Friday, July 13, 2012 -
Kyrgyz Prime Minister Omurbek Babanov warned his government ministers on Friday to resist the urge to seize private assets, so as not to frighten off foreign investors.
“We should forget the word ‘nationalization’, because it repels foreign investments,” Babanov told a cabinet meeting in the Kyrgyz capital Bishkek, the KyrTAG news agency reported.
His comments came as grasping politicians bay for foreign blood following publication last month of an 800-page parliamentary report into an alleged array of illegalities committed by the Canadian-run flagship gold mining company Kumtor.
Enraged deputies debating the study which documented supposed ecological and financial violations called for immediate jailing of Kumtor’s senior managers and kicking the Canadians out of Kyrgyzstan.
There were also calls for the government to wrest control of the controlling stake in the company, held by Toronto-based Centerra Gold. Kyrgyzstan owns the 33 percent of the firm, which provides around 12 percent of the country’s gross domestic product (GDP).
“We don’t fear international courts,” said some deputies, the independent 24.kg news agency reported at the time.
Eventually, the Kyrgyz parliament passed a resolution last month that will lead to a renegotiation of Kumtor’s contract with the state.
The uncertainty has caused the firm's stocks to fall precipitously as jittery shareholders abandon their stakes, fearing an asset grab by the Kyrgyz government.
Babanov justified his assertion that a wave of resource nationalism would be bad for the country by pointing out that more than 80 large- and medium-sized enterprises are currently lying idle because the country lacks the finances and expertise to revive them.
“At a time when businesses are idle, we should encourage the attraction of investments,” he advised the government ministers.