Kyrgyzstan’s economic week, May 22-27

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An important event for all countries in Central Asia occurred this week in Ashgabat. Two neighbors - Uzbekistan and Turkmenistan - signed a Memorandum aimed at ensuring the transit of electricity from Turkmenistan to Kazakhstan and Kyrgyzstan through the energy system of Uzbekistan.

It was signed during President Shavkat Mirziyoyev’s visit to Turkmenistan. Its importance for Kyrgyzstan is that it guarantees the supply of electricity to the republic from Turkmenistan in cases of its shortage, if the industrial demand will grow and the construction of new hydroelectric power stations continues to be dragged out.

This week it became known that the Pakistani textile company was invited to invest in Kyrgyzstan. Ambassador of Kyrgyzstan to Pakistan Erik Beishembiev made such a proposal during his trip to Karachi, which aimed at attracting foreign investors. The Ambassador met with director of the Pakistani Aziz Sons, a textile company.

The Kyrgyz Ambassador suggested the Pakistani company to invest in the creation of a textile enterprise in the territory of Kyrgyzstan. In response, the Pakistani side promised to study this proposal, the possibility of investing in the creation of such an enterprise.

Minister of Agriculture of the Kyrgyz Republic Nurbek Murashev stated this week that due to weather conditions, spring-field work is delayed to 20-25 days. He said that changing the weather affects the farmer's work and crops. “We have had a lot of precipitation this year and therefore we offered such seeds that are resistant to weather conditions," he said. Also the Minister informed that this year the grain crop was cut. "Because, we are changing the direction of the country's agriculture and switching to the sowing of technical cultures. For example, we increased the sowing of cotton and sugar beet," he said.

The Russian-Kyrgyz Development Fund (RKDF) intends to expand the list of its partner banks. This week RKDF signed a loan agreement with Demir Kyrgyz International Bank CJSC for the amount of 3 million US dollars.

The funds will be used for targeted financing of small and medium-sized businesses, leasing, as well as the supply of equipment from the Czech Republic and Turkey through a letter of credit.

The priority sectors for support are the agro-industrial complex, the garment, textile, processing, mining and metallurgical industries, tourism infrastructure, medicine and transport. That is, those areas of Kyrgyzstan which have been developing.

Trade and economic relations became the main topic at the meeting between the foreign ministers of Kyrgyzstan and the UAE. Minister of Foreign Affairs and international Cooperation of UAE Sheikh Abdullah bin Zayed Al Nahyan visited Bishkek to discuss the issues that were achieved during the visit of the President of the Kyrgyz Republic to the UAE in 2014. "During the talks, we noted the increased dynamics of contacts between our countries. First of all, we associate this with the opening our embassy in the UAE last year. The main topic of discussion was the trade and economic issues. I think that this topic will be also discussed during UAE Foreign Minister’s meeting with the President and Prime Minister of Kyrgyzstan," Kyrgyz Foreign Minister Erlan Abdyldaev said.

By the results of the first quarter of 2017, Kyrgyzstan's exports increased by 128%, import growth made 115%. These figures are consistent with the data of the Eurasian Economic Commission, which noted the growth of Kyrgyzstan's exports by 131%. Deputy Prime Minister of the Kyrgyz Republic Oleg Pankratov cited this data after acquaintance with the work of the checkpoint "Ak-Tilek Avtodorozhny" on the Kyrgyz-Kazakh border. He said that the removal of customs control on the Kyrgyz-Kazakh border affected the quality of statistical records. "A new methodology of accounting of imported and exported goods has been introduced at all checkpoints operating on the territory of the country. This methodology allows obtaining objective data on the volumes of trade operations, including with the countries of the Eurasian Economic Union," he said.

The Vice Prime Minister of the Kyrgyz Republic particularly noted the increase in the first quarter of this year exports of meat products by 581%, fruits and nuts by 188.5%, dairy products by 85.9%, light and textile products by 155%. Now the Government should continue to provide targeted support to export-oriented industries and create conditions for export development.

