She noted that even with funding, the establishment of laboratories, and the resolution of border issues, high production costs remain a significant barrier to competitiveness compared to neighboring countries such as China and Uzbekistan.
“Previously, the development of the sector depended on many factors, including a favorable exchange rate of the ruble, more lenient tax conditions, and the patent system. However, in the current environment, businesses need to adapt and focus on systematically reducing costs,” she added.
Tursunakunova explained that production costs are formed from expenses on raw materials, labor, and rent. After the events in Ukraine and changes in the market situation, the number of orders has decreased, and wages in the industry now depend more on output rather than a fixed salary.
She also emphasized the importance of production processes, highlighting the need to transition from individual tailoring to a conveyor system. This will allow for increased production volumes, maintain high quality, and significantly reduce costs through the specialization of operations.
Additionally, Tursunakunova proposed developing technoparks with special tax and customs conditions similar to free economic zones. This would allow for the import of raw materials and components without paying VAT, provided that they are subsequently processed and exported as finished products, which would significantly reduce production expenses.
“Reducing production costs will give Kyrgyzstan the opportunity to become competitive in both regional and international markets,” she concluded.
