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Factors Inhibiting Growth and Competitiveness of Value Added Industries in Kyrgyzstan: A Value Chain Analysis of Strategic Industries

The three industries analyzed were 1) cotton-to-textiles, 2) sheep farming and wool products, and 3) dairy and dairy products. In the dairy sector, the IVCA showed that poor availability and high cost of animal feed for large commercial dairy farms icombined with administrative barriers imposed by the road police on small dairy farmers are undermining the competitiveness of dairy based products. At the processing level, shallow management skills, fragmented production, the absence of market cohesion and structure, weak or often non-existent enterprise support infrastructure (e.g. distribution, freight transport, and warehousing), an underdeveloped packaging industry, and lack of access to market information and marketing services have thwarted market potential and growth opportunities for local enterprises.
Analysis showed that removing administrative barriers imposed by government and non-governmental organizations would improve competitiveness of dairy products by reducing production costs up to 33%. Our solutions helped the Kyrgyz government target and prioritize actions for administrative reform and identify root causes of market distortions imparing competitiveness of strategic Kyrgyz enterprises.

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