ASTANA (TCA) — The Korean company MANNA CEA is investing about 2.4 million US dollars in the construction of a salad greenhouse with an area of 0.6 hectares in the Kordai district of the Zhambyl province in southern Kazakhstan, Kazakh Invest National Company for Investment Support and Promotion reported.

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ASTANA (TCA) — In the near future, the Government of Kazakhstan and the National Bank will take new measures to support the country’s agricultural sector, the official website of the Prime Minister of Kazakhstan reported.

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KABUL (TCA) — A U.S. program to promote the role of women in Afghanistan is falling short of its goals, a new report says.

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ASTANA (TCA) — Kazakhstan President Nursultan Nazarbayev during his visit to Turkey met with the heads of the largest Turkish companies in Ankara on September 13, Kazakh Invest National Company for Investment Support and Promotion reported.

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BISHKEK (TCA) — Founders and top managers of more than two hundred leading enterprises of Kyrgyzstan and Russia discussed ways to expand cooperation within the Eurasian Economic Union (EEU). On September 14, a Kyrgyz-Russian business forum was held at the Ala-Archa state residence near the Kyrgyz capital Bishkek.

Two contracts were signed at B2B meetings. The Kyrgyz-Russian Development Fund and the Russian Export-Import Bank signed a contract on concessional lending for the supply of Russian equipment to a Kyrgyz state-owned company, and the Imperial Group of Companies, Kyrgyzstan’s footwear manufacturer, and Russian Leather JSC signed a contract for the supply of raw materials.

Five promising sectors

Kyrgyz Deputy Economy Minister Eldar Abakirov told the guests about five economic sectors profitable to invest in, as well as measures taken by the Kyrgyz authorities to create favorable conditions for doing business and improve the investment climate in the country.

Abakirov urged to consider the possibility of investing in the garment industry, processing of agricultural products, tourism, information technologies, and medicine. According to experts, these sectors can give high growth, and invested funds could be paid off in three-five years, he said.

Large investors can conclude investment agreements with the Kyrgyz Government and negotiate special conditions as part of the agreements. The country also introduced a stabilization regime under which investors have the right to choose the most favorable way to pay taxes including VAT for ten years. If taxes are raised, the investors will be able to use the tax rates fixed in their contracts.

The primary Government’s task is to ensure the private property rights and protect businesses from unreasonable interference of state bodies, Abakirov concluded.

Trade relations

The adaptation period after Kyrgyzstan’s entry to the Eurasian Economic Union has been passing without significant shocks, and this is the merit of both the state agencies and the business, Charge d’Affaires of Russia in Kyrgyzstan Vadim Chekmazov said.

Russia is trying to maintain its role of a strategic partner and ally, helping to smoothly overcome the transition period when the markets of the two countries unite. The Russian-Kyrgyz Development Fund has already allocated hundreds of millions of dollars to entrepreneurs in loans aimed at developing the food industry, transport logistics, agro-industrial complex and construction. As a result, production and exports are growing in Kyrgyzstan.

Exports of Kyrgyz goods to Russia increased by 41% over the first half of 2018 and by 47% in 2017.

In 2017, trade between Kyrgyzstan and Russia amounted to $1.5 billion and increased by 12.4% compared to 2016, of which Kyrgyz exports were $265 million, and imports — $1.3 billion. Kyrgyzstan exports clothing, machinery, agricultural raw materials, and glass to Russia, and imports oil products, ferrous and non-ferrous metals, consumer goods, timber, cardboard, chemical products, perfumes and cosmetics, plastics, agricultural products, and household appliances.

At the same time, imports of goods from Russia are growing more slowly. Over the first six months of 2018, it has grown by 10%, and in 2017 — by 34%. This is encouraging and shows that the economy of Kyrgyzstan is developing. This trend contributes to the improvement of the trade balance between the two states, Chekmazov said.

It is necessary to create new enterprises to provide products not only to the Kyrgyz market but also to the EEU countries, he added.

