Economic Week of Kyrgyzstan – Oct. 30 – Nov. 4, 2017

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Situation and the public. The situation on the Kyrgyz-Kazakh border is increasingly beginning to worry the public of the two countries. Kyrgyz Prime Minister Sapar Isakov during the meeting of the Heads of Government of the CIS states in Tashkent said that there appeared facts of detention and inspection of railway cars coming from third countries to Kyrgyzstan under seals and under international trade agreements.

"Thus, entrepreneurs of Kyrgyzstan receive notifications from the Committee of State Revenues of Kazakhstan to come to Kazakhstan to conduct: a quotation “thorough (full) customs examination” of goods - transit cargo from Europe. Or, all the goods that have been sent to the Kyrgyz Republic have become smuggled in night? " said Isakov.

Isakov said that it is already obvious that such unreasonable actions of the competent authorities of Kazakhstan are used not only for Kyrgyz carriers, but also for businessmen of other states following the transit to Kyrgyzstan.

He said that the creation of artificial barriers leads to significant time and financial costs for entrepreneurs and contradicts the basic principles of integration.

Isakov also said: "can we call the contraband 20% of cargoes with agricultural products (potatoes, onions, plums, grapes) grown in Kyrgyzstan".

"Or the dairy products supplied to the markets of Kazakhstan from enterprises in the unified register of the Eurasian Economic Union. Or maybe the transit of 80% of cargo to the Russian Federation is also smuggling?!," said Isakov.

Not only state bodies, but also public organizations start to raise the question "Why are the remaining states-participants of the Eurasian Economic Union understanding the situation on the Kyrgyz-Kazakh border are silent?". In particular, the head of the Public Association "Koomduk Jashtar Keneshi" Erlan Juzupov stated about this to the Kyrgyz press.

"This economic conflict on the border causes great damage to ordinary citizens who are engaged in entrepreneurship. They spend a lot of time at the checkpoint and cannot cross the border to sell their goods, and, accordingly, these are big losses," he said.

Commenting on the words of the head of Russia's Trade and Industry Chamber that the current situation on the Kyrgyz-Kazakhstan border is a problem between the two countries, Juzupov asked "then it is not clear why they created this economic alliance?"

Meanwhile, the consequences of the crisis started to affect. Entrepreneurs, stuck on the Kyrgyz-Kazakh border, lose about $ 23.5 thousand a day. Minister of Economy of Kyrgyzstan Artem Novikov said this at a government meeting.

He said that the drivers were asked in order to establish the volume of cargo and damage. A total of 349 drivers were interviewed.

"The situation is this: every day 349 trucks lose about $ 23.5 thousand. At the same time, diesel fuel costs $ 8.6 thousand, for food - $ 5.13 thousand, fines for late delivery of goods – $9.9 thousand. It is worth noting that one tuck crosses the border 5-6 days," he said. In total the amount of losses for 5-6 days are about $180 thousand.

The entrepreneurs of Kyrgyzstan propose the Eurasian Economic Commission and the World Trade Organization to create special groups to give an independent assessment of the situation on the Kyrgyz-Kazakh border.

Measures of the Government. Prime Minister Sapar Isakov, who made several attempts to resolve the issue on the border with his counterpart from Kazakhstan, signed a resolution on measures of state support for the entities affected by the current situation on the Kyrgyz-Kazakh border.

According to the adopted document, the situation on the Kyrgyz-Kazakh border is recognized as force majeure, and therefore a commission is created that will determine the amount of damage until December 1, 2017. Further, the list of affected subjects will be approved.

The State Tax Service of the Kyrgyz Republic will postpone the payment of the tax debt of the victims as of November 1, without penalties and interest charges. A similar delay should be provided by the Social Fund. Customs payments also will be delayed for three years.

The resolution also provides for the allocation of soft loans under the project "Financing of Agriculture-5" as a matter of priority to the victims due to the situation on the Kyrgyz-Kazakh border.

The credit payment period for entities affected by the current situation in 2017 will be up to 60 months with a grace period for the principal amount of up to 24 months.

The auto race to China. A pilot international auto race was launched in Tashkent, on the route Tashkent-Andijan-Osh-Irkeshtam-Kashgar. Minister of Transport and Roads of the Kyrgyz Republic Zhamshitbek Kalilov, Minister of Foreign Trade of Uzbekistan Elyor Ganiev and Chief Inspector of Security of the Ministry of Transport of China Cheng Pin took part in the opening ceremony of the auto race.

