BISHKEK (TCA) — For the first time in Kyrgyzstan’s history, a Prime Minister had to report for the work of two Governments in which he did not work a day. On June 14, Prime Minister Mukhammedkaly Abylgaziev, who has been heading the Cabinet since April 20 this year, reported on the Government’s work for 2017 at the session of the Parliament of Kyrgyzstan.
Whom to assess?
The MPs argued for a long time about whom and how to assess. The matter is that two prime ministers worked in Kyrgyzstan last year. Sooronbai Jeenbekov, the current President, headed the Cabinet from January to the end of August, and Sapar Isakov — from August to the end of the year.
In April, the Parliament expelled Isakov from office, following a no-confidence vote. The MPs accused him of the accident at the Bishkek Thermal Power Plant occurred past winter, and of unsuccessful contracts with foreign investors. However, they did not present specific evidence of his guilt. Isakov was replaced by Muhammedkaly Abylgaziev.
On June 5, Isakov was put in pretrial detention, a week after he was charged with corruption. He is being prosecuted in criminal cases over the modernization of the Bishkek TPP. The State National Security Committee accused Isakov of lobbying the interests of the Chinese company TBEA in the project to modernize the Bishkek TPP.
When discussing the report, the Parliament deputies differed in their opinions. Some MPs said it was necessary to recognize the work of the Government as unsatisfactory. Others objected, because the assessment would apply not only to Isakov, but also to the incumbent president.
The Parliament gave Isakov’s Cabinet a political assessment, and his work for 2017 should be approved, leader of the Social Democratic Party of Kyrgyzstan (SDPK) Isa Omurkulov said. According to the Government’s report, stability of macroeconomics is visible, he added. “If we say that the Government did a good job, then it turns out that we threw out Isakov for nothing,” MP Irina Karamushkina (SDPK) said.
Several MPs suggested just taking note of the report, not appreciating it. In the evening, after negotiations with the Prime Minister, the MPs almost unanimously (95 votes against 5) recognized the report of Prime Minister Abylgaziev on the work of the Government for 2017 satisfactory.
Problems unresolved
At the meeting with MPs, Prime Minister Abylgaziev spoke about shortcomings in the work of the Government in 2017.
Despite the growth in the economy and exports, many problems have not been resolved. In the energy sector, the contract for the construction of the hydroelectric power station Kambarata-1 with the Russian energy company RusHydro was canceled, and an ill-considered agreement was concluded with the Czech company Liglass, which was terminated later. The MegaCom mobile operator has not been sold so far.
The Prime Minister also recalled problems in the mining industry. In Toguz-Toro of the Jalal-Abad province in the south of the country, local residents burned a Chinese company’s factory in April. Abylgaziev believes that this was due to the poor performance of officials. Works at other deposits have not started. This indicates the unsatisfactory work of the Government, the Prime Minister concluded.
There are a lot of problems in the energy sector, so big reforms are coming in this sector. The Government plans to reestablish the Energy Ministry liquidated in 2014, Abylgaziev said.
Attracting investments
“The Government will intensify its efforts to attract investments and create conditions for doing business in Kyrgyzstan,” Prime Minister Abylgaziev said presenting the annual report.
The first phase of the project on financial support for export-oriented enterprises was implemented in 2017. Entrepreneurs were given an opportunity to obtain loans at 10% per annum. In 2017, 93 projects were funded for a total of 1.2 billion soms.
The fifth phase of the Financing Agriculture project was implemented in the country, and 15 thousand rural commodity producers were granted concessional loans worth 6.6 billion soms. The volume of loans increased by 1.8 billion soms compared to 2016.
As part of the project on leasing agricultural machinery, farmers got 363 units of equipment worth 530 million soms. Within the project, 24 agricultural machine and tractor stations were created in Kyrgyzstan. In addition, the Russian-Kyrgyz Development Fund (RKDF) allocated loans for small businesses worth 700 million soms at 14% per annum, which is twofold less than the rates of microcrediting companies. As of the end of 2017, the RKDF approved 823 projects for a total of $311 million.
The Head of Government reported on preferential taxation conditions. Since 2017, leasing companies have been exempted from VAT and sales tax and enjoy a 5% preferential rate on income tax. The benefits for income tax and VAT were extended for enterprises — processors of agricultural products — until September 1, 2018.
Failed projects
To develop textile and clothing production, the Kyrgyz Government allocated a land plot for the construction of a textile and clothing production technopolis. However, the Association of Light Industry Enterprises, Legprom, failed to fulfill its obligations and has not begun the construction of the technopolis, Abylgaziev said.
In the public healthcare sector, four projects were to be funded within the public-private partnership, but only one project is now being implemented. The procedure for holding a tender for the development of a feasibility study of other projects was delayed. In addition, the commissioning of the Kyrgyz-Turkish Friendship Hospital in Bishkek, built on a grant basis, was postponed until August 31, 2018.
There were problems related with corruption schemes during tenders for motor road construction.
Positive results
In 2017, the country’s foreign trade turnover increased by 12.5%. Exports to the Eurasian Economic Union member countries increased by 27%, and to third countries — by 8.6%.
In comparison with 2016, the revenues of the state budget grew by 16%, amounting to 135 billion soms.
Tax revenues increased by 9.6 billion soms (10.2%). Thanks to the measures taken to optimize and limit spending in 2017, the Government managed to maintain the budget deficit at 3.3% of GDP. Budget expenditures for the social sector were 52% of total budget expenditures (79 billion soms) and increased by 6 billion soms (8%) compared to 2016.
The average monthly salary increased by 6.7% from 14.4 thousand soms in 2016 to 15.4 thousand soms in 2017.
EEU membership
“After Kyrgyzstan’s entry to the Eurasian Economic Union, the working conditions of our citizens have improved significantly. Our citizens have equal employment rights with the citizens of the EEU host countries,” Prime Minister said. When registering for work, documents on professional qualification of Kyrgyzstan’s citizens are recognized by the employers of the EEU member countries. Kyrgyzstan’s citizens and members of their families have access to social and medical services there.
Labor migrants transferred about $2.4 billion to Kyrgyzstan in 2017, 24% more compared to 2016.
To develop cooperation within the EEU, the Kyrgyz Government will continue modernization of border posts and sanitary, phytosanitary and veterinary laboratories, Abylgaziev said.
