EEU: Investments and interest of foreign countries and companies in Kyrgyzstan
In connection with the rapidly changing situation in the world and sanctions against Russia, many foreign states consider such countries as Kyrgyzstan, as the country for investments and as a gateway to the huge market of consumers of the Eurasian Economic Union (EEU). In addition, the availability of cheap labor, low-cost electricity and favorable legislation in the field of taxation, customs and investments even more push not only foreign companies but also companies operating within the Union, to take their business to the country.
In an interview with a local media general manager of Demir Kyrgyz International Bank Sh.Sarylar told why to choose Kyrgyzstan. "First of all, in the Central Asian region - it is the only democratic country with parliamentary governing, which is made up of party factions. Here parliamentarism, I can tell you, in some ways even better than in Turkey. And especially since the entry of Kyrgyzstan into the Customs Union the potential of this country is very increased, as the market has increased," Sarylar said.
He told that in recent years the interest of foreign investors in Kyrgyzstan has increased significantly.
"For example, the neighboring countries have the ability to export products made in Kyrgyzstan. The second issue, Russia and other European countries have applied sanctions. In this regard, at the moment European manufacturers looking to enter the Russian market through other countries. And Russia cannot import the goods from Europe and from Turkey, so also is looking for alternative ways to receive needed goods. This situation gives Kyrgyzstan good advantages among the other countries because of its favorable geographical location and capacity of the economy and regional policy. In my opinion, if the current government will use the current situation correctly, it is possible after 5 years, Kyrgyzstan will be the star of Asia," general manager of Demir Kyrgyz International Bank said.
In addition, the opening of the customs borders of the republic after the accession to the EEU allowed companies from Kyrgyzstan to significantly reduce the time of delivery of goods to the markets of other countries of the Union. Many manufacturers have been able to substantially increase their exports due to this. The simplified procedure for customs declaration of vehicles of international transport also plays a good role. In addition, as part of the Union, Kyrgyzstan has also become a participant of a free trade zone agreement, which was concluded with Vietnam the first.
In this light, it is also important that one more format of the international activities of the Eurasian Economic Union - the conclusion of memorandum of understanding between the Eurasian Economic Commission and the governments of third countries is also beneficial for Kyrgyzstan. This fact also provide expansion of international ties of the member states.
Its worth to add that Kyrgyzstan also receives new positive economic effects from the integration projects that will be launched in the near future. In particular, it is planned to adopt the Customs Code of the EEU. Businessmen will have a single set of rules. The document suggests a number of innovations that significantly save business resources – simplified customs formalities, reduction of time for customs clearance, minimized communication with officials that will bring to improvement of the business climate in EEU countries.
It should be noted that after the entry of Kyrgyzstan into the Eurasian Economic Union, there are already four WTO members in the union - Russia, Kyrgyzstan, Kazakhstan and Armenia. Entry of Belarus in the organization is an open question.
As of today, the WTO members are 160 countries in the world with about 98% of world trade.
Notable is the fact that at the time of taking the decision to launch the Eurasian integration project the leaders of the Union countries acted on the premise that all members of the association want to become WTO members. Accordingly, the legal framework of the Eurasian Economic Union was created taking into account WTO rules and disciplines.
The position of neighboring countries and interest in Kyrgyzstan ...
Kyrgyzstan became the second country in Central Asia, which has entered the EEU. The usual routes of transportation of goods that have been used since the times of the USSR, pass through Kyrgyzstan. in recent years these roads have been reconstructing.
Neighboring Tajikistan, located in the transport impasse, is entirely dependent on Uzbekistan and Kyrgyzstan, and, despite the fact that the joining the EEU has been discussing the country in the past few years, the country is in no hurry to enter it. In Uzbekistan, the accession to the EEU is not on the agenda. But the government is in talks with Russia on a free trade zone.
Do not forget that the trade volume of these countries with the neighboring countries is lower than with the Union member states. For example, for Uzbekistan among all five of the EEU countries, Russia is main trading partner, while for Russia, in terms of turnover, Uzbekistan ranks fourth among the CIS countries. But due to the depreciation of the ruble, which has been observed in the past few years, and the non accession of Uzbekistan and Tajikistan to the EEU, the bilateral trade turnover decreased in 2015.
And while Uzbekistan and Tajikistan are considering joining the integration association, the way out is the establishment of joint ventures with Kyrgyzstan, as the creation of such enterprises with other countries of the union will be more unprofitable.
Existing agreements and treaties with the CIS line and other inter-state agreements also lose their relevance in the new conditions. And the need to comply with numerous regulations and requirements of the EEU further induces countries of the region to find new solutions to pressing issues.
Thus, cooperation with Kyrgyzstan in order to enter the market of the Union - it is one of the easiest ways out in this situation.
Interest in foreign countries
Kyrgyz leadership pays special attention to attracting investments from foreign countries. At the moment Kyrgyzstan considers the effective use of all mechanisms for fuller disclosure and implementation of the existing potential of bilateral cooperation and interaction with other countries on the world stage, including in the framework of regional and international organizations.
The frequency of the visits of official delegations to Kyrgyzstan, including representatives of business, demonstrate the seriousness of the issue of the use of Kyrgyzstan as the entrance to the large market of the EEU.
For example, during the ceremony of presenting credentials Ambassador of Kyrgyzstan to France the French President F. Holland said: "French companies are interested in investing activities and the development of joint projects in Kyrgyzstan."
Regional Director of the Eastern Committee of German Economy for Central Asia E. Kinsbruner, who arrived as part of the German delegation in October said that Kyrgyzstan has a great export potential in the field of agriculture. "We are interested in establishing contacts in such areas as livestock breeding, livestock identification and certification of finished products, the supply of agricultural and special equipment," said Kinsbruner.
Meanwhile, Vice Prime Minister of the Kyrgyz Republic Oleg Pankratov said that EEU is a large market with high purchasing power. "Therefore, businessmen from Germany might rightly consider Kyrgyzstan as a launching pad for the creation of local production with the subsequent delivery of products to the market of the EEU. This is especially important due to the fact that the location of production in Kyrgyzstan economically more advantageous. In addition, in recent years we have done a lot to improve the investment climate and improve the legal framework in the field of entrepreneurship and protection of investments, which also creates the most favorable conditions for the inflow of foreign investments," said Pankratov during a meeting with the German delegation.
There are a lot of such examples, when the country is making every effort to improve the business environment. An unconcealed interest of foreign countries and their companies in Kyrgyzstan, demonstrates that soon they will start the practical use of the potential of the republic within the framework of the EEU.
By Ermek Abdrisaev,
Kabar News Agency
Translated from Russian