Economic week of Kyrgyzstan – July 8 – 13, 2019
This week was characterized by more international events concerning the country's economy. The visit of President of the Kyrgyz Republic to Switzerland was accompanied by the signing of agreements between the business environment of the two countries. On the other hand, the visit of prime minister of neighboring Kazakhstan was also accompanied by signing of a number of important agreements, one of which opens the gates for Kazakh fuel and lubricants in the Kyrgyz Republic. Another important news is that the Eurasian Development Bank announced growth in savings, which is a good indicator for the Kyrgyz Republic. But perhaps the most noteworthy information of the week was the publication of data on the growth of the country's GDP in the first half of this year. There was no such a growth for a long time.
State Property Management. Like any other bureaucratic and rather clumsy government, Kyrgyzstan has an ineffective state administration.
In this regard, the Government of Kyrgyzstan, represented by the Ministry of Economy of the Kyrgyz Republic, proposed to take a number of measures to reform the state property management system by:
- the creation of national management companies that should assist the development of various spheres of the domestic economy;
- creation of conditions for the introduction of a modern corporate governance system for state-owned companies and the dynamic growth of their capital;
- laying the foundation for the development of the internal control system in state-owned companies in accordance with the best international practice in this area;
- establishing clear mechanisms to enable sectoral government bodies to pursue the necessary sectoral policies in public companies.
That’s why this week the Government initiated a draft law “On National Managing Companies in the Kyrgyz Republic” aimed at implementing the above measures.
The EDB portfolio has grown. This week it became known that by July 1, 2019, the accumulated investment portfolio of the Eurasian Development Bank (EDB) amounted to USD 8 billion 25 million and increased from the beginning of the year by USD 625 million.
EDB Chairman of the Board, Andrei Belyaninov, said that last year at that time the figure was about USD 6.9 billion.
“The current investment portfolio is USD 3 billion 708 million. According to the results of the first days in July 2019, the current investment portfolio increased by USD 272 million and amounted to USD 3 billion 980 million, the accumulated investment portfolio of the EDB amounted to USD 8 billion 280 million,” said Belianinov.
In addition, for the first half of 2019, the EDB's net profit amounted to USD 39.1 million, for the same period last year - USD 37.5 million.
Samruk-Kazyna and Kyrgyzstan. Kazakhstan’s «National Welfare Fund Samruk-Kazyna» is interested in several projects in Kyrgyzstan.
EDB Chairman of the Board, Andrei Belyaninov, said that in particular we are talking about energy and gold mining.
“I recently met with the leadership of Samruk-Kazyna, I know that they have plans for Kyrgyzstan. We are ready to support their integration efforts,” said Belyaninov.
It is known that the sole shareholder of Samruk-Kazyna is the government of Kazakhstan. Fund assets are estimated in tens of billions of dollars.
Business with Switzerland. An important event of the week was the visit of President of the Kyrgyz Republic Sooronbay Jeenbekov to Switzerland, which was accompanied by a solid campaign of leading businessmen of the country. After the official meetings, a meeting was held with representatives of big business in Switzerland. The result of this meeting was the signing of a number of documents.
According to official data, the following documents were signed:
- a document on mutual cooperation between the Investments Promotion and Protection Agency of the Kyrgyz Republic and the Swiss Chamber of Commerce;
- a document on mutual understanding and cooperation between the Department of Tourism of the Ministry of Culture, Information and Tourism of the Kyrgyz Republic and the Switzerland National Marketing Organization of Switzerland in tourism;
- a document between the Ministry of Health of the Kyrgyz Republic, the National Center for Cardiology and Therapy, University of Zurich and Zurich University Hospital about cooperation in the field of respiratory, internal and altitude medicine and research.
Pleasant growth. The gross domestic product of Kyrgyzstan in January-June 2019 amounted to more than KGS 232 billion and increased by 6.4% compared to the same period of 2018.
At the same time, the National Statistics Committee of the Kyrgyz Republic clarifies that excluding enterprises for the development of the Kumtor deposit, the volume of GDP in January-June 2019 amounted to more than KGS 207 billion and increased by 2.1%.
