AmCham Executive Director Hails Kazakhstan’s Cooperation with Investors
Feb 17. MFA
In a modern world facing economic challenges, attraction and effective use of foreign investment is one of the main trends in mutually beneficial trade and economic ties of one country with other ones. Kazakhstan is not an exception.
The Kazakhstan government has paid special attention to the creation of a favourable investment climate in the country since independence in 1991. The country continues carrying out social and economic reforms, building market economy, and creating conditions for doing business and attracting investment.
This ongoing work on investment climate development has helped Kazakhstan attract over US$ 136 billion of FDI since 1993, and opened the country’s attractive market to the world community. Today world’s largest companies are active in Kazakhstan.
“Both the foreign business community and the business community in general have made a huge contribution in every respect to the development in this country, not just to the economy, but to political development and social development as well,” Doris Bradbury, Executive Director of the American Chamber of Commerce in Kazakhstan, said in her interview to “The Business Year” magazine. “Foreign companies have helped to introduce Kazakhstan to the world, and brought it into the new century. Having a foreign business community here early on has been very helpful in this regard,” she added.
“The oil majors, such as Chevron and Exxon, were the first to come here in the 1990s, and as the decade progressed, economic development became more open. Now, a host of sectors is emerging as growth engines,” she added.
A great significance is attached to all aspects of a favourable business climate for investors in Kazakhstan, including elimination of administrative barriers, simplifying procedures, enhancement of law enforcement and judicial systems efficiency, as well as improving tax and customs administration.
Kazakhstan holds a leading position in terms of number and quality of recent reforms among CIS countries. According to World bank ratings, over the past two years, Kazakhstan was at the top of the list of 10 countries that have achieved considerable success in creating favourable conditions for conducting business. Still, there is work to be done.
“From what we see day-to-day, the big market movers really have a lot to do in terms of Kazakhstan’s development. They are vocal and AmCham ensures that their voices are heard at the very top where it matters. There are many investor issues that still require action. Foreign investors are active in this regard, and we see AmCham’s responsibility as organizing their access to the very top policy-makers and supporting them in every way. But Kazakhstan is listening, and that is important,” Bradbury said.
Currently, the work on improvement of the country’s business attractiveness is conducted within the State Programme for Accelerated Industrial and Innovative Development.
The Government has developed the National Plan on investment attraction that includes such measures as relief of customs duties of investment projects, special preferences for investors working in strategic sectors and projects, stability of legislation for investors in the processing sector. A national status was assigned to international investment in Kazakhstan, meaning foreign and domestic companies have the same conditions to conduct investment activities. Kazakhstan has favourable tax and investment climate and stable banking system. The state also creates preferential conditions mainly for manufacturing sectors.
Kazakhstan’s legislation also stipulates various guarantees to minimize risks that an investor can incur in carrying out investment activities in Kazakhstan such as legal protection of investor’s activity, income use warranty, transparency of state body activities with regard to investors, investor rights warranty in case nationalization and requisition take place, etc.
In terms of other tools of influence on business environment development, the AmCham through its policy advocacy initiatives also provides opportunity for its members and government officials to engage in an on-going dialogue with the intention of improving the business environment for foreign and local investors alike.
“AmCham has developed a very strong advocacy voice in recent years that allows us to speak on behalf of our members directly to the Prime Minister. We have specialized working groups composed of CEOs who write policy papers that we present to the Prime Minister and that are then discussed by the Group Chairmen with the relevant ministers. We also organize public conferences with broad attendance by the media on issues like rule of law and anti-corruption to encourage public discussion of these issues. These conferences involve government ministers and, when they are held in Astana, are broadly attended by the government and diplomatic corps,” the director said.
“As I said earlier, the government is listening and the relationship with the government of Kazakhstan is a good one. The government understands how important foreign investment is for Kazakhstan and knows that investors only come when the business environment is supportive. Kazakhstan has benefitted from foreign investment and shows respect for both investors and for AmCham as their representative,” she concluded.
International ratings also serve as evidence of a favourable investment climate in the country. Kazakhstan was ranked 47th in the World Bank’s Doing Business 2012 Report in terms of the ease of doing business and investor protection. In particular, Kazakhstan has improved its ratings in such categories as protecting investors, paying taxes, dealing with construction permits and getting electricity.
Kazakhstan has strengthened investor protections, for example, by regulating the approval of transactions between interested parties and making it easier to sue directors in cases of prejudicial transactions between interested parties, the WB report read. The ranking makes Kazakhstan by far the easiest place to do business among CIS countries.