Legal Market Overview
The elections held in October 2017 marked the first democratic transfer of power in Kyrgyzstan, yet it continues to be ranked among the top 50 countries in the world with the highest perceived level of corruption. It is the second poorest country in Central Asia after Tajikistan, with around 32% of the country’s population living below the poverty line.
Kyrgyzstan is rich in mineral resources, especially gold; the Kumtor gold mine alone accounts for 10% of the country’s GDP. In recent months, the government has increased its share of the mine from a quarter to a third, in an attempt to take more control over the country’s biggest asset. Negligible petroleum and natural gas reserves mean there is still a high dependence on foreign energy imports. The country’s plentiful water sources and mountainous terrain provide opportunities for hydroelectric projects, yet this resource remains largely untapped due to energy tariffs and restrictions on land ownership by foreigners. Agricultural processing is a key component of the economy; however, a lack of advanced technology means the work is carried out by hand, decreasing potential output.
The sanctions against Russia have had repercussions for Kyrgyzstan, with a noticeable drop in M&A transactions from the previous year. In addition, with the economy tied closely to Russia, a decrease in Russian currency value has translated to high inflation in Kyrzgystan; many firms now handle insolvency work rather than investment as in previous years. Political clean-ups have led to an increase in white-collar crime litigation, and litigation in the energy sector is particularly active. Mining still remains the most valuable source of work for local firms, which include the CIS-wide GRATA International and Centil Law as well as domestic Kyrgyz firms such as Kalikova & Associates Law Firm.