The government wants to make the legal framework more transparent in order to encourage foreign investment. In addition to China, Japan and South Korea, the Kyrgyz are courting Turkey and Arab countries. President Zaparov promises all kinds of protection for those who want to do business in Kyrgyzstan.
Moscow () – The Kyrgyz Council of Ministers has presented its plan to get out of the economic crisis, creating all the conditions to improve the investment climate and achieve a transparent fiscal policy. In the first half of 2022, Kyrgyzstan recorded an inflow of $628 million in foreign investment, compared to a flight of $483 million. Businessmen insist that as long as there is no independent legal system in the country, companies will continue to migrate abroad.
In Kyrgyzstan, most of the foreign investment comes from China, worth some 130 million dollars, surpassing Russia with 100 million. The positive flow seems to have doubled compared to last year, when 321 million in investments entered and 548 left the country.
At the Investors Forum (VIF) held in Bishkek in recent days, Deputy Prime Minister Bakyt Torobaev tried to reassure the participants. He spoke of the figure of the “digital nomad” and of assistance centers for entrepreneurs to help all those who have good initiatives to propose and develop. For those working in the construction sector, recruitment procedures will be simplified through a new “one stop shop”.
Investments in Kyrgyzstan especially flourished in the years 2015, 2019 and 2021, when the barrier of one billion dollars was crossed. In 2020, the pandemic cut the flow in half, and investment income fell to 537 million. The Kyrgyz reiterate that they are open to cooperation with foreign investors, and guarantee the security and intangibility of assets. In March, President Zaparov had signed a decree to improve the country’s potential to attract investment and a National Investment Agency was created for this purpose.
The director of the Agency, Umbriel Temyraliev, intervened in the forum explaining that “there is great instability throughout the world today, for well-known reasons, but we are also trying to attract investment from Arab countries such as Bahrain, Qatar and Saudi Arabia, and for Of course, also from China, Japan and South Korea”. All of these partners have expressed their willingness to work with Kyrgyzstan, despite concerns over international conflicts.
However, in Russia there is a movement of businessmen seeking to move their companies abroad to escape sanctions, and many are relocating to Central Asia and precisely to Kyrgyzstan. Turkey is also very active in the country, but $241 million of outward investment has gone to Ankara. The president of the International Affairs Council, Askar Sydykov, commented that “internal political instability and widespread corruption are factors that drive the flight of many capitals.”
In fact, the same Kyrgyz prefer to keep their profits safe in Kazakhstan, Turkey or the Arab countries, because “money has no nationality,” Sydykov points out, “and it circulates better where the rules of the game are clear.” Therefore, on his international trips, Zaparov does not miss the opportunity to promise all kinds of protection to those who want to do business in Kyrgyzstan.
As the economist Iskender Sharsheev warned, “today the competition at the international level is immense: everyone tries to attract investment in their own region, offering tax advantages and privileges.” In this regard, he stressed the importance of having a transparent and balanced legal system. Economy Minister Eldar Abakyrov also agrees with these conclusions: “great attention must be paid to justice and freedom in the country.”
