Governmental Plan for Export
Development of the Kyrgyz
Republic for 2015–2017
Annex
1
Contents
Acronyms ............................................................................................................................ 3
1.
General provisions ...................................................................................................... 4
2.
Overview of the current situation and problems ....................................................... 4
3.
Goals and objectives of the EDP ................................................................................ 9
4.
Identification of priority sectors ................................................................................. 9
5.
Areas of activity of the EDP ...................................................................................... 13
Area of Activity 1: Access to trade information and export promotion .............................. 13
Area of Activity 2: Trade facilitation ....................................................................................... 14
Area of Activity 3: Quality infrastructure support and development .................................. 17
Area of Activity 4: Access to finance ...................................................................................... 19
6.
Resources for plan implementation ......................................................................... 21
7.
Managing implementation of the EDP ...................................................................... 22
8.
Expected outcomes of EDP implementation............................................................ 22
Plan of activities for export development of the Kyrgyz Republic for 2015–2017 ........ 24
2
Acronyms
ADB
CIS
CU
EBRD
EDP
EU
EEU
FAO
GIZ
GSP
HACCP
IDB
IEC
IFC
ISO
JICA
MALR
MCIT
MEI
MES
MoE
MoF
MoH
MTC
SCS
SFD
SECO
SIVPhS
SMEs
SWCSE
TSI
USAID
VAT
WB
WTO
Asian Development Bank
Commonwealth of Independent States
Customs Union
European Bank for Reconstruction and Development
Export Development Planof the Government of the Kyrgyz Republic for 2015–
2017
European Union
Eurasian Economic Union
Food and Agriculture Organization of the United Nations
German Agency forInternational Development
Generalized System of Preferences
Hazard Analysis and Critical Control Points
Islamic Development Bank
International Electrotechnical Commission
International Finance Corporation
International Organization for Standardization
Japan International Cooperation Agency
Ministry of Agriculture and Land Reclamation
Ministry of Culture, Information and Tourism
Ministry of Energy and Industry
Ministry of Education and Science
Ministry of Economy
Ministry of Finance
Ministry of HealthMoJ
Ministry of Justice
Ministry of Transport and Communications
State Customs Service
Saudi Fund for Development
Swiss State Secretariat for Economic Affairs
State Inspectorate for Veterinary andPhytosanitary Safety
Small and Medium-sized Enterprises
Single Window Centre State Enterprise
Trade Support Institution
United States Agency for International Development
ValuedAdded Tax
World Bank
World Trade Organization
3
1.
General provisions
The Export Development Plan of the Government of the Kyrgyz Republic for 2015–2017 (EDP) is
aimed at achieving the objectives specified in the following documents:

National Sustainable Development Strategy of the Kyrgyz Republic for 2013–2017
approved by the Decree of the President of the Kyrgyz Republic ‘On National Sustainable
Development Strategy of the Kyrgyz Republic for 2013–2017’ dated 21 January 2013, No.
11;

Programmeof the Kyrgyz Republic of Transition to Sustainable Development for 2013–
2017 approved by the Resolution of the JogorkuKenesh of the Kyrgyz Republic ‘On
Approval of the Programme of the Kyrgyz Republic of Transition to Sustainable
Development for 2013–2017’, dated 18 December 2013, No. 3694-V.
Objectives of the EDPwill be implemented withinaframework of four areas:ensuring access to trade
information and strengthening of the capacity of economic entities and trade promotion organizations;
trade facilitation; development and support of the national quality infrastructure; and decrease of the
tax burden and access to financial resources by exporters.Specifics of the EDPlie in the creation of
favourable conditions for export and the support of predominantly small and medium-sizedenterprises
(SMEs), as well as building relevant SME export capacity.
2.
Overview of the current situation and problems
Substantial growth of Kyrgyz foreign trade volumes and changes in theirstructure have been observed
since 2000. Import volumes have been increasing more rapidly than export volumes, contributing to
the growth of the negative balance of trade and the balance of payments deficit (see figure 1).
Following the outcomes of 2013, the negative balance of trade exceeded US$4 billion, mainly due to
decreasesin exports of gold, dairy products and apparel, and increasesin imports of oil products,
wheat and coal.
Figure 1: Dynamics of Kyrgyz exports and imports of goods, trade balance, 2005–2015
(US$ millions)
Source:National Statistics Committee of the Kyrgyz Republic data.
4
The volume of exported goods and the number of destination countries provideimportant information
about the competitiveness of the country. Under both indicators the Kyrgyz Republic ranks below
average in world rankings. Despite the fact that trade contacts have been recorded with almost145
countries, the majority ofexports consist of a limited number of goods (see figure 2) exported to only a
few countries (see figures 3 and 4). Gold comprises the largestshare of exports (36.5%). The share of
the remaining goods is much less:




Vegetables and fruit:7.4%;
Apparel and clothing accessories: 5.4%;
Glass:1.4%;
Energy, cotton fibre, ferrous metal and scrap, milk and dairy products: each about 1%.
Yet dependence on existing products and traditional markets is still high. Diversification opportunities
are largely not exercised in terms of both new products and new markets.
Figure 2: Dynamics of Kyrgyz export structure, 2005–2013
(US$ millions)
Source:National Statistics Committee of the Kyrgyz Republic data.
The major trading partners of the Kyrgyz Republic among the countries of the Commonwealth of
Independent States (CIS) are the Russian Federation, Kazakhstan and Uzbekistan. The following
dynamics have been observed in trading with these countries: the share of exports to the Russian
Federation decreased from 44.3% in 2005 to 19.3% in 2013;the share of exports to Kazakhstan and
Uzbekistan increased from 38.3% to 40.7% and from 5.6% to 20.4% respectively duringthe same
period.
CommoditiesworthUS$153.6 millionwere exported to the Russian Federation in 2013. The main
exported goods included appareland clothing accessories, aviation fuel, raw cotton, vegetables, fruit
and rolled glass. The 30% decrease inexports to the Russian Federationcomparedwith2012 is
accounted for byadecrease inexportsof fruit, vegetables, apparel and clothing accessories.
Exports to Kazakhstan increased in the categories of apparel and clothing accessories; ores and
concentrates of precious metals; vegetables and fruit; and nonorganic chemical substances (see
figure 3). Exports of apparel and clothing accessories, and vegetables and fruit increased due to
fulfilment of the requirements of the Customs Union (CU). About 98% of exports of dairy products
5
have been sustainably supplied to Kazakhstan, whileexports of energy to this country decreased
twice in 2013.
Figure 3: Exports of goods by Kyrgyzstan to CIS countries, 2005–2013
(US$millions)
Source:National Statistics Committee of the Kyrgyz Republic data.
Motor vehicles for cargo transportation; parts and accessories of motor vehicles; commodities made
of metal; articles made of rubber; energy; and filament lamps were exported mainly to Uzbekistan.The
major trading partners of the Kyrgyz Republicamong non-CIS countries were Switzerland, China and
Turkey (see figure 4). The average share of Switzerland among the non-CIS countries was 49.8%
(exports of gold accounting for99.4%), China, 3.5% and Turkey, 11.8%. Exports to the United Arab
Emirates also increased due to exports of gold (with ashare of21.7%).
Figure 4: Export of goods by Kyrgyzstan to non-CIS countries, 2005–2013
(US$ millions)
Source:National Statistics Committee of the Kyrgyz Republic data.
6
Kyrgyzstan may decrease its trade deficit by developing the services sector, which has been steadily
growing since the country gained its independence (figure 5). Increasesinexport volumes in the
transportation sector, as well astourism, arealso noted.
Figure 5: Dynamics of Kyrgyz exports of services, 2005–2012
(US$ millions)
Source:National Bank of the Kyrgyz Republicdata
Tourism development encouraged the creation of a large number of workplaces. At present the
tourism sector representsabout 4.7% of gross domestic product. The sector employs almost4.5% of
the labour force.
Exports of services, includingexports of such creative services as active tourism and communitybased tourism,arethe key driving force of growth, which may be further developed to increase export
volumes. Exports of services outside the tourism sector havebeen decreasing since the mid-1990s.
Reversal of thistendency is acondition for improving the balance of trade and social and economic
development. Services such as insurance, finance and telecommunications are still underdeveloped
buthave potential. Development of these sectors will contribute to increasing the sustainability of trade
of Kyrgyzstan as an outcome of diversification of the trade structure, along with higher trading in
goods and energy resources.
World Trade Organization (WTO)membership
Accession of Kyrgyzstan to the WTO hasenhanced access to international markets and creation
ofacompetitive environment forlocal producers. Continuous governmental efforts, including trade and
investment liberalization, have created apredictable trade environment and resulted inincreased
regional and global integration, making Kyrgyzstan one of the most open trade and investment
regimes in the region.
General System of Preferences (GSP) membership
Kyrgyzstan has been a beneficiary of the European Union (EU) GSP scheme since 1993; however,
utilization of the scheme is at very low levels and needs to be improved. Market access to the EU
could be further expanded with entry into the new EU GSP+ scheme which targets vulnerable
economies with insufficiently diversified exports. The EU GSP+ scheme provides better tariff
treatment for countries which subscribe to the principles of sustainable development and good
7
governance. The new EU GSP+ scheme would likely have a positive impact on Kyrgyzstan’s exports
to the EU and Turkey while improving the country’s potential to attract foreign direct investment.
Membership in the Eurasian Economic Union (EEU)
On 29 May 2014 the heads of the CU member states signed theAgreement on Eurasian Economic
Union in Astana. The Agreement entered into force on 1 January 2015. The Agreement on Accession
of the Kyrgyz Republic to the Agreement on Eurasian Economic Uniondated 29 May 2014 was signed
in Moscow on 23 December 2014.
The ‘roadmap’ on accession of Kyrgyzstan to the CU stipulates the following major actions:

