Turkey offers Kyrgyzstan $100 mln in cheap loans

Turkey offers Kyrgyzstan $100 mln in cheap loans

Kyrgyz Prime Minister Omurbek Babanov (Photo: Today's Zaman)

June 28, 2012, Thursday/ 18:34:00/ TODAY'S ZAMAN

As part of efforts to help Kyrgyzstan improve its infrastructure, Turkey will extend the country $100 million in loans.

A deal for the loan was signed between Turkish and Kyrgyz officials on Thursday in Bishkek. Kyrgyz Prime Minister Omurbek Babanov, Minister of Finance Akılbek Caparov and Turkish Ambassador in Bishkek Nejat Akçal participated in the signing ceremony. In addition to the $100 million loan, Turkey also granted $6 million in financial support to the Central Asian government. The support comes at a time when the Kyrgyz state is seeking cash inflows amid a financial bottleneck. Domestic political tension back in 2010 led to an increased budget deficit in the country. In 2010, protests ended with the ouster of the Central Asian country’s former president, Kurmanbek Bakiyev. The Kyrgyz government earlier applied to the Eurasian Economic Community (EAEC or EurAsEC) for $106 million in loans but failed to receive this amount. An official visit by Kyrgyz President Almazbek Atambayev to Ankara this year paved the way for the $106 million loan from Turkey.

Turkey has given Kyrgyzstan $30 million in the past two years and written off $51 million in debt. The Krygyz budget deficit recently hit $612 million. As he thanked the Turkish state at Thursday’s ceremony, Babanov said Kyrgyzstan would repay the debt in a 20-year term with 0.18 percent interest. Kyrgyzstan signed a strategic cooperation agreement with Turkey last year and is also part of the Nakhchivan agreement signed in 2009 between Turkey, Kazakhstan, Azerbaijan and Kyrgyzstan to boost relations in all fields among these countries.

Data from the Turkish Statistics Institute (TurkStat) show trade between Turkey and Kyrgyzstan was recorded at $180 million last year -- more than four times bigger than the 2002 figure -- and the two nations aim to increase trade volume to $1 billion over the next five years. The industries of construction, infrastructure and mining remain key areas of investment between the two countries.

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