ELECTRIC POWER INDUSTRY

Electric Stations to export Tajik Aluminum Plant $10 million worth of electric power

Kyrgyz OJSC Electric Stations signed an electricity export agreement with Tajik Aluminum Plant (TajAP). Between October 2006 and April 2007, more than 1 billion kWhrs will be transmitted to TajAP from Electric Stations at a price over 1 cent per kWhr. At the moment this constitutes the largest volume of electricity exports to Tajikistan paid at market prices. This arrangement represents an alternative to electricity exports to Kazakhstan, which tends to use its own energy resources due to Kazakh government policies, according to AkiPress (http://kg.akipress.org)

IT & TELECOMMUNICATIONS

International exhibition “BishkekTelecom-2006” was held in Bishkek.

The international exhibition organizer ITE Group PLC in cooperation with its representative in Bishkek, Iteca-Ala Too, held an information technology and telecommunications exhibition “BishkekTelecom-2006”. This was the second exhibition in Bishkek devoted to IT & telecommunications. According to ITE, more than 20 companies from Kazakhstan, Kyrgyzstan, Ukraine, Russia and Europe participated in the event. Several multinational brands were represented, including those from the USA, Germany, and France. Not only were distributors represented: a few product manufacturers were also present. About 70% of exhibitors signed contracts by the end of the exhibition. Around 90% expressed interest in participating in next year’s event. According to an Iteca-Alatoo representative, a Kazakh Television and Radio broadcasting company will open a distribution center in Bishkek.

Oracle to host “Days of Oracle” in Kyrgyzstan

Oracle Corporation plans to organize a seminar for managers of banks, companies, and heads of IT departments on October 6, 2006. The seminar will be devoted to the latest technologies for effective business management. According to AkiPress, Oracle representatives and specialists will demonstrate the programs and solutions of the Oracle E-Business Suite and provide information about technologies and applications that Oracle provides. (http://kg.akipress.org)

BANKING SECTOR

National Bank of the Kyrgyz Republic forecasts growth of banking sector activity

Development of the Kyrgyz banking system is setting a good pace. Commercial banks plan to increase their financial stability by increasing capital by 2008. Growth rates for assets, credits and deposits are projected to be at 30%, 12% & 16% respectively from 2006-2008. More importantly, the mortgage system is rapidly developing, hitting all-time record levels. In 2005, the number of mortgage loans issued grew by over 400% compared to the previous year. The forecast for 2006 predicts growth of at least 300% over 2005. Overall trust in the banking system is improving with increased inflow of foreign capital and improvements in bank management. Trust in banking institutions is a strong indicator of banking system development. (Partially contributed by Akipress http://kg.akipress.org)

Deposit insurance system to be implemented in 2008

A representative from the Kyrgyz National Bank announced that a deposit insurance system will be implemented in 2008. A legislative project is currently in discussion. The point at issue comes the Ministry of Economics and Finance about charter capital. The legislative project states that charter capital contributions should be divided equally between commercial banks and the government budget. The original legislative project stalled in 2004 when a row over the makeup of the board of directors developed between the Kyrgyz government and the commercial banks. The dispute came about when both side disagreed about who should hold the substantial majority on the board of directors committee. Another contentious issue was the maximum deposit amount that could be insured.

BUSINESS LAW DEVELOPMENT

International Business Council (IBC) is worried about the new law for a 3-year limitation of work for foreigners

The Executive Director of the International Business Council Umar Shavurov expressed his dissatisfaction with the local authorities on the issue of a new law that would limit foreign employees to work for no more than 3 years in the Kyrgyz Republic. Mr. Shavurov believes will lead to an outflow of investment from the country. A qualified foreign professional has a 2-year limitation, after which he is to be replaced by a locally trained professional. Many investors and foreign employees that have been working in Kyrgyzstan for more than 3 years are very worried about their current status. Most foreign and local business people are confused about what Kyrgyz Government wants to achieve by passing this law.

TOURISM

Around 1 million tourists visited Issyk-Kul this summer

The number of tourists to Issyk-Kul has more than doubled, from 400,000 last year to about 1 million this summer. The reason for the increase is partially due to the longer sunny season in Kyrgyzstan. It is also partially due to the increased flow of tourists from Kazakhstan, who are taking advantage of their close proximity to the Lake Issyk-Kul. The tourism sector is growing and prices for land in the lakefront are moving upwards. Construction of a road connecting Almaty and Issyk-Kul will only increase the inflow of tourists. (partially contributed by AkiPress http://kg.akipress.org and the Ministry of Tourism).