In the context of a globally interconnected economy, the concept of Business Ready becomes a key factor for countries striving to improve their economic standing and achieve sustainable development, especially for developing economies like the Kyrgyz Republic. This concept encompasses a wide range of aspects, including the creation of favorable regulatory frameworks, infrastructure development, and support for entrepreneurs and small businesses.

The World Bank's Business Ready (B-READY) program is a comprehensive tool for analyzing and improving key aspects of doing business. It replaces the Doing Business project, offering a more balanced and transparent approach to analyzing the business climate. While the Doing Business project focused primarily on assessing the business environment for small and medium-sized enterprises, B-READY addresses the development of the private sector as a whole. B-READY evaluates parameters such as the regulatory environment, access to resources, and the quality of public services, allowing countries to identify and eliminate obstacles to private sector development.

In the context of the Kyrgyz Republic, it is important to understand that Business Ready is not just a tool for assessing the current state of the economy. It is a mechanism that facilitates the creation of an environment conducive to innovation, investment, and job creation. Addressing issues such as bureaucratic inefficiency and access to financing can help the country strengthen its position in international trade and attract more investments.

Overview of the Business Ready Concept and Its Impact on Economic Development in the Kyrgyz Republic

Understanding the Business Ready concept is crucial for promoting economic growth in the Kyrgyz Republic, as it reflects the readiness of local enterprises to operate in both domestic and international markets.

According to preliminary findings from B-Ready 2024, economies do not need to be wealthy to create a good business environment. A notable example is the Kyrgyz Republic, which scored 74.71 out of 100 in the "Operational Efficiency" section, compared to Rwanda's 81.31 and Georgia's 84.75. Operational efficiency reflects the ease of complying with regulatory requirements and the effectiveness of utilizing public services directly related to companies.

Scores by Section for the Kyrgyz Republic:

According to the 2024 Business Ready report, the Kyrgyz Republic demonstrates high performance in several key areas, including utility services, financial services, and business location. In particular, the utility services sector shows high efficiency in connecting electricity, water supply, and the internet, as well as quality control over the provision of these services. Financial services are characterized by well-established mechanisms for consumer rights protection, transparency in electronic payments, and effective risk management in the banking sector. In the area of business location, the country demonstrates a high level of transparency in regulating land use, zoning, and property registration. Business registration procedures for domestic companies are simplified, and licensing and reporting requirements are clearly defined.

However, despite these achievements, there are areas for improvement in several key aspects. In the area of taxation, there are no effective mechanisms for reviewing tax disputes, and conflict resolution procedures remain complex. In terms of business insolvency, there is no electronic case management system for company liquidation and reorganization processes. In the area of market competition, there are significant restrictions for foreign companies wishing to participate in public procurement. Digitalization issues include insufficient implementation of digital platforms in tax administration, business registration, and land document provision. In the area of labor legislation, there is insufficient protection of workers' rights and minimal use of data on gender and age. Environmental standards also require improvement: there are no requirements for energy efficiency and sustainability in the construction industry.

Analysis of Opportunities to Improve the Kyrgyz Republic's Indicators

To improve these indicators, it is recommended to implement digital platforms for filing tax returns and dispute resolution, which will increase the transparency of tax procedures, especially for foreign investors. In the area of business insolvency, electronic case management systems should be created to expedite company liquidation and reorganization procedures. To strengthen market competition, it is necessary to review restrictions on foreign companies' participation in public tenders and create equal conditions for all market participants. An important step will be the development of digital public services through the creation of a unified platform for business registration and reporting, as well as the digitalization of land and property registration services.

In the area of labor legislation, it is important to strengthen control over compliance with minimum social standards for workers, implement mandatory unemployment insurance, and expand social support measures for low-income segments of the population. In terms of environmental standards, mandatory energy efficiency requirements should be introduced for new construction projects, and incentives should be developed for the implementation of environmentally friendly technologies in the construction and utilities sectors. Finally, to support small and medium-sized businesses, it is advisable to launch financing programs and simplified procedures for registering new enterprises.

Thus, the implementation of these measures will significantly improve the investment climate and increase the competitiveness of the Kyrgyz Republic's economy.

