Kyrgyzstan: Invest in people to reduce human capital flight, says UN expert

BISHKEK (3 June 2022) – Kyrgyzstan's talented youth must not become its most important export commodity, Olivier De Schutter, the UN Special Rapporteur on extreme poverty and human rights said, in a statement made today at the end of a 12-day visit to the country.

Kyrgyzstan remains overly dependent on the extractive and tourism industries and on revenues from outmigration, with remittances representing 2.4 billion USD in 2019, or almost 30 percent of the country’s GDP. “Remittances benefit primarily poor rural households and reduced poverty by 11 percentage points in 2019. But they cannot be a long-term strategy for the development of the country. This is human capital flight of unprecedented proportions,” De Schutter said.

The UN Special Rapporteur, an independent expert appointed by the UN Human Rights Council to investigate poverty globally was invited by the Kyrgyz Government to report on efforts made to reduce poverty in the country. From May 23 to 3 June, the expert met with eight ministries, MPs, members of local governments, regional authorities, people affected by poverty, civil society organizations, and development cooperation and UN agencies.

Faced with post-pandemic challenges and the consequences of sanctions imposed on Russia for its invasion of Ukraine, Kyrgyzstan is struggling to cope with rising food prices, falling revenue from remittances, and increasing unemployment.

"While poverty in Kyrgyzstan has been gradually decreasing, more than a quarter of the population still lived under the national poverty line in 2020,” De Schutter said. “Today, the World Bank estimates poverty could rise to 38 percent of the population by the end of the year, setting the country back over a decade in its poverty alleviation efforts,” he said.

The Special Rapporteur urged Kyrgyzstan to move away from reliance on remittances and face its challenges head on by investing more in pre-primary education, improving the quality of schools and strengthening its social protection system to protect persons in poverty.

“With 350,000 young people set to graduate from school this year, the country must do more to provide its youth with real opportunities beyond migration. It must work to diversify its economy, provide quality jobs, and support informal workers in their transition to formal employment. Failing to do so will prolong the human capital flight crisis, which may ultimately harm the country’s development prospects,” De Schutter said.

According to the expert, improving the coverage of social protection benefits will protect the country’s poorest, build resilience and achieve important multiplier effects for the economy. Social protection transfers are currently exceedingly low in Kyrgyzstan, with child benefits and minimum income schemes barely allowing poor families to make ends meet. The monthly threshold for receiving the Monthly Benefit for Poor Families is also set at a very low level, effectively excluding thousands of families living in poverty.

“Financing social protection requires a budget. Therefore, accelerating the formalization of workers should be a priority: workers with a formal contract not only contribute to the viability of social insurance schemes – they also pay taxes. Resources from mining should also be used to invest in people, by ringfencing part of the revenues from the extractive industry to finance social protection. There is no better investment a country can make,” the expert said.

The Special Rapporteur also urged the government to tackle corruption more effectively. “Corruption imposes a triple sentence on people in poverty: having to pay bribes makes social services more expensive; it particularly affects people who dare not complain fearing retaliation; and discourages both investors and donors from entering or remaining in the country,” De Schutter said.

“By investing in its population and providing them with an alternative to migration, strengthening its education, healthcare and social protection systems, and fighting corruption in all spheres, the country will be able to better protect its population from poverty and the human rights violations that result from it.”

The Special Rapporteur will present his final report on the visit to the UN Human Rights Council in June 2023.