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Kyrgyzstan - Corruption

Corruption remains a serious problem at all levels and in all sectors of Kyrgyz society and the economy. According to the Transparency International Corruption Perception Index, in 2012 the Kyrgyz Republic ranked 154th out of 176 countries surveyed. Kyrgyz politicians and citizens alike are aware of the systemic corruption but the problem is deeply entrenched and difficult to fight. Moreover, many in the Kyrgyz Republic view paying of bribes as the most efficient way to receive government assistance and many, albeit indirectly, gain benefits from corrupt practices.

The Kyrgyz Republic is a signatory of the UN Anticorruption Convention but not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Kyrgyz Government recently announced a number of initiatives to fight corruption. Current President Almazbek Atambayev established a new anticorruption service within the State Committee on National Security. The service has taken action against a limited number of ministers and parliamentarians.

The Kyrgyz Government encourages all companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials, but not all companies have effective internal controls. The Kyrgyz Republic has laws that criminalize giving and accepting a bribe, with penalties ranging from a small administrative fine to a prison sentence, but the government’s active enforcement of these laws is uneven. While, at times, senior government officials take anti-corruption efforts seriously, a truly serious, sustained effort would probably result in more consistent enforcement of the existing laws.

Operating a business in Kyrgyz Republic will likely involve some or all of the following experiences. The Government of the Kyrgyz Republic issues special license plates to foreign business owners, which the police target for regular stops. Foreign businesses may also find themselves the subject of frequent tax audits and have a variety of inspectors consistently visiting their establishments. Each experience opens the door for bribery.

Corruption, including bribery, raises the costs and risks of doing business. Corruption has a corrosive impact on both market opportunities for U.S. companies and the broader business climate. It also deters international investment, stifles economic growth and development, distorts prices, and undermines the rule of law.

Harassment and extortion by people who purport to be Kyrgyz police officers take place occasionally. According to Kyrgyz law, any person claiming to be a police officer must show identifying documents on demand. The Kyrgyz Republic is a mostly cash-based economy, although credit cards can be used at major Western-style stores and some restaurants.

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Page last modified: 05-03-2013 19:05:49 ZULU