Minister for Investments and Development Zhenis Kassymbek reported on the work being done to improve the investment climate and attract foreign investment in the economy of Kazakhstan.
According to the data from the ministry, today Kazakhstan is the leader in attracting direct investment in Central Asia, whose share is about 70%. During the first 9 months of 2018, the total investment in fixed assets increased by 21.6% and amounted to 7.5 trillion tenge.
It should be noted that there is an increase in the mining industry (by 41.4%), in construction (by 37.1%), in the manufacturing industry (by 26.4%). At the republican level, the largest share of investments falls on Atyrau region (35.8%), Astana (9.2%), Almaty (6.5%).
Kassymbek notes that the share of private funds in the volume of investments in fixed assets for the first 9 months of 2018 was 73.1% (5.5 trillion tenge). In the first half year 2018, the gross inflow of foreign direct investment grew by 15.4% to $12.3 billion.
“The growth is shown by such industries as mining – $6.7 billion, transport – $393.3 million, trade – 2 billion tenge, financial and insurance activities – $359.5 million, information and communications – $124.2 million,” Kassymbek informed.
In order to fulfill the instructions of the Head of State, within the framework of the Nation's Plan – 100 Concrete Steps, the ministry is actively working to attract transnational companies. A list of 34 TNK projects worth about $10.6 billion was formed. At the implementation stage there are 12 projects worth $1.4 billion, of which 8 projects worth $1 billion have started the active implementation in 2018.
At the same time, a three-tier system for attracting investments have been built: at the external level —Ministry of Foreign Affairs, investment advisers at foreign institutions of Kazakhstan and Kazakh Invest representatives; at the central level — Ministry for Investments and Development — Investment Committee and Kazakh Invest; at the regional level — local executive bodies, regional representatives of Kazakh Invest.
“We have significantly changed our legislation, simplified the permit system, taxation, customs control, as well as the migration and visa regime. The list of countries whose citizens stay in Kazakhstan in a visa-free regime has been expanded — today there are 62 countries, this list includes all OECD countries. Also, in accordance with the recommendations of the OECD, work was carried out to improve the judicial system,” Kassymbek said.
Currently, investment disputes involving large investors are considered according to the rules of the court of the first instance in the Supreme Court. For their consideration in the Supreme Court, a specialized judicial panel has been established, which is also an appeal instance for the court of the city of Astana.
In order to promptly resolve problematic issues, the investment ombudsman institution functions, where investors are protected on controversial issues with government agencies.
At the regional level, at akimats, there are councils for improving the investment climate, there are special deputy akims, management of industrial-innovative development and investment, social entrepreneurial corporations, regional representatives of the Kazakh Invest and service centers for investors.
At the same time, Kassymbek drew the attention of akimats of the regions to a number of issues requiring the revitalization of work. These are issues of allocation of land for investment projects, construction of engineering infrastructure, gas supply, filling the territories of special economic zones, introducing new financing instruments to support the implementation of major breakthrough projects, as well as the quality of operation of investment portals in the regions.
“Given the statistical indicators of individual regions, akimats need to improve the interaction of all structures and increase the efficiency of attracting investments in the region,” the minister said.
Minister of Foreign Affairs Kairat Abdrakhmanov reported that in the recent Address to the people of Kazakhstan, the Head of State set specific tasks directly related to the “economic diplomacy”: supporting non-commodity exports, an active trade policy, promoting Kazakhstan's business abroad, attracting investment, technology and best world experience, tourism development.
“Elbasy emphasized that ‘export-oriented industrialization should be a central element of economic policy.’ It requires close mutual coordination of the investment and export directions to obtain a synergistic effect,” said Abdrakhmanov.
Abdrakhmanov recalled that since the beginning of the year, a number of top-level visits have taken place: to the United States, the United Arab Emirates, the People's Republic of China, Turkey and Finland. In March, the presidents of Tajikistan and Uzbekistan visited Astana. Recently, a meeting was held in Brussels with the "captains" of European business.
