kyrgyz republic - competitiveness recommendations

CENTRAL ASIA INITIATIVE

INVESTMENT AND COMPETITIVENESSIN CENTRAL ASIAFocus on the Kyrgyz Republic

Peer Review at OECD Eurasia Competitiveness RoundtableParis, 4 December 2013 With the financial assistance

of the European Union

http://en.wikipedia.org/wiki/File:Flag_of_Europe.svg

OECD Private Sector Development 2

The Kyrgyz Republic in the peer review process OECD members to comment on current policies and action plans for reform

Project Steering CommitteeKyrgyz Republic

Eurasia Competitiveness Roundtable

2. OECD

revieweron Access

to Finance

Country work on

1. Human Capital2. Access to

Finance3. Investment and

trade promotion for SMEs

1. OECDreviewer

on Human

Capital

3. OECD

reviewer

on Investment and

Trade Promotion

Kyrgyz Republic

Presentation of the country work to OECD peers

March-November 2013 3-4 December 2013, OECD Headquarters in Paris

The peer review process is expected to stimulate the policy reforms implementation

in the Kyrgyz Republic

Korea

TurkeyGermany


Project results to be peer reviewed include a policy assessment and action plans for reform in skills, access to finance and internationalisation of SMEs

Access to Finance for SMEs

Human capital development

Investment and trade promotion for

SMEs

Assessment of 3 policies for

competitiveness

Action plans for3 targeted competitiveness

reforms

How to set up warehouse receipts financing for

agricultural producers?

How to improve workplace training schemes in agribusiness ?

How to help textile and garment producers to move up the value-

chain?

1

2

3

OECD, GIZ and public-private working groups to support the on-going work, with

in-depth involvement of civil society and business associations

A B


OECD peer review methodology 34 policy indicators have been assessed across three major policy areas

Dimensions Sub-dimensions1 Access to finance for SMEs

Sub-Dimensions

1.1 Legal and regulatory framework

1.2 Sources of external finance

5.3 ACAAs

Sub-dimensions Indicators1.1 Sources of external finance for SMEs

Indicators

1.2.1 Credit guarantee schemes

Indicators Level of Reform

Indicators

1 2 3 4 5

Credit guarantee schemes

Public start-up funding

Supply-chain financing

Assessment of three policy areas to define priorities for reform implementation

1. Access to Finance for SMEs• Legal and regulatory framework

• Sources of external finance

• Financial literacy

2. Skills development• Education policy framework for business

needs

• Tools and public-private partnerships to promote skills for jobs

3. Investment and export promotion• Strategy and institutions

• Investment and export promotion tools

Each policy indicator is assigned a score ranging from 1 to 5 to measure the level of policy development and monitor progress in implementation over time


What are the major policy challenges in access to finance for SMEs in the Kyrgyz Republic and how to implement

reforms?

1

OECD Private Sector Development 6CONFIDENTIAL – NOT FOR DISTRIBUTION

Access to finance for SMEs in the Kyrgyz Republic - status quo analysis

Source : BEEPS, 2009, World Bank, National Bank of Kyrgyzstan

• 27.9% of firms identify access to finance as a major constraint to doing business

• 85.1% of loans in the Kyrgyz Republic require collateral

• The average amount of collateral required for a loan in the Kyrgyz Republic is 127.8%

• Only 17.9% of firms use bank financing

• Real interest rates for bank loans to agricultural sector averaged 15% from 2007 onwards

• 43.8 % of loans from microfinance institutions and credit unions were given to agricultural producers in 2011

Key facts and figures

Commercial Banks66%

Credit Unions3%

Microfinance Institutions

31%

Loan portfolio of Kyrgyz financial institutions, 2011

0

50

100

150

200

OECD aver-age**, 157%

Domestic credit to private sector (% of GDP)

12.4%

Source: World Bank, 2013, World Development Indicators; National Bank of the Kyrgyz Republic statistics** For the OECD average data for following countries was used: Australia, Canada, Chile, Czech Republic, Estonia, Hungary, Iceland, Israel, Italy, Japan, Mexico, Netherlands, New Zealand, Switzerland, United kingdom, United States

Acce

ss to

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SMEs

Skill

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Inve

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rt p

rom

otion

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-10

0

10

20

30

2.8

19.3

%

Real interest rates for bank loans to agriculture

Annual avg. inflation

Real interest rates for bank loans to

agriculture


Assessment framework to evaluate access to finance for SMEs in the Kyrgyz Republic

Access to finance

Legal and regulatoryframework

Sources of externalfinance

Other factors affecting demand and supply

• Cadastre

• Collateral and provisioning

requirements

• Registration systems for moveable

assets

• Credit information services

• Laws and procedures on

distressed companies,

receivership and bankruptcy

• Creditor rights

• Credit guarantee schemes

• Financial support services for

start-ups (vouchers, grants)

• Supply-chain financing

instruments (warehouse

receipts, contract farming, etc.)