The Impact of Business Ready Indicators on a Country's Investment Attractiveness

High rankings in the Business Ready (B-READY) index directly influence a country's investment appeal. Nations with favorable business climates experience higher levels of foreign direct investment (FDI), contributing to sustainable economic growth.

After implementing reforms aimed at improving business conditions, including reducing tax burdens and expediting registration procedures, Georgia entered the top 10 of the Doing Business ranking, leading to increased FDI and accelerated economic growth. In 2020, Georgia ranked seventh globally in the Doing Business study, achieving the highest position among countries in the Europe and Central Asia region.

Similarly, Estonia, through the adoption of e-government and transparent regulatory procedures, attracted significant investments in the IT sector, fostering the digitalization of its economy. Holding a high 18th place in the Ease of Doing Business ranking, Estonia stands out among other European countries and worldwide. This ranking, which assesses the ease of doing business based on criteria such as company registration procedures, taxation, cross-border trade, investor rights protection, and access to financial resources, underscores the effectiveness of this European country's economic system.

For the Kyrgyz Republic, improving its position in the B-READY ranking could attract major international investors and develop key economic sectors such as energy, agriculture, and tourism.

Conclusion

The Business Ready program plays a crucial role in shaping a favorable business environment and fostering economic growth. For the Kyrgyz Republic, actively utilizing B-READY data and recommendations can be a key step toward attracting investments, supporting small businesses, and building a sustainable economy.

B-READY advocates for the implementation of clear rules and consistent adherence to regulatory norms, promoting fair competition and strengthening investor confidence. For the Kyrgyz Republic, aiming to position itself as an attractive destination for international investments, having a reliable regulatory framework is essential.

Key steps to improve the Kyrgyz Republic's standing in the B-READY ranking include reforms in taxation, infrastructure connectivity, access to financing, and strengthening anti-corruption measures. These changes will not only enhance the country's position in international rankings but also positively impact the overall living standards of the population.

The full B-READY report is available at: https://www.worldbank.org/en/businessready

Introduction

In today's realities, the creation of investment hubs has become a key tool for attracting capital, stimulating economic growth, and fostering innovation. This article examines models of investment hubs based on international experience, including their key characteristics, management approaches, and critical success factors.

Definition of an Investment Hub

An investment hub is a geographic area or a specialized platform designed to create favorable conditions for attracting and placing investments. Investment hubs act as a bridge between investors and businesses, startups, or projects seeking funding. They can be both physical (e.g., special economic zones or clusters) and virtual (online investment platforms).

The purpose of investment hubs is to stimulate economic growth, create jobs, and promote the development of innovations, information, and technologies.

Key Characteristics of an Investment Hub

• Attracting Investments: Investment hubs offer various incentives to attract both foreign and local investments, including tax benefits, simplified regulatory procedures, and access to financing.
• Infrastructure: Availability of developed infrastructure, including transport and logistics networks, office spaces, and research and innovation centers.
• Support for Startups and Businesses: Providing services such as mentorship, training, access to resources, and funding to support the growth of new companies and innovative projects.
• Networking Opportunities: Creating conditions for interaction among investors, entrepreneurs, government bodies, and other stakeholders to facilitate knowledge and experience exchange.
• Sector Specialization: Many investment hubs specialize in specific sectors such as technology, finance, healthcare, or sustainable development.

Models of International Investment Hubs

Based on international experience, several models of investment hubs can be identified:

1. Financial Centers
   Examples: Singapore, Dubai, London
   Key Features:

• Focus on providing financial services, including banking, funds, and insurance companies.
• High level of financial regulation and market stability.
• Attraction of large international financial institutions.

2. Innovation Clusters
   Examples: Silicon Valley (USA), Singapore Technology Park
   Key Features:

• Concentration of high-tech companies, startups, and research institutions.
• Support for scientific research and development.
• Availability of infrastructure for knowledge and experience exchange.

3. Industrial Parks and Free Economic Zones (FEZ)
   Examples: Shenzhen (China), Jebel Ali (UAE)
   Key Features:

• Tax incentives and simplified administrative procedures.
• Focus on export-oriented production.
• Modern business infrastructure for operational activities.

