BISHKEK (TCA) — Corruption, a lack of governmental transparency, and an unpredictable legal and regulatory environment are key constraints to business in Kyrgyzstan, according to a survey released on January 29 by the International Finance Corporation (IFC), a member of the World Bank Group.
The report, “Investment Climate in Kyrgyz Republic – Views of Foreign Investors,” also identifies the ‘pain points’ within the country’s investment policy and offers recommendations to make Kyrgyzstan more investor friendly, the IFC said.
“The government recognizes the need for a robust investment climate that is transparent and encouraging,” said Alymbek Orozbekov, Head of Investments Department of the Kyrgyz Ministry of Economy. “We are grateful to IFC for this analysis of whether the current regulations are investment-conducive and look forward to implementing recommendations and best practices in business regulations and regulatory governance in an effort to spur investment, create jobs, and boost growth.”
While it is fairly easy to enter the Kyrgyz market and register a company, operating a business and doing it effectively is much less so. A transparent and predictable legal environment is critical to encouraging investment, and the Kyrgyz government should continue to simplify and streamline regulations, specifically in the areas of permits and licensing, the report says.
The report highlights public order and security as other critical concerns and sees considerable potential for boosting foreign investment. Among the top five determining factors for investors are the importance of investing in a domestic market, the ease of company registration procedures, the ease of obtaining necessary permits and licenses, legislation conducive to business development, and access to cheap labor.
“Foreign direct investment can bring more and better jobs, improve productivity, and foster economic growth,” said Serhiy Osavolyuk, IFC Project Manager. “But to attract investors, the Kyrgyz Republic must first eliminate bottlenecks to doing business. These include reforms that target investment entry regulations and investment incentives, help reduce uncertainty for investors, and enable the government to attract more and better-quality investments.”
The initiative is part of the Central Asia Investment Climate Program, which is funded by the government of Switzerland and the United Kingdom’s Department for International Development, and implemented by the World Bank Group Trade and Competitiveness Global Practice.