Sultanov B.K. Kazakhstan Today
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2002 гг.): Учеб. пособие. – 2-е изд., перераб. и доп. – Алматы:
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// www.mfa.kz
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реализации Хьюстонской инициативы // http: // ru.government.kz
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30. Председатель комитета Мажилиса встретился с послом
США 16 января 2009 г. // www.inform.kz
Kazakhstan today
Chapter 3. Foreign Policy
The CICA ministers of foreign affairs held their third meet-
ing in Almaty on 25 August 2008 and summarised the results of
their performance. They also welcomed Jordan and the UAE as
new members of the CICA and adopted the declaration entitled
“the CICA Progress in Implementation of Confi dence-Building
Measures”.
With continued interest from the member states the CICA
process may become a forum for dialogue between the parties in-
volved with a possibility of becoming an international law-making
institution. The implementation of the idea is capable of becoming
a basis for creating a regional security system and speeding up
processes of economic, cultural and social cooperation between
Asian countries.
222 223
31. Внешняя политика Республики Казахстан. Хроника
(1991—1999). – Алматы, 1999. – 120 с. – С. 32.
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содействия в СНГ// http://ncu.at.kz.
33. Соглашение о партнерстве и сотрудничестве между
Республикой Казахстан, Европейскими Сообществами и их
Государствами-членами. – Европейский Союз. Представительство
Европейской комиссии в Казахстане, 1999.
34. Официальный сайт Министерства иностранных дел РК
// http://www.mfa.kz
35. Официальный сайт Агентства РК по статистике // http:
// www.stat.kz
36. Дипломатический курьер. – 2007. – №1 (02). – С. 39.
37. По материалам официального сайта Министерства ино-
странных дел Республики Казахстан // http: // portal.mfa.kz
38. Токаев К.К. Дипломатия Республики Казахстан. – Астана:
Елорда, 2001.
39. Ближний Восток становится ближе // http: // www.
kazenergy.com
40. Токаев К.К. Дипломатия Республики Казахстан. – Астана:
Елорда, 2001.
41. По материалам официального сайта Министерства
иностранных дел Республики Казахстан // http: // portal.mfa.
kz
42. Перспективы укрепления казахстанско-индийского парт-
нерства. – Алматы: КИСИ при Президенте РК, 2006.
43. Министерство иностранных дел РК // www.mfa.kz
44. Токаев К.К. Под стягом независимости: очерки о внешней
политике Казахстана. – Алматы: Бiлiм, 1997.
45. Совместное Заявление Республики Казахстан и Респуб-
лики Корея по случаю официального визита в Республику Корея
Президента Республики Казахстан 12–14 ноября 2003 г. // Казин-
форм. – 2003, 14 ноября.
46. Подписано Совместное заявление Республики Корея и
Республики Казахстан // Казинформ. – 2004, 20 сентября.
47. Ермекбаев Н. Индонезия в орбите внешнеполитических
интересов Казахстана // Analytic. – 2008. – № 4.
48. Токаев К.К. Под стягом независимости: очерки о внешней
политике Казахстана. – Алматы: Бiлiм, 1997.
49. Агентство по статистике РК.
50. Выступление Президента Республики Казахстан
Н.А. Назарбаева на 47-й сессии Генеральной Ассамблеи ООН
(Нью-Йорк, 5 октября 1992 г.) // Официальный сайт Президента
РК // www.akorda.kz
51. Мирному сотрудничеству альтернативы нет // Казахстан-
ская правда. – 2002, 18 октября.
52. В Алматы завершилась 63-я сессия ЭСКАТО. 23 мая 2007 г.
// www.un.org
53. Токаев К.К. Дипломатия Республики Казахстан. – Астана:
Елорда, 2001.
54. Программа действий по развитию Содружества Независи-
мых Государств от 21 июня 2000 г. // http // cis.minsk.by/
55. План основных мероприятий по реализации стратегии
экономического развития СНГ до 2020 г. // http: // cis.minsk.by/
56. Пятеро президентов на встрече в Боровом приняли сен-
сационные решения // htpp: // www.centrasia.ru
57. Декларация о создании ШОС от 15 июня 2001 г. // htpp:
// www.sectsco.org
58. Материалы саммита глав государств Шанхайской организа-
ции сотрудничества от 5 июля 2005 г. // htpp: // www.sectsco.org
59. Бишкекская декларация от 16 августа 2007 г. // htpp: //
www.sectsco.org
60. В Москве дипломаты стран ШОС обсудили подготовку
к созыву специальной конференции по Афганистану // http: //
www.ca-news.org
61. Назарбаев Н. Ключи от кризиса // Российская газета.