Bringing the laws of Kyrgyzstan into compliance with CU Agreements:infrastructure
transformation, modernization, and equipping of checkpointsand laboratories;

Developinga mechanismfor paymentand distribution of collected import customs duties
among the CU member states;

Abolition of customs control at the Kyrgyz–Kazakh state border;

Determination of the transition period prior to CU technical regulations coming into force;

Negotiations with the WTO.
In general, the contractual and legal framework of the CU regulates movement of goods, including,
inter alia, customs administration; tariff and non-tariff regulation; sanitary, veterinary andphytosanitary
requirements;and technical regulations.
The participation of the Kyrgyz Republic in the EEU creates new opportunities for increased exports
of goods and services, including exportsto EEU member states. The main advantage will be the
absence of customs procedures at the borders ofEEU member states. The prospectof entry to the
huge market of theEEU member states will make Kyrgyzstan attractive for foreign investors from nonCIS countries including, China, Turkey, the Republic of Korea and others. Upgrading of testing
laboratories will facilitate improvedquality control oflocally produced goods, which will in turn enhance
competitiveness in foreign markets.Conditions will be improved and new opportunities will be created
for labour migrants from Kyrgyzstan; in particular, employment and access to social services.
The main problems in export promotion are:
1.
Export flows from Kyrgyzstan are oriented towards Kazakhstan and the Russian
Federation. Trade relations with other countries remain insignificant and unsustainable
(except for gold supplies);
2.
Exporters, especially SMEs, do not have production capacity that would allow them to
diversify their clientele; the rate of response of exporters to the qualitative and quantitative
requirements of new markets is low;
3.
Institutional support of SMEs to enter and flourish in thisuntapped market is still
significantly limited;
4.
The level of quality of transport services, cargo handling and certification is insufficient;
5.
Limited institutional capacity in quality management increases uncertainty and usually
entails additional costs when exercising opportunities inmore economically developed
markets. The role of metrology, tests and conformity assessment institutions is especially
important for entry into the European market and markets of the member states of the
Organisation for Economic Co-operation and Development;
6.
Access mechanisms to financial resources, including export credits and insurance, are
poorly utilized.
8
3.
Goals and objectives of the EDP
The goal of theProgramme of the Kyrgyz Republic of Transition to Sustainable Development for
2013–2017 in the area of foreign trade is to developcompetitive export potential for sustainable
economic growth. To achieve this goal the following priority areas have been identifiedforthemedium
term:


Developingthe export potential of the country;
Harmonizingthenormative andlegal acts of the Kyrgyz Republic in the area of technical
regulation with EEU documents.
In order to develop the export potential of the country the following priority objectives have been set:



Creating basic conditions for achieving a more attractive foreign trade regime;
Improving competitiveness of goods;
Improvingthe liability of producers for their goods.
Given these objectives, this EDPis focused on achievement of specific objectives in areas such as:








4.
Access to trade information;
Improving the capacity of economic entities and institutes;
Trade promotion;
Export support and promotion;
Trade facilitation;
Developing and supportinga quality infrastructure;
Decreasingthe tax burden;
Providing exporters with access to financial resources.
Identification of priority sectors
In the mediumterm, opportunities for export expansion come primarily from existing sectors.
Analysis of the existing dynamics and structure of exportsdemonstrates that goods such as gold,
energy, cotton, vegetables and fruitare incontinuous demand and thus require no special export
promotion. There are also dynamically developing sectorssuch as apparel manufacturingwith
sufficiently steadyexport growth.
Large companies have sufficient resources to meet the requirements for exporting. Foreign
companies are engaged inproducing specific types of goods; they bear all the export-related
expenses of, for instance, cotton and tobacco.The SME sector offers substantial export potential. In
2012 exportsby SMEs increased by 7.9% and amounted to 35.6% of total exports. However, many
SMEs need state support in order to compete in foreign markets.
Given the limited resources available, priority sectors should be selected. Identification ofthesesectors
should not be limited by the existing export structure. However, opportunities forexport diversification
and the impact of these sectors on the country’s economy and standards of living should be taken into
account.In order toidentify priority sectors in need of state support,16existing sectors were compared
and ranked along four dimensions:
1.
2.
3.
4.
Current export performance;
Domestic supply conditions;
World market trends;
The socioeconomic development impact of the sector.
9
The following sectors were selected on the basis of the abovedimensions: tourism, fruit and
vegetables, meat, dairy products, clothing, and bottled water.
The term ‘export potential’ is used in a broad sense and refers to the capacity to expand exports.
Some industries can be considered to have high potential because they have both a consolidated
export track record and the capacity to expand: existing export capacity can be seen by, for example,
high export values or high growth rates in recent years (e.g. clothing, fruit and vegetables, and meat
and dairy products) (figures 6–9).
Figure 6: Kyrgyz exports of vegetables and
fruit,2002–2013(US$ thousands)
Figure 7: Kyrgyz exports of meat products,
2002–2013(US$ thousands)
Vegetables
Fruits
Figure8: Kyrgyz exports of dairy products,
2002–2013 (US$ thousands)
Figure9: Kyrgyz exports of apparel, 2002–2013
(US$ thousands)
Source:National Statistics Committee of the Kyrgyz Republic data.
Yet there are sectors with insignificant export volume which may substantially increase if the required
conditions are created (for instance, tourism and information technology services). The contribution to
overall socioeconomic development was evaluated by estimates of the current employment rate of the
sector as well as its contribution towards poverty reduction and environmental sustainability. Final
results of the comparative analysis were received by the International Trade Centre in 2013 (table 1).
10
Table1: Selection of priority sectors
Export potential
Socioeconomicimpact
High
Low
--
Medium–high
Medium
Tourism
High
Articles of apparel
• Edible fruits, nuts
and vegetables
• Dairy products
• Processed fruits and
vegetables
• Bottle
of
Mineral
waters
Information
technology services
Cotton
Wool and animal hair
Raw hides and skins
and live animals
Mineral fuels and metals
--
--
--
--
Low–medium
Low
Handicrafts
Medium
Source:International Trade Centredata.
The priority sectors will be developed withinthe framework of new andeffective sectoralprogrammes.
State support of meat, milk, and vegetable and fruit production will be provided, inter alia, in the form
of the specific programmes and international development aid stipulated in the Mid-term Budget
Forecast of the Kyrgyz Republic for 2014–2016 approved by the decision of the Coordination Council
for Macroeconomic and Investment Policy under the Government of the Kyrgyz Republic ‘On
Republican Budget of the Kyrgyz Republic for 2014 and Forecast for 2015–2016’ dated 29 May 2014,
No. 17–36.

