Would better enforced Intellectual Property rights benefit Kyrgyz wearing apparel sector?

Kyrgyz Republic has its IP system since 1993 and the competent authority for it, is a State Service of IP and Innovation under the Government of the Kyrgyz Republic (Kyrgyzpatent). The country is a member of 70 multilateral international agreements in the area of IP, that are Paris and Berne Conventions, Madrid Agreement concerning the International Registration Marks, Patent Cooperation Treaty, TRIPS, Singapore Treaty on the Law of Trademark and others.

After the collapse in 1991, production of textiles haven’t recovered fully. The need in huge investment in capital in this area and high competition of lower priced textiles from China did not allow the country to recover its textile industry after KR gained its independence and pursued a market economy. Thus, textiles and thread are now mainly supplied by importers, mainly from China. Despite the dying textile industry in Kyrgyzstan, the production of garment has been increasing for the past decade. While small portion of garment is consumed domestically, most of it (90%) goes to export. The main export destinations are Russia and Kazakhstan (figure 3). Authors indicate that the main reasons for the expansion of this sector are Kyrgyzstan’s open trade regime[1], favourable tax treatment for the garment industry, market knowledge of the region and knowledge of customers’ tastes and preferences in export markets[2].

One of the challenges that may arise for Kyrgyz apparel sector with better enforced IP use would be special equipment, such as sewing machines. Currently, this type of equipment is being imported from China. In most instances it is not of high quality and thus may not serve as long as would higher quality branded equipment. The short term benefit of this is that the equipment is comparatively cheap. However, in the long term it would be better to have high quality equipment when the producers would be confident that the purchased equipment is from the company indicated on its label. Without better enforced IP rights, this is not feasible.

Another challenge is the computer software for designing the models. Since one licensed software package costs around 5 000 – 10 000 euros, the same but not licensed version costs around $500 (Jenish, 2014). This would make a huge difference in costs for the apparel producers, especially for micro-, small- and medium enterprises that make up the main fraction of this sector. However, the opportunities would also arise with this. The benefit is rather long term than short term. A separate designer sector may appear in the market that would specialize on making the designs of clothing and charge lower prices due to economies of scale. Clothes designers would specialize in their fields and reduce prices for their services. Also, this might be an incentive to the local software developers to make software for apparel design and sell the licenses to domestic market.

Bi-annual fashion shows are organized in Bishkek every year, where local designers show their creations. Kyrgyz designers would want to patent their creations. These shows drive competition and innovation and could have a stronger effect with better enforced IP rules. 

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[1] Kyrgyzstan is a member of WTO since 1998.

[2] Jenish, N., (2014) „Export-Driven SME Development in Kyrgyzstan: The Garment Manufacturing Sector” University of Central Asia, Institute of Public Policy and Administration. Working paper No 26.