– 2009, 2 февраля.
62. Рахматулина Г. Динамика развития интеграционных
процессов в государствах СНГ и перспективы формирования Еди-
ного экономического пространства / Под. ред. М.С. Ашимбаева.
– Алматы: КИСИ при Президенте РК, 2004.
63. Выступление Президента Республики Казахстан
Н.А. Назарбаева на Пятом Форуме руководителей регионов Казах-
стана и России 22 сентября 2008 г. // http: // www.akorda.kz.
64. Заявление «О десяти простых шагах навстречу простым
людям» // Бюллетень развития интеграции. – 1998. – № 2.
65. Рахматулина Г.Г. Перспективы формирования Союза
центральноазиатских государств // Казахстан-Спектр. – 2005.
– № 3.
66. Выступление Президента Республики Казахстан
Н.А. Назарбаева на Первом саммите СВМДА // www.mfa.kz
67. Декларация СВМДА об устранении терроризма и содей-
ствии диалогу между цивилизациями. – Алматы, 4 июня 2002 г.
// www.mfa.kz
Kazakhstan today
Chapter 3. Foreign Policy
224 225
68. Декларация принципов, регулирующих отношения между
государствами – членами СВМДА // СВМДА: вопросы и ответы
(справочник). – Алматы: ЦВПА, 2001.
69. Фомин О. Надежды Азии – в балансе новой стратегии //
Экспресс К. – 2006, 1 июля.
70. Декларация второго саммита СВМДА // Пятнадцати-
летний юбилей СВМДА: взгляд сквозь призму лет. – Алматы,
2007.
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
CHAPTER 4. KAZAKHSTAN’S ECONOMY
4.1. Strategy for Economic Reform
The grave socioeconomic crisis of the late 1980s and early 1990s
broke down the USSR and economic ties, and accelerated unemploy-
ment and infl ation. It was time to take decisive steps to overcome the
existing misbalance and reform the economy.
The fi rst stages of the economic reform aimed at overcoming
the crisis and ensuring stable development of the necessary insti-
tutes of the new economic system. From 1992 to 1997, the most
important, backbone reforms were effected, including economic
liberalisation, privatisation, the building of a market infrastructure,
introducing the national currency and developing the fi nancial
system, as well as the tax and budget systems, and the attraction
of foreign investment.
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Kazakhstan today
Chapter 4. Kazakhstan’s Economy
These reforms and anti-crisis programmes fostered the expansion
of the market economy and formed the basis for macroeconomic
stabilisation and the transfer to a new stage of development.
The Kazakhstan 2030 Development Strategy announced by Presi-
dent Nazarbayev in October 1997 was the most important factor in
determining a logical route for the nation’s progress. Later on, mid-
term strategic plans and programmes were prepared in order to attain
the priorities set by the Strategy.
From 1998 to 2006, the dynamics of the key macroeconomic in-
dicators was stable. GDP, industrial production, investment, foreign
trade, gross agricultural produce, and other economic indicators were
steadily rising.
By 2007, the rate of economic growth averaged 10%. GDP per
capita exceeded $6,800 compared to $1,445.9 in 1997 (an almost
fi vefold increase). Trade in the same period grew 5.4 times, including
exports 6.6 times and imports 4.2 times.
As the economy stabilised, important macroeconomic measures
were taken. These included the improvement of tax laws, the intro-
duction of a savings pension system, the formation of a stock market,
and the development of a two-tier banking system. At this stage, a
new objective was set: to diversify the economy, make effective use
of environmental assets, and encourage the advancement of knowl-
edge-intensive high-tech processing production.
The strategic approach to the use of the country’s natural resources
resulted in the creation of the National Fund in August 2000. Its pur-
poses are to ensure stable socioeconomic development, accumulate
fi nance for future generations (savings function), and ease the econo-
my’s exposure to unfavourable external factors (stabilising function).
Today, the National Fund’s reserve exceeds $25bn.
The current stage of Kazakhstan’s economic development is de-
termined by the Industrial and Innovation Development Strategy for
2003-2015 prepared in 2002. This comprehensive programme aims
at economic diversifi cation and the transfer (in the long term) to a
service and technological economy.