State support of crop growing. The goalsare to supply the population of the country with
good quality, affordable produce and increase the export potential of agricultural
products;

State support of animal husbandry. The goal is to meet local demandfor livestock
products throughthe sustainable development of livestock breeding;

Support and development of a state irrigation fund and land reclamation. The goal is to
meet alluser demandfor water resources to enableefficient functioning of the agricultural
sector;

State support of agriculture (Financing Agriculture 3 Project). The goal of the project is to
provide state support to agricultural producers for spring works in 2015, and further
development of the livestock breeding and agricultural processing sectors; seed and
breeding farms; and agricultural cooperatives by providing access to affordable and
preferential loans.
In September, 2013, the International Fund for Agricultural Development allocated US$20 million for
the agricultural project, Livestock and Market Development– I. Implementation of the project started in
autumn 2013 in Issyk-Kul and Naryn regions, anda second phase has been fundedto expand its
geographical coverage to Osh, Batken and Jalal-Abad regions. The goal of the project is to assist
farmers in achieving substantial improvements tolivestock productivity and development of markets.
The Pasture and Livestock Management Improvement Project is planned for2015 with thefinancial
support of the World Bank (WB). The goal of the project is to improve pasture management, animal
health and livestock breeding through associations of pasture users and the provision of private
veterinary services in Talas and Chui regions.
11
The Food and Agricultural Organization of theUnited Nations (FAO) will support the Kyrgyz Republic
in developing a draft national strategy and plans of action on animal identification. The system of
animal identification, movement and tracing will generate betterstatisticsonanimals, the veterinary
system and production management in the sector, as well as pasture management. It will also
contribute to improvement of animals’ genetics. It is expected that this support will enhance food
safety and security in Kyrgyzstan, as well as increasing the income of farmers and other stakeholders
through: better control and monitoring of animal diseases;a decrease inlimitations on exports of
livestock products; and improved health of animals, use of pasture and livestock productivity. TheFAO
will allocate US$20 millionto Kyrgyzstan for the preservation of pedigree livestock.
The Islamic Development Bank (IDB) will allocate US$1,380,000 to Kyrgyzstan for the development of
artificial insemination of livestock for pedigree improvement purposes. Co-funding will be provided
from the Kyrgyz budget.
The National Strategy for Pedigree Livestock Breeding Development in the Kyrgyz Republic for 2011–
2015, approved by the Resolution of the Government of the Kyrgyz Republic ‘On Approval of the
National Strategy for Pedigree Livestock Breeding Development in the Kyrgyz Republic for 2011–
2015’ dated 5 July 2011, No. 367, is being implemented.
State support of apparel manufacturing is provided pursuant to the Textile and Apparel Industry
Development Programme for 2013–2015 approved by the Resolution of the Government of the
Kyrgyz Republic ‘On Textile and Apparel Industry Programme of the Kyrgyz Republic for 2013–2015’
dated 6 March 2013, No. 123. The programme sets priorities such as: enabling a competitive textile
and clothing sector by diversification and expansion of exports; creating favourable conditions for the
development of textile production; developing the sector in the country’s regions; and intensifying the
social dialogue and partnership between SMEs and government agencies.
The state plans to develop a Governmental Plan of Activities on Tourist Sector Development for
2015–2017.
It is anticipated that a special document will be developed for state support of the bottled water sector.
One of the factors that makes the sector especially attractive is the substantial growth capacity of both
domestic and foreign markets. There are a number of factors contributing to the increase of domestic
and regional demand, including increased consumer revenues and a tendency to a more healthy way
of life. According to expert evaluations the domestic market capacity is 14 times higher than its
current size. The promising bottled water production sector will have an impact not only on the
economy, but also on the overall health and welfare of the population. Pursuant to the data presented
in figure 10, water exportsarestill at anearly stage of development. Improved bottled water production
will also decrease imports.
Figure 10: Dynamics of Kyrgyz exports, imports and balance of trade for mineral and sparkling water with
no sugar, thousands of litres, 2005–2013
Source:National Statistics Committee of the Kyrgyz Republic data.
12
5.
Areas of activity of the EDP
The EDPis oriented towardsobjectives common for all priority sectors. The activitiesof the EDPare
formulated considering the export capacity development of both these sectors and SMEs in general.
Activities of the EDPare categorized into four areas.
Area of Activity 1:Access to trade information and export promotion
At present exporters receive trade information and enjoy trade services from various sources such as
associations, trade support institutions (TSIs), the Union of Textile Enterprises, the Agribusiness
Competitiveness Centre, theInformation andMarketing Centre, state authorities, the National Bank of
the Kyrgyz Republic, and international development partners.
Despite the large number of sources of information and organizations providing services to
enterprises participatingin foreign economic activities, there are limitations, disunity and lack of
coordination in providing trade information and promotion.
Efficient collection, dissemination and use oftrade information depends on the qualifications of
organizations’ personnel. The level of knowledge of graduates of Kyrgyz educational institutions does
not always correspond to the current demands of employers (state authorities, business associations,
private sector). However, several educational organizations offer opportunities to improve expertise
on a commercial basis.
Business associations conduct educational workshops and trainings mainly with the support of
international partners. Such trainings are usually offered free of charge for specialists already in
employment. However, despite the number of such services these efforts are fragmented and poorly
coordinated.
A similar situation is observed in Kyrgyz goods promotioninforeign markets; in particular, participation
of exporters in specialized exhibitions and fairs. Sectoral associations offervarious trade promotion
services, particularly through participation in specialized trade fairs, especially inregional and
traditional markets. The Legprom Association organizes two international exhibitions: The Fashion
Industry in Bishkek and collective participation of private sector textile and apparel representatives in
specialized exhibitions both in CIS and non-CIS countries. The Kyrgyz Association of Tour Operators
assists Kyrgyz tour operators in attending specialized exhibitions in Germany, Japan and other
countries. The Chamber of Commerce and Industry of the Kyrgyz Republic organizes SME
participation in Expo World Fairs and annualexhibitions in CIS countries.
The Ministry of Economy (MoE)and the Ministry of Agriculture and Land Reclamation (MALR), with
the support of the German Agency for International Development(GIZ) organize Kyrgyz exporters’
participation in Green Week, aninternational agricultural exhibition in Berlin. The MoE also assists
SMEsto participatein a regionalExpo exhibition in Urumqi, China.
The Tourism Department under the Ministry of Culture, Information and Tourism organizes
participation of SMEs in specialized tourist events held in the Russian Federation and Kazakhstan. It
also hosts anexhibition at Issyk-KulLake.
Despite a multitude of exhibitions and fairs, Kyrgyz exporters do not participatefully in such events,
mainly because of limited financial resources.
National branding plays an important role in export promotion. At present there are specific industry
brands that are promoted with the help of international development partner programmes. However,
activities aimed at achieving the objectives and promotion of national brands are not carried out on a
systematic basis.Major constraints in the trade information and promotion areas are as follows:

Insufficient qualifications of personnel in the organizations responsible for collection and
dissemination of trade information;

Lack of awareness among enterprises of the importance of trade information to exports;
13

Lack of coordination between trade information providers and the private sector to gain
feedback on export promotion;

Lack of coordination among the institutions responsible for provision of trade information
and export promotion.
The following objectives will be achieved under this area of activity:

Improved access to trade information;

Improved trade promotion mechanisms.
The objective of improving access to trade information will be achieved through implementation of the
following activities:

Conducting research studies and identifying a list of problems in the area of trade
information exchange and dissemination for the purpose of export transactions;

Strengthening trade promotion organizations’ capacities in collection, analysis and delivery
of trade information;

Signing an export promotion cooperation agreement between the MoE and business
associations;

Cooperating with foreign trade promotion organizations over trade information exchange
and provision;

Conducting marketing studies onpriority sectors’ product promotion in target markets (with
consideration of accession of Kyrgyzstan to the CU);

Creating a common webportal of trade information gathered by TSIs and ensuring its
functioning;