According to the Association of Russian manufacturers of specialized equipment, agricultural machinery manufacturers increased their supplies to Kyrgyzstan up to 111 million rubles, which is 3.5-fold compared to the same period last year. There are all conditions for substantially increasing the exports in the future, they said.

According to representatives of Russian businesses, the currency risks have a negative impact on trade relations between the two countries and make some projects unpredictable.

New markets

Many Russian investors are thinking about opening new businesses in Kyrgyzstan, because they are attracted by new markets.

Russian Leather Enterprise signed a contract with a Kyrgyz company that produces footwear. The head of the Russian company said that he had been searching for partners in Kyrgyzstan for a long time.

“We had no fears about entering the Kyrgyz market, and there is no shortage of labor in the light industry, so we are very interested in cooperation,” he told Sputnik news agency.

The delegation of the Sverdlovsk region of Russia met with representatives the Ministry of Transport and Roads of Kyrgyzstan and offered to use materials of Russian manufacturers for laying roads, noting that crushed stone and mastic asphalt concrete is cheaper than that currently used in Kyrgyzstan.

The head of a Russian company engaged in supplies of wool processing equipment offered to open a new business in Kyrgyzstan. There are many sheep in the country, but no large wool processing workshops, except for small private companies. Farmers sell mostly untreated wool, and this is unprofitable.

The Russian company has the necessary equipment that allows producing goods from sheep wool, including traditionally national ones, yurt felt, koshmas and kiyiz (felt carpets).

It is important to restore the merino breed, since their wool is highly valued.

In the Soviet era, Kyrgyzstan was famous for its merino breed. The development of sheep breeding was put on a scientific basis, and new, highly productive sheep breeds, including fine wool ones, were bred. In 1991 (before Kyrgyzstan’s independence), there were over 10 million sheep in the country, and 92% of them were fine-fleeced. After the poorly conducted economic reforms, the merino sheep breed became unclaimed.

The merino breeding has only recently begun to recover, but the lack of financing and marketing services for the wool sale adversely affect its development. To interest farmers in the merino breeding, it is necessary to raise the cost of wool and provide with other incentives.

According to the forum participants, foreign businesspeople do not have enough information about the economy of Kyrgyzstan. Foreign investors may be attracted by cheap labor force in Kyrgyzstan, as it makes doing business more profitable.

Russian-Kyrgyz Development Fund

If joint projects are created in the priority sectors for the Russian-Kyrgyz Development Fund, it will provide concessional financing from 4% per annum in US dollars, the Fund Chairman Erkin Asrandiyev said at the forum.

The Fund has approved 1,530 projects worth $28 million in 2018. Of these, more than 55% of loans were allocated to entrepreneurs in the production and agro-industrial sector.

Since the beginning of 2018, 549 small and medium enterprises have been financed in the regions, and 349 of them are engaged in the agricultural sector. The regions’ financing has increased by 12% this year in such key areas as agriculture, processing of agricultural products and products of animal origin, and intensive gardening. The Fund is implementing three sectoral programs on the development of fine-fleeced sheep breeding, intensive gardening and fisheries.

The Fund is using a mechanism to stimulate entrepreneurs. If projects are successfully implemented and entrepreneurs timely repay their loans, the Fund returns half of the paid interest at the end of each year.

TASHKENT (TCA) — Along with political and economic reforms, Uzbekistan’s President has made some changes in his administration in an effort to redistribute executive powers and make the country’s governance more effective. We are republishing this article on the issue, written by Umida Hashimova, originally published by The Jamestown Foundation’s Eurasia Daily Monitor:

The president of Uzbekistan, Shavkat Mirziyoyev, issued a decree, on August 27, changing the official name of the 27-year-old “Presidential Executive Office” (Devon in Uzbek and Apparat Russian) to the “Presidential Administration.” Along with the new name, the Administration saw some personnel changes and possibly limitation of powers of certain advisors. Overall, these reforms are largely superficial as the Presidential Administration inherited not only the same departments and functions from the Executive Office, but maintains all the major stalwarts of the previous government structure.

