Kyrgyz President Sooronbay Jeenbekov presented his country in Germany. At the business forum "Kyrgyzstan and Bavaria: Investment Opportunities," he spoke about the benefits of doing business in Kazakhstan and invited German entrepreneurs to invest in the country. The meeting resulted in the signing of several contracts and memorandums amounting to more than 1 billion euros. At a meeting with Chancellor Angela Merkel, the Kyrgyz leader proposed to open an official representative office of the German economy in Kyrgyzstan.
Jeenbekov told German business about the benefits of working in Kyrgyzstan. In particular, according to him, in the Republic, there is one of the most liberal fiscal regimes in Central Asia. The profit tax and income tax rates are only 10% each, and VAT is 12%. “Access to affordable resources, including cheap labor and electricity, provides comparative advantages for joint ventures. Electricity tariffs are the lowest among the CIS countries,” the president said. Jeenbekov also noted that all sectors of the Kyrgyz economy are open to outside investors. The tools of public-private partnership are actively promoted. Significant tax preferences are provided for investors implementing regional industrial projects. Since January 1, 2019, new codes and laws entered into force in Kyrgyzstan. "A solid legal foundation has been created for the protection of investors' rights," the head of state concluded.
"From the moment of signing memorandums to their implementation, the distance is large. Sufficient enough to see the trade turnover between the two countries to understand Germany’s interest in developing trade cooperation with Kyrgyzstan. In 2017, it amounted to 72 million dollars, in 2018 - 80 million dollars. Two years earlier, the trade turnover amounted to 122 million dollars, and in 2013 - 244 million dollars. The visit took place amid of weakening of the bilateral trade. It is difficult to say by what means it can be increased as desired by President Jeenbekov,” Director General of the Strategy East-West Center think tank (Bishkek), Dmitry Orlov told Vestnik Kavkaza. According to the expert, the two countries do not have large joint economic projects. ”Do Kyrgyz officials think that as soon as the documents are signed, foreign investors will start to invest money? What can we offer to Germany? Walnuts, prunes, medicinal herbs and cotton. This is the entire list of goods that are exported to Germany and the EU countries, excluding gold that is exported to Switzerland. Of course, much depends on the productiveness of the businessmen contacts, and the way the authorities of both countries will pursue them. Kyrgyzstan was provided preferences by the European Union when joining the Generalized System of Preferences Plus (GSP +). But due to low capacity, the republic is not able to supply any goods. We need to increase production, which would be of interest to Germany. Meantime, from an economic point of view, Kyrgyzstan is of no interest to Germany,” Orlov stressed. According to him, foreign businessmen buy either raw materials or invest in the industries that bring fast money, such as communication and transportation, Orlov emphasized. But Bishkek has nothing to offer. Moreover, investments like silence. And this is not about Kyrgyzstan. ”The current conditions will not allow creating a normal influx of investors. Plus, there are still incomprehensible rules of the game,” the expert concluded.
Ex-MP, entrepreneur Omurbek Abdyrakhmanov believes that without systemic transformations, it will be difficult to attract investors from Europe, including from Germany. “Investors will not come to us. Not only Sooronbay Jeenbekov, previous presidents as well called for investing in our country. But corruption and bureaucracy allow to work neither foreign nor local investors,” Abdyrakhmanov said in an interview with Azatlyk radio. He added that he had brought 30,000 seedlings from Europe, but he had not been allowed to cross the border with them for four days. It had been said that each seedling needs a separate pot. For all inquiries of the deputy head of the President’s Office, Almaz Kenenbaev, the customs give noncommittal answers. The problem remains unresolved. The seedlings may die. “If we cannot put things in order in our own country, then how are we going to attract investors? In Georgia, it takes 15 minutes to get through customs. If a customs officer does not let a person in 15 minutes, he is dismissed. Without such reforms, we should not expect results,” Abdyrakhmanov said.
However, Angela Merkel liked the presentation of Kyrgyzstan. She recalled she had visited the country in 2016 and still remembers how beautiful it is. “You are solving your problems - establishing parliamentary democracy, dealing with natural resources, overcoming geostrategic challenges and multilateral cooperation. All these issues unite us,” the Chancellor said. Merkel noted that she holds in high regard for the tasks of the county’s regional strengthening. “The European Union is currently developing a new strategy for Central Asia, and in this context we would like to hear your expectations towards the EU,” the chancellor said.
As EU High Representative for Foreign Affairs and Security Policy, the Vice President of the European Commission, Federica Mogherini said earlier, the EU views the Central Asian region not as a beneficiary, but as an economic partner, and the region itself is becoming attractive for European investments. The practical meaning of cooperation is that the EU considers the Central Asian countries within their transit potential to link the EU and China, and also as a market for their products.
Meanwhile, it became known that a new agreement on expanded partnership and cooperation between Kyrgyzstan and the European Union is being prepared for signing.