The growth in industrial production compared to January-June 2018 was due to an increase in production of base metals by 51.2%, mining of metal ores by 44.3%, coal - by 22.6%, crude oil and natural gas - by 14.1 %, as well as in textile production - by 15.3%.
Price variation. During the first half of 2019 consumer prices increased in Kyrgyzstan by 0.3%.
The National Statistics Committee of Kyrgyzstan notes that consumer prices for food and non-alcoholic beverages increased by 1.6%, alcoholic beverages and tobacco products - by 3.4%, while prices and tariffs for non-food products, by contrast, decreased by 2% , services - by 0.4%.
Since the beginning of the year, prices for potatoes increased by 57.2%, millet - by 8.3%, lamb - by 4.2%, medium-grained rice - by 3.5%, flour of the first grade - by 3%, fresh fruit - by 2.1%, dry milk mixes - by 2.1% and chickens - by 1.8%.
At the same time, a significant decrease in prices is observed for draft milk (by 13.4%), chicken eggs (by 6.3%), natural instant coffee (by 6.3%), buckwheat (by 4.3%), chicken legs (by 2.7% a), granulated sugar (by 2.6%), horse meat (by 1.9%) and premium grade flour (by 1.1%).
Kazakh fuels and lubricants. This week, Kazakhstan’s Prime Minister Askar Mamin came to Kyrgyzstan, who held talks with the head of Government of the Kyrgyz Republic. At the meeting of the two prime ministers, Mukhammedkalyi Abylgaziev raised the issue of the supply of oil and oil products from Kazakhstan.
“In order to develop the fuel and energy complex, Kyrgyzstan is interested in solving the issue of supplying oil and oil products from Kazakhstan to the Kyrgyz Republic. We hope to sign this document in Kazakhstan,” said Abylgaziev.
Currently, Kyrgyzstan receives the necessary amount of fuel and lubricants from Russia without paying customs duties, as a result of which fuel and lubricants in the country remain relatively inexpensive and are delivered without delay. Meanwhile, it is known that the supply of fuel and lubricants from Kazakhstan may become noticeably cheaper for the Kyrgyz Republic than from Russia, since the Russians from the border regions prefer to buy gasoline from Kazakhstan gas stations, since they are cheaper and more qualitative.
The goal is USD 1 billion. During official talks with the Prime Minister of Kazakhstan, it was noted that the potential for increasing bilateral trade and increasing trade and economic ties between Kyrgyzstan and Kazakhstan is enormous.
The Prime Minister of Kyrgyzstan noted that Kazakhstan is one of the main trade partners of Kyrgyzstan.
“Kazakhstan’s share in Kyrgyzstan’s trade turnover is more than 11%, including 14% in exports. In 2018, according to our data, the volume of trade between Kyrgyzstan and Kazakhstan amounted to USD 843 million. Today we discussed in a narrow format that we will soon bring it to USD 1 billion,” said the prime minister.
Abylgaziev said that in comparison with 2017, in 2018 the trade turnover increased by more than 7%.
Kazakh contribution. Prime Minister of Kazakhstan Askar Mamin, who arrived in late this week for a visit to Bishkek, expressed the opinion of the Kazakh authorities regarding Kyrgyzstan and readiness to expand bilateral trade and economic ties. “Kazakhstan is among the three largest investors investing in the economy of the Kyrgyz Republic. The direct investments from 2005 to 2017 amounted to USD 670 million. We are ready to further develop investment cooperation. We discussed this in the framework of the meeting in a narrow format. We brought with us a large group of businessmen who are willing to actively work with their colleagues from Kyrgyzstan, and a number of such promising areas of investment cooperation were identified. I am sure that at today's meeting we will find and offer new projects for the development of investment cooperation between our countries. This includes direct investments in the economy of Kyrgyzstan. A number of our companies are actively working, and I am sure that in order to further expand investment cooperation, it is important to create favorable conditions for the business of the two states,” added Mamin.
One of the important results of the negotiations between the heads of Government of the two countries was an agreement on liberalization of access control for cargo carriers from the Kyrgyz Republic across the border and the territory of Kazakhstan heading to third countries. Previously, all issues in the field of veterinary cooperation between the two countries were removed.
Kabar News Agency