The University of San Francisco

Guy Ras1

The University of San Francisco

The St. Ignatius Institute2

An Economic View of Ethnic Conflict: the Case of Kyrgyzstan3


The Kyrgyz Republic experienced a popular uprising in 2010 which concluded with The University of San Francisco the ouster of President Bakiyev. In the aftermath of the revolution, violence which was initially directed at the government became ethnically charged between majority Kyrgyz and the ethnic Uzbeks. The latter The University of San Francisco comprise 15% of the population, but between 25% to 50% in the southern regions, specifically (Nichol, 2010a). With some 40% of the population living below the poverty line (Nichol, 2010b) it could be said that such clashes The University of San Francisco were to be expected. However, this does not seem to be the case outside of specific national events such as this latest uprising. With a full 50% of the workforce employed in agriculture The University of San Francisco (Nichol, 2010b), interethnic trade and the ability to forge economic interdependence was in evidence (Asian development Bank, et al., 2010). Skaperdas (1992) and Hirshleifer (1991) have been exploring the economic incentives and disincentives of violence both The University of San Francisco domestic and international, while Osborne (2010) uses this framework to inform thinking about ethnic violence. This paper uses the conceptual aspect of this economic framework as the lens through which to The University of San Francisco regard the aftermath of the popular uprising in Kyrgyzstan in 2010 and the ensuing ethnic violence.

^ Recent Political Background

The Kyrgyz Republic gained its independence in 1991 after the collapse of the Soviet Union. Kyrgyzstan The University of San Francisco remains a member of the Commonwealth of Independent States and the Russian Federation maintains a military presence there (Business Monitor International, 2010, p. 37). Traditionally, the Kyrgyz government has been described as “pro-Russian” (Business Monitor International The University of San Francisco, 2010, p. 37). However, the United States too has an airbase outside the Kyrgyz capital, Bishkek, and relations are generally good (Nichol, 2010a). Kyrgyzstan also enjoys good relations with its neighbors, Tajikistan, China The University of San Francisco, and Kazakhstan, however, has various territorial disputes with Uzbekistan.

Since its independence, Kyrgyzstan has enjoyed relative stability for the region with the exception of two recent popular uprisings, in 2005 and in April of The University of San Francisco 2010. On both of these occasions, the uprisings seemed to be motivated by public concerns over government corruption and voter fraud (Nichol, 2010b). In 2005, the former Communist leader Askar Akayev The University of San Francisco, fled the country after a legislative election and was replaced by Kurmanbek Bakiyev. Bakiyev was reelected in a landslide victory in 2009 after which he introduced constitutional reforms to the Assembly of the The University of San Francisco Peoples of Kyrgyzstan to create a “consultative democracy” which would abolish elections and replace “the ‘egoism’ of human rights with ‘public morals’” (Nichol, 2010a, p. 3). Though Bakiyev claimed that his plan had The University of San Francisco been supported by the Assembly, it seemed to be extremely unpopular with the public and exacerbated already rising tensions over increased prices of public utilities and restrictions on media access. Furthermore, Bakiyev’s promotion of The University of San Francisco his son to a key governmental position, as well as the relocation of some governmental offices to the southern city of Osh, angered the population of the northern areas The University of San Francisco, already somewhat underrepresented in the higher echelons of government (Nichol, 2010a). It is not difficult to see how Bakiyev’s actions could be seen as an attempt to consolidate his power.

After a series The University of San Francisco of protests in March about these concerns, government offices in the Western city of Talis were overrun. On April 6 and 7, opposition party leaders were jailed under accusations of incitement and this action resulted The University of San Francisco in spreading of unrest to other areas of the country (Nichol, 2010a). Notably, on April 7, 400 protestors clashed with police outside the Social Democratic Party headquarters in Bishkek and managed The University of San Francisco to overcome police resistance and capture armed vehicles with which they faced off at the Presidential Offices. During this encounter police used live fire “killing and wounding dozens” (Nichol, 2010a, p. 4). The The University of San Francisco next day, Roza Otunbayeva, a high ranking member of the Social Democratic Party, and a member of the legislative opposition, dissolved the Legislature and accepted the resignation of the Prime Minister and the The University of San Francisco Cabinet Ministers, and announced that Presidential elections would be held six months later. On April 15th, Bakiyev signed his resignation while in exile in Kazakhstan and on May 19 the interim government The University of San Francisco announced that parliamentary elections would take place on October 10th with Presidential elections to follow in December of 2011 (Nichol, 2010a).

