Istanbul Forum Country Exercise: Kyrgyz Republic

1. Istanbul ForumCountry Exercise:Kyrgyz Republic

2. Step 1: Diagnosis • Key issues you are planning to address Building of conditions for improving of business environment (reducing of regulations from the principles of deregulation, trustable court system, predictable and sustainable law system, lack of financing services, diversification of the economy); • How does your country compare to other countries with respect to these issues? Neighbor countries are facing with the same issues, especially in areas of regulations, court system, diversification of the economy; • What are the key causes of the problems you have identified? (Historical lack of reform and investment, undeveloped law system, financial system);

3. Step 2: Objective of the intervention • What do you hope to achieve with your proposal? Deregulation of economy (reducing of barriers for enter in the market, creating of general rules of doing business, fair competition and etc.); Easy access for financing, low interest rates; Independence from world price fluctuation for commodities; • What are the key institutions and target groups that will benefit from the proposed intervention? Small and medium enterprises, banking system, entrepreneurs, population, investors, government.

4. Step 3: Description of the Proposed Intervention • What are the proposed activities? 1.Review and analysis of current laws and business environment; 2.Outsourcing of some government services to private sector (by researching of private capability and its readiness); 3.Making recommendations for improving conditions of doing business, creation of Steering Committee (consist of representatives of government agencies, entrepreneurs, international organizations, parliament); 4.Increasing of capital requirements for commercial banks, privatization of state owned financial institutions; 5.Development of micro financing institutions; 6.Development of state policy for skills upgrading of entrepreneurs; • How much might they cost? It will be depend on amount and scope of measures, which will be identified.

5. Step 4: Institutions involved • Roles and responsibilities of government ministries or agencies The Ministry of economic development, industry and trade of the KR will be responsible for coordination of actions to be taken; The National Bank of the KR – for capitalization of the banking sector, development of micro financing sector; The Ministry of Finance of the KR – for optimization of business taxation; The Ministry of Justice of the KR – for reviewing of current laws and creating strong legal system and development of new laws based on recommendations of Steering Committee; The Ministry of Education of the KR – for development of state policy for skills upgrading of entrepreneurs; The State Property Fund – for privatization of state owned companies; The Parliament – for approval proposed laws; International organizations – for providing of technical assistance for implementation of recommendations. • What other partners would be involved? Business associations and structures, scientific institutions, universities, mass media.

6. Step 5: Results Indicators • Give a small number (2 or 3) indicators you would use to evaluate whether the intervention has been successful: 1.Share of SME in export; 2.GDP growth; 3.Poverty reduction. • Give a small number (2 or 3) indicators you would use to measure the progress of the intervention’s implementation: 1.Number of new business entities; 2.Rate of unemployment; 3.Volume of tax collection;

7. Step 6: Background Information • Name of Country Kyrgyz Repulic • Team members’ names Maksatbek Ishenbaev, National Bank of the KR, HoD Sanjar Mukanbetov, Ministry of Finance of the KR Asel Albanova, Ministry of Economic development, Industry and Trade of the KR • Contact information mishenbaev@nbkr.kg s.mukanbetov@mf.gov.kg aalbanova@mail.ru