BISHKEK (TCA) — Labor migrants gradually turn into real investors of Kyrgyzstan's new economy, President of Kyrgyzstan Sooronbai Jeenbekov said at his meeting with compatriots who work outside the country earlier this month. Continue reading
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BISHKEK (TCA) — Kyrgyzstan’s resort city Cholpon-Ata on July 21 hosted the fifth International Investment Forum "Issyk-Kul 2018". President of Kyrgyzstan Sooronbai Jeenbekov declared 2018 the Year for the Regions’ Development, therefore the forum was devoted to the support of small and medium businesses, infrastructure development of the regions and ways to attract investments there. Open to cooperation "Together with partners in the Eurasian Economic Union, World Trade Organization and other integration associations, Kyrgyzstan has opened access of domestic and foreign businesses to promising markets," First Deputy Prime Minister of Kyrgyzstan Kubatbek Boronov said at the forum. It is necessary to build innovative business interaction in conditions of developing global logistics and high-tech instruments of trade and commercial operations which are blurring the borders and the distance between countries and people, Boronov added. Promotion of investments together with introduction of modern information technologies will help boost the country’s regions, he concluded. The Issyk-Kul forum has been held annually since 2014 by the Investment Promotion and Protection Agency of Kyrgyzstan (IPPA) with the support of the Huahe international consulting company and the local authorities of the Issyk-Kul province. Every year the organizers choose a certain topic of the forum. For example, the forum agenda in 2017 was new opportunities and prospects in the Eurasian Economic Union. In 2016, the forum was dedicated to deepening business cooperation in the agro-industrial complex, tourism and ecology. Participants and presentations Representatives of DP World (a leading enabler of global trade and an integral part of the supply chain, which has a portfolio of 78 operating marine and inland terminals in 40 countries across six continents) and the Fujairah Chamber of Commerce and Industry from the UAE, the BAIC GROUP Chinese automotive corporation and the delegation of the Eurasian Economic Commission attended the forum. Deputy Chairperson of the Standing Committee of the People's Congress of the Hubei Province of China, Wang Ling, spoke about business opportunities in her region, taking into account the development of modern technologies and integration of business in making decisions important for the country. The forum guests were presented Kyrgyzstan’s investment opportunities. Representatives of the business community voiced their proposals for digital commerce.For the first time, the forum was online, and investors can now find it on social networks to contact interested companies or the Investment Promotion and Protection Agency. Reporting on the work done, IPPA Director Shumkarbek Adilbek uulu told about two cooperation agreements signed for $33 million — on the establishment of an industrial park in Ivanovka village in the Chui oblast and on processing of mining raw materials at the Kan lead and zinc deposit in the Batken province in the south of Kyrgyzstan. The Investment Agency, with the technical support from the Aid for Trade UNDP project, organized B2B meetings with business representatives from Uzbekistan, Russia and China. As a result of negotiations, five domestic companies signed six trade contracts for a total of 132.2 million soms, or $1.93 million. Contracts for the supply of honey, trout, limestone,...
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BISHKEK (TCA) — Considering that the World Nomad Games are to be held in 2018, it is expected that there will be a deficit of Kyrgyzstan’s state budget in the second half of the year, the Eurasian Development Bank said in its monthly macroeconomic review. World Nomad Games According to the Finance Ministry of Kyrgyzstan, it is planned to spend 306.3 million soms for the coming World Nomad Games (WNG) to be held from September 2 to September 8 on the Lake Issyk-Kul coast. Earlier this month, the WNG organizers asked businesses and state organizations to provide voluntary financial support for the event. The State Ecological Inspectorate is still the only state agency that has allocated money for the Games. The Inspectorate’s employees transferred their one-day salaries to the account of the World Ethnic Sports Confederation in favor of preparations for the WNG 2018. Meanwhile tickets for the third World Nomad Games are already on sale. Entrance tickets are strictly individual, with QR-codes. Tickets should be bought only for the opening and closing ceremonies (from 400 to 4.9 thousand soms). Entrance to other events will be free. Deputy Minister of Culture, Tourism and Information Ainura Temirbekova believes that the upcoming competitions will outperform the past ones in 2014 and 2016. At Kyrchyn jailoo, an ethno-town is being constructed. From 3 to 6 September, a cultural program will be held there including national songs and dances, clothing and food exhibitions, theatrical staging of Kyrgyz traditions and customs, yurt design and assembling, and folk crafts contests. The WNG organizers will try to surprise and delight the guests. In 2016, the appearance of a thousand of komuzists at the arena of the hippodrome caused the spectators’ admiration. Komuz is an ancient Kyrgyz string instrument. Foreign guests were more interested in customs and traditions of nomads than sports competitions. Therefore, this year the organizers decided to improve the cultural part of the program focused on both the external attributes of the nomadic life and the inner world and spirit of nomads. However, the lofty intentions to hold a high-level international event are not fully implemented. Scandalous road Scandals are continuing around the construction of a ring road around Issyk-Kul Lake, on the shore of which the WNG will be held. Recently, the Prosecutor General's Office initiated a criminal case related to the construction of the Balykchi-Korumdu road. According to the investigation, the Transport Ministry illegally used budget funds in attracting consulting services. Construction of this road, estimated at 6.8 billion soms, is the only major project financed from the state budget. The construction project which began in 2015 and was due to be completed in December of 2017, was accompanied by corruption scandals. In April of 2016, the scandal over this road led to the resignation of then Prime Minister Temir Sariev and Transport Minister Argynbek Malabaev. The total length of the Balykchi-Korumdu road is 104 kilometers, and only a section from the 33rd to 104th kilometer has been completed. Travel safety The incident...
