According to experts, the planned changes could seriously impact the country's economy, worsening the investment climate and slowing the development of key sectors, including the strategically important telecommunications sector.
The government intends to obtain permission to regulate prices for services and works. In particular, it wants to have the ability to introduce state price regulation for up to 90 calendar days a year, with the possibility of extension if necessary, for:
- socially significant goods and services, the list of which will be approved by the Cabinet of Ministers;
- goods and services provided by dominant players in the market.
The International Business Council characterized these amendments as excessive and risky, pointing out that limiting profitability to 25% makes Kyrgyzstan less attractive to investors, especially in capital-intensive sectors such as telecommunications, energy, and construction services. High-tech companies require a larger margin for the return on investments and further growth.
Price regulation may also affect mobile operators, which contradicts the national digitalization strategy and could lead to a decline in the quality of services provided and a slowdown in the implementation of new technologies.
Additionally, the IBC reminded that the proposed changes contradict Article 41 of the Constitution, which guarantees economic freedom, and the National Development Program until 2030, which aims to reduce state intervention in business.
The new approach would allow the government to add any services to the list of regulated ones with almost no restrictions, creating legal uncertainty and opening opportunities for arbitrary decisions.
“We believe that the government's attempts to revert to direct regulation methods concerning dominant companies, especially in the mobile services market, contradict the foundations of the dominance institution,” the council stated.
The business community suggests maintaining the current version of the Law "On Pricing" and not excluding part 5 of Article 6, which prohibits price regulation for all other services.
The International Business Council hopes that officials and deputies of the Jogorku Kenesh will consider the business position when making decisions.
