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IBC: It is essential to give freedom to business, remove all barriers and create incentives

March 13, 2022

In a crisis, it is important to maintain business activity and work, as is done in many countries. To do this, it is necessary to remove all barriers to doing business and create incentives for it, perhaps even unprecedented ones.

This was stated by the Executive Director of the International Business Council Askar Sydykov on March 12, 2022 at a meeting of the Minister of Economy and Commerce Daniyar Amangeldiyev with representatives of the business community. The participants discussed the current economic situation and anti-crisis measures.

“The removal of barriers is especially important in our situation, when the state will not be able to significantly help businesses due to limited financial resources. But the government can at least remove the barriers to business,” said the IBC head.

It is necessary to solve the main issues on the Tax Code, for example, to reduce the single tax rates for tourism and public catering, to quickly complete the adoption of all by-laws for the Tax Code.

Sydykov gave an example: “Many bottled water producers approached IBC regarding the introduction of labeling their products. It is better to postpone bottled water labeling indefinitely and not introduce it this year, even on a pilot basis.”

To ensure the protection of private property and investments, it is necessary to complete the implementation of all last year's presidential decrees in this area. As far as we know, they have not yet been fully implemented.

IBC proposes to introduce a restriction on the initiation of criminal cases on entrepreneurial offenses, as is done in many countries in crisis. Business also proposes to consider the introduction of a moratorium on all business inspections.

An important issue is benefits for oil traders. There is a risk of a significant increase in fuel prices, because they play an important role in the pricing of almost all goods and services. Business also recommends introducing incentives for other important goods including food and medicines.

As for internal anti-crisis measures, the public wants to hear how budgetary discipline is being carried out, how much government spending is being cut. Since everyone understands that it is necessary to tighten belts and reorient government spending from non-core to the most important, including food and medicine. In addition, it is needed to provide reserves for possible necessary expenses in the future.

“We are talking about this because we often hear statements about a policy of increasing government spending and expanding state participation in business in many sectors of the economy,” the IBC head explained.

“A course is announced for replenishing the budget at the expense of tax revenues. In crisis, on the contrary, it is necessary to leave more money in the economy, give freedom to business and inspire confidence of business, society, and investors in a consistent and adequate state policy based on the principles of a market economy,” he added.

To coordinate actions and respond in a timely manner to developments, an Operational Center is needed that will monitor the situation on an ongoing basis, contact entrepreneurs, possibly open a call center for requests from entrepreneurs and all citizens, and analyze risks for the short and medium term.

Entrepreneurs need to know whether there are sanction risks, even partial ones, and what opportunities can be used in this case.

The Operational Center should hold regular meetings with business and other stakeholders and make agreed operational messages to the press and the public.

It is important that all communications to the public come from one state body.

“Now there is very little official data. So that there are no rumors and incorrect information, it would be nice to get if from one source,” IBC believes.

Official information is needed to help businesses look for opportunities that can be used to benefit country’s economy. To raise capital, attract smart, highly skilled people such as digital nomads, and provide other services.

“We understand that this is only the beginning of the crisis. We will need to constantly meet, discuss and develop measures, and this requires a certain platform. On March 12, it became known that the Anti-Crisis Committee for Rapid Response to Social and Economic Challenges has been created by the decision of the Cabinet of Ministers. But it is not yet clear how it will work. Perhaps, after all, some kind of platform under the President of the Kyrgyz Republic is needed,” Sydykov said.

On March 12, the press service of the Cabinet of Ministers also reported that government agencies had been instructed to "finalize the bill on the state of emergency in the economy."

“We have already discussed this initiative and proved its inexpediency. We proved that the existing powers of the government are quite enough,” the IBC head commented.