Kyrgyz Republic
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KYRGYZ REPUBLIC Issue 1, April 2015 The USAID Business NEWSLETTER Growth Initiative (BGI) VALUE CHAINS APPAREL SECTOR COURTS RUSSIAN Dignitaries from both the Kyrgyz Republic and the United States attend BGI’s launch. Right FASHION RETAILERS to left: Mr. Valeriy Dil, Vice Prime Minister of the Kyrgyz Republic; Mr. Dan Rosenblum, Page 3 Deputy Assistant Secretary, US Department of State; Ms. Pamela Spratlen, US Ambassador to the Kyrgyz Republic; Mr. Michael Greene, USAID Mission Director; and Mr. Paul Hamlin, USAID Senior Economic Development Advisor. USAID LAUNCHES BGI PROJECT WHILE COMMEMORATING REFORMA ACHIEVEMENTS On October 14, 2014, USAID of- the Civil Aviation Agency were among ficially launched the Business Growth the 30 partners from government, the Initiative (BGI), a four-year, multi-fac- business community and civil society eted economic development project who commented on REFORMA’s con- BUSINESS designed to strengthen the competi- tributions in strengthening the busi- ENVIRONMENT tiveness of Kyrgyzstan’s apparel, tour- ness and investment climate since the ism and construction materials value project’s launch in October 2011. CABINET OF MINISTERS chains and improve the overall busi- ness enabling environment. “I would like to acknowledge the APPROVES MINING high quality work of the project. There STRATEGY More than 100 counterparts from was clear identification of priorities that Page 7 the Government of the Kyrgyz Repub- we jointly discussed to improve the lic, business associations, local imple- business environment and investment menting partners and other stake- climate. I would also like to emphasize holders attended the half-day session the high level of professionalism of that introduced BGI’s objectives and the project team, and specifically, the acknowledged the closing of USAID’s project’s timely responsiveness to our business environment improvement requests for assistance. We have had project, REFORMA. a good relationship with the REFOR- After opening remarks from Vice MA Project and would like to express Prime Minister Valeriy Dil and visiting gratitude for the work done,” the Prime HUMAN CAPITAL US Department of State Deputy As- Minister said. sistant Secretary Dan Rosenblum, the In the video, USAID Mission Di- BGI SEEKS TO IMPROVE agenda featured a 10-minute video rector Michael Greene said, “The US WORKER SKILLS entitled, REFORMA Through the Eyes Agency for International Develop- of Our Partners. THROUGH EDUCATION ment (USAID) is delighted with the ALIGNED WITH SECTOR In the video, Prime Minister work done by the REFORMA Project DEMAND Page 10 Joomart Otorbaev, Minister of Econ- over the last years, mostly because omy Temir Sariev, and Directors of REFORMA assisted in achieving the both the State Geology Agency and goals outlined by the Government.The REFORMA approach, based on build- ing a partnership between the Govern- ment and private sector, worked out policy directions that were supported by both sides. Such a process ensures sustainability of reforms, and I think this approach will be acknowledged through the adoption of long-term pro- grams and policies.” Mr. Greene at- tended the launch event accompanied by US Ambassador to the Kyrgyz Re- public, Pamela Spratlen. While the first half of the program featured presentations by counterparts USAID Mission Director Michael Greene presents awards of appreciation to REFORMA’s highlighting REFORMA’s achieve- local implementing partners. Mr. Valentin Bogdetsky accepts the award for the Kyrgyz ments in mining strategy development, Mining Association. VAT administrative reforms, aviation In introducing BGI to stakeholders, finance for small firms and build stron- safety initiatives, and institutional and USAID Senior Economic Development ger relationships between educational human capacity development of gov- Advisor Paul Hamlin said the project institutions and value chain firms to ernment agencies, the second half will work with individual firms and sec- improve workforce and management outlined BGI’s future activities. BGI tor stakeholders in the selected value skills. will continue the business environment chains to improve productivity, prod- initiatives launched by REFORMA, but uct offerings, branding, input sourcing, In the following pages, this news the project will focus primarily on build- new market access, quality control, fi- bulletin highlights initial activities BGI ing and strengthening the competitive- nancial management, and other critical has pursued since its October launch. ness of Kyrgyz firms and value chains components of internationally competi- BGI will highlight expanded activities in to promote business growth, job cre- tive value chains. It will introduce ac- its quarterly