In order to move power away from the Presidency, the interim government drafted a The University of San Francisco new constitution based on a parliamentary system. The final form of the new constitution was reached through a process of “public consultations and a nationwide debate” (Asian Development Bank et al The University of San Francisco., 2010, pp. 10-11) over a period of six to eight weeks. Approval of this new constitution was garnered in a national referendum on June 27 “with an overall turnout of 72 per cent and an affirmative The University of San Francisco vote of 91per cent. The turnout in the south of the country was 65%” (Asian Development Bank, et. al., 2010, p. 11). The October 10th, 2010 parliamentary election, the nation’s first after the adoption of The University of San Francisco the new Constitution, saw a highly fragmented vote with only five of the 29 parties securing seats in Parliament as the remaining parties were unable to achieve the required 5% of the general vote, the The University of San Francisco threshold for parliamentary representation. This is a departure from the recent political scene in Kyrgyzstan in which a legislative majority for the “pro-presidential grouping” (Economist Intelligence Unit, Country Report, 2010) had been characteristic The University of San Francisco of Krygyz politics. In fact, none of the 29 parties received more than 8.5% of the overall vote. The five parties who had managed to pass the threshold received between 5.5% and 8.5% of the total The University of San Francisco votes cast. As a result, over 60% of the vote is not represented in parliament” (Economist Intelligence Unit, Country Report, 2010). These recent events are set within Kyrgyz particular economic realities.

Economic The University of San Francisco and Ethno-geographical Considerations

Kyrgyzstan, a small country in Central Asia roughly the size of South Dakota (CIA World Factbook, 2010) is not unlike its neighbors, a relatively poor nation with some 40% of its approximately The University of San Francisco 5.5 million citizens living below the poverty line (Nichol, 2010b). The economy in the rural parts of the country is highly agrarian and agriculture accounts for close to half of the 2.5 million The University of San Francisco Kyrgyz workforce and one quarter of the GDP (Asian Development Bank et al., 2010; Nichol, 2010b). Roughly one third of the population, as of 2008, lives in urban areas (CIA World Factbook, 2010). A further fifth of The University of San Francisco the workforce, roughly half a million people, work in the Russian Federation, making the Kyrgyz economy highly dependent on remittance from this sector (Nichol, 2010b) and making remittance income equal to The University of San Francisco one quarter and one third of the Kyrgyz GDP (World Bank et al., 2010; Nichol, 2010b).GDP per capita, as per a 2009 estimate ranks Kyrgyzstan at 183 of 229 countries and autonomous regions The University of San Francisco, at $2200. However, it ranks 79 of 229 in GDP growth rate (CIA World Factbook, 2010). Industrially, gold mining is the most significant portion of Kyrgyzstan’s exports (Nichol, 2010b).

The Business Monitor International (2010), originally forecast a 4% growth The University of San Francisco in Kyrgyz GDP for 2010 but the April 2010 ouster of President Bakiyev and the ensuing ethnic violence, damaged the Kyrgyz economy to such an extent that the group has significantly lowered their initial The University of San Francisco estimates to 0.5% for the year. This represents a 3.5% decline rather than a 1.7% increase in GDP which was the original estimate relative to 2009. When regarded in conjunction with ethnic considerations in Kyrgyzstan The University of San Francisco, this forecast becomes an additional challenge.

