ECR Country view: Five reasons why 2011 will see renewed violence in Kyrgyzstan (and one reason why it won’t)

	Country risk March 2011: Middle East drops, sub-Saharan Africa rises For the March quarterly country score rankings click here For live country scores and rankings visit www.euromoneycountryrisk.com.  Methodology For more information contact Andrew Mortimer, Deputy Editor - Euromoney Country Risk (ECR) +44 (0) 20 7779 8287, amortimer@euromoney.com. About ECR Related:  Singapore considered the safest country in Asia Egypt’s finances will weather the storm Ghana to post double digit growth in 2011, driven by offshore oil production

Five reasons for: 1. A Fragile Coalition: Unusually for Central Asia, the election in October of an interim government led by President Roza Otunbayeva was judged by international investors to have been a fair contest. However, it remains to be seen whether the new parliamentary system adopted since the deposing of Kurmanbek Bakiyev last summer can be made to work as a system of government. The coalition between the SDPK, Ata-Meken and Respublika parties has already fallen apart once in December after the Ata-Meken party leader, Omurbek Tekebayev, failed to win election as parliamentary speaker. The dispute was eventually resolved, but tensions remain over which parties will control key government posts. The number of parties in the already stretched coalition may soon increase to four if, as many observers predict, the nationalist Ata-Jurt party are invited to join. The party has close links to former President Bakiyev, but its strong electoral base in the south may help remove the perception that the government is northern-dominated. 2. The south remains a concern: An uneasy peace remains in the province of Osh, where 426 people died in ethnic clashes between Uzbeks and Kyrgyz last summer. However, the government is said to have “have little control of local authorities in the south”, according to António Guterres, the UN High Commissioner for Refugees. Over 85 percent of 1,279 domestic terrorist suspects recognized by the Kyrgyz Interior Ministry are based in the south. The majority of these are members of Hizb ut-Tahrir, a banned Islamic group which advocates the creation of an Islamic caliphate. The government announced plans to create an anti-terrorism department in January, but it remains to be seen whether the rule of law can be upheld in a region which has long been the site of ethnic conflict. 3. Ethnic tensions remain high: The persecution of the Uzbek minority lead to thousands of people being displaced in 2010. The Kyrgyz authorities remain suspicious that extremist groups from Uzbekistan were behind much of the unrest. The leader of the national commission charged with investigating the violence, Abdygany Erkebayev, claimed that local Uzbek leader Kadyrzhan Batyrov incited the unrest and alleged that he petitioned of the government of Uzbekistan to intervene. Ethnic Uzbeks dispute these allegations, but with borders between Kyrgyzstan, Uzbekistan and Tajikistan highly porous, each country remains vulnerable to attack by foreign insurgents. 4. An armed population: A worrying number of weapons seizures have been carried out by Kyrgyz security forces so far this year. Weapons recovered in the Osh region include grenades, pistols and Kalashnikov assault rifles. In Bishkek, three police officers were killed on January 5th during a security check. A large cache of grenade launchers, mines and automatic weapons was discovered across the border in Tajikistan on January 11th. The evidence suggests that insurgents and terrorist groups in the region will have no trouble arming themselves in the event of further unrest. 5. Democracy doesn’t necessarily mean stability: Ironically, the increase in democratic momentum in Kyrgyzstan may itself prove to be a destabilising influence in the region. “We see the vote as providing a mixed bag for investors and/or country watchers,” notes Chris McKee, CEO of PRS Group, a political risk consultancy. “Ethnic divisions in the region are by no means confined to Kyrgyzstan – indeed they transcend state lines – and it would not be surprising if a wider movement toward greater democracy is accompanied by heightened ethnic violence.” And one reason against: 1. Kazakhstan: The wealthiest country in the region, Kazakhstan remains of crucial strategic importance both to stability in Kyrgyzstan and also the continuing war in Afghanistan. Ensuring that local ethnics groups refrain from further violence will be the first big test of whether Kazakhstan, the current leader of the Organisation for Security and Cooperation in Europe (OSCE), is truly willing to become a force for stability in Central Asia. Troops from the Kazakh Airborne forces carried out large-scale anti-terrorist exercises in January in readiness for the insurgent threat. However, Kazakh military readiness must be matched by diplomatic pressure on the Kyrgyz and Uzbek governments to co-operate if further unrest in the region is to be avoided.

View Kyrgyz Republic's current country risk score on Euromoney country risk

Score countries

Kyrgyz Republic
Kazakhstan
Uzbekistan

A version of this article first appeared in Euromoney Country Risk. Euromoney Country Risk is an online service from Euromoney dedicated to sovereign and country risk.