Kazakhstan: Opportunities for Investors
As a country leading the region in terms of social and economic growth, Kazakhstan could play a key role in the region turning Central Asia into an economically viable and independent region. It could drive and facilitate a dialogue with multinational corporations and incite international investors to develop the entire Central Asian region.
According to the World Bank’s the annual report on status and freedom of entrepreneurship in 145 countries worldwide, Kazakhstan is in the 5th (of seven) group with countries such as Germany, Denmark, New Zealand, Switzerland, Singapore and Georgia, which has the best result in the CIS. We intend to make further efforts to obtain an even higher ranking.
At this time, attracting investment capital to the economy of the Republic is one of the higher-priority tasks of the government. According to expert’s estimates over 80% of all direct investment in Central Asia was made in Kazakhstan. The World Bank ranked Kazakhstan as one of the twenty most attractive countries in the world for investors.
Foreign investors are becoming increasingly interested in the Kazakh market. Therefore there were 7,070 companies with foreign involvement in 2004 versus 6,579 in 2003 and 1,865 in 1999. These figures make it possible to describe Kazakhstan’s investment environment as liberal, enabling foreign investors to operate in virtually all sectors.
Laws have been passed and steps have been taken which have contributed to enhancing the country’s investment image and, accordingly, the inflow of foreign investment in its economy. As a result, Kazakhstan has been leading the CIS for a number of years in terms of FDI per capita.
In view of the limited access of Kazakhstan residents to borrowed reserves on the international capital market, the retention of a stable high inflow of direct international investment is the main factor that guarantees the balance of the balance of payments. According to the results of the year 2007, the surplus balance of operations of direct investment amounts to USD 7.1 bln, in comparison with USD 6.6 bln. of the preceding year.
As a part of the efforts to establish petrochemical facilities in Kazakhstan, (now one of the priority sectors), plans are in place to build a petrochemical plant to produce polyethylene and polypropylene in the west of Kazakhstan. The project is being prepared by the local firm Sat & Co, which is negotiating the involvement of the world’s largest producer of polyethylene and polypropylene – BASELL.
It is planned to implement a number of investment projects in association with the government development institutions. For instance, the JSC Kazakhstan Investment Fund reached an agreement with the Pilkington Firm of the UK (one of the world’s largest producers of glass plates) on collaboration on constructing a plant to produce glass plates in the Kyzylorda Region. There are many similar projects. Investment projects of social and economic significance to both individual regions and the country as a whole are now either being implemented or are expected to be implemented in all parts of Kazakhstan.
In September 2007 the Kazakh government approved a new list of priority activity categories in terms of investment. There are 237 of these in all, including agriculture, light industry, chemical and metallurgical industries, machine building, the electric power sector, transport sector, construction material sector etc. Kazakhstan's strategic aspiration is to become a modern, diversified economy with a high value-added and high-tech component, well integrated into the global economy.
