The price for US dollar had doubled and most of the foreign investors had withdrawn their capitals and left the country. (Akaev, pp.225-226) To overcome the crisis the government lowered tax rates and made changes in investment legislation. According to Russian economist Bulatov, "if there were no crisis in Russia, Kyrgyz economy now would look much better." (Bulatov, p.679).
During late 1991 and 1992 Kyrgyz Republic took its initial steps to transform planned economy into market economy. Changes in legislation have been carried out guaranteeing the rights of foreign investors. The government has fully liberalized the prices, external trade, and exchange and interest rates. The privatization program launched in 1991 has opened up every sector of the economy to private ownership and enterprise. Thus obstacles to private business have been eliminated. Excluding natural monopolies and largest companies the majority of enterprises are now private or in corporate form. "Despite the faults and errors made while transformation of the property, a significant progress has been achieved during the years of reforms."(Omurzakov, Internet) Evaluating the property structure by a number of enterprises, today 97.4% of the enterprises are non-state and 2.6% are state owned. More than two thirds of the fixed assets are held by the private enterprises. (Kyrgyzstan in numbers 2002, p.43).
According to the economic theory, "the macroeconomic stabilization cannot be achieved unless the radical improvements in the country's industry and agriculture fail to accomplish."(Akaev, p.219) Despite the certain progress in industrial production assured by Kumtor Gold Company and Kara Balta Mining Plant, crisis is still observed in industry. Just like industry, the agriculture has suffered a considerable reduction in productivity. Therefore, the government implemented reforms in agriculture in order to increase productivity of the farms.
