The Government of Kyrgyzstan has approved the Concept of development of the jewelry industry of the Kyrgyz Republic until 2018.
There are currently about 255 gold deposits in Kyrgyzstan, total reserves of which amount to 2,149 tones. The main part of gold is mined at Kumtor mine, gold production of which is ranked the 3rd in CIS and the 22nd in the world. In recent years, gold production at the mine remained stable at the level of 18-20 tons per year.
“The dynamic development and rise in the jewelry industry have been observed since 1998 till 2009. Over the past seven years, there has been decline in the production of jewelry from domestic precious metals and, accordingly, a significant increase in imports of jewelry. For example, the domestic production of silver in 2015 compared to 2009 decreased 2.2 times, while imports during the same period increased 28 times. The volume of domestic production of gold jewelry in 2015 compared to 2009 fell 2.9 times, while imports increased 50 times over the years. This increase has led to a sharp reduction in exports and the displacement of local producers from the market of jewelry, thus threatening the loss of the jewelry industry in future”, the concept says.
Export of the domestic jewelry is less than 5% of the total production. This figure is much higher in the shadow turnover. According to official figures of the Precious Metals Department under the Ministry of Finance, in 2015, the jewelry industry in the Kyrgyz Republic was represented by 594 business entities, including 156 legal entities and 438 individuals, 14 specialized jewelry stores, and more than 1,500 thousand people, engaged in the manufacture and trade of jewelry.
The document lists the constraints to the jewelry industry development. They are:
– lack of competitiveness of domestic jewelry enterprises due to the high cost of their products as compared with foreign manufacturers;
– high price of refined gold in the form of raw materials;
– insufficient protection of country’s market from import and illegal production, which amounts to more than 70% of annual retail sales;
– existing technical and technological level of production, not allowing introducing new sophisticated design models of jewelry;
– insufficient training of personnel for the jewelry industry;
– low provision with gem stones;
– insufficient promotion of domestic brands in the domestic and foreign markets.
The concept is aimed at creating favorable conditions for the development and rising competitiveness of jewelry industry enterprises, meeting the needs of the domestic market, increase in exports and creation of jobs. Its main goal is legalization of the shadow turnover in the market of precious metals and precious stones, the development of domestic raw material base for domestic manufacturers, etc. (24.kg/Business World Magazine)
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