Kazakhstan’s Modernization Boon To Korean Investors
Ahead of the scheduled visit of Kazakh President Nursultan Nazarbayev to Korea this fall, Kazakh vice minister of investment and development came to Seoul in mid-October to smooth bilateral ties and promote commercial opportunities in his country.
Yerlan Khairov, the ministry’s No. 2 representative, had negotiations in Seoul with government officials, potential investors as well as companies that are operating in the Central Asian nation.
“Korea has always remained a priority partner for Kazakhstan in East Asia,” he told The Korea Herald last week. “Investment and technology transfer are important for our value-added industries, particularly the export priority sectors of ferrous and nonferrous metallurgy, oil refining, petrochemicals, agrochemicals, food processing, automotive and mechanical engineering.”
Firms investing in these sectors will enjoy a wide range of state support, he underscored, citing investment subsidies, favorable laws, tax incentives and industrial infrastructure.
Investors are exempt from customs duties on import of equipment and raw materials, and the state provides in-kind grants, he said. Those investing in the priority sectors receive corporate tax, land tax and property tax holidays and reimbursement of up to 30 percent of capital costs.
The “One Stop Shop” provides streamlined public services, including investment incentives, visas and various other permits and licenses, greatly reducing red tape.
There are 10 Special Economic Zones in Kazakhstan at Burabay, Saryarka, Ontustik, Astana New City, Seaport Aktau, Khorgos Eastern Gate, Chemical Park Taraz, National Industrial Petrochemical Technology Park, Park of Innovative Technologies and Pavlodar. Currently 99 international projects worth some $8 billion are being implemented across the Special Economic Zones.
“Our goal is to turn Kazakhstan into a regional investment hub for the surrounding emerging markets,” he highlighted. “We aim to turn our country into a gateway to the Eurasian Economic Union market, comprising Kazakhstan, Russia, Belarus, Kyrgyzstan and Armenia. To enable this, we have made efforts to diversify our economy and make it more stable and free from dependency on oil.”
In light of the world economy’s sputtering growth, the government under President Nazarbayev kick-started a national program called “Kazakhstan 2050 Strategy,” aimed at ensuring long-term social and economic development and entering the ranks of top 30 economies in the world.
Under the purview of the program, a new economic policy of “Nurly Zhol,” meaning the “Bright Path,” has been implemented to overhaul transport, energy and industrial infrastructure; modernize built-up spaces; nurture small and medium-sized enterprises; and revamp finance, manufacturing, housing and schooling.
To make the country a regional transport and communications hub, over 7,000 kilometers of roads will be built and repaired within the “Bright Path” initiative, and some $1.8 billion will be disbursed from 2015-16.
One key infrastructure project is the Western Europe-Western China auto corridor scheme, which covers over 8,400 kilometers and costs some $3.5 billion. Korean companies are invited to take part in various programs under the “Bright Path” through public-private partnership, Khairov said.
The bureaucrat said large-scale joint ventures with Korean enterprises are implemented across Kazakhstan, involving steel producer Posco, Kia Motors, GM Korea, SsangYong Motor, Hyunwoo Industrial and Lotte Group.
Bilateral trade topped $360 million in the first seven months of this year, while over $4 billion of Korean investment has been plowed into the Eurasian economy last year.
By Joel Lee (firstname.lastname@example.org)