IFC Helps Kyrgyz Republic Deliver on Business Reforms
Partnering with Switzerland’s State Secretariat for Economic Affairs (SECO), IFC has over the past year helped the Kyrgyz government overhaul its business inspections system, significantly reducing the administrative burden and slashing costs for local businesses.
The number of inspectorates has decreased by nearly half – from 21 to 12 – while the number of business inspections has been cut by from 24,409 in 2011 to 13,507 last year, according to the Ministry of Economy of the Kyrgyz Republic. The time small businesses spend on inspections has been slashed from 30 days in 2011 to just five in 2012.
“This is a very important accomplishment, as entrepreneurs usually complain that the presence of inspectors disturbs normal operations, takes time, and makes the employees feel nervous,” says Temir Sariyev, the Kyrgyz Minister of the Economy.
The new system introduces a risk-based approach to inspections that allows businesses with low risk to be inspected no more than once every five years. Businesses that represent legitimate potential threats to health and safety are inspected once every one to three years, depending on the level of risk.
“Previously, very often inspectors didn’t know the subject of their inspection – requesting various documents and information while distracting entrepreneurs from their work,” said Uluk Kydyrbaev, Executive Director of the Bishkek Business Club. “Now, selecting business to be inspected in accordance with the level of risk they represent significantly reduces the number of inspections and save time and money for many businesses in the country.”
Another important innovation is the introduction of a checklist setting out the requirements for businesses during inspections. The checklist increases the transparency of inspections and reduces the potential for corruption as inspectors cannot make demands beyond the requirements stipulated in the checklist.
“We are moving in the right direction,” said Samat Aliev, Deputy Director of the State Inspectorate on Sanitary Safety. “We cannot turn away from this path.”
With IFC’s assistance, the Ministry of Economy also introduced an online portal for business inspections, www.proverka.kg. The new system gives business better access to information about planned inspections and allows them to check government regulations. The portal is becoming popular in the country, which boasts 40 percent Internet penetration, the highest in Central Asia.
“Jointly with the Kyrgyz government, we have achieved impressive results to make inspections more efficient for both businesses and inspectors, minimize costs to businesses and optimize outcomes for the government,” said Irina Kokaia, Project Manager, IFC Investment Climate Project in the Kyrgyz Republic.
Published April 2013, by IFC Corporate Communications