15% of Kyrgyzstan's population is мейд up of ethnic Uzbeks. However, in the southern areas of the country, near Jalal-Abad and Osh, their relative population The University of San Francisco rises to between 25% and 50% of the population (Nichol, 2010). According to Business Monitor International (2010), the area around the Fergana Valley is populated by both Uzbeks and Kyrgyz and is the remnant of population resettlement common The University of San Francisco in Stalin’s era. The fact that national borders do not follow the historic clan and tribal geographical lines exacerbate this population mixing and have led to long seeded tensions The University of San Francisco in these regions (p. 36). The rioting and violence during June, 2010 were predominantly in this southern region where the loss of life, some 120 dead and scores wounded, and damage to property and infrastructure was The University of San Francisco greatest (Nichol, 2010b).

It has been suggested that the June violence erupted as the Kyrgyz economy suffered and the two groups, the ethnic Kyrgyz and ethnic Uzbeks, blamed each other for The University of San Francisco their perceived deteriorating economic position (in the case of the Uzbeks) and reduced political clout (in the case of the Kyrgyz) (Nichol, 2010b). In addition, a north – south aspect to the strife offers that The University of San Francisco “the coup against Bakiyev, a southerner, was viewed by many southern Kyrgyz as an effort by northern Kyrgyz interests to reassert their dominance” (Nichol, 2010b, p.1). Language too may The University of San Francisco have played a role in fermenting dissatisfaction as

following the recognition of Kyrgyz as the official language, status was subsequently accorded to Russian but not to Uzbek even though, with Russian out-migration and The University of San Francisco relative birth rates, Uzbek speakers in Kyrgyzstan now outnumber Russian speakers (Mellon, 2010, pg. 143).

‘Voice’ may then be both a literal and symbolic item as evidenced by the lack of official status to The University of San Francisco the Uzbek language.

Religion too has a role in the Kyrgyz ethnic equation as 20% of the population is Russian Orthodox and 75% is Sunni Moslem (Europa World, 2010). The adherence to Islam therefore cuts The University of San Francisco across Kyrgyz and Uzbek, and north-south divides. Although this would seem to be a rallying point for the government to attempt to unify the population, it has refrained from doing so The University of San Francisco due to increasing tension over attempts to thwart the growth of Islamic militancy in the Fergana Valley beginning in 1999 (Hunter, 2001; Business Monitor International, 2010) combined with an increasing unemployment rate in the south where The University of San Francisco the Uzbek-Kyrgyz tension is highest.

Yet it should be mentioned that previous to the latest uprising and the previous governmental overthrow in 2005, there “has been a high degree of The University of San Francisco economic interdependence between the Uzbek and Kyrgyz communities (Asian Development Bank, et al., pg. 45). The underlying question then is how fundamental conflict largely ethnic in nature has been kept in check without direct governmental intervention The University of San Francisco. A conceptual frame that focuses on the economics of ethnic conflict may shed light on a possible answer.

^ An Economic Lens on Ethnic Conflict

The discussion of ethnic conflict has been informed The University of San Francisco by economic models of conflict more generally, such as Hirshleifer, 1991, and Skaperdas, 1992. Hirshleifer argues that there are “three technologies of economic activity…production, exchange, and conflict” (p. 1). In defining the The University of San Francisco technology of conflict, Hirshleifer conceptualizes conflict - the taking of others’ resources - and contrasts this with the ‘making’ of resources (self-technology), and ‘exchanging’ resources (market technology). Conflict is more likely, he says, when the The University of San Francisco assuredness of victory is high (Hirshleifer, 1991). On this point, he and Skaperdas (1992) agree yet Skaperdas, in his discussion of conflict in absence of property rights, extends the discussion when he offers that The University of San Francisco conflict is less likely in a setting that finds individuals and groups dispersed over wide distances, when resources are not scarce, and in which conflict is too costly to the The University of San Francisco parties (Skaperdas, 1992).

