Kyrgyzstan’s economic week – Jan. 21

Pension benefits in the EAEU. Kyrgyzstan completed the internal approval of the draft Agreement on the provision of pensions for workers of the Eurasian Economic Union.

Timur Zhaksylykov, member of the Board (Minister) for Economics and Financial Policy of the Eurasian Economic Commission (EEC) at the meeting with deputy heads of the authorized representatives in the field of pensions for the bodies of the EAEU states, which was held at the headquarters of the EEC, said that the draft agreement on the pension of workers of EAEU states has been completed in all countries. In the near future, the draft will be reviewed by the Board and the EEC Council, after which it will be sent to the parties for the internal procedures required for signing.

The EEC Minister also noted the need for the speedy adoption of the document in the interests of the citizens of the Union.

Kazakh oil. Kyrgyzstan and Kazakhstan began negotiations on duty-free deliveries of oil and petroleum products.

According to information of the State Committee for Industry, Energy and Subsoil Use of the Kyrgyz Republic, the first stage of negotiations on a draft agreement between the governments of Kyrgyzstan and Kazakhstan on trade and economic cooperation in the supply of oil and oil products is underway.

In accordance with the project, the Kazakh side is obliged to export products to Kyrgyzstan without duty in accordance with the approved indicative balance and protocol.

The contribution of the villagers. In 2018, gross agricultural output was produced in the amount of KGS 203.8 billion, thereby an increase made 2.7% compared to the same period in 2017.

According to data of the Ministry of Economy of the Kyrgyz Republic, growth in volumes was achieved due to an increase in crop production - by 3.4%, growth in corn and grain production - by 6%, fruits and berries - by 4.8%, leguminous crops - by 3.9%, vegetable crops - by 2.4%, barley - by 1.2% and potatoes - by 2.2%, as well as animal products - by 2.2%, due to the increase in production of livestock and poultry for slaughter in live weight by 2.1%, milk - by 2.2% and eggs - by 4.4%.

The contribution of agriculture to the formation of Kyrgyzstan’s GDP was 0.34 percentage points, the share of which in the structure of GDP production was 11.6%

PPP and Investments. 15 projects are being implemented in Kyrgyzstan in the area of public-private partnership (PPP) amounting of $ 165 million.

Daniar Abdyldaev, head of the PPP development department at the Investments Promotion and Protection Agency of the Kyrgyz Republic told that among these projects, 4 in the field of transport, 3 in the field of health, 2 in the field of tourism and sports, as well as projects in the field of education, insurance, etc.

PPP is a new mechanism, we need to carry out explanatory work. We conduct training seminars in government agencies, municipal and business structures. We are working in the regions. To implement these projects, our Agency visits investment forums abroad.

Investments declined. The volume of foreign investments has been decreased in Kyrgyzstan. According to data of the Agency for Investments Attracting and Protection Agency of Kyrgyzstan, the trend towards a decline in foreign direct investment is observed worldwide.

The head of the Agency, Adilbek uulu Shumkarbek, states that “if the global investment volume fell by 23%, in developed countries to 35–37%, in countries with transitional economies, that is, in countries such as Kyrgyzstan, the decline is 23%.” He added that in Russia there is a sharp decline in investment, but in Uzbekistan, Kazakhstan and Belarus there is an increase.

The main reasons for the decline in foreign direct investment in Kyrgyzstan, he called the problem of investors with the local population.

He also said that since 2015, direct investments from China to Kyrgyzstan have declined.

“If earlier we talked about investments from China in the amount of $ 500 million, then the figure dropped to $ 300 million, and today it’s already $ 120 million,” he said.

He noted that this is largely due to the fact that since 2015, China has been actively regulating the financial sector, which provided for an easy way to issue funds in banks or to receive a corporate amount.

Nevertheless, the head of the Agency stressed that China belongs to the top three investors in Kyrgyzstan.

Kumtor projects. Kumtor’s gold production forecast is expected to be in the range of 535,000 ounces to 565,000 ounces with approximately 28% of the production expected to be in the fourth quarter of 2019.

Planned exploration expenditures for 2019 are expected to be $11 million, growth capital investment at Kumtor for 2019 is forecast at $14 million which includes capital expenditures for tailings dam construction ($6 million), pit dewatering projects ($2 million) and other projects ($6 million).

Scott Perry, President and Chief Executive Officer of Centerra stated, “Kumtor had a strong fourth quarter and another solid year in 2018 delivering more than 534,000 ounces of gold production, which exceeded the upper end (510,000 ounces) of its gold production guidance. Gold production at Kumtor is expected to be evenly weighted for the first three quarters of 2019 with the fourth quarter of 2019 representing approximately 28% of the full year’s production forecast.

Foreign trade turnover. Kyrgyzstan's foreign trade amounted to about $ 6 billion in 2018.

Vice Prime Minister Jenish Razakov told during “Business Eurasia. Ways of Business Development” economic forum that compared to 2017, this figure increased by 6.25%, exports grew by 1%, imports – by 8%.

“The EAEU sets goals for modernizing the economy, achieving technological leadership, building a global value chain. One of the innovations is the labeling of goods. The agreement on the labeling of goods by means of identification of the EAEU was signed on February 2, 2018 in Almaty,” he recalled.

Trade with Kazakhstan. Kazakhstan attaches great importance to partnership with Kyrgyzstan.

Vice Minister of National Economy of Kazakhstan Aibatyr Zhumagulov at the economic forum "Business Eurasia. Ways of business development” in Bishkek told that given the considerable potential, it is necessary to step up work in the political, economic and cultural spheres. “According to data of Kazakhstan statistics, in 2018, the trade turnover between Kazakhstan and Kyrgyzstan increased by 10%. We believe that this figure should be higher. According to our experts, there is a great opportunity for trading in 20 commodity items,” he said.

Zhumagulov noted that there are unequal investments between Kyrgyzstan and Kazakhstan.

Meat to Russia. The well-known Russian store chain Pyaterochka will export meat from Kyrgyzstan. The corresponding agreement was signed in Bishkek between the Ministry of Agriculture, Food Industry and Land Reclamation of the Kyrgyz Republic, the Kyrgyz Union of Industrialists and Entrepreneurs and the Russian company X5 Retail Group (Pyaterochka), which was represented by Director for Interaction with State Bodies Stanislav Naumov.