Kyrgyzstan’s central bank governor, Ulan Sarbanov, has been placed under house arrest in the course of a government investigation into funds he transferred to the previous president, Askar Akayev, in 1999.
Sarbanov’s position has been shaky ever since Akayev was swept from power in the Tulip Revolution in March this year, and a group led by Kurmanbek Bakiyev seized power. Within days, politicians close to Bakiyev were pressing for Sarbanov to be fired.
Sarbanov has been instrumental in opening up the country’s banking sector to foreign competitors, particularly Kazakh banks. This has made him powerful enemies among the domestic banking elite.
However, he has been popular among foreign investors and representatives of multilaterals, who credit him with developing a stable monetary policy for Kyrgyzstan.
David Grant of the International Business Council in Bishkek says: “We asked foreign investors how they rated Kyrgyzstan compared with other emerging markets, and it scored low in almost all areas, apart from monetary policy.”
Sarbanov held on to his job in March in part because foreign investors and ambassadors intervened to protect him. “He is seen as an honest and competent technocrat in a country where such figures are in short supply,” says one diplomat.