Throughout the years of independence there have been numerous significant changes in the economy of Kyrgyz Republic. Many people especially elderly claim that the life was much easier and better then. In contrast, other people believe the reforms that have been made would lead us to prosperity and some people are already enjoying that prosperity and fruits of the changes. Since early 1990s Kyrgyz economy have experienced many transformations that contributed in changes in standard of living, level of income and others.
Having gained independence in 1991, our country inherited the vulnerable economy with deformed structure and ineffective dependent from Moscow management mechanisms. Despite having a considerable amount of natural resources, a highly skilled workforce and a beneficial geographical position, Kyrgyz Republic experienced many problems with the restructuring of the economy. "Kyrgyzstan economy entered to a difficult period of economic adjustment in which the consequences of the dissolution of the Soviet Union had to be faced. They included hyperinflation, losses of production and distribution links, overall economic decline and loss of direct Soviet budgetary support." (Omurzakov, Internet).
Output fell dramatically across the entire Kyrgyz economy. GDP (Gross Domestic Product) fell by about 10% in 1991, by 16.5% in 1993, by over 20% in 1994 and by 5.4% in 1995. The industrial sector experienced the sharpest loss in output, with annual declines in 1992, 1993 and 1994 of roughly 25%. (Kyrgyzstan in numbers 1999, p.11) In 1997 it seemed that Kyrgyz government had somewhat overcome the consequences of a crisis. But after the notorious August of 1997 the Russian financial market had collapsed and due to the dependence of Kyrgyz market from outcomes in Russia, situation here became tragic. Although local experts were claiming that Russian financial crisis would not influence our economy, after six months numerous firms and banks were bankrupt and ceased to exist.