1. Insights on the Business Climate in Kazakhstan
The global push for more sustainable and less‑carbon intensive economic models has increased the salience of Kazakhstan’s long‑standing diversification agenda. That this agenda remains only partially fulfilled reflects a number of issues that affect the conditions for investment, innovation and entrepreneurship. Elaborating on feedback garnered through a small, focussed survey of foreign firms in Kazakhstan, this report provides new insights into private‑sector perceptions of the ongoing reform process and in doing so draws attention to some of the most pressing issues facing policymakers and business.
English version // Russian version
2. Insights on the Business Climate in Uzbekistan
Addressing barriers to private‑sector development has been a long‑standing ambition of the government of Uzbekistan, with an extensive programme of reforms that began in 2017 redoubling efforts to foster the growth of a more competitive and productive population of private‑sector firms. Uzbekistan needs a more dynamic and innovative private sector if it is to meet the challenges and seize the opportunities of the green and digital transitions, which create a new impetus for accelerating these reforms. Elaborating on feedback garnered through a small, focussed survey of foreign firms in Uzbekistan, this report provides new insights into their perceptions of the ongoing reform process and in doing so draws attention to some of the most pressing issues facing policymakers and business.
English version // Russian version
3. Improving Framework Conditions for the Digital Transformation of Businesses in Kazakhstan
In recent years, Kazakhstan has developed a comprehensive digital government system and begun to create the legal and regulatory conditions for the digital transformation of the country’s economy. The digitalisation of the private sector requires further improvements in framework conditions, such as reliable access to broadband services, quality and affordability of networks, and digital security for businesses. Based on recent OECD work on digital framework conditions, this report examines the legal and operational environment that is holding back the digital transformation of private firms in Kazakhstan. The report suggests three sets of actions: (1) addressing the remaining Internet quality and connectivity gaps, notably by mobilising the regional public sector to improve the quality and density of networks, and by expanding the inclusion of the private sector in the policy‑making process; (2) improving competition in, and the investment attractiveness of, the telecom sector by setting‑up an independent national telecom regulator, and by developing a targeted investment attraction strategy to prepare for deployment of next‑generation communication networks; and (3) adapting the regulatory and policy framework for firms adapting to new digital challenges and raising their awareness of digital security.
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4. Digital Skills for Private Sector Competitiveness in Uzbekistan
Since 2019, digital transformation has been a clear policy priority in Uzbekistan. While the country has made significant progress in terms of Internet access, quality and affordability, digital uptake among firms remains low. This lack of digital skills seems to be a limiting factor affecting the digital transformation of business. Based on recent OECD work on digitalisation, this report examines what is holding back the digital upskilling of businesses in Uzbekistan. It suggests three sets of policy actions: (1) developing a supportive institutional framework for the digital uptake of firms; (2) raising firms’ awareness of the importance of acquiring digital and complementary skills; and (3) expanding existing support to digitalise while addressing the gender digital divide.
English version // Russian version
Other recent work on the region
5. Weathering the Economic Storms in Central Asia
Russia’s war against Ukraine and the international sanctions introduced against the former have had an unexpectedly mild impact on Central Asia, despite the region’s deep economic dependence on its northern neighbour. Notwithstanding high inflation, the five Central Asian states – Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan and Uzbekistan – have so far shown surprising resilience to the economic headwinds: remittances registered record-high figures in the first half of 2022, national currencies quickly rebounded to pre-war levels after an initial drop, and an influx of skilled workers boosted demand for services and hospitality. However, as the medium-term effects of the sanctions against Russia, the global cost-of-living crisis, and China’s economic slowdown start to unfold, Central Asia is faced with lingering uncertainty. This publication provides an assessment of the short-term effects of Russia’s war on Central Asian economies and the policy responses provided. It also analyses the challenges ahead and formulates policy recommendations to make Central Asian economies more resilient and diversified.
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6. Improving the Legal Environment for Business and Investment in Central Asia
Weaknesses in the framework conditions for private sector development and foreign direct investment have contributed to over-reliance of Central Asian economies on a narrow range of often volatile drivers for growth, principally the export of commodities and labour. Despite recent reforms by governments across the region – such as streamlining legislation or introducing new digitalisation programmes – the business environment in Central Asia remains challenging. Even where formal settings have improved considerably, uneven implementation and enforcement, as well as frequent policy changes, create a significant gap between de jure protections and the de facto operational environment for firms. The COVID-19 pandemic has exacerbated this problem and reinforced the need to address long-standing barriers to business development that could help the region transition to a more dynamic, private sector-driven growth model.
7. Enhancing Investment Promotion in Tajikistan
Tajikistan has identified Foreign Direct Investment (FDI) attraction as a critical component of its national development strategy, which could contribute to the achievement of several policy goals, including private sector growth, job creation, and economic diversification. As the COVID-19 pandemic has increased competition for FDI, the role of investment promotion agencies (IPAs) is growing around the world. Investment promotion and facilitation work carried out by a dedicated investment promotion agency can help attract FDI, when underpinned by measures to improve the overall investment framework.
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8. Supporting Firm Creation and Growth through Business Development Services in Kyrgyzstan
National governments working to support firms facing the COVID-19 crisis have strong incentives to support entrepreneurship and private-sector development. As they struggle to survive the crisis, entrepreneurs and SMEs need accessible and high-quality public services. In addition to improving delivery of public services to firms, governments can help stimulate the market for private business services, such as business advisory or training. This Policy Insight discusses the hurdles firms in Kyrgyzstan face in accessing public and private business development services (BDS). The report suggests three sets of actions to the government: (1) offering streamlined government to business services in physical and digital one-stop shops; (2) supporting greater uptake of private business services; and (3) working with other relevant actors, such as business associations and the development community to build a stronger BDS market, which can ultimately foster much needed business development.