Creating a common webportal of tourist information and ensuring its functioning.
The objective of improvement of trade promotion mechanisms will be achieved through
implementation of the following activities:

Organizing educational workshops on export promotion issues for the state authorities
involved in foreign trade policy development and provision of services (with consideration
of accession of Kyrgyzstan to the EEU);

Organizing educational workshops on export promotion issues for representatives ofthe
private sector (with consideration of accession of Kyrgyzstan to the EEU);

Organizing educational workshops on the issues of interaction with state authorities on
export promotion for business associations (with consideration of accession of Kyrgyzstan
to the EEU);

Developing training programmes for personnel from priority sectors;

Assisting the private sector in organizing and participating in specialized exhibitions and
fairs;

Development and implementation of programmes on national and sector brands’ design
and development.
Area of Activity 2:Trade facilitation
Trade facilitation is the simplification of all the procedures that must be completed by an exporter to
deliver goods to a foreign market (logistics, customs procedures, border control, etc.), and
improvement of the transport infrastructure. Efficient trade facilitation policies will contribute to
lowering costs, diminishing both real and perceived risks of doing business and reducing the time it
14
takes for products to reach their final destination. All these factors can enhance the competitiveness
of a country.
There have been a series of activities on trade facilitationconducted through initiatives supported by
the WB, Asian Development Bank (ADB), United StatesAgency for International Development
(USAID) and GIZ. One of the measures on trade facilitation under ADB support was the introduction
of the single window principle in foreign trade, through the introduction of a State Customs Service
(SCS) unified automated information and communication technologies system.The integration of SCS
information systems and the Single Window CentreState Enterprise(SWCSE) under the MoE and
further development thereof will allow exportersreliable paperless processingand exchange of
documents. A reduction in procedural time and a client-oriented approach will also permitKyrgyz
companies to respond more flexibly to demand conditions, thereby allowing them to supply the
markets in a more efficient manner and capitalize on new commercial opportunities.
The country is currently also implementing 10 projects under Central Asian Regional Economic
Cooperation, including projects on transportation and trade facilitation. By promoting and facilitating
regional cooperation in the priority areas of transport, trade facilitation and trade policy, Central Asian
Regional Economic Cooperationis helping Kyrgyzstan and neighbouring countries to realize the huge
potential in an increasingly integrated Eurasia.
The major constraints in trade facilitation include:

Long and complicated procedures for obtaining permits for foreign trade result in increased
costs and uncertainty for exporting enterprises;

Delays at terminal clearance points and checkpoints hinder the ability of SMEs to
efficiently bring their goods to market;

Lack of transparency and corruption at some stages of export increase costs and
uncertainty;

Inefficient administrative procedures decrease the ability of enterprises to efficiently serve
their markets;

Poor logistical infrastructure, coupled with the weak capacities of logistical companies, has
led to increased costs of doing business for enterprises in the export sector.
Excessive administrative barriers,and poor transport, logistics and telecommunications infrastructure
are serious obstacles for local exporters.
In many cases the goods produced in the Kyrgyz Republic are unable to compete on price in foreign
markets, for reasons including, inter alia, the cost burden caused by inefficient trade procedures and
poor transport infrastructure. According to ADB estimates, transportation costs comprise 13% of
export costs and 10% of import costs.
The current regulation of foreign trade is inefficient. Different government institutions often request the
same documents and data and do not share the information with each other, thus complicating
customs procedures, resulting in higher costs and increased processing time for required documents.
The inefficiency of this system leads to bribery and corruption. Procedures at border points are also
lengthy. Pursuant to the WB report Doing Business 2014,obtaining export documents and customs
clearance in Kyrgyzstan, including technical control, takes 23 days and costs US$210 and three days
and US$300, respectively.
Exporters use a variety of transport routes including rail, road and air. The vast majority of cargo is
transported by trucks. In general, the majority of physical transportation infrastructure is worn out and
noncompliant with international standards.Carrier fleets are outdated, management lacks the capacity
to organize and optimize transport solutions, and there is little interaction between stakeholders of the
transport and logistics sectors. The high cost of fuel, outdated vehicles and poor roads lead to
additional transport expenses that decrease the competitiveness of local goods in regional markets.
The issues of trade facilitation will become even more urgent in the futuregiven the adoption of the
WTO Agreement on Trade Facilitation dated 30 November 2013. Accession to this Agreement will
15
give additional impulse to ensuring transparency and facilitation of border crossing procedures, which
will result in decreased costs of foreign trade activities.
Given the aforementioned constraintsthe following objectives will be achieved under this area of
activity:

Implement activities on accession to the CU and Common Economic Area of the Republic
of Belarus, Republic of Kazakhstan and the Russian Federation pursuant to the plan of
activities for this accession;

Reduce time and costof exports;

Improve quality of export-oriented transport and infrastructure.
These objectives will be achieved if all requirements set forth in the roadmap for Kyrgyz Republic
accession to the EEUare satisfied, including:

Accession to the Customs Code of the CU and international treaties of the CU member
states regulating customs relations of theCU;

Bringing the customs information technologyand software facilities of the SCS into
compliance with CUcustoms legislation;

Bringing border controls (goods and vehicles crossing points) into compliance with CU
legislation;

Accession to the CU Agreement on Transport (automobile) Control at External Borders
dated 22 June 2011.
The procedures of the agencies involved in foreign trade regulation will be simplified and clientoriented. Activities aimed at decreasing barriers to entry into EU markets will also be carried out.
The second objective aims to reduce the time and costs associated with trade procedures. A first
priority will be to increase the transparency and predictability of procedures and services, while at the
same time ensuring the timely diffusion of information regarding changes to rules and regulations.
This will help reduce the time and cost involved in filing documents and going through procedures. An
important step, to be facilitated through the single window, will be the creation of a centralized system
for document registration and payment.
This objective will be achieved through implementation of the following activities:

Introduction of acentralized system of documents registration and payment of services for
foreign trade transactions via the single window mechanism;

Analysis and re-engineering of the business processes of the bodies involved in regulating
foreign trade, as well as unification and computerization of thoseprocesses;

Standardization and unification of the documents and datarequired for foreign trade
transactions;

Filing an application with the EUfor the Kyrgyz Republictoobtain the status of GSP+
beneficiary.
The final objective will focus on improving logistics services and infrastructure, including encouraging
the establishment of new transport and logistics companies. The next step will be developing the
transport and logistics infrastructure for the purpose of improved exports of goods and services. To
this end, work will be done to upgrade the infrastructure of transport terminals as well as road
networks. Trade and logistics centres will also be created. These centres will be multipurpose,
functioning, for example, as both warehouses and transportation terminals.
This objective will be achieved through implementation of the following activities:
16

Encouraging carriers to improve the quality of transport means used in foreign trade
transactions;

Improvingthe commodity distribution system infrastructure, i.e. transport terminals and
handling of perishable products;

Reviewing legislation and preparinga legal basis for the establishment of trade and
logisticscentres;

Developingan annual plan on road construction and rehabilitation with consideration of
goods and services promotion.
Area of Activity 3:Quality infrastructure support and development
The 91laboratories included onthe register of accredited conformity assessment bodies in
Kyrgyzstanfall into the following categories:


Testing laboratories accredited under International Organization for Standardization/
International Electrotechnical Commission (ISO/IEC) 17025 –86;
Medical testing laboratories accredited under GOST ISO 15189–two;
Calibration laboratories accredited under ISO/IEC 17025–three;
Accredited controlling bodies – 18, of which 17 are diagnostic centres fortechnical
inspection of ground transportation vehicles (under ISO/IEC 17020);
Products and services certification bodies in the Republic–13;

Providers of inter-laboratory comparison programmes –four.