• Microfinance facilities

• Credit unions

• Availability of risk capital

(e.g. venture capital, private

equity funds)

• Leasing

• Financial literacy

Acce

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SMEs

Skill

s fo

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Inve

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otion


Access to Finance for SMEs – Need to further strengthen the legal and regulatory framework and diversify sources of external finance

Implementation of warehouse receipt financing has been selected as a pilot project to improve usage of movable assets as collateral

1.1

.1 C

adas

tre

1.1

.2 C

oll

ate

ral a

nd

pro

visi

on

ing

req

uir

em

en

ts

1.1

.3 R

egi

stra

tio

n s

yste

ms

for

mo

veab

le a

sse

ts

1.1

.4 C

red

it in

form

atio

n s

erv

ice

s

1.1

.5 L

aws

and

pro

ced

ure

s o

n d

istr

ess

ed

co

m-

pan

ies,

re

ceiv

ers

hip

an

d b

ankr

up

tcy

1.1

.6 C

red

ito

r ri

ghts

1.2

.1 C

red

it g

uar

ante

e s

che

me

s

1.2

.2 F

inan

cial

su

pp

ort

se

rvic

es

for

star

t-u

ps

(vo

uch

ers

, gra

nts

, etc

.)

1.2

.3 S

up

ply

-ch

ain

fin

anci

ng

inst

rum

en

ts

(war

eh

ou

se r

ece

ipts

, co

ntr

act

farm

ing,

etc

.)

1.2

.4 M

icro

fin

ance

Fac

iliti

es

1.2

.5 C

red

it U

nio

ns

1.2

.6 A

vail

abil

ity

of R

isk

Cap

ital

(e.g

. ve

ntu

re c

ap-

ital

, pri

vate

eq

uit

y fu

nd

s)

1.2

.7 L

eas

ing

1.3

.1 F

inan

cial

lite

racy

1.1 Effective Regulatory Framework 1.2 Access to External Finance 1.3 Other factors that affect de-mand and

supply of fi-nance

0

1

2

3

4

5

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otion


Access to Finance for SMEsInitial recommendations

Effective

regulatory

Framework

Access to

external

finance

Other factors

Sub-dimension

Further strengthen the legal and regulatory framework for access to finance to stimulate lending to SMEs:• Streamline procedures for registration of moveable assets • Review current legislation on collateral and provisioning requirements• Review impact of the law on usurious activities on the microfinance sector• Extend availability of credit information services • Strengthen creditor rights and enforcement mechanisms

1

2

3

Diversify and expand external sources of finance:• Implement pilot projects to develop supply-chain financing instruments,

such as warehouse receipts• Expand activities of existing credit guarantee funds• Explore opportunities to attract risk capital (e.g. through business angel

networks and private equity funds)

Enhance financial literacy through targeted education programmes, for example in business planning and financial reporting to enable SMEs to prepare higher quality loan applications to banks.

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Warehouse receipt financing can improve access to finance by facilitating the use of agricultural production as collateral

Source: World Bank, FAO (2009), The use of warehouse receipt financing in agriculture in transition countries

•Increases transparency and efficiency in commodity markets

•Reduces collateral and liquidity constraints

•Encourages investment in warehouses and the development of the logistical network around warehouses

•Allows the farmer to pledge movable assets and inventory to get financing for working capital, leaving the necessary fixed assets to pledge for long-term financing of capital expenditures and investments

•Ensures increased access to working capital finance without having to sell crops at times of low prices, thus decreasing their exposure to price volatility

Benefits to agricultural players

Sector benefits

Examples of production used as collateral: seeds, fertilizers, grains, sugar, potatoes, processed fruits

and vegetables

Warehouse receipt financing

Agricultural supplier/ producer/ processor/

distributor/ traderWarehouse

Financial institution

Deposited goods

Warehouse receipt

Warehouse receipt

Loan

WAREHOUSE RECEIPT FINANCING IN AGRIBUSINESS

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Financial institution perspective: Potential risks to be mitigated

Source: Presentation from Marek Komorowski, OECD Working Group on Access to finance, Bishkek, November 2013

Risk Issue

„Commodity” definition Homogeneous goods, no individual labeling Price transparency

Legal title The ownership rights must be secured by adequate legal solutions

„Leakage” risk Risk mitigation for potential frauds

Storage conditions Proper storage conditions to protect to value Insurance against external risks (flood, fire, etc.)

