Kyrgyzstan: Bishkek Receives Second Tranche of Promised Russian Aid

Russia extended a $300-million "soft loan" to Kyrgyzstan early April 30, Kyrgyz news agencies reported.

The Kyrgyz National Bank confirmed the funds had been received. The loan comes with a mere 0.75 percent interest rate over a term of 40 years, with a built-in seven-year grace period.

The $300-million loan is part of an overall a $2.15-billion Russian aid package that was announced shortly before President Kurmanbek Bakiyev made public the government's intention to evict US forces from an airbase outside of Bishkek. [For background see the Eurasia Insight archive]. At that time, experts suggested that the Russian assistance would help bolster the Kyrgyz president's reelection hopes. [For background see the Eurasia Insight archive].

But Azamat Temirkulov, a political scientist at the American University of Central Asia in Bishkek, does not believe the money is enough to cushion the impact on Kyrgyzstan of the global economic downturn. "This money will not drastically change the economic situation in the country, but at least it will keep it afloat as it is at the moment," Temirkulov said. "Bakiyev will use the money to support the economic situation in the country at least until the elections."

"At the moment it is hard to criticize [Bakiyev] because he is implementing consistent politics. And the Russian loan is one aspect of his politics," Temirkulov added.

As part of the same package announced February 3 in Moscow, Bishkek already received a grant of $150 million from Moscow March 30.