The diversifi cation of industries and exports required the crea-
tion of special development institutions. The Kazyna Sustainable
Development Fund and the Samruk Kazakhstan Holding for State
Asset Management were set up to ensure the systemic and coordi-
nated functioning of Kazakh national companies and government
development institutions.
The main principles of the national holding and national manage-
ment company are to enhance the competitiveness and economic
activity of companies, to introduce the best corporate governance
practices, and to assist the government in advancing companies.
The key activities of Kazyna are the development and imple-
mentation of the strategy to improve the competitiveness and
export opportunities of small, medium and large businesses in
Kazakhstan, create the conditions and stimuli for businesses to
enter the global market, form export niches, and advance the
nation’s infrastructure.
The fi nancial and innovation development institutions under Ka-
zyna’s management include the Development Bank of Kazakhstan,
the National Innovation Fund, the Investment Fund of Kazakhstan,
the Corporation for Export Development and Promotion, the State
Export Credit and Investment Insurance Corporation, Damu Small
Business Development Fund, Kazyna Capital Management Fund,
and Kazakhstan Investment Promotion Centre.
Kazyna’s development institutions take a proactive part in the
implementation of promising investment, industrial, and innovation
projects in the framework of the Diversifi cation of Kazakhstan’s
Economy through the Development of Clusters in the Non-Extrac-
tive Sectors programme (the Cluster Initiative) launched in 2004,
and the 30 Corporate Leaders Programme prepared in 2007 to further
modernise the economy.
The objective of these programmes is to consolidate the efforts
of businesses and the government to create new production and up-
grade existing production so as to ensure diversifi cation and enhance
the export potential of the non-primary sector in the medium term
(before 2015).
Samruk Holding consolidated the government stakes in Kazpochta
(the national mail operator), KEGOC (Kazakhstan Electricity Grid
Operating Company), Kazakhtelecom (the national telecommunica-
228 229
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
tions operator), Kazmunaigas (the national oil and gas company), and
Kazakhstan Temir Zholy (the national rail company).
The main purpose of the holding is to prepare and implement a
strategy for the development of the real sector that would meet the
country’s interests, and to maximise the long-term value of the com-
panies. The uniqueness of Samruk, which is the fi rst such association
in the CIS, is that it combines the stability of a government economy
with the dynamism of a business-orientated company.
For objective economic and geographic reasons, Kazakhstan
pays particular attention to uniform regional development, and
effective territorial and economic organisation of regions. To this
end, the Territorial Development Strategy until 2015 was prepared
in 2006.
To strengthen the institutional base of this fundamental strategy, it
was decided to set up regional development institutions in the form of
social and business corporations. Compared to commercial corpora-
tions, their main difference is that they reinvest their profi ts to attain
the social, economic, or cultural goals of the region in the interests
of which the corporation has been set up [1].
In 2007, seven social and business corporations consolidating
geographical regions were set up in Kazakhstan. Their operations
have already produced results.
The strategic approach to the advancement of the socially orien-
tated economy helped Kazakhstan form the conditions for quality
economic growth, improvements in living standards, and the devel-
opment of competitive sectors. Further efforts will aim at deepening
diversifi cation, strengthening production infrastructure, and enhancing
government support for business activities. This solid base will help
counteract external challenges more effectively.
The current stage of Kazakhstan’s economic strategy is determined
by the need to overcome the effects of the global economic crisis.
The results that were earlier attained through the nation’s economic
policy allow one to conclude that the country will successfully pass
this crisis stage.
As a part of the global economy, Kazakhstan was also exposed to
the effects of the global fi nancial crisis of 2007. In the autumn of 2007,
the fi nancial sector faced problems that resulted in cuts in lending for
shared construction and to small and medium businesses.
The shortage of liquidity affected the rates of industrial growth,
which fell to 4.5% in 2007. The government took urgent steps to
stabilise economic development – $4.6bn was allocated to improve
situation in the fi nancial sector.
The second wave of the fi nancial crisis stepped out the global fi -
nancial system, with an adverse effect on the real sector. This resulted
in a signifi cant slowdown in the global economy and a respective
fall in the global demand for goods and services. To stabilise and
revitalise the domestic economy, Kazakhstan’s government had to
take additional measures.