Significant help in establishing and developing a modern quality infrastructure in Kyrgyzstan has been
provided by international development partners. Of the donor initiatives implemented in the country,
the projectReducing Technical Barriers for Trade and Entrepreneurship funded by the WB, GIZ and
the Trade PromotionProgramme in the Kyrgyz Republic Project implemented under the support of the
Swiss State Secretariat for Economic Affairs(SECO),areworth noting.
Adoption of the Law ‘On Fundamentals of Technical Regulation in the Kyrgyz Republic’ contributed to
the reform of the system of voluntary and mandatory requirements for products under the WTO
Agreements on Trade Barriers to Trade and Sanitary and Phytosanitary Measures. As a result, the
Programme of Development ofTechnical Regulations approved by the Government of the Kyrgyz
Republic on an annual basis facilitates the adoption of over 40 new technical regulations.
Pursuant to the Law of the Kyrgyz Republic ‘On the Uniformity of Measurements’, the metrological
system will be brought into compliance with international rules.The current national quality
management system is inefficient, which decreasesthe ability of local SMEsto produce goods and
services which are competitive in foreign markets.
The main constraints in infrastructure development and quality management systems are caused by
the following:

Tests of the main types of products are performed based on outdated standards;

Low awareness on the part of SMEs of theneed to introduce modern quality management
practices;

Insufficient finances for upgrading equipment and trainingspecialists innational testing
laboratories;

Countrywide introduction of Hazard Analysis and Critical Control Points (HACCP)is
hindered by limited finances and misunderstanding of the importance of HACCP by SMEs;

Difficulties in recruiting competent technical experts in conformity assessment;

Low levels of understanding of the role of accreditation and thus lack of belief inthe need
to exclude potential conflicts of interest;
17

A need toreform the inspectionsystem;

The inspectionsystem is largely oriented towards inspection of finished products and
virtually absent with respect to specific types of products;

Lack of food inspectors equipped with relevant basic technological education, including
knowledge of and work experience in food technology, food microbiology, food chemistry
and product manufacturing technologies to performadequate inspectionsunder theHACCP
system.
Withinthe framework of the EDP, the following activities are required to support development of the
national quality management system:

Reducing unjustifiable costs of producers and improvingexport volumes of local goods;

Creating understandable and transparent rules and procedures in the area of technical
regulation and metrology;

Creating an efficient and reliable system of food safety and production methodsfor the
health of theconsumer, sustainability andthe protection of the environment;

Harmonizing the technical regulation system with CU member states in the areas of
metrology and sanitary, phytosanitary and veterinary measures.
The main objectives under this area of activity are defined as follows:

Implementing the roadmap on accession of Kyrgyzstan to the CU in the areas of technical
regulation and application of sanitary, phytosanitary and veterinary measures;

Strengthening the capacity of TSIs to facilitate the access of Kyrgyz goods to international
markets.
The first objective will be achieved through implementation of the following activities.

Activities on accession to:
o
The Agreement on Unified Principles and Rules of Technical Regulation in the
Republic of Belarus, Republic of Kazakhstan and the Russian Federation dated 18
November 2010;
o
The Agreement on Circulation of Products Subject to Mandatory Conformity
Assessment (validation) in the customs territory of the CU dated 11 December
2009;
o
The Agreement on Mutual Recognition of Accreditation of Certification Bodies
(conformity assessment (validation)) and Testing Laboratories (centres) Performing
Conformity Assessment (validation) dated 11 December 2009.

Activities on accession to the CU Agreement on Sanitary Measures dated 11 December
2009.

Activities on accession to the CU Agreement on Veterinary and Sanitary Measures dated
11 December 2009.

Activities on accession to the CU Agreement on Plant Quarantine dated 11 December
2009.
To achieve the second objective the following activities are planned:

Prepare draft acts on introducing changes to the laws ‘On Fundamentals of Technical
Regulation in the Kyrgyz Republic’ and ‘On the Uniformity of Measurements’ stipulating
annual funds allocation ofa minimum of 0.04% of the Republican budget for reference
standards maintenance and membership fees payment;

Prepare documents on accreditation of inspection bodies under ISO/IEC 17020;
18

Attract resources for accreditation bythe internationally recognized accreditation body
forcalibration laboratories for the purpose of international recognition;

Establish a Products Testing Centre on the basis of the accredited conformity assessment
bodies;

Reorganize subordinate testing laboratories into independent conformity assessment
bodies;

Attract resources for strengthening of the capacity of testing laboratories in carrying out
reliable conformity assessment of food productscompliant with international standards,
including sanitary and phytosanitary requirements;

Strengthen SME capacity to improveboth the quality and safety of products and
awareness of theneed for quality control;

Create and maintainan e-database of the existing standards and technical regulations and
regular updates of information on international standards: (1) e-catalogue; (2) e-database
of standards and technical regulations;

Attract technical assistance intraining and consulting services for SMEson the HACCP
food products safety system;

Attract technical assistance for training and consulting services with respect to the
introduction of ISO 9001 or elements thereof by SMEs;

Attract technical assistance for awareness-raising, training and consulting under ISO
14001 for SMEs and state authorities;

Transfer veterinary services and veterinary andsanitary examination to the private sector;

Prepare a draft act amending the Law ‘On Veterinary’to make it compliant with the
requirements of the International Animal Health Code ofthe World Organization for Animal
Health, including creation of aveterinary statutorybody;

Post a list of certified veterinary preparations on the website of the MALR.
Area of Activity 4:Access to finance
Following the survey of companies performed by the European Bank for Reconstruction and
Development (EBRD) and theWB,Business Environment and Enterprise Performance Survey for
2013,the business environment has somewhat improved in Kyrgyzstan. In particular, the share of
businesses that consider that access to finance is a significant or very serious obstacle decreased
from 28% in 2008 to 6% in 2013.
Nevertheless, limited access to finance is one of the major impediments to export development and
trade growth. Despite adecrease inthe interest rates onloans from 25.4% in 2005 to 21.3% in 2013,
this level is still burdensome, especially for SMEs. The share of enterprises who noted that the high
interest rate was the major ground for refusal ofaloan increased from 24% in 2008 to 37% in 2013.
This situation leads to high demand among SMEs forconcessional lending. However, given itslimited
resources the state is not able to allocate substantial funds from the budget. ApproximatelyKGS 3
millionisallocated for the existing programme of concessional lending for farms.
The interest rate haslargely been reduced because of the general status of the economy, competition
in the banking system and lack of trust in financial institutions. These issues will be solved inthe
medium term within the framework of the relevant strategies and programmes. As far as other
possibilities to expand access to finances areconcerned, especially for SMEs, there is a need
forvarious financial mechanisms.
Introduction of Islamic financing services following the Resolution of the Government of the Kyrgyz
Republic ‘On Further Measures to Introduce Islamic Financial Services Industry in the Kyrgyz
Republic under a Pilot Project’ dated 22 April 2014, No. 234 is quite promising. Further development
of the leasing system and guarantee funds will contribute to attract financial resources.
19
A variety of donors are currently administering projects focused on promoting and improving access
to finance in Kyrgyzstan. These projects cover a wide range of issues, from credit assessment and
risk management to regulatory reform. A number of donors also provide direct guarantees or loans to
local financial institutions which are then used for SMEs or trade-related financing services.
The International FinanceCorporation (IFC) implements projects aimed at strengthening the financial
infrastructure and supporting microfinance institutions’ transformation. They are oriented towards
access to finance for individual consumers and SMEs by improving financial infrastructure and the
regulatory environment. ADB and EBRD provide long-term loans for financing local SMEs. GIZ
administers the Promotion of Microfinance in Central Asia project, which works to strengthen the
infrastructure of the microfinance sector.The International Development Association is also involved in
implementing aproject aimed at improving access to finance.
Perception of the taxation regime has improved during the last five years. The share of businesses in
whose opinion the tax rates represent a significant or very serious obstacle decreased from 49% in
2008 to 29% in 2013. This change reflects reforms in tax policy. In 2007 the corporate income tax rate
decreased from 20% to 10%,whilesocial deductions decreased from 19% to 17%. In 2009 a new Tax
Code of the Kyrgyz Republic entered into force, pursuant to which thenumber of separate
taxeswerereduced from 18 to eight and some special tax simplification regimes wereestablished. The
estimated general tax rate for the said period decreased from 61.4% of profit to 33.4%. Rural
commodity producers enjoy tax preferences, in particularwith respect to value added tax (VAT).
Imports of agricultural equipment arealso subject to preferences.
Despite the tendency towards improvement of the situation, tax rates are still a significant obstacle for
business; in particular, sales tax and VAT reimbursement is quite burdensome, especially for
exporters.
The main constraintsin access to finance are caused by the following:

The credit sector is insufficiently developed, thus leading to low levels of competition;

Limited financial products adapted to the SME sector;

Lack of access to the resources of foreign Exim banks;

Limited options for major equipment leasing;

High requirements for collateral and high interest rates make the current tools and loan
options unattractive to borrowers;

The unfavourable investment climate has a negative effect on credit activities in the
financial sector.
Strategic goals and objectives in terms of development of the financial system are formulated in the
Programme of the Kyrgyz Republic of Transition to Sustainable Development for 2013–2017.In
particular, the goal is to createa sustainable and efficient system of financial and credit institutions
capable ofefficiently mobilizing financial resources and meeting the needs of the population and
entrepreneurs forlong-term and accessible loans.
Given the above, the following objectives will be focused on under this area of activity:

Expanding access to exportfinancing mechanisms;

Decreasing the tax burden on exporting companies, especially SMEs.
The firstobjective will be achieved through implementation of the following activities:

Including exporting companies engaged in agricultural processing activities into the project
‘Agriculture Financing 2’;

Ensuring access to information on potential cooperation with foreign Exim banks;

Ensuring access to information on financial and technical assistance of donor countries
and international financial organizations allocated tosupporting business;
20

Introducing an online system of collateral registration;

Further development of guarantee funds;

Use of export credit mechanisms.
To achieve the second objective the following activities will be implemented:

Timely refund and reimbursement of amounts exceeding the VAT on export supplies for
SMEs;

Allocation of a sufficient amount for VAT refunds in the Republican budget and assignment
of these budget expenditures to the category of priority or protected budget expenditure
items, as well as prohibition ofdecreases to the allocated amount.
The activities envisaged under Areas of Activity 1–4 will be implemented pursuant to the Plan of
Activities on Export Development in the Kyrgyz Republic for 2015–2017 (attached).
6.
Resources for plan implementation
For efficient implementation and achievement of the objectives set out in the EDP,resources will be
mobilized both from the state budget and in the form of support frominternational development
partners. Work onimplementation of the activities envisaged in the EDP, development of the
normative and legal framework, and organizational activities will be undertaken by the ministries and
administrative agencies within the budget limits allocated.
At present international development partners participate actively in the following areas of activity:

Education (USAID, WB, ADB, Aga Khan Foundation, EU, GIZ);

Textiles and apparel (USAID, Aga Khan Foundation, GIZ, SECO, German Development
Bank, EU);

Agriculture (USAID, EU, FAO, the Japanese International Cooperation Agency (JICA),
GIZ, SECO);

Tourism (USAID, EBRD, ADB, FAO, EU, GIZ);

Private sector development and microfinance (USAID, EBRD, Embassy of the
Netherlands, SECO, the United Kingdom of Great Britain and Northern Ireland Department
for International Development, IFC, JICA, GIZ);

Business environment (USAID, EBRD, ADB, WB, the United Nations Economic
Commission for Europe, GIZ, SECO, the Swiss International Development Cooperation
Agency, JICA);

Economic development, industry and trade (USAID, ADB, WB, GIZ);

SME financing (ADB, EBRD, IFC).
Pursuant to the Mid-term Budget Forecast for 2014–2016, the priority sectors will be supported
through financing of Public Investment Programme projects. During this period the following projects
will be funded:

The WB Second On-Farm Irrigation Project

International Fund for Agricultural Development Project on Livestock and Market
Development

The WB Second Agricultural Investments and Services Project

The WB Agricultural Productivity Assistance Project.
The German Development Bank Rural Finance Programme Phase I and Phase II will be implemented
in the financial sector.
21
Implementation of the following projects will continue or the following projects will be launched for the
purpose of expansion of inter-regional trade and economic activities:






ADB Project on Bishkek – Naryn –Torugart Road Rehabilitation II – III
IDB/ Saudi Development Fund Project on Bishkek-Naryn-TorugartRoad Rehabilitation II-III
WB National Road Rehabilitation Project (Osh-Isfana)
Bishkek-Torugart Road Rehabilitation (IDB, SFD, Kuwait Fund for Arab Economic
Development, Organization of Petroleum Exporting Countries Fund for International
Development, Asian Development Fund)
WB Financial Sector Development Project
Other projects which will allow meeting the growing demands in passenger and cargo
transportation.
The resources will be mobilized based on communication with donors and development of project
proposals/application aligned with the priorities of the EDP. This approach will contribute to attraction
of resources from various sources, including national resources, foreign aid and private investments,
which will ensure sustainable implementation of theEDP.
7.
Managing implementation of the EDP
The EDPimplementation management system is based on the principles of close cooperation among
all export development stakeholders, including representatives of state bodies, business associations
and the private sector. For more efficient and focused utilization of resources, the coordination
function of the EDPwill be performed by the Council for Business Development and Investments
under the Government of the Kyrgyz Republic (hereinafter ‘the Council’). The MoE willact as the
working body of the Council in terms of coordination of the EDP. The functions of the said working
body will include:

Collection of information on implementation of the EDPand preparation of regular
monitoring reports for submission to the Council;

Evaluation of the efficiency and effectiveness of the EDP;

Ensuring implementation of decisions of the Council;

Assistance in resource mobilization for implementation of the EDP;

Assistance in coordinating the activities of local and international partners under the Trade
Facilitation Initiative and technical assistance programme in the area of trade;

Drafting recommendations on distribution of resources required for the implementation of
the EDP;

Cooperation with national and international development partners andEDPimplementation
initiatives, as well as gathering and analysing information on current and potential partners
and projects.
8.
Expected outcomes of EDP implementation
Implementation of the activities stipulated in the EDPwill allow:

Improved access to trade information;

Improved trade promotion mechanisms;

Reduced time and cost to export;

Improved quality of export-oriented transport and infrastructure;

Strengthened capacity of TSIs to facilitate local exports’ access to international markets;

