Another Free Market Disaster

In Chapter 4 we observed how the free market, with its privatization and deregulation, inflicted poverty and hardship on the former communist nations of Eastern Europe and the Soviet Union. Here we might give attention to Kyrgyzstan. This Central Asian former Soviet republic offers one of the best examples of how free market capitalism betrays the needs of the people. Kyrgyzstan’s acceptance into the WTO came at a painful price; it had to privatize and deregulate its economy. A USAID report to the US Congress cheered this process, claiming that “Kyrgyzstan’s major achievement” has been to establish the “framework for a market economy. Foreign investment is strongly encouraged and the country’s privatization is regarded as among the most ambitious [most thorough] of the former Soviet republics.”²⁵

Almost all government-owned enterprises in Kyrgyzstan have been transferred to private ownership. The country’s economy, which had been one of the best performing in Central Asia during the communist era, slowed down and actually began to contract. Its debt ballooned, consuming an ever-larger portion of the public budget. Deteriorating conditions within the country created increasingly inequitable and harsh social relations. Kyrgyzstan was transformed into a free market system that has worked supremely well for a few super rich oligarchs while wreaking havoc on the bulk of the population.

• WTO-mandated budget cuts have diminished government resources and left next to nothing for human services, causing widespread hardship among the working class population.
• Since abandoning a planned economy, Kyrgyzstan has experienced a dramatic 75 percent decline in its GDP and a notable increase in government corruption and cost of living, including a steep rise in fuel, water, and gas charges.
• Factories and state farms collapsed with the disappearance of their traditional markets in the former Soviet Union, causing further deterioration in living standards for the agrarian sector and a substantial drop in agricultural production.
• The World Health Organization reports a severely declining life expectancy since the Soviet days. A Kyrgyz population that once received free medical service now is facing rapidly escalating health costs, causing many to completely forsake medical care.
• Exports of gold, mercury, and electricity have grown, but domestically produced Kyrgyz goods are being replaced with foreign imports.
• The capitalist economy also brought a dramatic increase in organized crime dealing mainly with the smuggling of drugs from Afghanistan via Tajikistan on their way to Russia and beyond.
• The use of gas-consuming vehicles has grown in Kyrgyzstan and, coupled with increasing deforestation, has caused a marked deterioration in the country’s wildlife and air quality.²⁶

The free market, we are told, breeds democracy and prosperity. In fact, it brought neither democracy nor prosperity to Kyrgyzstan. Along with the economic hardships came rigged elections, police killings, riots, government harassment of dissenters, rampant corruption, national uprisings with demonstrators occupying official buildings and state-run TV stations, and bloody reprisals by security forces. Kyrgyzstan was listed by the New York Committee to Protect Journalists as one of the most difficult and dangerous places for journalists to work. By 2010, the country was being torn apart by suddenly arising interethnic conflicts among groups that had lived together in peace for decades during the Soviet era.²⁷

Kyrgyzstan has become a target for repressive imperial forces because of its rich water reserves, its proximity to China, Russia, and Afghanistan, and the need to secure the large US military base on its territory. The country may end up as another target in Washington’s “anti-terror” global counterinsurgency, subjected to external threat and internal destabilization until such time as it is reduced to being a perfectly obedient satellite thoroughly paralyzed by imperial subversion and free market poverty.²⁸

When next you hear individuals singing praises to the free market, remind them that the market is free only for the global empire’s moneyed patrons.