Bishkek hosted a business forum "Kyrgyzstan-UAE" with the participation of Minister of Economy of the Kyrgyz Republic Arzybek Kozhoshev, Deputy Minister of Foreign Affairs and International Cooperation for Economic Affairs and Trade of the United Arab Emirates Mohamed Sharaf, representatives of state bodies and business structures of the two countries. The Forum has becoming a platform to exchange views on further promoting economic cooperation between the Kyrgyz Republic and the UAE, as well as to help establish business contacts between business circles of the two countries.

Minister Kozhoshev said that, in recent years the volume of trade turnover between Kyrgyzstan and the UAE has a constant growth dynamics. For the period from 2010 to 2016, the volume of trade amounted to 520.7 million US dollars. "Of course, in absolute terms, these figures are relatively small, but this indicates that we have a lot of unrealized potential," the minister said. He told the Forum participants that, in order to create conditions for investors, Kyrgyzstan is actively pursuing efforts to strengthen a favorable investment climate, increase sales markets and improve access to them. After membership of Kyrgyzstan in the EEU, barriers are being lifted for the movement of goods, services and capital from Kyrgyzstan to the markets of the five EEU member countries with a population of over 180 million people.

In January 2016, the European Union granted Kyrgyzstan the right to participate in the Generalized System of Preferences (GSP +). The products of Kyrgyzstan (more than 6000 commodity items) can be imported into EU member states without customs duties with a market of more than 400 million people. At this time, Kyrgyzstan is the only country in Central Asia that has received the GSP+ status. In addition, the country has created the most liberal tax regime. The income tax rates are 10%, VAT - 12%, which differs favorably from rates in neighboring countries such as Kazakhstan, Tajikistan, Uzbekistan and China.

The existing tariffs for electricity are the lowest among the CIS countries. The country has a skilled workforce and an education system that allows to train necessary personnel in short terms. In addition, there is a visa-free regime in Kyrgyzstan for citizens of 61 states for up to 60 days for the development of tourism and attracting investment since 2012.

Another notable event in the relations between Kyrgyzstan and Uzbekistan took place this week. Minister of Agriculture, Food Industry and Reclamation of Kyrgyzstan Nurbek Murashev held a meeting with Ambassador of Uzbekistan to Kyrgyzstan Komil Rashidov.

The sides discussed the bilateral cooperation in the agricultural sector. In addition, the sides discussed the development and use of bilateral opportunities in setting up joint ventures. Nurbek Murashev expressed readiness for cooperation and strengthening of relations between the two countries in the agricultural area, and also noted the interest of Kyrgyz agricultural producers in fruit seedlings, in seeds of cotton and mineral fertilizers. The sides agreed on the possibility of meeting the ministers of the two republics for signing an agreement on cooperation.

Kyrgyzstan continues the policy of attracting potential investors to the country by presenting its capabilities in various countries. This week an investment forum was held in England entitled "The Kyrgyz Republic - a real democracy open to business", where investment projects of Kyrgyzstan were presented in industry, energy and subsoil use. The event was organized by the European Bank for Reconstruction and Development with the participation of representatives of several state bodies of Kyrgyzstan. The forum was attended by representatives of the House of Lords of the British Parliament, the EBRD and European companies. They were provided with a list of 44 Kyrgyz enterprises ready for joint operation. It is already known that light industry has become a visiting card of Kyrgyzstan, and the brand "Made in Kyrgyzstan" is familiar all over the world.

This week it became known that the Government allocated a land plot for construction of industrial zone in Chui oblast. Thus, 40 hectares of land are allotted for creating a technology town, where 40 sewing enterprises will be located. The similar industrial zones will be built in Bishkek too, where about 20 sewing enterprises will be located. After putting into operation this project about 10 thousand people will be provided with workplaces. According to statistics, half of the industrial exports of Kyrgyzstan make the garment industry enterprises, and the total number of people involved in the industry is steadily growing.

Kabar News Agency

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