On 25 November 2008, the government of Kazakhstan approved
the Plan of Action to Stabilise the Economy and Financial Sector in
2009-2010 (the Anti-Crisis Programme) fi nanced from the national
budget and the National Fund. A total of 2.2 trillion tenge, or about
20% of GDP, is expected to be injected into the economy.
The main operator of the Anti-Crisis Programme is the Sam-
ruk-Kazyna National Welfare Fund, which was set up in 2008
following the merger of the Samruk Kazakhstan Holding for State
Asset Management and Kazyna Sustainable Development Fund.
Samruk-Kazyna’s main task is to foster the development of Ka-
zakhstan’s economy against the background of the global crisis,
using the fi nancial and other resources of national development
institutions.
Today, the stability of the fi nancial environment, which is the
key element of the economy, is extremely important to our country.
Finance is often referred to as the circulatory system of the economy,
and every breakdown in this system adversely affects the activities
of the whole complex.
A total of $4bn was allocated to support the fi nancial system. This
money was used to additionally capitalise the four leading banks
(Halyk Bank of Kazakhstan, Kazkommertsbank, Alliance Bank, and
BTA Bank) through the purchase of additional issues of their shares.
According to the capitalisation terms, the money will be used to
implement projects in the real sector.
230 231
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
It should be emphasised that the government does not intend to
nationalise the banks. Samruk-Kazyna will own up to 25% of their
shares, and when the global fi nancial crisis eases the government will
gradually withdraw the state holding (on market terms).
Another important element of the support of Kazakhstan’s fi nan-
cial system is the creation of the Distressed Asset Fund, also in the
framework of the Anti-Crisis Programme. Its main task is to improve
the fi nancial condition of commercial banks by purchasing distressed
assets and managing them, including sale in the market.
In 2008, the national budget spent 52 billion tenge, as the fi rst
tranche, to capitalise the Distressed Asset Fund. In 2009, the fund’s
authorised capital will be increased to 122 billion tenge, also from the
national budget. The fund allows foreign investors to participate.
The second most important objective of the Anti-Crisis Programme
is to resolve problems in the real estate market. The programme con-
tains measures to revitalise the construction market. In particular, the
government will purchase and complete properties that are at least
20% complete. Money will be provided to refi nance mortgages with
lower interest rates, for additional mortgage lending, and for the
establishment of the Rental Housing Fund.
Local executive bodies (akimats) and social and business cor-
porations will take a proactive part in the implementation of this
objective.
The third task for the Anti-Crisis Programme is to support small
and medium businesses. This is an extremely important objective for
our country because small and medium businesses, being an engine
of the economy, enhance its diversifi cation and structural reconstruc-
tion opportunities.
To support small and medium businesses, the National Fund will
spend $1bn, which will be used to refi nance existing loans of small
and medium businesses and issue new ones. In this case, the interest
rate will not be higher than it was before the crisis (not more than
14%).
Another factor that will encourage economic activity by the popu-
lation will be the measures taken by the government to increase local
content in large mining projects.
The Anti-Crisis Programme is also expected to provide funds to
develop the agro-industrial sector. This is a very important objective
for Kazakhstan because 47% of its population lives in rural areas.
To implement this, the National Fund will contribute $1bn, and the
national budget a further $3bn. This money will be used to develop
processing industries in the agricultural sector.
An essential task of the Anti-Crisis Programme is the implementa-
tion of innovative, industrial and infrastructure projects. The National
Fund will spend $1bn on these activities, and another $3bn is expected
to be raised in foreign direct investment during 2009. The 30 Corpo-
rate Leaders Programme will also be pursued proactively.
Signifi cant attention will be paid to infrastructure projects, which
will help stimulate domestic demand and foster economic growth in
the country.
In addition, the Programme states that the government will use its
best endeavours to preserve the real incomes of people, and ensure
the performance of the Head of State’s order to raise social pay-
ments, pensions, and salaries to the public sector in 2009-2011. In
other words, all social obligations will be discharged irrespective of
the price of oil.
It should be emphasised that, in counteracting the global economic
crisis, Kazakhstan is gaining respective experience. When external
sources of fi nancing are closed, strategic approaches and decisions are
being found based on the country’s own opportunities and resources.
This gives us confi dence that the country will progress further.
The comprehensive implementation of the Anti-Crisis Programme
will help Kazakhstan resist the existing globalisation threats and
overcome the crisis, moving to a totally new level of development.