bulletin throughout its proj- ation and economic development. tivities to improve access to long-term ect life, ending in June 2018. BUSINESS LEADERS DISCUSS ECONOMIC CHALLENGES WITH VISITING USAID EXECUTIVE On December 8, BGI hosted a round table meeting with representa- tives of the business community to discuss their outlook on Kyrgyz eco- nomic development with USAID As- sociate Administrator Mark Feierstein. The session introduced Mr. Feierstein to the challenges and opportunities for Kyrgyz businesses in the current economic environment, particularly in light of the Kyrgyz Republic’s imminent accession to the Eurasian Economic Union (EEU). Representing the Kyrgyz business community were Mr. Emil Umataliev, Senior USAID official, Associate Administrator Mark Feierstein (second from left) visits devel- President of Kyrgyz Concept, Mr. Ak- opment projects in the Kyrgyz Republic, including BGI. tilek Tungatarov, Executive Director of the International Business Council the business environment, they stated Regional Trade Advisor to ATAR, a (IBC), Mr. Uluk Kydyrbaev, CEO of that many challenges remain in the ar- USAID project that seeks greater trade the Chamber of Tax Consultants and eas of tax, inspections, trade and prop- integration of Afghanistan with Central Chairman of the think-tank BizExpert, erty rights, among others. Asian countries. and Mr. Kuban Ashyrkulov, Adviser to the President of the Central-Asian Cor- USAID Mission Director in the Kyr- Associate Administrator Feierstein poration. Participants discussed the gyz Republic, Mr. Michael Greene, also is the third most senior executive of took part in the meeting with several challenges and advantages that EEU USAID in Washington, DC, and the membership will bring to Kyrgyzstan. members of his USAID Economic De- highest ranking USAID official ever to One participant noted that the eco- velopment staff and representatives of nomic landscape is rapidly changing the U.S. Embassy. Trade Specialist Mr. come to the Kyrgyz Republic. His visit so the ultimate impact of joining the Farhat Y. Farhat provided background demonstrates the U.S. Government’s customs union is currently unclear. Al- information on the genesis of the EEU interest in continuing to support growth though they observed that the Govern- and its predecessor, the Eurasian and development of the only parlia- ment has shown commitment to reform Customs Union. Mr. Farhat serves as mentary democracy in Central Asia. 2 The USAID Business Growth Initiative (BGI) Project KYRGYZ APPAREL SECTOR COURTS RUSSIAN FASHION RETAILERS On February 18, BGI hosted a pre- term health of Kyrgyzstan’s textile/ap- sentation of the production capabilities parel sector, currently experiencing of the Kyrgyz apparel industry to Rus- falling sales after nearly 10 years of sian retailers in a business-to-business rapid growth. The meeting highlighted (B2B) meeting conducted in associa- the production demands of Russian tion with the Russian Tekstilegprom retail buyers, which Kyrgyz producers apparel exhibition in Moscow. will need to meet to compete in this market segment. This was the first time that Kyrgyz producers engaged a captive audi- An immediate result of the pre- ence of 24 Russian retail brands and sentation was that two Russian retail- designers’ studios, most of which had ers provided BGI with detailed buying Ms. Larisa Popkova, Director of Larisa never previously contracted with Kyr- specifications while two Kyrgyz firms Fashions, outlines Kyrgyzstan’s advantag- gyz apparel makers. The presentation reported that serious discussions are es in product sourcing to representatives of highlighted Kyrgyz advantages in flex- underway with three other significant Russian retail brands. ible product development and produc- brands. The following week, BGI fa- tion capabilities, lower logistics costs cilitated the first purchase mission of way they do business and adjust to and shorter lead times than many in- a sizable Russian apparel chain to the the demands of large-volume buyers ternational mass-market competitors. Kyrgyz Republic and is now negotiat- to conclude supply contracts with this Feedback also revealed that joining ing contracts with two Kyrgyz firms. A new market segment. CHAINS VALUE the Eurasian Economic Union could smaller, but more upscale retailer visit- offer immediate price advantages for ed Kyrgyzstan in mid-March also keen In the long run, however, Russian Kyrgyz apparel producers who sell to to find sources of previously untapped retail chains may be the most prom- retailers within the economic bloc, de- supply. ising target for Kyrgyz apparel firms, spite widespread fears that tariff hikes who have found that traditional bazaar But terms may be difficult for Kyr- on Chinese fabrics would destroy Kyr- gyz manufacturers to meet.