Information and liquidity Financial institution (bank, MFI) secured with necessary supervision

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Draft action plan for the establishment of warehouse receipt financing in agriculture

Set up a pilot project1

Ensure the credibility of the system

Set up the regulatory framework

Medium/Long term

Short term

• Define the scope of the pilot project by focusing on one or two products• Identify reliable storage facilities and bulking sites at strategic locations• Support the development of trade and distribution services in agricultural co-operatives• Set up the agreements for financing in co-operation with banks • Disseminate information about financing opportunities to farmers

• Develop technicalstandards for warehouses • Establish a warehouse certification agency and ensure compliance of warehouses to the standards• Streamline proceduresfor registration of moveable assets

Promote investments in the warehouse system

4

• Promote investments in warehouse business• Consider building a warehouse/ logistical centre based on a public-private partnership

WAREHOUSE RECEIPT FINANCING IN AGRIBUSINESS

Acce

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Skill

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otion

2 3

• Build reliable systems for collection and dissemination of agricultural information• Support the development of a wider range of insurance products for agricultural sector • Establish an indemnity fund

Scale up to national level:


What are the major policy challenges in skills development in the Kyrgyz Republic and how to implement reforms?

2


Skills for private sector development in the Kyrgyz Republic - status quo analysis

Education spending (% of all government expenditure), 2009

Source : World Bank, National Statistical Committee, EU report on skills shortages in agriculture in the Kyrgyz Republic

• Literacy rate among adult population in the Kyrgyz Republic is 99% for male and female population. For young people (15-24 years) literacy rate is 100%

• 30.9% of employers in agriculture declare insufficient employees competence

• 51.7% of the unemployed in 2011 had secondary education


18.8%

1.6%

12.7%

10.1%

49.0%

5.7% 2.1%

Higher educationUnfinished higher ed-ucationVET IIVET ISecondary educationPrimary educationNo education

Labour force by level of education, 2012

Expenditure per student, tertiary (% of GDP per capita), avg 2007-2010

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OECD average, 26.4%

Kyrgyzstan Kazakhstan Tajikistan Mongolia0%

5%

10%

15%

20%

25%

OECD average 11.6%

Kyrgyz Republic Kazakhstan Mongolia Tajikistan0

5

10

15

20

25

30


Assessment framework to evaluate skills for private sector development in the Kyrgyz Republic

Acce

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for

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Skill

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Skills development

Policy framework for business education

Policy tools to promote skills for jobs

• Consultative processes in the education

system

• Workforce skills strategy: design and

evidence

• Development of the VET system

• Responsiveness of the university system

to business needs

• Skills gap analysis

• Work-related system of continuing education

and training

• Workplace training schemes

• Training quality assurance


Skills for Private Sector Development - Need to enhance public and private sector co-operation to implement the national education strategy

2.1.

1 Co

nsul

tati

ve p

roce

sses

in th

e ed

ucati

on s

ys-te

m

2.1.

2 W

orkf

orce

ski

lls s

trat

egy:

des

ign

and

ev-id

ence

2.1.

3 D

evel

opm

ent o

f the

VET

sys

tem

2.1.

4 Re

spon

sive

ness

of t

he u

nive

rsit

y sy

stem

to

busi

ness

nee

ds

2.2.

1 Sk

ills

gap

anal

ysis

2.2.

2 D

evel

opm

ent o

f a w

ork-

rela

ted

syst

em o

f co

ntinu

ing

educ

ation

and

trai

ning

2.2.

3 Ex

iste

nce

of w

orkp

lace

trai

ning

(i

nter

nshi

p/ap

pren

tice

ship

) sch

emes

2.2.

4 A

cces

s to

trai

ning

2.2.

