Kyrgyz Republic - Policy handbooks

 

Recommendations to boost competitiveness in the Kyrgyz agribusiness and apparel sectors are summarised by three OECD Policy Handbooks, released at an event in Bishkek, Kyrgyz Republic. The recommendations focus on access to finance, workforce skills development, and investment promotion, focusing on two key sectors of the Kyrgyz economy. The Handbooks are published by a project with European Union funding and implementation by the OECD, in partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

 

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Expanding the garment industry in the Kyrgyz Republic

There is a long history of garment manufacturing in the Kyrgyz Republic. Within the highly competitive current economic landscape, the Kyrgyz garment manufacturing industry has re-invented itself, growing six-fold in eight years. The Kyrgyz garment industry faces however important challenges. In particular, further development is hampered by a lack of trained workers. Key recommendations include:

 Create co-operatives and improve industry organisation

Trade promotion should scaled up and investment promotion overhauled

Foster access to better equipment

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Improving skills through public-private partnerships: The case of agribusiness

Despite its predominant role in the Kyrgyz economy, labour productivity in the
agribusiness sector remains low. The issue is particularly important for the Kyrgyz Republic in view of the scarcity of arable land in the country. Reasons for low labour productivity include outdated technology and equipment, a lack of qualified workers, and a persistent disparity between the demand and supply of skills. International experience suggests that public-private partnerships (PPPs) in education can help bridge the skills gap. The report recommends to:

Create and maintain a formalised relationship between educational institutions and companies

Ensure that students are efficiently matched with training places

Revitalise the agribusiness sector's image

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Improving supply-chain financing: The case of agriculture

Despite the tremendous growth of credit to the agricultural sector from both banks and microfinance organisations, the cost of credit remains high, especially for small agricultural farms. Banks in the Kyrgyz Republic are reluctant to provide credit to farms due to a number of risks associated with agricultural activity. Key recommendations include:

While the regulatory environment for warehouse receipt financing is in place, but provisions on warehouse receipts need to be established

Consistent sources of information on agricultural production and prices in the Kyrgyz Republic need to be established

Improve engagement of the banking sector