On 13 December 2022, the OECD held a high-level regional webinar to kick-start the assessment of progress made by five Central Asian countries in improving the legal environment for business following the identification of priority reforms in co-operation with the OECD in 2019 to 2020. The event was organised as part of the EU Central Asia Invest initiative and brought together representatives of the OECD, the European Union, the European Bank for Reconstruction and Development, and government officials of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Opening the webinar, Mr Kęstutis Jankauskas, Ambassador of the European Union to Kazakhstan, explained that 2022 saw the European Union and Central Asia rediscovering each other and growing closer than they had before, amongst others through intensified contacts and high-level visits of EU leaders to Astana and Samarkand. Ambassador Jankauskas went on to point out the importance of measuring and tracking reform implementation, and that the EU looks forward to collaborating with the governments in 2023 to realise developments on the ground.
Mr William Tompson, Head of the OECD Eurasia Division, noted that despite the challenging context provided by the COVID-19 pandemic, Russia’s full-scale invasion of Ukraine, and China’s economic slowdown, Central Asia has seen real progress in its business environment in recent years. He pointed to the digitalisation of tax payments, improvements in the labour legislation, and the simplification of business procedures as success stories, though he stressed that further measures would be needed to increase transparency and predictability, ensure the de facto implementation of legislation, and reduce the administrative burden on small businesses.
Presenting the main findings of a new OECD report Weathering Economic Storms in Central Asia, Ms Amélie Schurich-Rey, Economist and Policy Analyst in the OECD Eurasia Division, explored the impact of Russia’s war in Ukraine on major growth drivers in Central Asia. She explained that, although the region had performed markedly better than expected, considering the ongoing geopolitical shocks, a highly uncertain economic outlook and considerable downside risks require governments to rethink their diversification agenda and diversify economic relations over the longer term. Moreover, she set out short- and long-term policy recommendations to mitigate the shock and increase resilience.


Ms Céleste Laporte Talamon, Policy Analyst in the OECD Eurasia Division, presented the crucial reform areas identified for each country from among a range of policy dimensions from the Legal Environment for Business and Investment in Central Asia report, with the most common recommendations being on investment legislation and enforcement, trade facilitation and the local operational environment for SMEs. She then outlined the upcoming assessment approach, which includes questionnaires for government agencies, interviews with the private sector and international organisations, and in-country workshops to discuss the OECD’s findings and specific challenges to the reforms.

Mr Timur Zhaksylykov, First Vice Minister of National Economy of Kazakhstan, stated that entrepreneurial development is a core reform pillar, with the government seeking to support entrepreneurial initiatives, fiscal integration, and the competitiveness of SMEs. Mr Zhaksylykov shared that Kazakhstan has been simplifying regulations and reducing excessive regulatory burden, limiting government control over the economy, optimising permits and business processes at all levels of government, and providing systematic support through concessionary financing and tax preferences to support the economy.
Ms Ainura Usenbekova, Deputy Minister of Economy and Commerce of Kyrgyzstan, said that Kyrgyzstan has been seeking to create an enabling environment to attract investments into priority sectors of the economy and develop competitive enterprises. To achieve these goals, the government has updated the tax code, implemented procedures to reduce the shadow economy, provided incentives and special preferences to certain sectors, and implemented new funds and structures to improve infrastructure. These efforts were accompanied by revised public-private dialogue mechanisms and a newly launched consulting and service centre to facilitate dialogue and interactions between citizens, firms and the government – two recommendations provided by the OECD.
Mr Mehrali Bodurshozoda, Deputy Head of the Investment Promotion Department at the State Committee for Investment and State Property Management of Tajikistan, explained that Tajikistan’s efforts were concentrated around the creation of an enabling environment to attract foreign direct investment and provide entrepreneurship support to sustainably develop the economy. In addition to simplifying bureaucratic procedures, reducing certain fees, and improving transparency, Mr Bodurshozoda showcased some of the extensive tax reforms carried out in recent years to improve the business climate.

Mr Isgender Orazov, Deputy Head of the State Finances and Economic Policy Department of the Ministry of Finance and Economy of Turkmenistan, stated that Turkmenistan has been diversifying its industry and digitalising the economy on the basis of its investment and human capital potential. Among a variety of priorities, Mr Orazov singled out Turkmenistan’s progress in developing the private sector, which saw the state-owned enterprise share decline in the non-energy sectors, as well as improved conditions to attract foreign investment.
Mr Rustamkhon Azizov, Acting Deputy Director General of the Strategic Reforms Agency of Uzbekistan, drew attention to the two ongoing reforms to draft a new investor-friendly investment law in cooperation with the International Finance Corporation and a new private sector business code. Mr Azizov also presented the first major tax reform in 2018 to 2019 and the enhanced dialogue mechanisms between the government and the private sector. He welcomed the LEB monitoring project and said Uzbekistan is looking forward to hearing about progress made as well as working on a potential investment policy review (IPR) with the OECD.
Concluding the panel discussion, Mr Eric Livny, Regional Lead Economist for Central Asia at the EBRD, talked about the region’s economic growth despite geoeconomic headwinds. He stated that while countries are reaping the benefits of higher remittances, the arrival of skilled Russian workers, and new reexporting opportunities, Central Asia should not lose sight of reforms impacting the business climate. Here, the region’s track record is complex, continued Mr Livny. He shared examples of reform successes over the recent period, before indicating that governments also reversed progress in certain issues and that a gap remains between the de jure legislative improvements and the de facto implementation of these reforms.
Finally, Mr Grégory Lecomte, Senior Policy Analyst and Head of Unit in the OECD Eurasia Division and moderator of the discussion, thanked the participants for their active contributions and their continuing collaboration on these important topics over the coming period.