Kyrgyzstan Business & Economy - The Times Of Central Asia

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Kyrgyz Authorities Seeking Monopoly on Insurance, Industry Group Says

The Kyrgyz Association of Insurers is sounding the alarm that private insurance companies may soon be out of work due to government interference. According to a decree signed by Kyrgyz President Sadyr Japarov, all state bodies and local governments are now instructed to insure all their property with the State Insurance Organization (JSC SIO) in order to develop the national insurance market. "The Cabinet of Ministers of the Kyrgyz Republic will define JSC SIO as the national operator for reinsurance, including export risks, within the framework of cooperation with the Eurasian Reinsurance Company," the document says. The Kyrgyz Association of Insurers appealed to human rights activists to assist in protecting their interests. Private insurers are sure that the new law violates their rights and doesn't comply with Kyrgyzstan's current legislation. "According to insurers, the principles of entrepreneurial activity established by the legislation of the country, such as non-interference of state bodies in the activities of business entities, are violated. In addition, the state guarantees for the protection of the rights of entrepreneurs equal rights and opportunities to access financial resources -- as well as the creation of conditions for the protection and development of competition -- are being violated," - said the International Business Council, which was engaged by Kyrgyz private insurance companies on the matter. The current law "On Organization of Insurance in the Kyrgyz Republic" prohibits interference in insurance activities. Private insurance brokers and business owners argue that the state is playing an unfair game at the legislative level, forcing state-owned companies to insure their property with the SIO. Besides, the financial means to underwrite risk and pay out possible insurance claims are miniscule to the capitalization of private insurers. Last year, the authorities increased the capitalization of the SSO to 1 billion som, and this year they will allocate another 300 million som by presidential decree. "In the prescribed manner by 2027 to find and gradually allocate funds in the amount of 5 billion som to JSC "SIO" to increase the authorized capital... By 2027, the annual profit in the amount of 100 percent, received from the activities of JSC "SIO," will be directed to increase the authorized capital at the expense of the distribution of budget revenues and expenditures," the law reads. Today, 15 insurance companies, including SSS -- as well as several Chinese and Kazakhstani insurers -- operate in the Kyrgyz market. People familiar with the situation who spoke to The Times of Central Asia say most of the major national companies are already insured with SIO, meaning that only civil insurance lines -- like health and life -- and auto insurance remain for private insurers.

Business & Economy Kyrgyzstan Kazakhstan Kazakhstan Business & Economy Kyrgyzstan Business & Economy

Kazakhstan and Kyrgyzstan Enhance Allied Relations

On April 19 Astana hosted the sixth meeting of the Supreme Interstate Council of Kazakhstan and Kyrgyzstan. Chaired by Kazakh President Kassym-Jomart Tokayev and Kyrgyz President Sadyr Japarov, discussions focused on the development of bilateral cooperation in economy, trade, investment, and agriculture, in addition to joint projects regarding transport, water use and energy resources. The two leaders then signed an Agreement on Deepening and Expanding Allied Relations, aimed at providing a new impetus to the development of Kazakh-Kyrgyz relations. During the conference, Kyrgyz President Japarov stated, “Kazakhstan is our close neighbour, a fraternal country and one of our main trading partners. Kazakhstan is a priority in our foreign policy. There are no political or regional differences between our countries.” In support, President Tokayev expressed his wish for there to be no unresolved issues between the two neighbouring countries and drew particular attention to the need to strengthen trade and economic ties. Kazakhstan is currently one of Kyrgyzstan’s key partners in trade and investment. Last year, mutual trade turnover reached $1.5 billion and during their talks, the leaders confirmed their intention to increase that figure to $2 billion. The parties also signed an Agreement on Mutual Protection of Investments. Referencing measures to expand the volume of goods transported across the Kazakh-Kyrgyz border and improvements in customs clearance, Tokayev stated, “We have started modernizing the border checkpoints at Karasu, Besagash, Aukhatty, Sartob, Aisha Bibi, Sypatay Batyr, and Kegen. Each will be equipped with digital technologies, with work expected to be completed by 2028.” President Japarov, in turn, announced that an agreement had been reached to resume the operation of the Kichi-Kapka and Kamyshanovka checkpoints to help increase bilateral trade and relieve congestion. Turning to the importance of interaction in the water and energy sector, the Kazakh president said, “In recent years, the urgency of efficient and equitable use of transboundary water resources has increased. We shall continue our coordinated work and have agreed to soon give approval to a schedule for interstate water management structures and implement it in a timely manner. Kazakhstan is ready to fulfil all obligations and jointly implement important projects.”

