On April 30, 2020 Parliament has passed the Act on new economic freedom and development, which provides for measures to improve the implementation of entrepreneurial activity.

In the nearest future, several bills will be prepared that are aimed at improving entrepreneurial activity and will help the country overcome the economic crisis.

(ACT)

Toward a New Economic Freedom and Development

Against the backdrop of the global economic crisis associated with the pandemic of the coronavirus infection COVID-19, the Kyrgyz economy is in the worst situation. The latest forecast of the Ministry of Economy of the Kyrgyz Republic suggests a reduction in Kyrgyzstan's GDP in 2020 at the level of 6.8%. The economic crisis has already caused a significant drop in remittances of labour migrants, a devaluation of the national currency by 15%. According to the assessments of the Government of the Kyrgyz Republic, by the end of this year, the minimum volume of the republican budget may reach about $ 400 million. A sharp deterioration in the terms of trade with major trading partners and a decrease in domestic demand has taken place.

The most negative impact is on small and medium-sized businesses, whose share account for 40% of the country's economy. Without substantial support from the business community, a massive bankruptcy of companies is possible, in which case the economic crisis will drag on for a long period, causing such consequences as unemployment, increased poverty and falling budget revenues.

The measures taken by the Government of the Kyrgyz Republic and the National Bank of the Kyrgyz Republic to support entrepreneurs are mainly aimed at providing deferrals of tax payments and the principal amount of loans, cancelling penalties for paying utility bills and reducing the number of inspections.

Under these conditions, the only way the state can support entrepreneurs could be to drastically reduce the administrative burden on business and to effectively improve the conditions for doing business in the country.

Today, to overcome the economic crisis, a new economic policy is urgently needed, which is designed to gain the trust and support of citizens, and will improve the socio-economic situation in the shortest possible time. Only in this way can we build a developed economy and become a self-sufficient country.

The new economic policy should be aimed at:

- restricting government expenditure to 25% of GDP;

- reduction of the state budget deficit to 3% of GDP;

- conducting an amnesty of capital;

- a complete ban on increasing licenses (reducing permits), simplifying business management and providing complete freedom of individual entrepreneurship with payment of an annual patent;

- complete freedom of movement of capital;

- a complete inventory of state property and other assets;

- sale, privatisation through an auction of unprofitable state property;

- strengthening private property;

- reduction in the number of taxes;

- reduction in the number of inspections, including tax;

- a ban on initiating bills that worsen the business environment;

- an inventory of public administration functions and the elimination of unnecessary structures;

- a drastic reduction in the state apparatus by 10-20% in the next 3 years and subsequently by 30%;

- social support and fair state targeted assistance (by age, health status, etc.);

- reducing the number of social contributions, introducing a social tax and the transition to a funded pension system;

- Transition to business checks in full digital format;

- reduction of regulation of entrepreneurial activity, the transition of a business to the principles of self-regulation and the exclusion of the human factor;

- decriminalisation of economic crimes;

- ensuring the protection of property rights and guarantees for investors;

- the introduction of cashless payments, the principle of traceability of goods, and as a result - the reduction of the shadow economy;

- transition to economically sound tariffs;

- launch of large national infrastructure projects;

- adoption of a new investment code.