Expanded access to export finance mechanisms;
22

A decreased tax burden on exporting companies.
Successful implementation of the EDPwill have a substantial impact on the private sector.Notably,
productivity capacity will increase, the cost of doing business will be reduced, and access to finance
will be improved.
23
Plan of activities for export development of the Kyrgyz Republic for 2015–2017
Area of Activity 1: Access to trade information and export promotion
Objective
Indicators
Responsible
entity
Timeframe
MoE
31 December 2017
Responsible
entities
Timeframe
Resources
MoE
31 July 2015
Attraction of
donor aid
31 December 2016
Attraction of
donor aid
 Number of trained specialists
1.1
Enhance access to trade information
 Number of agreements signed
 Number of surveys conducted
Activities
1.1.1
1.1.2
1.1.3
Expected outcomes
Carry out research studies and identify a list 
of problems in the area of trade information 
exchange and dissemination for the purpose
of export transactions
Enhance capacity of TSIs in collecting,
analysing and delivering trade information
Sign agreements on cooperation on export
promotion between the MoE and business
associations
1.1.4
Ensure cooperation with foreign TSIs over
trade information exchange and
dissemination
1.1.5
Conduct marketing surveys on product
promotion of the priority sectors in target
markets (including with consideration of
Kyrgyz Republic accession to the CU)
Report on the studies conducted
Recommendations on solutions to
problems
MoE, MALR,
Ministry of Energy
and Industry (MEI),
Quality of the services provided is improved
Ministry of Culture,
Information and
Tourism (MCIT)
 Partnership relations between the public
and private sector are established in the
area of export promotion
 Regular meetings are conducted (not
less than once a quarter)
 Cooperation agreements are signed with
foreign TSIs
 Availability and updates of the trade
information provided by foreign TSIs
 Reports on the surveys
 Recommendations
31 March 2015
Within budget
allocations
MoE, SWCSE
31 December 2017
SWCSE
31 December 2017
Within budget
allocations
MoE, SWCSE,
ministries and
agencies
31 December 2017
Attraction of
donor aid
24
1.1.6
Develop a unified web portal of TSIs’ trade
information and ensure functioning thereof
 Trade web portal is developed and
operates
Attraction of
donor aid
SWCSE
31 December 2017
 Regular information updates
1.1.7
Create unified web portal of tourist
information and ensure functioning thereof
 Tourist web portal is developed and
operates
31 July 2015
MCIT, Tourism
Department (MCIT)
 Regular information updates
Objective
1.2
Enhance trade promotion mechanisms
Indicators
 Number of trainees who participated
in workshops, including heads of
state institutions, managers of
business entities and nongovernmental organizations
On a continuous
basis
Responsible
entity
Timeframe
MoE
31 December 2017
Responsible
entities
Timeframe
Within budget
allocations
Attraction of
donor aid
Within budget
allocations
 Number of organized participants in
fairs/exhibitions
 Number of organized fairs/exhibitions
Activities
1.2.1
1.2.2
Organize educational workshops on export
promotion, including with consideration of
Kyrgyz Republic accession to the CU, for
representatives of state bodies involved in
foreign trade policy development and
services
Organize educational workshops on export
promotion issues, including with
consideration of Kyrgyz Republic accession
to the CU, for representatives of the private
sector
Expected outcomes
Resources
Quality of foreign trade policy development MoE, MALR, MCIT,
31 December 2017
and services is improved
SCS
Attraction of
donor aid
Exports of enterprises that passed training
are increased
Attraction of
donor aid
MoE, MALR, MEI,
MCIT
31 December 2017
25
1.2.3
1.2.4
1.2.5
Organize educational workshops on
interaction with state bodies about export
promotion, including with consideration of
Kyrgyz Republic accession to the CU, for
employees of business associations
Update (develop) curricula for training of
personnel from the priority sectors
Assist the private sector in organizing and
participating in specialized exhibitions and
fairs
The role of business associations in export
promotion issues is increased
MoE, MALR, MEI,
MCIT
 Sector-specific qualification framework is
developed for priority sectors
Ministry of
Education and
Science (MES),
Ministry of Labour,
Migration and
Youth
MoE, MALR, MEI,
MCIT, Chamber of
Commerce &
Industry
(upon approval)
 Curricula comply with the requirements
of the sector-specific qualification
framework
Promotion of local products in foreign
markets
 The programme is developed
1.2.6
Develop and implement a programme on
creation and development of national and
sectoral brands
 The image of Kyrgyzstan as a country
producing good quality products is
improved
31 December 2017
Attraction of
donor aid
Attraction of
donor aid
31 December 2017
Within budget
allocations
Attraction of
donor aid
31 December 2017
Chamber of
Commerce &
Industry (upon
approval), MoE,
31 December 2017
MALR, MEI, MCIT,
Kyrgyzpatent (State
Intellectual
Property Agency)
Within budget
allocations
Attraction of
donor aid
Within budget
allocations
26
Area of Activity 2: Trade facilitation
Objective
2.1
Implementation of the plan of activities
(‘roadmap’) on accession of the Kyrgyz
Republic to the CU in the areas of
customs administration, information and
communication technologies of the SCS,
checkpoints and transport control points
Activities
2.1.1
2.1.2
Ensure accession to the Customs Code of
the CU and international treaties of the CU
member states regulating customs relations
in the CU
Bring the customs information technologies
and software of the SCS into compliance
with CU customs legislation
2.1.3
Bring checkpoints (goods and transport
vehicle crossing points) into compliance with
CU legislation
2.1.4
Ensure accession to the CU Agreement on
Transport (automobile) Control at External
Borders of the Customs Union dated 22
June 2011
Objective
2.2
2.2.1
Indicators
Responsible entity
Timeframe
MoE
Pursuant to the
roadmap on accession
of the Kyrgyz Republic
to the CU
Expected outcomes
Responsible entities
Timeframe
Relevant normative and legal acts are
adopted
MoE
Within budget
allocations
Data is exchanged pursuant to CU
customs legislation
SCS
Within budget
allocations
Checkpoints are compliant with CU
legislation
SCS, MoE, ministries
and agencies
Transport (automobile) control at the
external borders of the CU is compliant
with CU legislation
Ministry of Transport
and Communications
(MTC), MoE
Indicators
Responsible entities
Timeframe

The share of normative and legal
acts adopted

The share of documents and data
transferred through the
information system

The share of checkpoints
compliant with CU legislation
Pursuant to the
roadmap on accession
of the Kyrgyz Republic
to the CU
Pursuant to the
roadmap on accession
of the Kyrgyz Republic
to the CU
Reduce time and costs of export
Timeand costs of export
MoE
Pursuant to the
roadmap on accession
of the Kyrgyz Republic
to the CU
Activities
Expected outcomes
Responsible entities
Timeframe
Introduce a centralized system of document
execution and payment for services for
foreign trade transactions in all regions of
the country, based on the single window
principle for foreign trade
Single window mechanism for foreign
trade transactions is accessible in all
regions of the country
MoE, SWCSE,
organizations involved
in foreign trade
regulation
Resources
Within budget
allocations
Within budget
allocations
Resources
Within budget
allocations
31 December 2017
Attraction of
donor aid
27
2.2.2
2.2.3
2.2.4
2.3
2.3.1
2.3.2
2.3.3
2.3.4
Analyse and re-engineer business
processes of bodies involved in foreign trade
regulation, and unify and computerize
business processes of the said bodies
Standardize and unify the documents and
data required for foreign trade transactions
Procedures for obtaining documents to
carry out foreign trade transactions are
simplified, unified and automated /
computerized
MoE, SWCSE,
organizations involved
in foreign trade
regulation
MoE, SWCSE, SCS,
The number of documents and data
organizations involved
required for obtaining permits to conduct
in foreign trade
foreign trade transactions is decreased
regulation
1 July 2016
Attraction of
donor aid
Within budget
allocations
1 December 2015
Attraction of
donor aid
Within budget
allocations
File an application with the EU for Kyrgyzstan
to obtain the status of GSP+ beneficiary
Access to EU markets is facilitated
Objective
Indicators
Responsible entity
Improve the quality of export-oriented
transport and infrastructure
Timely and good quality movement of
cargo
MTC
Activity
Expected outcomes
Responsible entity
Improved quality of services rendered by
carriers
MTC
Develop a mechanism to give carriers
incentives to improve the quality of transport
services provided for foreign trade
operations
Adopt measures on improvement of the
commodity distribution network
infrastructure, including transport terminals
and handling of perishable perished
products
Within budget
allocations
MoE
31 August 2015
Attraction of
donor aid
Timeframe
Timeframe
Resources
1 March 2017
Within budget
allocations
Within budget
allocations
Improved quality of cargo transportation
services
MoE, MTC
Plan for creation of trade and logistics
centres
MoE, MTC, MALR,
SCS
31 December 2017
MTC, MoE, MCIT
On a daily basis
Review legislation and draft a legal
framework for the creation of trade and
logistics centres
Ensure preparation of an annual plan of road 
construction and rehabilitation with

consideration of goods and services’ exports
Theplanisapproved
Annual report on implementation of
the plan
1 May 2016
Attraction of
donor aid
Within budget
allocations
Attraction of
donor aid
Within budget
allocations
28
Area of Activity 3: Quality infrastructure support and development
Objective
Indicators

Carry out activities pursuant to the roadmap
on accession of the Kyrgyz Republic to the
CU in the areas of technical regulation and
sanitary, phytosanitary and veterinary
measures
3.1
Activities

Responsible entity
Timeframe
MoE, ministries and
agencies
Pursuant to the
roadmap on
accession of the
Kyrgyz Republic to
the CU of the
Republic of
Belarus, Republic
of Kazakhstan and
the Russian
Federation
Expected outcomes
Responsible entities
Timeframe
Resources
Harmonization of legislation for the
purpose of facilitating access to the
markets of CU member states
MoE
Pursuant to the
roadmap
Within budget
allocations
Harmonization of legislation for the
purpose of facilitating access to the
markets of CU member states
MoE, Ministry of
Health (MoH)
Pursuant to the
roadmap
Within budget
allocations
Fulfillment of the action plan
assuring direct implementation of
the CU technical regulations in the
territory of the Kyrgyz Republic.
Number of employees of state
surveillance and control bodies;
number of employees competent
in certification; and number of
testing laboratories (centres) of
the Kyrgyz Republic, who have
passed the training, including
training in raising expertise
Ensure accession to:
 The Agreement on Common Principles and
Rules of Technical Regulation in the Republic
of Belarus, Republic of Kazakhstan and
Russian Federation dated 18 November 2010