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BISHKEK (TCA) — The Russian ruble should be made the currency of settlements in the Eurasian Economic Union, Board Chairman of the Eurasian Development Bank (EDB) Andrey Belyaninov recently said at a conference of the Russian TV business channel RBC "Window of opportunities: Investments and new projects in Eurasia". Continue reading
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BISHKEK (TCA) — RusHydro, one of the largest Russian power generation companies, has notified Kyrgyzstan about the preparation of a lawsuit at the Hague court concerning the Upper Naryn cascade of hydroelectric power plants, Russian media reported. At the invitation of the Kyrgyz side, a RusHydro delegation plans to visit Kyrgyzstan for negotiations in the coming days, the company’s head Nikolay Shulginov said. RusHydro does not expect positive results from the negotiations, and is implementing measures to consider the dispute in the Permanent Court of Arbitration (PCA), an international arbitration court located in the Hague, Netherlands. The notification was sent to the Kyrgyz side, Shulginov added. The appeal to the Hague court will greatly affect the reputation of the state, Kyrgyz MP Akylbek Jamangulov told Radio Maral. Besides, there will be extra costs for the State. This situation resulted from the past wrong agreements and mistakes made by the previous Kyrgyz Government, he said. The Kyrgyz side did not control the spending of those $37 million (from RusHydro). Meanwhile, the Parliamentary commission concluded that the funds were used irrationally and the cost of the works was inflated, the MP said. Background According to the agreements concluded by the governments of Kyrgyzstan and Russia in 2012, the Electric Stations JSC from Kyrgyzstan and RusHydro JSC from Russia were authorized to implement the project. It was planned to build four HPPs with a total capacity of 238 megawatts on the Naryn river in Kyrgyzstan. The project cost $727 million. Both companies own 50% stakes in the authorized capital of the Upper-Naryn HPPs Joint-Stock Company. Russia had to provide money for feasibility studies and 50% of the cost of the project with loans on preferential terms. Kyrgyzstan had to provide land for the project. Russia did not give up the Kyrgyz hydropower projects but offered new terms at the end of 2015, which did not meet the interests of Kyrgyzstan. In January 2016, Kyrgyzstan denounced agreements between the two governments on construction and operation of Kambarata-1 hydropower plant (HPP) and the Upper Naryn HPPs cascade. According to the Kyrgyz side, the Russian economy was not on the rise, and the agreements on construction of HPPs could not be fulfilled by the Russian side due to objective reasons. Upper-Naryn HPPs It was planned to build the Naryn cascade within six years, and the first hydraulic unit of the main Naryn HPP-1 should have been put into operation in 2016. The Upper-Naryn cascade includes Ak Bulun, Naryn HPP-1, Naryn HPP-2, and Naryn HPP-3 power plants. The total capacity of the cascade should be at least 191 MW, with average annual electricity production of 1.55 billion kilowatt-hours. The project was estimated at $425 million in 2012, and it was increased to $727 million at the end of 2013. The construction agreement with Russia was terminated, although RusHydro already invested $37 million by that time. As part of the Upper-Naryn project, Russian money was spent to build a camp for construction workers, concrete plants, bridges, water supply,...
