Kyrgyzstan in Crisis

My heart goes out to the poor people of Kyrgyzstan. They seem to be sliding into civil war. The current government of this small, poor central Asian country of 5 million people, in power for only two months, seems unable to contain the ethnic violence in the south near the Uzbek boarder and is appealing for outside help. Nestled between Kazakhstan to the north, China and Uzbekistan to the east and west and Tajikistan to the south (and Afghanistan just beyond), Kyrgyzstan provides an example of how it might look easy for the U.S. to help a friend—they have allowed us to set up an airbase there that we use for supplying our troops in Afghanistan to the south. The Kyrgyz Army is weak and its police corrupt. The new government just drove out a corrupt President, Kurmanbek Bakiyev,
who had come to power in March 2005 in the bloodless Tulip Revolution that replaced Askar Akaev, Kyrgyzstan’s first President since its independence from the Soviet Union in August 1991. They need help to survive.

When I first visited this little mountain country in February 1992, I referred to it as the Switzerland of central Asia. Like Switzerland its snow-capped mountains are spectacular and it has few natural resources. I suggested that like Switzerland it could become wealthy with free markets, good policies, and hard work. I lead the International Monetary Fund’s
technical assistance to the National Bank of Kyrgyzstan and helped it replace the Russian ruble with its own currency, the Som, in May 1993. A matched set of that currency with the serial number 000000011, personally signed by the then governor Kemelbek Nanaev, hangs proudly on my office wall. At a celebration of the 5th anniversary of the Som, President Akaev, whose match set of the Som has the serial number 000000001, personally presented me with Kyrgyzstan’s Certificate of Honor for my role in introducing the currency. Some of the most exciting days of my life were in Kyrgyzstan. My strongly felt sympathies are with the new government. Yet it would be a tragic mistake for the United States to become militarily involved in restoring peace there.

Ms. Roza Otunbayeva, the interim leader until elections can be held later this year, has reaffirmed the U.S. lease on Manas Air Base after her deposed predecessor had tried to close it. She seems to be surrounded by pro market, pro freedom reformers. We have every reason to wish her government well. But a U.S. intervention would be taking sides in a potential civil war. Russia has bases in Kyrgyzstan as well and can hardly be indifferent to the fate of its neighbor and former fellow member of the Soviet Union. Russia has, up until now, wisely rejected Ms. Otunbayeva’s call for help and both Russia and the U.S. are exploring the possibility of international (U.N.) assistance. The U.S. Manas Air Base is an important U.S. air link to Afghanistan, but Kyrgyzstan is not critical to U.S. security. In any event, Ms. Otunbayeva asked Russia for help, not the U.S.

Were she to turn to us for help, it might look relatively easy to provide it. We have troops there already. But then for good or ill her problems would become ours and there is no knowing, really, what problems we might be taking on. The Viet Nam, Afghanistan and Iraq wars looked very different when we got into them than they did at the other end of the process (when ever that might be for the later two). We need to try hard to imagine how it might look in a few years looking back. If there is a good case for external help, the U.S. and Russia should be able to make that case to the U.N. If and when the U.N. acts, it will clearly be doing so above and beyond the potentially conflicting national interests of parties to a new Great Game that we and the rest of the world can ill afford.

About wcoats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 2003 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My most recent book is One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.
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