Context

The Kyrgyz Republic is a landlocked, mountainous country bordered by Kazakhstan to the north, Uzbekistan to the west, Tajikistan to the southwest, and China to the east. The population is approximately 64 percent rural. Ethnic Kyrgyz make up almost 75 percent of the population, along with significant Uzbek (15 percent) and Russian (six percent) minorities, concentrated in the south and north, respectively.

The Kyrgyz Republic gained independence in 1991 with the collapse of the Soviet Union; before independence, it had been among the poorest Soviet republics, but its largely agricultural economy had been sustained by the central government in Moscow, with 98 percent of its exports going to other parts of the Soviet Union as of 1990.

The newly independent the Kyrgyz Republic, under the leadership of President Askar Akayev, was unprepared for the transition from a state-run to a free market economy. With the disappearance of central planning, capacity, and subsidies from Moscow, the agriculture and manufacturing sectors collapsed, inflation and indebtedness skyrocketed, and incomes plummeted. By 1995, after just four years of independence, GDP per capita was barely half of what it had been. In 2000, in the wake of the Russian financial crisis, the extreme poverty rate was 33 percent.

In the mid-1990s, following advice from the World Bank, the Kyrgyz Republic dismantled its very large collective farms and distributed the land to families in small parcels. This land reform, along with the opening of several gold mines, jump-started economic development again. The heavy concentration of the population in smallholder agriculture also helped create a relatively equitable society. Since 2000, The Kyrgyz Republic’s Gini coefficient has hovered around 30, which puts it in the top third of countries in equality.

By 2006, with continued economic growth and a series of reform policies in many sectors supported by many international donors, the situation has improved considerably. Extreme poverty had dropped to nine percent (from 33 percent six years before) and GDP per capita returned to pre-independence levels. (In constant dollars, however, GDP per capita still has not matched that of the Soviet era.)

Although President Akayev held power for 14 years, he was driven from power in 2005 after a popular uprising known as the “Tulip Revolution.” Another uprising in 2010 left 80 people dead and resulted in another transfer of power; it was followed two months later by violent clashes in the south between Uzbeks and Kyrgyz that killed hundreds. Since then, however, the political landscape has been relatively stable and economic growth has continued, although it is possible that corruption continues to be a challenge.

In 2014, after almost 20 years of steady if unspectacular growth, the Kyrgyz Republic finally became a lower-middle-income country. In that year, the extreme poverty rate was just one percent. Health indicators had also improved significantly. The child mortality rate was 24 per 1,000, compared to 56 per 1,000 in 1997. Stunting was 13 percent, compared to 36 percent in 1997.

Remittances

Although the government provided this basic public safety net, the large transfers of cash into improverished hands were not the result of a specific intervention but a response to market forces. Since about 2000, after the Russian Financial Crisis, labor outmigration has been a major feature of life in the Kyrgyz Republic - and remittances a major feature of the Kyrgyz economy. Kyrgyz migrants work for a period of several months or several years outside the country, usually in Russia or Kazakhstan, send money home, and eventually return to the Kyrgyz Republic.

It is difficult to pinpoint the number of labor migrants, as estimates range from 200,000 to one million annually. However, remittances have increased substantially over time from one percent of the country’s GDP in 1997 to about 33 percent, or $2.5 billion, in 2017. The Kyrgyz Republic has among the highest remittances-to-GDP ratio in the world.¹

Obviously, in addition to boosting GDP growth, remittances play a significant role in household economies. Studies have repeatedly demonstrated that migrants’ families tend to use the proceeds to buy essential goods (including education, health care, and food), to build assets, and to invest in businesses that generate more income.

These global findings align with the Kyrgyz Republic’s experience. Household budget surveys from 2010 and 2013 show that remittances reduced the number of people in poverty by six to seven percentage points annually. As one woman in our focus groups said, simply, “We have money because of migration.” And as this research has established, poverty reduction in the Kyrgyz Republic led to better food security and health, which in turn led to the stunting decline.

It is worth noting that some studies of remittances have described reasons why remittances may not address stunting as effectively as one would expect.²  For example, in some cases, families with more money to spend on food may buy unhealthy food. It is clear that this happened in the Kyrgyz Republic with breast milk substitutes. Moreover, the pressures of maintaining a household with one parent away could negatively affect the health and well-being of the parent and children left behind in ways that offset the health and well-being that can be purchased with the remittances. As the head of a kindergarten in Batken Oblast said, “There is a big difference in mental and psychological development of children with parents in migration and those children who have a parent nearby.” Despite these caveats, it is clear that remittances are an important part of the Kyrgyz Republic’s story.

Unfortunately, we do not have any stunting data between the years of 1997 and 2006. Therefore, it is impossible to know for certain whether the decline happened largely in the years before or after remittances became a key part of the Kyrgyz economy. However, it is reasonable to conclude that they played a pivotal role. In 2004 and 2005, for example, remittances already accounted for eight and 13 percent of GDP, respectively, so the impact of those inflows would be seen in the 2006 stunting data.

Since 2006, when stunting has declined more gradually from 18 to 13 percent, remittances have been the dominant source of poverty reduction and therefore likely a key driver of stunting reduction.

Preconditions for success

Although the Kyrgyz Republic was a low-income country from its independence in 1991 to 2014, one legacy of its Soviet past is that it had above average infrastructure for a low-income country. On the contrary, thanks to years of subsidies from Moscow, Kyrgyz citizens had access to education, health, and sanitation systems that resembled those in rich countries. While each system had to be adapted to more straitened circumstances after independence, many fundamentals of a more developed society were already in place.

For example, when the Kyrgyz Republic was a Soviet republic, its health system was well-staffed and well-supplied, if inefficient.³ There were 3.4 doctors per 1,000 people, compared to an average of just .9 in lower-middle income countries (and roughly 2 in upper-middle income countries). The number of hospital beds - approximately 1,000 per 100,000 people - exceeded the standard in the EU15.

This health system got results that were also much better than low- or lower-middle income countries. The average child mortality ratio in lower-middle income countries was 122 in 1990; the Kyrgyz Republic’s was 66. The average maternal mortality ratio in lower-middle income countries was 545; the Kyrgyz Republic’s was just 80.

When the Kyrgyz Republic shifted from the Soviet system based on curative care in hospitals to a cheaper one based on preventive care in primary health centers, it required retraining and retrofitting, but the human resources, facilities, and equipment were on hand. Moreover, Kyrgyz citizens were accustomed to seeking care from doctors, which eliminated the challenge that exists in many low- and lower-middle income countries of generating demand for health services.⁴

The Kyrgyz Republic’s education system was similarly well-established, with a literacy rate approaching 100 percent. Of course, education per se does not reduce stunting, but in many cases it is correlated with reduced stunting, especially because it reduces adolescent fertility and otherwise contributes to women’s empowerment. In the Kyrgyz Republic, the vast majority of women were already relatively empowered as decision-makers about care and feeding in the household.

Finally, the sanitation system in the country was very robust. In 1990, 92 percent of Kyrgyz had access to improved sanitation, and there was essentially no open defection. In the other countries included in these case studies, open defection has been identified as a significant contributor to stunting (presumably because it leads to a heavy burden of diarrhea and pneumonia). In the Kyrgyz Republic, however, the sanitation infrastructure virtually eliminated that particular pathway to stunting.⁵

The shock of the transition to a free market economy impoverished the newly independent the Kyrgyz Republic, which both threatened the livelihood of individual Kyrgyz and weakened most government systems. Nevertheless, the job in the Kyrgyz Republic was to adapt and revitalize these systems, whereas in most low-income countries it has been to create systems where there were none.