Chinese investment and initiatives such as the Belt and Road (BRI) have the potential to promote new development pathways through infrastructure connectivity, stimulating job creation and encouraging economic transformation.
As China’s role across the region, including in Kyrgyzstan, has increased, so have concerns about the economic, financial, social and environmental risks of its activities. Transparency of Chinese lending, lack of employment opportunities and contractual liabilities have been raised by Western and developing country commentators alike. These risks will manifest differently across different countries. Existing development and economic policies, as well as political processes, can either increase vulnerability, exposure and risks, or build capacities, opportunities and resilience. It is also not one sided. How China’s impact on Kyrgyzstan development manifests depends on the balance of positive and negative outcomes deriving from its engagement and how risks are managed by China and host countries alike.
While this report takes the BRI as its main focus, an assessment of the risks deriving from Chinese investment in Kyrgyzstan cannot ignore other Chinese activities in the country, including private investment and trade. Many of those activities predate the BRI, and are often under other frameworks of engagement, such as the Shanghai Cooperation Organisation.
This report has tried to capture these forms of engagement to paint a comprehensive picture of the risks and opportunities of Chinese investment and infrastructure to the Kyrgyz development process. It explores these risks through two case studies: macro-level risks of Chinese investment and infrastructure projects, such as debt sustainability and security; and investment in the Kyrgyz gold mining sector.
