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Rural development Economy Agriculture Investments Kyrgyzstan Finance

Kyrgyzstan: President holds national dialogue on regional development

BISHKEK (TCA) — Conflicts between investors and the local population are the result of poor interaction between the relevant state bodies and local authorities, as well as the lack of outreach with the population. “This significantly reduces the opportunities for attracting foreign investors,” President of Kyrgyzstan Sooronbai Jeenbekov said at the conference “National Dialogue on Regional Development” held on February 27-28 in Bishkek. Continue reading

6 years ago

Housing Construction Economy Kyrgyzstan Finance

Kyrgyzstan: Preferential mortgage lending not affordable for state employees

BISHKEK (TCA) — Parliament deputies and experts are dissatisfied with the results of the state mortgage program in Kyrgyzstan because it is not affordable for state employees. The monthly salary of a teacher with three years of experience is about 6,500 soms ($93), and with 30 years of experience — about 15,000 soms. With such salaries, they cannot afford a state mortgage loan, MPs said. The State Affordable Housing program started in March 2016 to improve the issuance of preferential mortgage loans to state employees. Loans are provided by banks, which are compensated for the difference between market and preferential loan rates. Since November 1, 2018, the rates on newly issued loans under the program have been reduced to 7-9% per annum. Previously, they were from 8% to 12%. The State Mortgage Company OJSC (SMC) is the program operator. According to the SMC head Baktybek Shamkeev, if a citizen wants to obtain a 1 million soms loan, the total family income should be 22-24 thousand soms (around $330) per month. If a person receives a loan of 2 million soms, the total monthly income should be 45-50 thousand soms. Most civil servants in the country do not have such an income, MPs said. Poor program implementation The State Mortgage Company is working poorly on the implementation of the Affordable Housing program because only a limited part of solvent citizens who work in the public sector have received mortgage loans, concluded the Accounting Chamber following the results of the company’s audit. The unavailability of state mortgage for the public sector was affected by the high interest rate resulting from the conclusion of agreements with partner banks with the provision of an added 5% annual rate along with a 3% rate (previously 5%) of a budget loan received from the Finance Ministry. The auditors advised to reduce the cost of state mortgage by reducing the income of the State Mortgage Company and commercial partner banks. Overpriced loans The Affordable Housing program may become unavailable, MP Marlen Mamataliev said. The State Mortgage Company has not achieved good performance due to very high down payment amount and interest rates, he explained. The SMC says that loans are issued at 9%, but in reality people get loans at 14-16%. In addition, the cost of apartments in the houses the company provides is very high, which does not comply with the principles of the Affordable Housing program. For instance, an apartment in a house built in Naryn costs $34.8 thousand. If a teacher or doctor receives it at 9%, he will have to pay 12 thousand soms per month for 15 years. After 15 years, the apartment will cost him $67 thousand. Shamkeev told MPs about the SMC plans to create its own housing stock. Replenishment of capital is planned due to the Government’s contribution, he added. According to the program, it was planned that construction companies would build housing at their own expense, and SMC would redeem. However, not all companies can afford building of...

6 years ago

Kumtor Tax Mining Investments Kyrgyzstan

Kyrgyzstan: Subsoil users concerned about possible tax burden increase

BISHKEK (TCA) — The International Business Council based in Bishkek, mining enterprises and associations of the mining industry of Kyrgyzstan appealed to President Sooronbai Jeenbekov with a request to assist in solving problems in the subsoil use sector. The appeal is related to the recent decision of the Security Council on measures in the subsoil use. Continue reading

6 years ago

Tajikistan Kyrgyzstan Investments Turkmenistan Kazakhstan Central Asia Economy Uzbekistan

Central Asia countries focused on attracting foreign investment

BISHKEK (TCA) — The Central Asia countries have a great potential for attracting foreign investors due to rich natural resources, low labor cost and growing population. According to the estimates of the Boston Consulting Group, the Central Asia countries, primarily Kazakhstan and Uzbekistan, will be able to attract about $40 billion–$70 billion of foreign direct investment (FDI) in the non-primary sector in the future. Continue reading

6 years ago

Kyrgyzstan Transport Railway

Kyrgyzstan: Government proposes to corporatize the state railways enterprise

BISHKEK (TCA) — The Kyrgyz Government proposed to corporatize the Kyrgyz Temir Jolu State Enterprise (Kyrgyz Railways). The issue was discussed on February 5 at a meeting of the Parliamentary Committee on Transport, Communications, Architecture and Construction. “At the initial stage, we propose to create a joint venture with a potential investor in freight forwarding. We believe that this will allow us to attract additional financial resources for the development of the railway industry. It is also planned to introduce a mechanism of state and private participation in financing the railway transport modernization,” said Kyrgyz Temir Jolu General Director Kanatbek Abdykerimov, who was appointed to head the company three months ago. Former CEO Almazbek Nogoibaev was dismissed after being accused of corruption by MPs. Some deputies are skeptical about the idea of the enterprise’s transformation into a joint stock company. The Kyrgyz Temir Jolu had already been renamed into the national company, but it has not brought any results. In is necessary to develop the railway network and connect the north and south of the country by the railways, the MPs said. Timber, metal building materials from Russia and other cargoes that pass along the Bishkek—Osh highway have put this motor road in poor condition, MPs said. It is necessary to transport such cargoes through railways only, the MPs believe. They asked the Transport Ministry to make every effort to remedy the situation. The Kyrgyz Temir Jolu is now negotiating with banks on buying of new passenger and freight cars this year. The shortage of freight cars hinders the development of the country’s coal industry and creates difficulties for entrepreneurs, the MPs added. The purchase of freight cars in the near future would allow increasing the exports of goods from the southern regions of the country. Following the discussion, the parliamentary committee members suggested the Government to reduce by 50% the company’s net profit payment to the national budget and to allocate the released funds for modernization of the track infrastructure. Background The Kyrgyz Temir Jolu was established in 2005 as a successor to the Kyrgyz Railways, which, in turn, inherited the functions of the Frunze branch of the Alma-Ata Railways in 1992. The length of Kyrgyzstan’s railways was 470 kilometers in 2006, and it is 426 kilometers now. The track network is fragmented, and the rolling stock including coaches, locomotives and freight wagons, is outdated. Rail transport accounts for only 3% of the cargo turnover in the country. 4,812 people are now working in the state-owned enterprise. Rolling stock Over the 27 years of independence, Kyrgyzstan has bought only six locomotives. The rest have been exploited for 40 years, despite the expired usage period, Kyrgyz Temir Jolu General Director Abdykerimov said. More than 52.5% of freight cars and 51.6% of coaches are inoperative. From 2020, 94 coaches will be sent for scrap. To restore the freight car fleet and fully meet the needs of business entities until 2022, it is necessary to purchase 200 freight cars annually for more...

6 years ago