ABSTRACT
Two possible indicators for economic development mentioned in the model are higher yields and higher land values. Poverty alleviation is an important development challenge facing the Kyrgyz Republic. The government states that agricultural and rural development must lead the effort to combat poverty. Poverty has increased during the transition. Poverty assessment surveys show that poverty is more severe in rural areas and in the southern oblasts. Other indicators of declining living standards are the increase of malnutrition, particularly among children, and the greater difficulty of residents in rural areas to receive pensions and other social benefits, in part because of the inadequate banking system in rural areas. The smaller farms seem to absorb more labor per hectare than the old style farms and this will result in more employment in rural areas. There are still a number of conditions that should be fulfilled in order to achieve a sustainable economic development.
