Building plausible futures: Scenario-based strategic planning of industrial development of Kyrgyzstan

Industrial development is often considered to be a major engine of economic growth. Kyrgyzstan is an open, small, landlocked, developing economy in Central Asia. In 2018 the Government of Kyrgyzstan decided to elaborate a new industrial development strategy that would facilitate economic growth, reduce the country's dependence on foreign financing, and increase the welfare of inhabitants. This paper presents a set of plausible scenarios of industrial development of Kyrgyzstan to 2040. The scenarios were used as a basis for a Strategy for the Sustainable Development of Industry in Kyrgyzstan for 2019-2023, prepared by co-authors of this paper in collaboration with local experts in 2018. This strategy was officially adopted by the Government of Kyrgyzstan in September 2019. To construct scenarios, we used an approach developed by Roland Berger and Leipzig Graduate School of Management (HHL) Center for Strategy and Scenario Planning within the Intuitive Logics scenario planning paradigm. This approach relies on a systematic step-by-step scenario-building process that can be carried out when time and resources are limited. We augmented this approach by revealing and utilizing causal relationships among drivers. We also considered a denser spectrum of scenarios. The outcomes of each scenario planning step were validated in consultations with local stakeholders. We also designed a monitoring dashboard based on well-established publicly available development indicators. These can help policymakers identify which scenario the system under consideration is tending toward, so that necessary policy interventions can be executed in a timely manner.