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Traffickers of Human Organs Detained in Kyrgyzstan

The State Committee for National Security (SCNS) of Kyrgyzstan has detained members of an international criminal group at Manas Airport. The criminals had organized a black-market channel for the illegal sale of human organs abroad. All detainees are citizens of the Kyrgyzstan. According to the investigation, the criminal group looked for patients in foreign clinics who were willing to pay large sums of money for the transplantation of a healthy organ. The gang then found donors in Kyrgyzstan, who were fraudulently induced into undergoing organ-harvesting operations. "Donors necessarily underwent a medical examination, where, regardless of [their overall health], always issued a positive conclusion, after which the organizers through corrupt schemes made false documents on the relationship with the patient necessary for submission to the clinic, where the operation will be held," said the SCNS. Investigators found that the donors received between $1,000 and $7,000 for their kidneys. The recruiters of those donors earned about $3,000, and the organizers of the criminal channel received between $30,000 and $70,000. The SCNS said that all necessary measures are currently being taken to identify all those involved in this crime. Earlier this year, Kyrgyz president Sadyr Zhaparov signed a law on the protection of citizens' health, according to which private and public hospitals can engage in organ transplantation. However, a major stipulation requires that the organ recipient must be a relative of the donor. This loophole in the legislation was exploited by criminals by issuing fictitious documents on family kinship.

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Market Capitalization of the Kyrgyz Stock Exchange Reaches Record Level

In a short period of time, the Kyrgyz Stock Exchange (KSE) has launched various financial instruments: a government securities market, a precious metals market, other commodities instruments, and a sustainable development sector, KSE President Medet Nazaraliev explained at a meeting with representatives of the business community. The head of the exchange said that businesses registered in Kyrgyzstan have begun to show interest in the opportunities of the KSE, and with increasing financial literacy, more and more companies are interested in issuing securities to raise funds. KSE's market capitalization, according to official data, reached a record high of $1.25 million in the first quarter of 2024. "In recent years, the country's stock market has seen growth in all indicators. For sustainable development, companies need to expand the sources of attracting investments, and today the stock market [helps] to attract investments by issuing shares, bonds, creating a public [market] history and increasing the reputation and recognizability of the company," said Nazaraliev. At the meeting with participants of the Kyrgyz Chamber of Commerce and Industry, representatives of the exchange emphasized that it is important to develop not only the securities sector, but also the commodities sector. "One of the important tasks of the stock market is to ensure a high level of liquidity of investments in securities, [and] guarantees of execution of transactions. I hope that in the future the stock exchange will become a place for mass transactions in the commodities sector, as well. All over the world, commodity exchanges help to quickly raise money to increase production of high-demand goods and realize the tasks of creating transparent pricing mechanisms, including for commodities. Exchange mechanisms prove to be effective in terms of developing competition and ensuring equal access to goods," said KSE Vice President, Aida Chodulova. Officials are preparing to launch a digital project which will allow citizens to invest in securities online. There are also plans to attract international investments. International ratings agency, S&P Global Ratings is scheduled to evaluate the activities of the KSE, and the Kyrgyz government and business community hope that this will help the Republic multiply its chances of attracting foreign capital through the exchange.

Central Asia Kyrgyzstan Business & Economy Kazakhstan Kazakhstan Business & Economy Kyrgyzstan Business & Economy

Kazakhstan and Kyrgyzstan Sign Commercial Deals Worth $300 Million

On the side-lines of the Kazakhstan and Kyrgyzstan business forum on April 17 in Astana, businesses signed off commercial deals totalling $300 million. Attended by Deputy Prime Ministers of Kazakhstan and Kyrgyzstan, Serik Zhumangarin and Adylbek Kasymaliev, the forum attracted companies engaged in mechanical engineering, industry, metallurgy, construction, logistics, agriculture, pharmaceuticals, investment, and service industries. According to a report by the Kazakh Ministry of Trade and Integration, lucrative joint projects include the construction of solar power plants, a ferroalloy plant, a distribution centre in Kyrgyzstan, and the exchange of supplies of agricultural and other products. In 2023, trade turnover between Kazakhstan and Kyrgyzstan rose by 26% compared to the previous year, reaching $1.6 billion. Kazakhstan’s exports accounted for $1.1 billion, an increase of 35.8%, and imports stood at $495.2 million, an increase of 9%.

Central Asia International Affairs Kyrgyzstan International Affairs Kyrgyzstan Business & Economy Kyrgyzstan Business & Economy

Kyrgyz PM Japarov In U.S. For Talks With Energy Investors

Kyrgyzstan's prime minister Akylbek Japarov is in the United States this week, and will meet with potential investors as Kyrgyzstan looks to grow its energy sector. Japarov will meet with the heads of the World Bank, International Monetary Fund, the U.S. Agency for International Development (USAID), the U.S.-Kyrgyz Chamber of Commerce, Asian Infrastructure Investment Bank, Asian Development Bank and the European Investment Bank. He will also meet with representatives of leading tech corporations, according to the Kyrgyz government's press service. Kyrgyzstan's largest energy project is the construction of a hydroelectric power plant on the Naryn River, for which the World Bank has allocated a soft loan of $5 million for a feasibility study. Kyrgyz authorities are also negotiating a $500 million loan to construct the hydropower plant. In total, according to current estimates, the project will cost about $5 billion. The Times of Central Asia has previously reported that the Kyrgyz Chamber of Commerce and Industry intends to open representative offices in the U.S.