On 10 December, the OECD participated in a virtual event organised by the American-Uzbekistan Chamber of Commerce (AUCC) to discuss OECD activities and priorities for Central Asia and engagement with the region’s governments. The webinar was an opportunity to reflect on OECD recommendations from the Beyond COVID-19: Prospects for Economic Recovery in Central Asia and the Improving the Legal Environment for Business in Central Asia reports, and country-specific work with Kyrgyzstan, Tajikistan, and Uzbekistan.
The webinar was opened by Ms Elena Son, Executive Director of the American-Uzbekistan Chamber of Commerce. She recognised Central Asian governments’ approach to improving the quality, transparency and fairness of their business climates and reaffirmed AUCC’s support to these efforts, which matter greatly for US companies. Mr Val Kogan, President of the Mid-Atlantic Eurasia Business Council, praised the OECD for its work with the region on private-sector development.
Mr Aaron Miller, Director of the International Development Program at the Virginia Small Business Development Center (SBDC) at George Mason University, described the crucial role played by Business Intermediary Organisations (BIOs) in Central Asia in supporting small businesses, which helped governments identify SMEs in need in the midst of the pandemic. Mr Elyar Ganiev, founder of the consulting company AG Mentors Group and former Deputy Prime Minister of Uzbekistan, took stock of the 2017-2021 nationwide strategy in Uzbekistan, which brought positive reforms, but left room for improvement in many areas, from trade barriers to regulatory uncertainty and banking vulnerabilities. He indicated that Uzbekistan should take advantage of its accession process at the WTO and prioritise dialogue with the private sector.
The panel discussion began with Mr Grégory Lecomte, Head of the Central Asia Unit in the OECD Eurasia Division. He presented the continuous OECD dialogue-based collaboration with Central Asian countries. He then explained how the pandemic had affected the region, compounded by its heavy reliance on commodities and labour exports, and discussed factors that could slow down the recovery. Going forward, he discussed how the three long-term challenges outlined in the Beyond COVID-19 report – green transition, business environment, and digitalisation – could support recovery and growth. Ms Amélie Schurich-Rey, Economist and Policy Analyst at the Central Asia Unit, then focused on the business environment, and explained that despite reforms in this area, lack of contract enforcement and implementation gaps remained major weaknesses. She cited Uzbekistan as a textbook example of the need for reinforced implementation capacities to see the full extent of structural reforms. Ms Talisa zur Hausen, Policy Analyst, discussed country-specific peer reviews the OECD has carried out. Recent work with Uzbekistan has focused on export promotion, for which the institutional framework was enhanced, while branding and evaluation strategies could be improved. In Tajikistan OECD work addressed FDI attraction through investment promotion, and business development services (BDS) for SMEs in Kyrgyzstan.
These presentations led to a lively Q&A session in which Ms Schurich-Rey highlighted the budgetary constraints facing Central Asian governments during the pandemic, the need for regional co-operation to overcome the crisis and the way the pandemic has served as a “wake-up call” to develop social safety nets in the region. She also agreed with Mr Lecomte’s analysis of the high cost of capital in Uzbekistan fuelled by high interest rates, which could be tamed with increased competition and prudential regulation in the banking sector. Mr Ganiev reminded participants that WTO membership could be a double-edged sword for Uzbekistan but expressed optimism that the country would join the organisation in the coming years. Finally, Ms zur Hausen indicated that investment promotion agencies should select the sectors they want to prioritise to maximise their chances to attract investors. She provided a step-by-step guidance on how to prioritise sectors, which can also be found in the upcoming report on “Enhancing investment promotion in Tajikistan”.
The session was concluded by Ms Son underlining how OECD guidance has fostered a sounder business climate to Central Asia economies and how their expertise added great value to their national strategies.