BISHKEK (TCA) — For 25 years, since the establishment of diplomatic relations between Kyrgyzstan and the United Arab Emirates, not a single serious joint project has been implemented, although there is great potential for cooperation, President of Kyrgyzstan’s Chamber of Commerce and Industry Marat Sharshekeev said at the Kyrgyzstan-UAE business forum held in Bishkek last week.
Members of the UAE business delegation expressed a similar view at the forum. The UAE delegation included representatives of government bodies and businesses who visited Kyrgyzstan to study business and investment opportunities in the country.
“For local business people, it was a great opportunity to learn about the inspiring experience of the UAE development. The country has become a prosperous oasis for a short period of time and is now among world commercial, economic and financial centers,” Kyrgyz Economy Minister Arzybek Kojoshev said.
Bilateral relations are on the rise, he added. In December 2014, Kyrgyz President Almazbek Atambayev made the first official visit to the UAE, during which important economic agreements were signed.
Over the past years, trade between Kyrgyzstan and the UAE has seen a dynamic growth. From 2010 to 2016, it amounted to $520.7 million, a relatively small amount in absolute terms but this shows that there is an unrealized potential, Kojoshev said.
The UAE has an advantageous geographical location, developed infrastructure and communications. Currently, the two countries have regular passenger flights, which need to be expanded through the provision of additional services, such as trucking.
Kyrgyzstan intends to adopt the UAE experience and achievements in Islamic banking, development of renewable energy sources, and attracting investments.
Investing in Kyrgyzstan
Minister Kojoshev offered to consider the possibility of investing in priority areas of the Kyrgyz economy, such as the garment industry, processing of agricultural products, tourism, and information technologies.
He told the guests about prospects of investing in Kyrgyzstan, a member country of the Eurasian Economic Union with removed barriers to the movement of goods, services and capital to the markets of the five EEU member countries with a population of over 180 million.
In January 2016, the European Union granted Kyrgyzstan the right to participate in the Generalized System of Preferences (GSP+) and Kyrgyzstan can now export more than 6,000 commodity items to EU member states without customs duties.
The country has the most liberal tax regime in the region with a 10% income tax and 12% VAT. The existing electricity tariffs are the lowest in the CIS countries.
To develop tourism and attract investment, a visa-free regime is valid for citizens of 61 states for up to 60 days.
Several companies from telecommunications and garment industry presented their investment projects at the forum.
To implement investment projects, the Kyrgyz side suggested establishing a joint investment fund.
Kyrgyzstan uses only 10% of its tourism potential, so there are many opportunities for investment, Director of the Kyrgyz Investment and Export Promotion Agency, Alymbek Orozbekov, said.
Kyrgyzstan also has great hydropower potential and huge opportunities for the construction of small hydropower plants, since there are many mountain rivers in the country.
Only 12% of Kyrgyzstan’s agricultural production is exported processed, and the rest is raw products.
Kyrgyzstan needs a spinning mill to produce textile goods, Kyrgyz entrepreneurs said. Construction of a spinning mill will allow creating a link between the cultivation of cotton and the production of textile goods.
UAE interested in tourism cooperation
The United Arab Emirates are ready to strengthen bilateral relations with Kyrgyzstan, UAE Minister of Foreign Affairs and International Cooperation, Sheikh Abdullah bin Zayed Al Nahyan said.
In addition to the oil and gas sector, the UAE pays much attention to the development of other sectors of the economy, including tourism, he added. About 20 million tourists visited the United Arab Emirates last year. The tourism accounts for 9% of the country’s GDP.
The UAE business circles showed big interest in the tourism services market in Kyrgyzstan, especially in elite and health tourism.
“I admire the beauty and natural resources of your country so much that I intend to visit Kyrgyzstan soon with my family. However, to successfully develop tourism, it is necessary to create a quality service and ensure the safety of tourists,” General Secretary of the UAE Federation of Chambers of Commerce and Industry, Humaid Ben Salem, said.
The UAE is also interested in importing artesian water and environmentally friendly products from Kyrgyzstan.