Doing business in Central Asia can become easier
The International Trade Centre supports simplification of trade in Kazakhstan and Kyrgyzstan
In Central Asia, domestic and foreign enterprises face significant untapped export opportunities if the costs and time of international trade formalities were to be reduced.
Optimizing documentation requirements, simplifying cross-border procedures and digitalization offer prospects in achieving efficient trade. Central Asia is already making considerable progress in this regard.
However, the procedural simplification analysis conducted by the International Trade Centre (ITC), through its Ready4Trade Central Asia project reveals even larger potential, with streamlining trade procedures to have a rapid, meaningful impact on small business competitiveness.
Ready4Trade Central Asia therefore developed a list of detailed recommendations for legislative and institutional reforms, which the team presented to public and private stakeholders in workshops held in March 2022 in Kazakhstan and Kyrgyzstan.
Issues highlighted at the workshop include weak integration of information systems of different government agencies, paper-based workflows duplicating electronic documents and resubmissions, and open electronic information registers.
To tackle this, the workshop discussed a proposed simplification roadmap and action plan to streamline the workflow of up to 26 export and import documents.
Nurlan Kulbatyrov, Deputy Director General of JSC Center for Development of Trade Policy "QazTrade" noted some of the remaining challenges for the country.
“Kazakhstan still has work to do to reduce the steps involved in documenting export-import transactions,” he said.
“One of the acute problems remains mutual recognition of certificates of origin for goods”, he added.
The workshop discussed various optimization reforms, including limiting the time for reviewing and deciding on permit applications to one hour, and introducing an electronic queue management system at the border to speed up the movement of vehicles across the customs border.
Proposals also include introducing a digital platform for the transport complex with a marketplace for transport and insurance services, as well as implementing electronic insurance policies.
In recent years, the country has introduced an electronic customs declaration system – a ‘Single Window’ information system for foreign trade – and the ‘Tunduk’ system of interagency electronic interaction.
There is still room to further simplify these trade procedures, thereby reducing the costs of businesses and government agencies to implement and regulate international trade.
For example, dairy exports to neighbouring Kazakhstan could see a 41% reduction of transaction time, a 36% decline in the number of steps for transactions, and a 68% fall in the number of documents required for cross-border trade.
International expert on trade facilitation, Aleksei Bondarenko, who presented the results of the analysis on behalf of the International Trade Centre, noted:
"Today's challenges require quick and balanced decisions to stimulate the business climate, involve small businesses in international trade, and increase export volumes.”
“We have prepared a draft roadmap for 2022-2024, which contains seven objectives, 23 tasks and 55 specific activities, the implementation of which will significantly reduce exporter’s costs and stimulate trade”, he added.
Regional coordination for reforms
Many of these recommendations will require reforms that involve regional, coordinated action by all Central Asian countries.
For example, related to the implementation of electronic exchange and recognition systems for certificates of origin, phytosanitary and veterinary certificates, electronic use of transport documents (e-CMR) or to the coordinated implementation of electronic queue management systems (eQMS).
About the project
Kazakhstan and Kyrgyzstan are two of the five beneficiary countries of ITC’s Ready4Trade Central Asia project, funded by the European Union with €15 million.
The Ready4Trade Central Asia project is a joint initiative of the European Union and ITC. It aims to contribute to the overall sustainable and inclusive economic development of Central Asia by boosting intra-regional and international trade in the region. Beneficiaries of the Ready4Trade Central Asia project include governments, small and medium-sized enterprises, in particular women-led enterprises, and Business Support Organizations. The project operates in 5 countries: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.