The parties noted that this pilot race will raise the relations of Kyrgyzstan, Uzbekistan and China in the field of transport cooperation to a new level.

Earlier, the authorities of Kyrgyzstan and Uzbekistan have already considered the possibility of opening the Andizhan-Osh-Kashgar highway, aimed at developing trade and economic cooperation.

Growth in spite of obstacles. For 9 months of 2017, Kyrgyzstan's GDP grew by 5%. According to data of Minister of Economy of the Kyrgyz Republic Artem Novikov, for the same period of 2016 this figure was 1.5%.

Novikov said that by the end of 2017, the economy is expected to grow at a level of 3.6%, inflation will be about 5.7%.

"The actual growth of the economy today is more than expected by 0.8%. This indicator is the highest among the countries of the EEU. In Russia, the economy grew by 2.2%, Kazakhstan - 4.3%," he added.

The Minister of Economy in his report noted that there is an increase in industry in all regions of the country at the level of 7.9%, except Naryn oblast. There is a decline of 0.2%.

"In the construction sector there is a failure to meet the forecast. Remittances to Kyrgyzstan increased by 26.3% in 9 months," he said.

"Economic growth is ensured by all sectors of the economy, where the industrial sector was the main driver of growth, in agriculture, volumes increased by 0.8%, construction - by 5.2%, industry - by 21.2%, services - by 0, 8%," Novikov said.

Products in the scrap. Utilization of Kyrgyz products in Kazakhstan is connected with non-compliance with technical regulations of the Eurasian Economic Union, said Sergei Ponomarev, president of the Association of Markets, Enterprises and Service Spheres, at a roundtable. He said that the goods of enterprises that did not pass accreditation were destroyed.

"These companies did not receive documents as part of the work at the EEU. Moreover, in August 2017, new technical regulations entered into force. And these regulations are regulators that are responsible for the safety of consumption. In this regard, Kazakhstan has taken tough measures. In my opinion, it was not worth to utilize. In some countries, such goods are given to orphanages and nursing homes," he explained.

Deputy director of the State Inspectorate for Veterinary and Phytosanitary Security, Amangeldi Isayev, said that Kazakhstan had indeed explained its actions to utilize y Kyrgyz goods by the fact that they are not in the register.

This week the Veterinary Control and Supervision Committee of the Ministry of Agriculture of Kazakhstan destroyed over 100 kg of cheeses from Kyrgyzstan.

Astana explained its actions by the fact that suppliers did not present veterinary documents that prove the safety of the goods. The date of manufacture and the date of expiration were not indicated on the cheeses. In addition, the names of producers were not on the list of enterprises that can supply their products to Kazakhstan.

Care or answer? Kyrgyzstan banned the import and use of unenriched flour from Kazakhstan. According to Kazakhstani sources, Kazakhstan will not lose from this. Last year the country supplied Kyrgyzstan with more than 27 thousand tons of flour. This is about 1% of the total export volume.

Recall, in September, Kyrgyzstan banned the sale of Kazakh unenriched flour due to unimpeded importation after entering the EEU. Kazakhstani agrarians offered to enrich the products at flour mills in Kyrgyzstan, but such a proposal was rejected.

Third countries. Kazakhstan stopped passing raw materials from third countries to Kyrgyzstan, which negatively affects the work of domestic enterprises. Minister of Economy of the Kyrgyz Republic, Artem Novikov said that, written notifications were received from Kazakhstan that wagons with raw materials from third countries are being intensively inspected by the Kazakh side.

"This seriously affects the production potential. We will study the situation," he said.

He said that the current situation, when Kazakhstan stopped supplying raw materials to Kyrgyzstan and delaying the cargo going through its territory from third countries, is not determined by anything.

"Today, there are difficulties with the supply of coal from Kazakhstan. We cannot say directly that this is connected with the situation on the Kyrgyz-Kazakh border. But last year in the same period there were no problems with the supply of coal and raw materials from Kazakhstan, "Novikov said, adding that there are no problems with the grain and flour.

In turn, Deputy Minister of Economy Daniyar Imanaliev said that Kyrgyzstan has the opportunity to apply to the Eurasian court. But for this it is necessary to pass the procedure for considering the issue in the Eurasian Economic Commission.

Kabar News Agency

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