«The long-term consequences of the third coup in Kyrgyzstan will be a badly damaged image of the country. Potential large foreign investors who could work in the country have once again become convinced that it is meaningless to invest money in projects in the republic,» a Kazakh political scientist Zamir Karazhanov said, commenting on the short and long-term consequences of recent events for the investment climate of Kyrgyzstan.
According to the expert, in order to increase the investment attractiveness of the republic and attract new investors, it is necessary to take into account several basic requirements.
One of the most important is political stability in the country and preservation of the continuity of decisions made by the authorities. The second important requirement is the rule of law.
Zamir Karazhanov
He noted that «no one simply gives investments to anyone», especially in long-term projects. «Guarantees and obligations that will be fulfilled are needed. If these agreements do not work, or if there are doubts that they are not to be fulfilled, investors will not come. Or it will be such investors who would better not to come,» the expert says.
The political scientist gave an example — troubles with deposits that were developed by Russian and Chinese companies in Kyrgyzstan.
«Perhaps, foreign investors will not put forward demands and seek compensation for material damage now. They will take a break and wait. But as soon as the business realizes that the situation has calmed down, the question of damage will be put bluntly,» Zamir Karazhanov predicts.
One way or another, Kyrgyzstan will have to answer for the fact that investors have lost equipment, are forced to freeze work at the facilities, and Kyrgyzstanis have lost their jobs and social benefits, if they had any.
Zamir Karazhanov
The expert emphasized: it is important for the new authorities in Bishkek now «to take the situation under control and prevent new attacks on business in the country.»
«After solving tactical problems, it is necessary to move on to solving systemic problems and consequences of the change of power. The long-term consequences of the third coup in Kyrgyzstan were a badly damaged image of the country and an increase in mistrust on the part of external partners. Potential large foreign investors who could work in the country have once again made sure that investing in projects on the territory of the republic is unreasonable,» the Kazakh expert noted.
The political scientist believes that «to attract new investors to Kyrgyzstan, it is necessary to create additional advantages for them.»
The country may find itself in a situation where it will have to conclude deals that are very disadvantageous for it. Given the state of the economy and the lack of alternative proposals, the country may find itself in a circle of despair, and it is not easy to break out of it.
Zamir Karazhanov
The expert stressed that «the October events in Kyrgyzstan are not just looted offices and damaged equipment of foreign companies (it can be restored over time), it is a clear demonstration of system-level problems.»
I do not know how the new authorities of Kyrgyzstan will convince, first of all, new investors who have watched what was happening in the country, that they will guarantee security to partners.
Zamir Karazhanov
As for large and already working projects, the expert noted that, in his opinion, «business owners have two issues.»
«The first is to restore production and try to build relationships with new decision makers. The second is to stop work and leave the country. Unfortunately, it is no longer a matter of profit for them, it is a matter of minimizing losses,» the Kazakh political scientist summed up.
