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Government explains new foreign investment strategy, creation of Kazakh Invest national company

01 May 2017 11:01 AM | Julia Tikhomirova (Administrator)

Astana Times, 28 April 2017

Kazakh Prime Minister Bakytzhan Sagintayev and other top officials presented April 27 the outlines of the draft National Investment Attraction and Retention Strategy and the recently created Kazakh Invest national company as part of efforts to further attract foreign capital.

“Today, we are ready to present our vision of the solution to the task set by the President. Kazakh Invest has been formed on the basis of the old KAZNEX Invest with its complete restructuring. I was appointed the chairperson of the Board of Directors of the company. We deliberately raised its status to the level of a prime minister in order to stress the importance of our priorities in investment policy,”  Sagintayev  said  during  an  April  27  briefing  for  the  diplomatic  corps  at  the  Ministry  of Foreign Affairs on the strategy and company, noting both are still under development.

Sagintayev  told  the  gathering,  which  included  ambassadors  and  top  diplomats  from  around  60 countries as well as international organisations, the strategy and company are an attempt to reload Kazakhstan’s  approach  to  attracting  foreign  investment  to  maintain  the  lead  in  this  sphere  and increase  non-oil  investment.  He  said  the  new  strategy  and  company  would  also  assist  investors operating in the regions.

Head of  the  Vienna Office of  the Investment  Climate Practice  Group  of  the World  Bank  Group’s Trade  and  Competitiveness  Global  Practice  Ivan  Nimac  presented  the  draft  of  the  National Investment Attraction and Retention Strategy.

The strategy is a roadmap to diversify the share of investments with high added value focused on increasing efficiency, he said. “The  types  of  investments  must  be  changed  to  facilitate  the  process  of  economic  diversification. They should be focused not only on raw materials or natural resources, they should move towards other  types  of  investments:  qualitative  and  quantitative.  We  are  looking  for  more  effective investments to ensure economic growth and modernisation,” Nimac said. Nimac  said  the  strategy’s  goals  would  be  achieved  by  attracting  new  types  of  investments, increasing the benefits of existing foreign direct investments, conducting strategic privatisation and using more widely public-private partnerships (PPPs).

Kazakh Minister for Investments and Development Zhenis Kassymbek said the new strategy will be developed by the end of June and focus on defining priority investment industries and developing an Investment  Project  Map,  identifying  target  companies  and  international  investment  funds  and improving the investment environment, investment attracting mechanisms and financial instruments.

The strategy was developed with the help of World Bank experts and incorporates recommendations from the Organisation for Economic Cooperation and Development, said Sagintayev. Chairperson of the Board of Kazakh Invest Maksat Kabashev and Kassymbek briefed the diplomats on the company’s goals, tasks and interaction with state bodies and investors. “Kazakh Invest is not only a new name; it is the emergence of a whole new paradigm. Our focus is on investors. We find new investors, but we don’t forget about the existing ones. We know what they want and we want them to work in Kazakhstan. The main principle of Kazakh Invest is to help, without hindering,” Kabashev said. “This means moving to a more efficient, rational and business- oriented form of attracting investment to the country.”

Kazakh Invest will operate on a “one-stop shop” and will accompany investors through the entirety of  their  projects,  from  pitching  them  opportunities,  to  preparing  investment  proposals  to  the implementation and functioning of the business, Kassymbek said. The company has offices abroad and in all Kazakh regions. The board of directors headed by the prime minister also includes heads of ministries and top-level foreign consultants. “To date, nineteen sectors have been created in the regions to provide services to investors. In the regions,  representatives  of  Kazakh  Invest  will  be  given  the  status  of  external  advisors  to  akims (governors and mayors) of the regions and cities of Astana and Almaty,” Kassymbek added. Kassymbek said a monitoring system will also be introduced allowing investors to monitor online the progress of the services they receive.

Kassymbek  also  updated  the  diplomatic  corps  on  measures  that  have  already  been   carried  out, including  simplification  of  licensing  procedures  reducing  required  permits,  encouraging  public-private  partnerships,  establishing  free  economic  zones,  adopting  a  new  law  on  arbitration  and appointing an investment ombudsman.

These measures have resulted in foreign investment in 2016 of $20.6 billion, which is a 40 percent increase over 2015. Kazakhstan currently ranks 35th on the World Bank’s (WB) Doing Business Index.

Kassymbek  also  praised  the  activities  of  organisations  such  as  the  Council  of  Foreign  Investors under the President, the Council for Improving the Investment Climate under the Government, the Kazakhstan  Foreign  Investors  Council  Association,  the  European  Business Association  of Kazakhstan and the Investment Ombudsman Institute.