5 Tr

aini

ng q

ualit

y as

sura

nce

2.1 Education policy framework for business needs 2.2 Tools and public private partnerships to promote the skills for jobs

0

1

2

3

4

5

Implementation of workplace training schemes has been selected as a tool to enhance public-private dialogue in education

Acce

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for

SMEs

Skill

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Skills for private sector developmentInitial recommendations

Education policy

Framework for

business needs

Tools and public

private

partnerships

to promote the

skills for jobs

Sub-dimension

Support the implementation of the national education strategy:• Allocate a budget to enable main stakeholders to implement activities to

achieve defined goals• Identify mechanisms to enhance private sector contribution to education

and training provision, for example through VET programmes• Monitor the implementation of the strategy and hold regular public-private

consultations with social partners

1

2 Enhance public private partnerships in education:• Develop and implement efficient workplace training programmes (e.g.

internship/apprentice schemes) as a mechanism to enable students to acquire first practical knowledge and skills for their future jobs during their university studies

• Extend the usage of skills gap analysis beyond pilot projects that already exist in Naryn, Jalal-Abad and Osh regions to assess supply and demand for skills

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Workplace training is one type of public-private partnership in education that brings learning directly into the workplace and reduces the skills gap

Firms(private players)

Educational institutions

Convention

StudentsWage and training

Service and contract

Training report

MonitoringFeedback

on CVs

REGULATORY FRAMEWORK

FRAMEWORK TO:

• Provide certainty to employers

• Protect students (e.g. medical coverage, insurance) and employers (e.g. confidentiality)

• Rule the interaction between Universities and private players

• Promote the Schemes

• Provide internships which are relevant to the players and of high quality

WORKPLACE TRAININGS IN AGRIBUSINESS

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Despite being a relatively simple mechanism, the contract for workplace training and the regulatory framework are key aspects to consider


Action plan for the establishment of workplace training schemes in agribusiness

Strengthen the legislative framework and set incentives1

Ensure the engagement and ownership of the private sector2

Long term

Medium term

Short term

• Introduce an internship/ apprenticeship convention/ contract• Agree on a duration and on a minimum remuneration for workplace training

• Set up career services within agricultural institutions • Build a database (through alumni and company visits) • Organise outreach events, career fairs• Consider creating financial incentives for employers that offer workplace training• Provide workplace training opportunities on a competitive basis

Ensure that students are efficiently matched with training places3• Create a formalised platform to match supply and demand• Monitor the practical experience using a feedback report on the match of student skills

for firm needs

Promote education in agribusiness4• Adjust educational institutions’ curricula based on recommendations of agricultural firms• Market agribusiness as an attractive career option for students

WORKPLACE TRAININGS IN AGRIBUSINESS

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What are the major policy challenges in investment and export promotion in the Kyrgyz Republic and how to

implement reforms?

3


Investment and export promotion (SME internationalisation) Status quo analysis

Foreign direct investment in the Kyrgyz Republic

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011-100000000

0

100000000

200000000

300000000

400000000

500000000

600000000

700000000

800000000

-2%

0%

2%

4%

6%

8%

10%

12%

Foreign direct investment, net inflows (BoP, current US$)

Foreign direct investment, net inflows (% of GDP)

Fo

reig

n d

irec

t in

vest

men

t, n

et i

nfl

ow

s (%

of

GD

P)

2005 2006 2007 2008 2009 2010 2011 2012

-1600000000

-1400000000

-1200000000

-1000000000

-800000000

-600000000

-400000000

-200000000

0

Current account balance of the Kyrgyz Republic (BoP, MLN current USD)

• FDI in the Kyrgyz Republic represents only 3% of the total net FDI inflows in the Central Asia region

• 89% of FDI inflows originated from CIS countries in 2012

• 46% of FDI inflows went to the manufacturing sector and 32% to the real estate sector

• Exports amounted to 2.3 billion USD and imports to 3.9 billion USD in 2011

• Gold represented 40% of exports from the Kyrgyz Republic in 2010, chemical elements 15% , petroleum oils 4%


Source : World Bank, National Statistical Committee, The Observatory of Economic Complexity, EIU

Exports of the Kyrgyz Republic by destination, 2010

Switzerland; 23.10%

Russia; 19.39%

United Arab Emirates; 17.99%

France; 14.85%

Kazakhstan; 10.21%

Turkey; 2.50%

Uzbekistan; 2.39%

China; 1.90% Iran; 1.16% Tajikistan; 0.91%Other; 4.83%

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Assessment framework to evaluate investment and export promotion in the Kyrgyz Republic

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Investment and Export promotion

Strategy and Institutions Investment and Export promotion tools

• Investment / export promotion strategy

• Investment / export promotion agency

• Monitoring and evaluation

• One Stop Shop services for investors

• Aftercare services

• Free economic zones

• Business linkage programmes

• Public-private consultations with investors

• Export promotion programmes

• Financial support

• National export promotion events


Investment and export promotion for SMEs – Need to strengthen the institutional framework for investment and export promotion

Business linkage programmes have been selected as a pilot tool to upgrade and integrate the garment industry into global value chains

3.1.

