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Protection of private property

Wednesday, 24 September 2014 00:00

The main goal of the study was to determine level of governmental guarantees of protection of private property.

After carrying out constitutional reformsin the Kyrgyz Republic in 2010 authority of government institutions were reallocated, much attention has been paid to human rights and legal safeguards designed to protect property rights. The Constitution enshrines guarantees of immunity and protection of private property, is an integral and essential condition for development of market relations.

 

Achievements of countries in protection of property rights are measured by international index of property rights protection, which is a combined index, whichis calculatedstarting 2007 by the International Alliance of Property Rights. Kyrgyzstan ranked as 102 out of 152 participating countries in 2013and fell into a third category, compared with 88th position in 2012, which was due to deterioration of a situation in terms of inflation, opportunities for business to settle disputes in court, taxation, international trade, matters of hiring and firing workers. World leaders in protecting private property are Finland, Sweden, Singapore and Denmark.

A study on protection of private property named "Raiders: hostile takeover of private property issues in the Kyrgyz Republic" wasconducted 2008-2009 for the first time in Kyrgyzstan which openly discussed mechanisms of seizure of private property. The study showed that the authoritarian regime and its officials contributed to a raider seizure of property. Hostile takeovers usually were accompanied by authoritarian (political) pressure on rightful owners. On the other hand the owner himself, often unwittingly contributed to takeover, if its operations were not transparent.

One of the main questions of the questionnaire: "Do you think that private property today is under the proper protection of the state?" More than 85% of respondents answered "no". This significant figure says that distrust of the state system of protecting private property persists by inertia; citizens prefer to seek informal ways to protect their interests. Such a response is not correlated with a process of positive constitutional and political changes in the country, it gives a reason at the same time to think about creating additional economic securities for a freedom of performing business activities, eliminating illegal administrative interference in business.

There was a need previously (before 2010) to make decisive steps to oppose hostile takeovers (acquisition) of property, now it is necessary to take steps in creating conditions for promotion of business, transparency of government institutions, a new administrative culture of a relationship between government and businesses, in changing attitude of officials.

Business representatives isolate problem of legality in a work of the authorities. They feel a need to eliminate duplication of authorities in a response to a question "What legislative measures should be taken in the law?”There are a significant number of redundant, conflicting regulations in public administration, legal conflicts, and thedisparity in adopted by-laws to the laws regulating relations in business area. These factors lead to instability of governance and insecurity of economic actors.

There is a lack of confidence of businesses and investors in state authorities. As noted in the public policies , local authorities do not attractand actually inhibit activities of investors, and sometimes engage in outright extortion. This is evident in the mining sector.

Surveys among business in the mining sector, tourism, trade, and legal services were conducted. According to results of a sociological survey, the main conclusions were reached on a need of:
 Dialogue between business and the state;
 Business’s collaboration in order to defend their interests;
 Creation of a transparentinstitute of property protection rights with a right of control over actions of officials of the state (municipal) authorities.
A study provides recommendations for government institutions, which must be taken into account when adopting legislative measures.