04 October, 2018

Kazakhstan Global Investment Forum 2018: Prospects for investing in Kazakhstan presented in London

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Kazakhstan Global Investment Forum 2018 was held October 2 in London (United Kingdom). Over 150 business representatives took part in the event. The Kazakh delegation was led by the Deputy Prime Minister of Kazakhstan Askar Zhumagaliyev, reports the press service of the Prime Minister.

The forum was devoted to new opportunities in the field of business and investment, as well as the prospects of Kazakh-British projects in the fastest growing sectors of the economy of Kazakhstan. The main topics discussed included current innovations in improving the country's investment climate and tax and customs benefits, the State Property Privatization Program, the favorable geographical position of Kazakhstan at the crossroads of Europe and Asia, its participation in the Chinese initiative “One Belt, One Way,” the Eurasian Economic Union, and the functioning of the AIFC which applies the norms of English law on its territory.

Among participants there were more than 150 senior executives from the manufacturing, agricultural, chemical, mining and financial sectors, as well as metallurgy, alternative energy, logistics and digital technologies, including representatives of such large international corporations as Mitsubishi UFJ Financial Group, JP Morgan Bank, Deutsche Bank, Morgan Stanley, Ernst & Young, PricewaterhouseCoopers, the London Stock Exchange and many others.

Deputy Prime Minister of Kazakhstan Askar Zhumagaliyev, AIFC Governor Kairat Kelimbetov, Vice Minister for Investments and Development Arystan Kabikenov and Chairman of the Board of Kazakh Invest Saparbek Tuyakbaev spoke at the opening of the forum.

“Kazakhstan is interested in attracting British investors who will bring with them finance, technology and best business practices necessary for successful diversification of our economy and its integration into the global system,” Zhumagaliyev noted in his speech at the forum. The UK is one of the largest investors in the economy of Kazakhstan. It accounts for $13 billion out of the $300 billion raised over 27 years of independence.

The Governor of the Astana International Financial Center Kairat Kelimbetov devoted his presentation to opportunities opening up for investors, taking into account the work of the AIFC. Thus, the AIFC provides its members with a special tax regime up to 50 years, guarantees an independent system of dispute resolution based on English common law. The official presentation took place in July 2018.

“The launch of the Astana International Financial Centre this year is also transforming Astana into a regional financial centre that will promote your business further to the new horizons,” Kelimbetov summed up his address to the forum participants.

The Vice Minister for Investments and Development Arystan Kabikenov spoke about the development of investment climate. Today, Kazakhstan holds 36th position across 190 countries in the World Bank's Doing Business 2018 ranking. That’s number 1 in "Protecting Minority Investors”, and number 6 in "Enforcing Contracts.” At the same time, the work continues. Thus, by 2050 Kazakhstan must join the world’s 30 most developed countries. To ensure further economic growth, the Government continues to pursue a policy of attracting investment. In 2017, together with the World Bank, we developed and adopted the National Investment Strategy in which we identified top priority sectors for attracting investments. Mining and metallurgy are amongst the most important sectors of the economy, forming more than 21% of exports. Overall, Kazakhstan ranks the world’s 6th for natural resources, and 10th for total volume of minerals (excluding oil and gas). There is also a great potential in the fields of exploration and development of copper, gold, phosphates, and rare earth metals production, including lithium and vanadium. Investments into geological exploration, and the development of new technologies for processing raw materials are of special interest.

“This year we have adopted a new subsoil use code based on the ‘first come – first served’ principle. It also facilitates free access to geological information and will shorten the time for granting subsoil use rights for solid minerals from 18 months to just 10 days,” Kabikenov said.

In his turn, the Chairman of the Board of Kazakh Invest Saparbek Tuyakbaev informed the participants that the company identified and prepared 70 niche projects in priority sectors of the economy — agriculture, chemistry and petrochemistry, mining and metallurgy, mechanical engineering and metallurgical engineering, tourism, and energy.

“From establishing links with local companies to supporting project maintenance and coordination, we provide a wide range of services to facilitate investment, acting as a ‘one-stop shop’ for all investment queries and needs. Kazakh Invest serves as a single point of contact, representing the Government during discussions of proposals and conditions for investment projects in Kazakhstan,” Tuyakbaev said.

The company has a wide range of representatives throughout the world who in close cooperation with the Embassies ensure information and timely responses. This makes it easier for investors to learn potential for business growth and market expansion in the region. There are local representatives in the regions of Kazakhstan, who in fact serve as the Advisors to Akims (Mayors). They make sure the investors have smooth operations and all the questions and needs are addressed fully. Besides, the company streamlines all the interaction with the state bodies and local authorities when the investors need to register business, obtain permits, licences or any other public services. It also includes state support for investors such as investment contract, registration as a member of the Special economic zones, application for innovation grants and so on.

The United States Trade Envoy to Kazakhstan Baroness Emma Nicholson, President of the European Bank for Reconstruction and Development Suma Chakrabarti, Chief Executive Officer of UK Export Finance Louis Taylor, Executive Director, Head of Emerging Markets at Mitsubishi UFJ Financial Group Christopher Marks, Director of EBRD in Kazakhstan Agris Preimanis and others also spoke at the event.

“The interests of the UK are not limited to the mining industry of Kazakhstan, the privatization program and the development of Astana as a Eurasian financial hub. We also want to participate in the diversification of your economy,” the British Trade Envoy Baroness Emma Nicholson stressed speaking at the plenary session.

In his turn, the Head of the EBRD Suma Chakrabarti noted that Kazakhstan has the necessary potential to become a vivid example for other countries seeking to build a sustainable market economy that works in the interests of the whole society and is open to the rest of the world.

The outcome of the forum was the conclusion of a number of agreements with British companies in the fields of transport and logistics, metallurgy, energy, agriculture, engineering, and in the field of developing the healthcare system infrastructure. The Samruk-Kazyna Sovereign Wealth Fund and the EBRD signed an agreement on the provision of a guarantee to the loan agreement between ShalkiyaZinc LTD and the EBRD. The Fund has acted as a guarantor of obligations for financing the construction of a concentrator at the Shalkiya deposit in the Kyzylorda region.

With companies operating in the mining and metallurgical sector with the use of new processing technologies, projects on the processing of non-ferrous metal ores were discussed, and agreements were reached on further information exchange with the participation of representatives of the companies initiating the projects. Agreements have been reached with the Independent Power Corporation on facilitating its participation in tenders related to the construction of energy facilities in Kazakhstan and facilities in the field of logistics and data centers using UKEF funds. The representatives of the Department of International Trade discussed the prospects for cooperation of British companies in the implementation of the One Belt, One Road program, agreements were reached on further cooperation and information exchange regarding the implementation of projects in the agricultural sector, mining and gas and petrochemical industries in projects oriented to the PRC market. Agreements were reached with a number of companies operating in the field of infrastructure construction, water disposal and water supply, health care, to assist them in further negotiations with relevant ministries and organizations of Kazakhstan.

The UK is among the top 10 trading partners in terms of turnover, as well as among the six largest investors in Kazakhstan, which accounts for almost 5% of the total volume of attracted foreign investment.

Bilateral trade between Kazakhstan and the United Kingdom in 2017 increased by 1.5% and amounted to $1.28 billion. Exports rose to $926.7 million. In the first quarter of 2018, the total turnover of mutual trade amounted to $252.6 million, exports from imports reached $158.8 million and $93.8 million, respectively. More than 800 legal entities, branches and representative offices with British participation are registered in Kazakhstan.

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