013 KEITI report which will not only disclose data on license holders, contracts and the beneficial owners of the companies holding licenses in Kyrgyzstan, but also attempt to monitor the use of extractive revenues allocated to local development funds, infrastructure provisions and environmental restoration, addressing citizens’ concerns about how these funds are managed. If successful in bringing about this data, KEITI has the potential of greatly contributing to inform some of the contentious debates around mining and bringing about much needed dialogue between local communities, extractive companies in Kyrgyzstan.

As highlighted by Karybek Ibraev, Head of the KEITI Secretariat "the EITI Report is KEITI’s key instrument for raising awareness about the country’s extractive sector and the 2012 edition will contribute to debate across the country".

Kalia Moldogazieva, a representative of the NGO Coalition in the Kyrgyz Republic agreed that KEITI has potential, but noted that "it is only with dedicated support from the government that KEITI will be able to achieve its goals".

Please visit this page for more information on the EITI implementation in Kyrgyz Republic.