UNCTAD presented its draft Investment Policy Review of Kyrgyzstan to government officials, representatives of the private sector and civil society as well as development partners at a national workshop held in Bishkek on 16 June 2015.
Recognizing the role that foreign direct investment (FDI) can play to promote economic diversification and sustainable development, the Investment Policy Review (IPR) of Kyrgyzstan recommends a series of measures to improve the business climate, harmonize the legal framework for FDI, mainstream sustainable development principles in investment policymaking and make better use of modern investment promotion tools. The report also proposes a strategy to foster economic diversification through targeting FDI in specific sectors.
Opening the workshop, Kyrgyzstan's State Secretary of the Ministry of Economy, Aidai Kurmanova, praised the timeliness of the IPR, highlighting that investment policy reforms are important to further develop the country and to attract high quality investments.
The IPR assesses the country's significant but still largely unexploited potential to attract foreign investors in agriculture and agro-processing, textiles and garments, and tourism, which are amongst the Government's priority sectors to achieve economic diversification. The report also provides advice on increasing the sustainability of the mining sector and ensuring that it remains a pillar of growth. Finally, the IPR provides advice for the development of the newly created Investment Promotion Agency under the Ministry of Economy. Given the considerable effort involved in professional promotion activities, appropriate expertise and funding will be required, as well as a staged approach to the Agency's development.
"We know that we have capacity and potential. Our legislation is overall open to FDI and taxation is competitive but further reforms are needed to improve the business climate", the State Secretary said.
Resident Representative of the United Nations Development Programme (UNDP), Alexander Avanessov, commended the Kyrgyz authorities for undertaking the review. Indicating that "the IPR will help bring positive change to Kyrgyzstan that will result in sustainable development outcomes, including poverty reduction", he also said that setting up an action plan to monitor its implementation was important.
In her introduction, Chantal Dupasquier, Chief of UNCTAD's Investment Policy Reviews Section, said that actions to ensure that Kyrgyzstan moves forward to achieve its national development objectives through attracting more FDI should be undertaken. These include harmonizing legislation containing FDI-related provisions; introducing a sustainable development dimension in future investment treaties; moving forward with institutional reforms to improve the business climate in such areas as taxation, access to land, environmental performance, judiciary and governance reforms; and improving multi-stakeholder dialogue on investment issues.
UNCTAD has carried out more than 40 IPRs at the request of Governments in developing countries and countries with economies in transition. It stands ready to provide support to Kyrgyzstan for the implementation of the IPR recommendations once the final report, which will integrate the comments gathered during the workshop, will be published later this year.