232 233
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
4.2. Kazakhstan’s Natural Resources
Kazakhstan has a huge resource potential, which plays an impor-
tant part in its dynamic economic development.
The country ranks fi rst in terms of the known reserves of zinc,
wolfram, and barytes, second in silver, lead and chromites, third in
copper, manganese, and fl uorite, and forth in molybdenum. In terms
of its gold reserves, Kazakhstan is in the top ten. It also has about 8%
of the global reserves of iron ore, and about 21% of global uranium
reserves.
The advancement of the oil and gas sector is particularly important
to Kazakhstan’s economy. Today, the country is rich in hydrocarbons,
holding 3.3% of global reserves. The recoverable oil reserves are 4.8
billion tonnes. The recoverable gas reserves, including the new fi elds
in the Caspian shelf, reach 3 trillion cu m, while the potential reserves
are estimated at 6-8 trillion cu m. In terms of hydrocarbon resources,
Kazakhstan ranks second in the CIS after Russia.
Oil and gas condensate production totalled 67.2 million tonnes
in 2007 (up 4.1% on 2006) and 70.7 million tonnes, or 1.8% of the
global oil production, in 2008 (Table 1). The balance of reserves
and production suggests good prospects for the development of the
country’s oil and gas sector.
The forecasted oil production and exports are shown in Table 1,
gas production in Figure 1.
Table 1
Forecasted oil production and exports in Kazakhstan
(million tonnes)
Description
2007
(actual)
2008
(actual)
2010
(forecasted)
2015
(forecasted)
Production 67.2 70.7 80.0 100.0
Exports 60.4 62.8 73.3 90.0
Source: Ministry of Energy and Mineral Resources of the Republic of Kazakhstan
The development of the giant Kashagan fi eld, which will be car-
ried out by a consortium of major oil and gas companies, is extremely
годы
70
60
50
40
30
20
10
0
2007 2008 2009 2010 2011 2012 2013 2014 2015
29.6
33.7
38.9
42.6
43.2
43.9
45.1
53.3
61.5
important to the advancement of Kazakhstan’s oil and gas sector. Oil
production in this fi eld will start by 2013.
Source: Ministry of Energy and Mineral Resources of the Republic of Kazakhstan
Figure 1. Forecasted gas production in Kazakhstan (billion cu m)
The country’s oil and gas production progresses in accordance with
the state Programme for the Development of Kazakhstan’s Sector of
the Caspian Sea, launched in 2003.
The Programme set several stages of the development of oil and
gas fi elds. The fi rst stage covered 2003-2005 and included exploration
and the construction of onshore facilities.
The second stage (from 2006 to 2010) plans the expedited devel-
opment of fi elds. During the third stage (from 2011 to 2015), stable
production is expected to be reached. In addition to the oil and gas
blocks that are currently under development, more than 200 new
promising blocks will be determined and offered to bidders.
The mining and metallurgy sector is among the backbone indus-
tries of Kazakhstan and has high export potential. Its products, ferrous
and non-ferrous metals, are in stable demand in the global market.
Kazakhstan’s ferrous industry builds on major iron ore deposits,
whose reserves reach some 700 million tonnes (8
th
place globally).
Kazakhstan’s iron ore production ranks tenth after China, Brazil,
Australia, Russia, the U.S., India, Ukraine, Canada, and South Africa,
234 235
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
which account for more than 80% of global production. In the CIS,
Kazakhstan is third after Russia and Ukraine.
Manganese ore deposits are important to Kazakhstan’s ferrous
metallurgy. The country boasts over 7% of global reserves. A pecu-
liarity of Kazakhstan’s manganese ore is high manganese content (up
to 25%) and low phosphorus and sulphur content, and as a result its
treatment is cheaper.
Non-ferrous metallurgy is also essential for the industrial devel-
opment of Kazakhstan. This sector accounts for 11.7% of the total
industrial production.
The country is extremely rich in copper, lead, zinc, and other non-
ferrous, rare, and precious metals.
Kazakhstan’s proven copper reserves are estimated at 37 million
tonnes, or 5.5% of global reserves, and the country ranks fourth
after Chile, Indonesia, and the U.S. Over 90 copper deposits were
explored in Kazakhstan, the largest of which are Jezkazgan, Aktogai,
and Aidarly.