President Mirziyoyev’s office was not the only government body to be renamed. The heads of nine departments within the administration will now be called “Presidential Advisors,” dropping the word “State,” which had heretofore preceded their titles. Presidential advisors will reportedly now monitor and control the activities of the eight deputy prime ministers and work in concert with them (Gazeta.uz, August 27). A government official commented that, under the new arrangement, “the personal responsibility of presidential advisors will increase” (Gazeta.uz, August 27).

Yet, in actuality, the organization might mean advisors will have to share their authority with relevant ministries and, more importantly, their power will be limited to the deputy prime minister level. Under Mirziyoyev’s predecessor, Islam Karimov, presidential state advisors had long arms of power, while ministries and state enterprises were merely bodies subservient to the advisors (BBC News—Uzbek service, August 28). The reorganization may narrow the distance between ministers and the president, thus allowing the government greater access to the head of state. This is all logical in the context of Mirziyoyev’s attempts to decentralize governmental powers while increasing the accountability of various government bodies.

The presidential decree also precipitated some reshuffles of his team. Notably, Khayriddin Sultonov stepped down from the administration’s Mass Media, Cultural and Educational Affairs Department—a post he had held since 2000 (Facebook.com, August 27). Sultonov, however, remains in the administration as President Mirziyoyev’s speech writer. One of two longest serving officials remaining from the late Karimov’s Executive Office, Sultonov had joined the presidential administration in 1993, at the age of 37, where he led the analytical center. As of 2000, his tight supervision of Uzbekistan’s media outlets earned him the title of the country’s “chief censor” (Ozodlik, August 22, 2017).

On the other hand, Mirziyoyev’s Administration will continue to be headed by the little-known Zaynilobiddin Nizomiddinov. The exact date he had joined Mirziyoyev’s team is not clear. But he and his three deputies are all young men in their 30s. The head of the Administration is a powerful position: the law gives Nizomiddinov and his deputies control over information flows to the president by way of compiling and analyzing anything addressed to the head of state (Lex.uz, March 1, 2017). A peculiar function of the head of the Administration is monitoring and informing the president on the ongoing reforms in the country (thus indicative of the high priority Mirziyoyev places on internal reforms) as well as Uzbekistan’s standing in foreign relations and foreign economic affairs.

Zelimkhan Khaydarov, the second-longest serving official along with Khayriddin Sultonov, used to hold Nizomiddinov’s position in Karimov’s Office, beginning in 1993. Khaydarov unlike Sultonov will now hold an advisory role by heading the Administration’s Financial and Economic Department. Another official, Umar Ismailov, who oversaw the Staffing Department in Karimov’s Executive Office, will maintain the same position in Mirziyoyev’s Administration (Facebook.com, August 27).

The former head of the extremely powerful National Security Service (NSS), Rustam Inoyatov, also remains in the Administration under the same position he received in January 2018, after he stepped down from leading the NSS for 23 years (see EDM, February 8). At the time of Inoyatov’s new appointment, the division he was charged with was named the Political and Legal Affairs Department. However, as of April, this body has been renamed the Department for Legal Support for Reforms and Coordination of Law Enforcement Activities; and it has received a number of new functions (Lex.uz, March 1, 2017). The department’s tasks, among others, include identifying obstacles to the efficient functioning of the government or to its modernization, providing legal support to undergoing reforms in the country, as well as adapting foreign experience on better governance. These responsibilities in many ways represent the antithesis to Inoyatov’s previous professional functions as head of the NSS—raising concerns about the rationale of his appointment to this advisory role.

Any change in the presidential administration in Uzbekistan is significant given that the administration advisors are the closest officials to the president. In the previous regime, advisors were the most powerful state officials in the area they were responsible for; in effect, they ran the country by heavily influencing the president. With the recent administrative changes, Mirziyoyev is attempting to limit the reach of his advisors by transferring some of their power to the ministries and enhancing cooperation between his Administration and the Cabinet. Yet, at the same time, long-serving officials such as Khaydarov, Sultonov and Inoyatov—who matured under Karimov and were his heavy influencers—continue to linger in the new governing structures under President Mirziyoyev. And this raises the question as to whether they are being lined up for a phased honorary departure from the ruling administration.