State Influence in Oil Sector High But Investors Feel Comfortable

Sep 09. MFA

State Influence in Oil Sector High But Investors Feel ComfortableSpeaking a forum on developing manufacturing enterprises in Kazakhstan held in Astana on September 7, Chairman of the Board of Samruk-Kazyna National Welfare Fund Timur Kulibayev Timur Kulibayev also noted that state influence in oil sector is rather high, as it determines the volume of shipments for domestic market, export duties, tax legislation, etc. “And it all works,” he added.

“Of course, we have contracts that were signed in the early 1990s, e.g. the contract with the “Tengizshevroil”, where they have their own tax regime. Kazakhstan as a state stands for investment development and invites investors to Kazakhstan, showing stability of its obligations. Therefore, I think our investors feel comfortable,” he said.

However, the state will pay more attention to environmental issues, local content, and national staff. “These are all issues we are working on, including within our contacts with foreign investors,” he said.

Kulibayev emphasised that this year Samruk-Kazyna intends to increase the share of local content in the procurements of Fund’ companies up to 55% from the last year’s 50%, as well as to increase the scope of state procurement from domestic producers up to KZT 1,8 trillion, one third of which are under long-term contracts.

For making the process of state purchases more transparent public council on state procurement will be established under the Fund.

“Under my chairmanship top managers of the national companies and prominent businessmen, who work and produce goods and products for national companies, were invited to join and become members of this council. By the recommendation of Atameken National Economic Chamber 14 of such business people will be included into this council,” said Kulibayev.

According to him, in the framework of the public council, “we will develop procedures to improve the procurement process in national companies, increasing their visibility and transparency, and on the other hand, our enterprises and businessmen would be better aware of the needs and requirements of national companies.”

“We have already started to move to a five-year planning, so we can inform about our procurement plans in a medium-term period. I think it would be very useful and important information for entrepreneurs,” the Head of the Fund said.

Kulibayev stated from now on the corporation would only hire Kazakh builders for construction works within Samruk-Kazyna’s projects.

“For those objects which we are building, I’ll introduce such a requirement that 100% of constructors should be Kazakhs. We have the capacity for this,” he said.

At the same press-conference the Samruk-Kazyna chief announced the launch of a national contest of ideas “Innovative Kazakhstan” among young people devoted to 20th anniversary of Independence of the Republic of Kazakhstan.

The competition is being held under the motto “Your idea! Your chance! Your Future!” and arranged for young people aged 15 to 30 years old – school and university students, young professionals and entrepreneurs.

One of the main objectives of the Fund Samruk-Kazyna “is to promote innovative culture in companies. The solution to this problem depends primarily on the people, aimed at improving quality of life and progressive development of society, who are pushing innovative ideas to achieve these goals. Great expectations and hopes in this regard are set on young generation of Kazakhstan.

The Fund “Samruk-Kazyna” believes that the innovative development of Kazakhstan – is a complex task, which must be solved at the level of all society. It is necessary nowadays to properly educate a new generation, to prepare the staff, learn and create new technologies as well as encourage start-ups.

“I am confident that this competition will open up new names that will give a way to new original ideas and innovative solutions to urgent problems of economic and social life. And I believe if we support innovative youth today, we will get a strong Kazakhstan tomorrow,” said Kulibayev.

The competition aims to identify and support initiatives of young people in two main categories:

“Technological breakthrough”:
* Engineering and technical innovation;
* Information Technology;
* Industrial activity;
* Energy-saving technologies;
* Ecology and environmental management;
* Innovations in management.

“The social ideas”:
* Education, culture, health care;
* State, local governments;
* Social and political life;
* Infrastructure, housing and communal services in the regions, towns and villages.

Projects must be efficient from the technical, economic and environmental points of view, but also contribute to solving challenging issues for the Kazakhstan society.

“First of all, it is important for “Samruk-Kazyna” that we can get some new and fresh ideas, and secondly, to consider the youth perspectives for the personnel reserve, whom we could attract in our work”, – concluded the head of the National Fund.

There will be 10 finalists selected who will receive valuable prizes and two winners – one in each category – will receive grants amounting to 5 million tenge for their study abroad.