4. Multifunctional Hubs
   Examples: Astana International Financial Center (Kazakhstan)
   Key Features:

• Combination of financial, innovation, and industrial functions.
• International legal regulation standards.
• Attraction of both large investors and SMEs.

Key Success Factors for Investment Hubs

To ensure the effective functioning of an investment hub, several key factors should be considered:

• Transparent Legislation: Clear legal norms and investor protection mechanisms.
• Infrastructure: Modern office spaces, transport accessibility, and digital infrastructure.
• Government Support: Tax benefits, subsidies, and business support programs.
• International Integration: Participation in international economic unions and agreements.
• Qualified Workforce: Availability of educational programs and professional development centers.

Examples of Successful Investment Hubs

Singapore Model

1. Foreign Direct Investment (FDI) Strategy:

• Focus on high-tech and innovative sectors such as biotechnology, fintech, artificial intelligence, logistics, and green energy.
• Attraction of global leaders through specialized programs (e.g., grants and tax incentives).
• Investment Stimuli: Tax benefits and state support for R&D financing.
• Access to free consultations on administrative and legal matters.
• Legal Protection and Stability: Transparent legislation and intellectual property protection.
• Over 80 international trade agreements and double taxation avoidance treaties.
• Active integration into global supply chains.

Key Organization: Singapore Economic Development Board (EDB), a governmental body under the Ministry of Trade and Industry, responsible for strategies enhancing Singapore's position as a global business, innovation, and talent hub. https://www.edb.gov.sg/

2. Infrastructure and Startup Support:

• Innovation Hubs: One North – a research and innovation park focused on startups in medicine, technology, and media.
• Industrial Parks: Jurong Innovation District – a hub for high-tech manufacturing and research.
• Startup Support Programs: Startup SG provides grants, venture funding, and mentorship access.
• Angel Investors Tax Deduction Program: Encourages private investments with a minimum investment requirement of 100,000 SGD (~74,128 USD) and a 2-year holding period.

3. Successful Companies and Investments:

• Google: Opened a regional headquarters in Singapore.
• Dyson: Relocated its global headquarters to Singapore.
• Grab: Super app for transportation and delivery, raised $10 billion, including funding from SoftBank.
• Sea Group: The first Singaporean technology company to IPO on NASDAQ, valued over $100 billion.
• Carousell: An e-commerce platform operating in seven countries with $277 million in funding.

London Model

London's investment hub is a prime example of integrating various elements for attracting investments, supporting startups, and scaling businesses. It plays a central role in positioning London as a global center for business, finance, and innovation.

1. Investment Hub Functions:

• Attracting Investors: Actively engages international and local investors, offering access to high-quality projects and businesses.
• Support for Startups and SMEs: Provides consultancy, training, and financial access for new companies.
• International Cooperation: Assists foreign companies in entering the UK market with legal, financial, and marketing support.
• Promotion of Innovations: Facilitates advanced technology adoption through accelerators and incubators.

2. Infrastructure:

• Physical Spaces: Modern offices, coworking spaces, incubators, and laboratories.
• Digital Ecosystem: Online platforms for connecting investors, startups, and industry experts.
• Expert Networks: Collaboration with consultants, angel investors, and venture funds.

3. Key Sectors:

• Financial Technologies (FinTech)
• Green Economy and Sustainable Development
• Biotechnology and Healthcare
• Creative Industries and Artificial Intelligence

4. Government Support:

• Tax Incentives: Reduced tax rates for investors and companies.
• Regulatory Sandboxes: For testing innovative solutions.
• Public Grants and Subsidies: For strategically significant sectors.

5. Investor Services:

• Market analytics and industry research.
• Organizing meetings with key market players.
• Legal and tax support services.

6. Successful Examples:

• London & Partners: The official agency promoting London, attracting billions of pounds in investments. https://www.londonandpartners.com/
• Tech City UK (now Tech Nation): A technological development initiative that became a global investment magnet.

