On the international level, the initiative is potentially harmful to Kyrgyzstan’s relations with Russia. According to Andrey Grozin, representative of the Moscow Institute of the Commonwealth Independent States (CIS), the HIPC is against Russia’s interests. The initiative will allow a greater involvement of the West in Kyrgyzstan’s economy, and therefore curb Russia’s leverage in the country. Although officially Russia has supported the HIPC in Kyrgyzstan, it is unlikely that Kyrgyz President Kurmanbek Bakiyev would risk relations with Moscow if any disagreements still remain.

Former Prime Minister Felix Kulov signed a letter of agreement with the HIPC in December 2006 despite pressure stemming from the parliament and civil society groups. However, after the parliament declined his candidacy in January, he called off his signature.

Parliament Speaker Marat Sultanov argues that HIPC cannot be considered in Kyrgyzstan because the initiative reduces the Kyrgyz government’s shares in key economic sectors. A number of top officials consider the proposed debt-relief plan as insufficient. They claim that instead of $500-700 millions, at least half of Kyrgyzstan’s $2 million debt should be written off.

Representatives of the World Bank’s Bishkek office argue that HIPC offers a unique opportunity for the Kyrgyz government to reduce external debt and implement vital economic and administrative reforms. World Bank representatives also argue that HIPC in Kyrgyzstan has been considered under highly advantageous positions. Previous HIPC clients were granted less favorable conditions. Besides, Western observers claim that the role of the international donor community in alleviating poverty in Kyrgyzstan has been largely underestimated both by the government and society.

Some Kyrgyz experts argue that the HIPC is not favored by the government because of the requirement to reform the energy sector. Today, Kyrgyzstan’s energy sector represents a core part of the national economy and is arguably a major source of large-scale corruption. According to newspaper Bely parohod, the involvement of the international community in the energy sector will curb sources of illegal profit to some Kyrgyz officials.

As it became evident that the HIPC’s chances in Kyrgyzstan are slim, local civil society groups are rejoicing their victory over the international community. A number of NGOs have actively opposed the initiative since summer 2006. A few dozen Kyrgyz students participated in street demonstrations in Bishkek and wrote numerous articles in the local media against the HIPC. Their main concern was that electricity tariffs not be increased and that international financial institutions would only damage Kyrgyzstan’s economy under the initiative.

The HIPC’s opponents’ critique also contains nationalist undertones, claiming that the World Bank and the IMF’s pervasive engagement into local affairs undermine Kyrgyzstan’s sovereignty. The fact that many poor African states implemented HIPC and that Kyrgyzstan is the first CIS member to be considered under the initiative also fueled local nationalist moods. Both the government and parliament used civil society’s activism to show how the population opposes the initiative.

Anti-HIPC activists propose various controversial projects as an alternative. Their proposals range from mobilizing the entire population to pay off the external debt that comprises roughly 125 percent of Kyrgyzstan’s GDP, to suing all former and current officials who have ever agreed to take foreign credits. As one economist from the Kyrgyz government observed, “As a public official it takes me a lot effort to evaluate the real costs and benefits of the HIPC, I’m not sure if an average citizen can fully understand what it is all about”. Along with such nationalist outcries, neither the government, nor the parliament came up with a sober economic project to relieve the external debt and reform the energy sector.

Although the Kyrgyz government is yet to announce its official decision on the HIPC, the initiative is likely to be rejected. Pervasive corruption in public structures and the government’s reluctance to reform the energy sector are arguably the main reasons for the anti-HIPC moods. The parliament’s fear of losing support because of increased electricity tariffs is an additional reason. Society’s concern about being placed on the same rank as some of the poorest African states has also fueled the anti-HIPC debate. Today it seems that no one in Kyrgyzstan is in favor of the HIPC, yet everyone has a unique reason to oppose it.