The country’s proven zinc reserves are 25.7 million tonnes, or
9.5% of global reserves. Kazakhstan is fourth after Australia, the U.S.
and Russia. There are more than 50 deposits containing zinc, with
polymetallic ores as a prevailing type.
Kazakhstan’s proven lead reserves reach 11.7 million tonnes, or
10.1% of global reserves. Kazakhstan ranks sixth after Russia, Aus-
tralia, Canada, the U.S. and China. Kazakhstan’s lead reserves are
concentrated in more than 50 deposits.
The country has signifi cant potential to develop its aluminium
industry.
Over 20 bauxite deposits were explored in Kazakhstan. The
main portion of reserves is in Kostanai Oblast (Western Turgai
and Central Turgai bauxite areas). Ten bauxite deposits are being
developed.
The mined bauxites are sent for processing to the Pavlodar
Alumina Plant, whose products are exported mainly to Russia and
Tajikistan.
Aluminium production in Kazakhstan totalled 1,514,500 tonnes in
2006, 1,550,300 tonnes in 2007, and 1,713,400 tonnes in 2008.
Kazakhstan is a large gold-bearing area. Its proven gold reserves
reach 1,700 tonnes (4% of global reserves), making it seventh after
South Africa, the U.S., Australia, Russia, Uzbekistan, and Indonesia.
A total of 199 commercial gold deposits were explored in almost
all regions of the country, including 127 primary, 40 complex, and
32 placer deposits.
Copper and polymetallic deposits account for the main portion of
the reserves (68%). The largest gold deposits are Vasilkovskoye (360
tonnes of gold in proven reserves) and Bakyrchik (277 tonnes). In the
recent years, gold production exceeded 20 tonnes a year.
Kazakhstan’s silver reserves were explored in more than 100 de-
posits, with the polymetallic (copper, lead, and zinc) ones accounting
for the main portion (about 60%) of the reserves. Silver content in
these deposits is 40 to 100 g per tonne. Approximately 25% of the
country’s silver reserves are concentrated in cupriferous sandstone
deposits (Jezkazgan and others), with silver content reaching 10-20
g per tonne. The portion of gold and silver ores in the total silver
reserves and production is insignifi cant. The leading silver produc-
tion companies are Kazakhmys and Kazzinc; the annual silver output
reaches 700-800 tonnes.
Coal production is key to the economy of Kazakhstan. In terms of
proven coal reserves, the country ranks eighth and accounts for 4%
of global reserves. Power-station and coking coal, which is the most
valuable for industry, is found in 16 deposits.
Kazakhstan is one of the top ten largest coal producers globally.
In the CIS, it ranks third in terms of reserves and fi rst in terms of coal
production per capita.
Today, the country’s coal industry accounts for 78% of electric
power generated in Kazakhstan, and virtually 100% load of the by-
product coke industry. In addition, it fully meets the utilities sector’s
demand for fuel.
The leading coal producers in Kazakhstan are the companies from
Pavlodar and Karaganda Oblasts (Bogatyr Access Komir, Vostochny
Mine, Eurasian Energy Corporation, Maikuben-West, Coal Depart-
ment of Mittal Steel Temirtau, and the Borly Coal Department of
Kazakhmys).
236 237
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
Kazakhstan is one of the world leaders in terms of proven uranium
reserves, accounting for 21% of global fi gure. About 65% of these are
suitable for treatment using the most progressive, environmentally
friendly and cost effective method of in-situ leaching.
In accordance with the Blueprint for the Development of the Ura-
nium and Nuclear Power Industries of the Republic of Kazakhstan in
2002-2030, uranium production will reach 15,000 tonnes a year by
2010, making Kazakhstan the global leader.
Thus, Kazakhstan has signifi cant natural reserves and noteworthy
potential for the advancement of its primary sector and increasing its
infl uence on the global markets in raw materials.
4.3. The Investment Climate in Kazakhstan
Having become independent, Kazakhstan faced a need to locate
resources that would ensure a shift from a centrally planned economy
to a market economy. Socioeconomic, political and fi nancial factors,
or, in other words, a favourable investment climate, were to be cre-
ated to raise the attractiveness of the investment market and reduce
investment risks.
This was achieved rather speedily. Steady fl ows of foreign invest-
ment into the mining sector contributed to the country’s economic
growth.