1 In

vest

men

t/Ex

port

Pro

mo

tion

Stra

tegy

3.1.

2 In

vest

men

t/Ex

port

Pro

mo

tion

Age

ncy

3.1.

3 M

onit

orin

g an

d ev

alua

tion

of t

he

agen

cy

3.2.

1 O

ne S

top

Sho

p fo

r in

vest

ors

3.2.

2 A

fter

care

ser

vice

s

3.2.

3 Fr

ee e

cono

mic

zo

nes

(FEZ

s)

3.2.

4 Bu

sine

ss li

nkag

e pr

ogra

mm

es

3.2.

5 Pu

blic

-pri

vate

con

sult

ation

s w

ith

inve

stor

s

3.2.

6 Ex

por

t pr

omoti

on p

rogr

amm

es

3.2.

7 Fi

nanc

ial s

uppo

rt fo

r ex

port

pro

moti

on

activ

ities

3.2.

8 N

ation

al e

xpor

t/in

vest

men

t pr

omoti

on

even

ts

3.1 Investment and Export Promo-tion Strategy and Institutions

3.2 Investment and Export Promotion Tools

0

1

2

3

4

5

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Investment and export promotion for SMEsInitial recommendations

Investment and

export promotion

strategy and

institutions

Investment and

export promotion

tools

Sub-dimension

Strengthen the institutional framework:• Approve the 2013 – 2017 Export Development Strategy• Strengthen investment promotion efforts, for example by setting up an

investment and export promotion agency with sector expertise, and by defining clear roles and responsibilities to implement related activities

1

2Further develop investment and export promotion tools:• Implement business linkage programmes, as a mechanism to establish

linkages between SMEs and foreign investors and facilitate the participation of domestic companies in global value chains

• Assess private sector needs for government support and identify investment and export promotion support mechanisms that can be implemented with limited resources at hand

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The Kyrgyz garment industry displays high potential

The Kyrgyz Republic enjoys a cost advantage

Production in the textile and garment sector doubled from 2009 to 2012

2003 2004 2005 2006 2007 2008 2009 2010 20110

20

40

60

80

100

120

140

160

180

27

58 55

116 112

160

105

142

165

Apparel production (official)

Miil

lion

USD

The actual garment production is estimated around USD 375bn (2010)

1. Cost of labour estimates for the Kyrgyz Republic are preliminary calculations by the OECD ECP, based on ILO data. Cost estimates for other countries were compiled by the World Bank.Source: National Statistical Committee of the Kyrgyz Republic , USAID, WorldBank estimates, ILO, OECD ECP calculations

0.000.501.001.502.002.503.00

USD/hour

Among countries benefitting from an attractive cost of labour, compared capabilities are key

Estimated cost of labour in the garment industry1, 2010

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Improved company capabilities and business environment

Business environment

• e.g. trade and tariff agreements, investment policy, tax policy

• e.g. infrastructure, Technopolis

Improved business connections

The challenge is to sustain the industry’s development in the long term

Large/foreign firm

Local firmLocal firm Local firm

Value-added business relationships, e.g. FOB contracts, long-term contracts, investment

Increased integration in

regional/global value chains

Capabilities

• e.g. improved skills and knowhow through human capital development

• e.g. improved equipment and technology through better access to finance

• e.g. improved knowledge of markets and suppliers

• e.g. improved collective capabilities through co-operatives

Increased financial resources, knowledge transfer and ultimately higher added value productsSources: OECD ECP

INVESTMENT AND TRADE PROMOTION IN TEXTILE/GARMENT

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Draft action plan on fostering the development of the garment industry in the context of global value chains

Focus on areas of strength1

Enhance the capabilities of companies2

Ensure that the Bishkek light industry Technopolis brings the expected results3

• Decrease the number of actions in the strategic documents• By evaluating past industry development initiatives, including the “patent” system• By taking stock of the priorities of government and potential donors

• Focus on garment production• For textile production, rely on agricultural development and investment attraction

• Focus first on Russia, Kazakhstan and other CIS markets

Increase trade promotion and start sector-specific investment promotion4

• Focus on the development of technical skills• Improve access to equipment through basic schemes• Foster the creation of co-operatives

• Ensure that the planned project responds to actual business needs• Through a feasibility study

• Not only provide infrastructure, but also collective organisation

• Continue and scale up existing trade promotion efforts• Start investment promotion for the sector

INVESTMENT AND TRADE PROMOTION IN TEXTILE/GARMENT

Acce

ss to

fina

nce

for

SMEs

Skill

s fo

r pri

vate

sec

tor

deve

lopm

ent

Inve

stm

ent a

nd

expo

rt p

rom

otion


What are the next steps?


