The priority area for bilateral development cooperation is the promotion of sustainable economic development. After the collapse of the Soviet Union, the newly independent Kyrgyzstan lost not only its transfer payments from Moscow, but also its market access. Industrial production almost completely collapsed.

Support from the international community, particularly from the International Monetary Fund (IMF) and the World Bank, helped the country to implement radical structural measures and hence gradually to stabilise its economy. However, lack of investment –other than in Kyrgyzstan’s gold-mining industry – poor diversification of the economy and an underdeveloped banking system are limiting its growth prospects.

GTZ provides targeted assistance to small and medium-sized enterprises (SMEs) to strengthen their performance and export capacities. This creates jobs, especially for the workforce previously employed in Soviet-style large-scale industrial enterprises. At the same time, the diversification of the economy is being promoted through the following projects:

• Development of value chains and service markets
• Building capacities of public partners for cooperation on economic development
• Promotion of self-help initiatives in rural areas
• Granting of microcredits

Disadvantaged population groups and regions are being given greater support.

In early 2008, GTZ merged three projects to form the “Promotion of Sustainable Economic Development” programme. This enables synergies to be utilised more effectively and allows better project coordination.