The Kyrgyz economy has been, since itsearliest days, the most liberal and open among Central Asiancountries resulting in an atypical structural transformationwith limited productivity growth. It was the first CentralAsian country to become a WTO member in 1998 and its tradeshare in GDP is the highest in the region. This is largelydue to the flourishing cross-border trade with KyrgyzRepublic’s large markets, Dordoi and Kara-Su, intermediatinglarge volumes of goods: importing goods through both formaland informal trade systems, mainly from China, andre-exporting (in few cases with some value-addition) most ofthat to other economies in the region. It has highlyentrepreneurial traders and a logistics-system that caterswell to this large ‘entrepot’ trade. Agriculture and lightmanufacturing have contributed to its exports. This noteassesses the potential impact of BRI over connectivity andthe Kazakh economy. It looks at how, if fully implementedglobally, the BRI is expected to achieve better transportconnections and greater economic integration ofparticipating BRI countries, discusses improvements inKazakhstan’s cross-border transport, electricity and ICTinfrastructure to-date, and the potential impact of thecompletion of BRI transport projects on lowering Kazakhshipment time. It further looks at the likely economicimpact of BRI reductions in shipment time on exports, FDIand GDP, the within country regional distribution of thatimpact and how complementary polices can enhance thepositive impact and reduce regional inequity. Finally, italso examines the fiscal risk of scaling-up investment inBRI projects in the coming years without underminingmedium-term debt sustainability.
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