International Business Council took part in a first Kyrgyz-German business forum recently held as part of the Day of German Economy in Kyrgyzstan. The event was organized by the Investment Promotion Agency under the Economy Ministry of Kyrgyzstan in cooperation with the Delegation of German Economy for Central Asia and the Chamber of Commerce and Industry of Kyrgyzstan.

German businessmen including representatives of the Senior Experts Service (SES) met with the business community of Kyrgyzstan. The SES experts shared their knowledge on improving skills of colleagues in more than 50 sectors of the economy worldwide. In Kyrgyzstan, the SES office has been operating since 1993. Senior experts mainly support small and medium enterprises, as well as educational and social institutions in Kyrgyzstan. Experts assist local entrepreneurs in improving product quality, management, marketing, and personnel management.

The forum, aimed at creation of a favorable investment climate and business environment in the country, was attended by Deputy Prime Minister of Kyrgyzstan Valery Dill, German Ambassador Gudrun Sraega, and the business community of Kyrgyzstan and Germany.

On the eve of the forum, Kyrgyz President Almazbek Atambayev received the German delegation headed by Executive Director of the Committee on Eastern European Economic Relations Rainer Lindner. The sides discussed development prospects of Kyrgyz-German economic and trade relations. According to Lindner, German businessmen would consider investment projects in the Kyrgyz industrial, mining and banking sectors and infrastructure.

"The Kyrgyz Government is interested in deepening cooperation between the two countries, because Germany is one of the most advanced and technologically developed countries. It is necessary to develop ties between the business communities of both countries and attract more German investments in the Kyrgyz economy,” said Dill. Kyrgyzstan is counting on substantial help from Germany for economic restructuring in Kyrgyzstan, he added.

In 2014, trade between Germany and Kyrgyzstan was $242 million, and Germany invested $6.5 million in Kyrgyzstan. If Kyrgyzstan shifts from trade and re-export to industrial production, Germany could play a significant role in the Kyrgyz economy, Dill believes.

Energy was the main theme of the forum, given that it is a strategic sector of the Kyrgyz economy.

German businessmen were mainly concerned about investment protection. “Over the past 2.5 years, Kyrgyzstan has done a lot to improve its investment attractiveness. The tax system of Kyrgyzstan is the most liberal in the former Soviet Union. Entrepreneurs pay 10% tax on profit, 12% VAT and 10% income tax. In addition, the number of permit documents has been significantly reduced," said Dill.

According to Joerg Kirsch of the German Federal Ministry of Economy and Energy, the German economy is currently poorly represented in Kyrgyzstan because Kyrgyzstan is surrounded by large countries such as Kazakhstan, China and Uzbekistan. Kyrgyzstan should take efforts to attract investment from Germany.

Local authorities should be actively involved in attracting investment, believes Dill. Due to Kyrgyzstan’s accession to the Eurasian Economic Union (EEU), local governments are facing great challenges. It is vital to reform agriculture, develop seed-growing and livestock breeding on a scientific basis, and solve the problems of agro processing, packaging and sales.

According to Deputy Prime Minister, the local population often did not approve the arrival of investors to develop deposits, because the process of issuing licenses was not fair and transparent for a long time, and the law was defied.

"Investors came, worked and left the country, but the well-being of the local population has not improved. The public should see the benefits that will affect the welfare of the people living in areas with natural resources. In this regard, the Government has revised subsoil legislation, providing for contributions to the local authorities from the sale of licenses," Deputy Prime Minister concluded.

IBC also participated in a meeting of German businessmen, with the participation of the Senior Experts Service (SES), with the business community of Kyrgyzstan. The meeting was held as part of the Day of German Economy in Kyrgyzstan. The SES experts share their knowledge and improve skills of colleagues in more than 50 sectors of the economy worldwide. In Kyrgyzstan, the SES office has been operating since 1993. Senior experts mainly support small and medium enterprises, as well as educational and social institutions in Kyrgyzstan.