FLAWED LEGISLATION DISCOURAGES INVESTMENT IN KYRGYZSTAN’S GOLD AND RARE METAL INDUSTRY.

Interviewed in yesterday’s issue of the official Slovo Kyrgyzstana, Aleksandr Yarkov–the country’s foremost specialist in nonferrous metallurgy–strongly criticizes the changes made in the last few years to the legislation on foreign investment. The nonferrous sector is Kyrgyzstan’s chief source of foreign exchange earnings. Potentially a highly promising area for Western investment, the sector–according to Yarkov–has become unattractive because of disincentives unwisely introduced by the political authorities.

This situation has driven out leading U.S., Canadian, and Australian firms that had sought to acquire mining rights to Kyrgyzstan’s large deposits of gold and other metal ores. While recognizing that declining world prices for these metals are also a factor, Yarkov focuses on the effects of last year’s amendments to the tax code and the law on foreign investment. According to him, the amendments unduly raise taxes on profits, create potential risks to foreign capital, and in many ways run counter to the concept of investment protection. Yarkov calls on the parliament and executive leadership to act to improve that legislation. (Slovo Kyrgyzstana, August 5, cited by Russian agencies on the same date)–VS

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