Eurasia Division in the OECD


On September 23, the Eurasia Division in the OECD "Promoting economic recovery and sustainability" held a webinar on "Improving the legal environment for entrepreneurship in Central Asian countries".

The webinar was attended by 156 participants: Ministers and representatives of the highest political leadership of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, responsible for development and implementation of measures to improve the legal environment of entrepreneurship; representatives of OECD member countries, international experts and specialists, representatives of project partners, EU and OECD officials.

Kazakhstan's Minister of Trade and Integration Bakhyt Sultanov, Vice-Minister of Justice Akerke Akhmetova, and representatives of Economic Research Institute JSC took part in the video-conference.

The agenda of the meeting discussed: 

- General conditions for investment and trade
- Legal environment and conditions of domestic business entities activity

Moderator of the webinar, the Head of the Eurasia Division in the OECD William Thompson noted:

Central Asian countries have implemented good reforms to create a favorable business climate. However, the general trend indicates ineffective law enforcement practices. 

General investment and trading conditions

According to the FDI Regulatory Restrictiveness Index in Central Asian countries, compared to the OECD, restrictions are concentrated in such sectors as agriculture and forestry, mass media, finance and business services.

At that, Uzbekistan is closest to the OECD member countries in terms of the FDI Regulatory Restrictiveness Index.

The main restrictions on attracting FDI in Central Asia are:
- remote location and small sales market;
- significant role and presence of state-owned enterprises;
- distrust of the judicial system in resolving disputes;
- imperfect land legislation;
- low protection of intellectual property rights.

Legal environment and conditions of business entities activity  

Representatives of Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan shared their experience in creating favorable business and investment conditions. A common trend in all countries is the introduction of electronic document management and digitalization of public services for business. 

Deputy Prime Minister for Investment and Foreign Economic Relations, Minister of Investment and Foreign Trade of the Republic of Uzbekistan Sardor Umurzakov noted:

over the past 3 years, the country has been implementing policies aimed at reducing export controls, reducing and simplifying taxation, developing an arbitration court, creating stable and competitive business models, as well as creating conditions for legal entrepreneurship and investment policies aimed at technological explosions.

Tajikistan has created a one-stop shop for businesses that provides services for registering legal entities, registering property, connecting to electricity and other communications. In order to develop entrepreneurship, a consultative Council has been functioning under the President of Tajikistan since 2016.

The Minister of Finance and Economy of Turkmenistan Muhammetgeldi Serdarow said: 

currently, work is underway to simplify the procedures for registering enterprises and you can pass the state registration of enterprises and investment projects on the website of the Ministry of Justice.

In Kyrgyzstan, the Tunduk one-stop shop has been created, in which 53 state bodies are integrated. Currently, 92% of enterprises and government agencies use electronic invoices, cash registers, and labeling. 

According to the first Deputy Minister of Justice of Tajikistan Nigina Alizoda:

one of the innovations in business regulation is the introduction of regulatory impact analysis, the main purpose of which is to determine and assess the socio-economic consequences of draft laws being developed. In this process, any business entity can express its point of view, which is taken into account when making a final resolution on the draft law.   

In Kazakhstan, according to the Minister of Trade and Integration Bakhyt Sultanov, 

the economy during the crisis is reoriented to self-sufficiency in food products, which is implemented through the distribution system. In the future, this system will be integrated into a regional Hub with the participation of Central Asian countries. 

At the same time, new export and import standards were introduced in Kazakhstan, which simplified customs procedures to 20 minutes. In March 2019, Kazakhstan introduced a one-stop shop system for exports and is working to improve the Customs Code.

Vice-Minister of Justice of Kazakhstan Akerke Akhmetova noted that the Department is constantly working to improve legislation in the area of intellectual property, enforcement proceedings, simplification of registration procedures for legal entities and registration of immovable property rights. 

In June 2018, the Law was signed aimed at improving legislation in the area of intellectual property. The Law created a single-level system for registration of intellectual property objects, shortened the terms of expert and registration procedures. It also eliminates the need to verify the identity of applicants, since information is available from the Government Databases "Individuals" and "Legal Entities" through appropriate integration. 

Currently, work is underway to ratify two regional agreements: the Protocol on the Protection of Industrial Designs to the Eurasian Patent Convention dated September 9, 1994 and the treaty on trademarks, service marks and appellations of origin of the EAEU goods.

To improve Kazakhstan's position in the World Bank's Doing Business Rating, work is underway to reduce the time and financial costs of executing a judicial act where the parties are business representatives.

At the end of the webinar, Ambassador Sven-Olov Carlsson, the Head of the EU Delegation to the Republic of Kazakhstan, outlined the priorities for reforming the business climate for Central Asian countries, focusing on the operating environment for SMEs, contract execution, legal framework for investment and taxation. In particular, in relation to Kazakhstan, it is recommended:

- consistent and thorough implementation of the new code for entrepreneurs;
- improving dispute regulation for firms of all dimensions;
- trade facilitation and improved cooperation between agencies involved in export procedures.

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Saved: 25.09.2020

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