During the week from Feb. 24 to 29, 2020 there was a lot of interesting business news. In particular, the average salary of Kyrgyzstani was announced, some enterprises will be provided with tax preferences depending on their place of work, and that over 24 years Kyrgyzstan received billions of dollars for the construction and repair of roads. It was also announced that the Ministry of Economy of the Kyrgyz Republic was authorized from the country as the National Authorized Body in the Green Climate Fund at the UN.
There was other important news. In general, the week for the business community turned out to be quite acceptable.
Preferential. This week announced that the newly created enterprises are exempted from payment of a number of taxes, but it is especially noted that this applies only to those enterprises located in preferential settlements.
According to the information of the Ministry of Economy of Kyrgyzstan, within the framework of the decree of the Kyrgyz Government regarding the Tax Code of the Kyrgyz Republic of April 24, 2019, it provides for exemption for new enterprises “in preferential settlements from paying property tax, land tax, income tax and sales tax”.
Repair costs. In Kyrgyzstan from 1996 to 2018, nearly USD 2 billion was allocated for the construction and repair of roads. At a meeting of the Committee on Budget and Finance of the Kyrgyz Parliament, Minister of Transport and Roads of the country Zhanat Beishenov said that these funds were received as loans, and grants were also provided. “2079 km of roads were reconstructed for these funds, of which 310 km are under construction. In addition, tunnels and flyover bridges were built,” the minister said.
Credit and grant funds for road rehabilitation were provided by international financial institutions, including the Eximbank of China, the Asian Development Bank, the World Bank, and the Islamic Development Bank.
Green Fund. This week, a meeting was held at the Ministry of Economy of the Kyrgyz Republic with representatives of the Food and Agriculture Organization (FAO) of the United Nations on the green economy and climate change issues.
At the meeting, Minister of Finance Sanjar Mukanbetov informed about the latest institutional changes in the country, which will be the beginning of a new format of interaction in the framework of promoting a green economy and implementing climate measures.
The Ministry of Economy of the Kyrgyz Republic, as the state body responsible for strategic planning, issues of sustainable development and promotion of the green economy, is identified as the National Authorized Body in the Green Climate Fund. The Climate Finance Center of the Kyrgyz Republic is designated as the Secretariat to assist the Ministry of Finance.
How much under the pillow? It was announced that in Kyrgyzstan in 2018, the share of the shadow economy was 23.6%.
According to data of Minister of Economy of the Kyrgyz Republic Sanjar Mukanbetov, about USD 1.5 billion in the country's economy are “under the pillow” of entrepreneurs. “The government is interested in these funds being invested in the national economy. In this connection, a bill was initiated on the legalization or so-called amnesty of capital. In general, the government assumes that part of the legalized funds will be invested in enterprises for the development of the economy,” Mukanbetov said.
He noted that the bill was submitted to the Jogorku Kenesh for consideration. “If it goes through the process of legalizing capital, no one will find out the origin of finances, and the person will not be persecuted,” the minister added.
Coronavirus and economics. For the first time in the country, this week the country’s leadership thought about the consequences of an outbreak of coronavirus in the world on the country's economy. The minister of economy of the Kyrgyz Republic said that work is already underway on import substitution of goods coming from those countries that are quarantined, they are seeking for new markets in connection with the border closure.
He said that the first quarter of the year is considered weak in economic terms due to the New Year holidays.
“We assume that the trend will start, from April there may be a drop of 0.2% per month. If we turn to analytics, the average turnover is USD 7 billion, of which USD 5 billion is import and 35% of this import is import from China, in absolute terms this is USD 1.7 billion, and of which, if you take per month, it turns out USD 140 million we import every month from China,” he said.
The minister said that the import substitution is also being carried out along with the business, mainly with regard to fabrics, synthetic fabrics, and accessories.
Average salary. The average monthly nominal salary in 2019 (excluding small enterprises) amounted to KGS17 thousand 166.
According to data of the Ministry of Finance of the Kyrgyz Republic, its real wage growth, calculated taking into account the consumer price index, amounted to 4.7%.
“According to the results for 2019, the volume of GDP amounted to KGS 590 billion and the real growth rate was 4.5% (in 2018 - by 3.8%). Economic growth was ensured by all sectors of the economy: in agriculture, volumes actually increased by 2.6%, construction - by 10.6%, industry - by 6.9%, and services - by 2.9%,” the Ministry of Economy of the Kyrgyz Republic said.
The consumer price index, which characterizes the inflation rate, amounted to 103.1% (December 2019 compared to December of the previous year), a similar indicator in 2018 was 100.5%. “The average annual value of inflation (January-December 2019 to January-December 2018) amounted to 101.1% (for January-December 2018 compared to January-December 2017 was 101.5%). Also, according to the results for 2019, the foreign trade turnover of the Kyrgyz Republic decreased by 3.6% and amounted to USD 6.9 billion.
Production will increase. The challenges facing Kyrgyzstan this year were announced this week. The Action Plan of the Government of the Kyrgyz Republic for 2020 covers 227 measures aimed at ensuring economic growth in the strategic sectors of the Kyrgyz economy: the agro-industrial sector, as well as the energy, mining, transport and communications sectors.
According to the Ministry of Economy, for this it is necessary to ensure:
- commissioning of the Jeruy field since 2020; since 2020, the volumes of the Taldy-Bulak-Levoberezhnoye deposit should provide 3100 kg annually, deposits extracting concentrates (Bozymchak, Zhamgyr, Ishtamberdi, Kara-Kazyk, etc.);
- should annually increase production by 18-20%, the full development of production capacities introduced by the Kara-Balta and Tokmok refineries (as well as the modernization of enterprises for production using new technology for the production of K5, K6);
- construction of a cement plant with a capacity of 800 thousand tons of cement per year Kurmanbek LLC in conjunction with the Chinese company Gao Shan (Nooken district of the Jalal-Abad region);
The Government of the country will monitor and control the implementation of the other measures.
Kabar News Agency
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