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BISHKEK (TCA) — On June 27, at the end of the Parliament’s spring session, the President of Kyrgyzstan Sooronbai Jeenbekov addressed the Parliament and the people outlining priorities of the country's development. Tasks unfulfilled The current situation in the country needs changes, President Jeenbekov said. Many tasks have been accumulated and require immediate resolution. During the years of independence the country has not obtained the desired result in the economic development. There are no close economic ties between the regions and industries. Despite good legislation, the investment attractiveness of the country leaves much to be desired. “It should be openly acknowledged that due to corruption, many investments went to other countries,” the President said. The basis of the market economy — the property right protection and compliance with the terms of the contracts — are not always respected. There have been cases of raiding, Jeenbekov said. In the state administration, there were cases of protection of economic interests of a narrow circle of persons. As a result, the interests of the country were damaged. Radical reforms needed It is necessary to build a state in which the rights of each citizen should be strictly observed. For this, it is necessary to carry out cardinal reforms, Jeenbekov said. The judicial reform is the most important. In 2019, a new and crucial stage in the life of society and the State will begin. The results of judicial reform will lead society to positive changes. New codes and laws regulating the judicial and legal sphere will come into force. Strong measures will be taken against those who will try to sabotage the reforms. The Government should allocate the necessary funds to implement these tasks. Fighting corruption The society is dissatisfied with the fact that state bodies designed to fight corruption “acted unfairly themselves”. The most important task — the reform of law enforcement bodies — has not been solved. The tax and customs policy failed to ensure the transparent and non-corrupt work of the state bodies. Various shadow schemes damaged the state budget and adversely affected the solution of social problems. "The political opponents will not be punished under the guise of anti-corruption struggle. This struggle will not be politically motivated. It will be directed against violations of the law and economic crimes," the President stressed. It is necessary to establish fair and transparent public administration and achieve transparency in the decision-making process. The people should see the results of this struggle in their daily lives including changes in public service, business and social life. “Each person who violates the law, especially the ones who run their dirty hands into the state budget, whoever they are, must necessarily bear a severe punishment,” the President said. From July 1, 2018, the verification of the authenticity of (tax) declarations of officials of the Office of the President, Government, Parliament, judges, and law enforcement agencies will begin. This is a very important component in the fight against corruption. “Each official should live by the means that...
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BISHKEK (TCA) — The Government of Kyrgyzstan will open a special account for funds coming from the fight against corruption. According to the Government Decree, signed by Kyrgyz Prime Minister Muhammedkaly Abylgaziev on June 22, the account in the treasury system will be distributed exclusively over decisions of the Government. The second account will be open to citizens wishing to help the state to pay off its debts. Such a proposal came from the Parliament deputies. Special account "The Government intends to open a special account, where funds will come from those who want to help the State," the Prime Minister said at the Parliament meeting during the discussion of the Government's report for 2017 on June 14. Kyrgyzstan began to take loans from 1992, the second year of its independence. By March 31, 2018, the state's external public debt reached $3.9 billion, of which $1.7 billion is the debt to China. At the end of 2017, the state foreign debt was $4.1 billion, or 53.9% of GDP. The proposal of the head of the Cabinet caused heated discussions not only among experts and the media, but also in the general public. The first and the only person to respond to the Government's appeal was MP Kamchybek Joldoshbayev, who is ready to donate one million soms. However, the general public did not support the Government’s initiative. Kyrgyzstan’s citizens regularly pay taxes and have the right to expect that the State will rationally dispose of them. Asking for charity from people "The State is not a kind of abstract dependent which citizens keep at their own expense for the kindness of their soul. The State, including its management institutions, is the manager to whom citizens gave the most common functional levers for regulating economic activity to obtain in return for their security, order and the most efficient distribution of economic and social benefits," the Beli Parus newspaper writes. The state top managers are pathetic about calling for help to the citizens of the country, telling about great foreign debt and little money available, and malicious corrupt officials who had robbed the budget for billions of soms. But ordinary people cannot understand their relation to the state debts and stolen budget money. If the state made ill-considered strategic decisions, it was not clear where budgetary funds were spent, and taxpayers are unlikely to make voluntary donations. Asking for voluntarily help from the people, Prime Minister Abylgaziev understates the authority of the country at the international level, the Fabula Press newspaper reported. “Which states or international financial institutions will trust the state which asks for charity from its people? Abylgaziev begs from his people instead of feeding them." Mired in corruption Former judge of the Constitutional Chamber of Kyrgyzstan, Clara Sooronkulova, believes that such a proposal indicates the weakness and helplessness of the State. Who will give money to the State which is mired in corruption? If such a charitable foundation were created in another situation, perhaps people donated their money to help...