Conclusions

The development of investment hubs has proven to be a significant driver for economic expansion, facilitating the inflow of foreign capital while simultaneously nurturing a competitive entrepreneurial environment. A review of international practices demonstrates that the most successful investment hubs, such as those in Singapore, London, and Dubai, share a comprehensive set of attributes that contribute to their efficiency and attractiveness. These include transparent and investor-friendly legal frameworks that ensure the protection of capital and intellectual property, modern infrastructure capable of supporting both financial operations and innovation-driven enterprises, and proactive government support in the form of tax incentives, subsidies, and specialized business development programs.

Beyond regulatory and infrastructural factors, successful investment hubs often integrate advanced strategies for talent development and sectoral specialization, fostering collaboration between the private sector, educational institutions, and research centers. For example, the technological advancements observed in Singapore’s innovation clusters and Silicon Valley’s startup ecosystem highlight how hubs that encourage knowledge sharing, mentorship, and access to venture capital can become global leaders in emerging technologies and digital transformation. Moreover, strategic participation in international trade agreements and global supply chains enhances the global connectivity of these hubs, further amplifying their competitiveness.

For the Kyrgyz Republic, the establishment of effective investment hubs requires a multifaceted approach tailored to the national context while drawing from successful global models. The implementation of a modernized legal framework that ensures clarity, stability, and efficient dispute resolution will be critical to building investor confidence. Simultaneously, developing key infrastructure, including business parks, innovation centers, and transport corridors, would create the physical foundation needed for sustained investment growth. Additionally, policies aimed at supporting startups and small businesses, such as grant programs, accelerator initiatives, and STEM-focused education partnerships, would help foster a new generation of entrepreneurial talent equipped for global competition.

The Role of Business in Combating Climate Change in the Kyrgyz Republic

Introduction

Climate change poses a serious threat to sustainable development in the Kyrgyz Republic, where a significant portion of the economy depends on natural resources and sectors vulnerable to weather variability. Rising temperatures, shifts in precipitation patterns, and an increase in extreme weather events negatively impact agriculture, energy, and water resources, creating new challenges for the private sector. Businesses have emerged as key players in mitigating and adapting to these evolving climatic conditions.

1. The Impact of Climate Change on the Economy and Business

The Kyrgyz Republic is already experiencing the consequences of climate change, reflected in several key areas:

Agriculture: Unpredictable yields and increasing frequency of droughts, floods, and hailstorms threaten food security and escalate financial risks for agribusiness, creating volatile conditions for investment.

Water Resources: Vital to the economy, especially for irrigation and hydropower, water resources are strained due to the shrinking glaciers, the primary source of freshwater. This exacerbates risks for businesses in the energy and agricultural sectors.

Logistics and Infrastructure: Extreme weather events damage roads and infrastructure, causing delivery delays and increasing costs for companies.

Consequently, businesses in the Kyrgyz Republic must incorporate climate risks into their operational activities and investment strategies.

2. Adaptation Measures and Business Strategies

For the private sector, climate change presents not only risks but also opportunities for growth through innovation and sustainable practices. Key focus areas include:

Investments in Sustainable Agriculture: Large companies and farms are adopting conservation agriculture techniques, such as minimal soil disturbance and the use of organic fertilizers, to enhance resilience against extreme weather.

Digitization and Technological Innovations: Digital solutions, such as precision farming systems and soil monitoring, help optimize resource use, minimize losses, and reduce the carbon footprint.

Green Financing Development: The banking sector in the Kyrgyz Republic is beginning to offer specialized loan products to support green projects, including solar panels, energy-efficient technologies, and waste recycling.

3. Regulation and Business Participation in National and International Initiatives

Government policies and the Kyrgyz Republic’s international climate commitments significantly influence business activity. Key elements include:

National Adaptation Plans: Involving the private sector in the development and implementation of the National Climate Adaptation Plan fosters a resilient business environment. Green economic growth policies open avenues for new investments and innovative solutions.

International Obligations and Partnerships: As a party to the Paris Agreement and a participant in the Green Climate Fund (GCF), Kyrgyzstan gains access to financial resources for climate projects aimed at emission reduction and adaptation.

Regulations and Incentives: Introducing tax benefits and subsidies for companies investing in renewable energy and energy-efficient technologies can attract investments and accelerate business adaptation to climate change.

