Diversifying Away from Extractives: The Belt and Road Initiative, Chinese Capital and Industrialisation in the Kyrgyz Republic

Abstract

With its infrastructural offer and emphasis on connectivity, China’s Belt and Road Initiative (BRI) promises to support developing countries aiming to industrialise. The literature on industrialisation has identified a key role for infrastructure, markets and the state. This article looks at the case of Kyrgyzstan, one of the early members of the initiative, to understand the circumstances under which the BRI can facilitate manufacturing growth. Notwithstanding the presence of accessible markets and financial support for infrastructure, Kyrgyzstan has made limited headway in its industrialisation agenda. This can be attributed to the particular political economy of Kyrgyzstan, which predominantly relies on extracting rent from the mining and other sectors and consequently fails to allocate resources towards industrialisation. Though purportedly interested in revitalising the industrial sector, Kyrgyz politicians have primarily focused on extractive industries, hence impeding diversification and industrialisation efforts.