How’s the weather?

12 November 2010 at 14:00 6 comments

Manas, KG (Airport)
Updated: 13 min 38 sec ago
Smoke
43 °F / 6 °C
Smoke

Preparing to move to Kyrgyzstan for an undetermined amount of time caused some anxiety at my house. Not the least of our concerns was what mother nature might dish out during the winter in a place not so far from Siberia. The day before I left the U.S., wracked with an LSAT induced cold, my mom made sure I was ferried to the local REI to stock up on long underwear. Yet like with many things in life, the reality has been a bit underwhelming so far. I haven’t even needed to wear the ushanka I bought on my second day here. That’s not to say that the weather hasn’t been unique. I went ahead and included a screenshot from a weather website to illustrate.  I don’t mean to brag, but I have checked the weather in quite a few remote destinations already at this tender stage in my life,  never in Bangladesh, Japan, Fiji, New Zealand, Turkey, Egypt, etc. has ‘Smoke’ been the prevailing weather condition. No, there are not fires storming the Kyrgyz countryside, or even a U2 concert  with an out of control smoke machine, the fog of smoke that lingers at every corner in Bishkek is caused by coal fires.

Kyrgyzstan - Inflation rate (consumer prices) (%)See inset chart for general indication of recent consumer price changes in Kyrgyzstan. (Sourced with permission from indexmundi.com which utilizes statistics from the CIA World Factbook)

If you had checked the weather a couple years ago, you would be hardpressed to find a ‘Smoke’ filled day in Bishkek. The change has been in the rising energy prices, energy prices that have risen fast enough to play a significant factor in the ousting of a government here earlier this year. In February it was estimated that heating costs were rising at an annualized rate of 400%, electricity 170%, and hot water fees (in a post-Soviet country whose capital city has centrally piped hot water) would double (Source 1, Source 2, Source 3). Further, it was estimated earlier this year that while in 2009 20-30% of a citizen’s paycheck went towards energy costs, that figure could rise to 80%. Following the change in governments as a result of civil unrest in 2010, energy costs hikes were temporarily suspended but the future is uncertain for Kyrgyz consumers. In the meantime many people have resorted to utilizing coal fired furnaces to heat their homes.

For micro finance institutions (MFI) here in Kyrgyzstan these developments create a variety of adverse effects. The cost of administering a loan as well as the operating costs of branches rise significantly – MFI branches have to keep the proverbial lights on. This adds to the long list of factors applicable to the running debate on MFI interest rate levels. Further, clients who have not factored in the rising cost of energy can have a difficult time repaying loans. As a lender myself, I am often astounded at the repayment rates on loans amidst such economic turbulence. It also begs the question of how countries such as Kyrgyzstan, geologically unlucky to be left out of the energy boon many of it’s neighbors have enjoyed, will weather the anticipated rise in global energy prices induced by increasing demand and ever dwindling supplies.

In the meantime, it seems my walk to work will continue to be a smoky journey.

Charlie Wood is in his first placement (KF13) as a  Kiva Fellow with Mol Bulak Finance in Kyrgyzstan. Join the Mol Bulak lending team and lend to entrepreneurs in Kyrgyzstan!

Entry filed under: blogsherpa, KF13 (Kiva Fellows 13th Class), Kyrgyz Republic, Mol Bulak Finance, Uncategorized. Tags: , , , , , , , , , , , , , , .

This, too, is Lima The range of rural to urban businesses in pictures

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