Officials Call for Increased Special Economic Zone Development

ASTANA – Kazakhstan Prime Minister Serik Akhmetov stressed the need to develop Kazakhstan’s investment attractiveness and create clear development strategies for the country’s special economic zones (SEZ) during a July 16 government session.

Also during the session, First Vice Minister of Industry and New Technologies Albert Rau reported that during the years of existence of SEZs, they have attracted three times as much private investment as they have received in public funds. The SEZs have attracted 308 billion tenge or $1.98 billion in private investment compared to 97 billion tenge or $634 million received from the national budget. The SEZs have also produced goods worth 270 billion tenge ($1.77 billion).

Rau also reported that SEZs have paid 28 billion tenge ($183 million) in taxes, paying off nearly a third of the initial public expenditure. He added, however, that he believes SEZs’ performance can be improved. “We need to make sure that each SEZ project is a success,” Rau told the assembled government officials.

To that end, he said Singapore’s Jurong Consultants would be invited to consult on SEZ planning and projects. Medium-term plans for each SEZ that take into account the second five-year-plan of the State Programme of Accelerated Industrial-Innovative Development (SPAIID) and account for key performance indicators will be drawn up by the end of the year, Rau said.

The prime minister supported the enhanced SEZ development plans, saying, “Today’s analysis shows that the management and development strategies of existing special and industrial zones require significant adjustments.” In particular, Akhmetov stressed that efforts to attract private investors and management companies were not organised well enough and that each SEZ needed its own clearly outlined strategy.

He also said that the criteria for selecting projects for the SEZs needed to be clarified and that the emphasis should be on innovative, high-tech projects and products.

Akhmetov also tasked the Ministry of Industry and New Technologies and the akimats of Almaty, Astana and the relevant regions to work on attracting investment and developing their SEZs. The Ministry of Economy and Budget Planning and other state bodies were tasked to work together on financing mechanisms and the Ministry of Regional Development was instructed to work with the akimats to develop their SEZs and prepare proposals for any necessary amendments to the Business Road Map 2020.

Speaking on specific SEZs, Rau recommended refocusing the SEZ at the port of Aktau. “Despite positive results, we believe that the potential of the special economic zone is underutilised. The main activity of the SEZ should be to maximally supply the oil and gas sector and use the seaport to bring products manufactured in the SEZ to foreign markets via the Caspian Sea. We should reorient the SEZ across the board, move away from the word ‘seaport’ and refocus on the oil and gas sector, including exports to the Caspian states,” Rau said.

The prime minister appointed the head of Kazakhstan Temir Zholy, Askar Mamin, to supervise the Aktau Seaport SEZ. He also appointed Minister of Economy and Budget Planning Yerbolat Dossayev to supervise the Ontustik SEZ in south Kazakhstan and Deputy Prime Minister and Minister of Industry and New Technologies Asset Issekeshev to supervise the Saryarka SEZ in and around Astana.

Kazakhstan’s law on special economic zones was amended most recently in 2012, expanding the benefits for investors and increasing financing of SEZ infrastructure. There are currently 10 SEZs in the country with projects in the oil and gas sector as well as chemical manufacturing, locomotive manufacturing, tourism and other sectors. At the government meeting, Vice Minister of Regional Development Serik Zhumangarin said there were plans to create SEZs in 12 regions of Kazakhstan.

“At the moment we are identifying further approaches for development of industrial zones,” the vice minister said.

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