Progress of implementation of State Program for Accelerated Industrial-Innovative Development of Kazakhstan in 2010-2014
January 18. KAZINFORM. ASTANA
The State Program for Accelerated Industrial-Innovative Development of Kazakhstan in 2010-2014 was developed at the encouragement of President Nursultan Nazarbayev in his 2010 State of the Nation Address “A New Decade – A New Economic Growth – New Opportunities of Kazakhstan,” as well as in accordance with the Strategic Plan for the Development of Kazakhstan till 2020.
The program is a logical continuation of the policy to diversify the economy and involves the key approaches laid out in the Strategy of Industrial and Innovation Development for 2003-2015, and of the program “30 Corporate Leaders of Kazakhstan,” as well as other policy documents in the field of industrialization, the News Bulletin of the Embassy of the Republic of Kazakhstan to the US reads.
For the period until 2015, the main priority of for industrialization will be the implementation of major investment projects in the traditional export-oriented sectors of economy along with the multiplication of new business opportunities for small and medium-sized businesses through the purposeful development of local content, subsequent conversion and processing.
The program’s goal is to ensure sustainable and balanced economic growth through diversification as well as to enhance Kazakhstan’s economic competitiveness.
Main key performance indicators of the Program. Increase by 2015:
– GDP by 50% of the 2008th GDP;
– Productivity in manufacturing industry by no less than 1.5 times;
– Share of the manufacturing industry in the structure of GDP to 12.5%;
– Share of non-raw materials exports in the total volume of exports to 40%;
– Share of innovative enterprises in the number of active enterprises to 10%;
Decrease by 2015:
– Energy intensity of GDP by no less than 10% of the 2008th.
The State’s efforts will focus on the development of the following sectors:
– Traditional: Mining and Metallurgical Complex, Atomic industry, Chemical industry and Petrochemicals;
– Based on domestic demand: Machinery, Construction industry and Pharmaceuticals;
– Export oriented: Agriculture, Tourism and Light industry;
– Sectors of “future economy”: Information and Communication Technology, Biotechnology and Alternative Energy.
In 2010, the “Program to attract investment, the development of free economic zones and export promotion in 2010-2014” was developed by the Government of Kazakhstan, which includes support programs “Export-2020” and “Investor-2020”, operated by National Export and Investment Agency “KazNEX Invest” JSC.
The “Export-2020” and “Investor-2020” programs provide for further improvement of the investment climate for domestic and foreign investors, involves a number of measures to improve the investment climate of Kazakhstan and to build a system of service and financial support for exporters.
“Road Map Business 2020” aims to develop small and medium-sized businesses, as well as the creation of permanent jobs, and “Productivity-2020” aims to help enterprises improve their effectiveness, technological advancement, economic productivity as well as the optimization of production and business processes.
In addition to these programs, the new law on “Special Economic Zones” was adopted in 2011, providing a number of additional benefits to investors such as: a simplified procedure for foreign labor, the principle of “one stop shopping”; VAT zero-rated sales of goods to the territory of SEZ or consumed by SEZ participants for activities that meet the objectives of SEZ; the abolition of ground rent for SEZ participants for a period of not more than 10 years, the reduction of social tax payable to the budget by 100% for software companies for up to 5 years; the reduction in CIT at 100% of income from the activities appropriate for the purposes of SEZ and other. Also, three new special economic zones including “Saryarka” in Karaganda region, “Khorgos – East Gate” in Almaty region and “Pavlodar” in Pavlodar region were established apart from 6 existing ones.
At the end of first stage of the program, 609 projects with total cost of 9.6 trillion tenge have been introduced within the Industrialization Map, 237 industrial projects totaling over 1 trillion tenge were launched by the end 2011 and over 20 thousand new, permanent jobs were created.
The Ministry of Foreign Affairs of the Republic of Kazakhstan is actively involved in attracting foreign direct investment to Kazakhstan. In particular, various conferences, forums and workshops were organized by Diplomatic Missions in different countries such as the United States, members of the the European Union, the United Arab Emirates, Vietnam and others. With the support of our Embassies, 20 Trade Missions have been organized and export contracts worth more than $100 million USD have been signed. Over the past 2 years, 11 foreign companies from Forbes’ Global-2000 list were involved in our economy.
Foreign direct investment in Kazakhstan has increased every year since 1994. Since its independence, Kazakhstan has attracted FDI of over $136 billion USD.
Kazakhstan’s investment capacity has more potential for even more growth. Research shows that FDI inflows can be increased by $10 billion USD annually. Considering the fact that global competition for FDIs have increased dramatically of late, the Government of Kazakhstan saw the need to revitalize its National Plan for attracting such investments.
The National Plan consists of four main sections. The first provides for the establishment of a Special Regime for improving investment promotion legislation. The Special Regime will include additional investor support measures actively used by Kazakhstan’s major competitors and will apply to strategic investment projects.
The second direction, which tentatively called “entry group,” concerns the work of diplomatic missions, customs and border services, and other state bodies that are approached by a potential investor. The first priority – the simplification of visa policies – is expected to introduce a trial version of a visa-free regime for short visits of two to three weeks for the summer months of 2012 for citizens of 13 OECD countries – with reciprocity expected. The second section is aimed at resolving a number of problematic aspects that negatively affect the process of attracting investment. These include extending the allowed period of stay for foreign visitors, shortening the list of documents required for visa application, addressing the absence of the English-language in signage, and other common-sense steps. Third, to ensure systematic work with investors it is necessary to intensify the activities of all actors involved in attracting investment at all three levels: the level of the diplomatic missions abroad, at the level of the central state, and at the level of the regions within the country.
Another section of the National Plan concerns the automation of the process of interaction between all participants of the system of attracting investments.
The online database allows for all the information on the meetings and projects being implemented with the participation of investors starting from the moment the investor received the visa to obtain land, to the moment they obtain the land from the akimats (local administrations). The database enables users to track the history and degree of cooperation with investors, ensuring transparency of the process.