Partner: International Business Council, Kyrgyzstan
By Nazgul Aksarieva
What’s the best way to address a community’s needs and grievances? Sometimes, simply asking them is a good start.
Regional development funds in Kyrgyzstan were established in 2014 to support infrastructure projects and stimulate economic growth amongst local communities. They were financed primarily by non-tax payments from mining companies, such as a 3% payment for mining licenses and a regular 2% contribution for local infrastructure.
Over the past decade, these funds have been crucial for addressing regional needs. However, the way in which these needs were identified and prioritised was far from ideal. Historically, only local self-government bodies were permitted to submit proposals for funding. While this system improved public services, it overlooked broader opportunities for economic development beyond infrastructure projects and excluded the very community members best placed to articulate their own needs.
To make matters worse, the same mining sector that contributed to these funds also faced recurring conflicts with local communities over poor environmental practices and inequities in benefit sharing. The International Business Council (IBC) – that represents mining companies, recognised the need for a new approach. With support from PeaceNexus, it invested in strengthening its conflict sensitivity and engagement with local communities. This led to a better understanding of community perspectives and enabled them to identify systemic issues, including the exclusion of citizens from regional fund decision-making. Acknowledging the need for broader engagement, the IBC revised its recommendations to the government and successfully advocated for a more equitable and participatory approach to fund allocation.
Ordinary citizens are now permitted to propose projects, including those aimed at expanding small and medium-sized enterprises or launching start-ups. This shift has encouraged entrepreneurship, created jobs, and expanded grassroots economic opportunities.
The enhanced transparency and inclusivity of the funds also helped to mitigate community tensions with the mining companies. Operational disruptions for businesses have decreased, and trust and collaboration between the stakeholders have improved. The conflict prevention impact has been substantial: compared to 2011–2012, when conflicts numbered approximately 300 per year, such incidents have become exceedingly rare, now numbering fewer than ten annually.
By embedding conflict sensitivity into its approach and promoting inclusive governance of development funds, the IBC helped shift relationships from confrontation to collaboration, demonstrating how economic development can reinforce peace and social cohesion when communities are genuinely heard.
Since 2021, PeaceNexus has partnered with the International Business Council (IBC) to promote conflict-sensitive approaches and stronger environmental governance in Kyrgyzstan’s mining sector. We chose this story because it demonstrates how community inclusion can transform relationships and prevent violence. By enabling citizens to propose projects funded by mining revenues, the partnership has encouraged entrepreneurship, created jobs, and reduced tensions with businesses. It emphasises how inclusive decision-making can turn potential conflict into cooperation and deliver lasting benefits for communities.