In considering the implications of such an economic perspective on ethnic conflict, Osborne (2010) conceptualizes that these same basic principles of the value and likeliness of conflict can be used to The University of San Francisco explain oscillations in ethnic violence. Osborne contends that “Conflict in some countries involves mass killing, but in others is limited to ethnically based political parties or voting patterns, or a preference for in The University of San Francisco-group trading networks” (p. 368). A growing body of literature is engaging with the role of trade on the utility of and choice to engage in conflict (Osborne, 2010). This ‘economic peace The University of San Francisco’ perspective argues that economic interdependence leads to greater cooperation and fosters peace and stability in international affairs (Osborne, 2010). Osborne (2010) considers ethnic conflict from such a perspective.

Osborne (2010) suggests that ethnic conflict has one important defining The University of San Francisco characteristic and that is that groups are easily distinguishable from each other in appearance, language, or religion, and these factors support intra-connectedness to the possible detriment of interdependence through trade with The University of San Francisco other ethnic groups (Osborne, 2010). This may increase the potential for conflict as “interethnic trading can be costlier than intra-group trading, both because of language and cultural differences and general The University of San Francisco trading frictions embedded in the economy overall [and when] restraints on trade, along with linguistic and cultural frictions…bring this

about” (p. 369). Osborne states that it has been traditional to assume that public policy The University of San Francisco interventions with regard to ethnic conflict need to be structural to be effective. Often such structural interventions have created separation through regulation and restriction which causes conflict to increase “by promoting lower The University of San Francisco productivity in joint production, [and] should result in higher rates of taxation and greater separatism” (p. 369). Indeed, Osborne offers a theoretical conflict model of ethnic conflict through which he tests for the The University of San Francisco influence of self-segregation, trust, linguistic differences, and inter-group production and trade. His model suggests on all parameters that unlike Skaperdas (1992), rather than focusing on direct policy measures The University of San Francisco, the government should фокус on fostering and facilitating a more robust and open economy and that “economic freedom may trump political structure as a tool to lower such conflict” (p. 372). As he summarizes The University of San Francisco the results of the model Osborne states,

Economic theory suggests that ethnic conflict should increase when the incentive for ethnic cooperation decreases. The findings here support that proposition, with important implications The University of San Francisco for the role of economic freedom in minimizing ethnic conflict and separatism, albeit one widely known in the literature on trade and interstate conflict. When economic freedom is greater people cooperate more, fight less and The University of San Francisco trust one another more. Ethnic heterogeneity as such is not the problem; the difficulty of transacting across ethnic lines is (p. 373)

This perspective has the potential for informing our understanding of The University of San Francisco the outbreak of conflict in Kyrgyzstan.


Before the global economic recession, Kyrgyzstan experienced consistent economic growth (CIA Factbook, 2010 ), however, beginning in 2008, income from remittances began to drop, and together with rising The University of San Francisco utility prices, took a toll on the economy (Nichol, 2010a). The developing economic hardship caused The World Food Program to estimate “that in 2008, 35 percent of households were food insecure” (The Asian Development Bank, et The University of San Francisco al., 2010, p. 146). Before the uprising, the government passed the Law on Food Security 2008, and established the Agri-Food Corporation (AFC). These actions increased governmental involvement in the agricultural sector which was The University of San Francisco regarded negatively generally, but even more so when promises regarding stabilization were not kept (The Asian Development Bank, et al., 2010). This was the economic backdrop upon which questionable political behavior The University of San Francisco was taking place. Former President Bakiyev undertook far reaching and sensitive structural changes but “did not meet with opposition leaders or otherwise reach out to the population, instead increasingly used repression to quell discontent” (Nichol The University of San Francisco, 2010a, pg. 6). As a result of these pressures, public discontent boiled onto the streets and public protest resulted in the fall of the government. Of particular salience for our purposes here is The University of San Francisco the evidence that ethnic violence took place only after the fall of the Bakiyev government and not before. The case of the spring and early summer in Kyrgyzstan seems to reflect that The University of San Francisco despite undeniable economic hardship, while there was in place an outlet towards which to voice dissent, namely the government, ethnic conflict was not the chosen method of expressing frustration The University of San Francisco and dissent. Once the government ceased to provide a structure by which to express such frustration, the value of conflict would seem to have risen as the cost of cooperation became unrealistic in a The University of San Francisco society that was without a secure government. As the new government began engaging with citizens in the creation of a new constitution, the political process became the chosen modality for The University of San Francisco expression which can be seen in the fact that large numbers of people of all ethnicities voted and violence subsided. However, “The big surprise was the high level of support for Ata-Jurt The University of San Francisco (Fatherland), a nationalist party that is strong in the south and has been accused of fomenting anti-Uzbek feeling. Ata-Jurt was the leading party, winning 8.5% of the vote nationwide” (Economist The University of San Francisco Intelligence Unit, Country Report, 2010), fractionalization that suggests that the vote correctly embodied the underlying ethnic feelings, as Osborne (2010) describes– yet voting was nonetheless chosen over continuing the violence (Nichols, 2010a). It could be suggested The University of San Francisco that the Kyrgyz case reflects the trust that had been built throughout the previous experiences of inter-trading and positive economic activity between the groups (Osborne, 2010) which supports his conclusion The University of San Francisco that “diversity does not erode trust once the freedom to trade has been standardized” (p. 373).