4. Key Challenges and Barriers for Businesses

Despite growing awareness of the importance of climate resilience, the private sector in Kyrgyzstan faces several obstacles:

Lack of Knowledge and Expertise: Many enterprises, particularly small and medium-sized businesses (SMEs), lack information on available technologies and strategies for climate adaptation.

Limited Access to Financing: SMEs often struggle to secure funding for innovative solutions due to high interest rates and a lack of long-term loan products.

Weak Regulatory Framework: Insufficient legislative initiatives to support the transition to a low-carbon economy slow the adoption of green technologies and the development of sustainable business models.

Recommendations

For businesses to effectively engage in climate change mitigation, comprehensive measures are required, including:

Raising Awareness and Training: Conduct educational programs and training sessions for companies on climate risks and adaptation strategies.

Creating Investment-Friendly Conditions: Introduce incentives such as tax benefits and subsidies for companies implementing green technologies and solutions.

Strengthening Collaboration: Foster cooperation between the government, businesses, and international organizations to develop joint projects and programs aimed at reducing climate risks and promoting a sustainable economy.

Conclusion

Businesses in the Kyrgyz Republic have the potential to become key drivers of climate resilience, facilitating the transition to a low-carbon economy and contributing to sustainable development goals in the face of global climate challenges.

Dear Members of the Investment Council and Business Associations,

We have prepared an analytical brief on the current state of workforce training and the adaptation of the education system to labor market demands. This brief examines the key aspects of interaction between educational institutions and the labor market, as well as initiatives aimed at enhancing human capital quality and the competitiveness of our economy.

ANALYTICAL BRIEF ON THE CURRENT SITUATION IN WORKFORCE TRAINING

Analysis of the Current Situation

Modern labor market trends are characterized by rapid technological advancements and significant shifts in workforce skill requirements. According to the World Economic Forum’s report on the future of work, it is essential to consider the fast-evolving labor market, driven by new technologies like automation and digitalization. These technologies are transforming skill and qualification demands, leading to the emergence of new professions and reduced demand for traditional roles. In light of these changes, the development of a national qualifications system, aimed at raising professional skills and competencies, becomes crucial for global competitiveness.

Under the National Development Strategy of the Kyrgyz Republic for 2018-2040, one of the priorities is creating conditions for the comprehensive development of human potential. In this direction, the government is taking steps to improve educational programs, implement dual education, develop training and production centers, and stimulate private investments in the education system. These measures are aimed at improving education quality and aligning it with current labor market demands. Consequently, the state is undertaking efforts to reform the education system, develop new professional standards, and enhance workforce training mechanisms.

National Qualifications System

To improve specialist training quality, the Cabinet of Ministers of the Kyrgyz Republic approved a methodology for developing professional standards and industry qualification frameworks on July 15, 2021. Currently, the Register of Professional Standards includes 67 professional standards across various sectors, including healthcare (e.g., nurses and paramedics), agriculture (e.g., agronomists and livestock specialists), information technology (e.g., cybersecurity experts and software developers), and construction (e.g., civil engineers and designers). Additionally, a National Qualifications Council has been established to coordinate activities among government agencies, employers, and educational institutions in the development of the national qualifications system.

National Qualifications Council and Its Role

The National Qualifications Council (the "Council") is an advisory body created to coordinate the activities of government agencies, employers, educational institutions, and NGOs in planning, implementing, and monitoring the development of the national qualifications system. The Council includes representatives from various ministries, business associations, and industry organizations, enabling it to effectively consider the interests of all labor market participants.