July November December

2013

Working level

Steering Committee

level

2nd WG Meeting Work-in-progress Foreign experts

invited

Meeting Follow-up on

the Ministerial Update on the

country work

Meeting Review and endorsement of the

country work – horizontal assessment and 3 targeted reform plans

International level

Eurasia Comp. Roundtable

Peer-review of the country work

Next major step is the peer-review session of these results OECD Headquarters, Paris, 3-4 December 2013

16-17 July, Bishkek 12-14 November, Bishkek

17 July, Bishkek 14 November, Bishkek

3-4December, Paris

OECD reviewers’ visit and 3rd WG meeting

Finalisation of the horizontal assessment

Finalisation of the 3 targeted reform plans

2014

February

Meeting Capacity-

building workshops on « How » to implement the 3 targeted reform plans

Meeting Endorsement of

the 3 peer-reviewed targeted reform plans

Launch of 3 OECD Policy Handbooks


Background information


In the Kyrgyz Republic, 34 policy indicators have been assessed across 3 policy dimensions

Access to finance Skills development

Investment andExport promotion

Legal and regulatoryframework

Sources of externalfinance

Other factorsaffecting demand

and supply

Policy framework for business

education

Policy tools to promote

skills for jobs

Strategyand

Institutions

Investment and Export

promotion tools

• Cadastre

• Collateral and provisioning requirements

• Registration systems for moveable assets

• Credit information services

• Laws and procedures on distressed companies, receivership and bankruptcy

• Creditor rights

• Credit guarantee schemes

• Financial support services for start-ups (vouchers, grants)

• Supply-chain financing instruments (warehouse receipts, contract farming, etc.)

• Microfinance facilities

• Credit unions

• Availability of risk capital (e.g. venture capital, private equity funds)

• Leasing

• Financial literacy • Consultative processes in the education system

• Workforce skills strategy: design and evidence

• Development of the VET system

• Responsiveness of the university system to business needs

• Skills gap analysis

• Work-related system of continuing education and training

• Workplace training schemes

• Training quality assurance

• Investment / export promotion strategy

• Investment / export promotion agency

• Monitoring and evaluation

• One Stop Shop services for investors

• Aftercare services

• Free economic zones

• Business linkage programmes

• Public-private consultations with investors

• Export promotion programmes

• Financial support

• National export promotion events


Each policy indicator is assigned a score ranging from 1 to 5 to measure the level of policy development

The policy development path of each indicator is typically structured around the following lines:

• Level 1: There is no framework (e.g. law, institution, project, initiative etc.) in place to cover the area concerned.

• Level 2: There is a draft or pilot framework and there are some signs of government activity to address the area concerned.

• Level 3: A solid framework is in place for this specific policy area.• Level 4: Level 3 + some concrete indications of effective policy implementation of the framework.• Level 5: Level 4 + some significant record of concrete and effective policy implementation of the framework.

This level comes closest to good practices as identified by OECD standards.

Level of Reform Indicator 1 2 3 4 5

Credit guarantee schemes

No credit guarantee scheme in place.

Credit guarantee scheme facility under consideration.

Credit guarantee facilities in place. (Government initiative and state controlled).

Credit guarantee facility operating under contract to the private sector but state-funded.

Number of mutual or mixed credit guarantee schemes in place under private managers able to finance themselves out of fees alone.

Example

CONFIDENTIAL – NOT FOR DISTRIBUTION OECD Private Sector Development 33

Design of targeted reforms is on agribusiness and textile/garment since both sectors have strong potential for SMEs, FDI and exports growth

Agribusiness

Energy

Mining

Tourism

Logistics

How could the OECD Project help ?

Access to FinanceHuman Capital

Other barriers

!

!

!

!

Energy prices distortion

Limited impact on employment

Infrastructures first

Infrastructures first

SMEs FDIs Exports

Garment /Textile

Investment and trade promotion

REMINDER

kyrgyz republic - competitiveness recommendations

Economy & Finance