Though the Business Monitor International noted in their 2010 report that “The most dangerous aspect of the violence is its The University of San Francisco ethnic dimension” (pg. 36), the ethnic violence is an effect rather than a cause. A greater global economic crisis exacerbated political tensions which led to further political and economic instability domestically. Ethnic tensions, though The University of San Francisco present, were not the driving factor of the recent crisis. Due to border tensions with Uzbekistan, and the ethnic Uzbek location in these border regions (CIA World Factbook, 2010), external involvement in the The University of San Francisco area could be of concern going forward if external involvement changes the economic basis of the crisis to an ethnopolitical one.

With a multi-party parliamentary system now in place in The University of San Francisco Kyrgyzstan there is potential for a robust dialogue between the ethnic populations. However, if voting remains as fractionalized as previously described, a large percentage of the population will continue to The University of San Francisco be unrepresented in Parliament which is of concern as this may make open conflict a more cost effective means of expression and the only means by which to secure necessary resources. As a result The University of San Francisco, and as suggested by Osborne’s (2010) work, the Kyrgyz government must фокус on rebuilding and growing the economy in order to incentivize interethnic economic cooperation. The joint assessment by the Asian Development The University of San Francisco Bank, International Monetary Fund, and the World Bank, seems to have suggested this position in practice, as “While reconciliation and peace building must be the initial фокус, these can best be sustained The University of San Francisco in a vibrant rural economy in which the Uzbek and Kyrgyz communities re-establish their economic inter-dependence. This can be achieved through investments to improve equitable access to natural The University of San Francisco resources for both communities, to increase agricultural productivity and stimulate trade between the two communities.” (Asian Development Bank, et al., 2010, pg. 45).

The 2010 Kyrgyz popular uprising provides a compelling argument in support of The University of San Francisco Osborne’s (2010) theory that domestic economic factors have a significant influence on ethnic violence. As the crisis began, political instability caused significant economic instability in Kyrgyzstan. This economic instability translated into a breakdown The University of San Francisco of economic cooperation and trade interdependence. The ethnic differences between Kyrgyz and ethnic Uzbeks were used by these respective groups as a tool to attempt to attain relative economic security when this seemed more The University of San Francisco cost-effective than cooperation. With the understanding that ethnic conflict in the case of Kyrgyzstan, and perhaps beyond, may have an economic basis, the onus then is great upon governments to balance The University of San Francisco between market intervention and market freedom for reasons that exceed the immediate economic gains alone.


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1 My appreciation is extended to Professor Shalendra D. Sharma, PhD of the Politics Department and Professor Sean D. Michaelson, S.J. of the St Ignatius The University of San Francisco Institute for their input and comments.

2 I would like to thank the St Ignatius Institute for the funding that enabled this research.

3 This paper will refer to Kyrgyzstan and the Kyrgyz Republic The University of San Francisco interchangeably.