Council Composition:

• Deputy Chair of the Cabinet of Ministers of the Kyrgyz Republic, Social Affairs, Chair of the Council;
• Deputy Minister of Labor, Social Protection, and Migration of the Kyrgyz Republic, Deputy Chair of the Council;
• Deputy Ministers of Education and Science, Finance, Economy and Commerce, Agriculture, Transport and Communications, Health, Energy, Natural Resources, Ecology and Technical Supervision, Digital Development of the Kyrgyz Republic;
• Senior Vice President of the Kyrgyz Republic Chamber of Commerce and Industry;
• Presidents and heads of various industry associations, including Bio-KG Organic Movement Federation, Mining and Geologists Association, Builders’ Union, Communications Operators Association;
• Representative of the Federation of Trade Unions of Kyrgyzstan;
• Directors of light industry, public catering, and leading restaurateurs and hoteliers’ associations, software developers, and service providers;
• Head of the Secretariat of the National Alliance of Business Associations;
• Head of the Resource Center LLC "Kyrgyz Knauf Marketing";
• Head of the Training Center of North Electric Joint-Stock Company.

The Council performs the following functions:

1. Coordinating Function: Ensuring collaboration between all stakeholders (government bodies, labor market representatives, educational service providers, international organizations, etc.) for the comprehensive development of national qualifications system elements, ensuring consistency and transparency of procedures, their compatibility with international methods, and recognition of qualifications at regional and transnational levels. For example, a sectoral qualifications framework was successfully developed in construction, improving workforce training quality and international qualifications recognition.
2. Methodological Function: Developing elements of the national qualifications system (sectoral frameworks, professional standards, assessment tools, etc.) for comparability of results. One successful example is the development of professional standards in IT, creating clear criteria for specialist training and improving educational quality.
3. Educational Function: Coordinating the training of entities involved in the development and application of the national qualifications system. For instance, training seminars were organized for educational institutions’ representatives to implement dual education and improve teacher qualifications.
4. Informational Function: Disseminating information to the public, providing access to methodological and regulatory documents on national qualifications system development. The Council also launched an awareness campaign to encourage employers’ involvement in shaping educational standards, significantly boosting private sector engagement.

Business Community’s Role in the Council

The business community actively participates in the National Qualifications Council's work. Employers can offer suggestions on workforce training and professional standards development, crucial for aligning education and training systems with actual labor market demands. If you have ideas or initiatives on this topic, you may contact the Ministry of Labor, Social Protection, and Migration’s Labor Decision-Making Office. Your initiatives and suggestions will help make this mechanism even more effective and adaptable to economic realities.

Key Challenges and Solutions

A major challenge remains improving the interaction between educational institutions and the labor market. According to World Bank research, over 50% of graduates in the Kyrgyz Republic struggle to find jobs due to a mismatch between acquired knowledge and employer requirements. This underscores the need for close collaboration between educational institutions and businesses to create programs that meet contemporary labor market demands. Existing programs should be more flexible to address the constantly changing market needs and provide graduates with up-to-date knowledge and skills. Strengthening private sector participation in curriculum development and workforce training is crucial for aligning the educational process with professional demands.

Further work is also needed on lifelong learning, a vital factor for supporting professional mobility and adaptation to changes. Specific steps, such as establishing adult education centers, creating advanced training courses, implementing remote learning, and expanding retraining programs for various professional groups, are underway. Recognizing informal and spontaneous learning, as initiated under the National Strategy, is another effective tool.

Recommendations and Future Prospects

To improve the situation, the following recommendations are proposed:

• Strengthening ties between education and business. Private companies should actively participate in forming educational programs and student internships.
• Developing continuous learning. Educational institutions should provide opportunities for workers’ skill enhancement throughout their professional lives.
• Investing in educational infrastructure. Improving the technical base of educational institutions and incorporating modern technologies into the learning process is essential.
• Creating new professional standards. Based on economic needs, professional standards should be created and revised to match current and future market demands.
• Forming professional communities and platforms for knowledge exchange. Creating industry associations and communities can become an essential step in sharing knowledge and best practices.

Conclusion

The Cabinet of Ministers of the Kyrgyz Republic has created a working mechanism allowing employers to actively shape workforce training. Employers can use this mechanism to submit proposals for educational program improvements, develop professional standards, and participate in the National Qualifications Council's activities. For example, companies can apply to create specialized courses to train specialists in specific sectors or arrange student internships, which have been successfully implemented in IT and construction.

The National Qualifications Council and other institutions described above provide a platform for collaboration among government bodies, businesses, and educational institutions, making workforce training more efficient and aligned with modern labor market requirements.