Regulating prices for business services could set a dangerous precedent — Askar Sydykov

A bill is under discussion in Kyrgyzstan that could give the government the authority to regulate prices not only for socially significant goods but also for services. The business community has already called the initiative a dangerous precedent and warned of risks to the free market.

The proposed amendments are to be made to the Law “On Pricing.” They provide for the possibility of including the services and works sector in the list of socially significant categories, the prices of which the state will be able to regulate.

At parliamentary hearings, the head of the Antimonopoly Service, Aibek Mamyraliev, stated that the adoption of the law does not mean automatic control over all services.

According to him, the mechanism will operate on a case-by-case basis. For example, if prices for bathhouse services rise sharply, the government will be able to make a separate decision to introduce regulation specifically in this sector. Only after such a decision will the Antimonopoly Service have the right to intervene in pricing.

However, the bill itself does not yet specify which services may be recognized as socially significant. Authorities promise to develop the list of sectors in collaboration with the business community.

However, entrepreneurs fear that virtually any service could fall under regulation in the future.

Askar Sydykov, Executive Director of the International Business Council, stated that the document creates an opportunity for state intervention in the sectors of freight transportation, tourism, hairdressing services, as well as cafes and restaurants.

“Right now, they say that this or that sector won’t be subject to regulation. But no one can guarantee that this won’t change tomorrow. The government can pass a resolution in a day or two,” he noted.

According to Sydykov, if businesses stop making a profit due to administrative price regulation, entrepreneurs will either close their companies or go underground.

He emphasized that the business community does not support the proposed changes.

For his part, the head of the Antimonopoly Service pointed out that the state already regulates prices for coal, bread, and meat, and, according to him, not a single enterprise in these sectors has closed.