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Kyrgyzstan|business|April 3, 2014 / 01:04 PM
Business climate improved in Kyrgyzstan, but corruption remains key problem – study

AKIPRESS.COM - corruption According to the Kyrgyz Republic’s firms, the country’s business climate has significantly improved since 2008, but corruption remains one of the key obstacles in doing business, says the 2013 Business Environment and Enterprise Performance Survey (BEEPS), launched in Bishkek on April 2.

A joint initiative of the European Bank for Reconstruction and Development and the World Bank Group, the 2012/2013 round of BEEPS surveyed 270 firms in all six regions of the Kyrgyz Republic to measure their perceptions and experiences on a broad range of issues concerning the business environment in the country: regulations and red tape, taxation, unofficial payments and corruption, labor and workforce development, access to financing, courts in legal system, infrastructure.

Overall, the 2013 BEEPS results suggest that firms’ perceptions of various aspects of the business climate in the Kyrgyz Republic have improved since 2008. For all but two of the 16 potential obstacles to doing business tracked by BEEPS (corruption and political instability), the share of Kyrgyz firms reporting that these issues are not a problem has increased. The areas showing the greatest improvement are “Electricity” (from 11 percent of respondents reporting electricity not being a problem in 2008 to 35 percent in 2013), “Courts” (from 40 percent reporting it was not a problem in 2008 to 87 percent in 2013), “Crime, theft, and disorder” (from 24 to 51 percent), “Tax administration” (from 22 to 48 percent), and “Practices of informal economy competitors” (from 22 to 43 percent reporting this not being a problem in 2008 and 2013, respectively). The least improved areas in absolute terms were “Tax rates”, “Skills and education of workers”, “Transport”, and “Customs and trade regulations”.

Nevertheless, some old problems persist and new problems have emerged. Corruption remains the second worst obstacle and percentage of firms seeing it as an obstacle has increased between 2008 and 2013. Tax rates remained the third worst obstacle. Political instability now tops the ranking as the most severe obstacle in 2013 compared to 4th place in 2008 – in 2013 only 4 percent of the firms did not see it as an obstacle, compared to 22 percent in 2008 – reflecting the significant changes taking place from 2010. Skills and education of labor moved from the 10th to 4th worst obstacle.

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