3.1.1

3.1.2
The Agreement on Circulation of Products
Subject to Mandatory Conformity Assessment
(validation) in the customs territory of the CU
dated 11 December 2009
The Agreement on Mutual Recognition of
Accreditation of Certification Bodies
Performing ConformityAssessment
(validation) and Testing Laboratories
(centres) Performing Conformity Assessment
(validation) dated December 11, 2009
Ensure accession to the CU Agreement on
Sanitary Measures dated 11 December 2009
29
3.1.3
Ensure accession to the CU Agreement on
veterinary and sanitary measures dated 11
December 2009
3.1.4
Ensure accession to the CU Agreement on Plant
Quarantine dated 11 December 2009
MoE, MoH, MALR,
Harmonization of the legislation for the State Inspectorate for
purpose of facilitating access to the
Veterinary
markets of the CU member states
&Phytosanitary Safety
(SIVPhS)
Harmonization of legislation for the
purpose of facilitating access to the
MoE, MALR, SIVPhS
markets of CU member states
Within budget
allocations
Pursuant to the
roadmap
Within budget
allocations
Objective
Indicator
Strengthen the capacity of trade promotion
organizations to facilitate the entry of Kyrgyz
exports into international markets
Annual budget funding
Activities
Expected outcomes
Responsible entities
Timeframe
Resources
3.2.1
Develop draft acts on introducing changes to the
laws of the Kyrgyz Republic ‘On Fundamentals of
Technical Regulation in the Kyrgyz Republic’ and
‘On Unity of Measurements’ stipulating annual
allocation of budget funds in the amount of not
less than 0.04% of the Republican budget
Develop draft
MoE, Ministry of
Finance (MoF)
31 December 2015
Within budget
allocations
3.2.2
Develop a set of documents on accreditation
procedures of inspection bodies under ISO/IEC
17020
Kyrgyz Accreditation Centre order
approving the procedures
Kyrgyz Accreditation
Centre
31 December 2015
Within budget
allocations
MoE, Centre for
Standardization and
Metrology
On a continuous
basis
Attraction of
donor aid
The Products Testing Centre is
established
MoE, Centre for
Standardization and
Metrology
31 December 2015
Within budget
allocations
Testing laboratories are reorganized
MoE, MoH, MALR,
SIVPhS
31 December 2015
Within budget
allocations
3.2

3.2.3

Attract resources for accreditation of
calibration laboratories by an internationally
recognized body to achieve international
recognition of measurements
Number of accredited laboratories
Attract technical assistance for training and
consulting services on calibration of
measuring devices for enterprises
Number of enterprises which pass the
training and introduce calibration of
measuring devices
3.2.4
Establish a corporate Products Testing Centre on
the basis of the accredited conformity
assessment bodies
3.2.5
Reorganize subordinate testing laboratories into
independent conformity assessment bodies
Responsible entity
Pursuant to the
roadmap
MoE
Timeframe
31 December 2017
30
3.2.6
3.2.7
3.2.8
Attract resources to enhance the capacity of
testing laboratories to ensure full-scale conformity
assessment of food products with international
standards, including sanitary and phytosanitary
requirements
Attract resources to strengthen SME capacity in
improving the quality and safety of products and
raise awareness of the need for quality control
Develop and maintain an e-database of standards
and technical regulations and regularly update the
information on international and other standards:
1. e-catalogue
2. e-database of standards and technical
regulations
3.2.9
Attract technical assistance for training and
consulting services on HACCP for enterprises
3.2.10
Attract technical assistance for training and
consulting services on ISO 9001 and/or parts
thereof at enterprises
3.2.11
3.2.12
3.2.13
3.2.14
Attract technical assistance for improved
awareness of, training and consulting on ISO
14001 for enterprises and state bodies
Adopt normative and legal acts on transfer of
veterinary services and veterinary and sanitary
examination functions to the private sector
Develop a draft act on introducing changes to the
Law of the Kyrgyz Republic ‘On Veterinary’ to
comply with the requirements of the World
Organization for Animal Health
Post a list of certified veterinary preparations on
the MALR website
Agreements on assistance are signed
MoE, MALR, MoH
On a continuous
basis
Attraction of
donor aid
Agreements on assistance are signed
MoE, MALR, MoH
On a continuous
basis
Attraction of
donor aid
Economic entities have access to the
database
Centre for
Standardization and
Metrology
31 December 2015
Attraction of
donor aid
30 June 2016
Number of enterprises that passed
training and introduced HACCP
Number of enterprises that pass training
and introduce quality management
systems and enviromnet management
systems
Number of enterprises and state bodies
trained
MoE, MALR, MoH
On a continuous
basis
Attraction of
donor aid
MoE, MEI
On a continuous
basis
Attraction of
donor aid
On a continuous
basis
Attraction of
donor aid
MoE
Veterinary services and veterinary and
sanitary examination functions are
transferred to the private sector
MALR, MoE, SIVPhS
31 December 2015
Within budget
allocations
Draft law is approved
MALR, SIVPhS
31 December 2015
Within budget
allocations
Access to the information is provided
MALR, Centre for
Veterinary Preparation
Certification, SIVPhS
On a continuous
basis
Within budget
allocations
31
Area of Activity 4: Access to finance
4.1
4.1.1
4.1.2
4.1.3
4.1.4
Objective
Indicators
Responsible entity
Timeframe
Expand access to export finance
mechanisms
Number of new export finance
mechanisms
Office of the
Government of the
Kyrgyz Republic
31 December 2017
Activities
Expected outcomes
Responsible entities
Timeframe
Resources
Agroprocessing exporters are included in
the Project
MoE, MALR, MoF
31 December 2015
Within budget
allocations
The information is posted on the websites
of MoE and SWCSE
MoE, SWCSE
On a continuous
basis
Within budget
allocations
The information is posted on the websites
of MoE and SWCSE
MoE, SWCSE
On a continuous
basis
Within budget
allocations
31 December 2015
Within budget
allocations
Include exporters operating in the
agroprocessing sector in the Agriculture
Financing 3 Project
Provide access to information on
potential cooperation with foreign Exim
banks
Provide broad access to information
about the financial and technical
assistance provided for business support
by donor countries and international
financial organizations
Draft normative and legal acts on
introducing an online collateral
registration system
4.1.5
Adopt measures on further development
of guarantee funds
4.1.6
Develop proposals on the use of export
credit mechanisms
1. The normative and legal acts are
adopted
2. The collateral registration system is
introduced and used online
Ministry of Justice,
State Registration
Service
31 December 2017
Measures on development of guarantee
funds are undertaken
MoE, State Agency
for Local SelfGovernance Affairs
and Inter-Ethnic
Relations,
local self-government
bodies (upon
approval)
31 September 2015
Proposals on the use of export credit
mechanisms are developed
MoE
31 July 2015
Attraction of donor
aid
Within budget
allocations
Voluntary charity
and contributions,
grants
Within budget
allocations
32
Objective
4.2
Reduce the tax burden on exporters
Activities
4.2.1
4.2.2
Ensure timely refund and reimbursement
of VAT excess on export supplies for
SMEs
Develop draft normative and legal acts
on introducing changes and additions to
relevant legislation for the purpose of:
1. Allocation of sufficient funds in the
state budget for VAT refunds
2. Assigning this budget expenditure
item to the category of priority or
protected item and prohibit
reduction of the allocated amount of
funds
Indicators
Responsible entity
Timeframe
The share of tax payments in revenues
MoE
31 December 2017
Expected outcomes
Responsible entities
Timeframe
Resources
The requirements of VAT excess refund
and reimbursement are fulfilled
MoF, State Tax
Service
On a continuous
basis
Within budget
allocations
Draft normative and legal acts are
developed
MoE, MoF
30 June 2016
Within budget
allocations
33