ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of March 18, 2015 No. 129

About approval of the Program of the Government of the Kyrgyz Republic for private sector development in the Kyrgyz Republic for 2015-2017

For the purpose of increase in investment appeal and improvement of business environment of the country, according to articles 10 and 17 of the constitutional Law of the Kyrgyz Republic "About the Government of the Kyrgyz Republic" the Government of the Kyrgyz Republic decides:

1. Approve:

- The program of the Government of the Kyrgyz Republic for private sector development in the Kyrgyz Republic for 2015-2017 (further - the Program) according to appendix 1;

- The actions plan on program implementation of the Government of the Kyrgyz Republic on private sector development in the Kyrgyz Republic for 2015-2017 (further - the Actions plan) according to appendix 2.

2. To the ministries and administrative departments:

- take specific measures for accomplishment of the Program and the Actions plan at the scheduled time;

- quarterly, no later than the 15th following the accounting period to provide information on the course of accomplishment of the Program and the Actions plan in the Ministry of Economics of the Kyrgyz Republic for generalization.

3. To the Ministry of Economics of the Kyrgyz Republic:

- in a month to approve the Plan of monitoring and assessment of program implementation and the Actions plan;

- perform general coordination of program implementation and the Actions plan;

- quarterly, no later than the 30th following the accounting period to provide the summarized information in Government office of the Kyrgyz Republic.

4. To impose control of execution of this resolution on department of economy and investments of Government office of the Kyrgyz Republic.

5. This resolution becomes effective after ten days from the date of official publication.

Appendix 1

Approved by the Order of the Government of the Kyrgyz Republic of March 18, 2015 No. 129

The program of the Government of the Kyrgyz Republic for private sector development in the Kyrgyz Republic for 2015-2017

I. Introduction

The purpose of this Program is carrying out the reforms aimed at the development of competitive business environment in the Kyrgyz Republic and improvement of line items of the country in the international ratings for attraction of direct investments in economy taking into account the best world practices.

Reforms of the Program will be executed:

- on the basis of the undertaken reforms on private sector development in the country in recent years;

- taking into account the existing prerequisites and restrictions for carrying out effective and productive reform policy in the Kyrgyz Republic;

- with effective use of comparative advantages of the country for improvement of competitiveness in the Central Asian region and state members of the Eurasian Economic Union (further - EEU);

- with concentration on improvement of business environment in general and creation of equal conditions to investors in all sectors of the market for diversification of economy.

Reforms on private sector development will be directed on:

1) regulation of the trade and customs sphere;

2) tax administration;

3) labor law;

4) competition and price regulation;

5) regulation of control of safety of products;

6) horizontal reforms.

In last years the Government of the Kyrgyz Republic undertook measures for carrying out reforms for private sector development and improvements of business environment; positive results, for example, in the sphere of registration of business and property were achieved. However the majority of reforms were not complete and did not bring the expected results and improvement of conditions for business therefore the Government of the Kyrgyz Republic will continue implementation of measures, the reforms directed to active promotion on private sector development.

The program implementation is aimed at effective and productive measures for reducing corruption. In this regard reforms of the Program are directed to rationalization of institutional procedures, for the purpose of prevention and considerable reducing incentives and opportunities for corruption during program implementation.

The private sector is the primary target group and the beneficiary of the reforms directed to improvement of business environment and development of entrepreneurship; paramount value has ensuring intensive involvement of private sector in reforms. Creation of feedback with private sector in the course of carrying out reforms is integral part of the Program.

II. Analysis of the current situation

1. Prerequisites for carrying out reforms

The Kyrgyz Republic has number of strong prerequisites which create the base for carrying out the reforms aimed at the development of entrepreneurship:

- The Kyrgyz Republic carried out several stages of the reforms aimed at private sector development and has valuable experience on carrying out reforms;

- the country takes good positions in a number of the international ratings. In Doing Business 2014 the Kyrgyz Republic took the 68th place from 189 countries that above average value for the countries of Europe and Central Asia (71);

- active private sector which has institutional format of dialogue with the Government of the Kyrgyz Republic - the Secretariat of Council for business development and investments under the Government of the Kyrgyz Republic.

2. Restrictions for carrying out reforms

For notable break in transformation of business environment to competitive level management process shall become productive and transparent.

Private sector development faces number of fundamental problems which should be eliminated to create favorable conditions for realization of comparative advantages of the country.

Problems consist in the following:

- number of reforms was performed in recent years, but certain key spheres are reformed only partially therefore real improvement in business environment did not happen;

- the legislation is more enhanced and rationalized in many spheres, but the facts of corruption manifestations still meet;

- lack of cardinal decisions on number of fundamental questions, in such spheres as protection of the property rights or frequent unscheduled inspections from various bodies;

- The Kyrgyz Republic takes the 136th place from 177 countries on index of perception of corruption "Transparency International" in 2014;

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