In order to promote Pakistan’s trade with its non-traditional trading partners, the Pakistan Business Council (PBC) since 2015 has been doing a Country Profile Series aimed at introducing non-traditional markets to Pakistan’s exporters. This is the fourth publication of the Central Asia Country Series and features the Kyrgyz Republic.
Situated on the Pamirs and the Tian Shen range; the Kyrgyz Republic is the 4th largest country amongst the Central Asian States. Throughout history, the mountainous terrain has protected Kyrgyzstan from numerous invaders however it has also hindered economic progress in the country. As of 2016, Kyrgyzstan ranked 4th in terms of GDP per capita and last in terms of nominal GDP out of the five Central Asian States.
The following table shows a comparison between the Kyrgyz Republic and Pakistan for the three-year period ending in 2016. The Kyrgyz economy is not only smaller than the Pakistani economy, the per capita income is also lower. Even though the Kyrgyz Som enjoys a better exchange rate against the USD compared to the PKR, the total forex and gold reserves of Kyrgyzstan are a mere 9% of what Pakistan has.
|Nominal GDP (USD Billions)||244.36||271.05||283.66||7.47||6.68||6.55|
|GDP per Capita||1,316||1,431||1,468||1,278||1,121||1,077|
|Exchange Rate (LCU per USD, Period Average)||101||103||105||54||65||70|
Kyrgyzstan derives most of its GDP from the service sector, around 50% which is also the largest employer in the country. The agriculture sector has never thrived owing to mountainous terrain, however the country is rich in mineral deposits such as gold which Kyrgyzstan, has exploited. Gold is the foremost export and as of 2016 gold exports accounted for 10% of the GDP.
Most of the bilateral trade is concentrated towards Kyrgyzstan’s neighboring countries, Russia, Kazakhstan and China. Although Switzerland is the largest export destination of Kyrgyzstan, the trade is unilateral to a large extent. Imports from Russia and Kazakhstan majorly comprise of mineral fuel and food crops whereas the exports are dominated by machinery, articles of apparel and dried beans and vegetables.
Pakistan has not been a major trading partner of Kyrgyzstan. Part of this is owing to the similar nature of products imported by both countries and the absence of a suitable trading route. As of 2016, exports to Pakistan were valued at USD 0.31 million and imports at USD 3.27 million resulting in a trade deficit of USD 2.96 million. Major exports to Pakistan comprised of edible meat offal, raw hides and machinery. Major imports on the other hand, comprised of pharmaceutical products, furniture & bedding and toys. Both the countries, need to tap in to the vast trade potential with each other which will become a reality once CPEC comes into effect.