This business week is a continuation of the previous one. The dollar exchange rate has began to fall in price this week for the first time since autumn. The government is taking measures to stabilize prices for basic products, although this is an international problem, it was officially announced that the Jetim-Too field was and remains state property, as well as in January next year, all social benefits will be provided in full.
On the other hand, it was noted that the real sector of the country is clearly sagging and social networks discuss the benefits of the growth of the foreign currency exchange rate in the country for the poor, supported by labor migrants.
Interventions. This week, the National Bank of Kyrgyzstan achieved a noticeable depreciation of the dollar by conducting another foreign exchange intervention. The nominal rate of the National Bank of the Kyrgyz Republic for one US dollar is Kyrgyz som 83.1.
Commercial banks and exchange offices in the country sell US currency at KGS 82.1, and buy at KGS 81. In December 2020, the National Bank of the Kyrgyz Republic conducted three interventions.
In total, the National Bank conducted 29 interventions in 2020 as banking support.
The real sector of Kyrgyzstan. Compared to January-September 2019, the volume of profits of enterprises in the real sector of the economy decreased by more than 20 times.
According to the results of 9 months of 2020, compared to January-September 2019, the volume of profit of enterprises of the real sector of the economy decreased by more than 20 times. At the same time, the share of profitable enterprises amounted to slightly more than 28 percent (about 35% in the corresponding period of last year), the National Statistics Committee of the Kyrgyz Republic reported.
In January-September 2020, almost all types of economic activity experienced a decrease in the gross income of enterprises due to the forced interruption of production activities due to the introduction of quarantine and restrictive measures related to the COVID-19 pandemic.
The most affected enterprises were trade, hotel and restaurant business, transport, tourism, recreation and entertainment, as well as the provision of other services, which is due to their complete closure during the quarantine period, and in the future, the need to implement restrictive social distancing measures. Enterprises with a high debt load are also experiencing serious difficulties, especially if it is denominated in foreign currency.
Tax innovations. A round table was held this week on innovations for business introduced from Jan. 1, 2021 in the field of tax administration.
The round table participants discussed a number of topical issues. The first topic of the round table was the introduction of new special regimes from Jan. 1, 2021, that is, a simplified taxation system based on retail sales tax, as well as imputed VAT on imports of goods.
Within the framework of the second topic, the advantages of software (virtual) cash registers introduced from the beginning of next year and the first results of the fiscalization projects of tax procedures "SMART Salym", launched from July 1 of this year, were presented.
The event was attended by the management of the State Tax Service, the Ministry of Economy, 2 operators of fiscal data, representatives of business associations and entrepreneurs.
Money transfers and poverty. The issue of the growth of the US dollar exchange rate was actively discussed this week in Kyrgyzstan, since a great amount of money in US dollars is transferred to the country by migrants.
“The increase of the US dollar exchange rate reduces poverty in the southern regions. We associate this with money transfers. The larger the volume of remittances, the more the poverty level in the south of the country decreases,” said Ailuna Shamurzaeva, an expert at the Institute of Statistics Research of the National Statistics Committee, in a live broadcast on social networks.
She said that according to the study, the same factors differently affect the poverty level in in the regions of Kyrgyzstan. For example, remittances do not have a significant impact on the northern region, and as the US dollar increases, the number of people listing in the category of poor increases.
“For Naryn Oblast, the availability of livestock is important, while in Talas Oblast, the main factor affecting poverty is the price of beans. This study is the first attempt to identify the causes of poverty factors not only by demographic means, but also by using macroeconomic methods,” added Shamurzaeva.
Government measures. This week, the Government of the Kyrgyz Republic announced that it is necessary to ensure a full stabilization of the price situation in the domestic market for essential products.
“For a month we have been dealing with the issue of curbing the rise in prices for essential products, but we have not been able to stabilize the situation. Repeated instructions for monitoring pricing policy, negotiating with wholesalers, organizing fairs allowed to contain the rise in prices in recent weeks, but this does not give the desired effect. The latest price analysis shows a significant gap between the prices of socially important food products between regions. It is clear that there are logistics costs, but not as great. For example, the dollar exchange rate is high, but stable in recent months. What is the reason for such an increase in prices ?! It is necessary to take a set of measures to ensure food security and ensure a stable price situation,” Acting Prime Minister, First Vice Prime Minister of the Kyrgyz Republic Artem Novikov said this at a meeting on food security.
About Jetim-Too iron ore deposit. This week the Government of the Kyrgyz Republic gave an explanation on the issue of speculation about the prospects of the Jetim-Too iron ore deposit in Naryn Oblast.
According to the official statement of the Government of the Kyrgyz Republic, "the information that the Jetim-Too mine in Naryn Oblast was transferred to a Chinese company is not only unreliable, but also exacerbates tensions in society and aggravates the negative attitude of the population towards investors.
Chairman of the State Committee for Industry, Energy and Subsoil Use of the Kyrgyz Republic, Jyrgalbek Sagynbaev told reporters that Kyrgyzstan will independently start developing the Jetim-Too iron ore deposit in Naryn Oblast.
He noted that it is planned to independently start the development of the field from 2021.
“This is the largest iron ore deposit in the world. It ranks second in terms of reserves. It contains about 3 billion tons of iron ore. We will be able to make sure that this project helps the country to get back on its feet,” he said.
Social payments on time. It was officially announced this week that all guaranteed social benefits, including pensions, will be paid on time and in full. There will be no delays in the payment of pensions.
According to the Social Fund of the Kyrgyz Republic, as of December 18 of this year, the payment of pensions has been funded by 95% and in the coming days, according to the established schedule, all pensions will be fully funded.
Council on reforms. This week, the Kyrgyz government discussed issues of economic reforms in the country at the recently formed Council for Economic Reforms under the Government.
The working groups of the Council are working in important strategic directions, said Acting Prime Minister Artem Novikov.
“It is extremely important to ensure high-quality, fruitful and efficient work of the working groups to develop concepts, new approaches for carrying out a complex of economic reforms. The main task remains to radically change and improve approaches to reforms, their full and consistent implementation, to achieve practical results in the economy and social sphere, so that the reforms actually affect the welfare of the population and the country. The main task today is to provide employment for the population. In this regard, all the work of the government of the Kyrgyz Republic to create new jobs, create conditions for business development, ensure investment protection and guarantee the prosperous activities of investors should primarily solve these problems. Citizens should have an opportunity for self-realization,” Novikov said.
Kabar News Agency
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