Corruption and unpredictability of government - main problems for investors in Kyrgyzstan

Corruption and unpredictability of government are the main problems for foreign investors in Kyrgyzstan. Manager of the project "Improvement of the investment climate" of the International Finance Corporation Sergey Osavolyuk voiced the data on the results of a study today.

According to him, among the most important reasons for starting a business in Kyrgyzstan the investors named size of domestic market, ease of registration and getting a license, business-oriented legislation. At the same time, investors practically do not pay attention to the various benefits that the state presents. Therewith, according to the law, business registration procedure takes a little time, but the reality is different. In addition, 20 percent of investors admitted that they have made unofficial payments.

"Not all investors confess to making unofficial payments. Most often, they prefer not to disclose this information. But even 20 percent is an alarming figure. It shows that the legislation in Kyrgyzstan is poorly implemented into life," Sergey Osavolyuk told.

Another 80 percent of investors admitted that the largest barriers to doing business in the Kyrgyz Republic are corruption, low transparency and unpredictability of government actions. At the same time, 43 percent of investors called the corruption factor extremely important. Another 41.6 percent called unpredictable actions of the Cabinet the most important barrier to the business. In addition, 62 percent of foreigners consider the level of public order and security in the country as problematic and other 40 percent worry about the risk of expropriation. Other 39 percent complain of discrimination against foreign investors.

"Our survey found out that 41 percent of investors reduced their investments in the Kyrgyz Republic because of the actions of government agencies. However, only 34 percent of them mentioned unprofitableness as the reason for the closure of business, while the main part of them refer to corruption (33 percent) and low transparency of actions of government agencies (24 percent), " the expert added.