“Following all these negotiations, about 135 documents were signed worth more than $30.6 billion. The Foreign Ministry constantly monitors the implementation of agreements reached during the Heads of State’s visits abroad and visits of foreign heads of state to Kazakhstan. Special attention is paid to investment projects with transnational corporations,” the minister said.
According to Abdrakhmanov, the Intergovernmental Commissions and Business Councils can be an effective tool for the development of bilateral trade, economic and investment relations. As Abdrakhmanov noted, it is important to fully utilize the potential of these structures. Therefore, the Interdepartmental Commission has been established under the chairmanship of the Foreign Ministry, which will soon hold its first meeting. The Foreign Ministry also continues to assist domestic companies interested in attracting investment and promoting products for export. Special attention is paid to small and medium businesses as the most important driver of the economy.
“A good example is the trade and economic mission of companies from Kazakhstan to Tajikistan organized in August 2018 with the assistance of our Embassy. Three agreements were signed for a total of $18.8 million for the supply of buses, furniture and cars produced in Kazakhstan. We need to focus our entrepreneurs on the specifics of export markets. To this end, the Ministry of Foreign Affairs, together with the Atameken NCE, will consider the feasibility of developing the so-called ‘Guide to foreign markets,’ indicating the features of customs, tax and other procedures,” said Abdrakhmanov.
The minister also noted active work on the formation of a favorable visa policy. The visa-free regime is valid for OECD / EU countries, as well as Malaysia, Monaco, the United Arab Emirates and Singapore. Mutual visa-free regime is functioning with 20 countries. Along with this, the Ministry of Foreign Affairs, together with interested authorities, is working to improve the visa regime for foreign employees of AIFC JSC and the International Technopark of IT Startups Astana Hub.
In addition, the ministry also pays attention to the development of aspects in the investment direction within the country. A key factor in this activity is effective interdepartmental cooperation. In this context, the Foreign Ministry adopted joint action plans to strengthen cooperation in the investment and export sector with a number of ministries and quasi-state structures. This practice will be continued with other departments and organizations.
In turn, Chairman of the Board of Kazakh Invest JSC Saparbek Tuyakbaev reported that today a list of large and medium-sized investment projects was compiled in the republic, and an implementation roadmap was approved for each project.
Today the list consists of 188 projects. In particular, 49 projects are at the stage of construction and installation, documentation is being developed for 51 projects, 74 projects are at the development stage. The largest part of the projects is in the Almaty region (32 projects). Also in the first five are Karaganda region, Almaty, Aktobe region and Astana. In addition, since the beginning of the year, 22 projects received all necessary permits and construction and installation work began.
“On 47 projects investors decided to implement them and began to develop documentation. Among them are the Dutch Farm Frites, the Arabic Phoenix Global, the Australian Cedar Meats, the Belgian Carmeuse Group, the Turkish Yildirim Holding, the French Total Eren,” Tuyakbaev said.
At the same time, the Tuyakbaev reported that since the beginning of the year, meetings with representatives of Kazakh business were held in the regions with the participation of akimats, of over 200 proposals, 66 were selected.
“Today, of the planned projects, most have been prepared, on an ongoing basis, they are sent to foreign embassies and representative offices to work with specific companies. Thus, 55 new investors have been attracted since the beginning of the year. Of these, 16 are transnational companies,”said Tuyakbaev.
Together with the Ministry for Investments and Development, an analysis of akimats sites has been conducted. It is proposed in the standard version to create on the invest.gov.kz portal websites of all investment regions, opening for each special page. As a result, according to Kazakh Invest, this will allow investors to receive information on investments in all regions through a single investment portal instead of 17 available.
In addition, in order to promptly solve the problems of investors, the call center began to work on the principle of "first aid" for them. Since the introduction of the call center for investment activities, 474 consultations have been provided.
“In 2018, 40 complaints were received from investors to solve complex problems. Of these, 19 were fully resolved, interim responses were given to the remaining 21 appeals to investors, relevant work is being carried out together with the responsible state authorities,” Kazakh Invest chairman summed up.
The akims of the West Kazakhstan region A. Kulginov, Karaganda — Y. Koshanov and Shymkent — G. Abdrakhimov reported on the current situation in the regions and the ongoing work on attracting investments.