This week’s business activity was mainly influenced by two factors - this is certainly a difficult situation with the COVID-19 pandemic, which still severely hampers business activity in the country, as well as the onset of the summer season, when population activity is declining. Nevertheless, the vital activity of the business environment and especially the service sector is gradually increasing. For the first time during the pandemic, a business ombudsman stepped up, who discussed with the vice prime minister of the Government the difficulties in the business environment, the World Bank continued to support Kyrgyzstan financially, although the budget deficit and inflation in the country are growing steadily. On the other hand, the Government is making efforts to support the doctors involved in the fight against coronavirus, however, the price of fuel for transport has fallen markedly, and in the regions of the country, authorities are making efforts to solve important problems in the fight against the pandemic. In general, the week was less active than before, but nevertheless, in difficult conditions, the business environment continues to survive.
Protection of business ombudsman. This week, business ombudsman of the Kyrgyz Republic, Robin Ord-Smith, met with Vice Prime Minister of the Kyrgyz Republic Erkin Asrandiev and raised a number of important issues to support the business environment of Kyrgyzstan.
The start and intermediate results of the Institute of Business Ombudsman, the nature and trends of incoming complaints and appeals of entrepreneurs, the course of consideration of complaints received by the business ombudsman were discussed.
The measures taken to support entrepreneurship by the Government of the Kyrgyz Republic amid COVID-19 pandemic and the restoration of business activity when leaving the emergency mode were also discussed. The business ombudsman made suggestions and recommendations on investor support, improving the investment climate and simplifying the business environment. In conclusion, the sides discussed further measures to strengthen cooperation in the protection of the rights, freedoms and legitimate interests of entrepreneurs and business representatives.
WB assistance. The World Bank’s Board of Directors approved Additional Financing for the Enhancing Resilience in the Kyrgyz Republic Project in the amount of USD 55 million from the International Development Association (IDA) on highly concessional terms. Of this amount, USD 27.5 million is allocated in the form of a grant, which requires no repayment, while the other USD 27.5 million is a credit with a 0.75% interest rate, with repayments eased over 38 years, and a six-year grace period.
The original Enhancing Resilience in the Kyrgyz Republic Project, in the amount of USD 20 million, was approved by the World Bank in May 2018 and became effective in February 2019.
“At the request of the Government of the Kyrgyz Republic, on April 1, 2020, the World Bank activated a Contingent Emergency Response Component of the original project and reallocated $9 million to cover immediate needs in the face of the COVID-19 emergency,” says Bolormaa Amgaabazar, World Bank Country Manager for the Kyrgyz Republic. “Through the additional financing in the amount of USD 55 million, the combined investments will allow the country to achieve greater impact in scaling-up disaster resilience and improving the safety of school buildings”.
The growing budget deficit. According to the results of 5 months of 2020, the budget deficit of Kyrgyzstan amounted to KGS 13 billion 352 million.
Deputy Minister of Finance of the Kyrgyz Republic, Director of the Central Treasury Marlen Amandykov said that since March of this year there have been significant difficulties in fulfilling the budget revenue, in connection with which the Ministry of Finance of the Kyrgyz Republic took operational measures to attract donor funds for timely fulfillment of social obligations.
He noted that the loss of the budget revenue amounted to KGS 13 billion 248 million, including KGS 5.5 billion from the tax service and KGS 7 billion 700 million from the customs service.
Money to doctors. It was announced that the salary of physicians and law enforcement officers of the country for May was fully funded.
According to director of the Central Treasury, Marlen Amandykov, additional payments for March, April and May to doctors involved in the fight against coronavirus were paid. “Today, there is a question of finding additional funds - about KGS 700 million and this issue is being worked out jointly with the Ministry of Health of the Kyrgyz Republic,” Amandykov said .
Prices for petrol. According to the results of five months of 2020, Kyrgyzstan shows a decrease in retail prices for fuel and lubricants compared with the level at the beginning of the year.
According to data of the Association of Oil Traders of the Kyrgyz Republic, in January-May the average price for petrol in the country fell by 16.2%, and the average cost of diesel fuel fell by 19.1%.
In addition, representatives of the relevant authorities of Kyrgyzstan and Russia signed an indicative balance for the current year with the following volumes: petrol - 460 thousand tons, diesel fuel - 485 thousand tons, aviation fuel - 100 thousand tons, oil - 50 thousand tons. The agreement provides for the possibility of making subsequent adjustments to the balance sheet taking into account the actual pace of imports and consumption of petroleum products in the domestic market.
Due to the high level of cooperation between Kyrgyzstan and Russia, achieved and supported by the country's leadership, the supply of petroleum products is exempt from export duties. This form of support from the Russian side allows consumers of Kyrgyzstan to save significant amounts: for example, in January-May of the current year, the fee savings amounted to USD 8.5 million.
According to the rating on the GlobalPetrolPrices website, Kyrgyzstan ranks 21st out of 181 countries in terms of gasoline cost. At the same time, it ranks first in terms of fuel cheapness among import-dependent countries. The average cost of gasoline in the world is USD 0.92 per liter, while in Kyrgyzstan it is USD 0.50.
Inflation grows. In May 2020, as compared to the previous month, there was a decrease in consumer prices and tariffs in the Eurasian Economic Union member countries, except for Kazakhstan, where an increase of 0.5% was recorded, and Russia - 0.3%.
At the same time, prices and tariffs for food products in Kazakhstan (including alcoholic beverages and tobacco products) increased in May 2020 compared to December 2019 (by 6.8%). Meanwhile, Belarus recorded the maximum growth of prices for non-food products - by 3.2% and services - by 3.8%.
In May 2020, compared to December 2019, the highest inflation rate (3.7 %) in the consumer sector was recorded in Kyrgyzstan and Kazakhstan due to higher food prices.
Mayor demands. At a meeting of the collegiums of Jalal-Abad Mayor’s Office, it became known that over 3 months of 2020, the volume of production increased by KGS 215 million than in the same period in 2019. Thus, the growth rate was 120%, and the volume index was 105.4%.
During the meeting, Mayor of the city of Murataly Tagaev instructed the relevant employees to reduce accounts receivable, improve the work of tax institutions, combat the shadow economy and identify persons who evade taxes.
Youth centers are being built. The construction of youth centers in the regions of the country continues.
According to data of the State Agency for Youth, Physical Culture and Sports of the Kyrgyz Republic, youth centers are being built from scratch in Chek-Abad village of Osh Oblast, Balykchy town of Issyk-Kul Oblast, Kara - Buura village of Talas Oblast and Isfana town of Batken Oblast.
In the villages of Nariman in Osh Oblast, Suzak and Bazar-Korgon in Dzalal-Abad Oblast, and in the town of Kara-Balta in Chui Oblast repair work is being carried out on the allocated premises in the administrative buildings of the local authorities.
Special preparation in Issyk-Kul. This week, the heads of the tourist zones were officially informed how the rest in Issyk-Kul should be organized.
Governor of Issyk-Kul Oblast Akylbek Osmonaliev said that an order was approved on the implementation of 12 sanitary and epidemiological requirements by boarding houses, guest houses and sanatoriums.
The governor assured that local authorities are taking appropriate measures. Each head of facility is familiar with the requirements for receiving tourists.
Kabar News Agency
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