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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. Continue reading
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BISHKEK (TCA) — Well-developed infrastructure is a critical factor in economic development, international experts say. Motor roads in Central Asia require significant repairs, the OECD Central Asian Analytical Network reports, adding that 60% of roads in Kyrgyzstan, 54% in Kazakhstan, 48% in Tajikistan and 23% in Uzbekistan do not have asphalt or concrete cover. The Central Asian states impose their infrastructural hopes on China's One Belt, One Road initiative, in which Central Asia is of key importance. But it should not be forgotten that the growth of public external debt (PED) to China is rapid there, especially in Tajikistan and Kyrgyzstan, where the PED growth is exceeding the safe level, which imposes certain risks and obligations on bilateral cooperation. According to the Global Competitiveness Index for 2017/18 presented by the World Economic Forum, Tajikistan ranks 70th out of 137 world economies in terms of the road quality. The country scored 4.1 out of 7 points, and ranked the highest in Central Asia above Kazakhstan (115th) and Kyrgyzstan (122nd). No ranking was provided for Uzbekistan. Most roads in Tajikistan were rebuilt after the collapse of the Soviet Union. The main exception is in Gorno-Badakhshan Autonomous Province (GBAO), where Soviet-era roads are in poor condition, Asia-Plus IA reported. To compare, Kazakhstan held the 107th place a year ago. This year, Russia rose to 114th place from the 123rd in the previous survey. The WEF experts also noted the trend towards improving the quality of roads in Kyrgyzstan. The transport infrastructure is actively developing in the country, Economy Minister of Kyrgyzstan Oleg Pankratov said. In 2017, 566.7 kilometers of public roads were repaired. About 540 kilometers are planned to repair this year. Within investment projects, construction of 146 kilometers of highways will be completed to connect international transport corridors. Toll roads in Kyrgyzstan In Central Asian countries, roads are the main means of communication. The states allocate some funds for their construction and maintenance, but they are critically lacking. To find money, the governments decided to introduce toll roads. Since 2019, fees for the use of certain roads may be introduced in Kyrgyzstan, and the Minister of Transport and Roads is currently harmonizing regulatory documents, Minister Jamshitbek Kalilov said. To reduce the burden on the state budget and as part of the road development strategy, the Transport Ministry intends to introduce 26 kilometers of toll roads in 2018 and to bring this figure to 500 kilometers by 2025. The Kubaky–Kochkor road in the Naryn province, the North–South alternative road and the Bishkek–Tokmak bypass route will be the toll ones. Currently, all roads in Kyrgyzstan are free, except for the tunnel at the Too-Ashuu Pass at the Bishkek–Osh road. To reduce the personal participation in accepting payments for road travel, and therefore the possibility of corruption, the Transport Ministry installs automated systems for accepting payments at two checkpoints at the Bishkek–Osh highway. Payment will be made through the bank payment systems. Toll highways in Kazakhstan Kazakhstan plans to increase the share of toll roads...
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BISHKEK (TCA) — "We appreciate all investors who conduct their business in Kyrgyzstan, but often problems arise from the work of companies’ top managers who sometimes carry out illegal activities," Secretary of the Security Council of Kyrgyzstan Damir Sagynbaev said at a press conference in Bishkek on May 31. He was commenting on the situation around the detention of Ilyas Tulekeyev, General Director of KAZ Minerals Bozymchak, which caused great resonance in the country and abroad. Last week, Ilyas Tulekeyev was arrested and later put under house arrest in Bishkek. About the company KAZ Minerals Bozymchak belongs to the KAZ Minerals PLC group of companies, the largest copper producer in Kazakhstan. More than 33% of KAZ Minerals PLC shares belong to Vladimir Kim, who has a fortune Forbes estimated at $3.1 billion. KAZ Minerals Bozymchak has been operating in Kyrgyzstan since 2007. It holds licenses for exploration and development of the Bozymchak copper and gold deposit in the Ala-Buka district of the Jalal-Abad province. The explored reserves of copper are 140.78 thousand tons, gold — 22.96 tons, and silver — 144.2 tons. In 2015, the Bozymchak ore mining and processing enterprise was launched which now employs about a thousand people, and 97% of them are locals. For the operating period, the company has paid 2.8 billion soms of taxes to the state budget. Last year, KAZ Minerals Bozymchak was ranked among the top three taxpayers of the country, and paid about 768 million soms to the state budget of Kyrgyzstan. The company has invested about $500 million in the country. Official version The criminal case against KAZ Minerals Bozymchak was initiated in 2017 and was later suspended, Security Council Secretary Sagynbaev said. During a second inspection, the suspended criminal case was resumed, and Ilyas Tulekeyev, General Director of KAZ Minerals Bozymchak, was charged. On May 25, 2018, he was detained and charged for “abuse of powers by employees of commercial or other organizations". After Tulekeyev was detained, many other companies that are in arrears with the Social Fund and the Tax Service reimbursed their tax debts. In three days, six large companies transferred tax arrears worth 33 million soms, Sagynbaev said. Kyrgyzstan does not intend to scare away investors who have nothing to do with law violations, he added. On May 27, the Pervomaisky District Court of Bishkek released Tulekeyev from custody, but the charge was not withdrawn. KAZ Minerals's position KAZ Minerals Bozymchak expressed its concern about the unreasonable initiation of the criminal case, violation of the law and legal interests of the investor. On May 29, the KAZ Minerals Board of Directors held a press conference in Bishkek to clarify the situation. The company sued an administrative action to appeal the decision of Kyrgyzstan’s tax authorities due to the additional taxation according to the Government provision adopted in September 2017. The court session on this suit is scheduled for July 2018. According to the law, the investigation into the case of the General Director was to be suspended...
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