Of the twelve non-Baltic USSR republics, Kyrgyzstan was the first to declare independence from the Soviet Union in 1991. Since independence the Kyrgyz Republic has achieved considerable progress in improving governance as reflected in the substantial reforms in public sector management and in increasing degrees of accountability, participation, predictability, and transparency.

Government accountability is being improved in several ways, including better public financial management and civil service reform. Improving the management of public finance aimed at restoring fiscal balance constitutes one of the main elements of the Government's macroeconomic stabilization program. Besides instituting fundamental tax reforms, the Government has been making strenuous efforts to further rationalize expenditures, to strengthen the tax collection and administration, and to improve its budget process. The Government is also actively downsizing the civil service. Major ministries were reorganized in late 1996 and agencies privatized or contracted out. Civil service reforms are underway to strengthen local government administration, streamline central government policymaking, and progressively withdraw from directing and allocating the factors of economic production.

Areas in which the Government has taken steps to improve participation include:

As it privatizes state farms and state industrial enterprises, the Government is further encouraging and expanding the role for the private sector and non-government organizations. In the areas of predictability and transparency the Government recognizes that with limited state resources the private sector has to be the main engine of growth. With this in mind the Government has since independence embarked on a far reaching program of legal reform to create an environment supportive of the private sector. It has sought and obtained the assistance of various donor sources in improving the legal framework in a number of key areas and sectors such as agriculture, infrastructure, education, health, pensions and other social services, finance and the promotion of the private sector in general. While these have given a powerful stimulus to the development of the private sector in the country which now accounts by far for the majority of production, there is still much to be done. The Government needs to pay close attention to deepening the measures already undertaken to improve corporate governance and enterprise reform. Greater attention also needs to be paid to improving information flows between the Government and the private sector, which is so essential for efficiency in market-based economies. There is a pressing need to reduce corruption, to improve law enforcement systems, and to reduce excessive state interventions in licensing and inspections. The Government is aware of the need to take strong measures in these areas and is committed to the task, and it has finalized a program that addresses some of these concerns.

In 2001, Kyrgyzstan confirmed its commitment to major development goals by adopting the Comprehensive Development Framework (CDF) for 2001-2010. The UNCT-driven National Sustainable Human Development Strategy, launched in 1997, was pivotal to the formulation of the CDF. Ahead of the Millennium Development Goals timetable, the CDF stipulates halving poverty by 2010. The Government claims the poverty level fell by almost 5% in 2001 as the result of social mobilisation efforts and expanded micro-credit programmes. Yet the poverty rate is at least 47%, and some estimates place it much higher. For the fight against poverty to gain momentum and become irreversible, poverty reduction efforts must reach a target population of at least 500,000 vulnerable people.

Before 1999, the Republic was divided into six administrative regions, called oblasts and headed by Akims: Chui, Issyk-Kul, Osh, Talas, Jalal-Abad and Naryn. On October 12, 1999, the Parliament of Kyrgyzstan approved a law to separate 3 districts in the remote South West of Kyrgyzstan from Osh province, and turn them into a new, seventh province: Batken. This was done because Batken and South West Kyrgyzstan, due to their complex political geography, have special development priorities. In 2000, a United Nations Liaison Office was established in Batken.