Effective approach to cooperation and partnership of Kyrgyzstan with international financial organizations, introduction of innovative business models, exchange of available online resources and financing opportunities were discussed recently at the International Cooperation and Development Forum in Bishkek.
The forum, held by the international DevelopmentAid platform, involved representatives of international and donor organizations, financial institutions, NGOs, and private sector who are planning to expand their activities in Kyrgyzstan or to find regional or international partners in the implementation of projects.
Since Kyrgyzstan’s independence, donor organizations have been helping the country carry out economic reforms to improve the investment climate, support private enterprises and financial institutions, strengthen the financial sector, ensure food security, reform the energy sector, and conduct legal reforms.
Donor organizations such as the European Union, Organization for Security and Cooperation in Europe (OSCE), British Department for International Development (DFID), International Monetary Fund, International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), Development Bank KfW and German Society for International Cooperation (GIZ), United States Agency for International Development (USAID), Japan International Cooperation Agency (JICA), Russian-Kyrgyz Development Fund, and others successfully operate in Kyrgyzstan.
On behalf of the business community, Executive Director of the International Business Council (IBC) based in Bishkek, Askar Sydykov, suggested international donors to support Kyrgyzstan in carrying out reforms in the judicial system, as well as in key sectors of the country's economy including tourism, mining, and banking. The dialogue between the state and business associations can be improved through trainings and targeted researches, as well as the development of youth entrepreneurship.
"Local entrepreneurs have many ideas but they cannot properly formulate and compose them, and consultations of international experts could help them," the IBC head said.
Donors' assistance is also needed in improving legislation regulating the activities of the mining sector in Kyrgyzstan. Currently, the fiscal regime for mining is extremely burdensome. The changes introduced into the legislation of Kyrgyzstan since 2012 have negatively affected the financial model of mining enterprises, Sydykov said.
The legislation regulating the activity of the banks also needs improvement. It is necessary to remove restrictions on the issuance of foreign investment loans, as well to solve problems related to benefits provided for by the legislation on investments (after Kyrgyzstan joined the Eurasian Economic Union, benefits cannot be applied to representatives of the banking sector with foreign participation).
The business community proposed to establish relations between the banking institutions of Kyrgyzstan and the United States. Currently, customers of Kyrgyzstan’s banks use the US dollar for settlements with foreign counterparts for export-import transactions, but commercial banks of Kyrgyzstan do not have direct dollar correspondent accounts in the US banking institutions. Local banks are forced to use correspondent accounts outside the US, and this affects the quality and speed of customer service.
The insurance system of Kyrgyzstan also requires improvement. The business community offered to provide equal access for all private insurance companies in the implementation of compulsory home insurance. In addition, it is necessary to solve the problem of quality control of passenger transportation and protection of the interests of Kyrgyzstan’s citizens using the services of passenger vehicles.
Kyrgyzstan needs the assistance of international organizations to develop tourism through introduction of the open skies policy and removal of Kyrgyz airlines from the EU blacklist.
The business proposed to transfer the Manas International Airport JSC to a concession to foreign investors, as well as to modernize the airport infrastructure. The aviation legislation of Kyrgyzstan requires improvement, because it contains legal norms that impede the integration of Kyrgyzstan into the international aviation community and the implementation of the International Civil Aviation Organization (ICAO) standards.
Cooperation with donor organizations will help improve the investment climate and public financial management in the country, strengthen public-private partnerships, introduce innovations, and developing infrastructure.
Over recent years, business cooperation between the EU countries and Kyrgyzstan has been developing. Business delegations from Great Britain, Germany, France, and Austria visited Kyrgyzstan.
The Embassy of Germany in Kyrgyzstan is currently completing the Month of Germany conducted jointly with the Investment Promotion and Protection of Agency of Kyrgyzstan. Every Friday in April, the Embassy holds meetings on topics of interest to local businesses, such as export of food products and medicinal herbs to Europe, experience of the German savings bank system — ideas and opportunities for Kyrgyzstan.
Earlier this year, Bishkek was visited by the second trade mission of Great Britain to strengthen cooperation in education, infrastructure, legal services and IT sector.
A delegation of the MEDEF International (Movement of the Enterprises of France) represented by companies from the digital, energy, pharmaceutical, and transport sectors, considered cooperation within the framework of Kyrgyzstan’s governmental Taza Koom (Clean Society) project and the development of trade using the EU’s GSP+ status for Kyrgyzstan.
Same article at The Times of Central Asia