DM Monitoring
Bishkek: The week was more active than the previous one. It was announced that Russia will provide financial assistance to support the state budget of the country and social strata, the business sector announced that the Government of the country is providing support to entrepreneurs during the pandemic, the Bozymchak field may resume work. However, this week the national debt of Kyrgyzstan reached the permissible limit of external borrowing, and investment losses this year increased significantly, the US dollar rate rose again.
External conditions continue their negative impact, but still, on the whole, the week somewhat revives hope for a speedy recovery of activity in the country’s business environment.
Belief in Ombudsman. This week it was announced that the Institute of Business Ombudsman of Kyrgyzstan has received 62 complaints since its opening.
Nurlan Musuraliev, Deputy Business Ombudsman of the Kyrgyz Republictold said that the institute was established aon February 28, 2020.
However, due to the pandemic, the body was not able to fully work, in particular, the employees were not able to travel to all regions of the country, moreover, they worked remotely and complaints were accepted only online.
“If we pay attention to the geography of complaints, 67% came from Bishkek,” he said adding that of the total number of complaints, 42% were against the tax service, 21% were against law enforcement agencies.
“There were complaints about local government bodies, the State Communications Committee and the State Property Management Fund. Following the consideration of 20 complaints, 10 acts of response were issued. One of them is accepted. On other issues, the issue was resolved out of court. That is, the parties have come to an agreement.
As a result, it was possible to restore the rights of the business for 84 million soms,” he said.
Business support. Representatives of the business society told this week that the Government of Kyrgyzstan tried its best to support business.
Askat Seitbekov, expert of the Secretariat of the Business Development and Investment Council told that the business was negatively affected by political instability.
“October events slowed down the processes. However, the government was able to convene a council where urgent measures were considered that needed to be solved within three days or even one day. Such timely actions were taken against raiding, looting,” he said.
Askat Seitbekov also added that in November, the government decided to create a council on economic reform, which will work for the long term.
Business losses. It was announced this week that Kyrgyzstan’s losses on 5-6 canceled investment projects amounted to USD 128 million.
Executive Director of the International Business Council of the Kyrgyz Republic Askar Sydykov said this week that investors’ plans in connection with the pandemic and especially with the political crisis in the country have been reduced.
“Mainly, the loss of investment in the mining and exploration industries. Any events in these industries have an immediate effect and a reduction in activity. Purchasing power has also dropped, due to which many areas, such as agriculture, clothing industry, have experienced a decline in sales,” he said.
Askar Sydykov specified that the losses only in the mining industry amounted to USD 20-25 million.
Bozymchak gold deposit works. Bozymchak gold deposit is likely to start working after the presidential elections.
Executive Director of the International Business Council of Kyrgyzstan Askar Sydykov told this week that the investors are still afraid for their safety.
“They say that government agencies cannot ensure security now,” he said and added that the State Committee for Industry, Energy and Subsoil Use of the Kyrgyz Republic is making clarifications.
“We are far from the fact that Bozymchak will start working before the new year,” he said adding that most likely, it star working after the presidential elections.
In addition, Askar Sydykov said that out of 7 mining enterprises, 3 do not work.
The dollar rose again. In Kyrgyzstan, after a slight fall, the US dollar rate began to rise again.
This week, the American currency was sold in commercial banks at Kyrgyz som 82.4. Prior to that, the exchange rate rose to KGS 84.9, and then fell to KGS 79.
Debt increases. The external debt of Kyrgyzstan exceeded 60% of GDP.
Deputy Finance Minister Ulukbek Karmyshakov said that the Ministry of Finance really plans to amend the budget code.
“There is no exact part in the budget code on this matter. Therefore, we sent to parliament a draft law on amendments to the budget code to increase the debt threshold to 70%. This is a normal practice for countries, the state borrows from international institutions. Borrowing from international donors, we must develop infrastructure and budget-forming enterprises. Unfortunately, in our country these debts are directed to infrastructure projects, such as a thermal power station, the North-South highway, and the Datka-Kemin power transmission line. They do not directly generate income, but multiplicatively they pay off,” Karmyshakov said.
Aid from Russia. It was announced this week that Russia will provide Kyrgyzstan with USD 20 million.
According to the information provided by the Russian Embassy in Bishkek, the Government of the Russian Federation will allocate USD 20 million on a gratuitous basis to cover the financial gap in the Kyrgyz budget in terms of salary payments to public sector employees, pensions and benefits to low-income families, as well as financing the health care system.
The draft agreement has been approved by the Kyrgyz side and will be signed in the near future, the Russian Embassy said in a statement.
