The OECD, together with the EU, and the governments of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, held a Ministerial webinar on 23 September 2020. The event was an opportunity to discuss an OECD report analysing the legal environment for business in Central Asia and identifying key long-term reform priorities supporting private sector development. The webinar was organised within the framework of the Policy Component of the EU Central Asia Invest (CAI) initiative.
The webinar was opened by H.E. Ambassador Peter Burian, EU Special Representative for Central Asia, and Mr Andreas Schaal, Director of OECD Global Relations. They stressed the successful engagement of the OECD as part of the EU CAI with the region. Longer-term reforms aimed at improving the legal environment for business are arguably more important than ever, as post-COVID recovery calls for renewed efforts to attract investors’ confidence, support SMEs in their operations and enhance regional trade integration.
The first ministerial panel discussed the state of the general investment and trade framework in Central Asia. Mr Stephen Thomsen (OECD), provided an overview of the investment challenges in Central Asia and presented the OECD FDI Regulatory Restrictiveness Index. While Central Asia countries fare better than the non-OECD average in the index, significant obstacles remain, owing to often poor implementation of regulatory reforms, the lack of confidence in the court system, and the perceived weakness of both land legislation and the protection of intellectual property rights.
Mr Sardor Umurzakov, Deputy Prime Minister for Investments and Foreign Economic Relations and Minister of Investments and Foreign Trade of Uzbekistan, introduced his country’s reforms for economic openness. The introduction of the new Law on Investment, improvements in the tax code, and the lifting on exchange rate restrictions contributed to easing the environment for businesses and enhancing trade and investment attractiveness.
Mr Bakhyt Sultanov, Kazakhstan’s Minister of Trade and Integration, provided an overview of his country’s efforts regarding connectivity and trade integration in Central Asia, with special emphasis on the creation of regional value chains. Mr Farruh Hamralizoda, Chairman of the State Committee for Investment and State Property Management of Tajikistan, commented the key reform priorities identified by the OECD, in particular those related to international arbitration. Mr Manas Sarymsakov, Deputy Minister of Justice of Kyrgyzstan, discussed his country’s efforts regarding the improvement of dispute settlement, the de facto implementation of legislation and the digitalisation efforts to ease the operation of businesses. Professor Beata Javorcik, Chief Economist of the EBRD, concluded the panel by stressing the benefits of diversifying the sources of FDI to strengthen the resilience of economies, using investment promotion policies. Stabilising the regulatory framework will also help strengthen investor’s confidence, and promoting regional trade can enhance Central Asia’s global trade integration.
The second ministerial panel analysed the legal and operational environment for domestic businesses and entrepreneurs in Central Asia. Mr Luke Mackle (OECD) opened the panel discussion with an overview of challenges facing local firms in Central Asia, stressing that regulatory implementation remains weak, which creates an unpredictable and complicated operational environment for small firms.
Mr Muhammetgeldy Serdarov, Minister of Finance and Economy of Turkmenistan, provided an overview of recent reforms aimed at providing business and public services online through unified digital platforms, in particular for business registration. Mr Sanjar Mukhanbetov, Minister of Economy of Kyrgyzstan, discussed his government’s efforts to provide businesses with digital services, in particular through the provision of all government services under one portal, and the development of specific one-stop-shops. Ms Nigina Alizoda, First Deputy Minister of Justice of Tajikistan, provided an overview of her government’s efforts to involve businesses in the drafting and discussion of business-related legislation through public-private dialogue platforms and consultations. Mr Ruslanbek Davletov, Minister of Justice of Uzbekistan, discussed the simplification of administrative procedures for new and small businesses. Uzbekistan is currently streamlining the regulatory environment for businesses, bringing them together into a single code. Ms Akerke Akhmetova, Vice-Minister of Justice of Kazakhstan, discussed current initiatives to improve the protection of property rights and intellectual property rights of businesses. Regarding dispute settlement in particular, several reforms have been carried out to improve the arbitration framework. The panel was concluded by Ms Lilia Burunciuc, Regional Director for Central Asia at the World Bank, who emphasised the need to use the crisis as an opportunity for in-depth economic reform, such as opening up new sectors, to support economic resilience and job creation.
Closing the event, Ambassador Sven-Olov Carlsson, Head of the EU Delegation to Kazakhstan praised the quality of the EU-OECD cooperation with Central Asia. Building a more resilient economy will require to strengthen the private sector across the region, which is at the core of the EU Central Asia Initiative. Going forward, the OECD and the EU will provide targeted advice on what matters the most – implementation.