Today, investors are attracted by a country’s investment potential,
low investment risks, stable legal framework and key macroeconomic
characteristics (rich natural resources, workforce, fi xed assets, infra-
structure, etc.), consumer demand, and other factors.
Kazakhstan has the majority of the above features, which is why
investment is growing at a signifi cant pace.
To form a favourable investment climate, the legal framework
was improved. The Laws On State Support to Direct Investment and
On Investment were adopted to speed up the advancement of prior-
ity sectors.
These statutes provide guarantees for direct investment, insurance
against political risks, measures of state support, privileges and pref-
erences. In other words, they create a favourable investment climate
that corresponds to the strategic development goals of the country.
Kazakhstan’s investment system opens all industries to investors.
The government is particularly proactive in attracting investment.
In the process of economic reform, not only were conditions con-
ducive to the attraction of foreign investment offered. Large domestic
sources of potential investment were set up including the system of
commercial banks, the savings pension system, the stock market, and
the Regional Financial Centre of Almaty.
The adopted statutes and organisational measures strengthened
the country’s investment attractiveness and stimulated the infl ow of
foreign investment. As a result, Kazakhstan was the fi rst CIS country
to receive an international investment grade.
238 239
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
In order to ensure effective communication with investors the
Foreign Investors Council under the President of Kazakhstan was
formed. This advisory body ensures direct dialogue with investors
working in Kazakhstan and expeditiously resolves issues related to
the investment activities and investment climate.
The foreign members of the Council include the top managers
of international economic and fi nancial institutions, and foreign
companies and corporations who are interested in long-term
cooperation with Kazakhstan and who are working in the sec-
tors that are a priority for the country’s industrial and innovative
development.
The Council’s tasks include making proposals to the Head of State
on the improvement of the investment climate and implementation
of major investment projects.
To fulfi l its objectives, the Council has set up fi ve joint working
groups – taxation, legislative issues, ongoing operations of foreign
investors, improvement of the investment image of Kazakhstan, and
the oil and gas sector. The working groups tackle various aspects of
investment to make relevant recommendations to the members of the
Council and government structures.
The state’s proactive participation in building the favourable in-
vestment climate results in annual increases in foreign investment.
During the fi rst nine months of 2008, foreign direct investment in
Kazakhstan totalled $12.8bn, vs. $10.6bn in the same period of 2007,
and $7.5bn in 2006.
The experts estimate that, to date, Kazakhstan has received 80%
of all direct investment in Central Asia. The World Bank included our
country in the top twenty countries deemed attractive to investors.
Investment in fi xed assets grows year by year.
Because of the worsened external environment, measures were
taken to activate internal sources, strengthen the state expenditure
in the investment process, and stimulate domestic investment pro-
grammes.
In 2007, the National Investors Council under the President of
Kazakhstan was set up by a Decree by the Head of State, to work on
the measures of state support to large business projects. This advisory
body works to speed up economic diversifi cation and modernisa-
tion, and implement breakthrough projects with the participation of
domestic investors, taking into consideration the development trends
in national and foreign markets.
Samruk-Kazyna plays a leading part in consolidating domestic
investment potential. The objectives of this fund include fostering
investment activities in Kazakhstan, and the promotion of Kazakh
investors abroad.
Currently, every region of Kazakhstan implements or plans invest-
ment projects that are of socioeconomic importance to not only the
region itself, but to the country as a whole.
As a result of the government’s proactive policy to raise invest-
ment potential, the percentage of the non-government sector in total
investment continues to grow. As the market economy evolves,
Kazakhstan’s private sector is solidifying its positions in investment
and the portion of own funds is gradually increasing.
From 1993 to July 2008, over $76bn was attracted in foreign di-
rect investment. Two thirds of investment in Kazakhstan goes to the
primary sector (mining and exploration), followed by real estate (over
10%), transport and communications (over 10%), and the processing
industry (less than 9%).
The fact that this structure has been preserved over a long time
helped align interregional disproportions, and increase capitalisation
of the previously underinvested industries and regions. However,
in the long term, this can result in industry lagging behind. For this
reason, the government is trying to diversify investment fl ows and
attract more money into the processing industry, and into industrial
and agrarian regions.
Taking into consideration the pace of economic modernisation
and the need to make full use of the nation’s investment potential,
the state will also put effort into maintaining a favourable investment
climate and improving the country’s investment image.