Kyrgyzstan's economic week, May 2-6

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This week was relatively calm, although there have been several very important business events. Kyrgyzstan joined the system of cabotage transportation of the Eurasian Economic Union. To this end, Kyrgyzstan has officially made the necessary amendments to the Code of Administrative Responsibility.

The program of stage-by-stage liberalization of cabotage transportation is scheduled for 2016-2035. Kyrgyzstan has been participating in the program since December 2015. Its main goal is the formation of a common market for motor transport services within the framework of the EEU and facilitating access to carriers of the countries of the Union for the provision of truck transport services throughout the territory of the EEU.

Despite the fact that in Kyrgyzstan the contribution of industry to the overall economy does not exceed 20%, the Union of Industrialists and Entrepreneurs operates in the country, which mainly comprises private entrepreneurs. This week the previous president of the Union Zhyrgalbek Sagynbaev was replaced by Kurmanbek Otorov.

The Kyrgyz Union of Industrialists and Entrepreneurs is a co-founder of the Business Council of the EEU, the Silk Road International Chamber of Commerce with its headquarters in Hong Kong, and is a member of the International Congress of Industrialists and Entrepreneurs. The Union has a number of large production capacities that implement industrial projects important for the country.

US dollar exchange rate declined this week. Chairman of the National Bank of Kyrgyzstan Tolkunbek Abdygulov explained this as a seasonal factor influenced by external factors.

Since the beginning of the year, the exchange rate of the American currency has decreased by 2 soms. According to data of the National Bank, in January 2017, one dollar cost 69.2 KGS, today the exchange rate is 67 KGS.

In addition, Abdygulov said that the National Bank is working closely with the Government and the previously adopted dedollarization program is being successfully implemented. According to him, mortgage lending is carried out only in the national currency, and previously received foreign currency loans were transformed into the national currency at the established rate.

But Abdygulov is best remembered for his other statement - to legalize marijuana in the country to attract tourists. Was he kidding or not, but expressed such an opinion at a meeting with business people of the country.

For the first time this week, it was announced which roads of Kyrgyzstan will become paid. There are still no such roads in the country. It is planned that the fee for using them will be introduced gradually, and the first 26 km long road will be launched in 2018. It is expected that by 2025, the length of toll road will be 500 km. According to experts, the first section of the toll road will be a section of the road Kochkor-Kuyaki, 26 km long. The construction of the alternative South-North road, which also runs through the territory of Naryn oblast, may become the first long, but toll road in Kyrgyzstan. The cost of travel on such roads has not yet been determined, since the calculations are being carried out.

This week, Russia decided to write off Kyrgyzstan’s debt of $ 240 million. Russian Prime Minister Dmitry Medvedev signed decree which approved a one-time write-off of Russia’s debt on loans to Kyrgyzstan in the amount of $ 240 million.

“As of March 30, 2017, the amount of debt of the Kyrgyz side to the Russian side … is 240 million dollars … 100% of the amount of debt of the Kyrgyz side to the Russian side … are subject to non-recurring write-off of the date of entry into force of this Protocol”, —the Russian government stated.

It is noted that the cancellation is made within the framework of Russian official development assistance to Kyrgyzstan.

Moscow and Bishkek in 2012 signed an intergovernmental agreement on the settlement of debt totaling some 500 million dollars. The document called for full cancellation of one part of the debt — 188,9 million dollars — a day on which the agreement enters into force, and stretched for ten years, beginning in March 2016, the cancellation of the second part of the debt to $ 300 million.

The head of the state debt of the Ministry of Finance of the Republic Bakyt Sydykov said in April, which of these $ 300 million was already written off 60 million, and Kyrgyzstan is counting on one-time write-off of remaining debt to the Russian Federation in the amount of 240 million dollars, working through a relevant agreement with the Russian side.

Kyrgyzstan is increasingly becoming closer to the Arab countries. This week, in Jeddah, Saudi Arabia, Kyrgyz Ambassador Abdilatif Zhumabayev met with Vice President of the Islamic Development Bank (IDB) Group, Mansur Mukhtar. The sides discussed the preparation of the visit of the governmental delegation of Kyrgyzstan to the Annual meeting of the IDB Group. They also discussed the development of cooperation between Kyrgyzstan and IDB. The Ambassador of Kyrgyzstan expressed gratitude to the leadership of the IDB for the readiness to donate 5 mobile clinics with the participation of the Norwegian company NORMECA AS. The sides also discussed participation of President of IDB Bandar M.H. Khajar in July to Bishkek at the Third Round Table of the member of the Arab Coordination Group and expressed confidence that the visit of the IDB President will serve as an impetus for further strengthening of cooperation between the Kyrgyz Republic and the IDB and will create a basis for deepening bilateral cooperation. The IDB will develop IDB-Kyrgyzstan Cooperation Strategy for 3 years to mobilize new financial resources for the republic. The IDB team of experts intends to visit Bishkek in June to hold consultations with the Government of the Kyrgyz Republic.

Kyrgyzstan expands its economic ties with Pakistan and plans to establish a joint Business Council, Kyrgyz Ambassador to Pakistan Erik Beishembiev said last week during a meeting with Minister of Commerce Khuram D. Khan. The sides emphasized the importance of presence of regional transport links to intensify trade and economic cooperation and ensure the growth of mutual trade. It is proposed to make more active use of the existing potential of the "Quadripartite Agreement between Pakistan, China, Kyrgyzstan, Kazakhstan on transit transport", which will allow the mutual export of goods between these countries by the shortest, least expensive and safe route. The sides also expressed the desirability and importance of establishing direct air communication between the two countries. In addition, it is very important that having a large and successful experience in exporting its products to the European market under the GSP +status, Pakistan is ready to help Kyrgyzstan in this matter.

The sides expressed their intention to hold the first meeting of the joint Business Council this year and thereby give impetus to the activation of the entire range of trade and economic cooperation and trade between the two countries.

Kabar news Agency

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