Regional Development and Investment Climate Improvement ASKAROV Zamirbek

Regional Development and Investment Climate Improvement ASKAROV Zamirbek Maripbayevich Vice Prime Minister of the Kyrgyz Republic

ANALYSIS OF THE CURRENT SITUATION Gross regional product per capita in 2017 and poverty rate in 2018 by territory 250 40% 36% 197 200 34% 32% 31% 30% 138 150 100 22% 15% 22% 113 16% 15% 98 64 55 52 39 50 31 10% ая О ш ск ск ен тк Ба Н ар ы ад Аб Дж ал а л- ая ая нс к ая ск ка я сс ла Та ш ая ск Чу й ьс Ку л ы ксс И г. О ка я ке ш Би г. 0% к 0 20% ВРП на душу населения в 2017 году, тыс. сомов Poverty rate in 2018 - 22. 4% (in 2013 - 37%) Уровень бедности в 2018 году, %

REGIONAL POLICY OF THE COUNTRY Decree of the President of the Kyrgyz Republic National Strategy for Development of the Kyrgyz Republic until 2040 2018 - Year Regional Development 2019 - Year of Regional Development and Digitalization Government of the Kyrgyz Republic (Programm of the Government of the Kyrgyz Republic, Concept of Development of the Regions of the Kyrgyz Republic for 2018 -2022 and other sectoral documents) Ministries and departments 15, 973 public servants 8484 municipal employees

STIMULATING THE REGIONAL DEVELOPMENT Business development LSG Development Determining the preferential settlements in the regions Roadmap for the administrative-territorial reform Allocation of funds as a separate item from the republican budget for regional development Manual for LSG and regions on the development planning Significantly increased the volume of lending by financial institutions (RKFR, GF, RDF, FSH etc. ). Changing the approach on development through the support points Creating the Centers for Business Service (CBSs) in the regions, Foundation for Preparing the Sustainable Development Projects, Councils for Business Development and Investment in the Regions Laboratories, trade and logistics centers, vegetable storehouses, agricultural cooperatives, greenhouses, motor and tractor stations Redistribution of income tax. By 2021, 100% in favor of local budgets Development of border areas Improving the quality of service throughout all regions. (Information kiosks and opening the Public Service Centers - PSC) Implementation of national projects in the regions: the launch of enterprises, pure water, irrigation, roads, energy, etc.

Inefficient interaction of state bodies and regions Small-scale production Insufficient capacity and personnel turnover Poor infrastructure in the regions PROBLEMS AND CHALLENGES Transformation of land for commercial purposes Small number of a quality projects in the regions Vulnerable system of the leveling incentive grants Imbalance in resource provision for the regional development fund

PROPOSED RECOMMENDATIONS AND MEASURES Carrying out the reform of ATP Improvement of inter-budgetary relations Introduction of the principle of cluster development of the regions Development of social infrastructure in accordance with the real needs Increase of personnel capacities in the regions, effective management of services and land resources Mechanisms for dialogue between business and local self-governments

PROGRESS ACHIEVED IN THE REGIONAL DEVELOPMENT Foreign direct investment in the KR by territory in 2018 - 851 743, 6 thousand USD 400 000. 0 366 946. 0 350 000. 0 300 000. 0 250 000. 0 249 314. 3 200 000. 0 150 000. 0 128 806. 7 91 256. 9 100 000. 0 50 000. 0 8 238. 9 4 096. 8 2 152. 2 909. 7 22. 1 Batken oblast Talas oblast Osh city 0. 0 Bishkek city Chui oblast Jalal-Abad oblast Issyk-Kul oblast Osh oblast Naryn oblast

INVESTMENT CLIMATE IMPROVEMENT ANALYSIS OF THE CURRENT SITUATION TARGET 50 th position by 2022. UNITY. TRUST. CREATION.

INSTITUTIONAL ENVIRONMENT FOR IMPROVEMENT OF INVESTMENT CLIMATE AND BUSINESS SUPPORT IN 2013 -2019 Center for Public-Private Partnership (PPP) Institute of the business ombudsman State Body for Investor Support and Protection Department of Economic Diplomacy under the Ministry of Foreign Affairs Business service centers in Osh, Jalal Abad and Batken cities

Effective measures for improving the investment climate and support to the private sector in 2014 -2019 Accounting and tax procedures were simplified. New enterprises were exempted from taxes Investor's access to the PPP and tender procedures were simplified, conditions for private initiatives were stimulated Credit bureaus operation system, scoring and credit information sharing were improved Control over the power grid outages and upgrades of the powere networks were increased Rights of minority investors strengthened, independence of boards of directors increased Moratorium on checks of entrepreneurs was introduced Open Sky and 5 th Degree of Air Freedom Visa-free regime Conditions for investors' access to state property management have been created Pre-trial dispute resolution and mediation procedure were introduced 12

WEAK POSITIONS IN "DOING BUSINESS" RATING INDICATORS 1. C onnecting to the power supply system 2. Protection of minority shareholders RATING 143 - Duration of the procedures passing; - Cost; - Reliability of electricity supply and transparency of tariffs. 128 - Degree of protection of minority shareholders and rights of investors in corporate governance. 117 - Number of payments, payment time; - Tax rate; - Index of post-reporting and post-tax procedures. 3. Taxation 4. Enforcing Contracts 134 5. Overall rating Evaluation Indicators 80 - Period (days): from submission of documents to execution of court decision; - Court costs, quality of proceedings; - Judicial system structure index, judicial case efficiency index, automation level index.

ISSUES AND CHALLENGES Law enforcement and fiscal intervention in business Poor communication between investor and population Difficulty in connecting to utility networks ISSUES AND CHALLENGES Infrastructure mismatch with the urban planning and territorial zoning Shortage of qualified personnel Low investor confidence in public and judicial authorities

PRIORITIES AND MEASURES Reform and financial recovery in the energy sector Development of the public-private dialogue Dispute resolution through mediation institutions Ensuring the rule of law and the legality through the judicial and legal reform Educational services of the school, professional and higher education in the field of PPP Reform in the licensing and permitting system Digital Economy Development Reform in the law enforcement and fiscal agencies

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