Exclusive Kyrgyzstan for the EU: reform of judicial system for €26 million, grants for €34.5 million

Great number of international donors provide to Kyrgyzstan various help which is estimated not in millions, but billions of som any more. Beginning from trolleybuses and finishing with support of the state budget. The European Union acts as one of the main donors of the republic, only following the results of 2016 free aid consisted of €34.5 million. According to a seven-year cycle from 2014 to 2020 the EU provided grants for €184 million for development of the rule of law in the country, education, development of rural regions and other purposes.

Press conference has taken place in Bishkek following the results of bilateral cooperation between the EU and Kyrgyzstan in 2016 at which the ambassador Cesare De Montis has told about the achieved success.

The representative of the EU has begun the performance with the message that the current year will be very important for Kyrgyzstan in connection with the upcoming elections and has noted words of the president Almazbek Atambayev that the republic is only in the region where "nobody knows who will become a president, but all know when it will happen".

Atambayev visited Brussels

On February 16 Almazbek Atambayev for the third time of last three and a half years visited Brussels where he will meet all EU leaders. According to De Montis, it is an exclusive example for Brussels: "He is accepted by the top management of all European institutes - it is an importance signal".

The ambassador has assumed at the meeting that president will perhaps declare interest of the European Union in support of the new agreement with KR which will replace flowing, signed 20 years ago.

“It is time for new, wider and complex agreement since have the Kyrgyzstan, Europe and the world in general has changed during this time. Also I assume that the president will emphasize aspiration of the country to democratic system once again, and will possibly ask support from the EU in this regard. It not only financial support, it is also necessary to think of political support. Still, perhaps, the president will ask financial aid for Kyrgyzstan from EU", - he has commented. 

The ambassador has added that he can only guess the course which will be accepted by the forthcoming meeting, but at the same time guaranteed support from the EU based on inquiries of the president.

GSP+ and Kyrgyz Republic

Afterwards De Montis has told about granting results at the beginning of 2016 to Kyrgyzstan as the status of the participant of Generalized Scheme of Preferences (GSP+).

"It is an important element of trade development between the European Union and Kyrgyzstan. We are ready to development of a full range of actions in this sphere so that businessmen and exporters could benefit as much as possible from advantages of system", - he has assured. 

GSP + is a system through which Kyrgyzstan can export goods to the EU duty-free. However, it occurs not on a mutual basis. Practically all goods which KR can export are captured by this system – 6.2 thousand names. The republic has advantages and benefit of the final price in comparison with other competitors as goods aren't assessed with taxes.

KR obtained an opportunity to carry out duty-free import of goods to the countries of the European Union region. This right extends to agricultural goods: fruit, canned food, juice, dried fruits (walnut, almonds, pistachios), raw materials (beans, peas), foodstuff, tobacco, and also textile, felt products, clothes, including skin, carpet products and many other products.

Earlier exporters paid the customs duty of 14.6% by some types of fruit and vegetables and to 5-9% for articles of clothing.

As the ambassador has noted, this system of preferences is a peculiar elite club, a condition of participation in which is observance of 27 international conventions, and Kyrgyzstan has been accepted into it. In total GSP+ includes only 15 countries. Less than in a year export from Kyrgyzstan to the countries of Europe has increased by 53 percent. For the same period of time export of the republic to other parts of the world, on the contrary, was considerably reduced.

"It is good news both to national economy, and to businessmen – the nobility that the volume of export to the EU increases and there is a demand there", - he considers. 

However, as De Montis has emphasized, there are also difficulties in export of goods to Europe for republic. In particular, it is about quality of goods and abidance for certain criteria. There is a problem of quality and certification of goods as well. The mission of experts has arrived to Kyrgyzstan to discuss with economic entities and other partners on a way to provide a decision of solution here.

One more difficulty he has designated the small volume of exported goods on very large market, because "it is impossible to sell 1 kilogram of goods to Europe".

According to the ambassador, it is necessary to create network of producers which will be able to guarantee execution of terms and delivery terms in KR. It is a number of important elements which have to be considered at the same time.

The mission of experts intends to investigate this problem then the action plan and initiatives will be developed to allow Kyrgyzstan to use advantages of GSP+ as much as possible.

Grant help

The EU is one of the largest donors of the Kyrgyz Republic. All means arrive in the form of gratuitous grants which don't give load of growth of an external debt of the country.

The main part of a financial contribution is directed to the budgetary support. Cash of the European Union comes to the state budget through the Ministry of Finance of KR then spent by the profile ministries and other participants. In this regard Kyrgyzstan besides is an exclusive example of the fact that the EU allocates not "drugs or houses", but provides cash on a grant basis.

In 2016 Kyrgyzstan has received grants on various spheres from the European Union in amount of €34.5 million. The main sum of means has been sent directly to the budget.

So, from all sum of €34.5 million directly €24.25 million have been transferred to the budget of the country. Money has been sent to the following spheres:

  • On reform of an electoral system – €5 million;
  • On education – €10 million;
  • On social protection – €4.25 million;
  • Macrofinancial aid to the government – 5 million.

Conditions of the accountability and transparency of the budget, the general guarantees of use of money – all this states that Kyrgyzstan is recognized as the exclusive partner.

Reform of judicial system in KR

At the forthcoming meeting in Brussels is also expected signing the project on support of reforming of judicial system in Kyrgyzstan (the II phase) worth €13 million by Atambayev. The first (previous) phase of the project costs the same.

"It is the next exclusive example when such large sum of €26 million is allocated for one sector. It speaks also about importance of value of reforming of judicial reform for the European Union", - the ambassador has told and has added that the strong judicial system is the tool for business as investments won't come to that country where legal conditions aren't met and there is no safety.

Besides assignment for reform of judicial system, signing of the project in the sphere of complex development of rural regions is expected in March of this year. The sum of the project will consist of about €10 million. A row and other initiatives – water supply, environment protection, etc. are in the process of preparation.

Financing guarantees

On a question of what guarantees of target use of allocated funds to the country, De Montis has answered that before implementation of financing system effectiveness of auditors and all financial mechanisms go through the process of detailed checking.

"Then there is a realization which works at a bilateral basis. Time in a year the EU and KR carry in common the complex review of how money has been used and whether they have been spent properly. Quality of system and its efficiency is estimated. It is important to note that it is the detailed joint mechanism. We have obtained all necessary guarantees and we hope that in the future conditions will be met", - the ambassador has commented on a question. 

In the nearest future will take place dialogue with the government of KR during which decisions will be made on whether there will remain a former program of financing adopted earlier in the light of the last changes both in the country, and in the EU (the entry of Kyrgyzstan into EEU, acceptance of the UN of Sustainable Development Goals and others).

In conclusion De Montis has added that within the next three years can appear new spheres of support to Kyrgyzstan by the union.

"But donors will never have enough means to finance all calls of the planet. Also local resources have to be mobilized, the country recipient has to consider allocation of own means for the good of the citizens and shouldn't think that only the world communities will provide sources", - considered the representative of the EU. 

Territorial cooperation

Also the EU allocates €245 million for projects of regional cooperation in Central Asia during the period of 2014 to 2017.

Source: : https://www.akchabar.kg/article/money/isklyuchitelnyj-kyrgyzstan-dlya-es-reforma-sudebnoj-sistemy-/ .